How to Write a Business Plan: Organization Structure

How to write a business plan: organizational structure, what is the organizational structure for a business plan.

The organization structure section should discuss whether your business will be a sole proprietor, limited liability corporation, or corporation, who will run your business, each person’s responsibility, and how your business will expand if needed.  There are numerous benefits to a detailed assessment of the company’s structure.  First, examining the structure of the business will help for tax purposes.  For example, limited liability and corporations are considered excellent for protecting shareholders concerning liabilities.  However, tax-wise, these firms often are double taxed.  The second benefit of a detailed assessment of a company’s structure is to understand how each owner will contribute to the company.  In other words, if there is more than one owner, what are their responsibilities, and how are these responsibilities to be carried out.

Why is the Organizational Structure important? 

There are numerous reasons why the organizational structure is essential for a business plan. In this section, the business owner will lay out how the company will be structured.  For example, this section will include job titles and responsibilities, resumes from owners and management, showing expertise in the industry, and supporting accolades for expertise.  Through discussing job responsibilities and experiences for management, readers will better understand why this type of business structure, and this management team, will be successful in the proposed business.

A second important reason for the organizational structure is that the section introduces business owners.  The owners and management team should not only be introduced in this section, but their experiences in the industry need to be highlighted and thoroughly explained.  In doing this, a sound foundation for management competence will be established.

A final reason for its importance is the job responsibility segment.  Ownership and management need to have a written document showing specific duties for each owner, if applicable, and specific job responsibilities for each position within the company.  By having this document, readers will see how the business will function and better understand the breakup of management responsibilities.

When to write the Organizational Structure?

The organizational structure should be written after the company description.   In the company description, readers will be introduced to the problem that the company is going to solve and how they propose to solve this problem.  This is usually the product or service offered.  The logical next step is to show a business structure that will allow the company to supply that product or service effectively and efficiently.  Thus the need for the organizational section follows immediately behind the company description.

How to write the Organizational Structure?

When I write my organizational structure for a business plan, for the most part, I start the first paragraph by reminding the readers of the company name.  From this, I then introduce how the company will be held in ownership.  For example, will the company be a limited liability corporation?  Sole proprietorship?  Next, I briefly introduce the management team and owners.  Further, I also briefly introduce their experience in the industry.

By following this structure, the first paragraph is an excellent summation of the section. This allows the reader to understand the breadth of the ownership structure without gaining significant details.

Organizational Structure:  Ownership

In the ownership section, I usually start writing the section by introducing the CEO/founder/majority owner.  In this portion, I usually write the segment, almost like a brief biography.  I will discuss the CEO's history in the industry and the reason why they feel that they are best suited to start and run the operation.

Once this is complete, I then follow the same structure with the other management team members and minority stakeholders.  When this is done, the reader should walk away with an excellent understanding of the qualifications of the ownership team and how their skills will complement each other.

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Organizational Structure:  Responsibilities

In the job responsibility section, I usually structure this portion as a bullet-pointed list.  At the top, I put the title such as CEO, project manager, or job title.  Following this, I list the responsibilities and expectations for each position.  Not only does this help show structure and foresight for the company.  But also, this will help management divvy up duties for the business.

Organizational Structure: Resume

The resume section is for senior managers and owners.  By including resumes, supporting documentation is available for claims made related to experience.  For example, if the CEO claims to have 20 years of experience in the industry, then the resume will show where this experience came from.  This adds credibility to previous claims made.

Organizational Structure: Compensation

Compensation is sometimes necessary to include in the organizational structure component.  Investors expect management to be compensated and employees as well.  However, excessive compensation is often an issue with startups and established businesses.  By showing reasonable compensation for each position, not only will a solid understanding of the pay for each position be shown, but restraint for compensation by the management team and ownership may be highlighted as well.

Organizational Structure: Achievements

This final section is almost like a cherry on top of the cake.  By this point, the reader should be well-versed in the experience and expertise of ownership and the management team.  Adding achievements highlights their expertise in their chosen industry.

Organizational Structure Example

Organizational structure.

Legal Structure

ABC Restaurant will be a limited liability corporation.

Management Summary

John Smith, Sr., MBA., is the founder and CEO of ABC Restaurant.  He has started and managed numerous successful small restaurants over the last ten years.  Restaurants started, and managed, including a breakfast cafe, food truck, and 24-hour diner.  For each business, he was responsible for all aspects of the organization, from marketing to strategic planning.

Job Responsibilities

  • Create and execute marketing strategies for business growth.
  • Align business strategies with the vision statement.
  • Negotiating contracts with vendors.
  • Ensure legal compliance for the business.
  • Continually examine the firm’s external environment for new market opportunities.

General Manager:

  • Control inventory to ensure optimal levels are attained.
  • Manage day-to-day operations of the restaurant.
  • Servers and cooks during high volume times.
  • Interview and hire new employees.
  • Assist in the onboarding process for new employees.
  • Set up all workstations in the kitchen
  • Prepare ingredients to use in cooked and non-cooked foods.
  • Check food while cooking for appropriate temperatures.
  • Ensure great presentation by dressing dishes as trained.
  • Keep a sanitized and clean environment in the kitchen area.
  • Stock dining area tables with needed items.
  • Greet customers when they enter.
  • Present dinner menus and help customers with food/beverages selections.
  • Take and serve orders quickly and accurately.

Author: Paul Borosky, MBA., Doctoral Candidate, Published Author

Updated: 3/4/2022

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What Is an Organizational Structure?

Understanding an organizational structure, centralized vs. decentralized organizational structures, types of organizational structures, benefits of organizational structures, the bottom line, organizational structure for companies with examples and benefits.

what is organizational structure in business plan

Ariel Courage is an experienced editor, researcher, and former fact-checker. She has performed editing and fact-checking work for several leading finance publications, including The Motley Fool and Passport to Wall Street.

what is organizational structure in business plan

Investopedia / Julie Bang

An organizational structure is a system that outlines how certain activities are directed in order to achieve the goals of an organization. These activities can include rules, roles, and responsibilities.

The organizational structure also determines how information flows between levels within the company. For example, in a centralized structure, decisions flow from the top down, while in a decentralized structure, decision-making power is distributed among various levels of the organization. Having an organizational structure in place allows companies to remain efficient and focused.

Key Takeaways

  • An organizational structure outlines how certain activities are directed to achieve the goals of an organization.
  • Successful organizational structures define each employee's job and how it fits within the overall system.
  • A centralized structure has a defined chain of command, while decentralized structures give almost every employee receiving a high level of personal agency.
  • Types of organizational structures include functional, divisional, flatarchy, and matrix structures.
  • Senior leaders should consider a variety of factors before deciding which type of organization is best for their business, including the business goals, industry, and culture of the company.

Businesses of all shapes and sizes use organizational structures heavily. They define a specific hierarchy within an organization. A successful organizational structure defines each employee's job and how it fits within the overall system. Put simply, the organizational structure lays out who does what so the company can meet its objectives.

This structuring provides a company with a visual representation of how it is shaped and how it can best move forward in achieving its goals. Organizational structures are normally illustrated in some sort of chart or diagram like a pyramid, where the most powerful members of the organization sit at the top, while those with the least amount of power are at the bottom.

Not having a formal structure in place may prove difficult for certain organizations. For instance, employees may have difficulty knowing to whom they should report. That can lead to uncertainty as to who is responsible for what in the organization.

Having a structure in place can help with efficiency and provide clarity for everyone at every level. That also means each and every department can be more productive, as they are likely to be more focused on energy and time.

An organizational structure is either centralized or decentralized. Traditionally, organizations have been structured with centralized leadership and a defined chain of command. The military is an organization famous for its highly centralized structure, with a long and specific hierarchy of superiors and subordinates. In a centralized organizational system, there are very clear responsibilities for each role, with subordinate roles defaulting to the guidance of their superiors.

There has been a rise in decentralized organizations, as is the case with many technology startups . This allows companies to remain fast, agile, and adaptable, with almost every employee receiving a high level of personal agency. For example, Johnson & Johnson is a company that's known for its decentralized structure.

As a large company with over 200 business units and brands that function in sometimes very different industries, each operates autonomously. Even in decentralized companies, there are still usually built-in hierarchies (such as the chief operating officer operating at a higher level than an entry-level associate). However, teams are empowered to make their own decisions and come to the best conclusion without necessarily getting "approval" from up top.

Functional Structure

Four types of common organizational structures are implemented in the real world. The first and most common is a functional structure. This is also referred to as a bureaucratic organizational structure and breaks up a company based on the specialization of its workforce. Most small-to-medium-sized businesses implement a functional structure. Dividing the firm into departments consisting of marketing, sales, and operations is the act of using a bureaucratic organizational structure.

Divisional or Multidivisional Structure

The second type is common among large companies with many business units. Called the divisional or multidivisional (M-Form) structure, a company that uses this method structures its leadership team based on the products, projects, or subsidiaries they operate. A good example of this structure is Johnson & Johnson. With thousands of products and lines of business, the company structures itself so each business unit operates as its own company with its own president.

Divisions may also be designated geographically in addition to specialization. For instance, a global corporation may have a North American Division and a European Division.

Similar to divisional or functional structures, team-based organizations segregate into close-knit teams of employees that serve particular goals and functions, but where each team is a unit that contains both leaders and workers.

Flat (Flatarchy) Structure

Flatarchy, also known as a horizontal structure, is relatively newer, and is used among many startups. As the name alludes, it flattens the hierarchy and chain of command and gives its employees a lot of autonomy. Companies that use this type of structure have a high speed of implementation.

Matrix Structure

Firms can also have a matrix structure. It is also the most confusing and the least used. This structure matrixes employees across different superiors, divisions, or departments. An employee working for a matrixed company, for example, may have duties in both sales and customer service .

Circular Structure

Circular structures are hierarchical, but they are said to be circular as it places higher-level employees and managers at the center of the organization with concentric rings expanding outward, which contain lower-level employees and staff. This way of organizing is intended to encourage open communication and collaboration among the different ranks.

Network Structure

The network structure organizes contractors and third-party vendors to carry out certain key functions. It features a relatively small headquarters with geographically-dispersed satellite offices, along with key functions outsourced to other firms and consultants.

Putting an organizational structure in place can be very beneficial to a company. The structure not only defines a company's hierarchy but also allows the firm to lay out the pay structure for its employees. By putting the organizational structure in place, the firm can decide salary grades and ranges for each position.

The structure also makes operations more efficient and much more effective. By separating employees and functions into different departments, the company can perform different operations at once seamlessly.

In addition, a very clear organizational structure informs employees on how best to get their jobs done. For example, in a hierarchical organization, employees will have to work harder at buying favor or courting those with decision-making power. In a decentralized organization, employees must take on more initiative and bring creative problem solving to the table. This can also help set expectations for how employees can track their own growth within a company and emphasize a certain set of skills—as well as for potential employees to gauge if such a company would be a good fit with their own interests and work styles.

What Are Some Types of Organizational Structures?

The four types of organizational structures are functional, multi-divisional, flat, and matrix structures. Others include circular, team-based, and network structures.

What Are the Key Elements of an Organizational Structure?

Key elements of an organizational structure include how certain activities are directed in order to achieve the goals of an organization, such as rules, roles, responsibilities, and how information flows between levels within the company.

What Is an Organizational Structure Example?

An example of an organizational structure is a decentralized structure, which gives individuals and teams high degrees of autonomy without needing a core team to regularly approve business decisions. A good example of this decentralized structure is Johnson & Johnson. With thousands of products and lines of business, the company structures itself so each business unit operates as its own company with its own president.

What Is an Organizational Structure Chart?

Organizational structures are normally illustrated in some sort of chart or diagram like a pyramid, where the most powerful members of the organization sit at the top, while those with the least amount of power are at the bottom.

What Is the Best Organizational Structure?

There is no one best organizational structure, as it depends on the nature of the company and the industry it operates in.

There are entire fields of study based on how to optimize and best structure organizations to be the most effective and productive. Senior leaders should consider a variety of factors before deciding which type of organization is best for their business , including the business goals, industry, and culture of the company.

American Journal of Industrial and Business Management. " Organizational Structure: Influencing Factors and Impact on a Firm ."

McKinsey. " A New IT Operating Model to Better Serve Employees. "

what is organizational structure in business plan

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What is organizational structure and why is it important?

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Many company organizational structures are pretty linear — or, more accurately, pretty triangular. The traditional “org chart” images of a pyramid depict companies with a few powerful individuals at the top of the company. Under that is a slightly wider level that reports to them. Each subsequent level gets wider and wider, with a large base of entry-level employees at the “bottom.”

However, just because many organizations are structured in this way doesn’t mean that yours should be. Depending on the size of your team and how your workflows are structured, you may benefit from any number of alternative organizational structures. It can also give you some insight into areas of fraction and possible opportunities for development. If your teams are not delivering the outcomes you need, the organizational structure is one possible culprit. Outcomes are the way to assess whether your systems and structures are working as intended. 

