Differences in Management and Organisation of the Companies - Essay Example

? Topic: Lecturer: Presentation: Introduction Organizations are operated and managed differently depending on the size, structure, nature of business and leadership among others. Traditionally, organizations were bureaucratic and hierarchical in nature following strict rules and procedures. Communication between management and staff was through trade unions which acted on behalf of employees and negotiated employment conditions for them (Bach & Sisson, 2000). Due to globalization, the organizations are faced with various challenges such as; increased competition, technological advancements, rapidly changing environment, economic and political challenges among others. Organizations thus needed to change the way they are operated so as to keep pace with the changing trends. As a result, organizations do not follow strict procedures and bureaucratic structures which cannot respond quickly to the environmental changes. Watson engine components and H & M consulting are two organizations with different modes of operation and management. Watson is a family owned organization dealing with one line of business of producing and selling car engine components whereas H & M is a multinational organization formed through mergers and acquisitions dealing with various lines of business such as; consultancy, providing services to public and private sector in issues dealing with environment, education, water, energy among others. Watson is a traditional organization which has not yet embraced the changes brought about by globalization hence is finding it difficult to attract and retain employees as well as customers and it is at the verge of collapse unless drastic measures are taken. H & M on the other hand, is a global organization which is experiencing a lot of success due to its mode of operation and management. Its customer oriented and values its employees making it a leader in the market. This paper will analyse the differences between the two organizations in terms of how they are operated and managed. Organization Structure and Design The organization structure refers to the framework of the organization and design refers to changes made to the organization structure (Gitman & McDaniel, 2008). The structure determines how authority and responsibility are shared, the channels of communication, the span of control and how the activities are assigned within the organization. The structure is determined by various factors such as; size, leadership, type of activities, technology and the environment. The size of the organization matters when designing organization structure. Small organizations have an organic design. There are no complex rules and procedures to be followed and hierarchical structures as there are few employees. Large organizations are more bureaucratic and follow complex procedures (Hill & Jones, 2008). However, due to advancement in technology and emergence of team work, large organizations like H & M no longer need to be bureaucratic. Such organizations maintain strong employee involvement and use information technology to control the project teams. Watson though medium sized is highly bureaucratic with no staff involvement. According to Gold et al (2010), the leadership style determines the type of structure. Autocratic leaders are associated with bureaucratic organizations. They do not communicate directly with staff and workers have to follow strict procedures. Gordon Watson, the director of Watson engine components makes all the decisions which are put into action by the operations director. He does not embrace changes hence the organization structure remains bureaucratic and unable to deal with changes. Theo Wolf of H & M is democratic and has empowered the employees to conduct their project teams without interference. The structure of the organization is organic and flexible enough to deal with any changes. CliffsNotes (2011) argues that the level of technology and environment determine the organization structure. Watson engages in mass production of car engine components with technological systems which are not state of the art. However, the production manager Mr. Khan had proposed investing in new computerized production technology which would have required reorganization of the shop floor hence new organization design which embraces team work. Use of information technology in H & M has enables the managers to assume advisory and coaching role rather than control the teams hence organic structure. Rapid environment changes drive the organizations to adapt organic designs which are capable of responding to the changes. (Hill & Jones, 2008). Though Watson operates in a competitive and changing environment where order times are getting shorter and technology advancements, it has not restructured the organization hence the customers move to the newly created organizations in Eastern Europe and technical and managerial staffs are poached by competitors leading to high turnover. The authority and responsibility is shared differently depending on the organization structure. Traditional organizations like Watson relate authority to ones position in the organization. Authority and responsibility are equal; the operations manager has the authority and responsibility to manage the shop floor. Modern organizations like H & M on the other hand, believe in delegation of responsibility and sharing of authority. The managers and employees are given power to decide on important issues hence have authority. Responsibility can be delegated but authority depends on acceptance by the people being delegated (Hill & Jones, 2008). Bureaucratic organizations maintain a tight control of the employees hence have small span of control. For example, in Watson managers maintain close control of their departments and make all the decisions without involving employees. There are only 160 employees and 40 managers in the organization thus a small span of control. In modern organizations, the span of control depends on many factors. H & M spans 200 countries and more than 13000 employees hence a wider span of control than Watson. The two organizations also differ in the way their activities are organized. In Watson, division of labour is apparent whereby employees engage in one type of task. Those who work on the press machine are not required to work on finishing or assembly machines. The organization has thus managed to maintain market share despite competition due to production of high quality goods. Bach & Sisson (2000) argue that performing routine tasks results into boredom, stress, low productivity and quality in the long run and consequently increased absenteeism and high turnover like is being experienced at Watson. Modern organizations like H & M therefore encourage multi-skilling hence reducing boredom, improving workers skills and productivity. Employees are organized into project teams with varied skills