As with a line and staff structure, conflicts and confusion can arise when reporting to more than one boss. The functional manager oversees the employees and activities to ensure they’re in line with company standards and policies, while the project manager or team leader ensures the project is completed as planned. The functional team member reports to the project manager and the functional manager of that area. In this case, team leaders are assigned a representative from each functional area that applies to the project. It’s ideal for businesses that are project-based, where teams must also follow a functional structure. A matrix organization is characterized by more than one chain of command, with project team members reporting to two or more managers. The matrix organizational structure combines several types of organizational structures to create a customized solution to meet specific needs. Project charts can help track teams for each initiative. When the project is complete, managers and team members are assigned to other projects.įor a small business, projects may internal, for example marketing campaigns or charity events. The project manager chooses a team of people to work on the project based on their skills and expertise. Managers must be able to handle a variety of functions across multiple departments.Īt the top, you have a director who appoints the project manager for each project. While it’s helpful to be able to mix and match personnel based on project needs, it does mean teams have to adapt to new managers and colleagues for each assignment. The chart changes as needed for each project. If your business operates with projects that are different from one client to the next, and from one brief to the next, this structure is the ideal choice. Conflicting expectations can be confusing for bottom-tier workers and result in lower productivity. Staff and line positions have different objectives and are often at odds. The staff in this situation refers to experts advisors providing technical information, opinions, and advice, who may be allowed to authorize certain activities and assist with reports that bear weight in decision-making. This organizational structure is best for companies working in specialist fields. This type of chart establishes a hierarchy in each department while allowing for cross-communication. In a small business, you’re likely to have separate teams with a great deal of interaction the sales department may have daily interaction with administration and with shipping. It enables directors and managers to collaborate with one another over teams they don’t directly control, for better information flow and flexibility. Similar to the line organizational structure, the functional organization structure offers more lines of communication. Information flows through each layer of the organization in turn, and the structure doesn’t allow for collaboration between teams or “open door” access to upper management.įor small businesses with few employees, this type of chart is the least complicated, with the owner at the top, shift or department managers in the middle, and other employees under them.

This traditional hierarchy is simple and rigid. The top of the chart features the executives, then directors (for larger businesses) followed by the department heads, and the employees each department head or manager is responsible for. Line organizational structureĪlso known as a hierarchical organizational chart or a top-down organizational chart, this is the most common structure due to its simplicity. Understanding the types of org charts available allows you to choose the one that makes the most sense for your business. Allows for at-a-glance engagement with the right contacts.Clearly defines management structure, which is helpful in a complex business.You know who everyone is in the business, what they’re supposed to be doing, and the appropriate chain of command, so why would you spend time creating a chart that details all that information? There are several reasons such a chart can be a powerful tool for your company. Does my small business need an organization chart? There are multiple types to choose from and many reasons why you should create one for your business!īefore getting started, it’s critical to establish goals for your organization chart (also known as an org chart) to help you decide which type to use and what information to include. It outlines employee roles and demonstrates who employees report to within the company. A small business organizational chart is a visual representation of your business structure.

Create online organizational chart