Would Future Hierarchical Management Structures Be Less Evident - Literature review Example

In the future, hierarchical management structures will be less evident Table of Contents Introduction 3 Discussion 3 Changes and Shifts in Global Economy 4 Factors to be managed in Working Environment 5 Change Management Process 7 Impact of Change Management Process in Success or Failure of Organisations 10 Conclusion 10 References 12 Introduction Significant changes in global economic environment and high industry rivalry are forcing several organisations within the similar industry to implement change management process in the organisational management hierarchical structure to gain competitive advantages. It is important for the organisations to focus on effective and conflict free workplace environment in order to ensure significant business performance. Several leading organisations try to adopt unique strategies in human resource management process in order to improve its business performances and overcome several internal workplace challenges and issues (Bell, 2008, p. 23). Hierarchical management structure is an organisational structure in which each and every entity of an organisation follows a top down hierarchical level. It is true that the trend of hierarchical organisational management structure is shifting towards the flatter organisational management structure to enhance organisational communication process between several departments of the organisation (Boxall and Purcell, 2007, p. 98). There are several advantages and significance of flatter organisational structure. It enhances decision making process, operation cost control and better communication between the employees of different departments in an organisation. The essay will discuss on the statement that “In the future, hierarchical management structures will be less evident”. Discussion This part of the essay will discuss about several factors that influence the management of several organisations to implement change management process and ensure flatter organisational management structure. Changes and Shifts in Global Economy Global business environment is uncertain. Recent financial crisis and economic recession affected the economic growth of several countries. These economic distresses have strong effect on the decision making, business process and business performance of several organisations. These economic issues and fluctuating global economic environment will motivate the leaders or the management of the organisation to adopt flatter organisational management hierarchy (Buchanan and Huczynski, 2010, p. 31). Each and every organisation is trying to focus on the business operation cost reduction. It is highly important for the organisations to control the operation cost in order to ensure high profit maximisation (Buelens, Sinding, Waldstrom, Krietner and Kinicki, 2011, p. 69). Several leading organisations are adopting flatter organisational structure in order to reduce business operation cost. A flat organisational structure can be defined as an organisation structure with limited or no management level between the staff and management level employees. Flat organisation structure deals with low employee supervision (Burke, 2012, p. 36). The leaders in a flat organisation use to promote the employees and involve them in the decision making process. Organisation can gain huge benefit through flat organisational structure in this economic distress period. The major objective of flat organisation structure is to eliminate the level and salaries of middle management. This reduction in management level and salaries help the organisation to reduce overall business operation cost and budget of an organisation (Dawson, 2003, p. 84). In addition to this, flatter organisational structure elevates the level of responsibility of the employees in an organisation as this organisational structure brings more efficiency in the organisational communication process (Maylor and Blackmon, 2005, p. 89). As this organisational structure removes the excess layers of a management structure, the speed of coordination and communication between the employees of different department gets improves. Limited management level influences an organisation to undertake easy and conflict free decision making process among the employees. IKEA is one of the most popular and leading furniture retails around the globe. The organisation follows flat organisational management structures. Management hierarchical levels are quite limited in IKEA. In addition to this, the organisation heavily relies on skills and competencies of floor sales executives (McMillan, 2008, p. 25). These sales people of IKEA have the independence and responsibility to undertake effective decision regarding store operation and performances. The organisation always tries to meet market demand and satisfaction level of the customers (Redman and Wilkinson, 2006, p. 93). This flatter organisational management structure helps IKEA to reduce the extra management level costs due to limited hierarchical structure. In addition to this, the structure helps the organisation to develop effective decision making processes. Factors to be managed in Working Environment It is highly important for an organisation to maintain significant workplace environment in order to ensure effective business performances. Employees of an organisation are considered as the major business growth driver. It is highly important for several organisations to give effective value to the employees as it will help the organisation to manage effective workplace environment. First of all, the organisation should focus on its business objectives and corporate goals (Simons, 2011, p. 62). Without appropriate and feasible goals and objectives, an organisation cannot develop effective strategies and undertake effective decision making process to meet the goals and objectives. Employee motivation and effective leadership style is an important aspect for organisational growth and effective business performance. It is true that several organisations are trying to organise different types of employee engagement and motivation programs to engage the employees with the corporate culture of the organisation. Employee motivation helps the management and leaders of an organisation to achieve the corporate goals and business objectives quite significantly (Carnall, 2004, p. 29). First of all, the organisation should try to implement effective orientation programs for the employees as these orientation and induction processes help the employees to determine the corporate culture and business objectives of the organisation. Then effective training and development model is important for an organisation as it will help the organisation to increase the level of skills and competencies of employees. Each and every employee expects high social recognition and financial rewards against their hard work and effective workplace performances. It effectively helps the employees to stay motivated to perform well according to their skills and competencies (Cummings and Worley, 2009, p. 57). According to the Maslow’s hierarchy of needs, each and every employee tries to fulfil their basic needs and need for social recognition in different phases of life cycle. Business performance of an organisation highly depends upon the skills and competencies of the employees (Myers and Martin, 2001, p. 55). Therefore, it is highly important for the management of the organisation to motivate the employees. Corporate culture and organisational structure used to play an important role in the performance of a workplace (Hamlin, Keep and Ash, 2001, p. 19). Generally, it has been identified that the performance of an entire workforce gets affected due to inadequate decision making process, lack of collaborative work performance and lack of generation of significant ideas. Without these mentioned factors a firm cannot enhance effective workplace environment (Tricker, 2006, p. 82). It is important for the leading organisation to implement change management process regarding the organisational management structure as it is true that the ability