Choosing the right structure for your team requires you to think about how your team currently works and where you’re going. Before you draw up that org chart or start proposing new headcount, read on. We’ll dig into the various types of organizational structures, what they are, and ways to implement them.

What is an organizational structure?

An organizational structure is the way that a company, organization, or team is set up. It can be hierarchical, with different levels of management. Or it can be divisional, with different product lines and divisions. Sometimes, there’s little to no hierarchy at all. Every company and team has an organizational structure, even if it’s not formally defined.

An organizational structure defines how job titles, roles, and responsibilities are assigned within a company. It helps determine who reports to whom, and who makes decisions about what.

Startups often have a matrix organizational structure, with different departments working together on projects. Large organizations usually have a hierarchical structure with a clear chain of command. 

Most people only think of organizational structure as it relates to entire companies. But the same structural concepts also apply to how teams get organized within a function, department, or business unit. Organizational structures and restructuring are largely about decision-making authority, information flows, priorities, and allocating resources. 

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Each organization is unique (and has unique needs). Even so, each organizational structure will have a few key components in common.

Key elements of an organizational structure

No matter the organization’s size, certain aspects of workplace decision-making and processes need to be clear. Many small businesses handle these designations informally. As a company grows, though, it’s helpful to revisit and clarify these hierarchies (or lack thereof). At the minimum, each organization needs to designate:

Work specialization

Work specializations are less formally known as roles or job descriptions. They outline what a person is responsible for within an organization or on a smaller team. Clear work specializations allow you to make the best use of talent. They make it clear what an individual person’s responsibilities and measures of success are, and help safeguard against a thinning of resources..

Chain of command

If your organization, like many, relies on a mix of people managers and individual contributors , you need to establish a chain of command. This gives people clear direction on who they should reach out to for support. When people from other departments need to check on the status of cross-functional projects, it makes it easy to find out who’s driving them.

Departmentalization and compartmentalization

Compartmentalizing people into departments creates teams of people whose jobs are organized around a specific type of work. A department could be human resources, sales, marketing, or IT. People in these departments often share common skill sets and work together frequently on projects. Each department is typically led by an executive.

Span of control

The number of team members that report to a given manager is formally referred to as “span of control.” If a manager has a large number of direct reports , the team is often subdivided into smaller departments. This happens often at large companies, where multiple people may fill a similar job function.

Centralization and decentralization

Better thought of as “ top-down vs. bottom-up management ,” the terms centralization and decentralization refer to how much influence upper-level leaders have over an organization. Of course, all leaders have power over their organizations. But decentralized management structures tend to have more agile decision making happening at all levels. Employees are empowered to perform their roles and make decisions as they see fit.

Formalization

Formalization determines how much standardizing there is across the organization. It may affect functions, systems, job descriptions, and the flow of information. Organizations with high formalization are often more mature and highly systematized. Done well, this kind of structure should boost innovation, not stifle it.

three-employees-looking-at-laptop-organizational-structure

The importance of organizational structures

Organizational structures are important because they help businesses implement efficient decision-making processes. By assigning specialized roles to lower-level employees, businesses can make better decisions faster. 

Additionally, organizational structures provide a clear org chart that helps businesses keep track of their human resources. When your company is small, it’s hard to imagine that you’d ever lose track of what everyone is doing. After all, in startups and small businesses, it often feels like everyone is doing everything .

As you grow, these silos become more distinct from each other. At that point, an organizational structure helps you identify gaps in skills and support within your business. People’s roles become more specialized and individual teams grow bigger. Revisiting the allocation of work prevents the duplication of effort and reflects business priorities.

Keep in mind, however, that behind these flowcharts are real people. The leaders and employees represented in an organizational chart each work best under different circumstances and with different leadership styles. If you don’t keep them included in the what and why of your organizational shifts, they’re more likely to resist changes when they occur.

Since change is inevitable, it’s a good idea to communicate early and often as things shift. Strive for as much transparency in the workplace as possible. And if you do make changes in your organization, make time to check in with the people being affected. You can try to minimize the impact to them and help create a transition plan if need be.

employees-working-on-computer-organizational-structure

Types of organizational structures

There are several different types of organizational structures, each with its own advantages and disadvantages. The most common are functional , divisional , matrix , project team , flat , and network .

Functional organizational structures are best for small businesses because they allow for clear decision-making hierarchies. Each team operates as an individual “silo.” Once teams grow, they benefit from making these functional structures less rigid. Teams often move faster and collaborate better with more overlap.

Divisional structures are best for large businesses because they allow for more specialization. For example, a global company might divide their business into regions (such as EMEA/APAC), or broad service categories (like B2B/D2C).

In the matrix structure , employees work in both functional and project teams which may be structured differently. Employees then typically report to two bosses: one who oversees their day-to-day work, as well as another boss that oversees larger projects or tasks.

A project team approach would include any number of functions working together on a specific project without a permanent hierarchy. Employees report up through their individual bosses. But they also contribute to team efforts led by managers from other departments on the team as needed.

Flat organizations have as little hierarchical structure as possible. Middle managers are largely absent from staff. Instead, the workforce often reports directly to managers or leaders at the “highest” level. Highly-autonomous employees often thrive in these environments. The lack of hierarchy motivates people to make decisions, take ownership, and facilitates problem-solving.

In a network structure , individual freelancers, groups, or associations work together. They each work as separate functional teams, but may share an overarching entity. Professional associations often have this type of structure.

Choosing the best organizational structure for your company

When it comes to organizational structures, there is no one-size-fits-all solution. The best way to choose an organizational structure for your company is to first assess your business needs and goals. From there, you can match those needs with one of the common organizational structures. 

Although there isn’t a “right” answer, some organization structures are a better fit for your team than others. And while we normally advocate for trying several solutions until you find what works, that doesn’t work as well with organizational development . 

Company reorganizations (especially repeated ones) tend to destroy employee morale . Even when handled well, reorgs create uncertainty and stress on employees. Since they’re often a precursor to layoffs, people tend to fear losing their jobs — even when the changes are generally positive. And if there’s a pattern of other major changes rapidly coming down the line? That’s a recipe for cynicism and workplace burnout .

When deciding on an organizational structure, it’s important to keep these four factors in mind:

The structure you choose will depend on the type of company you run. For example, companies that rely on a number of front-line employees are structured a lot differently than nonprofit organizations. Each will have a different organizational chart based on what they do and where they need to prioritize their efforts. 

To build an effective organization , you need to know which team members are there to facilitate the work of the people in the field and which employees support the leaders. For example, C-suite executives often have a team dedicated to supporting their efforts. But the customer service team exists to support the end user. Some roles, like marketing or product development, sit squarely in the middle. Your allocation of resources needs to reflect a balance between these two sets of needs.

employees-working-in-a-group-organizational-structure

Company size is critical to consider when determining a formal organizational structure. Smaller companies often have a high deree of overlap in roles. They have less formalized structures. This lack of standardization can present some challenges, but it frees teams to grow rapidly. 

On the other hand, larger organizations tend to grow faster with a more centralized, formal structure. Why? It makes it easier for people to know where to find information, who to talk to in order to get things done, and avoid duplicating efforts needlessly. The challenges and unique strengths of each differently sized organization help inform the best type of arrangement.

3. Stage 

In order to create standardized systems, there (usually) needs to be something to systematize. It’s pretty hard — or deceptively easy — to develop systems for a business that has no clients, no services, and no employees.

In the early stages, not only do small companies benefit from a less formalized structure — they don’t need one. Once workflows emerge, patterns arise, and problems occur, they can reflect those learnings as a formal process. The need for reporting relationships and divisional structure arises as the need for systems does.

4. Systems 

Organizations at every stage — even with just one person — tend to organize their work by function. There’s accounting, marketing, and service right from day one. When this work is handled by a single person, there’s no need to articulate systems. More people means more need to define how, when, and why teamwork happens. 

Both the existing and desired systems play a role in organization structure. If you need or want faster collaboration and communication across teams, you’ll want to design a “flatter” structure. If leaders need to be removed from day-to-day activities, it will help to have a structure that delegates authority and accountability to others .

Building a healthy organization means more than just functioning well — although that is important. It means creating plans to support your employees and the workplace in their growth. Giving some thought to the types of authority that currently exist can help you choose the right organizational structure. But knowing where you want to go and the outcomes you want to achieve in the future will help you get there.

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What Is An Organizational Structure? [+Tips And Examples]

By Joan Ang , Jul 05, 2023

what is an organizational structure

Every company, whether large or small, needs an organizational structure that defines how it operates.

And if you know a thing or two about company structures, I’m sure you’ve heard about functional, divisional, matrix, and flat organizational design (and if you haven’t, I’ll teach you very soon!).

Each org structure type has its pros and cons, so it’s important to choose the right one for success.

In this post, I’ll walk you through the different types of organizational structures, help you figure out the best one for your business, and show you how to build an organizational structure.

If you’re worried about your design skills, don’t stress. With our Organizational Chart Maker , you can create org structures without hassle.

Another option is to customize our organizational chart templates for beautiful structures in minutes.

Click to jump ahead:

  • What is an organizational structure?

6 key elements of organizational structure

7 types of organizational structures, which organizational structure is best for what type of business.

  • 5 tips for implementing an organizational structure

How to create an organizational structure with Venngage

Which organizational structure is right for you, what is organizational structure.

An organizational structure is a system of rules and relationships that govern how an organization is run.

An organizational structure defines how a company operates.

Since different divisions in a company have specific roles, an organizational structure helps determine how decision-making is distributed, how work gets done, and how information flows. 

Here’s an example of an organizational chart:

Bold Flow Chart Template

Moreover, studying organizational behavior is also critical.

At its basic level, an organizational structure examines the impact of social and environmental factors on how individuals or groups work. 

A well-designed and successful organizational structure outlines how people interact, communicate, and collaborate.

They help companies run smoothly and efficiently, as you can see from this internal structure chart.

Organizational Chart PowerPoint

There are many different types of organizational structures, which are guided by certain behavior, and each has its own advantages and disadvantages. 

But they all have the same goal: to help the company run like clockwork. What the best organizational structure is for your own company will depend on its unique needs and circumstances.

Why is an organizational structure important?

An organizational structure is important because they define how responsibilities are divided, and coordinated.

If an organizational chart  is not drawn correctly, the entire system will fail.

For example, the organizational structure of government agencies, business units, or private companies always has a well-defined chain of command and operating procedures.

Whether it’s the public or private sector, an administrative structure based on policies, rules, and hierarchy is necessary.

The organizational structure is also critical when it comes to growth.

Employees are more likely to perform better when a system is in place. The structure helps define who is responsible for what and who the employees can turn to for help. 

An org chart helps everyone understand their role in the business as can be seen in this example.

Modern Organizational Flow Chart Template

According to  Organizational Behaviour (Bobbins, Judge, & Campbell, 2012), the six key elements to an org structure are:

  • Work specialization
  • Departmentalization
  • Chain of command
  • Span of control
  • Centralization
  • Formalization
  • Work specialization or division of labor

Work specialization refers to how operations are divided into separate roles.

Work specialization not only increases efficiency and production, but it also increases boredom, weariness, and stress. This can lead to low output, poor quality, increased absenteeism, and high turnover.

Hence, this tendency towards specialization has shifted as people realize broadening the scope of tasks can increase productivity.

Departmentalization refers to the process by which jobs are grouped together.

This can be done by function, product, geography, process, or customer.

Functional departmentalization divides tasks into categories based on their functions, such as engineering, accounting, or human resources. There are  project management software for accountants  that you can invest in which can help streamline communication between these different departments.

The chain of command is the line of authority that runs from the top to the bottom, defining who reports to whom.

The right of a boss to issue orders and expect them to be followed is referred to as authority.

Company Structure Chart Template

The span of control refers to the number of employees that can be managed by one manager.

A narrow span of control fosters a more intimate and hands-on work environment as a manager only controls a small number of employees.

But a wide span of control puts numerous employees under one manager, assuming that daily tasks and processes are clearly defined.

The optimal control span will vary depending on the situation.

Centralization refers to decision-making concentrated in a single place in the organization.

Top management makes crucial decisions in a centralized structure with little or no involvement from lower-level employees.

A decentralized structure, on the other hand, allows lower-level employees to provide input or even make choices.

Formalization aids the creation of processes, relationships, and operational procedures which outlines procedures, rules, and duties for individual employees, units, groups, teams, and the company as a whole.

When it comes to the type of organizational structure, businesses are spoiled for choice.

Here’s an overview of 7 common org structures used by companies today:

  • Hierarchial

Functional org structure

In a functional organizational structure, employees are grouped together according to function or role.

Similarly, internal departments are organized around core competencies required to accomplish a strategic goal.

