Organisational structure

Putting together an organisational structure is a key aspect of setting up a social business.

The main purpose of your organisational structure document would be to outline how the responsibility is divided between different roles and upheld by various rules to ensure the business is working towards its goals.

What is an organisational structure in business?

There are certain functions essential for all businesses, such as governance and strategic planning, financial management, marketing, human resource management and operations. These need to be carried out by individuals, teams or departments. 

In your organisational structure describe how these and other functions particular to your business model will be managed.

Before you begin, you will need to understand the difference between governance and management. Management is about making sure that the business is run according to policy. Governance, on the other hand, is about setting policy and strategy. You will need structures for both.

Organisational hierarchy template

At this stage you don't need to a detailed organisational chart for your social business, but if you can have one if you want. The key priority is being able to describe the relationships between the main groups that make up the business. These include:

Owners
Board of directors or trustees
Members (where proprietorship is open to any who meet the membership criteria)
Associate members (with fewer rights and responsibilities than full members), probationary members (on a pathway to full membership) or other categories of membership
Managers

Partnership business structures

You may consider something more complex, such as a consortium of member organisations or a franchising system. Or you may intend your organisation to have partnerships or close relationships with other organisations and statutory bodies. If this is the case with your social business, specify these relationships.

If you intend the business to be owned and democratically controlled by its members, you may want to adopt a co-operative structure. There are many types of co-operative, but they all  conform to a specific set of principles. You can find out more about what a co-operative is on the Co-operatives UK website.

If you are considering a co-operative option, make sure to specify what type of co-operative you are considering and what advantages you expect the co-operative ethos to confer.

You could also choose a model that involves employee ownership. Find out more about that on our Employee Ownership page.