Small business organizational structure

Assign a specific person to lead each department and own each role. Write a single name beside each of the boxes in the org chart. The Creative Thinker — this personality brings a ton of energy and innovative ideas.

Small business organizational structure

Organizations large and small can achieve higher sales and other profit by properly matching their needs with the structure they use to operate. There are three main types of organizational structure: Functional Structure Functional structure is set up so that each portion of the organization is grouped according to its purpose.

In this type of organization, for example, there may be a marketing department, a sales department and a production department. The functional structure works very well for small businesses in which each department can rely on the talent and knowledge of its workers and support itself.

However, one of the drawbacks to a functional structure is that the coordination and communication between departments can be restricted by the organizational boundaries of having the various departments working separately.

How to Create an Organizational Structure for a Small Business - IndieBrandBuilder

Divisional Structure Divisional structure typically is used in larger companies that operate in a wide geographic area or that have separate smaller organizations within the umbrella group to cover different types of products or market areas.

For example, the now-defunct Tecumseh Products Company was organized divisionally--with a small engine division, a compressor division, a parts division and divisions for each geographic area to handle specific needs. The benefit of this structure is that needs can be met more rapidly and more specifically, as each division can operate more or less independently for the other divisions in the company.

However, a divisional arrangement can also be cumbersome, as communication is inhibited because employees in different divisions are not working together. Divisional structure is costly because of its size and scope.

How to Make a Business Organizational Chart in 3 Steps

Small businesses can use a divisional structure on a smaller scale, having different offices in different parts of the city, for example, or assigning different sales teams to handle different geographic areas. Matrix Structure The third main type of organizational structure, called the matrix structure, is a hybrid of divisional and functional structure.

Small business organizational structure

Typically used in large multinational companies, the matrix structure allows for the benefits of functional and divisional structures to exist in one organization.

This can create power struggles because most areas of the company will have a dual management--a functional manager and a product or divisional manager working at the same level and covering some of the same managerial territory.

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She has written for a variety of online destinations, including Peternity. She holds a Bachelor of Arts in communication from the University of Rochester.A step-by-step guide on how to create an organizational structure for a small business including an example accountability chart.

Our Encyclopedia of Small Business is a comprehensive and easily accessible reference source for entrepreneurs that demand practical information that can be applied to their own business. Large or small, every organization should operate with a defined organizational structure.

A well thought out and strategic business configuration clarifies reporting relationships and supports good c.


Your organizational structure may help determine how your small business expands and innovates. Here are some of the most common—and a few new ways to look at office organization. Discover more in the Best of OPEN Forum series. The U.S. Small Business Administration (SBA) is a United States government agency that provides support to entrepreneurs and small mission of the Small Business Administration is "to maintain and strengthen the nation's economy by enabling the establishment and viability of small businesses and by assisting in the economic recovery of communities after disasters".

Small business organizational structure

Basic org chart template for a business. Suitable for getting started with your first org chart. Easily editable online via Creately.

Typical Organizational Structure of a Small Business |