These org structures generally start at high-level positions and work down from there.

In this hospital org structure example, the organizational chart establishes a clear chain of command from top to bottom.

Hospital Organizational Chart

Divisional org structure

A divisional organizational structure splits a company into self-contained divisions based on products, services, or locations.

These divisions are semi-autonomous and have control over their resources and act as an independent company within a larger one.

In this org chart example, a corporation is organized into divisions based on client segments.

Company Management Organizational Chart Template

Matrix org structure

A matrix organizational structure is a hybrid of functional and divisional structures. In this structure, employees are grouped based on functional expertise and/or specific projects.

Managers in a matrix org structure have more than one reporting line, which includes both individuals to manage and lines of responsibility.

Depending on project demands and priorities, it might be possible to “switch” from one boss to another.

Business Organizational Chart

Flat org structure

A flat organizational structure, also known as a horizontal or decentralized structure, has few or no levels of management between employees and top leadership.

In a flat organization, traditional layers of authority and decision-making are minimized to empower employees.

A flat structure is often used in startups until they grow big enough to have different departments.

Free Org Chart Template

Team-based org structure

A team-based organizational structure, also known as a team structure, emphasizes the formation of well, self-managed teams.

In this type of structure, an organization is composed of multiple teams such as Scrum or Innovation teams that have their own set of responsibilities and goals.

what is organizational structure in business plan

Hierarchical org structure

A hierarchical organizational structure, also known as a traditional or pyramid structure, is a system in which authority flows in a linear fashion from top to bottom.

With this structure, employees are organized into various tiers, each with a different level of authority and responsibility.

At higher levels, there is more decision-making power, while the lower levels carry out specific tasks and report to superiors.

Organizational Chart Free Template

Network org structure

A network organizational structure, also known as a networked organization or network model, is a relatively new approach to organizing businesses.

In a network structure, the organization has a decentralized network of interconnected entities, both internal and external, that collaborate to achieve common goals.

network org structure

Want to learn even more about types of organizational structures? Check out this post! Types of Organizational Structure [+Visualization Tips]

For different types of enterprises, different structures can work.

A functional organizational structure, for example, may not be right for a company with a lot of products or services because it doesn’t illustrate how they’re related and arranged. 

In this scenario, a divisional structure could be more appropriate.

Tech Flow Chart Template

However, if a company only sells one product or service and employs a small number of people (say, less than 100), a flat structure is the better option since it allows employees to communicate easily with each other and with supervisors.

Corporate Healthcare Organizational Chart Template

When an organization demands change or when difficulties occur, organizational structures must be updated.

For instance, if a leader wishes to make structural changes to be more responsive to changing consumer needs, they can transition from a functional to a matrix structure. 

When leaders find that staff is spending too much time in meetings or dealing with internal issues rather than executing their tasks, they should consider switching from a divisional to a flat structure.

Depending on the demands of the business, an organizational structure can also be a mix of two or more types. 

It’s also critical for project managers or management teams to examine their culture to implement necessary changes.

These design changes begin with actions that best match culture rather than what makes sense from a purely economic perspective.

Organizations should select change management techniques that enable them to attain their desired cultures while also allowing them to successfully implement new designs.

5 tips for implementing a corporate organizational structure

  • Define the organizational structure and levels

The first step in creating organizational structures is to designate management and employee levels.

This includes creating management layers and reporting links, cross-functional processes, and workflows, and clear lines of authority and accountability that enable staff to spot and fix issues before they become a problem.

  • Develop a philosophy

When designing organizational structures, the company’s philosophy should be clearly articulated.

A philosophy defines the driving ideas for how your company will operate, so it should be expressed in plain language that everyone can understand.

Employees must understand the type of company they work for to know what actions are required of them at all times.

  • Choose options based on tradeoffs

The organizational structure you select should be based on what works best for your business, given its unique demands and objectives.

Everything must be taken into account when developing a structure to guarantee that all employees understand their positions in the company.

The needs, competitive business climate, culture, communication patterns and processes, worker capabilities, and firm size are all elements to consider.

  • Prepare managers for their new roles

Because managers are in charge of allocating resources within units, they must be heavily involved in the development of organizational structures.

They should always be aware of how employees interact with each other when performing activities, as well as the impact changes in an org structure, will have on their function.

  • Communicate changes clearly and often

Changes in the structure influence everyone in the organization, so it’s critical to convey them clearly and frequently.

Employees will be more successful in accomplishing duties if they have a better understanding of organizational structures.

This will not only enhance employee morale but will also create stronger teams that properly manage their time and perform tasks per their needs.

Corporate Organizational Chart Template

When creating an organizational structure, numerous critical components such as design, chart, job descriptions, and workflows must be taken into account.

Venngage takes care of many of these requirements with organizational chart templates like the one below that you can customize. 

Company Organizational Flow Chart Template

  • Sign up for a free Venngage account.
  • Click on  Templates  on your dashboard or  Home , then  Diagrams  on the left pane to see a list of the types of diagrams and charts you can make, including an  Organizational Chart .

venngage organizational chart templates

  • Choose a template that suits your needs. This will bring you to the canvas, where you can adjust and edit the chart as needed with the many tools available. 

venngage organzational chart editor

  • You can save your work to your device if you have a Premium or Business account. Simply click  Download  from the upper right menu pane and select PNG, PNG HD, or PDF if you have a Premium account, or an Interactive PDF, PPT, or HTML if you have a Business account.

venngage organizational chart editor

Venngage also has a business feature called  My Brand Kit  that enables you to add your company’s logo, color palette, and fonts to all your designs with a single click.

For example, you can make your organizational structure reflect your brand by uploading your logo, fonts, and color palette using Venngage’s branding feature.

Not only are Venngage’s organizational chart templates free to use and professionally designed, but they are also tailored for various use cases and industries to fit your exact needs and requirements.

A business account also includes a  real-time collaboration feature , so you can invite members of your team to work simultaneously on a project.

We’ve already seen the advantages and disadvantages of different org structures.

But generally, large organizations can benefit from divisional structures since they can be organized by product line or market segment, resulting in a clear reporting chain.

However, if not handled appropriately, it can lead to silos, which is a problem when separate divisions compete against one another rather than collaborate.

On the other hand, smaller companies or teams will benefit from a flat org structure since everyone can contribute while being close to the boss.

But, on the other hand, employees may believe they lack the resources of larger organizations or authority to effectively provide value.

Corporate Hospital Organizational Chart Template

In Summary: Build your organizational structure with Venngage today

Venngage simplifies the process of creating organizational structures with stunning org charts .

The examples provided in this post can be used by companies to create structures that are best suited to their goals and available resources.

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How To Write the Management Section of a Business Plan

Susan Ward wrote about small businesses for The Balance for 18 years. She has run an IT consulting firm and designed and presented courses on how to promote small businesses.

what is organizational structure in business plan

Ownership Structure

Internal management team, external management resources, human resources, frequently asked questions (faqs).

When developing a business plan , the 'management section' describes your management team, staff, resources, and how your business ownership is structured. This section should not only describe who's on your management team but how each person's skill set will contribute to your bottom line. In this article, we will detail exactly how to compose and best highlight your management team.

Key Takeaways

  • The management section of a business plan helps show how your management team and company are structured.
  • The first section shows the ownership structure, which might be a sole proprietorship, partnership, or corporation.
  • The internal management section shows the department heads, including sales, marketing, administration, and production.
  • The external management resources help back up your internal management and include an advisory board and consultants.
  • The human resources section contains staffing requirements—part-time or full-time—skills needed for employees and the costs.

This section outlines the legal structure of your business. It may only be a single sentence if your business is a sole proprietorship. If your business is a partnership or a corporation, it can be longer. You want to be sure you explain who holds what percentage of ownership in the company.

The internal management section should describe the business management categories relevant to your business, identify who will have responsibility for each category, and then include a short profile highlighting each person's skills.

The primary business categories of sales, marketing , administration, and production usually work for many small businesses. If your business has employees, you will also need a human resources section. You may also find that your company needs additional management categories to fit your unique circumstances.

It's not necessary to have a different person in charge of each category; some key management people often fill more than one role. Identify the key managers in your business and explain what functions and experience each team member will serve. You may wish to present this as an organizational chart in your business plan, although the list format is also appropriate.

Along with this section, you should include the complete resumés of each management team member (including your own). Follow this with an explanation of how each member will be compensated and their benefits package, and describe any profit-sharing plans that may apply.

If there are any contracts that relate directly to your management team members, such as work contracts or non-competition agreements, you should include them in an Appendix to your business plan.

While external management resources are often overlooked when writing a business plan , using these resources effectively can make the difference between the success or failure of your managers. Think of these external resources as your internal management team's backup. They give your business credibility and an additional pool of expertise.

Advisory Board

An Advisory Board can increase consumer and investor confidence, attract talented employees by showing a commitment to company growth and bring a diversity of contributions. If you choose to have an Advisory Board , list all the board members in this section, and include a bio and all relevant specializations. If you choose your board members carefully, the group can compensate for the niche forms of expertise that your internal managers lack.

When selecting your board members, look for people who are genuinely interested in seeing your business do well and have the patience and time to provide sound advice.

Recently retired executives or managers, other successful entrepreneurs, and/or vendors would be good choices for an Advisory Board.

Professional Services

Professional Services should also be highlighted in the external management resources section. Describe all the external professional advisors that your business will use, such as accountants, bankers, lawyers, IT consultants, business consultants, and/or business coaches. These professionals provide a web of advice and support outside your internal management team that can be invaluable in making management decisions and your new business a success .

The last point you should address in the management section of your business plan is your human resources needs. The trick to writing about human resources is to be specific. To simply write, "We'll need more people once we get up and running," isn't sufficient. Follow this list:

  • Detail how many employees your business will need at each stage and what they will cost.
  • Describe exactly how your business's human resources needs can be met. Will it be best to have employees, or should you operate with contract workers or freelancers ? Do you need full-time or part-time staff or a mix of both?
  • Outline your staffing requirements, including a description of the specific skills that the people working for you will need to possess.
  • Calculate your labor costs. Decide the number of employees you will need and how many customers each employee can serve. For example, if it takes one employee to serve 150 customers, and you forecast 1,500 customers in your first year, your business will need 10 employees.
  • Determine how much each employee will receive and total the salary cost for all your employees.
  • Add to this the cost of  Workers' Compensation Insurance  (mandatory for most businesses) and the cost of any other employee benefits, such as company-sponsored medical and dental plans.

After you've listed the points above, describe how you will find the staff your business needs and how you will train them. Your description of staff recruitment should explain whether or not sufficient local labor is available and how you will recruit staff.

When you're writing about staff training, you'll want to include as many specifics as possible. What specific training will your staff undergo? What ongoing training opportunities will you provide your employees?

Even if the plan for your business is to start as a sole proprietorship, you should include a section on potential human resources demands as a way to demonstrate that you've thought about the staffing your business may require as it grows.

Business plans are about the future and the hypothetical challenges and successes that await. It's worth visualizing and documenting the details of your business so that the materials and network around your dream can begin to take shape.

What is the management section of a business plan?

The 'management section' describes your management team, staff, resources, and how your business ownership is structured.

What are the 5 sections of a business plan?

A business plan provides a road map showing your company's goals and how you'll achieve them. The five sections of a business plan are as follows:

  • The  market analysis  outlines the demand for your product or service.
  • The  competitive analysis  section shows your competition's strengths and weaknesses and your strategy for gaining market share.
  • The management plan outlines your ownership structure, the management team, and staffing requirements.
  • The  operating plan  details your business location and the facilities, equipment, and supplies needed to operate.
  • The  financial plan  shows the map to financial success and the sources of funding, such as bank loans or investors.

SCORE. " Why Small Businesses Should Consider Workers’ Comp Insurance ."

Types of Organizational Structures to Consider for Your Business

Table of contents.

what is organizational structure in business plan

Running a business means successfully delegating tasks among your employees. It also means having the final say on all projects or, if your company is on the larger side, hiring people whom you trust enough to give full approval powers. An organizational structure for your business can help you make sense of where and with whom your company’s responsibilities lie, and you have plenty of types from which to choose.

What is an organizational structure?

An organizational structure is a set of rules, roles, relationships and responsibilities that determine how a company’s activities should be directed to achieve its goals. It also governs the flow of information through levels of the company and outlines the reporting relationship among midlevel staff, senior management, executives and owners. It is effectively a hierarchy for a company, though some organizational structures emphasize a near-total lack of hierarchy.

An organizational structure determines how information, responsibilities and approval will flow within your company.

How many types of organizational structures are there?

