Key Contingency Factors for Consideration by Senior Managers of Jones Lang Lasalle - Case Study Example

Key Contingency Factors for Consideration by Senior Managers of Jones Lang Lasalle Student’s name Course title Instructor’s name Date of submission Table of Contents Table of Contents 2 Introduction 3 Organizational design 4 Contingency Factors 4 Strategy 4 External environment 6 Technical process (Technology) 7 Organisation’s size 8 Age of the Organisation 9 Forms of Organisational Design 10 Conclusion 12 References 12 Introduction Jones Lang LaSalle (JLL) is a global real estate management company that also has its imprints in the Australian market. The company operates in sectors such as the hotels and hospitality, investor services, and offers various corporate solutions such as lease administration, integrated facilities management, corporate consulting, among many others. The company strives to achieve excellence and its brand promises to “Take you to the next level.” Such a company needs to come up with a suitable organisational design to ensure that it is suited to the objective of achieving maximum performance. Performance of firms serve as important metrics for assessing the economic viability of business ventures (Harley, 2014). The company needs to look at a number of contingency factors that ensures that the company positions itself strategically and effectively to achieve the relevant objectives. These factors include looking at the company’s strategy, business environment, size of the organisation, strategy and age of the organisation. Such considerations will ensure that the company positions itself in readiness to achieve maximum success. This paper will look at each of these contingency factors in detail, with the focus mainly on the applicability of these factors in the organisational design process by senior managers at JLL. The company’s global Chief Executive Officer (CEO), provides some interesting perspectives that will also inform the discussions presented in this paper with a highlight on the Australian market. Organizational design In simple terms, organizational design refers to the way managers structure their organization to reach the organization’s goals (Silzer, 2002). The structural elements of the organizational design include the reporting relationships within a frim, allocations of duties and tasks, and number of levels in the organisation. The organizational chart informs the company’s formal design structure. JLL has an organizational structure that shows various levels of management of its Australian division. The Australian corporate solutions organization comprises of a number of top-level managers under the stewardship of Stephen Cowry as the Australian CEO, and Jordi Martin, serving as the Corporate Solutions CEO for the Asia-Pacific region. The organisational design helps firms to achieve two basic goals. First, the organisational design conveys information to decision makers and allows JLL to maintain a well-defined structural system for making critical decisions (Harley, 2014). Second, the organization chart helps in the coordination of independent parts of an organization. The organization chart of JLL shows how the company’s Australian offices division, corporate solutions divisions and the business network decisions operate under distinct managerial teams. The organizational structure of JLL relies on contingency factors that will be discussed in the following paragraphs. Contingency Factors Strategy An organisation’s strategy describes the long-term goals of an organisation while additionally giving perspectives on the mechanisms for reaching the goals. The strategy that an organisation employs will influence the organisational design process at every stage. The strategy that a firm takes determines the way in which in responds to various situations and dictates the approach it takes in rolling out its routine operations (Harley, 2014). Moreover, the strategy gives a perspectives as the methodology of resource allocation that will be pursued. In a nutshell, the strategy serves a mediating factor that links the external environment to the tools of organisational design. As a result, the strategy is informed by the structure and the structure also informs the strategy that a given firm employs. In the case of JLL, the company pursues an organisational structure (design) that is in line with its strategies. JLL has a strategy to achieve change management and ongoing high performance levels. Therefore, the company employs a collaborative management model. The collaborative management model comprises of joint leadership team operating model, performance management process, process improvement methodology, and alignment incentive system (Bhattacharyya, 2009). The joint leadership model ensures the JLL develops a clear set or roles and responsibilities and allows it to maintain common goals and objectives that are achieved as a team. Furthermore, the performance management process integrates technology into the system, thus, allowing for real-time process metrics, strategic analysis and performance monitoring guided by technology. As a result, the organization is looked at as the major tool that allows for the implementation of various strategies that the managers have in mind. The organisation’s design process by the senior managers aims at achieving maximum results from the value drivers. The strategy to recognize and utilize value drivers ensures that JLL sets the pace for improved performance in the present business environment. The adoption of a new labour model that collapses management and implementation layers and achieve staffing model that is suited to the company’s needs (Bhattacharyya, 2009). The strategy that the company employs also involves the workflow and operations management. The managers design the organisation to ensure that