Comparative Management Analysis of Two Firms. (Biogenta and Outback INC) - Assignment Example

? Comparative Management Analysis of Two Firms [Supervisor Introduction of the Companies Biogenta Biogentais a firm that deals with producing special chemicals and fertilizers for the protection of crops. These chemicals include herbicides, fungicides and insecticides. The firm is operating as any big corporation would by keeping its supreme values in mind and catering to the special needs of the employees. The staff is lavished with special offers and care by the firm in return for high-level innovation and creativity at work. The facilities for Biogenta are spread across the globe in 10 different countries and the organization believes in workforce diversity. The work is not monotonous at the firm and the teams within various functions keep switching and changing as the nature of work demands. Outback INC Outback INC is a firm that deals with tourism across Australia and is currently going into loses like the other tourism and fun related companies in Australia. There are many underlying issues to the scenario and a major one of them is rigid style of management and lack of innovation. Considering the nature of the business the work demands a very high level of creativity and persuasion for the clients but unfortunately the top management is highly resistant to change because of which the company is facing heavy losses and leaving no room for innovation. Comparative Analysis of Both Firms Organizational design and structure Organizational design and structure is main standing base of any corporation operating on a global and local level. If we look at the two scenarios both the companies are completely different in their perspective and focus of production but the nature of work demands innovation nonetheless (Mcfowler 2001). Organizational design and structure mainly consists of six major elements. These six elements consist of work specialization, departmentalization, chain of command, span of control, centralization or decentralization, formalization and traditional designs (Mcfowler 2001). Work specialization In terms of work specialization in organizations the term refers to how much pressure is put on to individuals within the organizations how through different processes each task is carried out. In both the organizations assigned to analyze each had an effective system of recruiting the most talented and skilled staff for the job but the problem for Outback lies in the external environmental forces too (Carroll 1985). The tourism industry is facing a shortfall because of which Australia requires a good number of 42,000 people by 2015. In such a scenario the staff hired should be valued and considered as an asset to the organization whereas the company is applying paternalism to the structure which is de motivating the staff to come up their ideas for revolution and change (Carroll 1985). On the other hand Biogenta is promoting its staff and making efficient use of its human capital by employing them in cross functional teams and making the best use of them (Carroll 1985). Departmentalization Both the organizations Biogenta and Outback have similar division of departments such as finance, marketing, human resource and support (Gitman and Mc Daniel 2009). Among the many types of departmentalization Biogenta chooses to go about product departmentalization and goes for cross functional teams and virtual teams from various departments to cater to different tasks. The good part about it is that it initiates a good flow of information within departments and the negative aspect is that it can only be applied to a limited category of products (Gitman and Mc Daniel 2009). As far as the case of Outback product departmentalization is applied to increase the levels of the system to satisfy family issues because of this there are limited follow up of organizational goals but yet efficient managerial distribution is carried out (Gitman and Mc Daniel 2009). Chain of command There is strict chain of command extending in Outback INC where authority is of supreme importance and the orders flow only from the higher ups. In case of Biogenta there is a relaxed environment and there is easy flow of orders and a unity of command (Baum and Wally 2003). Centralization / decentralization Biogenta follows a decentralized system of functioning whereby it tends to allow its employees and managers to have a clear say in the decisions of the organization and employee have a good level of authority and empowerment in the organization (Baum and Wally 2003). The decisions are made by taking in consideration diverse opinions, which tends to give better outcomes. Outback is a centralized firm where the decisions lie solely in the hands of the upper management and there is strict law of authority. There is less level of empowerment and the risk of failure is generally higher in such an organization (Baum and Wally 2003). Traditional structures and formalizations Organizational designs are of various starting from traditional structures, which consist of simple, functional and divisional (Burton, et al. 2011). Then there are contemporary designs, which consist of team structure, matrix structure, project structure, autonomous internal units, boundary less structure and learning organization (Burton, et al. 2011). Outback has a divisional traditional system whereby each department has been given and divided to various heads and each is independently responsible for managing the division under his supervision (Burton, et al. 2011). In such a system there is lack of co ordination of departments and chances of success of firm and integration of operations is bleak. Costs are increased in such scenarios and there is lack of customer retention. It is always best to be a part of a contemporary structure because of changing situations. Biogenta is a combination of team, matrix and learning organization because its promotes work in teams and usually the teams are selected from specialized functions and a system of learning is incorporated by initiating various courses and in house training to promote profitability (Burton, et al. 2011). Teams and Team Working Teamwork has generally increased within organizations to a great extent reason being that there are great benefits and added features associated to employees working in a team (Edmondson 1999). First of all there is less