Week 3 - Horizontal Organization - Shane Collins

This week, I wanted to examine horizontal organization structures in more detail. I read an article by Howard M. Guttman titled “Go Horizontal,” in which he discusses horizontal structures as the new wave of management. In the article Guttman explains that Liz Claiborne faced high turnover, low employee morale and decreased revenue due to archaic company organization. After reorganization to reflect a horizontal model, the company saw increased revenue and employee morale with a year and a half (Guttman, 2006).

Daft (2007) defines horizontal structures as lending to increased collaboration across multiple divisions and processes. Guttman explains that by shifting to a horizontal organization model, Liz Claiborne was able to move information across multiple layers of the company at a faster pace (2006). Further, this took accountability and decision making off the shoulders of top management, and allowed those with direct contact to the consumer make important decisions (Guttman, 2006).

In essence, what slows a corporation down from innovation and meeting consumer needs is a vertical organization, which lends to slow decision making. If a company decides to shift its organization to reflect a horizontal structure, management must first ask “why.” Why is it necessary for this shift to occur? What will the outcome of such reorganization be? Once this is determined, Guttman (2006) explains that “teams will move fast; they will get consumer insights and translates them to new products and improved sales and account delivery” (p. 1). In summary, Guttman believes that horizontal organizations are the best approach to company structure in an age when consumer demand changes faster than companies are able to produce new products. Horizontal structures make it possible for organizations to make decisions faster and work in collaboration with other departments to maximize innovation.

After reading Guttman’s article and comparing his insights to those of Daft, I believe that my company works horizontally across all departments, but has vertical structures within individual departments. At R&R Partners, a continuous reminder to pull in several disciplines during the account planning process fosters a culture of collaboration. This allows each marketing initiative to garner maximum potential from all marketing disciplines – public relations, digital, social media, paid media, or creative. However, within each department, a vertical structure is prevalent as hierarchy is of utmost importance.

Interestingly, this a real-world example of how horizontal organization on a macro level does not necessarily lend to horizontal organization on a departmental level. I suppose that R&R employs a matrix structure that seems to work well for the agency and the industry we work in.

Guttman, H. M. (2006). Go horizontal: See dramatic results. Leadership Excellence.

Daft, R. (2007). Fundamentals of organizational structure. Organization Theory and Design, (9th ed.).