it streamlines itself to achieve efficient usage of labour while leveraging on the Australian agreements. External environment Harley (2014) notes that firms typically face challenges in the process of doing business in various global markets. For instance, JLL’s global observes that Australia faced a record-low performance in its office leasing segment of operation. The causes of the low performance range from the difficult labour market and the falling resource investments (Harley, 2014). The challenges that the markets present to markets present significant effects and pressures on the operations and performance of various firms. JLL’s performance relies on the state of the business environment that it operates in. As a result, it is prudent for managers to assess the uncertainty that may exist in the external environment it operates in while contemplating design decisions. The conditions of the external environment may present various opportunities and threats that may affect the overall performance of the businesses. The managers need to put in places mechanisms to ensure that the organization’s design remains flexible in response to the external environment that the organization faces. A flexible design ensures that the company maintains the ability to react to various situations that may arise in the market with little or no resultant effects that may impact on the performance (Bhattacharyya, 2009). The company also considers the external environment in order to allow the managers to grasp a lot of information that allows them to make informed decisions at all times. The wealth of information that managers keep assist them in making precise predictions about the future and reduce the potential risks of incorrect or inappropriate decisions. The observations by Collin Dyer the corporate market shows indications of gradual recovery following two years of low performance highlights the value of information (Wilkinson & Kannan, 2013). The company, therefore, develops appropriate strategies that will allow it to improve its performance in light of the improved market conditions. The global CEO further observes that the increasing debt costs reveal an interesting perspective on the tapered effect on economies across the world. The Australian market is not left behind, but the expected improved performance such as the increase in leasing volumes in the coming years promises to cushion the firm against any dramatic effects. The observation of the external environment provides a basis for senior managers to design and position the firm in the firm in order to take advantage of good business conditions that may arise in the future. The CEO predicts that in 2015 or 2016, JLL is on a positive stretch to enjoy high performance that is backed by “strong equity, strong debt and strong demand” (Harley, 2014). Technical process (Technology) The technical process of an organisation refers to the usage of some kind of resources by an organisation to produce various goods or services. Broadly, technology encompasses the knowledge, skills, machinery and materials that are utilized to convert inputs in various outputs. The technology that a firm uses in its operations influences the organizational design that managers will pursue in order to ensure that the organization is well-equipped to achieve diverse objectives. The type of technical process assumed by a firm influences the behaviours of the organisation’s employees. For example, the pace of work, worker control, predictability, interdependence within the system, and degree of routine are all aspects of the technical process (Wilkinson & Kannan, 2013). For example, the managers at JLL embrace technology into the organisational structure to enable technology-based performance monitoring. The integration of technology sets the pace for the company to make strides towards better performance levels. Technological monitoring involves the integration of computer systems to aid the operations and the implementation of various operation frameworks by the managers. The computing systems allows for the collection of information concerning the performance of the firm in various areas and enables the comparisons vis-à-vis the prior targets (Bhattacharyya, 2009). Organisation’s size The organisation’s size refers to the number of organisation members at a given point in time. The number of people in the organisation at various levels influences the organisations designed that is formulated in order to integrate the efforts of various individuals and ensure collective productivity (Keillor & Wilkinson, 2011). As the size of an organisation increases, organisations tend to experience a number of dynamics. The organisations tends to have more formal rules and procedures that are designed to govern the operations of the individuals and ensure that the organisations maintain a focus on key activities. In addition, the organisations tend to have more management levels in order to ensure that the management steers clear of bottlenecks that may hamper smooth operations. The increase in management levels catalyses the need for higher coordination in order to cater for the complexities that may arise (Keillor & Wilkinson, 2011). For instance, JLL has come up with a stakeholder engagement, communication and governance framework. Such a framework allows for the coordination of diverse efforts at various levels of management within the firm. The framework is built by the joint executive oversight and management teams (Keillor & Wilkinson, 2011). The management team takes responsibility over the monitoring of performance while the operating teams undertake the actual work required to achieve results. The various levels of management ensures that the strategies formulated by the company are achieved by all means. The organisation’s size increases relative to the need for a