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The organization of a business process and the site for the business are critical aspects of the management and the operational plan, but it is the people who implement those processes and use the company facility on a daily basis. The roles and responsibilities of the people in the organization are typically depicted in an organization chart.


The entrepreneur and the founding team often perform all the functions when the business is just starting, and much of the work is accomplished through an informal organization or network of relationships. The informal network of people consists of those who tend to gravitate towards each other in an effort to accomplish tasks in a more efficient and effective manner than may be dictated by the organizational chart.

The networks form the “shadow” organizational structure that often brings the business through an unexpected crisis, an impossible deadline, or a formidable impasse. Metaphorically speaking, the organizational chart is the skeleton of the body, while the informal network consists of the arteries and veins that push information and activity throughout the organization – in other words, it is the lifeblood of the organization.


Entrepreneurs seem to have recognized intuitively the value of informal networks in the organizational structure, and often the most successful new ventures adopt a team-based approach with a flatter structure. The lead entrepreneur is the driving force for the entrepreneurial team, which normally consists of people with expertise in at least one of the three functional areas of a new venture: marketing, operations, and finance. The organization consists of interactive, integrated teams. In a new venture, these are rarely “departments” in the traditional sense, but rather functions, tasks, or activities.


What is the explanation for this? For one thing, entrepreneurs are usually too creative and flexible to be bound by the strictures of a formal organizational structure. They are more comfortable bringing together resources and people as a team and making decisions on the spot without having to go through layers of management.

Another reason is that new, growing ventures must be able to adapt quickly as they muscle their way into the market. Uncertainty and instability are a way of life for young ventures, and a rigid, formalized,  bureaucratic structure would unduly burden a new venture both financially and operationally.


What makes the entrepreneur’s situation unique is that – at least when the venture is in the start-up phase or the initial growing phase and capital resources are limited – the team the entrepreneur develops will probably include several people from outside the organization: independent contractors. For example, an entrepreneur may decide to subcontract the manufacturing of a product to an established company. The sub-contractor will then, of necessity, become part of the company’s team in the production of the product. Marketing, sales, operations, and finance people must also be able to work with the manufacturing sub-contractor to ensure the goals of the new venture are met with the timeliness and level quality desired. This requires the team to have skills not normally learned in school – skills such as diplomacy in the management of intra- and inter-team relationships, problem-solving skills, and the ability too take responsibility for innovative changes on the spot, often without direct approval.

Bernard TaiwoBernard Taiwo
Bernard Taiwo
I am Management strategist, Editor and Publisher.

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