How to create an organisational structure for your small business

Hierarchical organisational structure

A hierarchical structure has a clear chain of command from the top to the bottom. Biggest decisions will be made by the people at the top – CEOs, CFOs, etc. – and then department managers will make decisions at a team level.

This type of structure is common for larger businesses as it’s clear how decisions are made and who’s responsible for what in the organisation.

Flat organisation

Also known as horizontal, this compact structure is often used by small businesses. It has fewer levels of middle management, with more emphasis on line managers and the staff directly below them to make decisions.

A flat structure increases opportunity for collaboration, while junior members of staff are likely to have more responsibility.

Matrix organisation

This structure is more complex. It works for businesses that have different divisions, meaning a member of staff may report to two or more managers. For example, a graphic designer working for an agency may report to a project manager, as well as a senior stakeholder, such as a design lead.

This flexible structure is effective when team members with different skills need to work on the same project. Its downsides include confusion over hierarchy and increased potential for conflict between managers.

Divisional organisation

This is a type of hierarchical structure but with individual divisions operating independently. This structure is most commonly used by larger companies – for example factories and manufacturers – or those that work across different regions.

The hierarchy is split into departments, such as HR, finance, legal, operations, marketing, and product development. As a result, there’s less opportunity for collaboration as each department works independently. However, the responsibilities of each team are clear, which helps to increase accountability.

How to create an organisational chart

First off, you’ll need to think about which structure is closest to how your business operates and use this as a starting point.

The next stage requires you to create a list of all your employees, their roles, and who they report to.

After this, you can organise the employees and different teams into a hierarchy. It should look similar to a family tree, with arrows pointing to different team members and departments. However, the shape of the chart will depend on the type of organisational structure you’re working to.

Once you have a basic outline of your org chart, you can think about how you want to present it and the information about each employee you want to include.

Remember, the chart needs to be clear and easy to understand. Making it visually appealing, using graphics or photos of your staff, can help bring it to life.

Before creating a team organisation chart for your business, it’s important that you have a very clear idea of how your company is structured, the chains of command, and the responsibilities of each department.

Organisation chart templates

As mentioned already, an organisational chart is an effective tool for showing the structure of your company clearly.

If you’re not sure how to create your own, there are plenty of organisation chart templates that you can edit to fit your own business.

Here are some templates that can help you to create your own org chart:

Remember to use these templates as a guide and customise them with your own hierarchy and departmental structure.

Useful resources for developing your small business

What are your tips for creating business organisation charts? Let us know in the comments below.