Organisational Structure and Leadership - Assignment Example

Reflection B B2 The term ‘organisational structure’ collectively refers to the way the tasks within an organisation are carried out, how the various managers within the organisation report to each other and the distribution of responsibilities and authority within the company (Watson & Gallagher 2015, p. 152). In general, the way these tasks are carried out within organisations is defined by specific structures, procedures and relationships among the employees (Watson & Gallagher 2015, p. 152). Thus, the term ‘organisational structure’ covers various important aspects that relate to the design, operation and overall management practices of organisations. Also, the term covers the various ways in which managers within an organisation report to one another and share authority. One of the most common forms of organisational structure is what is referred to as the functional organisational structure. An organisation that uses this form of structure is normally divided into departments based on the specific functions of the entire organisation (University of Canberra, Faculty of Business, Government & Law n.d. p. 199). In general, organisations require the following functions for them to operate succesfully: finance, marketing, human resources and operations (University of Canberra, Faculty of Business, Government & Law n.d. p. 200). Using the functional organisational structure involves organising the company into specific departments that deal with the any one of the main functions of the entire organisation. An organisation that uses this form of structure is organised into finance, human resources, production and other departments that relate to the main functions of organisations. The functional organisational structure is commonly used in many large organisations. For example, a global company like Ford Motors can use the following distinctive functional areas: finance, human resources, manufacturing, marketing and others. Using this form of organisational structure helps the company to operate efficiently. Another form of organisational structure, called divisional organisational structure, is normally based on the products that a company deals in or the geographical regions in which a company operates. For example, a global pharmaceutical company like GlaxoSmithKline can be organised into small divisions that address the needs of specific geographical regions such as Europe, the Americas, Africa and the Middle East and Far Asia. Moreover, the company may be structured in the form of divisions such as those that deal with drugs for respiratory diseases, those that deal with drugs that treat tropical diseases, and so forth. The third type of organisational structure, the matrix organisational structure, makes use of product teams to determine the way individual employees report to each other. Product teams are made up of specialists for specific aspects of the product under development as well as for other conventional functions for the product such as its marketing and finance-related issues. In practice, organisations may incorporate other aspects of divisional organisational structure in the matrix structure (University of Canberra, Faculty of Business, Government & Law n.d. p. 202). For example, Microsoft may use this structure when developing a new software product for the market. B3 All these three forms of leadership, democratic, autocratic and laissez-faire, share the common characteristic that leaders who use any of them must make decisions and require that their subordinates execute the decisions. However, the way the decisions are made and how the leaders interact with their subordinates vary with every one of these leadership styles. For example, autocratic leaders do not involve their subordinates in the decision-making process but require the subordinates to adhere to the decisions without raising questions (University of Canberra, Faculty of Business, Government & Law n.d. p. 206). Democratic leaders normally involve all their subordinates in the decision-making process and rely on consensus to guide the activities of the entire group (University of Canberra, Faculty of Business, Government & Law n.d. p. 206). Under laissez-faire, leaders choose to cede direct control of affairs to their subordinates (University of Canberra, Faculty of Business, Government & Law n.d. p. 206). I prefer the democratic style of leadership. I think that if I use this approach as a leader, I will be able to make better decisions because everyone else in the organisation will be involved in the decision-making process. Besides, if I use this form of leadership, I will easily minimise instances of conflict among employees in the organisation. I think that if I make sure that employees are involved in the process of making decisions and that cases of workplace conflicts are at their minimum, I will be able to have big and positive impact as a manager.As one would predict, I would like to work under a manager who uses this approach of leadership. I think that this style of leadership brings the best out of people and minimises instances of conflict at the place of work. Therefore, I will be glad to work for a manager who seeks my input during the process of making decisions and genuinely takes my opinion into consideration. Moreover, I would like to work in an environment where there is harmony among the employees. Unlike the other two types of leadership, adopting the democratic leadership style helps employees to be engaged and work more harmoniously. B4 The main difference between transactional and transformational styles of leadership lies in the way the leader manages his or her subordinates. A leader who uses the transactional form of leadership focuses on identifying the mistakes and achievements of the employees and punishing or rewarding them accordingly (Martin 2006, p. 46). However, a leader who uses the transformational approach to leadership focuses on identifying the potential of subordinates and nurturing their potential (Martin 2006, p. 47). In other words, a leader who uses the transactional form of leadership is concerned with ensuring that the activities of employees are in line with the objectives of the company always. However, a leader who uses the transformational leadership style can be regarded as a mentor who seeks to help employees grow as professionals. I prefer transactional to transformational leadership. I think that as much as the transformational leadership style is effective in helping to create a strong sense of loyalty and enthusiasm among the employees of a company, it may not be the best one for managing the day-to-day operations of an organisation in the long-term. Because managers need to be in charge on a continuous basis, I would favour the transactional style over the transformational approach as a manager. I believe that it is only when a manager constantly rewards