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Organizational structure and the impact it has on an organization
Structure/design of organizations
Organizational structure quizlet
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Companies continuously seek for the best organizational structure that will allow employees to be as effective and efficient as possible. The question many managers must ask themselves is whether to organize their departments by product or by function. Managers must decide between having specialist grouped together by function regardless of the product they work on or having them grouped by specific products and which option will be best suited for their organization (Walker & Lorsch, 1968, p. 1). Walker and Lorsch in their article “Organizational Choice: Product vs. Function” (1968) take an in-depth look at two companies, Plant F and Plant P, in order to examine these two structures in action and determine some of the advantages and downfalls of each.
Plant F and Plant P
When examining both Plant F and Plant P, it was important that they be similar in terms of the products, market and technology in order to view a better comparison of organizational structure. Both plants had very similar management styles and had the same two objectives: one “maximizing current output within existing capabilities” and two “improving the capabilities of the plant” (Walker & Lorsch, 1968, p. 8). The plants main differentiation was in the organizational structure; Plant F had a more functional basis while Plant P had a more product basis.
Plant F, according to Walker and Lorsch (1968), focused more on their specific goals and maintained a focus on short-term deadlines and problems. Having a focus on individual goals, communication among different position or departments was seen as unnecessary and when communication was needed it was approached in a more formal manner. Conflict was also dealt with formally by upper management and often found del...
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...e” there is no easy answer and there is never a perfect solution for organizations. Each must determine their needs and there over all goals to have a better understanding of which organizational structure will better suit their organizational needs. Choosing between function and product is not as easy as flipping a coin or following the model of another organization because every company is different and only they can determine what is the best choice. Management has the tough job of determining what is best for the company and although their first decision may not be correct it is important to continue to redevelop and adapt to the changes.
Works Cited
Walker, A. H., & Lorsch, J. W. (1968). Organizational Choice: Product vs. Function. Harvard
Business Review. Retrieved April 29, 2014, from http://hbr.org/1968/11/organizational-choice-product-vs-function/ar/
Many people believe that in order to succeed in a business that is having difficulties, it is important to focus on a particular area in order to be better productive in each of them, and be able to reach the goal. Instead, Goldratt and Jonah demonstrates that is important to focus on the company as a whole, but at the same time, it shows that it is incorrectly to only focus in an specific manufacturing department, or one plant, or a department within the plant, because people should not be concerned in local optimums.
The team/matrix structure within this organic model clearly creates product innovation, job satisfaction, across the board high profits and lower costs. This is a result of the organic model with a team/matrix structure influenced by their innovation strategy.
The Foodcorp is a big organization of more than twenty thousand employees. The structure should help the organization achieved established goals and objectives. Therefore, the appropriate structural design is very crucial. The performance and the efficiency of the organization can be enhanced through specialization and appropriate division of labor. Foodcorp used a matrix structure but the management style of Foodcorp seemed to be a one boss arrangement. Information and decisions directly comes from the top. As we can see from the chart, group members report and communicate primarily with president. In my opinion, this style will work best in a simple organization, but not for a big organization like Foodcorp. If it relies too much on the president, the employees might face with many problems such as delays and bad decisions. Finally, Foodcorp may suffer from its structure. In my ...
Each plant comprises a number of small; multi-skilled; flexible; collaborative and self-managed teams instead of functional departments with specialised functions (e.g. legal, finance or human resources etc as in a conventional system). These teams have the decision-making power over all plant-specific business functions including capital allocation, expenditures, strategic planning and plant design. This bottom-up decision making process emphasises the trust the company places in its employees and is very effective in decentralizing the power base, consequently, involving every employee in being responsible for the performance of the company not just the CEO.
Organizational structure can be defined as the “formal arrangement of jobs within an organization” (Robbins & Coulter, 2009, p. 185). Having a defined and unified structure helps employees work more efficiently. Jacques Kemp, former CEO of ING Insurance Asia/Pacific, realized this need early on in his role. The company had been performing well and recently acquired another insurance company to become “one of the largest life insurance companies in Asia-Pacific” (Schotter, 2006, p. 4). However, Kemp’s proactive personality led him to seek out ways to achieve more efficient coordination between the regional office and business units (Robbins & Coulter, 2009). Kemp noticed that “most business unit managers did not even know the current corporate standards” and he began searching for a way to manage the managers (Schotter, 2006, p. 5). ING Insurance Asia/Pacific’s organizational structure was mechanistic and fairly well structured, but for a company that had recently been involved in a major acquisition and was divided across 12 geographically dispersed markets there was a great need to tweak this structure to unify the company (Schotter, 2006). If I had been in Kemp’s position as CEO, I would have made modifications to the organizational chain of command, formalized business processes, and used technology to stimulate collaboration amongst the region to help this company overcome organizational design challenges.
