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How Business Structure Affects Creativity

Have you ever wondered how business structures affect creativity within a company? Creativity is the turning of ideas into reality. Creativity involves thinking and then production. When you produce something new out of an idea, it is known as innovation.

Creativity and innovation is good because it produces growth. Now how does this creativity and innovation relate to business structures?

In the world of business, there are five known business structures. The first one is sole proprietorship. Considered to be the easiest way to start a business, leadership is in the hands of a single person, the owner, who just hire staff do certain jobs for him. The good thing about a single proprietorship is that the owner has control over the whole business, creativity and innovation is dependent on the owner and he doesn’t need to ask for the permission of anyone in order make some changes or innovate with regards to his products and services. If a problem arises, it can easily be solved by an individual because there is no need for him to go through the usual hierarchical decisions commonly made in large companies.

The next type is general partnership. In this type of business is a partnership, it can either be general or limited, but for purposes of this discussion we will treat these two as one. In this type of structure instead of one, there are two or more owners. In this type of business, we can conclude that creative inputs can come from not just one source, and changes that has to me made out of the creative inputs has to be approved by everyone. A pair or a small group enjoys the same easy process as in sole proprietorship.

In corporations, it is understandably harder because of the hierarchical structure present in the company. These hierarchies, especially the top down type obstruct creativity while bottom up management encourages collaboration from its members. In this set-up leaders contribute to the creative process by sharing in the decision-making. They also encourage imagination, soliciting ideas and gives rewards to revolutionary ideas that would usher change. Ideally a small group fosters exchange of ideas making it an efficient force however as the groups grow larger, obstacles begin to show. But management should find ways to work around these hindrances in order to maximize the flow of creative ideas.

Based on research, creativity does not have any adverse effects on business structures; rather it is a very important factor in every organization. Because of the competitive nature of the businesses, creative ideas are most welcome for companies to be able to keep up with the ever-changing needs of the customers. The problem of rising costs while improving services and operating procedures are matters than can be resolved by creative ideas that would lead to innovative solutions. Creativity and innovation also makes it possible to make products and services at a lower cost while maintaining higher qualities. These would ensure higher customer satisfaction and therefore higher sales for the company.

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1 Comment

  • MYKE WILLIAMS said on May 19, 2014
    I need updates on introduction to entrepreneurship and innovation

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