An Entrepreneur Employs 20 People in a Simple Structure

question 132

Essay

An entrepreneur employs 20 people in a simple structure. However, the company will likely employ over 200 people in production, sales, engineering and administration within a few years due to the growing success of the company's new products. The entrepreneur likes the simple structure and wants to avoid other forms of departmentalization. Explain to the entrepreneur why his company would be more effective through other forms of departmentalization as it grows larger.

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Definitions:

Regression Analysis

A statistical process for estimating the relationships among variables, often to determine the effect of one or more independent variables on a dependent variable.

Least Squares Line

A line of best fit determined by minimizing the sum of squares of the differences between observed and predicted values in regression analysis.

Weight

A measure of the heaviness or mass of an object or individual.

Coefficient Of Determination

The coefficient of determination, denoted as R², measures the proportion of the variance in the dependent variable that is predictable from the independent variable(s), indicating the strength of the relationship.