essay - GMAT Analysis of Issue3

Question:
"Corporations and other businesses should try to eliminate the many ranks and salary grades that classify employees according to their experience and expertise. A 'flat' organizational structure is more likely to encourage collegiality and cooperation among employees."

Discuss the extent to which you agree or disagree with the opinion stated above. Support your views with reasons and/or examples from your own experience, observations, or reading.

Answer:
These days, many companies pursuit organizational excellence in order to achieve high profitability and everlasting growth, resulting in a wide variety of organizational structures being adopted. In terms of classification of employees, it's also said that there's a wide variety of structure model at present.

In the early stage of history of corporation, highly structured organization model was adopted at many companies. There were apparent benefits including a simple chain of command and clear roles and responsibilities. As development of corporate strategies and rapid environmental changes like globalism proceed, however, many companies started adopting flat organizational structure or other advanced structure models like a matrix or project organizational structure.

I agree that flat organizational structure can quickly cope with the changes of business environment or new competitive situations, but I insist that there should be clear classification represented by ranks and salary grades.

Flat organizational structure is good for communication among employees. For instance, one of my client companies got rid of classified grade and promoted flat communication among its employees. They interact each other as equivalent colleagues, and this seemed superficially good at a normal situation.

I mean, however, if something unusual happens, such as a compliant violation or an incident causing its consumers hurt, a clear chain of command and clear roles and responsibilities are required to respond such situations, which is also tantamount to classification of ranks and grades.

Who can take a responsibility of a serious incident that possibly cause the person fired if nobody is at a higher position than others? Who can make a final decision amid great controversy if nobody has power to force others to follow his decision? Therefore, I insist that companies need to have clear grades and ranks to the extent of the level I mentioned above.

In summary, corporations move forward to the era of flat organizational structure, but to some extent corporations need to keep clear ranks and grades in order to respond to various events.