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It allows the companies to save money, an aspect that is really taken into account by the companies since the online marketing campaigns don’t require a large amount of investment.
The previous mentioned aspect, gives less importance to the differences between large and small companies in some way, thus increasing the competition and giving that way advantages to the customers. Presence on the Internet can help the expansion of the company from a local market to national and international markets at the same time, offering almost infinite expanding possibilities. On the internet everything can be measured, thus it’s easier for the companies to know almost instantly if their campaign is working or not, what company or user is interested in their products, from what cities or countries are they, etc. One of the major disadvantages may be the lack of trust of the users because of the constant virtual promotions that appear to be frauds. Other disadvantage is the cash on delivery system, since it doesn’t guarantee the 100% purchase of the product. It`s win win for online marketing, I do not see any disadvantages if done in natural and steady timeframe. How marketers can adapt and improve their marketing campaigns and marketing strategies to more effectively reach the consumer. Consumer behavior involves the use and disposal of products as well as the study of how they are purchased. Market research is often needed to ensure that we produce what customers really want and not what we think they want.
Secondary Methods.A  For more information about secondary market research tools and issues, please see my handout.
Personal interviews involve in-depth questioning of an individual about his or her interest in or experiences with a product.A  The benefit here is that we can get really into depth (when the respondent says something interesting, we can ask him or her to elaborate), but this method of research is costly and can be extremely vulnerable to interviewer bias.
Interestingly, it has been found that consumers tend to be more influenced by commercials that they a€?zapa€? through while channel surfing even if they only see part of the commercial.A  This most likely results from the reality that one must pay greater attention while channel surfing than when watching a commercial in order to determine which program is worth watching. This is a€?Organizational Designa€?, section 12.2 from the book Modern Management of Small Businesses (v. This content was accessible as of December 29, 2012, and it was downloaded then by Andy Schmitz in an effort to preserve the availability of this book. PDF copies of this book were generated using Prince, a great tool for making PDFs out of HTML and CSS.
For more information on the source of this book, or why it is available for free, please see the project's home page.
DonorsChoose.org helps people like you help teachers fund their classroom projects, from art supplies to books to calculators. Describe the different forms of organizational structure and how they apply to small businesses.
Organizing consists of grouping people and assigning activities so that job tasks and the mission of a business can be properly carried out.
Objectives a€?give meaning to the businessa€”and to the work done by employeesa€”by determining what it is attempting to accomplish.a€?John M. The resources of a small business and its employees must be coordinated to minimize duplication and maximize effectiveness.William M.
When a one-person small business adds employees, some kind of hierarchy will be needed to indicate who does what.
The informal organizationAll the connections and relationships that relate to how people throughout an organization actually network to get the job done.
The formal and informal organizations need to work together to sustain peak performance over time. They are static and inflexible, often being out of date as organizations change and go through growth phases. They cannot cope with changing boundaries of firms due to outsourcing, information technology, strategic alliances, and the network economy.
In its early stages, a small business may choose not to create a formal organization chart. Two major types of authority that the small business owner should understand are line and staff. Staff authorityAdvisory only; there is no authority to take action and no responsibility for revenue generation. Depending on various factors, organizations move back and forth on the centralization-decentralization continuum.
Several management principles can be used as guidelines when designing an organizational structure. The division of laborA job can be performed much more efficiently if the jobholder is allowed to specialize. Span of control (span of management)The number of people or subordinates that a manager supervises. The scalar principleAuthority and responsibility should flow in a clear, unbroken line from the highest manager to the lowest manager. Knowledge about organization structures is important for a small business that is already up and running as well as a small business in its early stages.
The functional structure gives employees and their respective departments clear objectives and purpose for their work.
The divisional structureA decentralized version of the functional structure in which functions still exist in an organization but are based on product, geographic area or territory, or customer. The divisional structure can work well because it focuses on individual geographic regions, customers, or products.
As a small business starts to grow in the diversity of its products, in the geographic reach of its markets, or in its customer bases, there is an evolution away from the functional structure to the divisional structure. The matrix structureBrings together specialists from different areas of a business to work on different projects on a short-term basis.
The matrix structure is for project-oriented businesses, such as aerospace, construction, or small manufacturers of the job-shop variety (producers of a wide diversity of products made in small batches).