In your research, you may at first read that there are two types of organizational structures: centralized and decentralized. However, using just these two classifications for every possible team structure may paint with too broad a brush. That’s why experts have come up with eight types of organizational structures, each of which is either centralized or decentralized:

  • Hierarchical structure (also known as line structure)
  • Functional structure
  • Divisional structure (also known as multidivisional structure)
  • Flatarchy structure (also known as horizontal, or flat, structure)
  • Matrix structure
  • Team structure
  • Network structure
  • Projectized structure

All of these are centralized except for the flat, team and network structures. In a centralized structure, power flows up the chain of command to the executives and owners, whereas decentralized organization structures give far more power to non-executives and non-owners. We’ll get more into how this works in just a moment.

Types of organizational structure to consider for your business

Now that you know the eight types of organizational structures, you’re probably wondering which one is best for your business. The answer, as with many business matters, is that the right choice differs by company. Below, we’ll detail what each organizational structure entails so you can discern which model best fits your ongoing business practices and future business needs.

1. Hierarchical structure

Hierarchical Structure graphic

A hierarchical structure, also known as a line organization, is the most common type of organizational structure. Its chain of command is the one that likely comes to mind when you think of any company: Power flows from the board of directors down to the CEO through the rest of the company from top to bottom. This makes the hierarchical structure a centralized organizational structure.

In a hierarchical structure, a staff director often supervises all departments and reports to the CEO. This structure is well suited for any business in any industry.

These are some advantages of a hierarchical structure:

  • It clearly defines reporting relationships, project organization and division of authority.
  • It details your company’s corporate ladder and promotional structure, thereby encouraging high-quality work.
  • It helps to specialize each employee’s work.
  • It cultivates stronger relationships among employees within a team.

There are also some drawbacks of choosing a hierarchical structure:

  • Bureaucratic hurdles could delay project completion and discourage employees from taking risks.
  • It may encourage employees to prioritize their own department and direct supervisors instead of the whole company.
  • It can make employees feel like they have no say in how to approach their projects.

2. Functional structure

Functional Structure graphic

The functional structure is a centralized structure that greatly overlaps with the hierarchical structure. However, the role of a staff director instead falls to each department head – in other words, each department has its own staff director, who reports to the CEO. Any company with several modestly sized departments may find the functional structure to be a fit. 

These are some advantages of a functional structure:

  • It helps employees develop specific, specialized roles.
  • It boosts individual departments’ and employees’ self-sufficiency and innovation.
  • It scales easily to work for companies of all sizes.

These are some disadvantages of a functional structure:

  • It doesn’t encourage communication and interaction among different departments.
  • It hides key details of departmental processes and strategies from employees outside that department.

3. Divisional structure

Divisional structure infographic

The centralized structure, known as a divisional organization, is more common in enterprise companies with many large departments, markets or territories. For example, a food conglomerate may operate on a divisional structure so that each of its food lines and products can have full autonomy. In the divisional structure, each line or product has its own chief commanding executive. Large companies of any sort, but especially in manufacturing industries, are the best fit for this structure. 

These are the main advantages of a divisional organization:

  • The different departments have some flexibility to operate separately from the company at large.
  • It’s more adaptable to customer needs.
  • Individual departments have more autonomy and room for innovation.

These are some disadvantages of a divisional structure:

  • It risks accidental duplication of resources.
  • It encourages poor communication and low interaction among different departments.
  • It encourages internal competition across departments rather than uniting the company against outside competitors.

4. Flat structure

Flat Structure graphic

A flat structure is a decentralized organizational structure in which almost all employees have equal power. At most, executives may have just a bit more authority than employees. This organizational structure is common in startups that take a modern approach to work or don’t yet have enough employees to divide into departments. That makes flat structures especially well suited to the tech industry, which is home to many small startups with flexible work arrangements.

These are some advantages of a flat structure:

  • Employees have more responsibility and independence.
  • It improves communication and interaction among employees.
  • It’s faster to implement new practices or ideas, with less risk of error.

These are the main disadvantages of a flat structure:

  • Employees lack supervision.
  • There could be confusion around reporting procedures.
  • Employees lack or don’t develop specialized skills.
  • It has poor scalability as the company grows.

5. Matrix structure

Matrix Structure graphic

The matrix structure is a fluid form of the classic hierarchical structure. This centralized organization structure allows employees to move from one department to another as needed. You might encounter this structure in industries home to highly skilled employees who might be their company’s only experts in their field.

These are the main advantages of a matrix organization:

  • Supervisors have the flexibility to choose the best employees for a project.
  • It allows a dynamic org chart with varying responsibilities for employees.
  • Employees have the opportunity to learn and foster skills outside their primary roles.

These are some disadvantages of a matrix organization:

  • There could be conflicts of interest between the needs for project organization and department organization.
  • The organizational chart is prone to regular changes.

In hierarchical or centralized structures, employee monitoring software may be necessary to reach peak productivity. Visit our employee monitoring software reviews page to find the right fit for your company. Or you can start with our full BambooHR review since this brand is our top pick for employee management.

6. Team structure

Team structure infographic

A team structure is a decentralized but formal structure that allows department heads to collaborate with employees from other departments as needed. It is similar to a matrix structure, but the focus is less on employee fluidity than on supervisor fluidity, leading to a decentralized functional structure. Any industry in which flat or matrix structures are common might also be home to many companies with team structures.

These are the advantages of a team structure:

  • The lack of compartmentalized labor drives productivity, growth and transparency.
  • It prioritizes employee experience over seniority.
  • It minimizes employee management tasks.

These are some disadvantages of a team structure:

  • It could confuse employees, given the potential subversion of traditional executive and lower-level roles.
  • It obscures the corporate ladder and may disincentivize employees from working harder to be promoted.

7. Network structure

Network structure graphic

A network structure is especially suitable for a large, multicity or even international company operating in the modern era. It organizes the relationships not just among departments in one office location, but also among different locations and each location’s team of freelancers, third-party companies to whom certain tasks are outsourced, and more. 

While this may sound like a lot for one type of network structure to detail, this decentralized structure can be useful for understanding the human resources your company has on hand. You’ll commonly encounter network structures among distributors, tech companies or logistics companies with international branches.

These are potential advantages of a network structure:

  • It improves understanding of how functional roles are distributed among on-site employees, off-site employees, freelancers and outsourced third parties.
  • It boosts flexibility for one department or location to delegate tasks to another.
  • It drives employee communication, collaboration and innovation.
  • It clearly outlines workflows and chains of commands in large businesses.

These are the possible disadvantages of a network structure:

  • It’s complex, especially in regard to out-of-office processes.
  • It’s vague as to which employee, department or office should make the final decisions.

8. Projectized structure

Projectized Structure graphic

In a projectized structure, the focus is on one project at a time. In this centralized organizational structure, project managers act as supervisors, not just resource allocators and decision-makers. 

Unlike other structure types, a projectized structure involves the demobilization of teams and resources upon a project’s completion. But it’s like other types of organizational structures in that an obvious hierarchy exists. Software development teams may benefit from projectized structures given the complexity that can go into app or website development.

These are some advantages of a projectized structure:

  • It fosters more efficient decision-making and communication.
  • The sense of urgency around project completion increases employee cooperation.
  • It increases employee flexibility and versatility.

These are some disadvantages of a projectized structure:

  • The strict deadlines could increase workers’ stress.
  • The power might be too strongly centralized with the project manager.
  • It lacks the opportunity for long-term skill development among employees.

Below is a chart summarizing the eight types of organizational structures.

Which organizational structure is best?

No one organizational structure is best for all businesses. When determining the right one for your company, think about how much power you would like to give your employees, how much room you would like to leave for innovation, how large your company is and how much interaction among employees matters to you. After weighing these factors, you’ll likely know which organizational structure is best for you – and if you get it wrong, you can always switch to another organizational structure.

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How to implement the right organizational structure for your business?

When it comes to building a successful business, one of the foundational elements that often gets overlooked is the organizational structure. An effective organizational structure can streamline operations, improve communication, and drive overall efficiency.

Published by Orgvue   November 20, 2023

Home > Resources > article > How to implement the right organizational structure for your business?

What is organizational structure?

Organizational structure refers to the framework that defines how an organization’s activities are organized, directed, and coordinated. A macro of organizational design , it defines roles, responsibilities, and reporting relationships within the company. Think of it as the blueprint for how your business functions and how decisions are made.

what is organizational structure in business plan

Understanding an organizational structure in business

The organizational structure of a business helps employees understand their roles, reporting lines, and how they fit into the larger picture. It defines how authority is distributed and how tasks are allocated. A well-designed structure ensures that everyone is clear about their responsibilities, which leads to smoother operations.

Types of organizational structure

There are several types of corporate structuring, each with its own set of advantages and disadvantages. Here are some common ones:

1.  Centralized organizational structure

In a centralized structure, decision-making authority is concentrated at the top of the hierarchy. This structure is common in smaller organizations or those with a strict chain of command.

2.  De-centralized organizational structure

Conversely, a decentralized structure disperses decision-making throughout the organization. It’s often seen in larger companies, as it allows for faster responses to local issues:

Functional structure – This structure groups employees based on their specialized functions, such as marketing, finance, or operations. It’s efficient for businesses with a narrow focus.

Multidivisional structure – Large organizations with diverse business units often use a multidivisional structure, where each unit operates somewhat independently.

Team-based – In a team-based structure, employees are organized into cross-functional teams that collaborate on projects. This structure promotes innovation and flexibility.

Flat structure – A flat structure has few layers of management between top executives and employees. It’s known for open communication and quick decision-making.

Circular structure – In a circular structure, there are no traditional hierarchical levels. Instead, employees work in a circular network, making decisions collectively.

Network structure – This structure relies on strategic partnerships and outsourcing. It’s common in the digital age, where companies connect with various suppliers and service providers.

Benefits of organizational structure

Implementing the right organizational structure of a company offers numerous benefits:

  • Clarity:  It clarifies roles and responsibilities, reducing confusion among employees.
  • Efficiency:  A well-designed structure improves workflow and task allocation, leading to increased productivity.
  • Flexibility:  The right structure can adapt to changes in the business environment and allow for innovation.
  • Accountability:  Clearly defined roles make it easier to hold individuals and teams accountable for their performance.

Implementing an organizational structure into a business lan

To implement an organizational structure that aligns with your business goals, consider the following steps:

1. Define your objectives

Start by outlining your business objectives and how you envision your company’s growth. Consider factors like industry, size and market dynamics.

2. Assess your current state

Evaluate your existing structure and identify any pain points or inefficiencies. Consider seeking input from employees at all levels to understand their perspectives.

3. Choose the right structure

Based on your objectives and assessment, select an organizational structure that best suits your business. Be open to hybrid structures that combine elements from different types.

4. Define roles and responsibilities

Clearly define the roles and responsibilities of each position within your organization. Ensure that everyone understands their role in achieving the company’s goals.

5. Communicate the changes

Introduce the new structure to your employees and explain the reasons behind it. Address any concerns and be transparent about how the changes will affect them.

6. Provide training and support

Offer training and resources to help employees adapt to the new structure. This may include leadership development programs or cross-functional training.

7. Monitor and adjust

Regularly assess the effectiveness of your organizational structure. Be prepared to make adjustments as your business evolves or as you identify areas for improvement.

The process for creating an organizational structure plan

Here are the key steps to follow in the process of creating an organizational structure in business plan:

  • Assess your business needs: – Begin by evaluating your current business objectives, size, and industry. – Identify the key functions and departments required to achieve your goals.
  • Determine leadership roles: – Define the leadership positions needed in your organization. – Determine the organizational structure hierarchy, including top-level executives, middle managers, and front-line supervisors.
  • Identify functional areas: – Break down your business into functional areas, such as marketing, finance, operations, and human resources. – Determine which functions are essential to your operations.
  • Clarify roles and responsibilities: – Clearly define the roles and responsibilities of each position within the organization. – Ensure that each employee understands their specific duties and how they contribute to the company’s objectives.
  • Choose an organizational structure: – Select the most appropriate organizational structure based on your business needs. – Consider options such as hierarchical, functional, matrix, or hybrid structures.
  • Establish reporting relationships: – Define reporting relationships to establish lines of communication and authority. – Specify who reports to whom to create a clear chain of command.
  • Allocate resources: – Determine the allocation of resources, including personnel, budget, and equipment, to each department or function. – Ensure that resources align with the importance and needs of each area.
  • Plan for growth and flexibility: – Anticipate future growth and changes in your business. – Design the structure to accommodate expansion and adaptability.
  • Communicate the structure: – Clearly communicate the new HR organizational structure to all employees. – Explain the reasons behind the changes and how they will benefit the organization.
  • Provide training and support: – Offer training and development opportunities to employees, especially those in leadership positions. – Support employees in adapting to their new roles and responsibilities.
  • Implement the structure: – Put the organizational structure plan into action. – Assign employees to their designated positions and departments.
  • Monitor and evaluate: – Continuously monitor  the effectiveness of the organizational structure. – Solicit feedback from employees and managers to identify any issues or areas for improvement.
  • Make adjustments as needed: – Be prepared to make adjustments to the structure based on feedback and changing business needs. – Adapt to evolving market conditions and growth patterns.
  • Review regularly: – Schedule regular reviews of the organizational structure to ensure it remains aligned with the company’s objectives. – Consider conducting comprehensive organizational assessments periodically.
  • Document the structure: – Create an organizational chart or diagram that visually represents the structure. – Maintain documentation that outlines roles, responsibilities, and reporting relationships.
  • Seek expert guidance if necessary: – If you’re unsure about the best structure for your business, consider consulting with organizational development experts or business consultants.
  • Align with company culture: – Ensure that the span of control in organizational structure aligns with the company’s culture, values, and long-term vision. – Encourage a culture of collaboration and communication within the structure.

