Organizational Design for Procurement and Supply Objectives - Research Paper Example

Organizational Design for Procurement and Supply Objectives Table of Contents Table of Contents 1 Abstract 1 Organizational Design 2 Flattening Organizations 5 Organizational Design Process 8 Intention for organizational design 9 Features for procurement and supply objectives 11 Organizational design and procurement and supply objectives 11 Conclusion 15 References 15 Abstract Organization Design is an arranged, directed course of action for putting together the staff, information and technology of an organization. This research presents the detailed analysis of the Organizational Design. This research will provide a deep insight into the development and implementation of the organizational design and its associated aspects. Basically this research concentrates on the assessment of the organizational design features that companies use or expect to use when pursuing procurement and supply objectives. So this paper will focus on organizational design features used in procurement and supply management. Organizational Design An organization synchronizes operations in the course of a structured hierarchy and proper standard operating methods. The arrangement organizes staff in a pyramidal structure of increasing power and accountability. The higher levels of the hierarchy comprise executive, expert, and technical personnel, on the other hand, the lower levels comprise operational personnel (Laudon & Laudon, 1999, p. 10). Organization Design is an officially approved procedure for incorporating the information, people, resources, and technology of a business. It is utilized to match the structure of the business as directly as probable to the functions that organization looks for to attain. In the course of the organizational design course of action, businesses function to progress the likelihood that the combined efforts of associates will be successful (Autry, 1996). Generally, organizational design is taken as an organizational domestic transform under the leadership of an outside facilitator. Organizational Managers as well as employees’ effort in cooperation to exemplify the requirements of the association then produce systems to convene those requirements the majority successfully. The facilitator guarantees that an organized procedure is tracked plus support resourceful thinking (Autry, 1996). Organizational design is a technique that is used by the management to accomplish the accurate arrangement of discrimination and incorporation of the organization's operations, in response to the level of vagueness in its outside atmosphere (BusinessDictionary, 2009). Discrimination is used for the part of functional or departmental units, each engaged with a specific feature of the organization's actions. Incorporation is used for the linking of differentiated units to accomplish union of endeavor in functioning in the direction of organization's goals. In times of elevated vagueness, larger organizational efficiency is accomplished through elevated discrimination coupled with high incorporation. In times of less vagueness, less organizational efficiency is accomplished through less discrimination coupled with less incorporation (BusinessDictionary, 2009). As organizations develop and the challenges in the outside environment turn out to be more complicated, businesses activities, structures and systems that formerly functioned turn out to be barriers to good organization, customer service, worker spirits and economic profitability. Organizations that don’t from time to time renovate themselves undergo from such indications as: (The Center for Organizational Design, 2009) Reduced performance and outcomes Incompetent workflow with failures and non value-added actions Redundancies in attempt (In other words “we don’t have time to do things correctly, however do have time to carry out them over”) Disjointed work with modest view for good of the whole Paying no attention to customers Silo attitudes and turf battles Deficiency of rights while things go incorrect (i.e. “It’s not my duty”)  Shortage of information or ability to resolve issues at what time and where they take place  Conceal and blame rather than discovering and resolving issues Decisions taken not in time Not carrying out activities on time Systems are nonspecific or support incorrect actions Have doubts between staff and management Organizational redesign is a gradually method that reduces or diminishes the above given situations and advances the on the whole strength and receptiveness of an organization by improved combining personnel with interior business activities, technology, and systems. Organizational design takes organizations through a course of action to recognize dysfunctional features of work flow, actions, structures, and systems, realign them to fit at present business objectives and then build up plans to put into practice the up-to-date changes. The course of action spotlights on enhancing both the sides of the business including technical and people (The Center for Organizational Design, 2009).  