Theory E²: Working with Entrepreneurs in Closely-Held Enterprises X: Interplay between Entrepreneurship and Organizational Structures and Operations, and Organizational Culture

Theory E²: Working with Entrepreneurs in Closely-Held Enterprises X: Interplay between Entrepreneurship and Organizational Structures and Operations, and Organizational Culture

Hierarchical Structures

Closely-held enterprises have traditionally been based on hierarchical and centralized structures. Clear boundaries exist between the top and bottom of the organization. Information is collected and distributed primarily at the top of the organization. These organizational structures are still dominant in our society. Appropriate styles must be found to serve this type of closely-held enterprise.

Typically, an assertive style is most welcome in hierarchical, centralized organizations. Just as participating leaders are products of the new corporate commitment to people, so assertive leaders are products of the traditional emphasis on control, predictability and efficiency. Assertive entrepreneurial leaders operate very effectively in hierarchical organizations and thrive under conditions where authority is clearly defined and responsibility flows downward A more participatory approach to entrepreneurship may be needed, however, if the leaders of a traditional closely-held enterprise are concerned about keeping their employees committed, creative and flexible.

The participating leader can make this work through her emphasis on training all employees in communication, conflict-management, problem-solving, and decision-making skills which has been reserved traditionally for managers. A participating entrepreneur can also help the closely-held enterprise make more effective use of technology (e.g. computer networks) so that all employees can gain access to vital information related to their work.

Nonhierarchical Structures

Many contemporary organizations are typified not by centralized and hierarchical structures, but rather by decentralized and dispersed structures. They look more like networks than like pyramids. The boundaries that exist between units of the organization and between this organization and other organizations are unclear. Information usually is found at, distributed by and distributed to all levels of the organization. In such an organization, decisions are being made not at the top of the organization but at lower levels of the organization where there is maximum relevant information.


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About the Author

William Bergquist

William BergquistWilliam Bergquist, Ph.D. An international coach and consultant, professor in the fields of psychology, management and public administration, author of more than 45 books, and president of a graduate school of psychology. Dr. Bergquist consults on and writes about personal, group, organizational and societal transitions and transformations. His published work ranges from the personal transitions of men and women in their 50s and the struggles of men and women in recovering from strokes to the experiences of freedom among the men and women of Eastern Europe following the collapse of the Soviet Union. In recent years, Bergquist has focused on the processes of organizational coaching. He is coauthor with Agnes Mura of coachbook, co-founder of the International Journal of Coaching in Organizations and co-founder of the International Consortium for Coaching in Organizations. His graduate school (The Professional School of Psychology: offers Master and Doctoral degrees in both clinical and organizational psychology to mature, accomplished adults.

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