What is the rationale behind a flat organization?
This notion is idealistic and appeals to people who have been burned by bureaucracies, but it denies the important functions that good management provides in setting priorities and coordinating work.
I once saw a case where a team switched managers and the team's output nearly doubled. Was the team suddenly better engineers? No. They were a fine team, but the manager worked to get everyone on the same page and ensure that their work was connected in a way that it had a multiplicative effect. Rather than everyone working on isolated projects, the projects leveraged each other to be much more valuable.