Falling Flat? How flat is too flat when it comes to management? You'd better find out before it's too late.

Bill Gilmer runs his 16-person commercial printing company withas few managers as possible. "We're an extremely flatorganization," says the owner of Wordsprint Inc. inWytheville, Virginia. Gilmer, 48, has made big investments intechnology to make sure each of his press operators and other keyemployees has all the information he or she needs to make decisionswithout a supervisor.

"Everything is in the system, from schedules to the latestbreaking news about a job, so every worker has access at theirkeyboards to the same information as management," Gilmer says."So why have management?"

Why, indeed? The answer is that an organization can be too flat.Sometimes managers are necessary. The key is to make sure yourorganization doesn't have too many managers-nor too few. Whenyou have too little hierarchy, decisions don't get made or aremade wrongly by employees who lack experience, accountability ormotivation to do the work of the missing managers.

Under Control?

"Hierarchies are going to be with us whether we like it ornot because hierarchies are effective for getting thingsdone," says Harold Leavitt, professor emeritus oforganizational behavior at Stanford University and author ofTop Down: Why Hierarchies Are Here to Stay andHow to Manage Them More Effectively. "I'm all forhumanizing organizations, but they can flatten so much that youlose control."

Leavitt's thesis highlights one inescapable fact aboutflatter organizations: The more you flatten, the less you control.To some extent, technology can be used to oversee employees by, forinstance, monitoring their productivity using job-tracking systems.It can also be used to empower employees to make their owndecisions, as in Gilmer's case. Gilmer also gives employeesincentives to take responsibility for decisions that mightotherwise be made by a manager, by basing much of their pay onindividual, departmental and company productivity.

But even flattening can go too far. "We skate the edge allthe time," Gilmer says. He knows he's gone too far whendecisions are not made or are made improperly. Sometimes, theproblem is that the employee isn't up to the self-managementjob, an issue Gilmer tries to avoid while hiring. "You have tohave people who are willing to make decisions and [who] areinterested in the big picture," he says. "We have thatnow, but at times we haven't."

Gilmer spends most of his day on business development, but acertain part of many days is spent dealing with management matters.If too much of his day is consumed with that type of work, hebegins to suspect he's too flat. But the solution of having amanager oversee production staff is one he's rejected.

For Leavitt, the issue is not so much whether a company is flat,too flat or not flat enough. It's that the entrepreneur isaware of the issue and prepared to grapple with it as part of agrowth plan. "Small companies often don't like the idea[that] they are going to formalize and get hierarchical as they getbigger," he says. "They can do it well or badly, butit's going to happen."

Gilmer anticipates Wordsprint expanding in sales and employmentas the economy rebounds. He believes that incentives, a corporateculture that prizes self-starters, and a good dose of IT will helpWordsprint get bigger without getting more hierarchical. Only if hecan't continue to find good employees does Gilmer plan to addmore layers. "When you have [lower-quality employees],"he concedes, "you need a supervisor to tell them what todo."

Mark Henricks writes on business and technology for leadingpublications and is author of Not Just a Living.