A well-designed organization makes certain that the structure of the organization matches its functions and objectives, get together the challenges presented by organization realities and considerably augments the possibility that the combined struggle of personnel will be victorious. The course of action directs to a more proficient organization design and considerably enhanced outcome: (The Center for Organizational Design, 2009) Outstanding customer service Augmented productivity Decreased operating expenses Enhanced effectiveness and cycle time An environment of dedicated and engaged personnel An apparent approach for supervising and rising business The unstable development in computing influence and networks, together with the Internet, is revolving organizations into networked enterprises, permitting information to be instantaneously disseminated inside as well as outside the organization. This potential can be utilized to redesign and restructure organizations, changing their structure, extent of actions, reporting and control methods, work practices, work flows, products, and services. Modern techniques of carrying out business activities electronically have come into view (Laudon & Laudon, 1999, p. 18). Flattening Organizations Huge, bureaucratic organizations, which were established earlier than the computer age, are unproductive, sluggish to transform, and not much competitive. A number of these organizations have economized, decreasing the number of workers and the number of levels in their organizational hierarchies. For instance, in 1994 heavy equipment manufacturer Caterpillar, Inc., was generating the similar rank of productivity as it did 15 years ago, however with 40,000 less workers (Laudon & Laudon, 1999, p. 19). Flatter organizations have smaller amount levels of management, by means of lower level workers being assigned superior decision making power. Those personnel are authorized to put together more decisions than in the earlier period, it is not compulsory for them to work standard 9-to-5 hours, as well as it is not necessary for them to work in an office (Laudon & Laudon, 1999, p. 19). In addition, such personnel may be spread physically, from time to time working half a world away from the manager. Up to date information technology has made this type of transforms achievable. It can build more information which will be obtainable to line workers so they can make decisions that until that time had been made by managers. Workers can work together as a team with the help of networked computers; it is another characteristic of flatter organizations (Laudon & Laudon, 1999, p. 19). With the appearance of worldwide networks for instance the Internet, team members can work together directly even they are not at same locations. These transforms indicate that the management extent of power has also been enlarged, facilitating top managers to handle and organize more workers spread over huge distances (Laudon & Laudon, 1999, p. 19). Numerous organizations have eradicates thousands of middle managers for the reason of these transforms. AT&T, IBM, and General Motors are presently only some of the organizations that have eradicated above 30,000 middle managers in one fell swoop (Laudon & Laudon, 1999, p. 19). See the figures below: Flattening organizations can decrease the number of levels in an organization by presenting managers with information to manage huge numbers of workers and by giving lower levels workers more decision making power (Laudon & Laudon, 1999, p. 19). Fig1: A traditional hierarchical organization with various levels of management: Source: (Laudon & Laudon, 1999, p. 19) Fig2: An organization that has been “flattened” by removing layers of management, Source: (Laudon & Laudon, 1999, p. 19) Organizational Design Process Organization design establishes by means of the enlargement and formation of an organizational and business strategy. A collection of business decisions strategy through which associates will make a decision about apposite proceedings. The arrangement is consequential as of obvious, abridgment declarations of principles, and ideas as well as from the organization’s fundamental perspective. Business strategy unites the goals of the business as well as spotlights members in the direction of proceedings proposed to accomplish preferred results. The business strategy supports measures that hold up the principle as well as dejects that do not (Autry, 1996). Organizations are creating a strategy that is business planning instead of managing. To systematize they have to attach people by each other in significant as well as determined methods. Furthermore, they have to unite people by means of the data and information as well as technology indispensable for them to be flourishing. Organization’s configuration outlines the official associations between people and identifies mutually their responsibilities as well as their tasks. Administrative structures managed the association in the course of strategy, measures as well as strategies. Data, Information as well as technology identify the procedures in the course of which associates attain result. Every component has to hold up each aspect and together they have to hold up the organization’s intention (Autry, 1996). Intention for organizational design This section presents the main intention for the organizational design. The designing and accomplishment of an organizational design is similar to designing of a house that is designed for the people to convene the requirements of the people resident in it. Similar to that during the organizational design organizations need to think about lot of factors. These