Organizational Structures of the COY Company - Coursework Example

work, Human Resources (HR) Organizational Design Problem Organizational structures: a case study of the COY Company Institution Tutor Date Introduction The COY Company’s management decided to go global by expanding its operation. The move was sought to broaden the scope of the company. It would have been advantageous for the company to go global and expand if the management would have been patient for a little longer. Immediately the company went global; it started facing poor management and organizational structure. Even though the physical aspects of the business expanded, it lacked leadership abilities and other characteristics necessary for fostering successful expansion. The fact that the leaders did not change their perspective of expansion damaged the organizational culture in the new territories. The internal structures did not change to match the growth of the company like required for successful global expansions. As observed, the corporate culture left loopholes where the inferior performers get rewarded while the productive employees get penalized. The core value of the organizational structure is to ensure that activities like task allocation, coordination, and supervision get stirred towards achieving goals of an organization. As such, the structure of an organization is critical to the performance and operational modes. The structure is known to affect an organization in two positive dimensions. The first dimension is that it offers a foundation for the development of standard operating procedures and routines. The second dimension is the determination that individuals handle a certain task and decision-making process. The structure ensures that it defines the extent with which these views shape the organization’s choice (Campbell and Craig, 2005). Challenges There are several challenges faced by the company due to rapid expansion and poor organizational structure. When an organizational structure does not coincide with facts evolving in operational action, it leads to poor performance when the company is expanding (Armstrong, 1996). COY’s inadequate organizational structure hampered cooperation regarding the established centers and the headquarters. Consequently, it leads to the hindrance of completion of defined operations (Peris-Ortiz and Sahut, n.d.). The structure results in a lag in time and misuse of resources when poorly implemented. As such, the organizational structure should be adaptive to the process requirements. The primary aim would involve optimizing the ratio of effort and input to output (Bahram Ranjbarian, 2011). Strategy change challenge Normally, the strategy of a company that has poorly implemented its organizational structure will change but the structure will not. In essence, this affects the corporate culture negatively. As per the definition, Organizational culture is the behavior of people within an organization. It is also advanced by the meaning attached to those actions (Clardy, 2013). If the strategy and the structure do not match up, the culture is diminished in that the collective values, beliefs and principles of organizational members will be misguided (Wright, 2006). Strategy change is mandatory when a company decides to expand. The organization will need to re-evaluate and change the structure, a move that COY ignored whenever there are structural changes. The company went ahead to adopt and implement its old structure in an entirely new environment. Per se, the company creates a new strategy for its operation but fails to rebrand its structure (Schein, 2010). Changing a business structure comes with numerous demands such as changes in interpersonal relationships, expectations, roles career trajectories and functions (Clardy, 2013: (Young and Burgess, 2010). Such factors are known to be coherent to team building and communication. Maintaining the old systems will destroy the communication channels and capabilities in the company like evidenced in the case of COY. Due to poor communications, people in the organization, especially in the new areas of operation, will get divided and work in achieving different organizational goals. The fights will be generated by perceived or real loss of power (New Zealand tries a new structure, 2011). Nonetheless, breaking from the past and forging straight ahead becomes a significant challenge presented by the stagnant organizational structure. COY has constantly failed to make a breakthrough on its expansion quests due to lack of restructuring. The staff in the new regions is required to employ previous strategies that fail in their regions. Not only does the lack of restructuring become detrimental to the expansion efforts but also the wrong restructuring exacerbates attachment to the status quo (Bahram Ranjbarian, 2011). Functionality challenge Functionality challenge happens when more resources are dedicated to functions focused on effective reporting and not those services focused on efficiency (DiMaggio, 1977). Efficiency is the backbone of effectiveness. When an organizational structure is not suitable to the expansion changes of a company, it degenerates functionality issues. Functionality challenge occurred when functions focused on effectiveness such as sales, marketing, and people development reporting to services focused on efficiency such as operations, quality control and administration (Jing, 2015). COY was predominantly focused on achieving the Six Sigma efficiently. As a result, the processes and systems became so efficient. They also enhanced the controlling function such that the margin for error was significantly minimized. Nature demands that effectiveness require flexibility and margin for error such that there is room for innovation and change adaptation. After the company had expanded, it was solely focused on maintaining this trend. Hence, processes and systems became so efficient such that they lost their effectiveness (Media, 2012). The company did not evaluate the new environment keenly. The cultures of the new environment required that the organizational structures pave a way for errors and efficiencies. Team building became a problem because the new environment could not withstand the functional requirements (Stanford, 2015: Ümit Arklan, 2011). The business strategy lost focus on the way as it became uncertain what the new environment required. COY did not avoid having functions too focused on effectiveness reporting to functions on efficiencies. The expansion strategy failed over time since COY lost its effectiveness over time eventually it failed (Leach, 2013). Long-range development challenges The long-range development challenge is tied to the organizational structure. It affects all the elements of the organizational structure. For its survival; corporate culture, communications strategy, and system processes must agree coincide for the occurrence of an efficient expansion (Hidiroglou and Srinath, 1993). The culture of the organization includes the vision, values, norms, systems, language and beliefs among other aspects (Bugos, 