firm to achieve higher levels of performance. Under JLL’s Australian corporate solutions segment, various levels of management arise with the objective that firm achieves maximum performance levels out of its dispersed operations (Keillor & Wilkinson, 2011). Age of the Organisation The age of an organisation influences its ability to incorporate standardised systems, procedures and regulations (Stanford, 2007). Organisations evolve in a typical life cycle coupled with various phases in its development process. The phases include birth stage, youth stage, midlife stage and the maturity stage. In the case of JLL, the company boasts of global operations and has been in operation for several years thus transforming it into a mature organisation. According to Burton, DeSanctis & Obel (2006), the maturity stage organisations achieve stable rules and regulations, refined division of labour, specialization of staff, effective operational budgets and appropriate control systems are employed. An organisation at this phase of life has endured a myriad of challenges and witnessed periods of success thus allowing it to derive vital lessons. Such lessons allows the firms to acknowledge the relevant mechanisms that lead it on a path to success. JLL has been in the market long enough for it to realise the real value that the organisation derives from outsourcing. The managers, therefore, develop an organizational design that will allow it to reap maximum benefits from outsourcing. The outsourcing option allows JLL to develop a business and portfolio strategy, conduct transaction management, administer leases, conduct project management, and integrated facility management (Keillor & Wilkinson, 2011). For instance, the company designs itself to integrate outsourcing function in such a way that it achieves a fast, flexible and on-time delivery of projects that it undertakes. Additionally, the outsourcing options allows JLL to achieve portfolio transparency and eliminate any underlying business risks. Forms of Organisational Design Based on the contingency factors highlighted above, organizations have various forms of organisational designs to implement. The three major forms include functional, divisional and matrix organisational designs. A combination of the functional and divisional designs gives rise to the hybrid design. Functional design groups the tasks of the organization in accordance to the activities that they perform and entails departmentalization such as manufacturing, marketing, finance, product research and development and so forth (Lewis, Goodman & Fandt, (2001). The functional design depends on the underlying tasks or goals of the organization. However, such a design is mainly synonymous with small to medium organisations. On the other hand, divisional design mainly makes use of decentralization of activities from the administrative units to other localities. The divisions are formed around products, services, location, customers, programs or technical processes (Cornelissen, 2008). The changes in the external environment motivate managers to diversify its activities to stay competitive in the present business conditions. The divisional design allows firms to realise expansion objectives. JLL aims at expanding its operations beyond the Australian market and into the Asia-Pacific region. The design of the management acts as a guide to the firm’s expansion process in order to ensure that a stable team steers the expansion initiatives. The expansion follows strategy, increases the organizational size, and takes advantage of the external environment. The divisional design is suited to firms operating in a complex, fast-changing external environment with non-routine and interdependent technical processes. In addition, the divisional design suits large organisations (Keillor & Wilkinson, 2011). JLL demands a strong network hence its decision to have a business network team that coordinates the management at the highest levels thus stressing the importance of autonomy of decision-making. The hybrid organisational design combines the synergies of the functional and divisional design to develop a strong organisational structure (Sarlak, 2010). The central office maintain some core functions while the divisions maintain some of the decentralized functions. The hybrid design allows for people in different parts of the organization fulfil the different requirements. The hybrid design would be appropriate for the large organizations such as JLL to maintain a network of interdependent functions and divisions. The hybrid design would allow JLL to enjoy the benefits of economies of scale by centralizing the expensive resources to support the divisions. Furthermore, the hybrid design would be suited to adapt to complex environments that are similar to the market conditions JLL faces. The fact that hybrid design focuses on products, services, and customers (Stanford, 2013). Conclusion The contingent factors critical to the senior managers in the process of coming up with an appropriate and effective design act as the factors for ensuring success. Firms such as JLL employ a number of strategic actions in order to ensure that they succeed in the markets that they operate in. Therefore, it is vital for the managers to put in place mechanisms to integrate the contingent factors in the organisation’s design. Such integration allows the company to come up with a suitable design such as the adoption of the hybrid design that will support the company’s prospects to grow (Bhattacharyya, 2009). The hybrid design will echo the sentiments of the global CEO to continue serving clients, increase the market share and invest in other profitable areas. Information gained on the business environment informs the strategies while also helping in the design formulation process. 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