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There are three basic forms of business ownership and each of them has its own advantages and disadvantages. First one, a sole proprietorship, is really easy to set up and control, but all of the firm’s debts and legal settlements are on owner’s liability. Second one, a partnership, where two or more individuals are sharing the responsibility of owning and running business, are also comparatively easy to set up. A partnership is a good opportunity to combine opposite skills and knowledge, and there are only few legal requirements. Partnerships are really vulnerable to personal conflicts. These conflicts can badly damage relations between partners, and if the partners fail to cooperate or find effective solution, then there will be a long and complicated process of dissolving business. Third one, a corporation, has many great advantages, and of the main advantages is that stockholders of the business take only limited financial risk. Corporations can count on specialized skills of many employees, which mean that employees can specialize in their most effective tasks. The biggest disadvantage is that owners have to pay double taxation of corporate owning. After corporation pays federal, state, local income taxes, its owners have to pay personal taxes from dividends they receive from corporation profits.
Whether small or large, every business has to have employees. At one time, employees were considered just another input into the production of goods and services. For every single business it is important to build a good foundation for employees so they feel invested in the organization. It is important for employees to know about history of business, about future vision, company’s goals and expectations. All of this can help employees to feel themselves as part of the team.
All above categories of business ownerships have different affect on how employees are motivated. Especially that is important in large businesses because that can improve in an instant one business’s chance to win in competition with another business. But topic is still remaining, why is it important for businesses to have their employees motivated? The answer is simple. Motivated employees can help organizations to survive and succeed in competitive market; motivated employees are more productive and creative. To be effective, managers need to understand what motivates employees within the context of the role they perform. Of all many functions that managers have, motivating and communicating with employees is one of the important and complex ones. In fact, factors that motivates employee’s changes all the time. But what is motivation? For business, motivation should be defined as the inner force that drives individuals to accomplish personal and organizational goals. So, for managers that is really essential to make their employees to be motivated in order to achieve business goals.
There are four main types of organization structure: line, line-and-staff, committee, and matrix structure. A line organization is the oldest and simplest organization structure. It is a direct relationship of chief executive and subordinates. In this type of organization structure, decisions are made quickly, due to manager’s authority over subordinate’s actions. This model is ineffective for mid-size and large firms, because manager is responsible for many activities and he can’t be an expert at all of them. Small organizations are perfect for this kind of organization structure. Managers in this model will be too busy with detail and paperwork, so they will have less time left for other organizational moment like planning, motivating employees. Also employees will have too many tasks and they will feel confused about what their main tasks are, what their objectives are.
A line-and-staff organization consists of line managers and staff managers, where line managers have authority throughout the organization and staff managers have authority only in their departments. This structure is effective, because it has line organization’s ability to make quick decisions as well as direct communication and help of staff specialists. In this model, it’s easy to improve employee motivation by assigning individuals with tasks that they’ll concentrate on or will be particularly good at. And employees who are successful at one thing will have the self-confidences to deal with new project with renewed energy and excitement.
A committee organization, it is a structure where authority and responsibility is in the hands of group of individuals. Committees are usually slow in making decisions, and decisions they make are often the compromise between conflicting interests. However, a committee improves business planning and employees morale.
A matrix organization, it is the structure when employees from different parts of organization work together on particular projects. The matrix structure in popular because of its flexibility in adapting quickly changes in the environment and its capability of concentrating on main problems. It provides a good base for employees’ creativity and initiative, which makes all employees feel worthwhile and important. By allowing employees to show initiative often leads them into leadership positions that will allow them to grow and develop. And if the employees are highly motivated, that leads them to the effective ability of the self-critique, which can have huge impact on successful work productivity.
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Yagmurov Farhad
Farhad Yagmurov
Business Administration department in AUCA, Bishkek. Kirgizstan
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