Why Startups Need Hierarchical Structure

Wharton management professor Saerom (Ronnie) Lee has a word of warning for aspiring entrepreneurs who envision an egalitarian workplace where there are no bosses and every employee ranks the same.

According to his latest research, startups with flat organizational structures often fail.

“Although many entrepreneurs dislike the notion of hierarchical structure and managers, they ultimately do need managers, and do need to plan ahead and design the appropriate hierarchical structure way earlier than they think,” he told the Wharton Business Daily show on SiriusXM. (Listen to the podcast.)