Principles of Establishing a Company for Entrepreneurs

Establishing an organization or company is not a matter that can be completed in a matter of snapping fingers. To ensure that the company you build can run in good alignment, be effective, efficient and in accordance with your needs, you need to instill strong foundations in the establishment of your company. Like what? This article will discuss the steps in establishing a world-class company that has been tested. Let’s peel them one by one.

Vision (Principle of Organizational Objective)

What is your vision of establishing a company? Is your goal to make a profit, or solve a problem and provide a service? You have to define your vision first because a good vision is one that moves yourself and moves others to help you.

Unity of Vision (Principle of Unity of Objective)

Without unity of purpose between individuals, the company’s goals will not be achieved. Each individual in the company will compete to achieve their own goals and ignore the larger goal, namely the company’s goals. Therefore, you need to instill an agreement to unify the vision of every stakeholder in your company.

Unity of Command (Principle of Unity of Command)

In any company, in an effort to achieve goals there must be ONE command to govern the team. So that an order can be accounted for by only one person. That way, your team can be maximally under one responsible command.

Span of Control (Principle of The Span of Management)

You must know how many subordinates a manager can lead effectively. 3, 4, 9 people? By knowing the skills of the manager, the appointment of personnel and the delegation of tasks can be made easier.

Delegation of Authority (Principle of Delegation of Authority)

This principle is how a leader can divide tasks to individuals in each division clearly. Managers as leaders must also be able to know what tasks and orders have been delegated to their subordinates to carry out the control function properly.

Balance of Authority & Responsibility

The responsibilities delegated by the leader to subordinates must be balanced with their authority. One of them should not be bigger or smaller so that subordinates can carry out their delegated responsibilities without hindrance.

Responsibility (Principle of Responsibility)

A subordinate is only responsible for his duties to the authority. So that accountability can be in accordance with the line of authority. So a manager needs to give a deadline.

Division of Work (Principle of Departmentation)

The division of tasks in one work unit must have an interrelated work relationship. It is very important that the divisions within your company have a more structured job description.

Personnel Placement (Principle of Personnel Placement)

The placement of employees must be based on their expertise, proficiency and skills, the term is The Right Man On The Right Place. Therefore, you must make an objective selection and be guided by the job specification to make a company run optimally.

The Principle of Scalar Chain

The orders given to subordinates must be orders that are vertical and uninterrupted. It means direct and clear orders from superiors to subordinates whose position is just below the line of power, without skipping one or more levels of position.

Efficiency (Principle of Efficiency)

A company must be able to place the tasks that must be done first to get maximum results. That is, if a task can be done in a short time, there is nothing wrong with doing it without delay. Your time can be more efficient to carry out the next task.

Continuity (Principle of Continuity)

The company must seek ways that are able to maintain its survival and the members in it. Your role here is to instill an understanding of how important it is to do a job on an ongoing basis or continuity because if you leave it can make your company collapse at any time.