A compact organization allows individuals within the business to focus on managing the company's operations rather than dealing with internal hierarchical issues. This structure promotes efficiency and clarity, as it reduces the layers of management and bureaucracy that can slow down decision-making processes.

In the book "Buffett: The Making of an American Capitalist" by Roger Lowenstein, this notion highlights how successful companies benefit from streamlined management. By minimizing the need for extensive oversight, employees can concentrate on their roles and contribute more effectively to the overall success of the organization.