Study on challenges faced by start-up during scaling up operations

Abstract

Most of the start-ups we see start with very flat organizational structure. Flat structure helps in lowering operational costs, improving fast decision making while also improving employee motivation and decision making. While it works really well during the initial phases, Start-ups face real challenges with flat organizational structure when they scale up their operations. There were numerous cases where start-ups failed on account of flat organizational structure with problems such as Employees lacking guidance, Founders unable to manage everyone by themselves, Slowing down the team overall, Missing or Overwhelmed by problems etc.. Moving to hierarchical structure is not very simple as it brings complete change in organizational culture. Further, It is difficult to fix the hierarchy by balancing between the new hires and employees who are with the firm since inception. Even after firm establishes hierarchy often it fails as employees were very used to earlier flat structure of working. Thus, with this project we would like to identify the challenges coming up on account of organizational structure and people management during transition stage of start-ups.