Select an appropriate organizational structure for businesses

Many small business owners today do not adopt the traditional structure - tree management (hierarchical reporting) in their companies. Instead, a corporate organization chart often resembles a spindle or wheel. This means that the entire decision-making process is centralized, important exchanges are done directly with the business owner, and there is no standardization of duties within the company.

When your business expands, it will often be a more cumbersome organizational structure, with a stricter hierarchy because you cannot monitor everything on your own. With this organization, the tasks of each department need to be clearly assigned and each function will be documented in detail.

This structure has advantages, but internal political issues and personal relationships may play an important role. This is also the time when the corporate culture will be formed without the control of the business owner. In this type of organizational chart there will be tight management and individual levels. Management will work directly with the business owner, and once the company expands, and each decision will go through multiple management layers.

This organization is suitable for businesses that need quick management and management decisions. However, it will create more employees than create leaders because every strategic decision is made at the higher level. But after a while, such a tight structure will prevent innovation and innovation in the constantly changing market. Therefore, the key to creating a strong ladder organization is to give each manager the goals of the department within the overall goals of the company. Managers will work with you to work out what needs to be done, but they are the ones responsible for how they are done. And so, they will get their own budget and have the right to hire their own staff.

In order to organize an effective scale, each leader named in the key chart needs to be evaluated on a quarterly basis for their impact on accomplishing specific goals and how they contribute to the company in general. Inefficient members will affect a department, department or the entire company. In businesses that operate effectively, people who are incapable will not have a place and will gradually be eliminated. Team members should be trained and cross-trained to replace employees who do not meet the requirements. In addition, systematic ways to solve problems need to be applied and followed.

1. CHOOSE THE RIGHT ORGANIZATIONAL STRUCTURE

An organizational structure cannot be suitable for every business. Therefore, it is extremely important to choose a structure that fits your company's strategy and business environment and allows your business to operate optimally.

If your business is producing low-cost products in large quantities, using the traditional ladder structure can be very successful. But if your company depends on continuous innovation in a volatile market, using this structure will no longer work.

For a small business, having too many specialized departments will lead to work delays. If your company has more than XNXX, you will save more when maintaining professional departments capable of making independent decisions. If your business operates in a field with strict regulations such as health, insurance or financial services, you need to organize the structure with very strict management and control.

2. CHANGES IN CORPORATE CULTURE

Businesses also have changes in their cultural-based structures, including:

Matrix management: in this way, different committee members (research / development, production, sales and finance) will work together on a project or product and report together with a single manager. This is completely different from the traditional ladder structure, when all employees with similar tasks will be included to work together and manage a class.

Reasons to use: this structure breaks down the departmental system and can enhance the exchange of information between different departments so that members will better understand the difficulties of other groups. In addition, this type of management also helps members develop many skills. However, this can confuse many people when there are too many superiors and many different job priorities.

Management by profit center: this structure is based on the capacity of the group to achieve the goal. For example, in a supermarket chain, each location will have a profit center independent of the self-managed group of 10. The leaders of these groups will also act as separate groups throughout the company.

Reasons to use: this method usually works well in autonomous areas or franchises. Each group can be evaluated based on how much they contribute to net profit and successful models can be replicated.

Network management: this is often effective when company employees work with a variety of external sources, each of whom manages a group of relationships. This method provided a vertical integration for a retailer that did not have a factory, but only hired outsiders who could produce clothing products for their suppliers. .

Reasons to use: this organization is suitable for small business owners who often have to work with many outside suppliers in charge of important parts of their business, including development, production, sales or service.

Virtual management: this method is very popular with small businesses that use many freelance or temporary workers to complete a project. Although this is not an official organizational structure, it can operate through a network of electronic devices that connect to the Internet and help businesses that are small but can still operate in large markets.

Reasons to use: how this organization is often used by small businesses that want to maintain a low number of employees and hire outsiders to implement a project on demand. When the project ends, the cooperation with the external staff is also terminated.

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