Effective Organization Structure - Case Study Example

Compare and contrast the 7S and Mintzberg’s configuration models of organisations Introduction By what means does an organization get caught up by struggle, why, and by means of what significances (Griffins et al 24)? Conflicts and power struggles occasionally capture an organization in complete or noteworthy measure, giving upsurge to a system of political arena. This gives rise to a conflict-driven organisation. This derives the question, “how organizations do goes about making strategic resolutions, and ensure appropriate pursuit of organisation interest more effectively (Storey 16)?” As a result, scholars have over the years tried to explain organisation structure in explaining an organization’s decision-making processes such as cost-benefit analysis, strategic planning among others. Henry Mintzberg enhanced organizational design literature by suggesting different forms of organizations (Clegg, 3-7). McKinsey 7s model explains how an organisation goes about analyzing how well it is positioned to achieve its intended objective. This model has remained persistent over the years because it is applicable in wide range situations where an alignment perspective is useful (Strategic management journal 279). Regardless of how an organization decides to define its scope of operations, alignment issues apply, making the model significant. Organisations being complex, this model eases the difficulty in understanding them, and helps to understand them, consequently yielding maximum benefit and profitability (Clegg, 27). Description Mintzberg defines organizational structure as, the total number of ways in which an organization distributes its labor into distinctive parts and then attains harmonization amongst them. He argues that each configuration comprises of six constituents, which are (Clegg, 23-29): Operating core: The human labor directly linked to the manufacturing of goods and services Calculated apex: Aids the necessities of the people in the organisation Intermediate line: Managers who link the premeditated apex with the operating fundamental Techno-structure: The expert who scheme, plot, modify or train the operating fundamental Support staff: Professionals who deliver sustenance to the organisation external of the operating core’s undertakings Ideology: Philosophies and customs that make the organisation exceptional. Each one of the above part is in control to tug an organization in a specific way which is advantageous to them. As a result, Mintzberg presents organisation configuration framework with six valid organizational configurations. They are (Clegg 31-89): Entrepreneurial organization: This is a simple structure characterized by little or no techno-structure; few support staff, minimal division of labor and work differentiation and little managerial hierarchy. There is no formal behavior, thus coordination is simple with direct supervision. This is the most starting point of many organizations (Davidson 46). Machine bureaucracy: Comprises of high specialized, routine operating tasks, very formal procedures, proliferation of rules, regulations, and formalized communication throughout the organization and reliance on functional basis for grouping tasks. There is centralized decision-making and an elaborate administrative structure with clear distinctions between line and staff. It houses the specialists who do the standardizing. Machine bureaucracy is mostly found in mature or old organizations, large enough to have repetitive and standardized tasks. Managers at this level are not problem solving, rather, they concentrate on enhancing work processes to generate more output efficiently (Hardling, et al 33). Professional organization: This bureaucracy depends on the synchronization on the adjustment of skills. It employs duly accomplished experts or professionals for the operational core, and gives them significant control over their exertion. They work autonomously of their coworkers, but, closely to the customers they attend (Semler, 47). Previously to assuming work, they learn what to expect from their colleagues, and thus they set their own standards. Professional bureaucracy stresses power of a specialized nature- the authority of proficiency. Technical system is not greatly modifiable, definitely not highly computerized. This is because professionals repel the streamlining of their abilities, because that would make them programmable by the techno-structure, destroying their foundation of sovereignty, and driving the structure of a machine form into their bureaucracy (Semler, 56). It is an strict structure, well fit to creating its standards yields but ill-suited to adjusting to the manufacturing of new produce or services Division organization: It is the coordinate output acting as a link between strategic apex, and the operating core. Innovative organization: Innovative organization has little formalization of behavior, relies on liaison devices to encourage mutual adjustment. It does not rely on standardization of skills to achieve coordination because; standardization would not lead to innovation. Missionary organization: The standards pervading the work are orderly for the whole organization, such that everyone functions according to similar established of philosophies, as in a religious mandate (Griffin, et al 67). McKinsey 7S model comprises of seven interdependent factors which are categorized as either being soft or hard (Davidson, 63). Soft elements include; shared values, skills, style and staff while the hard elements are strategy, systems and structure. Hard