success and punishes mistakes that the manager can remain in charge of the operations of a company. Moreover, the transactional leadership approach, which entails identifying and responding to mistakes and achievements, is necessary to keep the employees in check always. On the other hand, transformational leadership may be ideal for a new organisation. A founder-manager who uses transformational leadership may end up building an amazing team of employees. In my opinion, this approach may be necessary during the early years of a company. B8 The Wow Wee products, including Robosapien, Roborover and Flytech Dragon Fl, are typical consumer products. In theory, for consumer products such as these robots and others, marketers can use various segmentation characteristics to describe their markets (University of Canberra, Faculty of Business, Government & Law n.d. p. 316). The following are five segmentation characteristics that can be used for such products: the consumers’ age, location, income status, social class, gender and general lifestyle. The age of the people who generally are interested in the robots is an important market segmentation characteristic. Moreover, the income levels of the people who generally tend to buy the robots indicate the specific segments of the market to which the company should market the robots. Thirdly, the lifestyles of the people who purchase the robots can similarly be used to characterise the various market segments for the robots. The age, income status and gender of the clients correspond to the demographic segmentation category. The general lifestyle of the potential clients represents the psychographic segmentation category. The location of the potential customers represents the geographical segmentation category. B9 It would be necessary for Wow Wee to use the penetration pricing strategy for its Robosapien product when introducing the product to the market. Penetration strategy in pricing is useful because it helps a company grab a sizeable market share for its new product with relative ease (University of Canberra, Faculty of Business, Government & Law n.d. p. 332). In this case, the main competitors of Robosapien are way expensive; iRobo costs $3,600 and Aibo costs $1,800 (University of Canberra, Faculty of Business, Government & Law n.d. p. 332). Thus, Wow Wee should use a relatively lower price for its product to penetrate the market. Regarding the long-term strategy, the company should use the cost-based pricing strategy for its product. Companies use cost-based pricing strategy to not only ensure that they are profitable, but also to effectively block would-be competitors (Valenzuela 2013, p. 18). What this means is that the cost-based pricing strategy may be used as a perfect complement for the penetration pricing strategy. Thus, if Wow Wee uses this strategy for its product, it will be able to fend off potential competition and maintain its competitive advantage. Moreover, using this pricing strategy will augur well with the company’s initial market penetration pricing strategy. Thus, its rivals will find it hard to reduce the prices of their products to match that of Robosapien. B12 The following groups use accounting information: shareholders, managers, creditors and government agencies (University of Canberra, Faculty of Business, Government & Law n.d. p. 441). Company shareholders use accounting information to assess the performance of their investment over time. Based on the information, the shareholders decide whether to retain their investments in a company. Similarly, potential shareholders or investors use the financial information to assess the financial health of the company and decide whether to invest their money in the company. Company managers use the company financial information to evaluate the performance of the company relative to the competition (University of Canberra, Faculty of Business, Government & Law n.d. p. 441). Also, the management team of any company relies on the financial information of the company to make strategic decisions about the future of the company (University of Canberra, Faculty of Business, Government & Law n.d. p. 442). Creditors use the information to assess the creditworthiness of a given company. Government agencies rely on accounting information to calculate the amount of taxes that any given company should pay. It follows that if these parties, who are company stakeholders, fail to get the required information, the situation may inhibit their decision-making processes. This will be detrimental to the company. For example, managers may not be able to accurately evaluate the performance of the company involved if they do not get all the accounting information that they need. Similarly, existing and would-be investors cannot make the most appropriate decisions about their investments in any given company if they do not get all the financial information that they need about the company. B13 Source Amount Loan details Personal savings $50,000 Loan from a friend(s) $100,000 No interest for 1 year ($100,000) Bank loan $350,000 10% per annum for 3 years ($455,000) Totals $500,000 - B14 Several factors were considered in arriving at the three sources of capital for the business. First, it was necessary to maintain the business as a sole proprietorship. There are many other forms of ownership that could have been used. However, all the various forms of business ownership that could have been used are associated with various pros and cons. For example, adopting a partnership form of ownership for the business could have provided more additional capital but this could mean that the owner would have to share the level of control of the business. Similarly, structuring the business as a private limited company could have provided additional capital for rapid expansion. However, adopting such an approach could have meant that the owner of the company could lose overall control of the company over the course of time. Therefore, for the purpose of retaining control over the business, it was decided that the owner uses a sole proprietorship form of business ownership. Another important factor that was considered when developing the sources of capital for the new business relates to the need to reduce the amount of money that the owner had to borrow from banks and other formal creditors. To this end, the owner had to use his or her personal savings and access personal loans from friends to minimise the amount of money that he or she had to borrow from formal creditors. References Martin, B 2006, Outdoor leadership: theory and practice, Human Kinetics, New York. University of Canberra, Faculty of Business, Government & Law n.d., Foundations of business, University of Canberra, Faculty of Business, Government & Law. Valenzuela, F 2013, Marketing: a snapshot, Pearson Higher Education, London. Watson, GE & Gallagher, K 2015, Managing for results, CIPD Publishing, New York. Read More