A corporate system is a formal structure with procedures, processes, and communication channels that establish the way businesses operate on every day basis. A well-designed system can be adapted or modified to meet specific business goals. The system includes everything from organizational structure reporting relationships, the communication channels, task management processes, policy creation, and enforcement, to the overall culture of the company.

Large companies use a hierarchical structure, which has distinct levels of management, from the lowest-level employees all the way to the top executives. Some organizations might have a flat structure with few or no middle management levels, promoting open communication and collaboration. In a process-oriented system, teams focus on documenting and improving internal processes in order to achieve efficiency. A network-oriented approach employs teams and projects that collaborate across traditional boundaries of departments to achieve the goals of the business.

It isn’t always easy to develop and document business systems, but the effort is worthwhile in terms of performance improvement. The clearness of roles and responsibilities for instance, can help ensure that tasks are allocated effectively. Documenting communication channels and protocol ensures that information is sent to the right people at the appropriate time.

Limited liability is another advantage of business corporations as compared to other kinds of business entities, like sole proprietorships or joint partnerships. This means that the control and earnings of investors are independent of their ownership a corporate system of the company. This safeguards their assets in the event of a business failing. For small businesses, purchasing pre-documented business systems from third-party vendors or buying into an existing franchise with established business systems, could be feasible alternatives to creating their own.