Simple organizational structures are typically good for companies that have 100 or fewer employees. The structure tends to be flat, having few management levels between the owner or executives and the frontline employees. The different types of simple organizational structures can include line discipline, line production, or division-style breakdowns. Companies are free to set up their structures in whichever manner best suits their needs. Once set, however, it can be difficult to change depending on the company’s flexibility.
Flat structures are often common in small companies because these organizations have few managers outside of the owner. This simple structure allows for reduced bureaucracy and more involvement for the owner. This style also tends to help increase the company’s awareness of the market and prevent bogging down operations with too many employees. As the market shifts, owners are able to adjust the company in a manner 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 in closely related tasks. For example, the accounting department may have financial, cost, and tax accounting divisions beneath the larger group. The overall accounting division may have a single director, such as an accounting manager or controller. This individual is directly responsible to the owner in simple organizational structures. In some cases, the owner may be the director over all the subbusiness activities.
Line commodity simple organizational structures have different lines for entire business activities. In manufacturing firms, the divisions are according to the products produced by the company. For example, different lines exist for widgets, cogs, and screws produced by a single manufacturer. Beneath the director or manager position resides all other employees. The lack of divisions beneath production helps keep the structure simple and allows for better owner-division interaction.
Division-style simple organizational structures are often the most common organizational structure for smaller businesses. The division here may not even need directors outside of the owner as a manager over the department can be sufficient. The breakdown in these companies simply includes separate divisions, such as accounting, human resources, and production among others necessary to run the business. Owners can change or alter the company fairly easily as no individuals stand in the way of moving divisions or merging them with another. Essentially, owners have much more control in this extremely flat organization.