Reorganisation of the Aquarius Advertising Agency Organisational Structure - Case Study Example

REPORT ON REORGANISATION OF AQUARIUS ADVERTISING AGENCY ORGANISATIONAL STRUCTURE Name: Course: Tutor’s Name: Date: 1.0 Introduction Managers or departmental heads are often referred to as uncaring, insincere, unsupportive, and disconnected. With high employee turnover in many firms, studies have shown that it’s affecting many firms. Obviously, management structures in firms are deficient. Because many firms try to reinvent traditional management structures to suit its current firm’s operations and demand from its workforce, even if the firm formulate good policies, yet bad management structure in any firm will offer poor modeling and practice through traditional behaviors (Amaral and Uzzi 2007). The Aquarius Advertising Agency is a middle-sized company that offer two basic advertising services to its customers or clients: (1) complete plans for media (such as TV, newspaper, radio, Internet and billboards), and customized plans for advertising campaign (such as layouts and slogans). Additional services that are offered by the firm to its clients include: marketing research to test advertising effectiveness, and marketing and distribution of products. In Aquarius Advertising Agency, a gap can be found in the organizational structure, between levels of management structure and each employee in firms from the bottom up. The Aquarius Advertising Agency has realized the need to meet the ever changing demands of its clients. This is why the firm wants to re-organize its management structure so that it can have a more cohesive management structure that supports the deliverance of innovation, creativity, cooperation, collaboration, and teamwork; may nurture improve productivity and processes among all. 2.0 Analysis of Key Problems 2.1 Management Problem The Aquarius Advertising Agency wants to change its management structure in response to competition pressures from its competitive. The firm’s has a tradition management process that makes it difficult to manage growth. The firm used the board of directors; being the decision making organ to launch growth, but this approach has not helped the firm in improving customer service or controlling costs. 2.2 Hierarchical arrangement Traditional structure that has been existence at the firm encourages expansion of a hierarchical arrangement. Starting from supervisor in the middle management in the firm’s department levels before encountering the President; this type of a system has proved to be a mismatched with today’s business environment. The excess in decisions and power are left up to the board of directors instead of distributed to the firm’s departments. Therefore, the board of directors in essence will do little to implement change and improve the firm’s quality of business. The primary purpose of the board of director’s is coordinating business functions, and serving the delegation of duties, while organizing and planning resources. 2.3 Contradictory Process Traditional structure at the firm is serving a contradictory process in the delegation of managers and supervisors within a single department. Traditional structure has been found not to focus dynamic, creative and fast changing business environment. Therefore, the firm departmental heads are not able to work effectively will employees of each departments (Repenning 2002). 2.4 Communication Problems Employees in the firm work under many layers of management structures. Most of the communication at the firm originate at the top (i.e. board of directors), and flows downward through the firm’s various departments or layers. Therefore, employees or workers that are found in the lower most or at the bottom of the firm’s chain of command usually experience difficulty communicating with other employees in other departments, as the firm’s organizational structure prohibits the horizontal flow of interactions or communication among its employees. Therefore, workers at the firm often lack the ability to communicate upward, and this barrier prevents the receipt of workers feedback. In modern organizational structures, workers in a firm communicate with each other (or with peers) throughout the firm, and many firms have been found to encourage workers to express their concerns or ideas with senior management (Repenning 2002). 2.5 Low Creativity Most traditional management structure encourages “mechanistic organizations”. In other words, this type of a system feature strictly documented procedures, and top management expect any company’s employee to follow any order or decision that has been approved without deviating from it. Although this type of structure has been found to work well in the manufacturing sector, it has discouraged employees in the firm to apply creativity when solving problems. In addition, this structure gives employees little room to explore new ideas, which has been a trademark for highly modern firms like Southwest Airlines and Google.inc (Repenning 2002). 2.6 High Cost Traditional organizational structures at the firm have several layers of managers, and management who command higher wages or salaries than workers at the lower level in the firm. Typically, the firm has been able to increase its management layers each time they is growth at the firm, and these expansions has increased the firm’s costs. In contrast, modern companies tend to use more horizontal, flatter organisational structure that is able to reduce the number of layers or managers. 