WHAT IS THE ORGANIZATION CHART OF A SMALL COMPANY LIKE? - CULTURE VOCABULARY - 2025

The organization chart of a small business can be structured in different ways. In fact, it is common for the organization chart of a company to undergo modifications as it grows and transforms.

When production increases, when product or service lines are included or eliminated, or when there is a major change in the company, it is likely that the organization chart will have to change to adapt to the new circumstances.

In essence, the function of an organizational structure is to create a hierarchy between the different functions of a company.

This with the aim of increasing the efficiency and effectiveness of business operations.

To determine the organization of a small company, there are different types of organizational structure that can be used: linear, functional, by projects, by matrices and by holocracy.

Types of organization charts for small businesses

Linear organization chart

The linear organizational structure consists of a hierarchy based on the functions performed by workers within the company. Therefore, this type of organization chart allows employees to be grouped according to their functions and hierarchy.

In these cases, there is an executive director at the top of the organization chart, followed by deputy directors or heads of area.

The latter are responsible for ensuring that each group of employees performs its functions and that the orders that come from the executive management are carried out.

For example, a company may have a research area, a production area, and a marketing area.

Each of these areas has an independent operation and only the management has the knowledge about the general operation and how the different areas complement each other.

This type of structure is very rigid and there is limited exchange of information and collaboration between the different areas.

In this type of company, employees have very specific tasks and no participation in the decisions of the organization.

For this reason it has less and less use. Especially among small companies looking for more organic structures, where the potential of all employees can be fully utilized.

Functional organization chart

The functional organizational structure is based on a hierarchy just like the linear structure. However, in this case, communication between the different areas is open and the same employee may have to respond to different managers.

This model is useful when you want decisions not to be made exclusively by the CEO. But in addition, they are a strategy to avoid the excessive specialization of workers and their disconnection with the general operation of the company.

However, it can have some downsides. On the one hand, there can be confusion around which leaders a worker should follow within the process and it can also cause disorder in the assignment of tasks and the communication of results.

That is why it is necessary to take into account that it requires a great effort in internal communication so that it can function efficiently.

However, this type of organization chart has become increasingly popular among small companies due to its advantages for knowledge management.

Organization chart by projects

The project structure is one where the roles of employees are organized by groups responsible for specific products or projects.

Therefore, each worker has to interact with a project manager and with a team that varies depending on the project to be developed.

In this case, the company will have as many directors as there are projects and each one of them will be able to function independently to meet its objectives.

This organizational structure is ideal when it is required to work based on specific activities that require a certain time limit.

In addition, it allows to maximize the potential of employees according to the needs that arise for the company.

Matrix organization chart

Matrix-type organizational structures are those that combine the characteristics of functional and project structures. In these cases, the workers are organized by projects but within a hierarchical system.

For example, each project may have its own budget coordinator, who in turn will report to the company's budget manager.

In this way, independence and flexibility are achieved, while maintaining an authority and a common north.

This type of structure offers great advantages for small companies because it allows greater decentralization. On the other hand, it is very useful when it comes to companies that have operations in different countries or geographical regions.

Holocracy

The “holocratic” structure is a new working model that has been developing in recent years. It is a “bossless” organizational structure that some companies have begun to implement.

The objective of this organizational model is to allow decisions to be made in a distributed way among the members of the company.

In addition, it is aimed at giving everyone the opportunity to work in the job they do best.

In the holocracy, information is openly accessible and different decisions are made collectively.

While this structure is ideal for small businesses because it allows for equal participation to all employees, it is also critical in the business environment.

The main one of these criticisms is the radical nature of the proposal within an environment that works in a similar way to traditional structures.

This implies an extra effort to constantly reinvent and evaluate the structure, neglecting the central purpose of the company.

Transformations in the organization chart

For all organizations, large or small, flexibility is essential. In general terms, the organization chart of a company should not be conceived as a static product that remains the same through the years, but as a changing process.

However, in the case of small companies this is even more important. When a company has fewer employees and fewer production lines, its structure can be even more flexible.

This well-used feature can be extremely important to the survival of the business.

This is because it will facilitate your ability to adapt to new situations and even to recover from your own mistakes.

References

1. Lorette, K. (SF). Typical Organizational Structure of a Small Business. Recovered from: smallbusiness.chron.com.
2. Morgan, J. (2015). The 5 Types Of Organizational Structures: Part 5, Holacratic Organizations. Recovered from: forbes.com.
3. O'Donell, E. (2014). Who's In Charge Here? Creating an Organizational Structure for Your Small Business. Recovered from: smallbusinessonlinecommunity.bankofamerica.com.
4. Stevens, G. (2017). Following In Zappos Footsteps: Is it Time to Shift to the Holacratic Workplace? Recovered from: business.com.
5. Veyrat, P. (2017). Organizational Structures: But which to use? Recovered from: heflo.com.