Possible Changes in Structure and Leadership Style of an Existing Company - Research Paper Example

An Essay Exploring Possible Changes in Structure and Leadership Style of an Existing Company I. Background and Company Evaluation In the ever changing business environment, companies need to continually evolve and innovate to remain competitive. Companies that refuse to go with the development of the market are bound to meet a lot of problems when it comes to satisfying the needs and wants if their customers. Although the supermarket company that my father has founded has been around for 20 years, it has not grown much in the past 2 decades. Despite the fact that the company is profitable, compared to its contemporaries, the company that my father has founded is less productive, less progressive and definitely lacks that winning edge that could make it a leader in its field. The problem with the company that my father founded lies in its organizational structure and management or leadership style. Note that the company has been micro-managed by my father in the last two decades. He was an autocratic leader and all decisions emanate from him. Although autocratic leadership as defined by Lewin et al (1939) has its good points in the sense that it moves people into action, it also has its limitations. In our modern times, autocratic leadership is less favored by managers since it does not foster the dynamic sharing of ideas and teamwork (Gratton, L., 2004). Since autocratic leadership does not encourage the sharing of ideas and teamwork, all the ideas for the development of the company comes from the leader (Lewin et al, 1939). This situation can pose a lot of problems especially when the leader no longer wants to keep abreast with the latest development in the market which is the case of my father. You see, after running the company for 20 years, my father already has set ideas about management and organizational development. He was already contented with the performance of the company and since he is about to retire, he is less open to changes and innovations. Another problem that the company has is that it has a very lean management that follows the simple line management functional structure. Technically, the functional structure of the company is very simple. The manager being the head of the company has direct supervision with all of the people under him. The management system is highly centralized that everyone reports directly to my father as the manager. As the incoming general manager of the company, my aim is to overhaul the organizational structure of the company and change its leadership style to make it more suitable to the present demands of the market. My aim is to make the company grow and become more profitable in the next 5 five years. In restructuring the company, I will the organizational experiences of two of the leading companies in the United Kingdom, Marks & Spencer and Wm Morrison Supermarkets. II. Understanding and Analyzing the organizational structure and culture of Marks & Spencer and Wm Morrison Supermarkets The outlooks of Marks & Spencer and Wm Morrison Supermarkets are more or less the same. Both companies are customer oriented and they are very much attuned to the needs of their clients. However, the differences between these companies lie in the kind of market segments that they serve, and the kind of products that they sell in the market and their marketing strategies. Note that while Wm Morrison Supermarkets is more focused on food production and selling good quality food products for very affordable prices (Morrison Annual Review 2009), Marks & Spencer is focused on clothes, parallels and food products for the high end market (Marks and Spencer Annual Report 2009). However, despite the fact that these two companies have different products and target markets, these companies still have similarities in terms of management and leadership approaches. The strategic locations of these companies also affect their management and leadership approach. Note that while Wm Morrison Supermarkets are operating solely in England (Morrison Annual Review 2009) for now, Marks and Spencer has outlets in around 30 countries around the world (Marks and Spencer Annual Report 2009). As it is, the organizational structures of these companies are guided by their outlooks. To give us a clearer view of the management structures these companies; let us discuss them one by one. a. Company Structure and Culture of Wm Morrison Supermarkets The Wm Morrison Supermarkets were originally founded as a family enterprise by William Morrison way back in 1899 (Morrison Annual Review 2009). Back then, the company sold eggs and butter at a stall at Rawson Market in Bradford England (Morrison Annual Review 2009). The company did set up supermarkets across the UK until it acquired Safeway way back in 2004 (Morrison Annual Review 2009). However, from the time the company expanded its reach, it has become the 4th leading supermarket chains in the UK (Morrison Annual Review 2009). At present, 15.5% of the company is still owned by the Morrison family (Morrison Annual Review 2009). The company structure of Wm Morrison Supermarkets follows the multifunctional and multidivisional structures (Morrison Annual Review 2009). At the head of the company is the Board of Directors which serves as the think tank of the company and is collectively responsible for the creation and protection of shareholder value through the management of the company (Morrison Annual Review 2009). The