2.7 Less Happiness According to Luthans Fred, author of the college textbook "Organizational Behavior," Traditional management structures have been found to reduce opportunities for workers to express themselves, give feedback and in controlling their work environment. Staff who lack the ability of managing and controlling their working environment have been found to have low levels of independence often experience less happiness in the work environment as compared to their counterpart in firms that empower its staffs. Luthans further state that employees in firms that still have traditional structures tend to feel more stress, will have lower output and reach burnout more quickly than counterparts found in less restrictive and more modern firms (Braha and Bar-Yam 2007). 3.0 Recommendation The flat management structure is widely used in small and medium companies. As the firm grows it becomes hierarchical and more complex, which makes the firm to expand its structure, with more departments and levels. Often, this type of management structure results in bureaucracy. This has been the main reason why Shell Oil Company structured its management into a matrix. Starbucks being a multinational company has been able to successful implemented matrix structure, which supports the firm’s focused strategy. “In any firm, different functions and employees do not work completely independently. Flattening an organization is one approach that can be used to develop horizontal connection and deemphasize vertical reporting relationships”. This can simply mean doing away with layers of middle management structures. For example, Toyota Company has only four levels or layers of management: plant management, top management, section management and department management. While, some firms in America have drastically reduced the number of departmental heads or managers as part of reorganizing their traditional structure; not just to reduce wages expenses, but to improve decision-making and communication (Kogut, Urso, and Walker 2007). By design, matrix structure combines product and functional based divisions, with firm’s employees reporting to two managers or heads. This creates a team spirit, and the firm will be able to empower its workers into making their own decisions. Additionally, employees at the firms are able to develop both soft and hard skills. And this has been the reasons why Starbucks has one of the best customer services. Matrix management structure is a combination of two or more different management structures. One advantage of this structure is that it can facilitate the use specialized equipment and staff. Rather than duplicating functions as compared to the traditional structure (Kogut, Urso, and Walker 2007). To support the redistribution of power at the firm, the traditional organizational structure that is in place should be transformed. In each department, cells should be created that will make up the body of each department. Each cell at the department should operate at a 25 per cent ratio (such as four cells per department) and this will depend on the level of the workers per department. Each cell should be assign a team leader and each team leader should operate as forerunner and represent his/her fellow employees in the department. The reason for doing this is to replace traditional management roles and supervisor combined. In addition, team leader in each cell will act as collaborator in his/her cell. Thus, the necessity of department managers will end, because one individual (departmental head) will not be required to make decision for the whole department. Rather, team leaders that are in charge of cells will share the vision of their respective cells, discuss ideas that are new, and will agree to improve the department operations and processes. This reorganization of the departmental structure will bridge the gap that has been missing in the traditional management structure at the firm. In the traditional structure, departmental heads have acted in a controlling role rather than collaborative role. When team leaders have a say in the daily operations of the firm, more management practices at the firm will be endorsed. And this will be an added advantage for the firm since direct methods of coaching an mentoring will occur, while barriers that existed in the traditional management structure is broken (Butler 1986). The departments at the firm should be reinstituted to do away with departmental heads but in return it should include department leaders. The department heads that will be appointed at the firm should be made to operate within the role of serving the operational process of many departments, and should be trained to handle issues and problems that may arise. There is need for more diversified management at the firm in the present times. Therefore, the agreement that will exist between department leaders will encourage dynamic skills and ideas that will be utilized within the firm. In addition, it will help the firm to bridge the working of departments together. For example, management restructuring will help in consolidation of software support, hardware support and R & D department combined in one department. Lastly, restructuring will give every employee in the firm a stronger knowledgebase throughout their firm, additionally, it will encourage skilled workforce that is diverse. Also, it will encourage employees to offer creative skills and ideas that will benefit multiple aspect of the firm (Braha and Bar-Yam 2007). The next level that should be restructured is the firm’s executive level. Traditional management structure at the firm has embraced the idea of departmental head per every department. This may include Finance, Marketing, Planning, Personal and Administrative, Legal, Research and Development. Therefore, this gap that exists between departmental heads and departments should be brought closer. For example, a simple departmental head in operations should be able to encompass many levels of operations in Administrative Personnel, Human Resources, Research and development, and others. The second departmental heads should be in-charge of Marketing, Finance, Planning, and Legal combined. This can be structured differently between departments but the point should be necessary removal of increased management structure with smaller scopes of duties. This will prevent the ability of the firm to be diversified throughout the firm, but it will present authoritarian aspects at the departments that will decrease the power that has been given to lower and middle level leaders (Kogut, Urso, and Walker 2007). 