2007). In a wider viewpoint, regarding the expansion of a company, the structural culture influences how employees and groups interrelate with each other, with clients and stakeholders. Organizational culture also affects how employees identify with the organization. The primary factor that holds these elements together is the organizational structure. In case the structure is not adaptive to new changes of expansion; the long-range development challenge may also arise. COY assumed a vital element that would guide the company expansion strategy through the waves (DiMaggio, 1977). It is vital to recognize that the similar way efficiency overpowers effectiveness; the demands of today always overwhelm the needs of tomorrow. COY maintained functions within its organizational structures that were focused on long-range development. These features include branding, and people development, reporting to functions focused on driving daily results such as running current market campaigns, sales, and administration. As a result, a conflict of interest emerged (Bugos, 2007). For instance, the marketing strategy functions of COY reports to the sales function. The marketing strategy functions are a long-range orientation focused on branding, re-branding, and positioning and strategy development. The sales function is a short-range orientation focused on execution of results at the moment (Erzhanova, 2009). Critical analysis indicates that the marketing strategy will succumb to sales pressures of sales. The ultimate result is that marketing functions ended up becoming sales support functions hence the essence of the organizational structure was lost. The company sales department got what it thought it needed in the short-run. Nevertheless, the company lost its ability to develop and re-brand its products and services. It also failed in adopting a new strategy over the long range Hence; the organizational structure did not support the organization culture, communications, processes and systems (Balmer et al., 2006). Autonomy vs. control challenges The organizational structure for COY did not balance the need for autonomy against the necessity of control. The company seems not to realize that the autonomy in selling rests in meeting the customers’ needs and demands. Consequently, customers’ needs should always take precedence in the organizational structure. Without the sales functional department, the organization will cease to exist. It is necessary for the organization also to exercise certain controls to prevent and protect itself from systematic harm (Barker and Angelopulo, 2006: Starke-Meyerring, 2004). Such kind of damage can destroy the entire organization. As observed, the expansion efforts of COY were subdued by the inherent and natural conflict between autonomy and control. The new organization’s territory needed freedom to produce results. The freedom would also help in regulating for greater efficiencies in the end. Autonomy is a function that should be given to those who are closer to the customers. Such duties in the organizational structure include sales, marketing, and account management. The ability to control for systematic risk should be maintained at the core of the structure. Such functions in the organizational structure include accounting services, legal and HR. Observations indicate that COY tried to force these functions to interact efficiently with each other on their expansion mission (Erzhanova, 2009). The structure accommodates the inherent conflicts, plans for it and creates a structure that harbors the overall good to the organization from happening. As observed in the COY situation, sales in the expanded regions were forced to follow a bureaucratic accounting and legal procedures in a bid to create an impression of the overall organizational structure. Nonetheless, this move is very damaging to the entire organizational structure (Young and Burgess, 2010). If the sales function sells some under-qualified propaganda that will not pay eventually, the whole company will suffer just the same way COY suffered. It means that the sales function, as well as other functions in the organizational structure, need to have their freedom of execution of mandate (Balmer et al., 2006). That way, the functions will forge ahead even in the new environments to hit the mark. The centralization of accounting service duties and the legal functions ensure that the structure conforms to expansion pressures, a move overlooked by COY. Loss of cash or legal ability emerged. Hence, COY was placed at risks of being bankrupt (Politis, n.d.). The structure was not able to adhere to inherent risks, and conflicts hence, did not suit the business need of COY. Wrong people in the right functions The people factorize the organizational structures with which they represent. These people within the structure get mandated with ensuring that it works as required. The employees are also accountable for ensuring that the organizational cultures, communications, functions, and structures are swift and relevant to their tasks (Stevenson, 1990). All the functions in the organizational structure are embedded in different activities. These activities will require every person in the organization to apply their natural styles in meeting the requirements. COY lacked a close alignment between job requirements and an individual’s style and experience as dictated by the new environments (Barker and Angelopulo, 2006). Their race for market share in the newly acquired expansions halted as a result of miscommunication of the vision and values matrix. As a result, the performance went to very low levels. Core made a mistake of misfitting styles to functions due to perceived time and resource constraints (Hartley and Chatterton, n.d.: Stevenson, 1990). For example, the manager of COY decided to move an accounting functions officer to the sales department. This move was after discovering that the company could not hire a new employee. The account manager was not successful because the accounts function employee was no expert in sales matters. As a result, the move hurt the new organizational environment and culture (Black, 2004: Witte and Muijen, 1999). Conclusion An organizational structure is an important aspect of any organization. It stipulates well the functions and different roles in the organization. It also defines how these roles interact and how things get accomplished. In instances where the company wants to expand, the same structures are used to cohere the expansively with the environment, organizational cultures, communication, processes, and systems. There are several aspects that affect the functions of the organizational structure when it comes to expanding a company. COY is affected by these factors such that it does not attain its aims and objectives. Such factors include steep hierarchies, procedural issues, and lack of coherence as discussed above. Reference list Balmer, J., Mukherjee, A., Greyser, S. and Jenster, P. (2006). Corporate marketing. Bradford, England: Emerald Group Pub. 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