elements are easier to define, and identify and management can directly influence them. This is because they are practically available to management and they are in the form of organization charts, Information technology systems, strategy systems and reporting lines (Clegg, 57). On the other hand, soft elements are more difficult to describe, and less tangible and more influenced by culture. Both factors are significant for an organization to be successful. Shared values are central in this model, and they are critical for the development of other elements. The original founders of an organization create these values. As these values change over time, so do other elements (Clegg, 28). Shared values denote to the controlling philosophies of an organisation. They are the central values. Strategies refer to the route-map to accomplish competitive advantage. They include on ways to deal with customers, updating business plan, customer demand among others. Structure is an outline on how the organisation undertakings are going to be harmonized. Its concerns employee needs and, their work range (Clegg, 63). Systems are day-to-day practices and measures, which guarantees smooth running of all organizational facets. Style entails governance approach and the organisation inclusive operational approach such as subdivision. Skills are distinct proficiencies of peoples within the organization. They highpoint the toughest represented experts within an organisation and the main proficiencies which an organisation should strive to maintain. The interdependence amid these fundamentals shows the complexity of running an organisation and sheds light to managers on vital elements, which they should pay devotion to, to ensure success (Clegg, 71-73). Discussion Comparisons Both models are formed on the basis that organisations are complex in structure, and that they differ in various ways (Clegg, 79). Consequently, they both try to understand the basis underlying these complexities and thus come up with differing suggestions, on the causal elements (Clegg, 81). Equilibrium notion is well argued in both models, through suggestion on ways through which harmonization of activities can be efficiently achieved, thus achieving success (Hardling, et al 31-35). These two models break down jobs into explicit tasks, and support these tasks to form organizational structure. They further debate that there is no much intricacy within the work force; complexity ascends depending on how work force is structured. Both models have played a substantial role in the usage of technology in business processes, by signifying on the prominence of technology to enterprises and means in which it develops performance (Clegg, 90). These models concentrates not only on strategic decision making, but also on strategy decision makers and how they realize harmony, by concentrating on the process of strategy making rather than on the content of the strategy. In addition, they both denote to organizational structure as the approved alignment among personages and groups concerning the apportionment of jobs, duties, and the power within the enterprise (Storey, 23). Unceasing application of these models has laid fundamental grounds for understanding relationships among different elements of organisations, with much impact on the relationship between organisation strategy and its structure. They have improved research on organisation structures, especially evolving research on service organisation, a feature that was missing in this discipline before advocacy of these theories (Clegg, 112). These two models have simplified the basis of organizational conflicts, by each of them outlining its elements which they both consider as independent, with fluctuating influence on the organisation performance, and emphasize on the interdependence of these elements, consequently signifying amalgamation of these variables to achieve success (Clegg, 137). Empirical studies by these two models have focused on larger firm, typically with more than 100 employees (http://www.imf.org/external/index.htm). Lastly, they collectively accepts that organisation structure can have a bearing on the way it executes and, restructuring, is an continuing process through an life, as a result of changing dynamics within the environment which it operates; that is, structure plays a key role in the human dimension of an organization (Clegg, 197). Contrasts While Mintzberg argues that all organisations trail similar pattern, McKinsey outlines the 7S plays a significant role on which pattern an organization will follow, thus suggesting that there are different patterns available for organizations to follow (Clegg, 201). Mintzberg argues that owners of a business have unswerving and greater influence over the direction of the business. In countering this, McKinsey argues that shared values have greater influence on the direction which an organisation follows and that each value has the ability to pull an organisation in a certain direction regardless of the owners or founders influence (Clegg, 223). A realistic illustration of this is large enterprises owned by for instance by pension scheme, and quoted in a stock market. Regardless of management decisions on the way forward, stock market performance will have a significant impact on the direction which such an organisation moves (Davidson 98). Mintzberg advocates for definite organisation coordination technique such as direct command and standardization of work depending on the structure of specific organisation, on the other hand, McKinsey suggests that coordination techniques depends on the 