Lesson 1: Managerial Organization

Line Organization

Small businesses often use line organization.


It is a simple organization based on authority. The line of communication is from the top down. Every worker reports to one person only.

Example: In a small convenience store, the line of communication could be from the owner to the supervisor to the person who stocks shelves and cleans the floors.

Notice the previous sentence represented by an Organizational Chart placed to the right which makes it very clear what each person's position is and who to report to. This is a flowchart of communication which is vital to the success of the business.

Line Organization

  • Simplest organization mostly used in small businesses
  • Organizational structure based on authority
  • Line of communication from the top down
  • Every worker reports to one person
  • Top manager can make quick decisions

Try This


Below are 10 boxes with the different positions for Renovations Unlimited a hypothetical company. Arrange the boxes into the dotted lines to complete a Line Organizational Chart for this company.


Check Your Work

Think about the possible advantages and disadvantages of this type of structure and then click on the Advantages tab or the Disadvantages tab to see how you did.


  • Line organization enables quick decisions by the top manager about most matters.
  • Employees can see easily where they fit into the line of authority and account for their work.
  • Top Manager may be over-worked trying to oversee everything.
  • Top Manager and decision maker may lack the specialization required for every position.