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April 8, 2022 Reading Time: 3 minutes

Some companies have the luxury of allowing employees to decide whether they want to continue working from home or return to the office, while others are leveraging WFA (work from anywhere) options to attract talent and serve as a sign-on bonus.

However, the ‘do what you want’ mantra being championed by some is not as simple as it sounds. In order for WFA policies to have long-term application, they must be carefully crafted with high expectations regarding disciplinary excellence and preset standards, and managers must reinforce the notion that an organization is made up of team members thereby requiring direction, attention, and connection.

Imagine a coach telling a sports team to practice where they want, when they want, and then on game day to simply deliver results. Coordination would be lacking and accountability would be unclear, and this has proven to be true when tried in the business realm.

Removing the hierarchical levels of an organizational structure (often referred to as flattened management) has been known to have disastrous results when not handled with great care. Indeed, organizational models that essentially cut out middle-level management and physical departmental oversight have proved problematic for not only performance levels but even employee morale (and Github and Medium can attest to this when it was tried during pre-pandemic times).

Zappos, which was the greatest champion for an autonomous work environment, now serves as the greatest example of why such a model can be detrimental. After roughly six years of trying maximum flexibility and autonomy via its self-governance company policy, Zappos needed to reinstate an organizational structure due to employee backlash and high turnover rates.

The Financial Times reported in 2019 that organizational models devoid of a hierarchy in no way represent a workers’ paradise; and egalitarian workplace systems were being viewed as a naïve notion rather than a worthwhile strategy up until 2020.

But when the pandemic hit, there was no choice – the office became obsolete, WFA was required, and some managers lost touch with their teams creating a new interest in removing structure-based systems.

Now, as in-person options increase, and as firms continue to assess the productivity rates and cost savings associated with remote work, managers should be wary of embracing a WFA environment that becomes too lax regarding structure and supervision, and here are two primary reasons for why:

Flattened management limits employee growth

Many benefits can be derived from having middle management positions and divisional boundaries since it establishes a chain of command, opportunities for promotion, clear lines for communication, and potential for collaboration. Moreover, supervision can aid in mentoring organizational members, and supervisors can serve as champions for employees (by providing feedback, guidance, resources, and encouragement).

Conversely, when organizations blur the lines of accountability by removing hierarchy, power simply reverts to those previously in charge since opportunities for delegation and deliberation are not evident. And absolute autonomy can lead to total anonymity within an organization, and employees who are out-of-sight will be out-of-mind from those with decision-making power.

Flattened management limits organizational growth

Scaling is difficult to do in an unstructured environment and agility is hampered when roles and tasks are not clearly defined. And since flattened management has been known to centralize power when it comes to decision-making, diverse perspectives are absent while the work environment evolves into personal cliques rather than departmental cohorts.

Moreover, when departments and divisions are flattened or fluid, interactions and teaming are unlikely, which is unfortunate since cross-functional teaming allows for employees to learn from each other as well as feel a greater connection to the organization as a whole. The novelty of an organization and its competitiveness is derived from the people within it, and when teaming and collaboration are absent within an organization, so are the developments of new ideas and processes.

The lackluster effects of egalitarian workplace systems should serve as a warning for firms flirting with flattened management, and managers should leverage the benefits of hierarchical systems to a greater degree (as preferred by employees).

Supervisors and departmental structures are important elements for a firm’s growth model as well as an individual’s career trajectory. Therefore, firms adopting WFA policies should not equate remote flexibility with a hands-off mentality. And firms should certainly take into consideration the incentives and tradeoffs of any new policy prior to implementation (the public sector would do well to follow this same advice as one-size-fits-all policies limit options and opportunities for an economy just as it does for individuals within a company).

Henri Fayol, along with his predecessor Frederick Taylor (known as the father of scientific management), espoused coordination to be a primary function of management – and it holds true to this day, particularly given the rising interest in relationship management studies.

Collaboration is key and organizations should aim to develop managerial structures that engage, enable, and empower workers rather than institute egalitarian systems that eliminate guidance and growth and limit opportunities for the decentralization of power.

Reprinted from RealClearMarkets

Kimberlee Josephson

Dr. Kimberlee Josephson is an associate professor of business at Lebanon Valley College and serves as an adjunct research fellow with the Consumer Choice Center. She teaches courses on global sustainability, international marketing, and workplace diversity; and her research and op-eds have appeared in various outlets.

She holds a doctorate in global studies and commerce and a master’s degree in international policy both from La Trobe University, a master’s degree in political science from Temple University, and a bachelor’s degree in business administration with a minor in political science from Bloomsburg University.

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