The virtual organization (or network organization)Administration is the primary function performed; other functionsa€”such as marketing, engineering, production, and financea€”are outsourced to other organizations or individuals. The positives associated with a virtual organization include reduced real-estate expenses, increased productivity, higher profits, improved customer service, access to global markets, environmental benefits (such as reduced gas mileage for employees, which contributes to reduced auto emissions), a wider pool of potential employees, and not needing to have all or some of the relevant employees in the same place at the same time for meetings or delivering services.John M. Thinking and rethinking the business organization structure is important for all businessesa€”large or small.
Organizations are changing every day, so small business owners should be flexible enough to change their structure over time as the situation demands. The functional structure is overwhelmingly the choice of business start-ups and is probably the most commonly used structure today. The functional structure organizes a business according to the job or the purpose in the organization and is most easily recognized by departments that focus on a single function or goal.
As a small business starts to grow, there is an evolution away from the functional to the divisional structure. The matrix structure brings specialists from different areas of a business together to work on different projects for a short-term basis. In the virtual structure, administration is the primary function performed, with other functionsa€”such as marketing, engineering, production, and financea€”outsourced to other companies or individuals. Creating an effective business organization structure should take the competition, the industry, compliance or legal requirements, investors, and lending sources into consideration. Select two small businesses that market two very different products, for example, a small manufacturer and a restaurant. Frank Rainsford has been, in effect, the CEO of Franka€™s All-American BarBeQue since its inception.
This is a matter that is gaining strength lately, the moment when the social networks hoard thousands of users with different social, economic, cultural and political interests.


If the companies build too complex or too large websites, it will take too long for users to check them or download them and they will get bored eventually.. Because of this, some salesmen are starting to guarantee the possibility of returning the product. This is an aspect that deteriorates the image and reputation of quality and honest companies. This is also the case of thousands of users that dedicate themselves to daily mock big companies by ordering on the internet using false identities. Product use is often of great interest to the marketer, because this may influence how a product is best positioned or how we can encourage increased consumption.
For example, aggressive marketing of high fat foods, or aggressive marketing of easy credit, may have serious repercussions for the national health and economy.
For example, by understanding that consumers are more receptive to food advertising when they are hungry, we learn to schedule snack advertisements late in the afternoon.
Marty Fishbein, a marketing professor, went on sabbatical to work for the Centers for Disease Control trying to reduce the incidence of transmission of diseases through illegal drug use.
Common sense suggests, for example, that if you buy a 64 liquid ounce bottle of laundry detergent, you should pay less per ounce than if you bought two 32 ounce bottles. See the license for more details, but that basically means you can share this book as long as you credit the author (but see below), don't make money from it, and do make it available to everyone else under the same terms.
However, the publisher has asked for the customary Creative Commons attribution to the original publisher, authors, title, and book URI to be removed. The result of the organizing process should be an overall structure that permits interactions among individuals and departments needed to achieve the goals and objectives of a business.David L.
Rather, the organization decision is based on a multitude of factors, including business size, market, product mix, competition, the number of employees, history, objectives and goals, and available financial resources.John M.
However, organization must exist even without a chart so that the business can be successful. These authorities reflect the existing relationships between superiors and subordinates.Samuel C. For example, managing a crisis requires more centralized decision making because decisions need to be made quickly.Zhiang Lin and Kathleen M.
Although there are many principles to consider, the focus here is on unity of command, division of work, span of control, and the scalar principle. Organizations are changing every day, so small business owners should be flexible enough to change the structure over time as the situation demands, perhaps by using the contingency approachThere is no a€?one besta€? structure appropriate for every organization.
People in accounting can focus on improving their knowledge and skills to perform that work.
However, significant growth would be needed before the divisional structure should be put into place.