The market-oriented structure groups workers according to the market they serve, such as product, project, client, or geographical area. Large companies that implement a market-oriented structure may have market-based divisions or create a conglomerate of separate subsidiaries (Judith R. Gordon, 2002). I believe that this structure is more adoptable by those multinational corporations which have to respond to diverse cultures and meet the unique needs of various countries. The teams have the same goal meeting the market demands.
Organizational structure within an organization is a critical component of the day to day operations of a business. An organization benefits from organizational structure as a result of all it encompasses. It is used to define how tasks are divided, grouped and coordinated. Six elements should be addressed during the design of the organization’s structure: work specialization, departmentalization, chain of command, spans of control, centralization and decentralization. These components are a direct reflection of the organization’s culture, power and politics.
With the rise of the economy, consumers have become more and more knowledgeable on selecting their favourable product as a result the organization cannot focus on what it sells but on the side focus on what the customer wants to buy.
In order for one to evaluate and identify with the diverse business structures, he/she must be aware of the meaning and standards that makes that structure. Various businesses functions in different ways as the world is full of technology and new structures, company cultures and new ways in which companies are run. In order to fully grasp the concepts of Organizational structure and culture in the movies, I will use the Movie Up in the Air and The Devil Wear Prada movies to analyze a business scenario from them.
Matrix structure is first introduced in the aerospace industry in the 1960s and become one of the popular organizational design options in today’s business and industry (Derven & Alexandria, 2010). Burns and Wholey (1993) poinited out that matrix structure were used in advertising agencies, aerospace firms, research and development laboratories, hospitals, government agencies, and universities. Matrix structure is the combination of two or more different structures and take the advantages of the pure functional structure and the product organizational structure (Robbins & Judge, 2011, p. 497). The employees in the matrix may have two bosses: their functional department managers and their product managers. For example, all engineers may be in one engineering department and report to an engineering manager, but these same engineers may be assigned to different projects and report to a project manager while working on that project. In many organizations, a matrix structure is implemented to address the requirement to do more with less and become more agile. The matrix structure, which focuses on horizontal as well as vertical management, has become more widespread as a result of globalization and the...
Nike is made up as a matrix organizational structure, which consist of several specialists and some individuals report to at a minimum of two managers. In the company, the staff informs to a crew of managers who dispatches the development report to the manager of the department. Each product within the company includes of it is own section and has its own department who performs independently of the CEO. The managers and employees of Nike decide concerning design and manufacture while the department managers concentrate mainly on ethical issues. In addition, the managers are completely accountable for the employees. While operating a matrix structure, Nike makes choices and responds quicker than any other department. Unlike Nike, Microsoft uses a divisional structure because it offers various separations within the company that functions almost as their own separate entities. However, this does not mean that they do not collaborate on projects or cross reference with each other. The divisi...
In today’s ever changing and ever-quickening business environment, there is constant debate about what type of organizational structure is “best,” and how choice of structure impacts productivity. Companies in the same industry that receive different results may employ contrasting organizational structures. Founded in 1958, W.L. Gore and Associates trademarked Gore-Tex, a breathable, waterproof fabric (Gore, n.d., para. 1). Columbia Sportswear Company, founded in 1938 is a leading innovator in the global outdoor apparel, footwear, accessories and equipment market (Columbia, n.d., para. 2). In this paper we will analyze the connection between organizational structure and productivity by comparing W.L. Gore & Associates’ Gore-Tex, and Columbia.
“Management is the process of working with people and resources to accomplish organizational goals. Good managers do those things both effectively and efficiently.” (Bateman & Snell, 2004). Management contains four basic functions; planning, organizing, leading, and controlling. By using these four functions, one can create an organization both successfully and proficiently. Planning is specifying the goals to be achieved and deciding in advance the appropriate actions needed to achieve those goals. Planning sets the stage for actions and for major achievements. Organizing is assembling and coordinating the human, financial, physical, informational, and other resources needed to achieve goals. Organizing attracts people to the organizations, specifying job responsibilities, grouping jobs into work units, marshaling and allocating resources, and creating conditions so that people and things work together to achieve maximum success. Leading is directing, motivating,...
Some decisions prove to be vital and any miscalculation that may be involved may prove dire for the individual or the organization. In identifying the criterion to use while evaluating different decisions, many factors pertaining the structure should be considered. The pros and cons of every decision made should be evaluated to ensure that the option chosen has the most positive effect on the individual and the organization. Some of the activities that may require keen decision making include project development, finance and operations. With the knowledge attained it will be easier to cope with tough decisions that may come up in my career. Decision making models may be generated to give an in depth view to the problem and also provide critical analysis ability. It is also vital noting that for those in managerial positions, they face a bigger task in decision making. A good understanding of the business function and structure will provide an in depth knowhow to those that have studied the
4. Assessment of the proposed organizational set-up (patterned from the set-up of Martex) by evaluating whether implementa...