Planning for Business Growth and Expansion
There is a tremendous amount of information to be considered when starting a business. Not only is there planning for the business you are experiencing at the current moment, to maintain success an owner must plan ahead for growth and expansion. This planning should include the structure of the company as it grows as well as planning for any type of business product. I plan to discuss the detailed projects and plan regarding growth and expansion of a dot. com start up and the challenges that may be faced along the way.
Business Phases The business at hand is a dot. om start up that involves renting apartments to students. Phase One (see example page 6) has five employees. The original organizational structure of the company had three Salespersons, one Accounting/ Billing person, and the owner. The owner handles all of the apartment maintenance, is an extra salesperson and performs any extra duties as needed. Organizational structure helps to define how Job tasks are formally divided, grouped, and coordinated, (Robbins, 2010).
The Salespersons and the Accounting person are specialized into their departments but due to the small size of the company there may be some overlap in duties. Phase Two (see example page 6) has developed very quickly and without planning. The company is currently at 30 employees and has grown 500% over the last six months. This growth has required a more in depth look at each individual Job and has required more work specialization. Work specialization is the degree to which activities are subdivided into separate Jobs, (Robbins, 2010).
A manager has been brought in to strengthen the chain of command and manage all the processes and employees to ensure each area is running smoothly. At this point, the small size is still manageable but the chain of command is not a hard and fast rule with the wner still very involved in the day to day aspects of the business. The owner still makes all of the decision regarding the business and is an example of a Centralized management style. Challenges of the business at this point can be no formal Job descriptions, Jobs getting lost in the shuffle due to business growth and the owner and manager trying to run the business at the same time.
Phase Three (see example page 7) of the business becomes more involved in a variety of ways. Once a company grows to fifty employees, the majority of labor laws begin to apply. The next forecast for growth is for two hundred employees and is rojected for one year out. We begin to see a more de-centralized approach as operations of their departments and are responsible for carrying out the objectives set by the owner. Human Resources is formed to manage the legal employee aspects of a company this size as well as recruiting, new hire orientations, payroll and any type of employee relations issues.
The Sales Department has the largest growth due to the fact that this department brings in the most revenue. As this department continues to grow, support staff will be needed to manage calendars, maintain files and any other as needed duties. Where the sales staff may have been creating their own documents when the company was smaller, they may now rely on administrative help to perform their general maintenance of documentation. As the company grows, an Information Technology Department will be needed to create a network for the business and ensure all employees have the technology they need.
Sales representatives may require laptops as opposed to regular employees that can use a stand-alone personal computer. As growth continues, problems will occur which presents the need for a Help Desk department to correct computer roblems and help employees manage day to day technology challenges. As the company expands, so does the need for Maintenance. The Maintenance staff is responsible for cleaning and preparing an apartment to rent when an old renter moves out. They are also responsible for responding to any problems with the rental units.
In addition to the rental units, some maintenance employees will be assigned to cleaning and maintaining the corporate building that houses the employees. Looking to the future, it is important to plan ahead to and create a formalized structure. The owner should create a mission statement and yearly goals to share ith the employee. Human Resources should have formal Job descriptions for each job title in the company. An appraisal process should be implemented and as the company grows, career paths should be created.
There should be a formal employee orientation process with a well thought out socialization process. “The most important socialization stage is at the time of entry into the organization. This is the time to mold the employee into an employee in good standing”, (Robbins, 2010). If an employee is not socialized properly and allowed to flourish in their position, they may be frustrated, resign, or cause problems within the department. Each department should have their own formal policies and goals that tie into the corporate goals of the company.
It is important to formalize all policies and procedures in an effort to protect the company from law-suits and employee ethics charges. Formalized policies will make it clear what the company stands for and how to enforce the rules and regulations. It will also be necessary to create an employee management process for employees that are not performing up to standard. A written policy will enable managers to follow-through with employee performance issues and not miss any steps that could create a liability for the company. Phase Four (see example page 8) of the Growth and Expansion plan is for two into specific roles and models.
The division of labor is highly specialized and grouped into individual departments. Each individual department reports into their department manager creating a decentralized management process. Each manager then reports into the owner which is an example of a centralized management chain of command. The current set-up of each department utilizes a Bureaucratic organizational design style. Each department will have highly routine operating tasks achieved through specialization, (Robbins, 2010). All of the company policies and rocedures should have been developed and enforced.
As the company continues to grow, each individual department will need to be assessed to evaluate if the current reporting structures is effective. Rapid growth will require the additions of sub- categories such as assistant manager or supervisors that report to the individual department manager. Additional support Jobs may be needed and lor more specialized Jobs may be created as the business grows and changes. The company will need to learn to react to the changing external environment of the business which could require changes to the organizational design process or structure of the ompany.
Conclusion Starting a business can happen from inspiration or simply a great idea as in the example for our study. There is much more to consider beyond the product itself. Organizational design and culture can make or break a company and be the determining factor as to whether your employees will stay and flourish or leave for a competitor.