Board of Directors is also responsible for instituting sound management practices, risk management and strong internal controls (Morrison Annual Review 2009). Next to the Board of Directors is the Chief Executive Office (CEO) and directly under the CEO are the senior management and the management committees of the different divisions of the company (Morrison Annual Review 2009). Each divisions of the company also have their own functional structures composed of the senior management, the management committees, the supervisory groups and the team leaders (Morrison Annual Review 2009). The roles of the management people in the company are clearly defined. Like most companies in the United Kingdom, Wm Morrison Supermarket separates the powers and functions of their Board of Directors from the Operations Management Team. For instance, the roles Chairman of the Board of the Directors and the Chief Executive Officer of the company are clearly defined and separated. As defined by the company’s Annual Report, the role of the Chairman of the Board is to lead and govern the operations of the Board of Directors. He or she does not have direct control over the day to day operations of the business but he or she may meet regularly with the senior managers of the company to confer with them regarding the progress of the company (Morrison Annual Review 2009). On the other hand, the role of the Chief Executive Officer is responsible for the day to day operations and management of the supermarket chain. In discharging his duties and responsibilities, the Chief Executive of the company receives advice, reports and assistance from the different store managers and division managers (Morrison Annual Review 2009). The clear definition of the roles and functions of the people in the organization is essential in making the company more productive. As traditional industry selling food products in the market, the culture of Wm Morrison Supermarket is service oriented. According to the Morrison Annual Review Report for 2009, as a matter of company policy, all employees of the company are encouraged to learn more about the products and services of the company so that they will be able to answer the questions of the clients. Moreover, since the employees of the company are well versed with the products and services of their company, they are also expected to give sound recommendations to the clients as which products are best suited for their needs. Good communication between the staff of the company and the clients is essential to retain good customers. The management of Wm Morrison Supermarkets strongly believes that in order for the company to stay at the top of the competition, it must deliver good quality products and services to its clients (Morrison Annual Review 2009). Technically, the key to the success of this company lies in its ability to make good quality products and services available and accessible to its clients at affordable prices. According the Morrison Student Information pack, the company is committed to give the highest quality service as the least price. b. Company Structure and Culture of Marks & Spencer Like the Wm Morrison Supermarkets, Marks and Spencer started out from humble beginnings. Founded in 1884, the company started by opening a few stalls in Kirkgate Market in Leeds (Chislett, H., 2009). The company went through tremendous growth in the past 125 years and it has become a household name in many countries around the world (Chislett, H., 2009). Over the years, company has maintained high quality products and has gained a reputation of giving fair value for its customers’ money (Chislett, H., 2009). Like Wm Morrison Supermarkets, the company structure of Marks and Spencer follows the multifunctional and multidivisional structures (Marks and Spencer Annual Report 2009). However, since this company has operations in other countries, its organizational structure is more highly evolved than that of Wm Morrison Supermarkets. According to Robbins, S.F., Judge, T.A., (2007), big companies that have offices in different parts of the globe opens the multinational dimension of management. The multinational structure adopts a decentralized operation where the divisions or offices located in other countries are given a certain degree of freedom to decide on matters involving their day to day operations (Robbins, S.F., Judge, T.A., 2007). The decentralization of operations is based on the assumption that different countries have different business regulations, thus, each of the divisions or branches located in different countries need to exercise a certain degree of freedom in making decisions for the company (Robbins, S.F., Judge, T.A., 2007). According to Gratton, L. (2004), presence of strong competition among multi-national companies also influences the management structures of these companies. As it is, more multi-national companies now have flatter and less hierarchical structures (Gratton, L., 2004). In comparing the structures of Wm Morrison Supermarkets and Marks and Spencer, we can see that in terms of hierarchy of management officers, Wm Morrison Supermarkets has a more defined hierarchy than Marks and Spencer. Note that in the case of Wm Morrison Supermarkets, each of the company’s division has management committees that report directly to the senior management and in turn, the senior management reports to the CEO (Morrison Annual Review 2009). On the other hand, the structures of Marks and Spencer are more fluid and more flexible (Chislett, H., 2009). If