Organisation Creation


The organisation refers the structure created by an entrepreneur in serving the customers and earning the profits thereby. Organisation may be regarded as four walls within which it operates, receives raw material / services and converts the same or does the value addition before the same gets delivered to the customer.

The organisation may not have all elements to look like a normally perceived organisation, e.g., a car cleaner may be operating alone without formal structure of an organisation but he/she is equally an entrepreneur and faces the challenges of growth as faced by any other organisation.

Birth of an organisation

    • Existence of Vacuum (i.e. blank space requiring the same to be filled) due to :
        • Poor service quality; or
        • Supply constraints (demand > supply); or
        • Existence of customer need; but no product exists
        • Poor governance of existing organisations (Govt., etc.) → resulting poverty, mismanagement, sanitation, food shortage, etc.
    • Presence of an Entrepreneur who has following attributes
        • Creator of value from raw material / raw services
        • If no vacuum → no entrepreneur; vice-versa also true
        • Voyager, conceptuliser, leader, organiser, mentor, motivator → binding factor of an organisation
        • Strong entrepreneur sails the boat and sailors through wildest sea storms
        • Sees through thin air in the future for what lies ahead
        • Even a small service provider (plumber, cobbler, etc.) also entrepreneur, may be one person’s organisation; may not be handling all issues as handled by large organisation.
    • Entrepreneur deciding to fill the vacuum by 
        • Creating a mission for himself / herself
        • Inventing a new product
        • Altering an existing product
        • Copying the existing product → filling the supply gap
        • Least cost + best quality to customer
    • Organisation Structure planning
        • Form of the organisation (Corporate / Joint Stock Company, partnership, proprietorship, etc.)
        • Organisation made-up of 5 elements (entrepreneur, manpower, machine, land, capital); we are also made-up of 5 elements (earth, air, water, fire, space) → Imbalance in organisation if any element less (i.e. shortage) / more (i.e. waste)
        • Leading organisations in the industry has following all elements:
            • Quality of Entrepreneur  ↑
            • Quality of team members (its’ people / manpower)   ↑
            • Quality of mechanisation (its’ machines)  ↑
            • Location advantage (its’ land)  ↑
            • Healthy net current assets (its’ capital)  ↑
        • Planning leads to organising + execution
    • Organisation Structure creation
        • Planning leads to organising + execution
        • Planning in mind + discussion → collecting all elements (manpower, machine, land, capital) → Building an organisation
    • Need for Process (i.e. a binding factor of all elements)
        • Organisation with 5 elements only = lifeless object / dead body → needs soul to run the object / body → NEED FOR PROCESS
        • Organisation Without process = lifeless organisation → Process defines “who, what, when, why, where and how” of an organisation → Process defines what’s to be done, who is to do, how to be done, etc.

Organisation’s build-up / growth

After the organisation’s birth, the challenges before the organisation are:

      • Building the culture of Excellence
      • How to generate momentum in the organisation so that it achieves the milestones?
      • Motivation of manpower
      • Bringing new profitable products
      • Generating sufficient cash-flows
      • ……. The list goes on and new challenges keep appearing

Deliverables (i.e. expectations from an organisation)

    • Product with best quality and least cost (except product with exclusiveness)
    • Transparency in working
    • Good employer
    • Good governance
    • Contributor in society building

Important developments in organisation build-up

    • Work-from-home structure of employees reducing the need of physical space
    • Development of cloud offices i.e. shared virtual office wherein employees logging into the software from anywhere in the world
    • Online stores on the internet providing 24 X 7 service, 360 degree view / analysis of a product alongwith comparatives with other organisation / competitors’ products → reducing the need of physical stores
    • Development of “specialised outsourced services / organisations” managing the organisation’s functions / elements → organisation are becoming lean managing its core function of creating value for customers

Traditional forms of an organisation

    • Physical spaces of organising the resources

Challenges before organisation build-up (each decision involves capital, manpower needs, adaptability to new challenges at market-place, etc.)

    • Whether to buy or lease the office-space?
    • Whether to manufacture or trade the products?
    • How much to automate since automation has cost of purchase, customisation and implementation?
    • How much manpower to hire and from which location (since each location has different manpower skills, pricing, etc.) or to outsource?

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