Hierarchies: flat gives way to six-pack

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Over a decade ago, flat hierarchies were the toast of management thinking. Company after company cut layers or grades in the organisational structure to create a flatter and more responsive setup. But by now, the concept has taken a 180-degree turn. The new thinking is that having more rungs will help an organisation address an individual’s professional growth aspirations.

The confession comes from none other than Peter Cappelli, George W Taylor Professor of Management and director, Centre for Human Resource, The Wharton School, University of Pennsylvania. On an email to FE, he says, “We thought a decade ago that flat hierarchies were the key to success, that it made it easier to redeploy workers and made cross-functional work easier. We also thought that workers liked less hierarchy. They probably do when they are not at the top of it. But now US employers are getting worried not only about retention, which is a much bigger problem in India than it is here, but also about worker complaints that they are not being developed, that there is no career advancement,” adding, “what exactly workers mean by this isn’t completely clear—do they mean development in the sense of getting more skills and learning or do they mean development in the sense of just more money or do they have this idea about advancing in a hierarchy?”

Says D Subramanyam, vice-president, group human resources management, Minda Industries Ltd, gives the issue a local perspective. He says, “Delayering has been in vogue with the inception of Japanese management in India and it got a boost with the rise in IT industry. The inherent belief is that the less the number of layers of hierarchy the better it is for the organisation. Many organisations have gone ahead and done delayering. But in a country like India, job titles and promotions form an important part of social life and peer comparison.”