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Features that all successful small companies share

Being a small business is not as disadvantageous as it seems. Local shops and manufacturers cannot compete with the retail giants but they can easily survive in the niche market catering for the demand big businesses are unable to fulfill. Small business owners also do not have numerous problems tied to large companies, therefore, they possess an instant and effective problem-solving power. In fact, there are a few characteristics that make small entrepreneurs successful economic subjects and happy citizens.

It is impressive how flexible owners of a small business can be. Their strategy changes with the demand of the target audience and owners are usually open to novelties. They adopt new features fast and can fulfill the needs of their consumers faster than big businesses. Producers of custom-made shoes, for example, do not have to reset their assembly line and test it before delivering a new model of shoes to the consumer.

Owners of small businesses often focus on a niche market and small groups of clients within it. While big businesses can get a sufficient revenue only if they have a mass customer, private entrepreneurs can work with those who have special needs. For example, a local Scandinavian cosmetics brand can produce a foundation in a super-fair shade that big European manufacturers just cannot afford.

Communication with customers is of utmost importance, but only small brand owners can do it in person. While big companies communicate with their people through hundreds of intermediaries, a producer of local goods can meet their consumers and deliver goods in person. Small brands are a person, and customers always like that.


Advantages and disadvantages of public-private partnerships

Public-private partnerships commonly perform projects in transportation and infrastructure. These are initiatives formed and funded by governments but implemented by private entities, such as construction companies. They can build transport infrastructure as well as municipal and environmental objects such as water facilities. Public service institutions such as schools, dormitories, or prisons are also constructed involving the public-private partnership. In such cases, cooperation between the government and private companies is unavoidable.

A public-private partnership is so popular because it has multiple advantages for the both sides. The private sector can offer advanced technical opportunities for construction. Their operations allow completing the project in the minimal time. The public sector gives the necessary costs to the companies and induces them to finish the project in time. Besides, the cooperation can possibly reduce the budget deficit and generate a greater return on investment. Nevertheless, public-private partnership is not devoid of risks.

Building transport infrastructure, private entities risk covering extra costs for delays and defects in the construction. They also can fail to meet quality demands put by the government. If there are few users of the constructed property, the private partner receives not enough revenue to benefit from the project. In case of a failure, not only private party pays the bill but the government is also entitled to spend extra costs.


The theoretical basis of performance-based pay

Paying workers for their performance seems fair to both employers and workers. First, the worker receives as much as they have actually done, and employers do not waste their funds to pay for the work that is not done. Nevertheless, economists found that performance-based pay drags disadvantages. Sometimes companies need to give their workers more incentives and stimulate them to perform the tasks that do not pay much. Besides, performance-based pay does not work with the group performance. However, there is a strong evidence that performance-based salary does not work mostly when it was poorly implemented.

Multiple business theories claim that paying people for how well they work is the most effective reward. The goal-setting theory takes the payment as a goal essential for performing tasks. The expectancy theory insists that an effort turns into a motivation only when people expect to be rewarded for it. Doing more work, people expect a higher salary, and it stimulates them to perform better. A similar idea of a positive reward occurs in the reinforcement theory. Yet looking at the Maslow’s theory of needs, we may say that the salary is a top psychological need that affects our living standards and helps to satisfy our primary physiological needs. That is why we are strongly motivated to perform well in the first place.

Performance-based pay suits the organizations that can estimate the worker’s performance precisely. It mostly concerns an individual performance and it is not same effective with groups. Many companies consider it the best for everyone to do their own tasks. Thus they can estimate the performance and its quality to pay the fair salary to the individual. In groups, however, the performance-based pay may discourage teamwork and create competition between groups and their members.


Policies used by companies to promote diversity in the workplace

In the workplace, diversity refers not only to sex and ethnicity of the workers. Differences in work styles, policies, and practices also exist, and such a diversity is no less essential than the ethnic and cultural background of workers. Just like other top priorities of the company, diversity is set by top managers. If there are strategic leaders in the company, they are open to the diversity of thoughts. They do not care about what is traditional or generally accepted. Methods that work are of their prior concern even if they involve hiring people with different education and social status.

Flexible hiring policies allow diverse applicants to enter the company. The federal Equal Employment Opportunity Commission guidelines encourage companies to hire people from a broad range of candidates. Some companies engage in recruiting on college campuses not to lose potential qualified workforce. In most cases, hiring managers aim to reproduce the diversity of the target audience inviting people to join the company.

Hiring different people is not enough to make use of diversity in the company. All of them require further education and training to develop their unique ideas and work styles. These are not only ethical training but seminars that encourage employees to think broader than they usually do. Colleges often do not teach to develop alternative approaches; they rather make things black or white. Such a traditional approach kills diversity, and employers shall make sure that their people get rid of professional stereotypes.

Employee interaction makes their diversity productive. Exchange of ideas is exactly the thing that makes people think on the broader scale. Team building activities and corporate holidays let people enjoy the company of each other and interact more effectively in the workplace.


Evaluation of the roles of middle level managers in the decision making in a company

There is no single board responsible for decision-making in a company. The highest management makes long-term decisions, while operational managers resolve everyday issues. Commonly, managers agree their decisions with each other, though top management does not need anyone’s permission. On the highest levels, managers define the company’s mission, create a strategic plan, and choose the tools to reach these goals. The developed strategy goes down the corporate hierarchy where it is further implemented.

Once middle managers receive the strategic planning from above, they start creating smaller plans that contain a lot of details. They also summarize the information they get from supervisors and make reports to top managers. In most companies, middle managers work with accounting, human resources, manufacturing, marketing, client services, research, and development. They make up plans for these departments and their subdivisions; the guidance contains very precise instructions so that people understand what exactly they need to do. The results produced according to these instructions must be measurable.

Operational managers or supervisors work each in their own specific unit. They get directions from middle managers and implement them with the help of their subordinates. They report the statistics back to middle managers who further decide whether the goal has been achieved or not and how successful every particular strategy was. As top managers receive statistics from the middle management, they decide whether to leave the plan as it is or change the strategy that does not work.


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