Organizational structure examples: final thoughts

what is organizational structure in business plan

The right organizational structure can be a powerful tool for achieving your business objectives. Whether you opt for a traditional hierarchy or a more innovative approach, the key is to align your structure with your goals and continuously evaluate its effectiveness.

Remember that there is no one-size-fits-all solution, and flexibility is crucial in today’s ever-changing business landscape.

When thoughtfully designed and implemented, your organizational structure can empower your employees, improve efficiency, and drive your business toward success. So, take the time to consider your options and choose the structure that best suits your unique needs and aspirations.

Let Orgvue shape your organization to better achieve its strategy. Book a demo  today.

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How to Create a Small Business Organizational Chart in 4 Easy Steps

Elizabeth Kellogg

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Whether you're just starting out or have been in business for a while, creating and maintaining a business organizational chart can be an extremely helpful way to illustrate how your company operates and can also be used to show how you're going to grow and change in the future.

What is a small business organizational chart? A business organizational chart, sometimes also referred to as a "business org chart," is a visual representation of the structure of your business—it outlines the role of each employee and clarifies who reports to whom within your company. In many cases, developing and updating this chart will fall under the purview of your small business HR department, but if you don't currently have a separate human resources branch (or even if you do) it's worth understanding how these tables work and how to create one.

In this guide, therefore, we'll explain exactly how to create a business organization chart in four simple steps—discussing the various types of diagrams you can choose from, as well as the different goals you should consider when making an org chart for your company.

what is organizational structure in business plan

How to create a business organizational chart

Although looking at business organizational chart examples can be overwhelming, creating one of these diagrams for your company can be broken down into four easy steps. By taking this process one step at a time, you'll be able to decide which type of chart is best for your business and ultimately, develop a table (like many other operational documents you have) that can be utilized throughout the lifecycle of your business. With this in mind, let's get started:

Step 1: Decide how to structure your business organizational chart.

The first step in creating an org chart for your business is deciding what type of chart you want to use. Generally, there are four popular designs to consider and you'll want to choose the one that best suits your business's needs.

Hierarchical business organizational chart

To begin, a hierarchical diagram starts at the top of the business and works its way down the chain of command (as you can see below). A vertical line between individuals indicates that the employee above directly supervises the employee below. Hierarchies also show lateral relationships, where two people are on equal footing within the business framework, but may still collaborate or share responsibilities—these charts use horizontal lines to connect lateral workers. The business organization chart here shows how the company is structured starting with the CEO and progressing through the rest of the company.

Overall, most small businesses use a hierarchical organizational chart because it’s the simplest option. This being said, you can use this type of business org chart even if you only have a few names to fill in—as your business grows, it's easy to add new employees.

Functional business organizational chart

Next, you might consider a functional business organizational chart if your company is large enough to divide employees into departments. This type of diagram shows the head of each department and all the individuals who report to them. A functional chart is not entirely distinct from a hierarchical chart, but it does have a slightly different emphasis based on the different departments.

You can use this same information in all small business organization charts:

Name of employee (leave blank if the position is open)

Department (sales, marketing, accounting, operations, etc.)

Position or job title (sales representative, supervisor, account manager)

Description of duties (a brief phrase or two should be sufficient)

Location (if you have more than one office)

Contact information (physical address, phone number or extension, business cell phone number, work email address)

Photo (to recognize each other with ease)

As you can see, although the functional small business org chart is fairly similar to the hierarchical option, this diagram can be useful for distinguishing departments, giving a larger insight into how your company functions in this specific way.

Matrix business organizational chart

The third option, called a matrix or cross-functional business organizational chart, is useful if workers report to multiple supervisors. Like hierarchical graphs, matrix org charts illustrate the immediate supervisory relationships between employees, but they also show the project manager, team, or department to which an employee reports. Solid lines once again indicate that an individual is the primary manager of the person below them. Dotted lines demonstrate a less direct, but nonetheless important, reporting connection.

As this org chart from the Project Management Institute shows, the matrix small business organizational chart is often used by companies with project managers that work across different teams. Similarly, you may find that product, research, and engineering-based companies are more likely to utilize this type of diagram to illustrate their business structure.

Circle business organizational chart

Finally, the last option to consider is the circle business org chart. The circle diagram has become increasingly popular, especially among startup small businesses that wish to discard traditional business hierarchies. The idea behind these graphs is that all teams—and the employees that comprise them—play an equally important role in the company.

Once again, although this example shows dummy text, you can see how you would complete the chart based on your business's information. Each department makes up a spoke in the wheel and the employees within are listed in each section. As we discussed above, you would fill in essential information for each employee—name, job title, brief description, contact information, etc.

Ultimately, this first step may take time—you'll want to consider your business as it exists now and how you want it to grow—that way, you can determine which of these four org chart options will work best for illustrating your company structure.

Step 2: Collect employee information and categorize the data.

Now, once you’ve decided on the type of business organizational chart you’ll use, the rest of your chart development is fairly straightforward.

For your next step, therefore, you'll want to write a list of all the employees at your company and include the pertinent information about them that we mentioned above.

If you selected a hierarchical chart, you'll place each individual in their proper order on the list. The business owner occupies the first tier, anyone who reports directly to them belongs on the second tier, and the chart progresses from there. If you chose a functional or circle chart, you'll organize your list by each department, as shown in the examples we explained above. Finally, if you opted for a matrix small business org chart, you'll want to be sure to make note of all supervisory relationships.

Step 3: Decide how you'll complete your business org chart.

After you've gathered all of the information you need for your employees and categorized it based on the chart type you've selected, you'll want to determine how you're going to complete your chart. As you saw in our examples above, there are images and small business org chart templates you can download and edit using a software program like Adobe Photoshop.

On the other hand, you might choose to create your business organizational chart in a simple, reliable program you might already own, like Microsoft Office (Excel, Outlook, PowerPoint, or Word) or Google Sheets. You also have the option to purchase a template from a provider like SmartDraw or Lucidchart. To make the most out of your investment, however, you might consider purchasing an HR or payroll software that includes this functionality (among other features). As an example, Gusto's all-inclusive platform allows you to create an org chart within their system, as well as manage your essential payroll and HR tasks.

Although technically , you could diagram your small business org chart by hand, if you use an online template or software, you can modify your graph with ease as your business expands and staff changes.

Step 4: Fill in your business organizational chart and file it securely.

Finally, once you've chosen how you're going to complete your org chart, you'll be ready to actually fill it in.

With the data you've compiled, you'll fill in each box or branch of the chart that you’ve picked. Once again, if your diagram is hierarchical, you'll start with the owner or CEO of the business at the top. Then, you'll create a box below the owner for each person who is an immediate report, and draw a solid vertical line down from the proprietor to each of these supervisees. You'll continue this process for each layer in the company chain of command, and move down the corporate ladder until you’ve placed every employee on the chart.

If your graph is a functional design, you'll fill in the primary boxes with the information for the head of each department and the remainder with the information for every individual they directly manage. You'll follow the same procedure with a matrix chart—with this chart, however, don't forget to include secondary managers to the side of each department, and make dotted lines (or some other distinction) between boxes to represent those additional supervisory relationships.

Last, with a circle chart, you'll add the information employees and duties of each department to the corresponding pie slice, and your diagram is complete.

Once you've completed your small business org chart, you'll want to be sure you save it in a secure location—if you're not utilizing an HR software or another program that allows you to save it within that system. You'll want to keep your organizational chart on hand to update as your business grows and changes.

Along these lines, it's also helpful to store a copy of your org chart on a shared company server, drive, or employee portal so that everyone in your company can see it (but not change it)—this way, everyone in your organization can understand how the company is structured and refer back to the chart as needed.

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Once we uncover your personalized matches, our team will consult you on the process moving forward.

Small business organizational chart templates

If you're not ready to invest in a software platform to build your diagram, you may be interested in exploring different small business organizational chart templates. As we mentioned, there are well-known solutions, like Microsoft Office, that offer org chart templates that you can download and use for your business. Let's look at a few examples:

Microsoft Office : Within the templates section of the Office website, you can find various, free business org chart templates that you can download for free and customize within PowerPoint, Word, or Excel. For a simple hierarchical chart option, you might start with this "Minimal organization chart."

24Slides : Among other business template options, 24Slides offers free small business org chart templates that you can copy and edit within Google Slides. They also offer these templates in different types including the classic hierarchical chart, as well as the circle chart.

Canva: Image editing and graphics platform Canva allows you to design and customize your own business organizational chart (for free, you just need to sign up for an account) using their system.

Vizzlo : Although Vizzlo does offer paid plans, with their free version, you can access over 100 different chart types, including small business org templates. Plus, you have the option to edit your template within Vizzlo, or create your chart direct in PowerPoint or Google Slides using a Vizzlo integration.

Of course, these are only a few options—there are numerous additional templates and examples you can find by searching and browsing online.

The benefits of a business org chart

As we've shown through our four-step guide, creating a business organizational chart can be a fairly straightforward and simple process. However, if you're just starting out, or don't have a dedicated employee or department to work on developing this graph, you may be wondering if you really need an org chart. Ultimately, the decision is up to you—but, to this end, it's worth highlighting some of the benefits of one of these diagrams and why they can be so useful for your small business.

Clarify management structure

If you're just starting your business the process necessary to construct a business organizational chart forces you to officially distribute tasks and flesh out the roles of each individual and the purpose of each department in your enterprise. This avoids confusion later, as your business grows. Of course, you can always restructure your business organizational chart down the road—however, if you outline the expectations for each position early on, you’re already a step ahead in the entrepreneurial process.

On the other hand, if your company is more established, a business org chart helps both new and existing employees to understand where they fit within the company’s framework, which clarifies any questions regarding the chain of command. This transparency saves time and increases efficiency, as workers can consult your organizational chart and determine exactly who to speak with when faced with a given issue. Plus, if your business organizational chart is well-structured, your employees will already know not just the name of the proper individual to consult, but also what position they hold and what responsibilities they oversee.

Increase operating efficiency

Another benefit of creating and maintaining a small business org chart is that by doing so, you can examine your company’s current structure and unearth potential ways to improve it. Are certain employees responsible for too many tasks, and others too few? Is there unnecessary overlap between individual workers? Are there any duties that fall through the cracks? Should you reorganize in order to meet those needs, hire additional workers, or possibly even outsource these assignments? You may find that you can better utilize the workers you already have, and thereby increase productivity.

A business organizational chart can also improve cross-functional communication throughout your business, which leads to more effective project management. It’s easier to accomplish tasks that involve multiple workers or teams when the reporting structure is clear, and everyone knows who to talk to about what.

Demonstrate current success

Even if you think that your business wouldn’t benefit from an organization chart, you may find that potential lenders want to see one when you're applying for financing. Similar to a business plan, banks, institutions like the SBA, and potential investors want assurance that you’ve carefully considered the structure of your business, as such preparation is often an indicator of future success.

As financial professionals, they’ll also want to ensure that the business organizational method you’ve chosen is one that they believe is likely to prosper—so that you can pay back your potential business loan on time.

Facilitate future planning

Finally, a small business organizational chart can help you prepare for the evolution and expansion of your business. In this vein, we'd recommend that you create two versions of your organization chart: one that reflects your current company structure and one that shows your growth objectives. You might even consider additional charts that indicate how you might reorganize should unexpected changes occur, like reductions in funding or the sudden departure of a key employee.

Your second business organizational chart, of course, will have a lot of blank spaces—room for all the positions you’d like to fill in the future as implement your business growth strategies. In this way, you can use your chart to find possible holes that exist in your current staffing, and you’ll have a built-in roadmap for future hiring.

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The bottom line

At the end of the day, taking the time to plan and create a business org chart can be extremely beneficial for your small business—now and in the future. Whether you develop this diagram yourself, or work with your team to do so, you can follow our four simple steps to complete the process relatively quickly and easily.

Plus, if you already utilize a payroll or HR software, you can check to see if your platform already includes an org chart builder. If it doesn't, you might decide to use one of the templates we've discussed here. On the other hand, if you don't have an HR or payroll software, you might consider exploring some of the top options out there—Gusto, Zenefits, etc.—as any of these solutions will not only allow you to create a small business org chart, but will also help you efficiently and effectively an important part of your day-to-day operations.

