Management of people and organizations - Essay Example

Management of People and Organizations (WalGreen Company) Outcome 4 F84T 34 ID: (Family, Given Table of Content 0 Introduction The Walgreen Company is one of the largest pharmaceutical retailing chains which has more than 8000 stores in 50 states which is providing a range consumer goods and products, running online stores as well. Initially it was operating as a local store. However, now the store is operating in many states of United States. This paper presents organizational structure of this company, a recommendation is provided, an alternative form of structure that the company can adopt. It will also focus on relationships within the organization and authority, responsibility and delegation within the organization. Type of Organizational Structure currently adopted by Walgreen As can be seen from the above chart, the organizational structure followed by the company is a ‘Functional’ one. The company follows rigid specialization and departmentalization, which is a centralized set-up. The departments are not expected or needed to interact with each other on a daily basis. There are times when inter department communication is necessary but they are not expected to work in collaboration for the fulfillment of their routine tasks. The organization has a narrow structure supplemented by the following; There are various factors that have an influence on the span of control of an organization. As this is a centralized setup, the organization has a narrow span of control as all the departments have to report to the CEO. This enables a tighter control for the management. There are three levels in this company namely; first the CEO on the highest level with CFO, HR, Operations, IT Heads on the second level. The Sales & Marketing departments are under directives of CEO as well. The supervisory staff members and other employees will come on the third level. There is a great degree of centralization in the decision making of the organization. The narrow span of control and the narrow structure both support this centralized decision-making. This kind of structure is beneficial for the repetitive nature of work associated with such an organization (Pride, Hughes and Kapoor). The problem for the organization starts when there are non-routine decisions that need to be made. Due to the centralized decision-making, all such decisions need to be routed through the CEO. A bureaucracy as defined by Max Weber has six major principles. These include 1) a formal hierarchal structure 2) management by rules 3) organization by functional specialty 4) an up-focused or in-focused mission 5) purposefully impersonal 6) employment based on technical qualification (Miner). Walgreen Company is highly bureaucratic by nature. The narrow span of control, the narrow chain of command, functional structure and centralized decision making are all qualities of a bureaucratic set up. A bureaucratic structure is advantageous in organizations where the work is repetitive. Employees are driven to fulfill certain routine tasks while the management lays down the policies on how the job is to be done. For an organization like Walgreen such a set up has its merits. Alternative forms of structure Walgreen’s provides services across the different states of United States.There are a differing set of policies and regulations across the different countries as well as the different counties and states. In light of a Geographical structure is recommended as it would be most suitable for such an organization. In the chart above the area/country manager will not be just one individual but the organization would have a number of area managers according to the geographical dispersion, and each area manager would be in-charge of the departments working for those territories (Harlacher). The recommended structure would remain narrow as for this type of organization a narrow structure would be most suitable. The span of control for the management would be narrower than before. This is because the departmentalization within the organization has increased. This would be beneficial for the organization as it will enable the managers to focus clearly on their territory objectives and enable greater specialization within the function even though there would be a communication gap among the departments. The level of management would increase from three to four levels with the addition of the area/country manager. This would take some of the decision making burden off the CEO and his powers would have to be delegated to the area/country managers. The recommended structure will somewhat decentralize the existing decision making process of the organization. While the major decisions will come from the top, some of decisions will have to be made by the area/country managers. The overall decision making of the organization would still remain quite central. Application of Contingency Approach A mechanistic structure has been defined as bureaucratic structure with emphasis on centralization, specialization and formalization (Harris and Hartman). Walgreen’s is such a mechanistic system. Decisions flow from the top, the communication is formal and minimum and workers are expected to be good at their routine jobs. The recommended structure would not affect the mechanistic nature of the organization. Walgreen uses the imitation strategy. The company may not look for innovative prospects for entering new market but would rather play safe and look to maximize profits by minimizing costs. The imitation strategy means that the company shall only look to enter new markets where the viability of the product or process has already been established (Smith, Farmer and Yellowley). The technology used in the previous structure would not be affected much by the change in the organization. Innovation of technology is an important feature which works well with the organization. The departmental heads will be reporting to area managers regarding advancement of technology and its implication and not be directly answerable to the CEO. For an organization like Walgreen the environment plays an important role as the whole supply demand structure is based on environment. As reporting and authority is centralized departmental heads can ensure that there is a work friendly environment so that there is more