During Alibaba's development, Jack Ma has grown from a company of 20 to 30 people to an Internet group of several hundred people and then to tens of thousands of people. As the CEO of the group, Jack Ma has gone from working at the forefront with employees in the early days to retreating behind the scenes. What caused such a change?

Simple structure

A small retail store, an electronics company run by entrepreneurs from scratch, and an airline's "war room" set up during a pilot strike. The answer may be that they are likely to use simple structures

To describe a simple structure, it is better to say what it is not than what it is. It has a simple structure, low departmentalization, a wide management span, power concentrated in one person, and low formalization. It is a "flat" organization, usually with only 2 to 3 vertical levels, a variable number of employees, and decision-making power concentrated in one person.

Most companies start with a simple structure, and many are based on innovative technologies. Simple structures are most widely used in small businesses. In this organization, the business operator and the owner are usually the same person.

The advantage of a simple structure is its simplicity. It is responsive, flexible, has low operating costs, and clear responsibilities. Its main drawback is that this form of organization, due to its low formalization and high centralization, leads to an excessive information load on the upper level, making it difficult to adapt to the needs of organizational expansion. As the size of the organization expands, if the operator still attempts to monopolize power, then the organization's decision-making will become increasingly slow and eventually stagnant. This often leads to the destruction of small businesses. If the organizational structure is not changed at this time to make it more sophisticated, the company will lose many development opportunities and may even end in failure. Another drawback of a simple structure is its riskiness, that is, everything depends on one person. In fact, a crisis is enough to destroy the information and decision-making center of the entire organization.