usage of resources, less time and energy is consumed, better decisions are prompted, equal level of participation in initiated, a system of integration and bonding is formed and a diverse set of people working together contribute more than they do as individuals (Edmondson 1999). Apart from these many other benefits associated with teams is that they tend to improve efficiency, productivity and flexibility with in the workplace. The working environment is also made comfortable as the interaction between employees increases as a team, collective goals are achieved faster and many individual basis benefits are also achieved. The individual basis plus points are job satisfaction, empowerment and good performance (Edmondson 1999). There are three basic types of teams or work groups (Greenberg 2005). Types of work groups Functional Cross functional Self managed teams Functional teams refer to teams that consist of a manager and group of people with different abilities to perform various tasks. A cross functional team is one in which various specialized professionals from various teams are brought in together to work on a project utilizing their special abilities (Greenberg 2005). Self managed teams are those in which there are no mangers or supervisors and all the internal and external functions are carried out by the team members’ on their own on independent basis (Greenberg 2005). Virtual teams Very special categories of team group that has evolved sometime back and is gaining a lot of importance in the work environment are virtual teams. These are special teams that operate virtually via different communication channels (Jarvenpaa & Leidner, 1998). There are many positive factors associated to virtual teams, which are why they are used. First of all they help in improving the efficiency of the firm without costing a lot, secondly they tend to cut down geographical barriers and communicate through technological devices that are not prone to fault, as are the physical systems and devices. In this fast age of information and flowing operation the utility of virtual teams has greatly increased (Lipnack and Stamps 2000). A set of virtual teams was employed by Biogenta and was making efficient use of it. On the other hand Outback was highly resistant to change and did not accept the updated IT systems because of which it dis approved of any IT systems (Lipnack and Stamps 2000). This in turn de motivated the employees to bring about a change to revolution and thus decrease efficiency and profits in the long run. Virtual teams can also cater to diversity by connecting to each other from various parts of the global and physical distances can be diminished in no time (Jarvenpaa and Leidner 1998). Approaches to Leadership and Management Leadership and management go hand in hand in an organization. Without these two components running of an organization in a successful manner seems as an impossible task. Leadership theories mainly highlight the characteristics of a leader essential to be a leader but in reality the overall idea is a bit more realistic (Bass 2008). The various types of leaderships are great man theory, trait theories, behaviorist theories, and situational leadership, and contingency theory, transactional and transformational theories. Maintenance of good relationships with employees and subordinates has also been ranked as a main feature (Bass 2008). The different styles of leadership are autocratic, paternalistic, diplomatic, participative, delegative, and free reign style (Dansereau, et al. 1995). If we focus on the case of Biogenta there is the example of an inspirational and motivational leader such as Jane Morgan who encourages and supports her team to give their best performance and creates the environment for them to come up with creative and novel ideas (Tannenbaum 1973). If an employee is dis satisfied at work then that thing is reflected on his work and ultimately a cycle is initiated that affects the whole of the organization. Participative and democratic styles usually work well in organizations when managers have to get work done from the employees and want to have their best performance at work (Tannenbaum 1973). In the case of Outback INC the system employed leaders who followed the traditional style of leadership and considering the demand of the business the leaders operated in a totally different manner (Schriesheim 1982). They employed the autocratic style along with paternalism which intended to de motivate the employees and lack of empowerment furtherer made the situation worst (Schriesheim 1982). The nature of the business demanded the employees to be innovative and convincing in their approach but the consistent orders of the higher management and their resistance to accept any form of suggestions and amendments tended to make the situation bad and unemployment levels even worse (Schriesheim, 1982). Domination and suppression in leadership is always taken in a negative sense and the impact is always negative. Instead of motivation it leads to increasing job stress and job dis satisfaction (Tannenbaum 1973). Organizational Culture Organizational culture refers to the set of patterns, norms, events, beliefs and activities carried out considered acceptable in a certain working environment of an organization. There are many things that collectively get together to make up the overall culture of the organization. The different components in relation to the cases are discussed below (Barney 1986). Power control In case of Biogenta as mentioned in the case the authority and power rests with the manager but she is so subtle in her directions and creates such a homely environment at work that the levels of power and authority are distinguished in the process and a relaxed environment is formed for the employees (Schein 2004). This in turn initiates them to focus more on work rather than being stressed about pleasing their managers and working under pressure. On the other hand the case is totally opposite for Outback INC, there is a strict power control that is completely in the hands of the upper management, the employees are not allowed to voice their opinions or make any amendments to the work assigned so there is hardly room for any improvement in the system (Schein 2004). Events, rituals and symbols In Biogenta a very serene and peaceful environment is provided to the employees so that they can feel good about being