Is less hierarchy an idea whose time has come – and gone?

Executive Summary

Flat management was supposed to represent the future of enlightened business organization. Proponents touted the concept of reducing layers of management and empowering employees to make decisions as a quick path to making companies more efficient and Millennial-friendly. But a growing chorus of critics is condemning flat management as overhyped and fraught with its own set of problems, including uncertainty about employee roles, difficulties with scale and lack of accountability. Other business scholars say the trend toward less hierarchy is here to stay and caution companies against giving up on it too soon.

A few key takeaways:

  • Flat management seems to work best in smaller companies or in discrete units of larger ones.

  • Estimates of organizations using a flat-management system in whole or in part range from a few hundred to almost 1,000 worldwide.

  • Online shoe retailer Zappos, the largest organization to turn to flat management, has stayed with the approach even though some 18 percent of its employees left when it implemented the system.

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Resources for Further Study



Goodman, Malcolm, and Sandra M. Dingli, “Creativity and Strategic Innovation Management: Directions for Future Value in Changing Times,” Taylor & Francis, 2017. Two academics offer an updated primer on the latest in management thought.

Groth, Aimee, “The Kingdom of Happiness: Inside Tony Hseih’s Zapponian Utopia,” Touchstone, 2017. A journalist tells the story behind online shoe retailer Zappos, CEO Tony Hseih and the turbulent quest for self-management.

Kirkpatrick, Doug, “Beyond Empowerment: The Age of the Self-Managed Organization,” Jetlaunch, 2017. A consultant who worked at one of the earliest self-managed companies details why 20 years of empowerment programs have so often failed to give employees power, and what companies must do to make such efforts work.

Pontefract, Dan, “Flat Army: Creating a Connected and Engaged Organization,” Elevate Publishing, 2016. A management consultant provides tips on how to overcome resistance when trying to flatten an organization.

Shaw, Robert Bruce, “Extreme Teams: Why Pixar, Netflix, Airbnb, and Other Cutting-Edge Companies Succeed Where Most Fail,” American Management Association, 2017. A leadership expert offers an insider’s look at how teams work in some of the most successful companies.


Bernstein, Ethan, et al., “Beyond the Holacracy Hype,” Harvard Business Review, July–August 2016, Harvard researchers and a Zappos insider take a critical look at what works and does not work about Holacracy, a self-management system.

Giang, Vivian, “What Kind of Leadership Is Needed In Flat Hierarchies?” Fast Company, May 19, 2015, A journalist shares ideas on how leadership needs to change in flat organizations.

Luzajic, Tamara, “What Is Holocracy And Is It Destroying Companies?” Customer Experience Magazine, Jan. 10, 2017, A journalist summarizes the problems with Holacracy.

Michelman, Paul, “Leading to Become Obsolete: Haier CEO Zhang Ruimin is transforming a manufacturing giant into a platform for entrepreneurship –and his employees into self-governing entreprenuers,” MIT Sloan Management Review, Fall 2017, One of China’s most visionary leaders explains how he is realigning his company with customers and the internet of things.

Mukherjee, Amit S., “The Case Against Agility,” MIT Sloan Management Review, Sept. 26, 2017, A professor of management who is a former tech executive argues that lean and fast is not always best.

Romme, Georges, “The big misconceptions holding holacracy back,” Harvard Business Review, September 2015, A Dutch professor of entrepreneurship describes how misunderstandings about Holacracy – such as that it eliminates bureaucracy –create barriers to its adoption.

Useem, Jerry, “Are Bosses Necessary?” The Atlantic, October 2015, The vicissitudes of introducing a self-management system at Zappos are described.

Reports and Studies

Balls, Andrew, “The Flattening of Corporate Management,” NBER Digest, Oct. 6, 2017, A study by the National Bureau of Economic Research measures how much corporate hierarchies are flattening.

