Economics/Business

Horizontal and vertical management/advantages/disadvantages

Horizontal management is an organizational model in which companies structure their processes based on group decisions. Vertical management, on the other hand, is characterized by the figure of a boss who centralizes the power to decide, without taking into account the opinion or needs of the other collaborators on his team. In this article we will provide you the elaboration of Horizontal and vertical management.

Managing horizontally, however, does not mean lack of control or lack of leadership. On the contrary, the role of leaders is reinforced by the autonomy that people receive from this management model.

Does it look confused? Throughout this post, we explain in more depth the characteristics of horizontal management and vertical management, as well as the advantages and disadvantages of each. Good reading!

What is horizontal management?

Horizontal management deals with decision-making in a decentralized manner . A common misconception about horizontal management is that it is a model in which there is no order and people do what they want.

It is important to be clear that managing horizontally is not the same as not managing.

What happens is a better delegation of tasks, thus generating, for each employee, the possibility to make decisions about how to perform the proposed tasks, to suggest other ways to carry them out and even to suggest something new.

Instead of a boss, teams have facilitators. These professionals, in a way, occupy positions or assume directive functions, but without the same prerogatives that traditional bosses usually have. They can even openly receive criticism, without this implying a breach of discipline or motivating any kind of punishment.

Autonomy at work

When a company opts for a work regime in which teams decide their own directions, supported by a reference figure, the results are usually reflected in improved performance and relationships.

There are even cases of companies that have been registering continuous growth due to the increase in productivity provided by horizontal management.

A good example of this is The Morning Star Company , an American tomato processing company. In it, every person must make what is called a CLOU (Colleague Letter Of Understanding) , an operational plan for the achievement of each one’s mission.

At the North American company Gore, a company that manufactures several types of technological components, every new hire chooses what they call a sponsor . Although the term is usually associated with sponsors, in the company it works more like a sponsor.

Thus, he is someone to whom new employees ask for advice, raise doubts or reveal possible dissatisfactions. At any time they want, they can change sponsors, if they understand that this can be more useful for their development.

What is vertical management?

Although the horizontal organization of companies is a more current model, this does not mean that vertical management is “bad” or that it should necessarily be put aside.

What can be seen is that there are companies favored with a less rigid hierarchical system, while others do better when more centralized leaders make the decisions.

In any case, the vertical model is predominantly hierarchical . It is the way of organizing companies that has followed corporations since the First Industrial Revolution. In this type of management, people are always subordinate to the orders of a superior in the chain of command.

In vertical management, leadership is more imposed and less suggested. Professionals in command positions are the ones who concentrate decision-making power. Even so, the vertical organization pattern does not totally exclude the employee’s participation in the company.

His empowerment can be materialized in other ways, such as the purchase of shares, which automatically makes him the owner of part of the company. Still in this model, the hierarchy is clearly arranged in the form of organizational charts and schemes in which the leadership positions are not divided.

Usually, it is up to a single professional to determine deadlines, goals , workflows and other competencies. Furthermore, the company’s management is divided into levels and sub-levels, each subordinate to the one above in the corporate organizational chart.

What are the advantages and disadvantages of horizontal and vertical management?

As can be seen, both models have negative and positive points when compared separately. However, a model alone should not be considered as the solution to all management challenges.

Every organization must plan and know its processes in depth — what goes wrong and what works right — before opting for horizontal or vertical management.

In a broader view, horizontal management has the following main advantages :

  • make processes clearer for employees;
  • make people more comfortable making suggestions, constructive criticism and proposing improvements;
  • encourage entrepreneurial initiative, as group decisions favor the actions of those who really want to present solutions;
  • favor engagement, since there are fewer bureaucratic obstacles due to the lower degree of formalities.

As disadvantages, we can highlight:

  • difficulty in managing processes, more felt in times of growth;
  • if communication fails, leaders can feel discredited and employees disoriented about what to do.

Vertical management, as well as horizontal management, may work for some companies, but in others it may not be very effective. It will be up to the leaders to decide according to the profile of the business, and may even adopt hybrid management models.

In isolation, vertical management has the following advantages :

  • ease in delegating tasks;
  • employees feel more secure in relation to the performance of their tasks;
  • decision time is faster, as long as bosses put principles above personality;
  • more space is opened up for more specialized professionals (who would hardly find peers in level teams);
  • more clarity in the information channels.

It is also worth mentioning that, in companies that operate in the supply chain, construction or that carry out large logistics operations, vertical management is the most adopted, as it makes the execution of tasks less subject to interference.

Among the disadvantages of this management model, some stand out:

  • “studding” entrepreneurial initiatives by subordinates;
  • greater dependence on the decisions of a single professional;
  • Wrong decisions tend to have repercussions throughout the hierarchy, in a kind of ripple effect.

As you have seen, more than comparing horizontal management and vertical management, it is up to companies to adopt the model that best fits their objectives and organizational culture.

Keep in mind that both have characteristics that can be positive for some, but for others can be a source of managerial challenges or loss of control.

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