Organizational Structure Guidelines
The organizational structure of a small business must include how employees receive their assignments or functions. Employees assigned to the tasks they perform best will meet the needs of your customers. Before choosing a structure for personnel, think about how customers receive assistance, such as when they experience problems with products or services. Your structure may have to change regularly to fit shifts in the business environment.
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Line Model
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A line model involves drawing an organizational chart. At the bottom of the chart, you show the line workers, or the people who interact directly with customers. They report up the chain of command, ending with the highest executive. If you manage all operations, you are the top executive on the chart. You must establish levels of authority so that people in higher positions on the chart have more responsibilities and the right amount of authority to carry them out.
Line and Staff Model
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Add to the line organization model by giving each department (including a line manager and line workers) one or more specialists. These people will assist in the appropriate business function without having direct authority over line workers or line managers. Specialists have special expertise, technical or otherwise, that will help these business functions meet customer needs. Don't confuse staff specialists with line managers or technical line workers, because specialists support a business function instead of running it.
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Simple Model
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You can also set up your small business with no tiers of authority. Concentrate the decision-making in your corner as the business owner, and have employees specializing in different tasks report directly to you. According to R. Duane Ireland, Robert E. Hoskisson and Michael A. Hitt, authors of "Understanding Business Strategy - Concepts and Cases," the advantages of this simple structure are that it "calls for few rules, a dependence on informal relationships, and limited task specialization."
Work Teams
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One way to organize employees in a small business without committing to a rigid, long-term structure involves work teams. Build teams around specific projects or business functions (such as payroll and customer service). These groups might increase or decrease in number according to changes in your sales volume and other business conditions. You might find it easier to hire people to fill holes in teams if they come armed with a range of skills. Some businesses require technical skills and knowledge to meet specific customer needs, such as someone who can operate a particular machine.
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References
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