A corporate system is a formal structure with procedures, processes, and communication channels which define the way businesses operate on every day basis. A well-designed system can be adapted or modified to achieve specific goals. The system covers everything from organizational structure reporting relationships, communication channels, processes for task-management as well as policy creation and enforcement, to the overall culture of the company.
Large companies typically employ an organizational structure that is hierarchical, with distinct levels of management ranging from employees at the entry level to the top level executives. Other organizations might employ flat structures with little or no middle management levels, promoting open communication and collaboration. In a process-oriented system teams concentrate on documenting and enhancing internal processes in order to achieve efficiency. Network-oriented methods rely on teams and projects that collaborate across traditional departmental borders to accomplish business objectives.
Documenting and establishing business systems can be challenging, but the effort pays off in terms of increased performance. A clear understanding of roles and responsibilities for example, can help ensure that tasks are allocated effectively. Documenting communication channels and protocols ensures that information is sent to the right people at the right time.
Another benefit of business companies, when compared to previous kinds of business entities, such as sole proprietorships and joint partnerships, is the fact that they are not liable. This means that the control and profits of investors are independent of their ownership in the corporation. This means that their assets are protected if the business fails. For small-sized businesses, purchasing pre-documented business systems from third parties or acquiring an existing franchise that has established business systems, could be feasible alternatives to creating their own.
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