Organizational Structure and Strategic Leadership in Dell Inc - Research Paper Example

Along with this, if managers (agents) manage to obtain the support of directors concerning their practices, which do not deliver the optimum level of value to the shareholders (principals) then the problem of agency, aggravates into a corporate governance problem(Kashyap, Antia, and Frazier). Therefore, governments use to intervene in this kind of case because shareholders simply do not have sufficient resources and competencies to pinpoint fraud on a directorial level. However, the law bounds organizations to announce their financial performance publically. In the same instance, governmental financial law enforcement agencies analyze the organizational practices of corporations to quantify their compliance with the general premise of maximization of shareholders' wealth(Wojcik). However, modern governments are planting their representatives on the board of directors so that they can monitor the fulfillment of the promises made by managers to shareholders in real-time.

2.1 Organizational Structure and Strategic Leadership

Another purpose of this paper is to define hybrids of widely accepted organizational structures worldwide. However, for this purpose, it is important to note that there are two basic organizational structures known to the world, which are centralized and decentralized formations of organizations(Homburg, Jensen, and Haiin). The former is characterized by centric leadership and authority therefore, all of the departments take orders and instructions from a formalized chain of command. On the other hand, the latter can be defined as something, which is attributed to a delegation of authority and job autonomy. Under this mechanism, top management is only responsible for providing broad objectives for middle and line management to achieve. Nevertheless, top management in this case does not concern itself with the operational layout through which intended goals are being fulfilled. But, with time, the centralized organizational setting evolved into a structure with a separate department for innovative project management thus, incorporating characteristics of a decentralized organizational structure. On the other hand, the informal organizational structure grew more intense through the introduction of self-managed teams(Singh).

3.0 Analysis

The most common example of an industry with a decentralized organizational structure is IT, which through its focus on innovation granted its employees an overwhelming level of job autonomy to enhance their creativity. However, it is also important to notify that, the information industry is more prone to corporate fraud because, of its highly technical nature which an ordinary shareholder cannot comprehend.

4.1 Evaluation and Solution

In parallel, to the astonishing development of Dell into a major competitor in the technological marketplace, is now plagued with the aspect of inefficiency, due to its inability to develop impressive technological products over the last five years. This trend is because of Dell’s propensity to bless its employees with too much autonomy, which consequently caused its ability to innovate effectively. In light of this argument, Dell is suggested to implement a relatively centralized approach to management to provide viable direction to its R and D department.   

5.0 Conclusion

            This report analyzed the current condition of corporate governance and came to acknowledge that this exercise is often plagued with agency problems. However, information technology is the most suspicious industry regarding corporate fraud. Additionally, Dell is facing an internal threat based on its inability to innovate effectively in recent years.