Flat vs Hierarchical Organisation Structure - Good or Bad

I used to work in multinational head office and never like it because of office politics.  I think office politics is damaging.  I think politics exist because of:
- power seeking;
- people involved have their own interest in mind; and
- breakdown of communications.

It brings in acts that are unproductive and waste of time and raises frustration among employees.

I started with my current employer when it was a small 25 employess company with 2 offices.  One in Sydney and one in Melbourne.  The Melbourne office have 8-9 employees. 
It was a flat reporting strucutre where all employees report directly to the boss, who comes only once a month. We did have weekly teleconfence meeting for brief update of the week. Small office, everyone focus on his/her work, very relax environment.  The only setback when we are not in main office, is, internal support, such as IT is slow.  The good thing is, if there is any problem, we directly hightlight that to the boss personally.

My company is doing well and is expanding.  New reporting hierarchical structure has been put in place.  I report to a leader and he reports to the boss.  We no longer meet weekly and the boss may not come every month as there are new offices set up at other states.

While the company is doing well, it is good to know my job is secured.  I think it is effective that the boss focus on strategic decision that moves the company forward.
However, with the new structure in place, that means there is a gap with the boss, especially we don't see him in the same office.  He relies more on others' input to make decision rather than own observations.  I do hope there will be no office politics in future for reasons mentioned earlier.

So, is flat structure better than hierarchical structure? 
It depends on the employees in the organisation.  If the boss is not smart and sensitive enough to ask the right questions and detect hidden problem then either sturcture is bad. 

Going back to the fundamentals:
- it works well if the employees' goals go along with the organisation goals/objectives;
- we are in the generation where Money is important, but Job Satisfaction carries the same if not more weight;
- we get defensive and disappointed when feeling not appreciated and misunderstood;
- it does take everyone's effort to respect the boundaries that each other have at work place.

An example will be my earlier post of the cheeky colleagues of mine taken my parking spot rudely.  It is not a matter of car spot.  It is a matter of being selfish and for own convenince, but affecting others.

So, let's see what comes next.