Leadership Structure in Small Business

An effective leader establishes order and structure in the small business. The leader in a small business will most likely be a founder of the firm. As the firm grows, structure becomes a more necessary component. To establish order, leadership and ownership in those who are not the owner/founder of the small business, a decision-making structure places accountability on the founder. Accountability for implementing the firm’s business, holds staff and other senior managers responsible for taking care of assignments based on the mission statement and company vision. The founder/leader needs to communicate to everyone in the firm what the structure looks like and what it means (consequences). A responsible, successful leader implements a strategic plan that includes long term and short term goals. As the entrepreneur manager moves to the professional management role, it is important to look outside of the firm for possible growth opportunities such as new markets, acquisitions, teaming arrangements, joint ventures and strategic alliances. This decision to go beyond one’s personal knowledge base indicates the growth of the leader him/herself. As a leader in the start up phase, the entrepreneur guided everyone with a vision based on his/her professional knowledge base. The transition to the professional management stage necessitates knowledge from other sources; thus, hiring in senior managers to consult and address the growing number of needs and issues. The leader must ensure that the firm’s internal organizational structure is optimal for success. In addition, a strong leader continuously motivates staff and boosts spirits.