Aquarius Advertising Agency - Organization Structure - Case Study Example

Case study Student’s Name: Institutional Affiliation: Case study Executive summary Aquarius Advertising Agency is in a dilemma. Its traditional organizational structure does not allow organizational effectiveness or efficiency; there is conflict of interests in performing the functions in the organization. The hierarchical structure of the organization creates many levels of management that hinder effective communication and result in slow approach to issues. Many informal contacts between the clients and specialists in the agency end up calling for formal problem-solving approach. In so doing, many resources of the company are lost through repetitive functions and unplanned for commitments. This paper analyses the existing organizational structure at Aquarius Advertising Agency. The possible problems that result from the structure of the organization are discussed in details. The manner through which the organization structure hinders organizational effectiveness is also outlined. Recommendation for a proposed new structure and its operations are also discussed. Finally, the whole process is summarized in the conclusion that echoes the theme of the assignment. Introduction Aquarius Advertising Agency offers plans that are customized for the content of advertising (layouts and slogans) and plans that are complete for media (e.g. TV, radio, billboards, internet, newspapers). Apart from this service, Aquarius Advertising Agency is involved in support service for distribution and marketing research in determination the effectiveness of advertising. The activities of the organization are organized in a traditional manner which hinders organizational effectiveness in the delivery of services. The organization structure as depicted in the Exhibit 3.22 is very hierarchical (Daft, 2010). Hierarchical structure of organization has its own disadvantages that affect the execution of functions within the organization. Setbacks of hierarchical structure will be discussed in this assignment. Traditional organization theory It has been noted that Aquarius Advertising Agency uses traditional organization in its structure. The theory of traditional organization was put forward in the sun-set years of the 19th century and was adopted a bureaucratic structure. The head of the bureaucracy presided over many bureaucracies within the organization. In this theory, the president of the organization was the central authority and he ruled over other managers within the organization. Duties of managerial are broken down to serve functions such as organizing, planning, controlling and staffing. Despite its prevalence, this type of organization structure does not appreciate human skills and does not motivate workers to be productive (Repenning, 2002). Employees are not appreciated and are not seen as being able to govern themselves. Employees are seen to lack material input. In this kind of organization structure, business strategy and direction are dictated from the top of the organization and function of the manager is to accomplish them as stated. Consequently there is a lot of bossing and bulldozing people with ideas and strategies that they may not be happy about leading to low productivity. Problems with the organization structure The organization structure at Aquarius Advertising Agency adopts a hierarchical or bureaucratic structure that characterized by slow decision making and high-handedness. This kind of structure hinders innovation and creativity from taking place in the organization. Repetition or overlap of functions can easily occur is such as an organization structure. There is a lot of inquiry that has to be done before a certain function is performed. The management functions at Aquarius Advertising Agency are only split into two functions. There is the human resource manager and the financial manager (Daft, 2010).  On the other hand, the operation vice president works directly under the executive vice president. At the top of the organization, also there is the president, and the board of directors is at the very peak. Decision making can take a very long process, which is slow and time consuming. If the managerial functions do not understand what the operation function is doing, there will be duplication or repetition of duties. The levels of management in the organization structure at Aquarius Advertising Agency are very many. These numerous levels of management can lead to confusion in the organization and tedious hierarchical approach to solving problems. The activities in the organization were planned in the traditional manner. There are many conflicts in the operations of the organization. Each account is coordinated by an executive of an account who acts by liaising with the client and marketing and operation divisions. The operation division and the marketing division are at different levels within the organization structure. The operation vice president reports the executive vice president who in turn reports to the president. Work etiquette and approach to issues professionally cannot be held in this organization where there seem to be many levels of management without distinct functions to carry out. The human resource level seems to be very distinct from the other levels and hence it is hard to tell if there is adequate coordination of functions within the organization. The human resource department has to work closely with the operations department in ensuring that a healthy work environment is created. The number of direct contacts and communications between Aquarius specialists, account executives, and clients are many and confusing. The structure of the organization allows specialists and clients to communicate without involving the account executive whose office has to mediate the two. Consequently there are many offices that are redundant and increase the operational expenses of Aquarius without any good reason (Daft, 2010).  