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Organization Theory and Design - Essay Example

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Organization theory and design Name: Instructor: Task: Date: Organization theory and design Topic 1: What are the differences in the design models? According to the article published by McKinsey, the functional model is not split into various business units like the hybrid structure, which is divided into many business units…
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Download file to see previous pages Additionally, in the functional model, decision-making is usually made at the top and this makes it difficult to react to the altering competition (McKinsey, 2006). In the hybrid structure, decision-making it not difficult since the manager in each unit is able to make decisions autonomously. The unit leaders are accountable for the outcome of their decisions and this motivates them to have more entrepreneurial strength. The separate unit management enables the leaders to react to alteration in the market faster than in the functional model. Splitting of business into units enhances proper communication, which is difficult in the functional model. Lack of proper communication can lead to the difficulties in cooperation and supervision in a corporate. Furthermore, the splitting enables the CEO to concentrates on the business strategies instead of the daily business operations. Hybrid business structure promotes the development of the young leaders in the organization. The functional model can work best in the aviation groups that contract out many support functions, those that do not have the sophisticated communication system that are required to manage complex structures, or the ones that serve few uniform customers sections. To avoid the problems associated with the functional model, especially since the airline business is very complex the business should shift to Hybrid model (McKinsey, 2006). In businesses, there are many tasks, which should be completed in time in order to realize the organizational goals. The can be made easier through differentiation. Differentiation is a process, which a corporate assigns people to different tasks. The process also involves the allocation of resources to the businesses’ tasks. Differentiation in corporate ensures that the workers are given tasks according to their areas of interest. From my observation, Hybrid structure gives more differentiation compared to the functional model. This is because in the hybrid, the managers are assigned to each unit according to their areas of specialization. Additionally, the managers in each unit are responsible for decision-making and the model is mostly used in customer segments that are not homogenous. Differentiation promotes the business’s transparency. Since the hybrid structure provides more differentiation, it makes the firm to be more transparent unlike the functional model. The transparency ensures there is easy accountability for the corporate outputs and the appropriate distribution of resources and proficient leaders in each unit. Differentiation enables the firm to lower expenses too. Since the hybrid structure is more differentiated, it enables the managers in each unit to negotiate labor contract. This ensures that the work conditions and wages of the workforce correspond to the ones for the direct rivals (McKinsey, 2006). Support structure needs to be the same if the changes made can result to the problems associated with duplication of efforts. Example of a support structure that should not change is the airline branding. All the units should use the parent name of the company to attract the consumers. Minor support functioning like the services offered to consumers and delivery can change depending on the unit level. Some support functions can be bought with other corporate units while others can ...Download file to see next pagesRead More
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