factors can be the number of people working in organization, type of business, type of available resources. The ultimate design of a business/organization should be no matter what formation most excellent aids the association to accomplish its objectives. There are some ideas that used in the planning and development of the design of a business (McNamara, 1999). There are lots of concepts concerned in the designing of the origination these can be: Line authority: the kind of power where executives have appropriate influence over their assistants activities (the subsidiaries are corresponds beneath the administrator on a concrete line in the association chart), branches straightly concerned in generating services or goods are occasionally called line departments (McNamara, 1999). Responsibility: the responsibility to carry out a task or carried out a definite action (McNamara, 1999). Authority: the appropriately arranged power of a position to formulate decisions, go behind objectives as well as obtain resources to practice the objectives: power in an administrative position can subsist merely to the degree that assistants concur to contribute this power or pursue the orders from that arrangement (McNamara, 1999). Extent of control: the diversity of workers who have to inform to an executive position (McNamara, 1999). Delegation: procedure of assigning a job to an additional alongside by means of the apposite accountability as well as ability to perform the job (McNamara, 1999). Staff departments: the kind of power where executives control line managers in the course of staff's particular advice; divisions that hold up or counsel line subdivisions are acknowledged as staff departments as well as encompass, e.g., officially authorized, human resources, financial, etc (McNamara, 1999). Responsibility - accountability for the outcome of the course of action (McNamara, 1999). Chain of authority: the position of influence in an association, who reports to whom (McNamara, 1999). Features for procurement and supply objectives A lot of issues comprising factors that are outer to supply management, decides an organization achievement. Optimistic associations among managerial, organizational and business design characteristic as well as general corporation performance could outcome in excellent outcomes. In its place, respondents assessed the amount to which they apparent their present managerial propose held up the achievement of supply as well as procurement objectives. Though attaining these aims and objectives can improve organizational performance (Trent, 2004). Organizational design and procurement and supply objectives Supply chain management incorporates the supplier, distributor, and customer logistics requirements into single consistent method. The supply chain is a group of physical entities for instance manufacturing plants, supply centers, transportation, retail outlets, personnel, and information, which are connected all the way through processes for instance procurement or logistics, to distribute goods or services from source through utilization (Laudon & Laudon, 1999, p. 55). To handle the supply chain, an organization struggles to do away with delay and cut the quantity of resources engaged along the way. This can be done by streamlining the organization’s domestic actions or by diminishing inventory expenditures by inquiring suppliers to postpone release of goods and their payments until the moment they are required. Supply chain management can be utilized to produce well-organized customer response systems that act in response to customer demands more proficiently (Laudon & Laudon, 1999, p. 55). The reality is that just about everyone involved in the action of procurement. In its most fundamental type, procurement is nothing more than the actions that are utilized in the acquirement of goods and services. From this point of view, all consumers contribute in the course of action of procurement. While for business or for the home, there are progressive actions that we all carry out as we work toward procuring those items that we need (Tatum, 2003). Organizational project teams are a noteworthy constituent of present organizational design. Every section, for instance, points out product improvement and team’s development that encompasses procurement as well as supply representatives. Though there are lots of aspects and attributes that are aligned to the organizational design, the evaluation of the team’s structure is also a compulsory in aspect of the organizational design. The feature of team for the development of the organizational design engaged in the approximately three of the seven the majority extensively utilized aspects and features at bigger organizations. In the medium and small organizations two out of seven select the aspects of the teams for the development of organizational design (O’Marah, 2009). A lot of other attributes are frequent to the entire three segments (smaller, medium and larger organizations). These encompass specific individual’s allocated accountability for running key supplier associations encompassing supply chain associations: direct customers or E-commerce (website) based specialists selected to handle non centrally or non commodity corresponding objects or services: as well as normal policy/performance management through the CPO to the head or else CEO. Connected to arrangements