Organizational Structure: NutriSystem - Essay Example

?academia research Organizational Structure For NutriSystem Maribel Jabido June 7, Organizational performance and change are importantelements of an organization. Transformational and transactional change affect mission and strategy, leadership, and culture that which influences structure, management practices, and climate. Work unit climate affects motivation which is determinant of performance. This literature explains how these variables interact and how the process work. These variables are further explained using NutriSystem as an example. Organizational Structure 1 According to Burke, W.W., Litwin (1992), a model of organizational performance and change encompasses two lines of thinking – understanding how organizations function and how organizations might change (p. 2). Based on their theory, there are factors that affect performance and how change occurs. There are two kinds of changes: transformational and transactional. Transformational change occurs by responding to the external environment. This affects mission and strategy, leadership, and culture in an organization. These factors affect transactional change, particularly organizational structure, systems, management practices, and climate. Together, transformational and transactional factors affect motivation, that which affects performance. (Burke, W.W., Litwin 1992, p. 1). These variables can be demonstrated in NutriSystem. NutriSystem’s mission is “to provide a weight loss program based on quality foods and a nutritionally balanced meal plan; individualized counseling is the core of our commitment that customers always have the privacy, support and knowledge needed to reach their goal weight” (Nutrisystem.com, 2011). Strategy and Structure in Organization Venohr (2007) states, “The structure of an organization can be defined simply as the total of the ways in which its labor is divided into distinct tasks and then its coordination and integration is achieved among those tasks” (p. 7). In other words, structure assigns key roles to different levels in management that describes how the organization is managed by showing who are in power or who has authority with corresponding tasks and skills or core competencies. Organizational Structure 2 Strategy indicates capabilities of organization that differentiates them from its competitors. The organization must excel in order to meet strategic goals. (Kates 2007, p. 3). There is a relationship between strategy and structure in an organizational design. As defined by Alfred Chandler (1962), strategy influences structure. Thus, structure follows strategy (Venohr 2007, p. 4). Otherwise, it will result in inefficiency. NutriSystem uses a marketing strategy that provides a balanced nutrition that is also low glycemic index (GI). (nutrisystemblog.com) GI is important to NutriSystem because meal plans with low GI improve hunger management, it produces better weight loss outcomes, and that it helps those who have diabetes. There are approximately 79 million adults in U.S. who are pre-diabetic and 24 million suffering from diabetes (nutrisystemblog.com). This is a good strategy for NutriSystem because millions of people are likely to respond to their diabetes control diet program. As a result of management decisions, Nutrisystem and the American Diabetes Association formed a strategic alliance to promote the importance of weight loss for people with type 2 diabetes (Medicalnewstoday.com, 2009). Organizational Culture and Climate Culture is a fundamental part of organization although management cannot “directly” design culture. According to Kates (2007), it consists of values, mindsets, and norms of behavior that have emerged over time that most employees share. It is rather the outcome of the cumulative design decisions that have been made in the past and of the leadership and management behaviors that result from those decisions (p. 3). Thus, it can be inferred that management practices influence or shapes organizational culture. NutriSystem is devoted to educating Americans about the effects of diabetes and inspire them to take action. This is the Organizational Structure 3 behavior and mindset of employees that has emerged from the alliance with American Diabetes Association. NutriSystem focuses on improving healthy diets while meeting its financial goals. Climate is the people’s perceptions of their working environment. It describes the overall tone or work atmosphere of an organization (OED 2006, p. 2). According to research and experience, climate has a long-term impact on organizational performance and productivity. For example, climate depicted as informal, less procedure, independent, and high responsibility tend to motivate creative professionals of R & D. However, this can be frustrating to other employees in the same work environment who are motivated by a structured and predictable climate. Thus, climate explains motivation of employees in an organization. Climate, then, can become an active and useful tool for managing the people side of the business. (OED 2006, p.2). It can be illustrated in this diagram: Figure 1 Climate is probably the most significant part of organization. Managers can change the climate to improve motivation and productivity of employees. For this reason, climate is determined by most variables. Leadership or management practice is the single most important determinant of climate because the leader has the power to influence the expectations of employees. The second determinant is the organizational culture. It defines patterns of behavior that is considered acceptable that has become the cultural norm, and therefore powerful social Organizational Structure 4 motivators. The third determinant is organizational structure, systems, and procedures. The rules and regulations can impact the tone of the workplace and create strong barriers or incentives to employee behavior (OED 2006, p. 5). The fourth determinant of climate is external environment. Based