Resources When Starting a Business

Organization and Management Issues for the Small Business

Written by Samuel Muriithi for Gaebler Ventures

Every member of a given organization is tasked with a number of management functions as part of his or her job description. What are these organizational and management aspects that a small business must incorporate for success?

The organization needs for a business must seek to address a number of crucial factors as follows:

  • Clarifying and identifying the primary purposes and objectives for which the business was set up in the first place.
  • Identifying the various ongoing activities and processes that must be executed so as to realize the organizational strategies set.
  • The organization needs for a business must also establish how these aforementioned activities and processes will be distributed to different individuals or groups of individuals, and the roles that these people will play after assuming responsibility for the same.
  • Further, after these roles have been defined it will be necessary to assign well defined authorities and responsibilities for those who'll be placed in charge.
  • Structures detailing how decisions will be made and by whom must be put in place. The same applies for those who'll control these different tasks when they are being performed.
  • Communication and coordination issues and how these will be facilitated are also important organization needs for a business that must be clearly defined.
  • Here, communication and coordination aspects must apply for both the internal and external social environments.

Achieving efficiency in the organization needs for a business can be done in three recommended ways:

  • Ensuring that each employee reports to one specified person who is well known to him/her in the job context.
  • Ensuring that the number of people reporting to that designated manager is just right in that the manager's supervision will be effective.
  • Designing a structure that is well understood i.e. in the form of an organizational chart.

There are six facets of management in a business i.e. strategic management, human resource management, financial management, marketing management, IT management, and operations management.

Strategic management in a business involves the specification of the organization's goals and objectives, the design of the procedures and policies that will help actualize these objectives, and allocating resources for the required activities. This aspect is mainly handled by the small business owner i.e. the chief executive.

Human resource management begins with an identification of the appropriate organizational design and the recruitment and training of people best suited for these positions. These persons must uphold performance management ideals and they must be governed by policies that meet stipulated regulations. Appropriate benefits and compensation packages must be made available.

Financial management in a business has to do with issues of accounting, budgeting, financial reporting, collecting monies owed to the business, risk management practices, and insurance. Information management practices must be designed and subsequently used to manage the financial, personnel, customer, supplier, distributor, inventory and knowledge aspects of the business.

Samuel Muriithi is a business owner in Nairobi, Kenya. He has extensive international business experience in the United States and India.

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