Management in Small Organization
Small business is an essential sector of modern market economic system. Small business is an activity for which there is independent owners and management and which is not leading in its field of business. Small business has the following characteristics: a limited field of action, small size compared with the entire industry, independent management, its own capital. In small business, achieving results depends crucially on the persistence of entrepreneurs, their knowledge, professional competence, and high ambitions, which makes it possible to work effectively even in very difficult situations.
Small organization has certain advantages that allow it to dominate in market. It is quick to respond to changing consumer demands. It is well-suited to limited markets and markets where innovation and personal relationships are very important; the economy has the necessary flexibility characterized by a high rate of turnover of capital advanced and contributes to the formation of a competitive environment. In addition, small businesses provide jobs to thousands and even millions of people; they are easy in the formation. Their management responds quickly to opportunities as it is characterized by mobility in decisions influenced by market conditions. Small organization requires a relatively small initial capital in many countries that is a public benefit.
Small organization has disadvantages: it does not always have equal access to resources, especially in the financial and small size that makes it difficult to work successfully taking advantage of scale and deciding on the internal specialization. Because of such conditions, small businesses experience a great level of bankruptcy. According to experts, a small firm with 20 or fewer employees has only one chance to survive three to four years. The majority of failures are attributed to poor management.
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