By outsourcing much of the operations of a business, costs and capital requirements will be significantly reduced and flexibility enhanced. Having a business organization structure will give potential investors and funding institutions a window into how the business organizes its operations. The functions still exist, but they are based on product, geographic area or territory, or customer. This structure is for project-oriented businesses, such as aerospace, construction, or small manufacturers. Contact the manager of each business and conduct a fifteen-minute interview about the organizational structure that has been chosen. His major role has been that of restaurant manager, receiving support from his assistant manager Ed Tobor for the last fourteen years. In Germany, where a law that regulates e-commerce and guarantees the customers the total refund of the money exists since 2000, the electronic commerce is very popular. By understanding that new products are usually initially adopted by a few consumers and only spread later, and then only gradually, to the rest of the population, we learn that (1) companies that introduce new products must be well financed so that they can stay afloat until their products become a commercial success and (2) it is important to please initial customers, since they will in turn influence many subsequent customers’ brand choices.
However, we will also need to analyze our own firm’s strengths and weaknesses and those of competing firms. Nielsen will actually recognize the face of each family member when he or she sits down to watch). You may also download a PDF copy of this book (38 MB) or just this chapter (3 MB), suitable for printing or most e-readers, or a .zip file containing this book's HTML files (for use in a web browser offline).
At times, principles can be used exactly as the way they are stated; at other times they should be modified or even completely ignored.
It consists of all the connections and relationships that relate to how people throughout the organization actually network to get a job done. Most small businesses find organization charts to be useful because they help the owner or the manager track growth and change in the organizational structure.William M.
Carley, a€?Organizational Design and Adaptation in Response to Crises: Theory and Practice,a€? Academy of Management Proceedings, 2001, B1a€“B6.
These principles are applicable to small businesses although, as has been said earlier, they should not be seen as etched in stone. Each person in a business should know who gives him or her the authority to make decisions and do the job.
The span of control typically becomes smaller as a person moves up the management hierarchy.
This structure organizes a business according to job or purpose in the organization and is most easily recognized by departments that focus on a single function or goal.
This structure has also been shown to work well for businesses that operate in a relatively stable environment.John M. The functions still exist in the organization, but they are based on product, geographic area or territory, or customer. Each person on the project team reports to two bosses: a line manager and a project manager. It is important to be flexible in creating a business structure that will best allow a business to operate effectively and efficiently.
Perhaps an industry lends itself to flexible organization structures, or perhaps more hierarchical structures are the norm. Even if an industry is not regulated, there may be compliance issues associated with employing a certain number of employees. Ask each manager to describe the existing organizational structure (drawing an organization chart), explain why that structure was chosen, and reflect on the effectiveness and efficiency of the structure. Frank has two children, a son and daughter, who both worked in the restaurant as teenagers. In other words, in this case, knowing this fact will sensitize you to the need to check the unit cost labels to determine if you are really getting a bargain. Although small business owners may believe that they do not need to adhere to the organizing principles of management, nothing could be farther from the truth. Small business owners must learn through experience when and where to use [the] principles or to modify them [emphasis added]. Objectives provide direction for organizing a firm, helping to identify the work that must be done to accomplish the objectives. Someone with staff authority assists those with line authority as well as others who have staff authority. A relatively small number of line managers make the decisions and hold most of the authority and power.
A noncrisis or a normal work situation would favor decentralized decision making and encourages employee empowerment and delegated authority.John M. They can be modified or ignored altogether depending on the business, the situation at hand, and the experience of management.Samuel C.


Having conflicting orders from multiple bosses will create confusion and frustration about which order to follow and result in contradictory instructions.John M. Individual professionals may or may not share office space, the organization is geographically distributed, the members of the organization communicate and coordinate their work through information technology, and there is a high degree of informal communication. This makes a business much more financially attractive to potential investors or banks, which might provide funding for future growth.
Look at their reporting line structures and their procurement, production, marketing, and management systems.
Also ask each manager whether any thoughts have been given to changing the existing structure. His daughter has worked periodically at the restaurant since she graduated from high school. It was also determined that the practice of sharing needles was too ingrained in the drug culture to be stopped. A competing firm that targets babies, a shrinking market, is likely to consider repositioning toward our market. Principles when used effectively and in the right context often bring organizational efficiencies and thus result in the growth of the business.
Understanding these fundamentals can facilitate the creation of an organizational structure that is a good fit for a small business. The formal organizational structure helps employees feel safe and secure because they know exactly what their chain of command is. It is organized according to a hierarchy, typically expressed in the organization chart, where one manager may have authority over some employees while being subject to the formal authority of a superior at the same time. Examples of staff authority are human resources, legal, and accounting, each of which is relevant to a small business. DecentralizationAuthority and job activities are delegated rather than being held by a small management group. Abiding by this principle will result in more effective decision making and communication at various levels in the organization.
