Pros
The owner is right there, not detached from the operation. No board of directors or shareholders to answer to so there's a human connection to a point.
Kontras
Managers and directors are all "chosen ones" who get moved around like deck chairs on the Titanic. Because of that, your next manager/supervisor might take you or your department into a completely different direction. Sometimes, that direction isn't good for you personally. Nepotism is rampant. You are a tool to be used. Once your usefullness is used up, you are discarded like an old shovel. Don't get sick with an extended illness on their dime because you won't make it two months after your return. Artificial "slow work periods" are created as needed to cull the workforce of the lower performers and those who might be a liability in the future such as the aged and ill.