Why Horizontal Organizations Don’t Fall Flat: Organizational Structure Shapes Perceptions of Egalitarianism and Company Warmth

Abstract In recent years, a growing number of companies have evolved toward relatively “flat” management structures with minimal hierarchical layers of management. Some even leverage this flatness as a key marketing message and defining element of corporate identity. Although organizational structure has been studied extensively throughout various disciplines, its influence on consumer response has received little attention. This research reveals that a company’s organizational structure can shape consumer perceptions of and subsequent responses to the company. All else being equal, perceived organizational flatness (vs. tallness) tends to induce more positive consumer reactions, such as increased purchase amounts, advertising engagement, purchase intentions, crowdfunding contributions, and brand choice. This phenomenon occurs because consumers infer that flatter companies foster relational egalitarianism, which in turn enhances perceived company warmth. However, the positive effect of perceived flatness is not universal. It is eliminated or reversed among people with a lower preference for egalitarianism and those with conservative political ideologies. This work enriches our understanding of how a company’s organizational attributes, which are usually regarded as beyond the consumer’s purview, may shape consumer perceptions of the company, offering insights for businesses as they embrace new ways of communicating and promoting themselves to consumers.