This article originally appeared on JustBusiness, a subsidiary of NerdWallet.

On a similar note...

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Business Plan Section 3: Organization and Management

This section explains how your business runs and who’s on your team. Learn how to present the information in this section of your business plan.

Organization and Management

This section of your business plan, Organization and Management, is where you’ll explain exactly how you’re set up to make your ideas happen, plus you’ll introduce the players on your team.

As always, remember your audience. If this is a plan for your internal use, you can be a little more general than if you’ll be presenting it to a potential lender or investor. No matter what its purpose, you’ll want to break the organization and management section into two segments: one describing the way you’ve set up the company to run (its organizational structure), and the other introducing the people involved (its management).

Business Organization

Having a solid plan for how your business will run is a key component of its smooth and successful operation. Of course, you need to surround yourself with good people, but you have to set things up to enable them to work well with each other and on their own.

It’s important to define the positions in the company, which job is responsible for what, and to whom everyone will report. Over time, the structure may grow and change and you can certainly keep tweaking it as you go along, but you need to have an initial plan.

If you’re applying for funding to start a business or expand one, you may not even have employees to fit all the roles in the organization. However, you can still list them in your plan for how the company will ideally operate once you have the ability to do so.

Obviously, for small businesses, the organization will be far more streamlined and less complicated than it is for larger ones, but your business plan still needs to demonstrate an understanding of how you’ll handle the workflow. At the very least, you’ll need to touch on sales and marketing, administration, and the production and distribution of your product or the execution of your service.

For larger companies, an organizational plan with well-thought-out procedures is even more important. This is the best way to make sure you’re not wasting time duplicating efforts or dealing with internal confusion about responsibilities. A smooth-running operation runs far more efficiently and cost-effectively than one flying by the seat of its pants, and this section of your business plan will be another indication that you know what you’re doing. A large company is also likely to need additional operational categories such as human resources and possibly research and development.

One way to explain your organizational structure in the business plan is graphically. A simple diagram or flowchart can easily demonstrate levels of management and the positions within them, clearly illustrating who reports to whom, and how different divisions of the company (such as sales and marketing) relate to each other.

Here is where you can also talk about the other levels of employees in your company. Your lower-level staff will carry out the day-to-day work, so it’s important to recognize the types of people you’ll need, how many, what their qualifications should be, where you’ll find them, and what they’ll cost.

If the business will use outside consultants, freelancers, or independent contractors, mention it here as well. And talk about positions you’d want to add in the future if you’re successful enough to expand.

Business Management

Now that we understand the structure of your business, we need to meet the people who’ll be running it. Who does what, and why are they onboard? This section is important even for a single practitioner or sole proprietorship, as it will introduce you and your qualifications to the readers of your plan.

Start at the top with the legal structure and ownership of the business. If you are incorporated, say so, and detail whether you are a C or S corporation. If you haven’t yet incorporated, make sure to discuss this with your attorney and tax advisor to figure out which way to go. Whether you’re in a partnership or are a sole owner, this is where to mention it.

List the names of the owners of the business, what percent of the company each of them owns, the form of ownership (common or preferred stock, general or limited partner), and what kind of involvement they’ll have with day-to-day operations; for example, if they’re an active or silent partner.

Here’s where you’ll list the names and profiles of your management team, along with what their responsibilities are. Especially if you’re looking for funding, make sure to highlight the proven track record of these key employees. Lenders and investors will be keenly interested in their previous successes, particularly in how they relate to this current venture.

Include each person’s name and position, along with a short description of what the individual’s main duties will be. Detail his or her education, and any unique skills or experience, especially if they’re relevant to the job at hand. Mention previous employment and any industry awards or recognition related to it, along with involvement with charities or other non-profit organizations.

Think of this section as a resume-in-a-nutshell, recapping the highlights and achievements of the people you’ve chosen to surround yourself with. Actual detailed resumes for you and your management team should go in the plan’s appendix, and you can cross-reference them here. You want your readers to feel like your top staff complements you and supplements your own particular skill set. You also want readers to understand why these people are so qualified to help make your business a success.

This section will spell out the compensation for management team members, such as salary, benefits, and any profit-sharing you might be offering. If any of the team will be under contract or bound by non-compete agreements, you would mention that here, as well.

If your company will have a Board of Directors, its members also need to be listed in the business plan. Introduce each person by name and the position they’ll hold on the board. Talk about how each might be involved with the business (in addition to board meetings.

Similar to what you did for your management team, give each member’s background information, including education, experience, special skills, etc., along with any contributions they may already have had to the success of the business. Include the full resumes for your board members in the appendix.

Alternately, if you don’t have a Board of Directors, include information about an Advisory Board you’ve put together, or a panel of experts you’ve convened to help you along the way. Having either of these, by the way, is something your company might want to consider whether or not you’re putting together the organization and management section or your business plan.

NEXT ARTICLE > Business Plan Section 4: Products and Services

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what is organizational structure in business plan

what is organizational structure in business plan

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what is organizational structure in business plan

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  • Section 1. Organizational Structure: An Overview

Chapter 9 Sections

  • Section 2. Creating and Gathering a Group to Guide Your Initiative
  • Section 3. Developing Multisector Task Forces or Action Committees for the Initiative
  • Section 4. Developing an Ongoing Board of Directors
  • Section 5. Welcoming and Training New Members to a Board of Directors
  • Section 6. Maintaining a Board of Directors
  • Section 7. Writing Bylaws
  • Section 8. Including Youth on Your Board, Commission, or Committee
  • Section 9. Understanding and Writing Contracts and Memoranda of Agreement
  • Main Section

What is organizational structure?

Why should you develop a structure for your organization, when should you develop a structure for your organization.

By structure, we mean the framework around which the group is organized, the underpinnings which keep the coalition functioning. It's the operating manual that tells members how the organization is put together and how it works. More specifically, structure describes how members are accepted, how leadership is chosen, and how decisions are made.

  • Structure gives members clear guidelines for how to proceed. A clearly-established structure gives the group a means to maintain order and resolve disagreements.
  • Structure binds members together. It gives meaning and identity to the people who join the group, as well as to the group itself.
  • Structure in any organization is inevitable -- an organization, by definition , implies a structure. Your group is going to have some structure whether it chooses to or not. It might as well be the structure which best matches up with what kind of organization you have, what kind of people are in it, and what you see yourself doing.

It is important to deal with structure early in the organization's development. Structural development can occur in proportion to other work the organization is doing, so that it does not crowd out that work. And it can occur in parallel with, at the same time as, your organization's growing accomplishments, so they take place in tandem, side by side. This means that you should think about structure from the beginning of your organization's life. As your group grows and changes, so should your thinking on the group's structure.

Elements of Structure

While the need for structure is clear, the best structure for a particular coalition is harder to determine. The best structure for any organization will depend upon who its members are, what the setting is, and how far the organization has come in its development.

Regardless of what type of structure your organization decides upon, three elements will always be there. They are inherent in the very idea of an organizational structure.

  • Some kind of governance

Rules by which the organization operates

  • A distribution of work

The first element of structure is governance - some person or group has to make the decisions within the organization.

Another important part of structure is having rules by which the organization operates. Many of these rules may be explicitly stated, while others may be implicit and unstated, though not necessarily any less powerful.

Distribution of work

Inherent in any organizational structure also is a distribution of work. The distribution can be formal or informal, temporary or enduring, but every organization will have some type of division of labor.

There are four tasks that are key to any group:

  • Envisioning desired changes . The group needs someone who looks at the world in a slightly different way and believes he or she can make others look at things from the same point of view.
  • Transforming the community . The group needs people who will go out and do the work that has been envisioned.
  • Planning for integration . Someone needs to take the vision and figure out how to accomplish it by breaking it up into strategies and goals.
  • Supporting the efforts of those working to promote change . The group needs support from the community to raise money for the organization, champion the initiative in the state legislature, and ensure that they continue working towards their vision.

Common Roles

Every group is different, and so each will have slightly different terms for the roles individuals play in their organization, but below are some common terms, along with definitions and their typical functions.

  • An initial steering committee is the group of people who get things started. Often, this group will create plans for funding, and organizational and board development. It may also generate by-laws, and then dissolve. If they continue to meet after approximately the first six months, we might say they have metamorphosed into a coordinating council .
  • A coordinating council (also referred to as a coordinating committee, executive committee , and executive council ), modifies broad, organization-wide objectives and strategies in response to input from individuals or committees.
  • Often, one person will take the place of the coordinating council, or may serve as its head. Such a person may be known as the Executive Director, Project Coordinator, Program Director, or President . He or she sometimes has a paid position, and may coordinate, manage, inspire, supervise, and support the work of other members of the organization.
  • Task forces are made up of members who work together around broad objectives. Task forces integrate the ideas set forward with the community work being done.
For example, from the director of a coalition to reduce violence in a medium-sized city: "Currently, we have three operational task forces. Members of each have an ongoing dialogue with members of the coordinating council, and also with their action committees. The oldest was formed with the goal of eliminating domestic violence about fifteen years ago, when a local woman was killed by her husband. Then, after several outbreaks of violence in the schools a few years back, our group offered to help, and a second task force sprung up around reducing youth violence. We've just started a third, with the goal of increasing gun safety. "All of it is interrelated, and all of it applies to our mission of increasing the safety of residents of South Haven, as well as that of our visitors. But each task force is contributing to that mission in vastly different ways, with different objectives, and using different strategies. 'Cause, you know, the strategies you use to stop a ninth grader from bringing a gun to school just aren't the same as the ones you use to stop a 40-year-old man on unemployment from beating his wife."
  •   Action committees bring about specific changes in programs, policies, and practices in the sectors in which they work.
For example, the task force on domestic violence mentioned above has the following action committees: A government and law enforcement committee . Members include police officers, lawyers, a judge, and a state representative. Currently, they are trying to pass laws with stronger penalties for those convicted of domestic violence, especially repeat offenders. They are also training officers to be better able to spot an abusive relationship, and better able to inform a victim of his or her options. A social services committee . Members (who include representatives from most of the service agencies in town) work to assure that staff members know where to send someone for the resources he or she needs. They are also trying to increase the number of trained volunteer counselors who work at the battered women's shelter. A media committee . Members include local journalists, writers, and graphic designers. They keep the project and the issue in the public's minds as much as possible with editorials, articles and news clips of events, as well as advertisements and public service announcements.
  •   Support committees are groups that help ensure that action committees or other individuals will have the resources and opportunities necessary to realize their vision. Financial and media committees are examples of committees formed to help support or facilitate your work.
  • Community trustees , also known as the board of trustees or as the board of directors , provide overall support, advice, and resources to members of the action groups. They are often either people who are directly affected by the issue or have stature in the community. That way, they are able to make contacts, network with other community leaders, and generally remove or weaken barriers to meeting organizational objectives.
  • Grantmakers are another part of the picture. Grantmakers exist on an international, national, state, and local level and may be private companies and foundations, or local, county, state, or federal government organizations (for example, block grants given by the city would fall into this category).
  • Support organizations (not to be confused with the support committees listed above) are groups that can give your organization the technical assistance it needs.
  • Partner organizations are other groups working on some of the same issues as your organization.

Although this list is pretty extensive, your organization may only use two or three of the above mentioned roles, especially at the beginning. It's not uncommon for a group to start with a steering committee, ask others to serve as board members, and then recruit volunteers who will serve as members of action committees. In this broad spectrum of possibilities, consider: Where does your organization fit in? Where do you want to be?

Examples of Structure

So how can all of these pieces be put together? Again, the form a community group takes should be based on what it does , and not the other way around. The structures given are simply meant to serve as examples that have been found to be effective for some community-based organizations; they can and should be adapted and modified for your own group's purposes.

  A relatively complex structure

Example - The Ste. Genevieve's Children's Coalition The Ste. Genevieve's Children's Coalition is a relatively large community-based group. They have a coordinating council, a media committee, and three task forces, dealing with adolescent pregnancy, immunization, and child hunger. Each of the task forces has action committees as well. For example, the adolescent pregnancy reduction task force has a schools committee that focuses on keeping teen parents in school and modifying the human sexuality curriculum. A health organizations committee focuses on increasing access and use of the youth clinic. The media committee works to keep children's issues in the news, and includes professionals from the local television stations, radio stations, newspaper, and a marketing professional. The coordinating council is composed of the executive director, her assistant, the media committee chair, and the chairs of each of the three task forces. A board of directors has been invaluable in helping keep the coalition financially viable.

In diagram form, a complex organization might look like this:

Image depicting a complex organization showing a large circle entitled Community Trustees. Outside this circle are three smaller circles with bidirectional arrows leading to/from the larger circle: “Community members; Collaborators; Supporting Organizations (funders, TA orgs).” Inside the large circle is a small circle entitled Coordinating Committee. Four other circles connect to this central circle: Support Committees (e.g., financial, media) and three Task Force circles, each with smaller Action Committee circles connected to them.