If there is no restructuring, the organization will continue to spend many on office holders who are of no importance to the company. The role of the account executive seems to be down played within the organization. Where there is no distinct separation of power, there is a high possibility of conflict of interests when performing the normal duties of the organization. Communications that bypassed the account executive was not good for the company since the specialists would not know if the issue at hand met the threshold of being handled by the company. Informal communication undermined the essence of the bureaucratic structure and relegated it to being some form of an informal organization. The confusing levels of management are the ones that make clients and specialists to see communication through the formal channels to be tedious. Communication within the organization has to be fast enough and effective. It should address the issue at hand. Clients should not feel that they are being taken through a long and tedious process before being served. Direct contacts comprised of telephone calls, meetings, e-mail messages, and telephone calls. Many direct contacts or communications happened between the specialists in the agency and their colleagues, in the organization of the client. Some contacts which were unstructured occasioned formal meetings with clients in which personnel of the organization made representations, defended and interpreted agency policy, and had the agency to commit to certain action courses. This trend is very unprofessional and can lead to the Aquarius agency losing colossal amounts of money. The inceptions of these meetings were in the first place wrong and informal, but they ended up making the agency to commit its resources in solving the problems raised from these meetings. An illustration is given whereby a specialist in art working on a certain team on a client’s account would usually be directly contacted by specialist of in-house art, and personnel in research would have direct communication with the client’s firm research people. Looking at this flow of events there was indescribable confusion within the organization (Daft, 2010).  There is no one single transaction that could be monitored professional without having problems. The transactions within the agency evoke thoughts of conflict of interest throughout the organization. The resources of the organization could be committed to solving a problem that started informal due to unlimited contact and communication with clients. The hierarchical structure within every department was delaying the organization from performing its functions with the outside world. The levels of management brings confusions, and that is why there is unmonitored and numerous contacts with the clients. This is very costly for the organization, and there is the need to change the structure of the organization to allow quick problem solving. There is a confession by and in the organization who says that it is hard to tell what is happening around. Someone gets to know what is happening when it is very late. Individuals in the organization end up making his own contact with the client without following the required procedure. It is very hard to ensure that everything is done professionally and formally in such circumstances (Jacobides, 2007). Organization time and resources will be lost on operations that are not beneficial to the company. Hierarchical structure does not favor quick deliberation over issues and expedient feedback. There are many parts of the transaction that can be confused along the way as many procedures are followed. In the current world of globalization and increased internalization, flat organizational structure is preferred as opposed to hierarchical organizational structure. When something goes wrong in the hierarchical structure, it takes a long time to realize and address the problem. Too much communication in Aquarius may be hindering delivery of exceptional services within the organization. It is not easy to implement organizational change in an organizational structure that is very bureaucratic. Demarcating every unit and its function in the organization is the big challenge in the bureaucratic structures organization. The organizational structure has to be restructured in order to meet the specific needs of the customers without depleting the resources of the agency. It is reported that both professional and hierarchical systems operated in the departments of marketing and operations divisions. Account executives felt left out in the whole process as their influence was drastically reduced. Control was only through supervision of work done and control of promotion. There are many details that would have been overlooked in this system of organization (Tsui, 2011). The organization structure of the firm can determine whether the organization succeeds of fails in meeting its objectives and goals. Aquarius Advertising Agency organization structure allows overlapping of duties that can harm the effectiveness of functions. Solution-based on a new organizational structure The need for reorganization is imperative owing to changes in the prevailing environment. Within a short period, there was a massive turnover in many accounts that were being handled by the agency. Agency reorganization was one of the recommendations suggested by the top management in increasing flexibility, in an environment that is unpredictable. It is important to come up with a type of organizational structure that eliminates many levels of management and does not allow duplication of functions. The role of the account executive should be defined