Business Process Formalization as a Growth Enabler: Managerial Transitions from Entrepreneurial to Institutional Structures
Abstract
Rapid growth challenges the managerial foundations of entrepreneurial organizations by exposing the limits of informal coordination and founder-centric decision-making. While informal processes support speed and flexibility in early stages, they often become constraints as firms scale, increasing operational risk, coordination failures, and managerial overload. In this context, business process formalization emerges as a critical enabler of sustainable growth rather than a bureaucratic burden. This paper examines the role of business process formalization in facilitating managerial transitions from entrepreneurial to institutional structures. Drawing on business management and organizational theory, the study develops a conceptual framework that explains how formalized processes support coordination, control, and accountability as organizational complexity increases. The analysis highlights that effective formalization is selective and adaptive, reinforcing managerial capacity without undermining entrepreneurial agility. The paper argues that process formalization enables firms to decouple growth from founder dependence by embedding knowledge, decision rules, and accountability within organizational systems. Through this transition, organizations shift from personalized management to institutional structures capable of supporting scale and long-term performance. The study contributes to business management literature by reframing formalization as a strategic management capability and provides practical insights for leaders navigating growth-induced transformation.
Keywords
Business Management, Business Process Formalization, Entrepreneurial Growth, Organizational Transition, Institutional Structures
Citations
IRE Journals:
Resit Akcam "Business Process Formalization as a Growth Enabler: Managerial Transitions from Entrepreneurial to Institutional Structures" Iconic Research And Engineering Journals Volume 7 Issue 11 2024 Page 900-909 https://doi.org/10.64388/IREV7I11-1713950
IEEE:
Resit Akcam
"Business Process Formalization as a Growth Enabler: Managerial Transitions from Entrepreneurial to Institutional Structures" Iconic Research And Engineering Journals, 7(11) https://doi.org/10.64388/IREV7I11-1713950
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