Answer :
Simple business structures are characterized by two key features:
- Flat organization: There are few, if any, levels of management between the owner(s) and employees.
- Low formalization: There are few written rules or procedures, and decision-making is informal.
Simple business structures, typically seen in sole proprietorships and partnerships, function with minimal complexity. These businesses have a flat organizational structure, meaning there's little to no hierarchy. The owner(s) directly manage employees, eliminating the need for multiple layers of supervisors. This fosters a more flexible and adaptable environment where decisions can be made quickly.
Furthermore, simple structures exhibit low formalization. There are minimal written policies or procedures, and operations are often guided by common sense and the owner's (or partners') direct instructions. This informality simplifies day-to-day operations but can also lead to inconsistency if not managed effectively.
In essence, simple business structures prioritize agility and ease of management over the structured processes found in larger organizations.
