1. What are the links between organisational design and structure Illustrate your points with real-life examples.
My Coca-Cola experience allowed me to understand that there is no doubt that organizational structure and design are concepts that intermingle. One summer, I worked for a Coca-Cola bottling company in Singapore. The first and key stakeholder group of the Coca Cola Company is the employees. Employees are a key asset for any company that wants to compete with other players in any industry. Coca Cola Enterprises has 73000 individuals who run the production facilities, sales, distribution centres, and administrative offices all over the world. This means that the opinion of this large group of people is vital in the decision making of the company. The role of this group of stakeholders is to ensure that the operations of the company run smoothly, and to protect the culture of the company. The leadership of the company can engage this group of stakeholders through the administration of employee surveys and focus groups. This will act as a tool of collecting the views and opinions of the employees, and integrating them in the decision making process (Coca Cola enterprises, 2011). The workers are all guided by a well stipulated structure that allows flow of information and power outline.
While organizational structure refers to the makeup of positions, responsibilities and power in a company, the design is the strategy employed to realize its goals. In a sum, structure is about long term plans as opposed to organizing. It must be understood that creating an organizational structure is a complex process that takes time and tedious work. Perhaps one of the biggest challenges in creating an organizational link in a company is the tasking duty of creating a highly organized system of supervision. The creation of supervisory roles enables the upper management positions to have the ability to oversee the junior employees. Effective organizational structure is helpful in the effective management as well as coherent worker relationship (Fineman, & Gabriel, 2010).
In some cases, a company’s organizational structure and design may be different as a result of the intended goals at creation and planning of the company. For instance, when a company creates its organizational structure, the company must design a work flow to enhance business operations. The process of designing operations must be based on process such as product lines, functions, and many other instances such as the hybrid between the two designs and others. The design process often starts after the process of designing an organizational structure. It must be understood that while changes in the design of a company may be possible, it is often difficult to undertake the same changes on the structure (Bolman, Deal 2008).
While management focuses on the ability to communicate and acknowledge people and their potential, management is based on using the potential and talent to achieve a goal. Effectiveness in management is the ability to get a group to accomplish its mission that does not entirely depend on a leader’s ability and attributes. First, the success emphasizes how the manager treats the subordinates while the second aspect premises on the leaders organizational skills (Morgan, 2007).
2. To what extent does strategy affect organisational design? Illustrate your points with real-life examples.
Finema & Gabriel (2010) report that organizational strategy’s purpose is for shaping the future for a business. The role of organizational strategy is to create value in the eyes of the customer as well as implementing models that creates values in the eyes of the customers. The organizational design affects the ways in which a company can realize its strategy. When companies grow bigger, they expose themselves to external environments that may be complex and out of line for the business process. The business structures and designs that previously worked become complex to implement. In some cases, the structures and the designs of the business become barriers to the effectiveness of the business in areas such as efficiency, customer service, and employee moral as well as financial profitability. Because of this reason, companies must be able to change their designs such that the strategy for business is not compromised and the goal of profit making is not endangered.
Compared to organizational strategy, organizational design is a systematic methodology that is used to correct non-working aspects of work flow, procedures and systems and realigns the non-working aspects of business such that they meet the needs of the business in the contemporary. The aim of organizational design is the requirement of meeting the business realities and goals. When referring to design, the meaning is the integration of people that handle business process, the technology and the other systems that daily drive the operation of the entire system. In business, a well designed organization makes sure that the design of the company matches its strategy (Morsing & Oswald, 2009).
Let me use the case of Zebra Technologies to illustrate how a company can mix up its design and combine with strategy to meet the needs of the 21st century. Zebra Technologies Corporation is a leading provider of international range of innovative technology solutions for business enterprises across the globe. Zebra’s products include safe and affordable printers, state of the art software and hardware solutions. Zebra’s emphasis on sourcing, visibility, security, and accuracy has enabled its customers to meet their needs at the required time. Currently, Zebra is a global leader in serving over 90 percent of Forbes’ top 500 companies across the globe. I use Zebra as a case example of changing strategy and design to meet the diversifying needs of firms as the company seeks the Russian market (Zebra Company Information, 2012).