productivity (Croome). The historical background of such an entity starts with the owner and the cultural norms set by him in the organization. For such bureaucratic set up it is the owner that sets the base of historical background that enable a proactive working environment. Line, staff, functional and lateral relationships In this structure of organization there is staff relationship. The Area managers and Human Resource Departments are providing roles and responsibilities to the departmental heads that are required to work in accordance to what the tasks are assigned to them. The reporting directly involves the area manager and the CEO and assistants cannot provide their own authority over their work. Line Relationship is a relationship in an organizational setting where the supervisors have a direct relationship with subordinates to carry out their functions effectively. In a line relationship the subordinates may correspond with the authorities relating to work and may exercise control and authority over their tasks (Anbuvelan). In this organization, there is no line relationship as the employees have to abide to the rules and responsibilities provided to them and there is reporting to the direct Area manager regarding work performances of the individuals. However, a Line relationship may carry out between the supervisors and the employees within one department. Staff Relationship consists of advises and assistance carried out by Human Resource and Personnel Departments. They have a direct link with area managers and the reporting is carried out to these department and area managers regarding the tasks, which are needed to be completed (Anbuvelan). The organization consists of an effective staff authority and relationship as there is direct reporting to the HR and Area Managers regarding the work. Functional relationship refers to an organizational structure in which separate departments are reporting to departmental heads who then directly report to the CEO of the organization. In this organization, functional relationship exists as the subordinates are reporting to their departmental heads. They are directly involved to report the progress of the subordinates to the area managers. Lateral Relationship refers to the relationship between the subordinates and the peers which gives rise to coordination and interdependence (Bolman and Dea). Lateral relationships are present in the organizations between the employees in one department. Authority, responsibility and delegation Authority refers to the power and control of such bodies in the organization, which give directives, make decisions and also enforces rules and regulations in the organization (Hellriegel). CEO of the organization is the absolute authority. However, in this organization the reporting is done to the area managers who give command of actions to the departmental heads. Responsibility refers to a state in which the employees indulge in activities to be held accountable of their duties, which they are dealing with. In this organization, it is the responsibility of the employees and the departmental heads to carry out their jobs effectively. The departmental heads are also responsible to report the work and progress of the employees to the Area manager so that they know the shortcomings and take measures to achieve organizational goal. Delegation is an act of delegating responsibility, which refers to an activity in which an authority transforms his power or control to his subordinate to undertake his tasks (Hellriegel). As this is a mechanistic structure with very centralizing features in the organizational setup, there is minimum delegation of authority. The Departmental heads are required to report to Area Managers who are answerable to the CEO. However, some decision-making powers can be delegated from CEO to Area Managers. Some responsibilities may also be delegated within the departments so that if any employee is absent, his subordinate can carry out his tasks to avoid discrepancies in the work. Summary This report consists of an organizational structure of Walgreens. It consists of levels of functional setup with centralized reporting and authoritative work processes. The original structure consists of three levels of management; the CEO on the first level, CFO and Departmental heads on the second level, supervisors and managers in the third level. There is a recommendation given to re-structure the set-up. Instead of three levels, Area Managers can be located at level two who will be responsible to give directives to the departmental heads. As Walgreens is providing services at national and international platforms, it is necessary to locate Area Manager. During this process, some authority and decision-making powers of CEO can be transferred to the Area Managers. It is bureaucratic organization with very less communication between the departmental heads. However, there can be some delegation of work within the department. Supervisors can take the role of the Line Managers in the organization. However, there is a need to define their responsibility. Managers and Departmental Heads can play an effective role in filling communication gap and provide solutions within the department. Works Cited BIBLIOGRAPHY Anbuvelan, K. Principles of Management. New Delhi: Firewall Media, 2007. Print. Bolman, Lee G. and Terrence E. Dea. Reframing Organizations: Artistry, Choice, and Leadership. San Francisco: John Wiley & Sons, 2013. Print. Croome, Derek. Creating the Productive Workplace. New York: Taylor & Francis, 2006. Print. Dirk, Harlacher. The Governance of Professional Service Firms. Germany: Kölner Wissenschaftsverlag, 2010. Print. Harlacher, Dirk. The Governance of Professional Service Firms. Germany: Kölner Wissenschaftsverlag, 2010. Print. Harris, Jeff O. and Sandra J. Hartman. Organizational Behavior. New York: Psychology Press, 2001. Print. Hellriegel, Don. Managing: A Competency Based Approach. Mason: Cengage Learning, 2007. Print. Miner, John B. Organizational Behavior 3: Historical Origins, Theoretical Foundations, and the Future. New York: M.E. Sharpe, 2006. Print. Pride, ‎William M., Robert James Hughes and ‎Jack R. Kapoor. Business. Mason: Cengage Learning, 2009. Print. Smith, ‎Paul, Marilyn Farmer and ‎Wendy Yellowley. Organizational Behaviour. New York: Routledge, 2013. Print. Read More