7S present in the environment which an organisation operates (Hardling, et al 113-119). Further, Mintzberg argues also, that organization sequence of command, which is vertical, horizontal, or selective decentralization, is the key determining factor on the direction, which an organisation goes. McKinsey further argues that the prime determinants on the direction taken by an organization entail shared values, and the way employees relate to them on their day-to-day activities (Clegg 187). While McKinsey suggests the importance of culture, which he refers to as shared values in achieving organizational success, Mintzberg theory does not consider culture in understanding organizational structure (Semler, 118-127). McKinsey suggestions on organisation structure consist of two magnitudes: work division, which encompasses dispensing responsibilities and activities, and, coordination contrivance, which encompasses regularization and formalization. On the other hand, Mintzberg organizational structure concentrates on the coordination contrivance, and operationalization of variables to accomplish victory. This contributes to complexity in understanding organizational structure. Mintzberg studies show an affiliation between structure and managerial variables such as governance style and form of control; and compatibility of these variables with little intricacy, high reinforcement and high monopolization. McKinsey studies show the relationship between structure and coordination, and how structure is altered by adjustment in coordination efforts of a firm (Clegg, 227). Application of the 7S model necessitates an entity to toil in reverse, by questioning how paramount an organisation can be affiliated through the essentials to realize objective. Contrary, application of Mintzberg models requires a study of organisation day-to-day processes, to understand how the exhibited character relates to this model, and eventually modifying them by utilizing techniques advocated by this model to achieve objective efficiently (Clegg, 235). As a result, the 7S model can be used to evaluate past, current and proposed upcoming organisation goal, and then categorize gaps and discrepancies amongst them, and outline a modification design or technique to confirm an organisation runs successfully and well towards accomplishing that end objective (Semler, 314). On the other hand, Mintzberg model is suitable for analyzing past and present coordination mechanisms within an organization. Further, it is not capable of dealing with the unknown future due to ever changing dynamics in business coordination because of dynamic advances in technology and emergence of new organizational structures, completely different from the ones used in empirical studies in advocating this theory (Clegg 241). Conclusion Regardless of their suggestions, it is evident that both models attempt to establish who runs an organisation (Clegg, 241). Successful organisations are those that have reckoned out the finest way to assimilate and harmonize it key basics, which depends on the model chosen by an organisation for referral. When organisations approach, ecological forces and the organizational structure itself apt well, such an organisation accomplishes well. In conclusion, understanding organizational structure can be a very perplexing undertaking (Clegg, 114). It requires attention of numerous theories and studies available, and coming up with your unique elements to consider, and disposal of certain skills and techniques to do it magnificently (Clegg, 123). In the contemporary world, new organizational structures are evolving, which significantly differ from the traditional ones used by scholars in empirical studies (Clegg, 305). Influences behind these new organizational structures comprise globalization, rapid progresses in technology, and strains on practice capabilities among others. Endlessly changing settings necessitates organisations to adjust their structure. This is advocated in McKinsey theory and absent in Mintzberg theory (Davidson, 223). This study concludes that by assembling like undertakings to realize the benefits of specialty, organisation structure themselves lessen synchronization costs and yields benefits. With increased ambiguity and dynamic forces in the business environment, organisation can best achieve success by assimilating various techniques advocated in these models, rather than using one model in running its activities (Clegg, 297). However, it will be a complex undertaking but role variation and integration will benefit coordination efforts. Replacement of human labor with Information technology techniques will reduce employee’s number, by maintaining core competencies and eliminating less skilled workers, regardless of an organisation scope of operations, consequently reducing costs, and upholding a less complex organizational structure (Clegg, 305). Work cited Clegg, Stewart. Handbook of Organization Studies. London: SAGE, 2013. Print. 3-305 Strategic Management Journal; Mar 1999; 20, 3; ABI/INFORM Global pg. 279 Griffin, Ricky W, and Gregory Moorehead. Organizational Behavior: Managing People and Organizations. Mason, OH: South-Western/Cengage Learning, 2012. Print. 24-67 Davidson, Andrew. Smart Luck: And the Seven Other Qualities of Great Entrepreneurs. London: Prentice Hall Business, 2004. Print. 46-98 http://www.imf.org/external/index.htm retrieved on 27th February 2013 at 09:07pm Harding, Sue, and Trevor Long. Mba Management Models. Burlington: Gower Publishing, 2008. Print.33 Harding, Sue, and Trevor Long. 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