we take a close look at the structure of Marks and Spencer, we can see that the company works through a complex form of the multi-functional and multi-divisional matrix which allows it to maintain coordination among its product divisions in different geographical areas (Chislett, H., 2009; Marks and Spencer Annual Company Report 2009). Since some of the divisions of the company are free to make important decisions for the company, we see a more fluid decision making process. According to the Marks and Spencer Annual Report (2009), to secure good corporate governance, the company (a) considers what it achieve in practice to be as good as what is stated in the company’s formal structures (b) maintains strong and dynamic relationship between the Board of Directors and the operations management team to facilitate the efficient sharing of information (c) values the contribution of the employees and understands that the employees are partners of the company in creating a fluid chain of command from the boardroom to the shop floor (Marks and Spencer Annual Report 2009). When it comes to company culture, like Wm Morrison Supermarkets, the culture of Marks and Spencer is oriented towards strong customer service. III. Approaches to Management and Leadership The approaches to management and leadership in Wm Morrison Supermarkets and Marks and Spencer have similarities and differences. When it comes to similarities, the two companies are the same in the sense that they both follow the classical administration structure. Note that both companies have Board of Directors that serve as the policy making body of the company. In both companies, the functions of the Board of Directors are more or less the same. In the areas of operations management, both companies also have management teams that have control over the day to day operations of the business. Applying the principles of Weber (1957) regarding systemic rules, we can clearly see that both these companies follow the impersonal structure where the powers of the position held by the leader govern and not the personality of the person sitting in the office. When it comes to difference in the approach to management and leadership, we can see difference in the sense that the management structure of Wm Morrison Supermarkets is more hierarchical compared to Marks and Spencer. Since Wm Morrison Supermarkets produces and process most of its food products, the company maintains a strong chain of command in order to have strong control over the quality of its products. On the other hand, the fact that Marks and Spencer has outlets in more than 30 countries around the world make this company more decentralized in management and operations (Chislett, H., 2009). In effect, the leadership approach of Wm Morrison is more bureaucratic compared to Marks and Spencer. According to Weber (1957), a bureaucratic approach to management is universal since companies need to define and codify its experiences to be able to use these experiences as basis for creating rules of behavior in the workplace. Since Marks and Spencer has other offices abroad, it has taken a more liberal approach to decision making and problem solving (Chislett, H., 2009). Taking a close look at the management systems of Marks and Spencer we can conclude that this company favors more the delegation approach to leadership. As defined by Blanchard et al (2005), the delegation approach to leadership turns over the decision-making and problem solving responsibilities to the subordinates. IV. Conclusion Based on my evaluation of the two companies, I can now recommend certain changes in the structures of my father’s business. First, I will propose that the experiences of the company be codified and used as basis to create management rules and regulations. Second, I will adopt a more liberal approach to leadership and delegate some of the functions that my subordinates can already execute without supervision. Third, I will set up a management team to handle the day to day operations of the company. I will also use the management team as sounding board for sharing value ideas and experiences. Fourth, in terms of culture, I will adopt the customer oriented culture of both companies. However, since my father’s business caters to diverse market, I prefer to go for Wm Morrison’s vision of best value for less. Bibliography Books and Journals 1. Blanchard K, Zigarmi P, Zigarmi D (2005), Leadership and the One Minute Manager William Morrows and Co. 2. Chislett, H. (2009), Marks in Time: 125 Years of Marks & Spencer, Weidenfeld and Nicolson 3. Dawkins, William (1995), "Principles of a Profitable Alliance," Financial Times, p. 14. 4. Gratton, L. (2004), “The Democratic Enterprise”, Financial Times Prentice Hall, pp. xii-xiv. 5. Lewin, k. Llippit, R. and White R.K. (1939), “Patterns of Aggressive Behavior in Experimentally Created Social Climates”, Journal of Social psychology. 10, 271-301 6. Robbins, S.F., Judge, T.A. (2007), Organizational Behaviour, 12th edition, Pearson Education Inc., p. 551-557. 7. Weber, M. (1957), The Theory of Social and Economic Organization New York: Oxford University Press. Internet Sources 1. Marks and Spencer Annual Company Report 2009 http://annualreport.marksandspencer.com/about/default.aspx 2. Morrison Annual Review 2009 http://www.morrisons.co.uk/Corporate/2009/AnnualReport/downloads/Morrisons_Review.pdf 3. Morrison Student Information pack http://www.ngfl-cymru.org.uk/vtc/ngfl/bus_studies/13/company_info_unit_two/student_pack_morrisons.pdf Read More