Organizational Structure of Spectrum Brand, Inc - Research Paper Example

FOR COVER PAGE Spectrum Brand, Inc. (Spectrum), formerly Rayovac Corporation, is a global consumer products company, supplying batteries, personal care products, pet supplies, and lawn and garden products. As a large, diversified company, its use of the organizational structure that best suits its goals and objectives is key in shaping the stability, flexibility, and overall effectiveness of the company’s operation. The Matrix structure is one of the most popular organizational structures in the modern business world. It gained popularity in the second half of the twentieth century due to the rapid growth of small and mid-sized companies into large and extended corporations with international reach. Also known as Project Management structure, it fosters the use of teams created from various departments, to achieve goals or create products. This type of structure can be beneficial to Spectrum, as it combines aspects of both a functional organization and project team structure. It effectively coordinates resources for various projects and allows personnel to retain membership on both the team and their functional departments. However, the matrix structure has some inherent communications challenges. One such challenge is line of authority and resource allocation ambiguity as personnel report to both their functional manager and the team/project manager. Confusion as to which manager’s authority takes priority regarding tasking can be addressed through the use of pre-established lines of authority, project plans, resource allocation plans, and timelines, as coordinated between the functional and team management. Ambiguity surrounding resource allocation can lead to personnel disputes on the number of resources allocated to respective projects. Clearly defining the level of capital, resources, and lines of authority at the beginning of each project, offers a viable solution for this dilemma. A second communication challenge is the need for a common terminology. New terminology or language can lead to personnel feeling out of place, when joining a new team, and can hinder productivity of the newly formed team. Management can address this by scheduling on-the-job or external training, as part of the project timeline. A third challenge is the lack of peer interaction from functional teams, due to logistics, if geographically dispersed. To combat this, management should ensure that periodic virtual or in-person team meetings are conducted, allowing personnel to stay abreast of developments in their functional area of expertise and promotional opportunities. Multidivisional structure was also developed as a response to the emergence of large companies and multi-national corporations that were difficult to govern and manage, via rigid vertical distributions of power. This structure organizes the company into divisions, often based on a commonality such as geography, product, customer, or a combination of features. Multidivisional structure allows for delegation of decision-making authority to divisional or department level managers, thus creating a semiautonomous entity that can more fully meet the needs of its consumers. This structure can benefit Spectrum, as it allows the divisional managers to focus on the day-to-day operations and corporate managers to focus on strategic plans for the organization. However, this structure also creates duplication in efforts across the organization, which can increase operational costs and feelings of isolation. Feelings of isolation can lead to several communications breakdowns. Being geographically dispersed, as many multidivisional organizations are, can result in perceptions of being disconnected from the corporate headquarters. This can also cause a second challenge, the feeling that executive management is out of touch with the division. Thirdly, in cases where the division is a wholly-owned subsidiary, the management of the division may feel that they are not being supported by the parent organization and that their value to the overall corporation is not sufficiently acknowledged. All three of these challenges can be addressed through inclusive communications tools from the corporate headquarters to the personnel of all divisions. Company-wide emails, newsletters, or announcements keep personnel in all business areas informed of company news, events, and opportunities. Additionally, forums for feedback from the divisions to corporate headquarters can be established and encouraged, to provide a sense of value and belonging for divisional Personnel. Centralization is associated with strict hierarchy and control while decentralization is associated with greater autonomy of middle managers and staff (Ferrell, Hirt and Ferrell, 2008). As identified by Ferrell, Hirt, and Ferrell (2008), “the extent to which authority is delegated throughout an organization determines its degree of centralization” (p. 243). Generally, matrix structure is more centralized than multidivisional structure. The corporate headquarters of a centralized company gives orders to its functional managers. In turn, these orders are further transmitted to project managers and members of the project team, through a more rigid hierarchichal structure. Centralization is often found in the matrix structure. In the centralized matrix structure, it is the responsibility of management to control the allocation of resources across projects. As each project is temporary, a visible degree of centralization is needed to avoid chaos, role conflict, and project failure. Conversely, multidivisional structure is decentralized by definition, as divisional managers are delegated the authority to make decisions, regarding the operation of the division. This decentralized multidivisional structure is supported by the semi-autonomy of the division, where innovation and creativity are key components to success. With these points in mind, Spectrum, as a global consumer products company, would benefit most from the multidivisional structure. Many researchers and business practitioners believe that, in addition to the aforementioned advantages of a multidivisional structure, it is the most effective for companies with diversified product lines (Ferrell, Hirt, and Ferrell, 2008). The diversification of products is a continuing challenge for the growing corporation. The multidivisional structure would help to solve many coordination and control-related challenges, as the company strives to maintain quality and anticipate consumer preferences. However, Spectrum would also benefit from features of the matrix structure, incorporated into the multidivisional structure. For instance, a division can matrix a subject matter expert from another division/product line, to help develop a new product. The result is a combination of the most appropriate aspects of the two business structures. It allows Spectrum to allocate resources more wisely and decrease the overhead of duplicity often found in the multidivisional structure. Within the decentralized multidivisional structure, Spectrum’s corporate management should provide the overall goals, policies, and long-term direction of the company. Each division should be responsible for the daily productivity, decision making, and operations of their staff. This will allow corporate management to focus on the strategic planning necessary to help the company move forward. At the same time, each division is provided adequate authority to administer their respective resources, according to customer demand. Individual divisions possess a better understanding of what the customers’ expectations are and how the company should meet those expectations. Balance is key in the centralization of power. Corporate management should reserve the right to make final decisions, while divisions should be given authority to make innovative decisions faster, for overall success and health of the company. References Spectrum Brands (2010). About Us page. Retrieved February 3, 2010 from http://www.spectrumbrands.com/AboutUs.html. Farrell, O. C., Hirt, G. A. and Ferrell, L. (2008). Business: A Changing World. Columbus: McGraw-Hill College. Read More