New small businesses grow organically, with elements springing up and players reacting and adapting as needed. Eventually, all this organic movement needs taming, and a small-business owner seeks a formal organizational structure to serve as a framework for growth. Organizational structures fix the scope of jobs, group operational activities together in some fashion and provide for superior-subordinate and peer relationships. Decisions leading to the best structure for a particular business weigh the company’s circumstances, aspirations and character. Operations is one of the aspects considered by a small-business owner who’s creating an organizational structure.
The first step in creating an organizational structure is determining all the needed tasks and then creating job positions. Specialization refers to how narrow or wide the scope of each job is. If a small business needs operational efficiency, the owner may opt for narrow job specialization. Employees tackle small tasks repeatedly, becoming faster and more efficient over time. Such routine jobs require fewer supervisors in the structure than do complex jobs.
Also fundamental to structure is how jobs are grouped together to best tackle operations. It’s often practical to departmentalize jobs by similarity. Grouping together jobs according to functions such as manufacturing allows for resource sharing and increased efficiency. Instead of choosing such a functional structure, creative businesses such as marketing firms might group people into teams featuring a mix of functional experts who contribute to the success of client projects.
A company’s objectives and goals will help shape structure. For instance, if the goal is to standardize operations, the company needs a structure that lets the owner exert control over work processes. Control can be achieved by defining set work procedures — something the functional structure supports well. A company aiming to be a cutting-edge marketplace leader will choose a less controlled structure — such as the team structure — that fosters employee innovation.
The range of operations influences structure. Companies operating in more than one location or that have a range of products or different target markets may choose a structure that can cater to these circumstances. The divisional structure allows a small business to create divisions that dedicate efforts to a customer type, product line or place. The structure allows each division to adapt its operations as needed.
The technology used in operations may become a deciding factor in creating departments. Phases in a manufacturing process might dictate separate departments if the technologies used in the different phases require different locations and skills. Today’s communication technologies allow small businesses to adopt the network or virtual structure. Subcontractors located away from the company, even in foreign countries, can perform operations. This allows a small business to easily expand or contract operations as needed.
- Management: Meeting and Exceeding Expectations; Warren R. Plunkett, et al.
- Reference for Business: Organizational Structure
- Business Essentials; Organizing the Business; Ronald J. Ebert & Ricky W. Griffin
- Inc.: Organizational Structure
Continue at: https://smallbusiness.chron.com/operations-determine-organizational-structure-business-67510.html
The text above is owned by the site above referred.
Here is only a small part of the article, for more please follow the link