through the CPO is a top CPO who has a supply related and procurement title that is charged highly through larger and medium firms (O’Marah, 2009). In the development of the organizational design the organizational of medium size look forward to to carry on their distinction on arranged policy/strategy management as well as evaluate gatherings among practical groups as well as among business components or else division. Smaller organizations as well anticipate pressuring policy/strategy management as well as evaluation conferences though at lesser practice levels. A stress on these aspects/features indicates the significant function that managerial design acts in managing procurement as well as supply tasks and sustaining incorporation all the way through the practical groups as well as locations (McNamara, 1999). A further item of attention for bigger organizational links to an anticipated augment in proper division of tactical as well as tactical procurement and supply tasks, positions, worker, and arrangement. Huge organizations points to that the decision-making ability is decentralized, by means of a number of restricted procurement. This propensity is dependable by means of former research illuminating a steady transfer in the direction of centrally directed procurement. Division of tasks should turn out to be additional widespread as organization expand a centrally matched or centrally guided supply association (Trent, 2004). In point of fact, it is secure to wrap up that organizations expectation utilizing organizational design aspects attain bigger incorporation, together within as well as outwardly, in excess of the subsequent three to five years (Trent, 2004). Organizations Design aspects/features that persuade internal as well as external incorporation are anticipated to demonstrate augmented practice include: (Trent, 2004) Official value exploration/value production groups Latest product teams that involve dealers A online/web-based or virtual procurement organizational design aspects groups, persons, as well as departments linked in the course of IT systems On-site dealers to carry out inventory administration tasks An official team accountable for supply and demand or cross-functional group organization intended about procurement as well as supply procedures A common services model as well as arrangement that directs widespread actions or procedure throughout business divisions or locations Formal policy management as well as evaluation sessions among working groups Additional aspects support a predictable transfer in the direction of inner management throughout the supply and procurement function. This is steady by means of the aspiration of the majority corporation to develop in the direction of a elevated level of inner management inside procurement plus supply. Organizations specify that they look forward to augmenting utilization of the subsequent design aspects that encourage fundamental as well as cross-location organization within procurement as well as supply. Prescribed supply strategy and procurement management as well as review sittings among divisions or units Centrally matched service teams that build up as well as apply companywide supply policy A business level navigation group that manages companywide supply and procurement schemes Standard performance/ strategy evaluation presentations through the to CEO or to the head or CPO Conclusion This research has presented a detailed analysis of the organization design. This paper has provided a deep analytical research about the need and development of the organizational design for the business. This paper has outlined the main aspects for the organizational design and its implementation. The main aim of this research was to access the main organizational design features companies use or expect to use when pursuing procurement and supply objectives. This research provides a better insight into the business and management. References Autry, R. H. (1996). What is Organization Design? . Retrieved 08 09, 2009, from Inovus, Inc.: http://www.inovus.com/organiza.htm BusinessDictionary. (2009). organizational design . Retrieved August 12, 2009, from BusinessDictionary.Com: http://www.businessdictionary.com/definition/organizational-design.html Laudon, K. C., & Laudon, J. P. (1999). Management Information Systems, Sixth Edition. New Jersey: Prentice Hall . McNamara, C. (1999). Key Concepts in the Design of an Organization. Retrieved 08 09, 2009, from http://www.mapfornonprofits.org/: http://208.42.83.77/org_thry/concepts.htm O’Marah, K. (2009). How Do You Design a Supply Chain Organization to Achieve Maximum. Retrieved 08 09, 2009, from AMR Research: http://www.i2.com/supplychainleader/issue7/departments/opinion-supply-chain-organization-design.cfm Tatum, M. (2003). What is Procurement? Retrieved August 13, 2009, from WiseGEEK.com: http://www.wisegeek.com/what-is-procurement.htm The Center for Organizational Design. (2009). Organizational Design: How to Win in the Current Economic Crisis . Retrieved August 13, 2009, from centerod.com: http://www.centerod.com/redesigning-your-organization-for-high-performance.html Trent, R. J. (2004). The use of organizational design features in purchasing and supply management, Journal of Supply Chain Management. Retrieved 08 09, 2009, from BNET: http://findarticles.com/p/articles/mi_hb6503/is_3_40/ai_n29111974/pg_2/ Read More