The Importance of a Corporate System

A corporate system is an organizational framework that defines ways that departments work to reach business goals. It also defines the flow of information within and between departments to prevent communication issues and maintain efficient workflows. The most efficient business systems let companies run smoothly and aid in making more profit. However, not all systems work for every business. It’s important for management teams to take their time when constructing the system, ensuring it aligns with the business model of the company and culture.

Companies can choose from four kinds of organizational systems that include the flat, matrix and divisional systems. The functional system is comprised of special divisions like accounting, sales and marketing. It is organized in a clear manner and every employee is directly accountable to the head of their division. This system is perfect for companies that have a large number of services or products, as it provides a clear structure and ensures every employee has a task to complete.

The divisional organizational system divides staff into teams based on their project which include public relations or research and development. Each project team is directed by a project coordinator. This system allows for faster decision-making, and eliminates redundant tasks. The disadvantage of this system is that employees could develop tunnel vision, and be unable to share ideas across departments. A matrix organizational structure combines the advantages of both functional and divisional systems, allowing information to flow easily between departments.