clearly. The job description should explain how he links the clients to the specialists within the agency. Having many office or centers of power is confusing. Consequently some centers of power that are not very important should be eliminated from the current organization structure. An effective organizational structure should have a maximum of four levels of management. Uncoordinated over communication with clients from different quarters of the organization is not doing well for the effectiveness of its performance. Account executives should be given the role of coordinating the activities between the client and specialists from the firm. In the recent past, there has been a high turnover of clients (Robbins & Judge, 2007). The clients must be unsatisfied with the sort of service they are receiving from Aquarius Advertising Agency. Clients should know where to complain in case there is a quandary, and there ought to be a special unit that deeds with clients complaints that refer them to account executives who in turn link up with specialists in the agency. Elaborate separate of powers will ensure effectiveness of the organization in achieving its objectives and goals. A flat organizational structure ensures faster communication as compared to hierarchical organizational structure. Effective communication and clearly defines roles of each function ensures that there is no conflict of interest arising anywhere in the organization. The proposed organizational structure will only have three levels of management. At the top of the structure, there will be the board of directors as appointed stakeholders. The president will be next in line, and he will be charge of managerial units. The accounts manager will oversee the activities of the accounts executive; who, in turn, will link clients to specialists in Aquarius agency. Finance manager will deal with financial matters such as budget allocation, revenue collection and expenses prediction (Kogut, Urso & Walker, 2007). Operations manager will deal with all production units in the company. The marketing manager deals market intelligence and looking for new clients for the agency. He also seeks new markets for the products of the company. With fewer levels of management, disparities between set objectives and organizational performance can easily be spotted and corrected before they worsen. Proposed new solution-based structure Board of Directors President Accounts manager Finance manager Operations manager Human resource manager Marketing manager TV/Radio/Internet The human resource manager will be in charge of recruitment, selection and training of new employees of the agency. He is also in charge of human resource development and training. He keeps records of all employees of the agency, and sees to it that they carry out their functions as stipulated in their letters of appointment. It is impractical to govern people in an organization with very many levels of management. Conflicts of interests easily arise, and duplication of functions is the order of the day. Organizational effectiveness can be mentioned where work can be easily supervised, and accountability and responsibility are encouraged. The organizational structure should strengthen the marketing department which is a special unit that forecasts what is going on in the larger market (Amaral & Uzzi, 2007). Clients are referred to the accounts executives who schedule for meetings with the various specialists within the agency. The old structure of the organization was hindering different functions from achieving effectiveness as far as their duties are concerned. Many centers of power can be confusing and misleading at the same time. The new organization structure elevates the level of responsibility of employees in the organization. It improved coordination and pace of communication through the structure. Decision making is made easier, and employees can take part in it. Conclusion Organization structure plays an integral role in the organization’s accomplishment of its set goals and objectives. The structure of the organization can create a crisis or a dilemma as far as accomplishing its functions is concerned. It is a wise move to review the organization of the company and see whether it meets the set objectives of the formation of the organization. Unpredictable and changing environment requires that organization structure is reorganized to meet the competitive advantage that it needs for survival. The previous structure of Aquarius Advertising Agency was an impediment to its goal of achieving organizational effectiveness. Unprecedented huge client turnover was witnessed that called for reorganization of the firm’s organization structure. The proposed structure has clearly defined and well organized centers of power and reduced levels of management. In so doing, the effectiveness of the organization in achieving its goals and objectives has been tremendously improved. The new organization structure avoids duplication of functions and conflicts of interests. References Amaral, L. A. N., & Uzzi, B. (2007). Complex Systems—A New Paradigm for the Integrative Study of Management, Physical, and Technological Systems. Management Science, 53 (7), 1033–1035. Daft, R. L. (2010). Organization Theory and Design (10th Ed). Melbourne: Cengage Learning Australia Pty Ltd. Jacobides, M. G. (2007). The inherent limits of organizational structure and the unfulfilled role of hierarchy: Lessons from a near-war. Organization Science, 18(3), 455-477. Kogut, B., Urso, P. & Walker, G. (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. Robbins, S. F., & Judge, T. A. (2007). Organizational Behavior, 12th ed. Upper Saddle River, New Jersey: Pearson Education Inc. Tsui, F. (2011). Managing Systems and It Projects. Melbourne: Jones & Bartlett Learning. Read More