and after completion of the task, teams are disbanded and new ones formed with employees from various functions and different skills. Work can also be organized according to departments. Watson is divided according functions; marketing department liaises with customers while production department deals with processing of the parts. H & M divides its function into cross-functional teams which are led by a project manager. Leadership The leaders influence employees and determine the direction of the organization. A leader without a vision cannot give direction to the employees he is leading thus creating confusion and resistance to change. According to Hill (2008), an effective leader should have the following characteristics; ambitious, highly motivated, risk taker, have cognitive ability and knowledgeable about the business he is managing. Watson does not have a clear direction as to where the organization is heading. The company is faced with a lot of challenges due to rapid changes in the external environment but the director still upholds his motto of ‘if it ain’t broke don’t fix it!’. This hinders the organizations to make adjustments and move forward. He is about to retire and hence does not have the will to lead and take charge of the business. Furthermore, he does not embrace the changes suggested by his able and experienced production manager which are vital to the success of the business. The human resource manager also doesn’t know how to handle the employees to create a good working atmosphere but blames the union and supervisors for his mistakes. The leadership of H &M is an example of effective leader. He is motivational and inspirational to the staff and able to influence them. He has set a mission to accomplish and does not fear taking risks thus he takes challenging projects all over the country and worldwide. He also empowers employees to carry out their work diligently and take initiatives to discover new things and develop their skills as well as organization success. The employees know what is expected of them thus they are motivated and committed to their work. The style of leadership used by each organization determines the success of the company. The style depends on the manager’s beliefs, values and assumptions (Gold et al. 2010). The leadership style used by Watson is autocratic. The managers make all the decisions and the employees follow without being involved in the process. This lowers staff morale hence reduced productivity and absenteeism. Laissez-faire is applicable in H & M consulting whereby there is strong staff involvement. The organization is employee-owned as they are left to work independently and sort out their problems. The work of the managers is to coach and give advice to project teams. The employees are also given opportunity to learn and develop hence job satisfaction and motivation leading to high performance. For example, its rating for responding to customer needs increased from 7.8 in 2004 to 8.1 in 2005 and 8.2 in 2006 and won over 50 awards for innovation or excellence in 2007. Team Work Modern organizations are embracing the success associated with team work. Though some managers argue that team work is a threat to the organization due to the possibility of riots, successful teams are a source of competitive advantage, skill development, encourage innovation and are a source of employee motivation. Hayes (2002) argues that teams need enough authority to make decisions about their work and power to ensure proper performance of tasks. This gives them a sense of ownership hence commitment and motivation. However, the team should have a clear understanding of what is expected of them so that it can be able to formulate own objectives and strategies of achieving the set goals (Heathfield, 2011). To get team commitment, the management should ensure the team activities build on individual skill development. Recognizing the team members for a task well accomplishment can go a long way in enhancing commitment and motivation among employees. Successful teams are formed through a combination of skills and capabilities. Cross-functional teams such as that of H & M consulting combine different skills hence efficiency in performing the tasks given. The management should offer support in terms of finances, personnel, and materials so that the group can accomplish its objectives (Parker, 2008). H & M ensures sufficient resources and skills through use of information technology. Conflict resolution measures should also be put in place as teams consist of individuals with diverse cultures and opinions thus a room for conflict. An effective group leader should be able to settle disputes and control the team effectively for success. Team members are also bound to have conflicts regarding roles and responsibilities hence roles and authority should be clearly defined. Communication is important; groups should have time to socialize at work or outside work settings so as to create a good working relationship (Hayes, 2002). There are various types of teams in an organization; some are permanent while others are temporary formed to accomplish a given task. Functional or permanent teams are formed by employees who work in same department to accomplish organization objectives. Cross-functional teams comprise of employees from various departments within the organization with different skills and are temporary (Parker, 2008). In H &M, teams are formed by combining experts from various departments to carry out a given project such as transport systems in Taiwan and once the project is complete, the project team is disbanded. This enables the employees to acquire knowledge and skills in different fields thus job satisfaction, motivation and commitment. Watson specializes in individual work and an employee is not expected to move from his/ her department. The production manager had suggested use of self-directed teams where employees organize their work without manager’s intervention to oversee complete work processes and avoid overworking some employees while under working others. However, his idea was not accepted. Watson employees are thus denied skill development thus lack job satisfaction, produce low quality products and increased absenteeism due to lack of motivation. Many teams fail due to failure by the management to belief in team working. Some managers believe that getting people together is a recipient for trouble and resistance by employees. The management thus does not give support to the team leading to failure. The group need to feel its work is valued and feel a sense of belonging to the team. If a manager lacks trust in the group, then it is doomed to fail (Jones & George, 1998). Team work if taken seriously brings a lot of advantages to the organization; it leads to career and skill advancement hence job enrichment and satisfaction and consequently improved performance. It also leads to high commitment hence low staff turnover and