Generally, the design of the initial organization will be simple. In fact, the entrepreneur may find that he or she performs all the functions of the organization alone. This is a common problem and a significant reason for many failures. The entrepreneur sometimes thinks that he or she can do everything and is unwilling to give up responsibility to other or even include others in the management team. In most cases when this occurs, the entrepreneur will have difficulty making the transition from a start-up to a growing, well-managed business that maintains its success over a long period of time. Regardless of whether one or more individuals are involved in the start-up, as the workload increases, the organizational structure of the organization. Effective interviewing and hiring procedures will need to be implemented to ensure that new employees will effectively grow and mature with the new venture. All the design decisions involving personnel and their roles and responsibilities reflect the formal structure of the organization culture that evolves over time that also needs to be addressed by the entrepreneur. Although we are speaking of an organization culture rather than an organization design, the entrepreneur can have some control over how it evolves. Since issues related to this culture can be just as critical as the formal design of the organization for ensuring a successful and profitable enterprise, they will be discussed in more detail in the next section of this chapter.
For many new ventures, predominantly part-time employees may be hired, raising important issues of commitment and loyalty. However, regardless of the number of actual personnel involved in running the venture, the organization must identify the major activities required to operate it effectively.
The design of the organization will be the entrepreneur’s formal and explicit indication to the members of the organization as to what is expected of them. Typically these expectations can be grouped into the following five areas:8
• Organization structure. This defines members’ job and the communication and relationship these jobs have with each other. These relationships are depicted in an organization chart.
• Planning, measurement, and evaluation schemes. All organization activities should reflect the goals and objectives that underlie the venture’s existence. The entrepreneur must spell out how these goals will be achieved (plans), how they will be measured, and how they will be evaluated.
• Rewards. Members of an organization will require rewards in the form of promotions, responsible for these rewards.
• Selection criteria. The entrepreneur will need to determine a set of guidelines for selecting individuals for each position.
• Training. Training, on or off the job, must be specified, This training may be in the form of formal education or learning skills.
The organization’s design can be very simple-that is, one in which the entrepreneur performs all the tasks (usually indicative of a start-up) –or more complex, in which other employees are hired to perform specific tasks. As the organization becomes larger are more complex, the preceding areas of expectation become more relevant and necessary.
Generally, the design of the initial organization will be simple. In fact, the entrepreneur may find that he or she performs all the functions of the organization alone. This is a common problem and a significant reason for many failures. The entrepreneur sometimes thinks that he or she can do everything and is unwilling to give up responsibility to other or even include others in the management team. In most cases when this occurs, the entrepreneur will have difficulty making the transition from a start-up to a growing, well-managed business that maintains its success over a long period of time. Regardless of whether one or more individuals are involved in the start-up, as the workload increases, the organizational structure of the organization. Effective interviewing and hiring procedures will need to be implemented to ensure that new employees will effectively grow and mature with the new venture. All the design decisions involving personnel and their roles and responsibilities reflect the formal structure of the organization culture that evolves over time that also needs to be addressed by the entrepreneur. Although we are speaking of an organization culture rather than an organization design, the entrepreneur can have some control over how it evolves. Since issues related to this culture can be just as critical as the formal design of the organization for ensuring a successful and profitable enterprise, they will be discussed in more detail in the next section of this chapter.
For many new ventures, predominantly part-time employees may be hired, raising important issues of commitment and loyalty. However, regardless of the number of actual personnel involved in running the venture, the organization must identify the major activities required to operate it effectively.
The design of the organization will be the entrepreneur’s formal and explicit indication to the members of the organization as to what is expected of them. Typically these expectations can be grouped into the following five areas:8
• Organization structure. This defines members’ job and the communication and relationship these jobs have with each other. These relationships are depicted in an organization chart.
• Planning, measurement, and evaluation schemes. All organization activities should reflect the goals and objectives that underlie the venture’s existence. The entrepreneur must spell out how these goals will be achieved (plans), how they will be measured, and how they will be evaluated.
• Rewards. Members of an organization will require rewards in the form of promotions, responsible for these rewards.
• Selection criteria. The entrepreneur will need to determine a set of guidelines for selecting individuals for each position.
• Training. Training, on or off the job, must be specified, This training may be in the form of formal education or learning skills.
The organization’s design can be very simple-that is, one in which the entrepreneur performs all the tasks (usually indicative of a start-up) –or more complex, in which other employees are hired to perform specific tasks. As the organization becomes larger are more complex, the preceding areas of expectation become more relevant and necessary.
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