Simple organizational structures with few levels of management are good for small businesses. They can be flat, with different types including line discipline, line production, or division-style subdivisions. Owners have more control and can adjust the company as it grows.
Simple organizational structures are usually good for companies that have 100 or fewer employees. The structure tends to be flat, with few levels of management between the owner or managers and frontline employees. The different types of simple organizational structures can include line discipline, line production, or division-style subdivisions. Companies are free to set up their facilities in the way that best suits their needs. Once set up however, it can be difficult to change depending on the flexibility of the business.
Flat structures are often common in small businesses because these organizations have few managers other than the owner. This simple structure allows for reduced bureaucracy and greater owner involvement. This style also tends to increase the company’s awareness in the market and prevent operations from becoming clogged with too many employees. As the market changes, owners are able to adjust the company to take advantage of the changes. Simple organizational structures change as the business grows and increases in size.
Line discipline organizational structures create separation in a business from similar activities into closely related businesses. For example, the accounting department may have accounting, finance, and tax divisions under the largest group. The general accounting division may have a single director, such as an accountant or processor. This individual is directly accountable to the owner in simple organizational structures. In some cases, the owner may be the director of all businesses.
Simple line commodity organizational structures have different lines for entire businesses. In manufacturing companies, the divisions are according to the products produced by the company. For example, there are several lines for widgets, gears, and screws made by a single manufacturer. Under the position of director or manager reside all other employees. The lack of divisions below production helps keep the structure simple and allows for better interaction between owner and division.
Simple division-style organizational structures are often the most common organizational structure for small businesses. The division here may not even need directors other than the owner, as one department manager may suffice. The split into these companies simply includes separate divisions, such as accounting, human resources, and manufacturing, among others needed to run the business. Owners can change or alter the company quite easily as no individual stands in the way of moving divisions or merging with another. Essentially, the owners have much more control in this extremely flat organization.
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