How does a purely flat organization lead to no constraints or accountability? In a flat organization every member needs to be responsible for actively upholding the organizations vision in the same way that this article is advising the managers need to actively uphold their companies vision.

It's the lack of an active vision that creates problems not the hierarchical or flat structure of the organization.

For example a democratic process can be used to maintain an organizations active vision including resolving disruptive people and processes.

It leads to unconstrained, unaccountable behaviour because nobody has any clear procedure for punishing divergence from the group's interest. There is, if you like, no "immune system". In such an environment parasites thrive -- and indeed a major driver of both evolution and civilisation is adaptation to parasitic behaviour.

The idea of a democratic process presupposes an institution, which includes explicit divisions of power, which is independent of the individuals taking part.

It is still a hierarchy as someone will hold the power. It is an explicit hierarchy because those powers are enumerated. That the process of replacement is democratic is slightly besides the point (though not entirely, as it prevents all-or-nothing power acquisition).

Whereas a loose, "flat" organisation with no differentiation between the rights, responsibilities and power of members is utterly vulnerable to the first sociopath who happens upon it. Such a person will wind up with an informal dictatorship and everyone else will be stuffed.

I was more referring to a democratic process like - http://en.wikipedia.org/wiki/Direct_democracy

I agree that a loose "flat" organization is prone to serious problems :)

The problem with direct democracy is the same as for voluntary voting: voters on the fringe, who are more highly motivated, will come to dominate the polity.