Business

It is evidentfrom the facts mentioned in the case that Du Pont had a Tall Organizational Structureat the time the CEO introduced changes in the hierarchy. Owing tothe limitations of havinga Tall Organizational Structure Du Pont was facing the problems that are mentioned in the case.

To put it simply, an organization structure with many levels of management is called as a tall organization. In a tall organization the span of control is narrow i.e. each managerhas a very few number ofsubordinates directly reporting to him.Moreover, the chain of command is long, due to the presence of a number of positionsbetween the top level executives and the frontline workers.

Limitations of Tall Organizational Structures
Tall form of Organizational structures havemany disadvantages inherent in them. Some of them have been mentionedhere.

Due to the presence of long chain of command, thereare communication problems in the organization. The decision making slows down as a result. Theemployees in this form of organization are less satisfied because of restrictions on their freedom. Such organizations generally have a military style of functioning and the employees may not be ready to accept the high level of authority. Such structures also incur huge costs for the company because the managers are paid more than other employees. Hence larger number of managers would mean higher management costs.Thedrawbacks of bureaucracy creep into such organization which results in slowing down of the recognition of the problems as well as companys reaction to them as is evident in the case.

After the introduction of changes in the hierarchy, the organization is said to having a Flat Structure. Flat structures have a short chain of command from top to bottom and the span of control is usually wide as against that of tall structures.

Strengths of Flat Organizational Structures
Due to the presence of less number of managers bureaucracy is reduced and the decision making becomes easy. Here the managers are in almost direct contact with the frontline employees as well as the customers. This results in better team work, as well as swift response to the changing customer needs and market preferences. Innovationand product development is speeded which boosts the sales. Flat structures are moredemocratic and innovative and hence the organization becomes more flexible and more capable tocope with the competition pressures and changing external business environments. Last but not the least, flat structures involve less number of managers and hence greatly reduces the cost of the company in terms of salaries, perks and other management costs. Fierce competition to climb upthe hierarchical ladderis almost non existent in flat structures, while in tall structures such competition is omnipresent and gives rise to many organizational problems and conflicts.