Contemporary galloping technological, social, economic and political changes create an increasingly complex, unpredictable and unstable living and working environment. For the purpose of a competitive business-doing, companies have to continuously adapt to new conditions, and, among other things, adapt their organizational structure in time. Within the framework of the dissertation, the research of scientific literature has been carried out with the aim of determining the current knowledge about the problem and possible solutions of continuous adjustment of small and medium-sized enterprises to turbulent changes in the business environment. The necessity of constant adaptation of the organizational factors of the company to changes in the context has been determined, however, no adequate systematic practical solutions have been found that would enable this. The research has been conducted in a representative sample of small and medium-sized Croatian production companies in order to determine the possibility of their adjustment to the changes of a business environment from the viewpoint of business activities, competences and informations. Examinations have been carried out by means of semi-structured interviews and through the insight into the operational documentation and business activities of the company. Through the analysis and statistical processing of the obtained data, it has been determined that companies do not have an adequate adaptability. On the basis of the results obtained from all the conducted research, the Dynamic Organization Model has been designed, which has afterwards been implemented in a few Croatian middle-sized production companies and its practical applicability has been confirmed by means of validation. The use of the Dynamic Organization Model has enabled small and medium-sized production companies to adjust their organizational structure in a dynamic manner and thereby ensure a continuous response to changes arising from external and internal influences.