What is a business structure?
A business structure relates to the way the business is organized with respect to who makes decisions and directs what part of the business. Often drawn as a diagram, it shows the relationship between decision makers and different departments within the company.
business business structure
In the corporate business structure, any decision that needs to be made is made centrally, either by one person or at headquarters, the results of which are then communicated to the workers. This is the most ‘rigid’ of organizational structures, as workers have little or no input into the decision-making process, instead they just have to follow the orders that are issued.
The entrepreneurial business structure is most commonly found in sole traders with few employees, or in organizations that have to make decisions quickly, such as publications, where there is often very little time available to discuss things in meetings when there is a deadline that you have to meet. . be put. In this case, someone has to make a decision quickly without having to discuss or justify it.
For a sole trader, you are often the sole owner of the business, and that is how they say. Since it is his property, no one has the authority to block or delay his decision. While many may seek advice from the people they employ, often they will already have an idea in their mind about what they would like to do, so they will probably make the decision immediately.
Advantages of the business business structure
The main advantage of the entrepreneurial business structure is the ability to make decisions quickly. Without long meetings and discussions, or proposals sitting around waiting for approval, decisions can be made almost instantly and changes can be implemented. This allows companies to quickly adapt to any change in market conditions. It is also a leadership style used by governments in emergencies, and virtually all countries have laws in place that allow legislation to bypass parliament or equivalent bodies and be enacted when speed and response time are the highest priority.
Another advantage is that it is one of the least expensive commercial structures available, and in most cases it will be the cheapest option. This is because there are no layers of middle management to pay or maintain (eg company cars).
Third, everyone knows who is in charge and to whom they are accountable, which eliminates the potential for confusion if different department heads ask workers for different things (for example, the head of the production department asks workers to improve the quality of the product by spending more time on each one, at the same time that the head of the finance department requests more production to generate more income).
Disadvantages of the entrepreneurial business structure
Despite its advantages, there are a number of disadvantages to the business business structure.
Due to their autocratic nature, when workers are told what to do without being involved in the decision, there is always a real danger that they will lose morale and motivation if they disagree with the decision. The degree of their discouragement will depend on a number of factors, such as the degree of disagreement they have, as well as the amount of explanations (if any) they receive as to why that particular decision was made.
Decision makers may not know as much about the problem, market conditions, etc. as they think they do. While they make quick decisions, they are not necessarily the best decisions, and it may be better for the company to have a specialist manager who is an expert in a particular area.
It may also not be a suitable organizational structure if the business grows, as decision makers simply have too many decisions to make. As stated above, decisions can be made quickly in an entrepreneurial business structure. But if there are so many decisions to make that cause delays while different employees wait for answers, it may actually be faster to appoint a manager and delegate responsibility for making certain decisions to him.
