In a workgroup, each computer operates independently and resources like files and printers can be shared without the need for a centralized management system or dedicated server. This setup is suitable for small networks, typically in a home or small office setting. A domain setup, on the other hand, requires a centralized domain controller and is more suitable for larger organizations where centralized management is necessary. The mention of 'without a dedicated server' in the question points to a workgroup as the correct choice because a domain requires a server.