Organization Structure and Organization Design - Case Study Example

XXXXXXXX Number: XXXXXXXX XXXXXXXX XXXXXXX XXXXXX of XXXXXXX XX – XX – 2010 Organization Structure and Organization Design Organization Structure: a) The organizational structure is an essential aspect of every business. There have been a number of different views and notions on the organizational structures and several authors have developed theories that relate to the same (Schein). Of these Max Weber, Heni Fayol and Rensis Likert have developed theories that relate to the organizational structure and consider organizations from the management perspectives. These authors have adopted a ‘top-down’ approach in their theories. The main lesson that they explain which is relevant even in the 21st century is as discussed below (Slocum and Hellriegel). It is essential to note that the authors have provided the basic building blocks for management theories and their ideas are effective even now and this is clear from the examples like United Parcel Services which implements the ideas of the authors. The ideas form a basis for building the efficiency on automation, computerization and also scientific management principles and for relatively larger organizations ideas like the fixed hierarchy of authority, and division of labor and defined regulations still hold good in the current work environments. Hence these theories are very effective. b) Considering the centralized and decentralized structures it is essential to note the pros and cons of each style. i) Centralized approach: In terms of the centralized approach, there decision making is strong, authoritarian and in a number of cases this is also charismatic. Also here all the controls follow the top-down method hence making the execution decisive and coordinated along with being really fast as well. This method is also helpful in dealing with major issues and changes (Schermerhorn, Hunt and Osborn). However this can prove to be a disadvantage as well as the top management will not always have a clear picture of the events and working conditions in different locations and this can hence lead to issues as well. ii) Decentralized Approach: On the other hand considering the decentralized approach, it is essential to note that this method uses a bottom – up approach and concentrates on the culture and also learning dynamics (Ricky W Griffin). This method is also based on democratic and participative decision making which is very useful as it deals with all issues and tasks at hand locally without the interference of any management which is not present in the place. The decentralized business approach used in companies extends possible business opportunities for the entire business in terms of product improvement, design, research and expansion. The drawback of using this method is that it can lead to the division of authority which can lead to differences of opinions and conflicts. c) Delegation refers to a person in authority putting another person in authority for a task to transact on his behalf. This implies that the actual leader would still be responsible for all activities that relate to the task (Ricky W Griffin). The main reason a manager resort to delegating authority is to either assist in the work processes and to reduce the burden on the managers. While delegation is also done in order to help build a level of accountability and responsibility among the employees (Schermerhorn, Hunt and Osborn). Delegation does not mean shrugging away from the responsibility. This is very helpful in cases where the managers try to build a strong rapport and a more trusting relationship with the employees. There are three types of delegations namely, downward, upward and sidewise (Schermerhorn, Hunt and Osborn). Organization Design: a) Structure Follows Strategy: This concept was introduced by Albert Chandler. The author argued that strategy was the first to be developed after which structure follows. He explains that companies that follow a strategy tend to find it simpler to develop the appropriate organizational structure to be able to achieve the strategy. This went on to be accepted as a part and theory. Chandler explains strategy as, “the determination of the long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out these goals” (Strategic Management: An Overview). Any changes in the strategy are mainly due to the changing environment and the changes in the choice of people. It is essential to note that the company owners need to keep this in mind and it is essential that a lot of care is taken while deciding the structure as the strategy is one which keeps changing from time to time (Strategic Management: An Overview). Hence it is essential that the strategists take their time and choose their people well. Alfred also explains that the structure although an important aspect of the company is based on the strategy of the company (Slocum and Hellriegel). Strategists need to keep in mind contingencies like the external environment, the possible changes to the strategies. This is simply because the strategies tend to change with time and it is essential that the structure of the company is strong to be able to withstand any changes (Schein). Hence it is for the strategists to ensure that this is taken care of the structure is built strong so that the organization is able to grow strong and face any changes in the environment and also internal changes. Hence the contingencies need to consider the possible changes and need for changes in the future and then make informed decisions on the development of the structure of the company. b) Bobbit and Ford’s Strategic Choice Model: As explained by Griffin and Moorhead strategic choice model is, “The integration of the structural imperative approach to organisation design with the strategic approach takes into account the role of the manager, whose perspective on contextual factors and the organization, along with personal preferences, values, and experience, help determine the structure of the organisation” (Ricky W Griffin, p. 446). The Strategic Choice Approach to Organization Design (Ricky W Griffin) This theory also explains that the manager’s choice for the structure of the organization is mainly impacted by the strategy being adopted by the company. Another important aspect that also affects the choice of the managers is their personal value choice. Here this is one of the mentioned perspectives. Another perspective is also that the relationship between structure and strategy is reciprocal. This simply implies that the “the structure may be set up to implement the strategy, but the structure may then affect the process of decision making” (Ricky W Griffin). When such a thing occurs then there is also a decision which is impacted, i.e. whether to be centralized or decentralized and also other aspects like the formulation of the rules and regulations of the business. Hence it is clear that both structure and strategy are closely related and have a major impact on the business as well. Works Cited Ricky W Griffin, Gregory Moorhead. Organizational Behavior: Managing People and Organizations. Mason: South Western, 2010. Schein, Edgar H. Organizational Culture and Leadership. Jossey-Bass, 2004. Schermerhorn, J.R., J G Hunt and R N Osborn. Power and politics organizational behavior. Chapter 12: Power and Politics. New York: John Wiley & Sons, Inc., 2005. Slocum, J W and D Hellriegel. Fundamentals of Organizational Behaviour. USA: Thomson South-Western, 2006. Strategic Management: An Overview. 2010. 26 August 2010 . Read More