In this video, I talk about the transition in organizational structure from a small company to a large company. This transition in organizational structure is imperative to grow your business, and identifying the best org structure for a business is dificult. A small business is normally defined as a organization that is less than 500 people (250 in the Canada/UK), in a large company is defined as one that is greater than that in employees.
As businesses grow, they have to transition through several stages. It is common to hear that there is a fundamental change in how companies are managed from a small business to a large business. Much research in organizational theory and strategy have investigated this pattern. In particular, the importance of organizational structure is highlighted.
Firms generally start out with a very simple owner-manager structure, in which the organization is a extension of a manager or entrepreneur. Then they may transition to a functional structure, in which the organization is divided into different functions. Finally, very large organizations use the M-form multidivisional structure, which divides the organization into independent units that may or may not compete for resources.
The reason why organizations go through this transition is because of communication, coordination, and control problems. Generally, small businesses will face challenges that cannot be resolved, or the manager will feel very overwhelmed with their duties. Thus, the goal of managers as their organizations grow is to let go of different tasks in a very controlled manner. If managers find this difficult, it is recommended that you pursue having a change management or business development consultant come in and help with this transition.
If you are interested, here are some additional videos:
Why It Is Important To Go Slow To Create And Grow A Business Faster
https://youtu.be/9m9_05UwEYwWhat Are The Two Most Important Strategies In Business? - Startup & Small Business Saturdays
https://youtu.be/-onnifiZug0Using Mergers & Acquisitions (M&As) For Business Development - Startup And Small Business Saturday
https://youtu.be/UknJ6UdOkdc*****************************
As a research professor of entrepreneurship, innovation, and business strategy, I discuss topics, such as behavioral science, strategy, innovation, and entrepreneurship, and apply these to my new peer proofreading and editing platform. Topics include the sharing economy, altruism, investing in technology, and bounded rationality. My favorite videos pertain to incentives, goal setting, and learning from failure to drive behaviors such as weight loss, stopping telemarketers, creating novel technologies, and creating new movements.
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