Discovering the efficient organization structure: horizontal versus vertical

Abstract

Structure analysis is one of the most important issues in corporate management. The pyramid structure, which is a well-known vertical structure, plays an important part in corporate organizations. Most structures of traditional organizations, such as the functional structure and the divisional structure, are vertical. Recently, owing to the development of information technology, a new horizontal structure instead of the vertical one has received considerable attention. In this article, we review organizational structures and find that there are two efficient structures, a vertical structure and a horizontal structure, depending on the different abilities of each member in any organization with a comprehensive evaluation measurement. The line structure of a vertical organization is efficient when the ability of all members is small. While if the ability of all members is large, the star structure of a horizontal organization will be efficient. Therefore, this article provides a theoretical proof of the efficiency of the structures of organizations and their required conditions.