Zebra has used the strategy of standardization. Standardization employs the use of trans-national strategy. In a transnational strategy, a firm develops a plan to produce and sell standardized products in different markets. The advantages of standardization are that the firm has the potential of combining the benefits of global scale efficiencies with the benefits of local advantages in the market. The actual choice of a strategy is a function of the conditions in the firm’s internal and external conditions. These conditions must be defined by opportunities, which are conditions in the firm’s general industry that makes it possible for the firm to achieve its short term and long-term goals. The opportunities are contrasted with threats. Threats refer to the firms the obstacles that prevent the firm from successfully using its competencies to gain an advantage in the market. For firms to make profits, they must assess the trends in the general environment and assess the effects of competitive forces in the industry to formulate policies that can maximize profits in the global market arena.
3. To what extent does the external environment affect structure and design? (For example, mechanistic versus organic processes). Illustrate your points with real-life examples.
Businesses’ do not operate in a vacuum; they operate in environments that surround the operations of their activities. The business environment refers to the outside factors that affect the efficiency of the organization. These forces include competition, government, market structure, season, and nature of the industry. If the business operates in an environment with low competition, it might strive. However the environment is is stiff or cut throat, the business must be over the edge to make profit. Internal environment refers to the coherence of the management, efficiency of workers, machines, and the organizational structure of the company. It is the internal environment that affects the business most. The external environment in most case, its out of the business’ control, but the internal environment is its responsibility (Clegg & Bailey, 2008).
The mechanistic model of organizational structure refers to an organizational design where there is extensive departmentalization, high formal structures and clear chain of command. This system is also characterized by narrow spans of control, limited information and network. In short, mechanic organic structures do not allow low-level participation in making decision that affects the company. Most state governments apply the system of mechanic organization design. The other example is called the organic model of communication. The organic model of communication works with cross-hierarchical methods and cross team functions. This process has low formal process and possesses quite a comprehensive information network. In some cases, high-tech firms that specialize in the early years before going big operate on more organic methods for making decisions. I will use the case of McKinsey and Co to illustrate how the idea of external environment can affect the structure and designs of corporations.
McKinsey & Co is a global firm of accounting and engineering advisors. It was founded in 1926 by James McKinsey, a professor at the University of Chicago whose business and creative mind was able to transform this small consultancy firm to be a leading global player. Mac’s ability to change the company was made possible by his focus on training, use of skilled personnel, and his global orientation. After establishing his company, Mac started by hiring experienced executives that knew their way around managing. In order to ensure that the McKinsey & Co was successful, Mac created a systematic approach system that trained his new hires on how he wanted the company to be managed.
After almost three decades of unrivalled success in consultancy, McKinsey and Co faced challenges from an economic crisis of 1970 accruing from the famous oil spill, the changing dynamics of business in terms increasing number of sophisticated client demands, and mainly the rise of competition from the Boston Consulting Group. Although unanticipated, these changes caused a reduction in profits and growth of the consultancy company. The company had to change its strategy and design to sail through these changes.
A change of the strategy was thus imminent. As a result, a commission set up to investigate the cause of the company’s poor performance reported that the company’s woes were a function of neglect of development of professional skills as a result of unchecked expansion, and lack of specialized expertise for key cases. Ron Daniel was thus elected as the Managing Director for McKinsey & Co. The first thing Ron Daniel did was appointing a new director of training. In addition, Daniel adopted structural changes that he and his fellow directors had implemented in the New York office. Ron Daniel’s was able to reenergize the working system of McKinsey to adapt to the new system of doing things that was new to the company. He advocated for formal ways of doings things in the areas of strategy, organizations and operations to counter the completion from BCG. Ron Daniel also worked in a group that he called “Super Group” led by a critic of the traditional method called Fred Gluck to work on new ways of consultancy. Together with hiring new recruits, for example, a PhD holder Tom Peters, Daniel was able to revitalize the growth of McKinsey and Co
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