of new idea generation and decision making options get limited due to hierarchical organisational management structure (Moore, 2003, p. 36). Now-a-days, it is important for the organisation to engage the employees in the decision making process of the organisation. This factor has two different advantages that can ensure positive business performance of an organisation. First of all, it will help the organisations to increase the motivation level of the employees as the employees will feel that they are socially recognised by the organisation (Ridley, 2008, p. 71). On the other hand, the organisations will find it quite easy to adopt different set of valuable idea. It will help the management of the organisation to develop and implement new diversified and valuable strategies or ideas in the business operation processes (Kanter, 2004, p. 62). Last but not the least; adoption of flatter organisation structure in the corporate culture will enhance the communication process between the employees of various departments (Lipman-Blumen, 2005, p. 47). It is highly important for an organisation to deliver effective customer service and conflict free business process. Inadequate communication between the management and employees will help the employees to provide better customer service (Duck, 2001, p. 93). Change Management Process According to change management process, for any change to happen any organisation needs to go through three phases of change. This is Unfreeze, Transition and Freeze. Through this Kurt Lewin model it is possible to understand the process of change in any organisation. Figure 1: Kurt Lewin Model of Change In the Unfreeze stage the management has to reduce the forces which strive to maintain the status quo. In hierarchical organisation structure the company has a number of levels. In such organisations the number employees reporting to each manager gets smaller which results in greater opportunities for the managers to supervise the activities of the employees. In this structure there is more number of levels resulting in more number of managers hence they have sufficient power at their disposal (Burke, Lake and Paine, 2008, p. 145). Existing systems needs to be broken down so that a new way of operating can be installed. So the employees need to be educated to bring about the change. They need to be told about the disadvantages of having hierarchical structure and how adopting the flat structure will increase the operational efficiency of the organisation. They also need to change the attitude of the staff, which has changed over so many years. According to Kurt Lewin one of the best ways to motivate the employees to accept the change is to make them see the need for change (Cummings and Worley, 2009, p. 432). Hence the employees must be given demonstration or provided with examples of how such a similar change in other organisation has resulted in greater success. They have to be the change agent and create a strong reaction among the employees so that the follow them (Liu, Akram and Bouguettaya, 2011, p. 19). The organisation must realise that change cannot be just for the sake of change but there must be change because of compelling reasons provided for it. Hence the organisation must do a thorough analysis to determine whether at all change is needed, and if needed to what extent it is needed. That is by changing the organisation structure form hierarchical to flat, whether it will result in any enhanced benefit for the organisation as a whole. The organisation must maintain a regular communication with all the employees so that they can answer to any query from them (Rao and Rao, 1999, p. 310). The management needs to have an open door policy which allows its employees to discuss concerns like helping the managers in allaying the fears and motivate them to direct the change. The management needs to be honest with the feedback to their employees which will help them build a cohesive group (Biech, 2007, p. 128). During the transition phase the organisation will aim to alter the behaviour of the employees, departments which will change the entire organisation (Baligh, 2006, p. 324). The employees in this phase will look for new and better ways of doing things. Though the behaviour of the employees can be mechanical slowly the employees will get themselves acclimatised to the flat organisation structure. The organisation must simply communicate the change to the employees and the departments. It will result in gaining of their trust. The organisation must give the employees plenty of time and during this they must communicate plenty of information to the employees about the benefits of flat structure, the more power and responsibility they will get. The less time it will require formulating the decisions. The organisation must immediately address any barriers like negativity of the employees to such change, make the process relate to the need for change (Aquinas, 2009, p. 341). During the Freeze stage the employees need to recognise the need to continually change. But the organisation must understand that this change can only be a temporary change and it can again be reverted back to its old hierarchical structure (Bagad, 2008, p. 201). Hence the company must strive to celebrate any success with the employees to encourage them. The organisation can increase compensation to the managers who have let go of their power. They can be given additional perquisites and involve them in the strategy policy formulation process. Impact of Change Management Process in Success or Failure of Organisations Change is a great instrument which can be applied to any organisation to make the organisation improve their operational efficiency. But the organisation must be sure of the success of implementation of the change. While changing the organisation from hierarchical to flat, the company must analyse the success in such a change, the cost involved like in training and the benefits achieved. If the benefits outweigh the cost then the organisation must implement the change. Conclusion It is clear from above discussion that it is highly important for an organisation to maintain effective workplace environment in order to ensure business growth and high business performance. The hierarchical management structure organisations are trying to change their corporate culture and organisational management structure due to several reasons. Hierarchical management structure has several disadvantages that can affect the organisational workplace performance and business profitability. Hierarchical organisational management structure generally follows top down communication process that create several difficulties for the organisation in decision making and strategy development process. In addition to this, excessive management structure level in this specific management structure increase business operation cost of an organisation. It is highly important for an organisation to implement change management process in order to adopt flatter organisation structure. It will help the organisation to engage its employees in decision making process. In addition to this, limited structural level in flatter management structure will eliminate the possibilities of addition cost that can help in overall budget cost. Looking into the above discussions and findings, it can be stated that the presence and adoption of hierarchical management structure will be reduced in near future. References Bell, G., 2008. Perceptions of Organisational Change from inside a School District-Wide Reform Process. Cambridge: ProQuest. Boxall, P., and Purcell, J., 2007. Strategy and human resource management, London: Palgrave Macmillan. Buchanan, D., and Huczynski, A., 2010. Organisational Behaviour. Harlow: Pearson. Buelens, M., Sinding, K., Waldstrom, C., Krietner, R., and Kinicki, A., 2011. Organisational Behaviour. Berkshire: McGraw-Hill Education. Burke, W., 2010. Organisation Change: Theory and Practice. London: Sage. Carnall, C., 2004. Managing Change in Organisations. London: Prentice Hall International Ltd. Cummings, T., and Worley, C., 2009. 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