A corporate system is a formal structure of procedures, processes, and communication channels that establish the way a company operates on every day basis. A well-designed corporate system can be modified, improved and adapted to achieve specific business goals. The system encompasses everything from the organizational structure, reporting relationships, communication channels, processes for task-management creating policies, enforcement to the overall culture of the organization.
Large organizations often use an organizational structure that is hierarchical, with distinct levels of leadership ranging from entry-level employees to the highest executive levels. Some organizations employ an unstructured hierarchy with no or few levels of middle management to promote open communication and collaboration. In a system based on processes, teams are focused on documenting and improving their internal processes to maximize efficiency. A network-oriented system uses teams and projects that work across traditional departmental boundaries to achieve the business objectives.
Documenting and establishing business systems isn’t easy, however the effort is worth it in terms of improved performance. A clear understanding of roles and responsibilities for instance, can ensure that tasks are allocated effectively. Additionally, documenting protocols and communication channels ensures that information is disseminated to the appropriate people at the appropriate time.
Limited liability is another advantage of business corporations compared to other types of business entities, like sole proprietorships or joint partnerships. This means that the investors’ control and profits are separated from their ownership of the corporation as well as their personal assets should the business fail. For small-scale businesses, buying pre-documented business systems from third parties or purchasing the franchise of a company that already has established business processes, could be feasible alternatives to developing their own.
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