This article provides a few reasons why entities lose their flexibility with their growth.
Throughout my life, I could witness many companies’ formation and development, as well as large established corporate entities’ functioning. It is well known that at some stages of development, a business faces crisis and it cannot evolve further before it is internally reorganized. Large corporations employ hundreds and thousands of people. The administrative structure of such companies consists of many ‘layers’ and their employees conduct their work according to instructions and processes descriptions.
At a business formation stage, the level-structured administration system is not developed yet, but there are some factors to assess its functioning: finance readings, asset growth, customer base expansion etc. A corporate entity rather works effectively, makes a profit and evolves, or decays in vain. The second scenario often happens because of an investor’s rent-seeking behavior. With its development, a business must hire new stuff, which naturally causes an increase in employment numbers and complexes the administration process.
Corporate administrators’ capacities often fall into communicational and technical ones. In large entities, communicational skills are thought to be the most significant . Despite an employee’s experience or skills, having tough relationships with the employer will definitely affect his or her chances for a promotion. The same can be said about teamwork. A problem employee with bad team chemistry will seldom succeed at the task, as far as teamwork requires mutual understanding and ease communication between colleges. As they say :
If there’s no agreement between friends,
They’ll break up fast as one suggests.
On the other hand, a good corporate administrator should possess a balanced skillset. But in reality, people often have one personal quality to take control of others. Therefore, administrators with developed social engineering skills benefit the most. However, when it comes to the problems that require technical capacity, naturally, such employees cannot contribute as effectively as their technically literate colleges. When a decent leader faces a knowledge gap, he would always collaborate with the specialists in the specified field, though for some people admitting their lack of skills may be very tough. Things can be even worse if a leader does not understand his incompetence and forces his subordinates to make an impaired decision.
Large companies function due to using business processes to profit. It is the inefficient negotiation that obstructs entity’s growth. Such processes are put into effect in order to achieve :
- Results regularity;
- Characteristics predictability;
- The decrease in company dependence from specialists’ teams that conduct a process.
Actually, the process adjusting is like building arrangements for achieving a good result not depending on stuff actions. An effective business process is an essence of a company that is frim in position. On the other hand, the process may get outdated because of business environment changes and start influencing the working efficiency. A good administrator should analyze ongoing processes and pin point their shortcoming. He is also responsible for making processes more effective by the means of employing new technologies and tools, discarding unnecessary structure departments, hiring new specialists etc. Taking these steps has a lot in common with innovative activities. However, not all the innovations result in prosperous business. Changing something is always a risk since it can worsen a company’s current position . That is why many choose a less risky tactic, which is just following the main business process, in other words, bureaucracy. A person who neatly follows instructions always has an excuse or argument to prove his position in any conflict. Furthermore, a leader would rather come down on a person who tried to do something innovative and failed, than on a person, who ‘obeyed the rules’, which led to the problem.
In other words, the leader’s opinion is the main criteria of corporate administration assessment process. That explains administrators’ emphasizing the effort they put into solving the problem, which is nothing but showing off their qualities. Between two managers the one that ‘advertises’ his actions (even if the issue arose out of his poor judgements) would benefit rather than the one who is calmly and effectively doing his job. This also explains that even the smallest and insignificant issues related to the administration have a primal priority to be solved.
In addition, I would like to provide a short insight on administration board meetings. Meetings are important to:
- Share information: current company position, presentation of the readings, instructions on the further development course.
- Solve significant issues.
For a corporate administrator, meetings are must-do part of their job. Furthermore, some of them can spend most of their working time on this activity. After all, a meeting is one of the business process tools. The main problem here is the cost of time spent on a meeting (multiplied by the cost of the participants working time). A meeting also requires various preparations and time to switch back to the working process.
Therefore, I suggest using meetings only when it is more beneficial than using other business administration tools. For example, it is better to employ administration systems to monitor company’s current situation and its readings. Here it is possible to use other communicational tools to acquire such information without getting distracted from the working process.
It is a generally acknowledged fact that the decisions a group of specialist would suggest to solve a problem are better than a single person would do (even if this person were a high-skilled specialist) . However, establishing continuous positive outcomes has a lot to do with the meeting technique and the members’ list. Without these two components, meetings are just a waste of time.
Naturally, if meetings are held too often, a company is probably facing a systematical problem related to business processes. In other words, instead of following the business ‘treadmill’, administrators continuously search for the other directions to develop their company.
“For many administrators, the ‘favorite’ activity is setting a limitless number of meetings that mainly consist of empty talks.” 
For a large business, meetings are important, but, “Meetings are a symptom of a bad organization. The fewer meetings, the better.” 
The last but not the least, some words about employee management. As mentioned above, with the hierarchy levels increase, criteria for the crew selection and assessment become more subjective. In a small company, business owner or a director can help working with an effective employee despite his personal qualities that might not match the company’s requirements (problems with corporate discipline or harsh character). In a large entity, such workers often get fired or quit the job . However, stuff dismissal is a loss for a company that can be estimated by the amount of employee’s yearly wage .
With the company’s growing in size, capacity in social relationships become more significant. As an outcome, for an administrator position large structure would rather hire a social engineering specialist than a technician.
The absence of objective assessment criteria for employees’ effectivity results in a leader’s opinion priority.
This leads to efficiency loss because of messed up business processes, increase in expenses for unproductive activity and HR mistakes.
This is a paradox – an administrator, who is important for a growing company functioning, may be the cause of the company’s efficiency loss.
- The way of the rat. A survival guide to office politics. Joep Schrijvers.
- The swan, the pike and the crawfish. Ivan Krylov.
- Why do we need business processes? Alexey Yanchyuk, Konstantin Kondratyuk.
- The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. Clayton Christensen.
- Testing dot-com. Roman Savin.
- The Wisdom of Crowds: Why the Many are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies, and Nations. James Surowiecki.
- The Effective Executive: The Definitive Guide to Getting the Right Things Done. Peter Drucker.
- The Top 10 Reasons to Fire an Employee.
- The Cost of Employee Turnover.