There are two types of organizational structures. The vertical structure and the horizontal structure. Vertical structures have a chain of management which usually reaches from the CEO at the top making any and all decisions and then delegating authority to all the lower-level managers. The horizontal structure which is often referred to as flat structure, have close to no middle managers which means that high level managers handle all the typical day-to-day tasks as well as interacting with the customers and employees. Since most new companies and small businesses will opt for the flat structure because of the fact that they have a more limited amount of employees. The smaller the business is, the more intimate it is. The lack of large workloads means that management styles are going to be more informal than formal.
This means that companies like Wal-Mart, Sam’s Club, and even Chevron will be vertically structures whereas mom and pop shops will be more of a horizontally structures company. Since I am currently 6 months pregnant and crazing Mexican food, I will have to use this as my company organizational structure comparison. I will begin with Taco Bell. Because it is a chain, it has the vertical organizational structure. The CEO makes most if not all of the decisions while the lower to middle level management enforces all decisions and rules.
There is however, an amazing restaurant in San Marcos Texas called Gracias. They serve in my opinion, the BEST cheese enchiladas in the whole world. Now, there are only four restaurants in south Texas and each of them is owned by one person, but each store does its own thing. Depending on which day you go into the restaurant, you might get the waitresses that know that ordering a half and half means an iced tea, half sweetened and the other half UN sweetened. Also, depending on which store you go into and which day you go, you might get the enchiladas with too much Cumin on them, or the ones that are just perfect. Each store has their set recipes, but it is always up to the cook how they want to prepare the food.
The difference between this and Taco Bell is that Taco Bell’s food is pre-made, freeze dried, and more expensive. They do not make anything, everything is just put together for them and they must arrange it in the proper order. They are preparing it rather than cooking it. The stores themselves are arranged how the manager of that store wants it to look. The only thing the same is the menu and the sign out front. Taco Bell has everything looking the same, with no differences. Since CEO’s like structure and duplication, there is no room for difference or creativity. In a horizontal structure, there is room for differences because it is a smaller business where the rules are more lax.
In my personal opinion, I will always prefer the smaller stores or the horizontal businesses. You get more attention in these kinds of places. They get less business because they are not as well-known and not as crowded all the time. Because they do not advertise on the television, they are reserved for locals more than tourist or people that are just passing through. Since there is no real HR department, you must work things out with fellow employees or managers. There are always laws that will protect you regardless of who your business owner is, but there is not a specific department that handles those kinds of things within the company.
The location is key in this situation because it is hidden in a smaller part of an old neighborhood. All four of the stores are. This is perfect because you have the chains closer to the highway so people can get in and out quick without getting lost in the city. Since this restaurant is more directed to locals, only true locals know about it. This restaurant is ALWAYS packed on the weekends and usually full during lunch hours during the week, while Taco Bell gets I’s regular business from time to time. Because the food is better, the service is more personal, and the environment is home town, this makes it a better place over all to enjoy a good meal. Since there are only four stores compared to the thousands that Taco Bell owns, there is less revenue, but since it is a family business, there is no need to share the money with a lot of outside investors or business men/women. Another example would be Wal-Mart versus Buda Grocery. Wal-Mart is a major shopping center chain that is run by many different CEO’s and higher ups. They make decisions that directly benefit themselves and hire and fire employees freely because they feel like employees are a dime a dozen.
They expect middle management to run most if not all the day to day business and handle as well as track all revenue. Buda Grocery is a tiny store with 4 aisles in the small town of Buda Texas. Its owners, Mr. and Mrs. Montague, have run the store for almost 50 years and they inherited it from Mr. Montague’s father before him. There are 3 employees other than the couple themselves. George is the butcher, he took the position when Mr. Montague got too old to cut the meat himself. George is almost exact with any and all weight of meat the first time without having to put any back. Sue is the cashier and is one of the sweetest women in the world. She never has a frown on her face. Finally, they have a college student come in from time to time to help with the store up-keep and stocking. I never got his name. Mrs. Montague is the book keeper/manager. She does all the ordering as well as any HR work that needs to be done and tracks the revenue as well as signs the checks.
The store was sold to a different owner when Mr. Montage died of a heart attack in 2004 and Mrs. Montague could not run it on her own. The new owners have since then re-modeled the store with beer advertisements and even included an extra aisle for adults only. The store before was a dry store, which meant that they did not sell beer or alcohol. It is sad to see what kind of changes the business has faced, but it is still a horizontal organizational structure until this chain becomes big enough to own more and more stores like this. In conclusion, we can see the differences between a vertical organizational structure, where the rules are passed down and expected to be followed through with, and a horizontal structure where things are done depending on how well they work for each department or store. Each structure works well in its own way, but I always feel more comfortable in a horizontal situation because there is room for error. You never have to fear about the higher ups coming to evaluate everything because you are the higher ups. Things are more lax because it just works better that way.
Bateman, T. S., & Snell, S. A. (2011). Management: Leading & collaborating in a competitive world (9th ed.). New York, NY: McGraw-Hill Irwin.
Green, Sarah. Personal Experience, (2010). Being a customer of Buda Grocery for over 20 years.
Courtney from Study Moose