A corporate system is the formal structure, processes, procedures and communication channels that determine the way in which a company functions every day. A well-designed corporate system is able to be improved, modified and adjusted to meet specific business goals. The system covers everything from organizational structure and reporting relationships to communication channels and task management processes, policy creation and enforcement and overall culture within the organization.
Large companies typically employ a hierarchical structure that has distinct levels of leadership ranging from employees at the entry level to the top executive levels. Others may have flat structures with little or no middle management levels, promoting open communication and collaboration. In a process-oriented structure teams concentrate on documenting and improving internal processes in order to achieve efficiency. A network-oriented approach employs teams and projects that work together across traditional departmental borders to achieve business goals.
It can be difficult to create and document business processes However, the effort is worthwhile in terms of improved performance. Clarity in roles and responsibilities, for instance, can help ensure that tasks are allocated efficiently. Additionally, documenting protocols and channels for communication ensures that information is distributed to the appropriate people at the appropriate time.
Another benefit of business corporations, compared to previous types of business entities like sole proprietorships and joint partnerships, is that they have limited liability. This means that the control of investors and profits are not tied to their ownership of the business as well as their personal assets should the business fail. For small-scale businesses, buying pre-documented business systems from third-party vendors or acquiring the franchise of a company that already has established business processes, could be feasible alternatives to developing their own.