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There are basically 2 types of organizational structures commonly found in every organization. Namely these two are the vertical organization or the horizontal organization. (Deal, Kennedy, Deal & Kennedy, 2000). I myself have worked in both scenarios and personally favor the horizontal approach as the proposition for success is to work in teams, and cross functional teams. If a company follows a vertical approach then supervision of work becomes a much more difficult task and communication gaps arise which have been termed as the major component of project and process failures.
In a horizontal organization hierarchal levels are divided in such a way that management of work becomes easier and people of different departments can share their expertise and knowledge when working together. An organization’s bottom line consists of 2 aspects, which are sales and costs. It is the major objective of any organization to maximize its sales and decrease its costs to the minimum in order to extract maximum revenues and hence increase profits and growth (Belker & Topchik,2005).
Costs can be reduced when a horizontal structure is being followed as the number of channels through which information flows till it reaches its destination is reduced but opposite is in the case of a vertical approach where any information needs to cross through many channels before it reaches its destination. his results in the altering of the original message which negatively affects business plus due to the number of channels costs also increase (Porter, 1998).
In the same way cross functional teams in a horizontal approach can lead to better and efficient performance as each member of the team is representing his or her department and wants to prove his or her abilities, hence this results in more efficient business processes (Singer, 2004). On the other hand a vertical approach makes it difficult for the company to work because no department is ready to share his or her data with other departments and it is difficult to manage the circulation of information throughout the organization, which results in slow business processes and inefficiency.