Claudino, Tiago Bomfim, et al., “Fostering and limiting factors of innovation in Micro and Small Enterprises,” Innovation in Management Review, April–June 2017, Researchers look at the factors driving innovation in small companies.

Pfau, Bruce N., “What Do Millennials Really Want at Work? The Same Thing the Rest of Us Do,” Harvard Business Review, April 7, 2016, A human resources specialist at the consulting firm KPMG discusses research that seeks to disprove the notion that what Millennials want from work is different from other generations.

Roelofsen, Erik, and Tao Yue, “Case Study: Is Holacracy for Us?” Harvard Business Review, March–April 2017, A Harvard Business School case study based on irregularities at the Dutch company Royal Imtech explores the legal risks and challenges self-management can present.

Romme, Georges, “Management as a science-based profession: a grand societal challenge,” Management Research Review, 2017, A Dutch management professor attempts to quantify how many companies are using “circular management.”

Walsh, Dylan, “Rethinking Hierarchy in the Workplace,” Insights by Stanford Business, Sept. 5, 2017, Stanford researchers find hierarchy can create more functional teams.

Zitek, Emily, and Alex Jordan, “Research: Narcissists Don’t Like Flat Organizations,” Harvard Business Review, July 27, 2016, Surprise! A study shows narcissists prefer organizations where they’re in charge.

The Next Step


Aileron, “Small Business, Big Opportunity: Replacing Traditional Management With Holacracy,” Forbes, Oct. 9, 2017, Intrust IT, a business technology provider, took the opportunity to implement Holacracy when a service manager left the company.

Hinssen, Peter, “Why Your Organization Needs To Put Culture Before Structure,” Forbes, June 12, 2017, A Forbes contributor recommends a company lay a cultural foundation that suits its needs before settling on a management structure.

Kessler, Sarah, “GE has a version of self-management that is much like Zappos’ Holacracy–and it works,” Quartz, June 6, 2017, General Electric employs a management system called “teaming,” where employees work in groups that decide among themselves the best way to get work done. The system uses coaches instead of supervisors and sets goals rather than issuing directions.

Silicon Valley

Agarwal, Ajay, “How To Effectively Grow An Early Stage Business,” Forbes, May 26, 2017, New companies need to build a flexible leadership team as they grow beyond the startup stage, says a managing director of Bain Capital Ventures.

Edwards, Jim, “Secrecy, Control and ‘Kindness’: What the Snapchat IPO tells us about its corporate culture,” Business Insider, Feb. 3, 2017, Snapchat’s IPO filing gave insight into a company culture that encourages “kindness” among employees and group therapy sessions.

Mucklai, Shazir, “Why Startups Need Project Managers Now More Than Ever,” Forbes, April 12, 2017, Startups that embrace flat structures are more adaptable than traditional corporations, but this flexibility comes at a cost to project management, a Forbes contributor warns.


Agile Alliance
1101 N.E. Paren Springs Road, Dundee, OR 97115
International organization that promotes agile software development and the use of collaborative, cross-functional teams.

American Management Association
3118 28th Parkway, Temple Hills, MD 20748
Trade association for management training.

1741 Hilltop Road, Suite 200, Spring City, PA 19475
The company that developed Brian Robertson’s self-management theory of Holacracy.

How Metrics
745 Fifth Ave., 8th Floor, New York, NY 10051
Publisher of the How Report, which measures the ways self-governing organizations produce better business outcomes.

Institute for Business Innovation
F402 Haas School of Business, #1930, University of California, Berkeley, CA 94720-1930
Berkeley Haas Business School research arm that studies innovation at startups and established companies.

Morning Star Self-Management Institute
500 Capitol Mall, Suite 2050, Sacramento, CA 95816
Research and education organization that supports management model based on the tomato processing company Morning Star.

Scrum Alliance
7401 Church Ranch Blvd., #210, Westminster, CO 80021
Nonprofit organization that supports an “agile” workplace.

DOI: 10.1177/237455680331.n1