Examine the nature of the distinctive managerial,organisational and Essay

Examine the nature of the distinctive managerial,organisational and developmental characteristics of small business visavis large companies.What are the impli - Essay Example Small businesses have distinct features in terms of management organization and development structures. According to Wood (1981), Business objectives are negotiated outcome of the inter play of power and influence between owners of property (capital) and those who do not own properties in the industrial field. (Monsted, 2005) In management, small scale businesses are usually owner-managed while in large scale businesses management has a formal structures with well articulated portfolios that are occupied by professionalism their field of business. Management has been charged with the responsibility of formalizing a coherent long-term industrial relations strategy. Successful small-scale firms engage in strategic management either knowingly and with a set vision or even unknowingly without any set vision. Success is related to sound management while failure shows management is somehow wanting. In the management of small firms owner-managers pursue personal goals which are geared by personal visions; this to some extent hinders achievement of success in the business relative to their large counterparts. This is different from the management in large firms because managers are directly answerable to the stakeholders. (Burns, 2007) In small firms' owner-managers, being the principal stakeholder, in most cases play a multiplicity of roles in management, thus the probability of poor decision-making is higher compared to large firms resulting to inappropriate actions due to lack of efficient management attention to issues that are strategic. (Nooteboom, 1994) Analysis of labor management in small firms commanded little attention during the 80's. Human resource management is a new type of management that is widely used in large companies to quite a great success and has since been introduced in the small firms as well. Previously, it was argued that industrial relations and personnel management in small firms was inexistent thus leading to exploitation of employees. Whereas as large companies dictate supplier relationship, the owners of small businesses are denied options regarding the way they manage labor as considering cost constraints and meeting targets for quality takes away the liberty of independent decision making. Research conducted in the personal field tends to focus on the large firms employing more that 100 employees on a full time basis at the expense of small firms. Small firms put more emphasis on the fields of accounting over personnel management (Nooteboom, 1994). The characteristics of personal ownership, independence and lack of marketing power are unique to the small businesses. These characteristics produce the constraints on management produce the constraints on management and financial resources that are an inevitable consequence of small scale, independence plays to the advantage of the small businesses is that decision making is fast and does not have to undergo all kind of bureaucratic stages as witnessed in large businesses. (Nooteboom, 1994) This saves time and if they make the right decision, they reap the whole of the returns. In small business, there is always room for innovation. This makes the small business to be able to come up with new products and services for the various markets. However, ideas developed in small-scale businesses are not likely to prosper because