How does a flat organizational structure affect communication?

Answers will vary. Many businesses today have downsized and eliminated layers of management. Companies implementing Total Quality Management programs are reorganizing to distribute the decision-making power throughout the organization. The trend is to eliminate functional or departmental boundaries. Instead, work is reorganized in cross-disciplinary teams that perform broad core processes (e.g., product development and sales generation) and not narrow tasks (e.g., forecasting market demand for a particular product).
In a flat organizational structure, communicating across the organization chart (among cross-disciplinary teams) becomes more important than communicating up and down in a top-heavy hierarchy. An individual can take on an expanded role as important tasks are assumed. This role can involve power and authority that surpass the individual's status, or formal position in the organizational chart. Much of the communication involves face-to-face meetings with team members rather than numerous, time-consuming "handoffs" as a product moves methodically from one department to another. Companies such as IKEA, the Swedish furniture manufacturer and retailer, are using flat organizational structures within stores to build an employee attitude of job involvement and ownership.