And in diagram form:

Image of a diagram depicting Mid-size Structure. A large circle entitled Community Trustees contains three smaller circles: One Coordinating Council and two Action Committee circles connecting to it.

As smaller size means fewer people, these groups are usually less complex, as they have less need for a formal hierarchy and instead have governance that is consensus-based. A diagram of such a small group might look something like this, with each of the circles representing an individual member:

Image of a Small-size Structure with no text labels, just six circles interconnected to each other.

What type of structure should you choose?

First, decide upon the formality your organization will have. The following table, adapted from The Spirit of Coalition Building can help you make this first decision.

Organizational structure is something that is best decided upon internally, through a process of critical thinking and discussion by members of the group.

In your discussions, your answers to the following list of questions may guide your decisions.

  • What is your common purpose? How broad is it? Groups with broader purposes often have more complicated structures, complete with many layers and parts, than do groups with more narrow purposes.
  • Is your group advocacy oriented or service oriented? Service organizations use "top down," one-person-in-charge structure much more often than do advocacy based groups.
  • Is your organization more centralized (e.g., through the work of a specific agency ) or decentralized (e.g., different neighborhoods working independently on the same problem)? A decentralized group might find a "top-down" structure inappropriate, as such a group often has several peers working together on an issue.
  • How large is your organization? How large do you envision it becoming? A very small organization may wish to remain relatively informal, while a community-wide group might require a more formal structure. A related question, with similar consequences, is:
  • How large is the community in which you work?
  • How old is your organization? How long do you envision it lasting? A group formed to resolve a single issue might not need a formal structure at all, while an organization with long-term goals may want something more concrete, with clearer divisional responsibilities and authority.
  • Is the organization entirely volunteer, or are there (or will there be) paid staff? How many? An organization with many paid staff members may find it more necessary to have people "in charge," as there are generally more rules and responsibilities for paid staff members, and thus, there must be more supervision in carrying out these roles.
  • Should yours be a new organization, or part of an existing structure? Do you really need to form a new structure, or would it be better to work within existing structures? Sometimes, your goals may be better met if you are part of (or linked with) another organization.

Structure is what ensures that your organization will function smoothly and as you intended. You should think about structure early in the development of your organization, but be aware that the type that fits best may change as your organization grows.

Online Resources

How to Develop an Organization Structure , by Tara Duggan, Demand Media, is an informational article on how to develop organization structure with a short step-by-step analysis.

It's All About the Base: A Guide to Building a Grassroots Organizing Program   from Community Catalyst.

Module 2: Organizational Structure , by Pathfinder International, is a concise manual describing pros and cons, together with suggestions for how one might change the organizational structure one has.

Print Resources

Berkowitz, W., & Wolff, T. (1999). The spirit of coalition building. Washington , DC: American Public Health Association.

Unterman, I. & Davis, R. (1984). Strategic management of not-for-profit organizations: From survival to success . New York, NY: Praeger.

Noirwolf

Business Plan Organization and Management: How to Write Guide .

Sep 17, 2023 | Business Consulting , Business Plan , Organization and Management , Organizational Development , Strategy

Every successful business plan should include a section on organization and management. This section will help you communicate your vision for your business's structure. Here's a guide on how to write an effective section.

Writing the Business Plan Organization and Management Section

It provides critical information for those looking for evidence that your staff has the necessary experience, skills, and pedigree to realize the objectives detailed in the rest of your business plan.

What Is the Organization and Management Section in a Business Plan?

The organization and management section of your business plan should provide details about your business structure and team. This section typically comes after the executive summary. However, some people have it further in the document after the market analysis section.

This section generally is separated into two parts. The first concerns the organization as a whole. It gives readers an overview of the company structure, which is an excellent opportunity for the reader to lift the roof off your office and peer into its inner workings. For your legal design, you may set up as a limited liability company (LLC) or nonprofit/ charity or form a partnership. It’s crucial to include this section. However, suppose you’re starting a home business or have an already operating business where you’re the only person involved. In that case, you can skip this section or show the company registration details from either the company’s house or the awarding .gov.

The second part focuses specifically on your management team and introduces readers to each member — your chance to impress them with the many accomplishments pinned to your organization’s management team.

This section may seem less important than some of the other parts of your business plan, but the truth is that your people are your business. If they’re highly competent and accomplished, the implication is that so is your business.

Of course, if you’re a sole proprietor with no management structure or any employees, this section is unnecessary other than to talk about yourself and your achievements.

Every successful business plan should include a section on organization and management. This section will help you communicate your vision for your business's structure. Here's a guide on how to write an effective section.

The section on organization and management should outline the hierarchy, individual roles, and corresponding responsibilities. It should also highlight each person’s strengths and qualifications for their positions.

Business Plan Organization Section

The organizational section of your business plan outlines the hierarchy of individuals involved in your business, typically in a chart format. This section identifies the President or CEO, CFO, Director of Marketing, and other roles for partnerships or multi-member LLCs. If you’re a single-person home business, this section is straightforward as you are the only person on the chart.

Although this section primarily focuses on owner members, you can include outsourced workers or virtual assistants if you plan to hire them. For example, you may have a freelance web admin, marketing assistant, or copywriter. You may even have a virtual assistant who coordinates with your other freelancers. While these individuals are not owners, they hold significant responsibilities in your business.

There are various business structures, such as sole proprietorships, partnerships, LLCs, and corporations.

Detail the Legal Structure within the Business Plan Organization and Management Section

Here is an indicative list of business structures. It would help if you talked to your accountant and legal advisors to determine which legal form is the best for your business proposition.

Sole Proprietorship

When embarking on a business venture, it’s essential to consider the various structures available. A sole proprietorship is a structure whereby the business is not regarded as separate from its owner’s finances. The owner retains complete control and responsibility for the company. However, they are unable to sell stocks or bring in new owners. The business becomes a sole proprietorship if not registered under any other structure.

Partnership

When forming a partnership, it can either be a limited partnership (LP) or a limited liability partnership (LLP). One partner assumes most liability in a limited partnership (LP). In contrast, the other partners have limited liability and control over the business. Alternatively, in a limited liability partnership (LLP), all partners have limited liability from debts and actions of other partners, and there is no general partner.

Limited Liability Company

A limited company (LTD) or limited liability company (LLC) is a mixture of business structures that mixes aspects of partnerships and corporations. It offers limited personal liability to the owner and passes profits through to their tax returns.

Corporation

There are various types of corporate structures. A C-corporation enables the issuance of stock shares, pays corporate taxes instead of personal returns, and provides the highest level of personal protection from business activities. On the other hand, nonprofit corporations are similar to C corporations. However, they do not aim to make profits and are exempt from state or federal income taxes.

More information on company legal structures is available on UK.Gov and USA.SBA websites.

Describe Your Company’s Organizational Structure

This first step illustrates the positions in your organization’s employee hierarchy and how they all relate to each other.

This is usually done graphically as a guide, using an organizational chart, or “org chart” for short. People use a Microsoft tool, i.e., PowerPoint or Excel, to help.

Organization Charts typically follow a top-down hierarchy, starting with your CEO/ Managing Director in the top box at the top of the page. Lines extend down from that person’s name to boxes containing the terms of the CEO’s direct reports.

We have included an example organizational chart below for guidelines only.

Showing an organizational structure for a business

Identify your business organization structure and list your team members’ strengths and skills.

Those managers then have lines extending to those who report to them, and so on, down to your lowest staff positions.

This section will give your readers a quick understanding of your management and governance structure, the size of your organization, and your lines of control and communication.

Describe your Team in your Business Plan Organization and Management Section

In your business plan’s Organization and Management section, please provide a detailed description of your team. Y ou will discuss the company’s management team, starting with the owners.

This section highlights who is involved in the running of your business and who are the support professionals. It also includes the roles and responsibilities of managers.

Suppose the company structure is a multi-owner arrangement or some other multi-owner arrangement. In that case, you’ll want to include information for every member and their percentage of ownership and ongoing involvement in the company.

It’s important to discuss how ownership interests are split, their responsibilities, what they did before securing their current position, and how they came to be involved with the company.

Here, it would help if you talked about some of your critical team members. These people are directly responsible for large portions of your business operations.

Owner/Manager/Members

Within your business o rganization and management section, y ou should introduce the team and talk about their experience, qualifications, previous companies and achievements, role in the company, and any special skills they bring with them. Please provide the following details for each owner, manager, or member of the business within your business plan:

  • Percentage of ownership (if applicable)
  • Level of involvement (active or silent partner)
  • Type of ownership (e.g., stock options, general partner)
  • Position in the company (CEO, CFO, etc.)
  • Responsibilities and Duties
  • Educational background
  • Relevant experience and skills
  • Previous employment history
  • Skills that will benefit the business
  • Awards or recognition received
  • Compensation structure
  • How each individual’s skills and experience will complement and contribute to the business’s success

Perhaps they’re an entrepreneur, business coach, exclusive advisor, or industry specialist to help you grow.

This is an ideal opportunity for companies with an Executive Board of Directors, Governance Structure, or Advisory Board to introduce them to your readers.

Executive Board

Having a board of directors is essential for your management team. Without one, you may be missing out on crucial information. This section includes details similar to those found in the ownership and management team sub-section, such as the names, areas of expertise, positions (if applicable), and involvement with the company of each board member.

Strategic Advisors

Suppose you’re looking for funding for your business or to fill a gap in your knowledge, or you may not have the funds to hire an executive board. In that case, you must inform potential partners and investors that you have a team of professionals assisting you. This includes lawyers, accountants, and any freelancers or contractors you may be working with. When listing these individuals, include their name, title, educational background, certifications, services they provide to your business, and their relationship with you (i.e., hourly rates, projects, retainer, as-needed, regular). Additionally, highlight their skills and experience that make them an asset to your team you need

Does anything else make them stand out as quality professionals (awards, past working with credible brands)?

Spotlight on the Wider Team Structure

Now, you’ve showcased the management team in its entirety. You can provide brief bios for hiring team needs or secondary members and talk at length about how the team’s combined skills complement each other and how they amplify the team’s effectiveness.

It’s also important to point out any gaps in the knowledge your team is currently suffering. Your readers will likely be savvy enough to pick up on existing holes.

Therefore, you’ll want to get ahead of these criticisms and demonstrate that you’re already aware of the positions and complementary skill sets your management team still requires and how you plan to address the knowledge gaps with future hires.

Do you need help writing your business plan o rganization and management section ? 

Every successful business plan should include the organization and management section, helping you communicate your legal structure and team.

Writing a business plan can seem overwhelming, especially when starting a small, one-person business. However, it can be a reasonably simple task. This section of the plan should be updated if there are any changes to the organization structure or team members, such as additional training, awards, or other resume changes that benefit the business.

Creating your comprehensive business plan takes planning, research, time, and a herculean effort. If, at any point, the work becomes too much to handle, we can step in to assist.

Do you want an expert “second opinion” before creating your business plan or financial forecasts? Let’s talk !

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Contact Noirwolf Consulting today using the website contact form or by emailing [email protected] or call us at +44 113 328 0868.

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Business Plan Management Structure: What You Need to Know

A business plan management structure can help your business identify its goals, growth plan, and structure for management. 3 min read updated on February 01, 2023

Business Organization

Every business, regardless of size, needs to have a solid plan in place for how it will be run. Without a business plan, it is nearly impossible to run the company smoothly or successfully. One aspect of the business plan should include the positions in the company and definitions for each position. Those definitions can identify roles and responsibilities, as well as the reporting structure for each role. As the needs of the business change and shift, the business structure likely will change as well. It's easier to make changes as you go when you have a plan in place.

When you're starting a business and need funding, you might not have any employees to fit the roles you have outlined in your plan. This list of roles could be more idealistic for how the company will operate when you have funding and more opportunities to hire employees. Smaller businesses tend to have less complicated needs than larger ones, so the process is usually more streamlined. However, all businesses need to show a clear understanding of workflow and demonstrate how it will be handled through every phase of growth and expansion.

The business plan should include:

  • Administration
  • Marketing and sales
  • Production and distribution of product or service execution

Larger companies need a more detailed organizational plan with procedures that have been well thought out and documented. By creating this detailed plan, you can avoid internal confusion about who is responsible for what as well as avoid duplicated efforts that waste time. When your business runs and operates smoothly, it will be more cost-effective and efficient than a business that is disorganized. With a detailed and informative business plan, it becomes clear to potential investors and employees that you know what you're doing as a business owner. Larger companies may also need additional resources to operate, such as research and development or human resources.

Organizational Structure

You can use graphics to show your company's organizational structure. Simple flowcharts and diagrams offer visual representations of the management levels within your business, as well as the positions that fall beneath each level. With a graphic, it's easier to show the reporting structure and how various departments and divisions work together. This graphic will also help you show the other employee levels within the business.

