Small businesses form majority of the businesses world-wide. They contribute to the success of most world economies greatly. In developing countries, they are drivers of the economy. Therefore, they are a very critical part of the business society.
Despite their critical importance to our society, small businesses are not as complex as they may sound. Individuals, who in most cases are the owners, run a majority of those businesses. Consequently, their Organizational Structures are quite simple. In the Case under analysis (Sports Shop), the owner performs all the managerial duties whereas the employee tackles the mechanical activities of the business.
Organization Structure is the process that enables allocation of tasks and responsibilities to different departments in the organization. It influences division of labor to a great extent. This is because Organizational Structure sets clear guidelines as to what role each employee of the organization plays.
In this case, it helps to avoid conflicts in the work place. Therefore, it provides a peaceful working environment. A wrong Organization Structure may mean the end of business for the organization in question. This is because Organization Structure helps to specify who makes what decision and the reason for that.
The Sports Shop Structure is simple as there are only two workers involved. It employs a centralized structure. Hence, the owner makes all the managerial decisions. He (the owner) is responsible for the running of the shop. He only delegates the mechanical part to his employee.
This structure ensures that the owner has full control and responsibility over the business. By making all the important managerial decisions, the owner remains sure that things will go right. The assumption is that the owner undertakes only those activities that benefit the business and help it to grow.
As stated previously, small businesses are critical in most world economies, especially in developing countries. This is because they are productive in their areas of business. Since most small businesses sell proprietorships, their productivity heavily depends on the determination and diligence of their owners.
In the recent past, small businesses have recorded high levels of productivity. This is because of the Governments’ efforts in encouraging entrepreneurship to create jobs. The cost of lending money has reduced greatly to enable Small-Scale Investors to invest more. Depressions in economies across the globe have led to massive job losses. As a last resort, economies dedicate their time to small businesses.
Because of their manageable nature, small businesses have highly centralized and flat structures. In the Case above (Sports Shop), the employee has to be accountable to the owner. The owner has to be accountable to itself and to the customers. The owner has to be accountable to the employee to give him motivation for doing a good job.
As much as it is the owner’s business, he also has to employ professionalism and to avoid subjectivity in the business. This will help him to avoid conflicts with his employee. This is another type of accountability.
The employee has to be accountable to the owner for any business carried out in his (the owner’s) absentia. The owner has to be accountable to the employee in terms of salary increment/payment. This means that the owner has to be considerate of the welfare of the employee in terms of safety and monetary security.
Planning is a major part of the organization. This is because, planning helps in the formulation of budgets, monitoring of operations and directing the future of the organization as whole. Planning skills enable managers to visualize the future of the organization and set achievable goals.
The owners of the small businesses do the planning. They decide what they intend to achieve in the short-run and the long run. They may involve the other employees as a source of information but they make the final planning decisions. In most small businesses, the owner’s experience in doing business affects planning. In addition, the environment in which business operates heavily affects it. As the business grows, it employs complex planning skills.
Business activities in small businesses follow a regular if not repetitive pattern. Consequently, their coordination requires less effort as the parties involved are accustomed to operating in the pattern.
Coordination is also easy because of the small number of employee/parties involved in performing the various tasks. In this case, there are only two parties involved in the operations of the Sports Shop. However, the owner naturally supervises the operations of the business. Furthermore, the owner performs most of the activities, which makes coordination easier.
Coordination is paramount in ensuring that operations are successful in an organization. It helps to keep operations in line with the Vision and Mission of the organization. It also helps to marry operations with other related operations in order to complete projects successfully. In addition, coordination helps in controlling operations to ensure operations’ completion in time or as required. Finally, coordination ensures efficiency both in terms of time and cost.
An organizational structure is a concept which shows how integrated entities in an organization interact to achieve an organization’s goals and objectives. These can be departments and relates with the way different positions in an organization are identified or levels of management and the reporting relationships between these positions or hierarchies commonly referred to as the line of command (Organizational Structure 1).
Communication or the flow of information is usually upward, downward, and horizontal. An organization’s structure determines the responsibilities and roles of organizational employees. An organizational structure also consists of organizational culture and organizational behavior as in the case study.
According to the article Organizational Structure (1) these structures depend on what the organization wants to achieve and their core functions.
These structures are those without specific benchmarks or standardized activity definitions. (Organizational Structure 1). These do not have formal structures in place and standardized task and sub-task allocations and responsibilities.
A functional structure is specifically meant for large organizations. Such a structure has the advantages of better allocations of tasks and responsibilities. In addition, it is a cost effective manner of carrying out tasks and sub-tasks for efficient use of an organization’s resources.
Within each entity employees find it easy to work together since communication between them is efficient. However communication from the outside of a specific department may be slow. This structure has the advantage of efficient employee and resource utilizations but slow interdepartmental coordination.
Different regions have different market needs. In order to meet the needs of a market, an organization can be structured after the needs identified with different geographical divisions or marketing needs. The functional requirements for each division are integrated into organizations such that they are met (Organizational Structure 1).
Sometimes organizations are structures such that different organizational structures are amalgamated to form a single structure. This kind of structure may be an integration of functional structures, divisional structures, pre-bureaucratic organizations, and bureaucratic organizations.
Each organizational entity is grouped according to the product it produces, the functions it performs and standards established. A matrix structure’s strength is teamwork. Here, each team is required to exploit and capitalize on its key strengths to best achieve an organization’s goals.
In addition to these, a matrix organization is characterized by decentralized management. This reduces the effect of tall and short organizational structures.
For an organization to efficiently perform and put to efficient use the human resources and other organizational resources, tasks and sub tasks have to be identified and differentiated. In addition to that, the tasks have to be standardized in line with an organization’s goals and objectives aligned in its vision.
Then a strategy must be laid to achieve that vision. Therefore an organization must be designed according to its strategy, the level of available technology (Organizational Structure 1). Environmental issues which touch on corporate social responsibilities for the organization are vital.
An organization’s structure is usually shown on an organization’s chart. Organizational activities include coordination, communication, task assignments, departmentalization, and employee motivation among many others. Each organizational activity must be communicated well to elicit understanding. Good communication within the organization in the case study leads to employee motivation and performance improvement.
Organizational Structure. 15 March, 2010. 29 Apr. 2010