Simple organizational structures are good for small companies with few levels of management. Different types include line discipline, line production, and division-style breaks. Flat structures allow for less bureaucracy and greater owner involvement, but can be difficult to change.
Simple organizational structures are generally good for companies with 100 employees or less. The structure tends to be flat, with few levels of management between the owner or executives and frontline employees. The different types of simple organizational structures can include line discipline, line production, or division-style breaks. Companies are free to set up their structures in the way that best suits their needs. Once defined, however, it can be difficult to change depending on the company’s flexibility.
Flat structures are often common in small businesses because these organizations have few managers outside of the owner. This simple structure allows for less bureaucracy and greater owner involvement. This style also tends to help increase the company’s awareness of the market and prevent overrunning operations with many employees. As the market changes, owners can adjust the business to take advantage of the changes. Simple organizational structures change as the company grows and increases in size.
Line discipline organizational structures create separation in a business by similar activities into closely related tasks. For example, the accounting department might have financial, cost, and tax accounting divisions below the larger group. The general accounting division can have a single director, such as a manager or controller. This individual is directly responsible for the owner in simple organizational structures. In some cases, the owner may be the director of all sub-business activities.
Simple line commodity organizational structures have different lines for entire business activities. In manufacturing companies, the divisions are according to the products produced by the company. For example, there are different lines for widgets, gears and screws produced by a single manufacturer. Below the director or manager position 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 smaller companies. The division here may not even need directors outside of the owner, as a department manager may suffice. The breakdown in these companies simply includes separate divisions such as accounting, human resources and production, among others needed to run the business. Owners can change or change the company quite easily as no individual prevents divisions from moving or merging with others. Essentially, the owners have a lot more control in this extremely flat organization.
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