Horizontal or Vertical: two views of the organization—which is right?

An image that we have used over and over again in recent years to explain the managerial implications of  the knowledge era is depicted in this graphic. It is an abstraction of the organization chart. Like an organization chart, the triangular figure is wider at the bottom where there are more people at the bottom working in units or on projects. There is a management level that connects the “worker” to the corporate or executive level. As you will see throughout the coming chapters, the shift to the knowledge era is necessitating greater emphasis on the bottom of this triangle. 

We use this chart to illustrate the differences between the industrial and the knowledge views of the organization. The vertical axis is the main industrial perspective. It is about hierarchy and strategic control. The horizontal axis is the main knowledge perspective. It is about collaboration and innovation. Every organization today uses both perspectives. We are using these perspectives and labels not to brand differing practices as old fashioned or cutting edge.  Rather, we have found that these distinctions are necessary to help people understand why and how management practices are changing.

It is helpful to think of the organization chart as illustrating the vertical connections between people in your organization. Org charts describe hierarchy. The network, on the other hand, describes the horizontal connections in your organization. This is also the knowledge perspective. More to come on networks…

Adapted from Intangible Capital: Putting Knowledge to Work in the 21^st Century Organization by Mary Adams and Michael Oleksak.