Rather, this approach contends the a€?besta€™ structure for an organization fits its needs for the situation at the time.a€?Patricia M. ROIA performance measure used to evaluate the efficiency of an investment or compare the efficiency of several investments. All businesses must continually coordinate the activities of othersa€”an effort that should never be underestimated. Informal groups and the infamous grapevine are firmly embedded in the informal organization.
Formal authority also encompasses the allocation of an organizationa€™s resources to achieve its objectives.Samuel C.
Buhler, a€?Changing Organizational Structures and Their Impact on Managers,a€? Supervision, 2011, 24a€“26. The son produced several plans to expand the business, including the opening of a second restaurant and the extensive use of social media.
Fishbein created a campaign that encouraged the cleaning of needles in bleach before sharing them, a goal that was believed to be more realistic. The grapevine (or water cooler)The informal communications network within an organization, separate froma€”and sometimes much faster thana€”formal channels of communication. Authority and job activities are delegated rather than being held by a small management group.Samuel C. There are no universally accepted guidelines for determining whether a centralized or a decentralized approach should be used.
In addition, violating the unity of command will undermine authority, divide loyalty, and create a situation in which responsibilities can be evaded and work efforts will be duplicated and overlapping. Companies are flattening their structures by reducing their layers of management, particularly middle management. Following this principle is particularly important to small businesses because the tendency may otherwise be to operate on a more informal basis because of the size of the business. If a small business employs fewer than fifteen people, it may not be necessary to worry too much about its organizational structure. ROAAn indicator of how profitable a business is relative to its assets and indicates how efficient management is at using its assets to generate earnings.
After careful consideration, Frank has decided to open a second restaurant, but this has presented him with a major problema€”how to assign responsibilities to personnel. For example, although we may have developed a product that offers great appeal for consumers, a recession may cut demand dramatically. Small businesses have a definite advantage here because their size allows for more flexibility and manageability.
As a small business grows, a decision may be made to add staff personnel because the most significant factor in determining whether or not to add personnel is the size of a business. It has been noted, however, that, a€?the best organizations are those that are able to shift flexibly from one level of centralization to another in response to changing external conditions.a€?Francis Fukuyama, a€?Why There Is No Science of Public Administration,a€? Journal of International Affairs, Fall 2004, 189a€“201. As mentioned earlier, small businesses are commonly staffed with people who wear multiple hats, including the owner. Alan Randolph, a€?Cross-Functional Structures: A Review and Integration of Matrix Organization and Project Management,a€? Journal of Management, June 1992, 2. His son wants to be designated the restaurant manager of the second restaurant and made the vice president of marketing.
The larger the organization, the greater the need and the ability to hire staff personnel to provide specialized expertise.Samuel C. Given the flexibility and the responsiveness of small businesses that originate from their size, any movement that is needed along the centralization-decentralization continuum will be much easier and quicker. However, the larger the business, the more desirable it will be to have people specialize to improve efficiency and productivity.
The day-to-day tasks of those with line authority involve working directly toward accomplishing an organizationa€™s mission, goals, and objectives.K. To do otherwise will be to slow down processes and use more resources than should be necessary.
As a small business grows, there will likely be more management hierarchy unless the small business owner is committed to a flatter organization. The position on the organization chart will be indicative of the amount of authority and formal power held by a particular individual. Small business owners must acknowledge the existence of the grapevine and figure out how to use it constructively. Small businesses, however, may prefer to hire outside service providers for staff functions such as legal and accounting services because it would be difficult to keep such people busy full time.
Examples of positions with line authority are the president, the vice president of operations, and the marketing manager. In a small business, the owner or the top manager will have line authority over his or her subordinates. The extent of line authority beyond the owner or the top manager will depend on the size of the business and the organizational vision of the owner. The disadvantages notwithstanding, many companies with multiple business units, operations in multiple countries, and distribution through multiple channels have discovered that the effective use of a matrix structure is their only choice.Jay R.



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