The lower-level employees are responsible for the daily tasks of the business, so you'll need to identify and recognize the types of individuals you plan to hire, the number of people needed, and their qualifications. You might choose to include details about your hiring plan, such as where you will find employees and their estimated salaries. Don't forget to include your plan for hiring independent contractors, freelance workers, or consultants. Finally, the hiring plan should include any future positions that would be added if the business is able to expand.

Management Team Section of a Business Plan

Your company's management team is essential to business success. The management team is responsible for identifying and analyzing the objectives and goals of the company. After completing these tasks, experienced management professionals can implement and enforce strategies that will lead to success. In your business plan, this team should include the managers, owners, and board of directors (if applicable).

You can include information about the management team in several sections of your business plan, depending on the style. Regardless of where you place the details in the plan, make sure to include information about the company's legal structure and a list of owners. The owner's education, experience, and other related skills should be outlined. Discuss how much of the company each owner has, as well as the role of each owner in the business operations.

If your company has a board of directors, include the name of each member. Along with their names, you should also expand on their experience, background, and credentials, as well as include their contact information. Provide additional details on the contributions provided by each member to the company, along with information about how the members will contribute to the future growth and expansion of the business.

If you need help with a business plan management structure, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.

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What Is Organizational Planning in Project Management?

ProjectManager

If you’re looking to start or grow a business (or just keep a business profitable), you need a business plan. But not all plans are the same. If you need to define your business and its objectives, you need to use organizational planning.

That planning provides a clear path forward. When you organize the various departments of your business, everyone knows what their function is—and the tasks and processes necessary to achieve your business goals.

What Is Organizational Planning?

Organizational planning is how business owners organize the day-to-day operations of a business. This can range from simple things, like the companies’ reason for existence, to more complex considerations, like setting goals to realize a specific objective. You use the organizational plan as a framework for creating tasks that, when executed, will allow the company to achieve its goal.

Organizational planning is often used to improve a company’s overall business, but a company can direct it towards its workforce, finances or products. There are, therefore, various types of organizational planning goals; from workforce development and financial planning to products, services and expansion planning.

That’s a lot of data to organize. ProjectManager has interactive Gantt charts that help you organize all that information, create a functional plan and manage it successfully. Try ProjectManager today for free!

ProjectManager's Gantt chart

Why Organizational Planning Is Important

It goes without saying that the better you organize your company, the better your company performs. Organizational planning is important because it lets companies develop effective planning and achieve their stated goals.

Having an organizational plan is also helpful because a prepared company responds better to changes in the workplace. Furthermore, organization planning clarifies the roles, responsibilities and expectations of everyone in the company. This helps management make sure they’re meeting the determined benchmarks.

Because organizational planning creates a structure where relationships between teams and managers are clearly defined, it can also reveal where there are any shortcomings, issues or liabilities. The company can then resolve these hamstringing limitations.

Typical Organizational Planning Processes

These phases of organizational planning are defined in these four processes:

  • Strategic Planning: This is the big picture view for the company. Here, you define the company goals. The goals must align with the overall mission, vision and values of the company. This process involves upper management, though you can bring employees into the discussion.
  • Tactical Planning: Next, the discussion moves toward how to implement the developed plan. These are more short-term goals, usually no more than a year in duration. This is where middle management takes the ball, in terms of creating plans and marketing campaigns.
  • Operational Planning: Now we’ve come to the day-to-day operations necessary to execute the tactical plan. This is where you set up work schedules, policies, rules and regulations for employees. You also assign specific tasks and create a protocol for tracking work.
  • Contingency Planning: It’s important to have a backup plan or two in case of unforeseen events or issues that make the original plan impossible. Spend time thinking of possible risks and responses. Events include natural disasters, software malfunctions or the departure of a C-level executive from the company.

How to Make an Organizational Plan

The four phases of the organizational planning process create a framework, but there are different steps when making an organizational plan:

  • Start with the goals and objectives of the company: Where do you want to be in the short- and long-term? Then, assemble a team to lead the execution, tracking and progress of the plan.
  • Create a chart that illustrates the organizational structure of the plan: Share it with the whole company and keep them updated on progress as you hit milestones set for the long- and short-term.
  • Define the company goals and objectives: Make this a detailed list to help everyone understand the goals and objectives, as well as their part in realizing them.
  • Create a task list with roles for everyone on your team: Assign them tasks and make sure the team understands what is expected of them.
  • Review where the company is currently: What processes are in place at this moment? Reviewing this allows the team to see what they need to do to reach the company growth targets.
  • Take what you’ve collected and put it in a document: Use this to track progress when you execute the organizational plan.

How to Communicate Your Organizational Plan to the Team

Once you’ve created an organizational plan, you need to communicate it to the team. This is a crucial step. If you implement a plan without having everyone understand it, you may have problems that might derail the whole plan.

One way to get everyone on the same page is to call a company-wide meeting. Have a tight agenda that details the organizational plan, and get feedback from those in attendance. You can also create a one-sheet, and distribute it prior to or during the meeting.

If your company has project management software, you can bring the whole company in on the organizational plan, assign tasks and communicate through the tool if they have any questions. Then, when you implement the organizational plan, you can track progress and ensure everyone stays in communication.

How ProjectManager Helps with Organizational Planning

ProjectManager is a cloud-based tool with multiple project views that allow managers and their teams to choose the tool that they want to work with. No matter which they use, data is shared across the platform so everyone is working from the most current data.

Lay Out Entire Plans on Gantt Charts

Begin planning by organizing tasks and adding deadlines. Gantt charts are the traditional tool to get all your work on a timeline, but not all Gantt charts are the same. ProjectManager’s Gantt chart project view lets you to filter for the critical path without any complicated calculations. You see what is essential, and what you can skip, if time and money become an issue.

ProjectManager Gantt chart

Set Baselines to Track Progress

Once the schedule is completed, you can set a baseline. This captures your planned effort around tasks, resources cost and more. That means, once you start to execute your plan, you can compare the actual effort to your planned effort to make sure you’re keeping on track.

Baseline section of Gantt chart

Get Real-Time Data from Dashboards and Reports

To keep an eye on progress and performance, use ProjectManager’s live dashboard. It collects data, automatically calculates it and displays it in easy-to-read graphs and charts. Unlike other software, you don’t need to configure the dashboard; it’s up and running from the start.

ProjectManager’s dashboard view, which shows six key metrics on a project

ProjectManager is award-winning software that has everything you need to plan, execute and track your organizational plan. With timesheets, automated notifications and kanban boards, managers get transparency and teams have the autonomy to manage their tasks. See how ProjectManager can help you with organizational planning and take a free trial today.

Click here to browse ProjectManager's free templates

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IMAGES

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  2. 5 Organizational Structure Examples

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  3. How To Write Organizational Structure In Business Plan

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  4. 32 Organizational Chart Templates (Word, Excel, PowerPoint, PSD)

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  5. How to Write Your Business Plan Owner Bio & Team Structure

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  6. 5 Best Organizational Structure Examples (For Any Business)

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COMMENTS

  1. 7 Organizational Structure Types (With Examples)

    The organizational structure is how the company delegates roles, responsibilities, job functions, accountability and decision-making authority. The organizational structure often shows the...

  2. Writing the Organization and Management Section of Your Business Plan

    What Is the Organization and Management Section in a Business Plan? The organization and management section of your business plan should summarize information about your business structure and team. It usually comes after the market analysis section in a business plan .

  3. How to Write a Business Plan: Organization Structure

    The organization structure section should discuss whether your business will be a sole proprietor, limited liability corporation, or corporation, who will run your business, each person's responsibility, and how your business will expand if needed. There are numerous benefits to a detailed assessment of the company's structure.

  4. Organizational Structure for Companies With Examples and Benefits

    An organizational structure is a system that outlines how certain activities are directed in order to achieve the goals of an organization. These activities can include rules, roles, and...

  5. Organizational Structure: What it Is and Why it is Important

    An organizational structure is the way that a company, organization, or team is set up. It can be hierarchical, with different levels of management. Or it can be divisional, with different product lines and divisions. Sometimes, there's little to no hierarchy at all.

  6. Creating Your Business Plan: Organization & Management

    This section of your Business Plan should include the following: your company's organizational structure, details about the ownership of your company, profiles of your management team, and the qualifications of your board of directors.

  7. What Is An Organizational Structure? [+Tips And Examples]

    A network organizational structure, also known as a networked organization or network model, is a relatively new approach to organizing businesses. In a network structure, the organization has a decentralized network of interconnected entities, both internal and external, that collaborate to achieve common goals. Source.

  8. How To Write the Management Section of a Business Plan

    Key Takeaways. The management section of a business plan helps show how your management team and company are structured. The first section shows the ownership structure, which might be a sole proprietorship, partnership, or corporation. The internal management section shows the department heads, including sales, marketing, administration, and ...

  9. Types of Organizational Structures to Consider for Your Business

    An organizational structure is a set of rules, roles, relationships and responsibilities that determine how a company's activities should be directed to achieve its goals. It also governs the...

  10. Organizational structure: How to create or rebuild one

    When business size impacts organizational structure. You may be surprised to learn that the overall process of creating an organizational structure is the same regardless of employee headcount. And there is no definitive, black-and-white answer to the ideal organizational structure or the number of layers according to your business size.

  11. Implement the right organizational structure for your business

    Here are the key steps to follow in the process of creating an organizational structure in business plan: - Begin by evaluating your current business objectives, size, and industry. - Identify the key functions and departments required to achieve your goals. - Define the leadership positions needed in your organization.

  12. How to Make a Business Organizational Chart

    Step 1: Decide how to structure your business organizational chart. The first step in creating an org chart for your business is deciding what type of chart you want to use. Generally, there...

  13. Business Plan Section 3: Organization and Management

    One way to explain your organizational structure in the business plan is graphically. A simple diagram or flowchart can easily demonstrate levels of management and the positions within them, clearly illustrating who reports to whom, and how different divisions of the company (such as sales and marketing) relate to each other.

  14. Section 1. Organizational Structure: An Overview

    The best structure for any organization will depend upon who its members are, what the setting is, and how far the organization has come in its development. Regardless of what type of structure your organization decides upon, three elements will always be there. They are inherent in the very idea of an organizational structure. They are:

  15. Best Organizational Structures for a Business

    An organizational structure is literally a chart or diagram that depicts the logistical organization of a company. Finding the most appropriate organizational structure for a business depends on a number of factors. Below are three of the most important factors to consider in choosing among the best organizational structures for a business:

  16. Organizational Planning Guide: Types of Plans, Steps, and Examples

    There are four phases of a proper organizational plan: strategic, tactical, operational, and contingency. Each phase of planning is a subset of the prior, with strategic planning being the foremost. Types of Organizational Planning Strategic A strategic plan is the company's big picture.

  17. Business Plan

    A business plan is a document that contains the operational and financial plan of a business, and details how its objectives will be achieved. It serves as a road map for the business and can be used when pitching investors or financial institutions for debt or equity financing.

  18. Business Plan Organization and Management: How to Write Guide

    The organizational section of your business plan outlines the hierarchy of individuals involved in your business, typically in a chart format. This section identifies the President or CEO, CFO, Director of Marketing, and other roles for partnerships or multi-member LLCs.

  19. Business Plan Management Structure: What You Need to Know

    Organizational Structure You can use graphics to show your company's organizational structure. Simple flowcharts and diagrams offer visual representations of the management levels within your business, as well as the positions that fall beneath each level.

  20. 5 Best Organizational Structure Examples (For Any Business)

    Your Organizational Structure not only captures who is responsible for what but also the reporting and communications lines that tie everything together. To give you a better idea on the "why" we're going to go through 5 of the most popular organizational structures & explain how each works. Bear this in mind, though.

  21. What Is Organizational Planning in Project Management?

    Organizational planning is how business owners organize the day-to-day operations of a business. This can range from simple things, like the companies' reason for existence, to more complex considerations, like setting goals to realize a specific objective.

  22. How To Create an Organizational Plan

    An organizational plan usually involves five steps, including strategic planning, operational planning and reviewing and revising throughout. Each step breaks down the step before, ensuring the organization can achieve the larger goals.

  23. Business Structure

    Forms of Business Structure. The different business structures are discussed in detail below: 1. Sole Proprietorship. A sole proprietorship is the simplest business structure and involves one individual who is responsible for the day-to-day operations of the business. Also, from a tax perspective, the incomes and expenses of the business are ...

  24. What Is Organic Organizational Structure?

    An organic organizational structure is a flexible, decentralized form of organization that emphasizes an adaptive, informal network approach to management and decision-making. ... Plan the transition: Outline the steps, ... In an increasingly competitive and dynamic business environment, organizational development (OD) & design are becoming ...