on OED Consulting (2006) research, this influence is exercised through the environment’s impact on leadership, strategy and culture. There are factors that affect organizations and its managers such as government regulation, economic conditions, competitive industry forces and technology. (OED 2006, p. 6). And finally, the strategy of organization as a determinant can have an impact on climates. For example, if the company chooses an aggressive and a growth-orientated strategy, the goals, priorities, and research allocation decisions needed to support the strategy will help determine organizational climates (OED 2006, p. 6). Strategy sends signals to employees about what an organization expects from them. It is important that there is clarity and that management is able to communicate its focus and priorities. As a result of these factors in creating organizational climate, NutriSystem received an ACG Emerging Company Award because of its annuals sales of up to $500 million, at least three years of growth, exemplary leadership, and high-level community involvement (Gale, 2008). Motivation and Performance Motivation is the reason or, more appropriately, the set of forces influenced by an organization that causes people to do something or behave in a particular way. Performance is influenced by motivation. Motivation is a vital determinant of performance. Work performance is determined by the abilities of staff and the strength of their motivation. If employees are to Organizational Structure 5 achieve the best performance of their abilities, one must pay attention to the nature of work motivation and job satisfaction (Nature of Motivation, Scribd.com p.2). The balanced nutrition programs, low GI prepared meals, and diabetes control diet are motivation factors for NutriSystem. They have created a cookbook with recipes online in their diet programs. Max Sugarman became a culinary intern who provided tips for NutriSystem customers such as making the food more tasty and flavorful by using spices without extra calories. NutriSystem also formed a Culinary Council by enlisting expertise of their star chefs. These chefs were in a challenge to create 5 star quality meals. Internship and creation of quality meals by these chefs or student chefs have created a working atmosphere for NutriSystem presumably with clear perceptions of their environment and knowledge of its marketing strategies. NutriSystem has developed a functional climate for its chefs and employees. As noted, work unit climate influences motivation, which then influences performance and productivity. As a result of performance and productivity, NutriSystem ended the year 2010 with revenues of $509.5 million, operating profit of 53.2 million, and 12 months EPS of $1.12 per share (Redling, 2011). Redling (2011) also stated that for 2011, their goal is “to optimize the core business and maximize profitability at the expected lower demand levels. Then we plan to accelerate core product offering innovation, develop new products to target specific diet segments, and explore expanding our channels of distribution.” According to Clark (2011), the entire NutriSystem management team is motivated to protect shareholder value in 2011, and to that end, they are reducing expenses with the goal of driving profitable full year financial reserves, positive cash flow and protecting the balance sheet (Seekingalpha.com, 2011). Organizational Structure 6 Conclusion It is apparent that NutriSystem as a leading provider of weight management products and services has exemplified the interactions of transactional and transformational variables because of evidence shown here such as receiving an ACG award, forming strategic alliance, and transparency in financial positions and management goals for the future. It takes motivation to be able to achieve an award or form an alliance to promote health and nutrition. It is important that other organizations follow a model that is well suited to the company’s strategy, structure, culture, and climate that can influence motivation, performance, and productivity. This will result in a successful business. Organizational Structure 7 References Burke, W.W., Litwin, 1992. A Causal Model of Organizational Performance and Change. Journal of Management. p. 523, 23 pgs. Daggy, B. 2011. The Lowdown on the Low Glycemic Index . Retrieved at http://www.nutrisystemblog.com/the-lowdown-on-the-low-glycemic-index/ Gale, 2008. NutriSystem, Inc. Receives ACG Emerging Company Growth Award. Retrieved at http://findarticles.com/p/articles/mi_m0EIN/is_2007_May_3/ai_n27226058/ Kates, 2007. Fundamentals of Organization Design. p. 1-26. Retrieved from http://media.wiley.com/product_data/excerpt/44/07879949/0787994944.pdf Nichols, M. 2011. Take the Easy Road to Weight Loss & National Nutrition Month. Retreived at http://www.nutrisystemblog.com/take-the-easy-road-to-weight-loss-national-nutrition-month/ No author. 2009. Nutrisystem and the American Diabetes Association. Retrieved at http://www.medicalnewstoday.com/releases/168768.php No auth., 2011. Motivation in Organization Behavior. p. 2. Retrieved from http://www.scribd.com/doc/19835107/Motivation-in-Organization-Behaviour No auth., 2011. A Weight Loss Program for the 21st Century. Retrieved at http://www.nutrisystem.com/jsps_hmr/about/index.jsp Organizational Structure 8 OED Consulting, 2006. Leadership Tools, Organizational Climate: A Proven Tool for Improving Business Performance. Organization Effectiveness and Development (OED). p. 1-8. Retreived from http://www.oedconsulting.com/assets/oed_organisational_climate.pdf Redling, Clark, 2011. NutriSystem CEO Discusses Q4 2010 Results - Earnings Call Transcript at http://seekingalpha.com/article/254980-nutrisystem-ceo-discusses-q4-2010-results-earnings-call-transcript Venohr, B., 2007. Strategy Process, Organizational Structure and Control. Berlin School of Economics. p. 1-6. Retrieved from http://www.berndvenohr.de/download/lehre/english/ 10_organizational_structure_control.pdf Read More