at work. This is essential to get employees loyal to the firm and also to give their best at work (Schein 2004). Apart from that there are many educational incentives and financial programs assigned to employees to encourage them to go ahead with their studies while they are working at the company. Leaves and holidays are also granted for taking up special courses because all these factors in the end add up to increasing the profitability of the firm in the long run. The organizational also offers projects and science fairs at various schools to promote biology and serves to impress its employees as being socially responsible (Barney 1986). On the other hand Outback does not get involved in any major events although the need requires that since China and Japan is its major potential market so it should carry out marketing campaigns according to the mentality of the people of those region but all its marketing efforts have failed (Barney, 1986). Moreover it has a strict culture based on use of traditional systems, which is setback for new employees joining in. It is the historical background of the firm that makes up the culture as well, as outback was a family owned business there were divisions within the structure based on family ties so the internal system was hard to change (Barney 1986) Flow of information In case of outback INC there is a strict hierarchal system in which the information only flows vertically whereas in Biogenta the information flows vertically, horizontally and diagonally. This ensures that the information is being circulated throughout the organization and decreases the chances of mistakes and miscommunications (Burton, et al. 2011). Customer services are one very essential aspect of a firm that comes in direct play when flow of information is concerned. In case of Outback INC there is only one type of flow because of which customer retention is poor and every now and then the company is facing loses (Burton, et al. 2011). On the other hand there is Biogenta that is spreading its networks globally and expanding at a very fast rate, attracting employees and customers at a great rate (Burton, et al. 2011). The aspect of efficiency and work performance also jumps in with these factors. When the information flows smoothly through the network efficiency in operations and functions is initiated (Burton, et al. 2011). Presence of cross functional teams play a very essential role in this part of the organization and as we have seen from the two cases Biogenta has a vast variety of cross functional team for each task and excels in this feature whereas Outback has independent functions working on their own (Burton, et al. 2011). Cultural diversity Cultural diversity refers to having a workforce that is diverse in nature in a way that possesses human capital from various parts of the globe, of different nationalities. If organizations can deal with it well efficiencies can go soaring high for the firm but if workforce diversity is difficult to manage for the firm then it stands as a major problem (Barney 1986). As mentioned in the case of Biogenta it has a research and development facility consisting of a staff of people of 20 different nationalities and they are doing an impeccable job. So the company in other words is making the best use of different abilities and positive factors of different nationalities to create something novel and interesting (Schein 2004). Outback on the other hand only recruits employees from its own region and is unable to retain them as well because of a rigid system at work (Barney 1986). Conclusion and recommendations The conclusions that I would like to offer after this detailed analysis and comparative study of both the teams is that Biogenta is not perfect in its approaches but to whatever extend it applies them they are in alliance with their organizational goals and aims and that’s is what matters in the end. Fulfilling the prime aim of profitability and successful relationships with all stakeholders is the name of the game (Baum and Wally 2003). Whereas on the other had there were many reasons for the failure of Outback INC, which were pretty obvious. They had not let go of the rigid styles of functioning and as a result they were losing on to business (Schriesheim 1982). Another very important aspect associated to this comparison was that the strategies, leadership and management should vary according to the nature of the business and the type of product one is dealing with. Adopting the right set of management activities ensures that the work is done as per the requirements of the changing trends (Bass, 2008). A very important aspect to learn from these cases is that the traditional style of leaderships fails in any situation and most organizations are making the use of tools such as empowerment and cultural diversity to utilize the full resources of the human capital working under them. Incentives for employees also stands as major aspect in motivating them to be loyal to the organization and with the effort of each individual on his own the organization can perform really well in the market (Dansereau, et al. 1995). The recommendations for both the companies is that Biogenta needs to add in a little bit of traditional leadership style so as to refrain employees being too laid back and relaxed about work. There should be a constant drive in them to produce something new and genuine in the market. On the other hand as far as Outback is concerned it should make serious changes within its setup. It needs to completely revolutionize its concept of organizational structures and designs starting from the point of goals and aims and also bring about a change in the overall concept of the firm, only then can fruitful results be achieved. List of References Barney, B. J., 1986. Organizational Culture: Can It Be a Source of Sustained Competitive Advantage?. The Academy of Management Review, 11(3), pp. 656-665. Bass, R., 2008. Models and theories of leadership. In: The Bass Handbook of Leadership. New york: Free Press, p. 47. Baum, J. and Wally, S., 2003. Strategic decision speed and firm performance. Strategic Mangement Journal , 24(11), p. 1107–1129. Burton, M. R., Borge, O. and DeScanctis, G., 2011. Structures for managing knowledge exchange . In: Organization Design . New York: Cambridge University Press, p. 94. Carroll, R. G., 1985. 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