In many companies they do not have a clear idea on the general organization of business, i.e. the distribution of roles in the company. The functions of various staff members may sometimes get crossed, duplicate each other or even get lost. Wrong role subordination in the management strongly reduces the overall efficiency of management. So, my vision of business organization in the company, represented here will possibly help you in the same situation.
 
Any business is based on four whales. The owners of business, i.e. organizers or initiative group, responsible for a state of affairs before the community form the basis. The owner is the one to take the final decision concerning the business structure, crediting, stock output, personnel selection and so forth. He is to coordinate the fundamental points of business with partners and to hold the responsibility, which is the most important. It is he who determines the company's reputation before the society.
 
The following level of subordination is technological management of business. Its primary goal is to develop proper and effective interactions in the company, as well as with clients and partners. Documents circulation, information gathering, the organization of production (including purchase of raw material, warehousing, sales), marketing actions and so forth are the basic functions of associates of such divisions. On this level the staff members are responsible only before the owners of business. We can certainly mention their responsibility before the business partners, but they always have an opportunity to write off the lacks of management on the owners of the company.
 
The lowest level is represented by executives divisions. Along with the direct production of goods and services, organizations of transportations and warehousing, the associates of this level also perform the functions of direct management of the executives, determined at the technological level (the bottom management level and executives).
 
These seem to be all about the essence of business. But there is another important level, namely initiative or expert group. Its primary function is to develop suggestions for business development, in other words to generate ideas, not simply by what - to - do principle, but with regard to the company's activity, region, economic situation, state of affairs in the markets. This level is responsible only before the owners of business. However, it is strongly related to the technological level of management. It is quite reasonable, as we can have many wonderful and bright ideas, but the functional of our company will not allow realizing them. In this case the group of associates would simply work into a basket, their ideas concerning the company's activity are simply utopian. Naturally, technologists are not the only source of information for them, as they work in a tandem with the company's management. They should have a clear idea of the risks the owners of business could possibly run. Thus, the functions of these associates also include researches of markets, progress prospects, seasonal sales fluctuations and so forth.
 
A company can be a success only when it has all the four business levels properly functioning. Structurally, they may not be represented in an explicit form, i.e. some functions can be performed by one staff member or by a certain division. We all know that few companies can afford an expensive expert group. It is important to understand, that the company's business structure should represent all the four whales of business organization, their clear-cut functioning, distribution of roles and responsibility by lines of activity. Then it is possible to achieve the best efficiency of the company's management and, as a result, the well being of its staff members.

Last modified: 12.01.2003
Translation by Elena Polyanskaya