Comparing Vertical and Horizontal Organizational Structures

Vertical and horizontal are the two main types of organizational structures. Vertical structures involve a chain of management starting from the CEO at the top, who delegates decisions to lower-level managers. Horizontal structures, also referred to as flat structures, have fewer middle managers with higher-level managers taking on day-to-day tasks and interactions with customers and employees. New companies and small businesses often opt for flat structures due to their limited number of employees. Smaller businesses tend to be more intimate, with management styles leaning towards informality rather than formality due to smaller workloads.

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.

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The CEO makes most if not all of the decisions while the lower to middle level management enforces all decisions and rules.

In San Marcos Texas, there is an incredible restaurant named Gracias that, in my opinion, serves the best cheese enchiladas in the world. There are only four Gracias locations in south Texas, each owned by a different person, with each store operating independently. The experience at Gracias can vary depending on the day you visit - from waitresses who understand that "half and half" means half sweetened and half unsweetened iced tea, to variations in the amount of cumin used in the enchiladas.

While each store follows set recipes, it is ultimately up to the cook how they decide to prepare the dishes.

Taco Bell's food is pre-made, freeze dried, and more expensive, unlike this. At Taco Bell, everything is pre-made and must be arranged in the proper order. The stores are designed based on the manager's preferences, with the only consistent components being the menu and sign. Taco Bell aims for uniformity without room for creativity or variation, reflecting the preference of CEOs for structure and duplication. In contrast, a smaller business with a horizontal structure allows for more flexibility and creativity, as rules are less strict.

Personally, I will always prefer smaller stores or horizontal businesses because you receive more attention in these settings. These places may have less business due to their lesser-known status and lack of constant crowds. Without TV advertisements, these establishments cater more to locals than to tourists or passersby. In the absence of a formal HR department, issues must be resolved directly with coworkers or managers. Although legal protections are in place regardless of ownership, the company does not have a dedicated department for handling such matters.

The restaurant's location in a small, old neighborhood alongside four other stores near the highway allows for easy access and attracts locals who appreciate its superior food quality, personalized service, and cozy atmosphere. This results in high weekend and lunchtime traffic compared to Taco Bell, which only sees occasional business. Despite having only four stores, the family-run restaurant does not need to share profits with outside investors like Wal-Mart does with its numerous CEOs prioritizing decisions that benefit themselves. Unlike Wal-Mart's practice of freely hiring and firing employees due to their belief that they are easily replaceable, the restaurant values its loyal customers and staff members.

Buda Grocery, located in Buda Texas, is operated by Mr. and Mrs. Montague along with a team of three employees. The store has been under the ownership of the Montagues for almost half a century, passed down from Mr. Montague's father. Middle management oversees daily operations and revenue tracking, with George handling meat cutting and Sue serving as the friendly cashier. Additionally, a college student occasionally aids with maintenance and stocking tasks. Mrs. Montague takes charge of bookkeeping, ordering, HR duties, revenue tracking, and check signing.

When Mr. Montage passed away in 2004, the store was sold to a new owner as Mrs. Montague was unable to manage it alone. The new owners have renovated the store with beer advertisements and added a separate aisle for adults, a change from its previous status as a dry store. Despite the changes, the business still operates under a horizontal organizational structure, allowing for more flexibility and room for mistakes. In contrast to a vertical structure where rules must be strictly followed, a horizontal structure allows each department or store to operate based on what works best for them. While both structures have their benefits, a horizontal approach provides more comfort and autonomy for employees.

The following references are listed below:

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 loyal customer of Buda Grocery for more than two decades.