improved staff morale. There is also increased productivity and efficiency for workers and the organization as a whole. It also enhances innovative skills which enable the organization to maintain competitive advantage against its competitors (Hayes, 2002). Organization Culture This is environment at a workplace formed through socialization or interaction of employees at the workplace. It represents the values, norms and beliefs of the members of the organization reflected in the behaviours that they portray (Gitman & McDaniel, 2008). A company is recognized by employees and the entire community upon which it operates by its culture. It can be recognized as a socially responsible organization, an employer of choice, a leader in the market among others. The leadership of the organization has much influence on the organization culture as it determines the mission and values embedded in the organization culture (Alvesson, 2002). The organization culture tends to direct the behaviour of employees in an organization. All activities carried out follow the established values and norms and employees act in a way that reflects the culture of the organization (Alvesson, 2002). People are hired from various sources and are socialised into the culture of organization despite their diverse values and attitudes. The culture of Watson Company is specialization and formalized bureaucratic procedures. There is no communication between departments except through the directors and this hinders innovation and results in strained relationship between departments. Poor communication leads to mistrust (Jones & George, 1998). Communication to the staff is through a trade union hence employees do have the freedom to air their views leading to mistrust between the management and employees and consequently severed relations and increased industrial action. New ideas are not taken seriously due to poor communication. Employees have ideas as to how to improve the organization but due to poor communication channels and lack of employee involvement the ideas remain a dream leading to low staff morale and job dissatisfaction hence high turnover especially for technical and managerial staff and absenteeism. The production manager is innovative and experienced but his skills are not valued and a result he is due to be poached by a German firm. The company has the ability to improve its technological systems and machines but the director has instilled a culture of not acting unless something is out of control. The company thus cannot compete effectively as it is unable to respond to changes. The company’s failure to meet customer demands due to lack of integrity is driving customers away to the newly created Eastern Europe organizations. H & M on the other hand, is associated with innovation and excellence and was considered as the top consulting company and one of UK’s top 20 best big companies to work for in 2008 and 2009. This is due to its culture demonstrated by PRIDE. The company values employees and customers hence it ensures staff development and customer satisfaction through excellent services offered. H & M is also a corporately responsible company. It thus rewards the environmentally responsible companies with contracts and works with the community to control floods, promotes health and safety, encourages diversity in workforce and activities geared towards improving standard of living of the community. It also helped a company to reduce its carbon emissions hence creating a condusive environment to those in surrounding area. The organization is thus respected nationally and internationally and this has ensured continuous success for the organization by acquiring major projects in the public and private sector as well as attracting and retaining highly qualified workforce. All this is enhanced by its leader who is a risk taker and therefore motivates and inspires the staff to be innovative and excellent in their work. This attracts other skills to the organization unlike at Watson where employee empowerment is not appreciated. Conclusion Different organizations are operated and managed differently depending on the leadership style, organization culture and structure, approach to leadership and management and attitude to team working. The kind of leadership skills portrayed by the management determines success or failure of the organization. An autocratic leader who does not encourage ideas from others may hinder business success as it hinders innovations and diverse ways of handling issues. It also discourages employees from innovation hence lack of commitment and motivation consequently poor productivity and inability to respond to environmental changes. The structure of the organization also determines how well an organization responds to changes. Bureaucratic organizations like Watson are slow in response while organic structures like H & M respond quickly to environment changes due to good communication channels. The organization culture reflects the values of the organization and enables all members of the organization to act in accordance with the culture. The culture enables the organization to portray a good image such as H & M or ineffectiveness like Watson. Team working is essential in an organization to ensure employee skill development and organization success but should have clear expectations and support from the management as well as power and authority to function independently to ensure success. Organizations like Watson therefore need to embrace employee diversity hence change its organization culture and structure to embrace innovation, team work and corporate responsibility in order to be successful and effectively compete in the market. References Alvesson, M (2002). Understanding Organizational Culture. London: Sage. Bach, Stephen., Sisson, Keith. (Eds). (2000). Personnel management: a comprehensive guide to theory and practice, 3ed. Oxford: Wiley-Blackwell. CliffsNotes (2011). ‘Principles of Management: Five Approaches to Organization Design’. http://www.cliffsnotes.com/study-guide/five-Approaches-To-Organization-Design’. Accessed 21 Apr 2011. Gitman, L., McDaniel, C (2008). The Future of Business: The Essentials. USA: Cengage Gold, J., Thorpe, R., Mumford, A (2010). Handbook of Leadership and Management Development. England: Gower. Hayes, N (2002) Managing Teams: A strategy for Success. UK: Thomson Learning. Heathfield, S (2011). ‘Twelve Tips for Team Building: How to Build Successful Work Teams’. http://humanresources.about.com/od/involvementteams/a/twelve-tip-team.htm. Accessed 21 Apr 2011. Hill, C., Jones, G (2008). Strategic Management: An Integrated Approach. USA: Cengage. Jones, G & George, J (1998). ‘The Experience and Evolution of Trust: Implications for Cooperation and Teamwork’. Academy of Management Review, Vol 23 (3): 531-566. Parker, G (2008). Team Players and Teamwork: New Strategies for Developing Successful Collaboration. San Francisco: Jossey-Bass. Read More