4.0 Practical Impact In a virtual sense, technology can be used to flatten the organization structure. The use of software designed and computer networks to facilitate communication within the firm can speed decision making and communication. Additionally, intranets can be used in the firm to make information readily available throughout the firm. The development of such technology has made it possible for boundary less and virtual organizations to prosper, where technicians, managers, suppliers, clients, distributors connect digitally rather than physically. With evolution of technology, decision making processes can be made faster even in a global environment. Reorganization of management structure at the Aquarius Advertising Agency will present the firms with many opportunities that exist regionally or worldwide with the use of telepresence or video conferencing in its business operations. Traditional uses of indirect delegation and email notifications methods will not fit in the modern structure. In fact, it decreases time that will be used to distribute new data or information. Additionally, these methods cannot be personalized among employees and management. The introduction of cells and team leaders in departments will encourage interactions (face time) and a line for direct communication between members of each cell. Therefore, this will increase the use of human capacity at the departments and ensures that decisions that have been passed at every cell level are implemented fast (Braha and Bar-Yam 2007). In the new management structures, firm’s executives are given enough time to evaluate new business growth and ventures opportunities for the firm while cell team leaders and departmental heads account for innovative ideas and creative changes. Reorganization of the firm’s management structure is a form of decentralization from the traditional management structure. This is a way of downsizing; in contrast to traditional structures where the firm still focuses on unnecessary level of management structure which put much focus on the delegation of duties and time wastage as a result of maintain constant accountability. In the modern structures, cell team leaders would be placed among their peers to operate with departmental heads, guide them, and improve the firm’s service and operations. This will provide the firm with fast feedback in performance delivery (Kogut, Urso, and Walker 2007). 5.0 Challenges in Implementation The challenges that can be faced in the reorganization of the traditional structure at the firm are the lack of view in authority between team and employee as the gap that exist between the two is brought closer together. Too many responsibilities and roles may be given to the department leaders and cell team leaders. In order for the firm to succeed on this, they must be prepared to minimize these issues and put in place a collaborative environment into place. All members of a team including team leaders should be encourage to work together to meet the goals and objective of the firm. First Steps: Traditional based mindsets should be altered Reintegrating operational processes at the firm Selecting qualified employees to suit the new management structure. The firm should distribute information on the changes to its employees and also tell them how this information will benefit them. Provide training to employees on the new structure. The firm should implement recommendations given on qualified team cell leaders. 6.0 Conclusion To foster renewal of faith in the firm, the firm must reassure its employees that each employee in the firm is an asset and provide value to the firm itself. The implementation of these new changes in the firm sometimes would prove to be hard in altering traditional based mindsets, selecting qualified employees to suit this new management structures, and reintegrating operational processes. Therefore, the firm should notify its employees on the new roll-out and how it will benefit them. Additionally, the firm should create a platform that enables employees to voice their concerns and recommendations given to them. In previous traditional management structures, departmental heads or cells leaders would be evaluated in experience and skills to seek a qualified leader that is able to manage functions of a department. In addition, new training of these positions may need to be updated. An employees in the firms will feel that they are empowered within their positions, and this will increase the overall motivations and creativity. References Amaral, L.A.N. and B. Uzzi. (2007) Complex Systems—A New Paradigm for the Integrative Study of Management, Physical, and Technological Systems. Management Science, 53, 7: 1033–1035. Braha, D. and Y. Bar-Yam. (2007) The Statistical Mechanics of Complex Product Development: Empirical and Analytical Results. Management Science, 53, 7: 1127– 1145. Butler Jr., J.K. (1986). A global view of informal organization. Academy of Management Journal, 51, 3, 39-43. Kogut, B., P. Urso, and G. Walker. (2007) Emergent Properties of a New Financial Market: American Venture Capital Syndication, 1960–2005. Management Science, 53, 7: 1181-1198. Repenning, N. (2002). A Simulation-Based Approach to Understanding the Dynamics of Innovation Implementation. Organization Science, 13, 2: 109-127 Read More