Introduction
Our topic and trigger on the class this time was concerning the company growth, change and how this all is affecting on the employees and the structure in the company. We found out the learning objectives we would find out more for our blogs.
What company structures there are and how do they work?
Organizational structure is the way how the organization arranges people and jobs the way that the work can be done, and the goals can be met. In very small companies, this kind of structure is not necessarily needed, but larger organization the decisions must be made by delegating tasks and procedures are established that there are responsibilities for various functions. According to these decisions that the organizational structure will be made. (Distelzweig & Droege)
Point Park University introduces four typical organizational structure models (2018) The functional structure is an organization divided to smaller departments, like information technology, marketing and finance. All the departments have each the one manager, who supervises the department and answers to the vice president of the company. People working in this structure, are allowed to use their work force to specific set skills, but this model might have a lack of inter-departmental communication
Larger companies might use a divisional structure. Each division operates like as own companies allowing to control their own resources and spent money and aspects. This structure can be also geographical, different divisions can be located even in different continents. Division works as it´s own company, where there are 1 or 2 people reporting to the parent company. In this model, employees don’t necessarily have chance to communicate between divisions. There might be also problems with accounting practices and tax implications (2018)
Matrix structure can be a challenging organizational structure. Employees may report to several managers in the same time and work may be projects where various expertise is needed at the time. Because of this, there might be some communication problems. Employees must know their roles, work priorities and responsibilities very well.
Flatarchy is combining elements from functional and flat organization, which allows decision making among the different levels of organization. Within this system, also the employee level is encouraged to suggest ideas and run with them. Negative side for this structure is, that this structure can be confusing and some employees might feel uncomfortable how this structure should be organized. (2018)
How to adjust company´s infrastructure to growth?
Functioning infrastructure in business ensures, that proper coordination of human resources, processes and other operational tools will ensure the profitable growth for the company. Good infrastructure of the company is essential especially when the company grows. (Pierre, 2012)
Following things can be part of functional infrastructure of the company; a solid foundation, consistency with delivered customer service and a model, that makes each time you do something, little bit easier. (Pierre, 2012) From human resources side, infrastructure can be policies and procedures, job task analysis, and job descriptions. From business processes side this can be hiring, service delivery, collection and sales processes. And from operational side, these can be the databases and software, equipment and furniture and templates and checklists.
Fast growth in the company requires usually additional employees, better technology and process documentation. (Pierre, 2012)
I´m currently working in a company that has grown and changed immensely during one year time. The problems, I and the others have been mainly faced, are with the technology and some system changes. Big help for this infrastructural matter has been a full day IT help, who is helping us at the office during the weekdays. One more visible thing that became a problem during company growth, was that our workspace became unfunctional due to more staff members and this also increased noise at our office. We also had problems working schedule functionality. I can easily relate to the article “Why everything breaks when you reach 25 employees” we got into, during going through trigger 3. As a conclusion what is needed to adjust in company´s infrastructure when it grows, are in my opinion, that the IT works, or there are tools or help to make it work. Also, the management should be aware of all the operational work in the business, and it´s functionality during the changes.
How to secure financial stability in growing company?
Robert Ginsberg (2019) says, that growth journey is different to every business, but there are some guidelines every company should consider when thinking about finance.
To set out goals to short, medium and long term, to determine whether the finance is right course at this point. Does the business want to access new markets or develop new products for example and think if it can be done by own cash flow or if extra capital is needed. If extra capital is needed, company should decide, which form of finance is reasonable. Lots of research should be done about different capital lenders. It´s important to find a lender who is looking for a long-term relationship and understands the needs of the company. Change can be fast for small business during periods of fast growth, so finding a supportive finance provider is important. Different options for growth finance can be for example different leasing and hire purchases, loans and overdrafts. (Ginsberg, 2019)
What happens to employees when company starts to grow?
I use my previous personal experience about the company growth as an example. When company grows, the team leader or the management doesn’t have that much time for the employees anymore. It might get more difficult to ask help or talk about work related problems or ideas to someone. There might be a work-related problem, that the management doesn’t have time to listen or have one-to-one conversations. If the employee has a feeling not to be listened, they start thinking about finding a new job. I had a time when I didn’t have a real conversation with my team leader during almost 10 months and I started thinking, do they really want me to be here.
Other things that are interesting, how people will get interested about the opportunities for growth in the company. It´s mentioned in Lighthouse blog, that older employees start looking for the growth opportunities and possibilities for promotion. They also mention that same that I have found out in my workplace, employee turnover if the management don’t have tools to keep the employees when company grows.
One more mentioned thing in the blog, is the work culture, how it starts forming when the company hits 25 employees. This will require lots of effort from the management side. Culture can easily develop to negative, widespread or in a good case into supportive, dynamic pulling together atmosphere.
In Snellman´s (2019) article, there are mentioned things, that the management need to ensure, that te employees will stay engaged when the company grows. First of all, employees need to know that their matters and they have value, work culture should evolve based on feedback. People should be also able to show their vulnerability. This concerns especially underrepresented groups. I think this we should also keep in mind when we study International Business and probably work in multicultural workplaces in the future.
References
Butler Pierre, A. 2012. Equilibria. Business infrastructure- what it is and why every company needs it. URL: https://eqbsystems.com/business-infrastructure-company/Accessed 12.11.2019
Butler Pierre, A. 2012. Equilibria. Definition of business infrastructure. URL: https://www.slideshare.net/PromotionQueen/definition-of-business-infrastructure Accessed 12.11.2019
Distelzweig & Droege. Reference for Business – Organizational Structure. URL: https://www.referenceforbusiness.com/management/Ob-Or/Organizational-Structure.html#ixzz64zoYVkSz. Accessed 12.11.2019
Ginsberg, R. 2019. Case study about How businesses should approach finance. 2019. URL: https://growthfinanceawards.com/how-businesses-should-approach-finance/. Accessed 13.11.2019
Snellman, E. 2019. When to start your HR function – later than you thought. URL: https://www.slush.org/article/when-to-start-building-your-hr-function/. Accessed 12.11.2019
Lighthouse – A blog about leadership and management advice. Why everything breaks, when you reach 25 employees. URL:https://getlighthouse.com/blog/company-growth-everything-breaks-25-employees/. Accessed 13.11.2019
International Business study blog / Anna 