Organization Theories and Design - Case Study Example

Organization theories and design MHRM 516 By: Samah Albusaeedi ID: P08001007 Introduction “Industry analysis” The organization chosen for analysis will be anonymous and identified as Company X. It is a large multinational operating within the mobiles and telecommunication retail industry which is in a constant state of change. It has numerous branches worldwide and a huge number of employees. In order to be aligned with competitors, it essential to study and analyze one’s business and anticipate customers’ behavior. The organizational environment Information about the organizational environment in company X was collected through analyzing the telecom industry and through direct observation upon visiting one of the local telecom company branches. In the telecom industry, companies usually deploy open system strategies and do not operate in isolation. As a result, there are numerous factors affecting their operational environment both internally and externally. 1. Internal Environment: When it comes to the internal environment there are a lot of internal factors affecting the organization environment such as human resources, finance, and technologies. One of the main factors the plays a major role in Company x is investment in acquisition of permanent employees even when other members of this very industry are employing temporary workers. The benefit of such a strategy is that these individuals have become highly motivated and they deliver high results. (Grey 39) Additionally, this company’s managerial structures are highly versatile. Part of the reason for this is that the company frequently switches managers in one part of the world to another. Consequently, they are able to apply skills learnt from their original locations in the new ones. However, the downside to this approach is that sometimes some managers may be more suitable in one location than in another. The latter company’s internal environment is also characterized by an efficient shareholder team. It offers stock options to its employees and this has gone a long way in boosting company loyalty, productivity and overall competiveness. 2. External Environment: An external environment includes many factors that have a direct and indirect impact on the company. As a result of this fact, Company X operates within a complex telecom external business environment. Task Environment: Industry Sector: First of all, there are numerous competitors offering mobiles and telecom services, consequently, it has focused on overcoming this competition through intensive distribution, latest technologies and entertainment with high quality. Raw materials sector: Company X is growing fast in the Telecom industry and operates in many countries around the world; they deploy their time and resources in cheap raw materials and labor force through various countries especially in Asia. They found that cost will be reducing if they manufacture the mobile phones in those countries rather than exporting full equipments and devices from the mother country. As a result they built their own factory in one of the cheapest countries. This country was able to supply the producing country and its nearest branches. Technology Sector: This firm is faced with a number of technological options in its business operations. It has tried embracing these components especially when it comes to accounting and employee development. General Environment: Government Sector: Political situations have been affecting it largely because of its choice to expand into different countries. Usually, when this is done, the company has to learn the different legal hurdles that must be overcome in order to stay ahead of the pack. Sociocultural Sector: Since Company X operated in multinational countries, they have to analyze the socio cultural factors in depth in order to avoid any religious or ethical conflicts that may impede their business. As an example when the company launched a new branch in Afghanistan, they did not put women’s pictures on the marketing posters because its unacceptable among the Muslim fraternity. The organizational chart illustrating functional relationships. Information for determining the components of the organizational chart and the rest of the organizational design tasks was obtained through interviews of top managers within this company’s local branch. The head of the organization is the Company president who is then assisted by a vice president. Regional heads are expected to report to a vice and are responsible for nationwide managers. The lines of communication are further broken down into storewide managers who are responsible over each branch. Each of these branches has a factory under their management and the factory manager reports directly to the regional manager. In case of multi branches in the same country, each branch will have a national manager and both of them report directly to the regional manager. The factory manager will have separate store managers and accountants reporting directly to him in order to facilitate the exporting and product costs. Moreover he must have a worker and duty manager who are responsible for recruiting and training the factory employees. All members of staff must be aligned with the mother company’s quality standards. They must also manage the all company functions related to them. Workers and duty managers usually require shift managers to assist them in coordinating employee duty schedules and related issues. Company X has a centralized HR in the Mother Company and a financial department to control the organization’s goals and quality. Besides that, it also manages the costs and revenue. Organizational structures The company is one of the largest when it comes to size. This is because it has close to sixty eight thousand employees under its wing. In terms of the administrative and operational aspects, this company has adopted a matrix structure in which their strategy is vey focused. Usually, the company incorporates both its product and functionally based divisions so as to ascertain that they deliver on their promises. Besides this, the company has also established itself as one of the formidable forces within their industry. This is largely because it often trains its employees to handle challenges as they come along. This means that they have been empowered to offer some of the best Telecom products and services in the world. In terms of the vertical and horizontal components, each store in firm X normally has a head in charge of function and another in charge of products. Employees are expected to report to these two heads so as to foster a spirit of teamwork. In other words, their vertical system is not as pronounced as it is in other types of companies. However, the company has a very strong horizontal structure. Most workers normally collaborate with one another irrespective of the departments that they represent. The major challenge that this company has to deal with in this particular structure is the issue of power plays within the horizontal structure. At certain times, heads in charge of products may be at logger heads with those ones in charge of function. Eventually, there may be a conflict within the store and there may be difficulties determining whose word will be the final one. For instance when the sales manager requires an urgent consignment for a customer in the same region then he may conflict with the corresponding factory manager who may have to export a consignment from another regional branch. Because they have to communicate through regional managers without internal or vertical authority, they tend to take longer to make decisions making and this might have a bad effect by costing the company money. In terms of integration, Company X adopts a grouping strategy in employment and staff allocation in order to promote cultural diversity in the company. However, at the branch level, they usually adopt strategies from the original company to manage the branch and keep the company’s quality standards. There is a small degree of centralization during large scale decision making processes. This is especially the case when strategic matters are being discussed. (Gratton 39) This company has also moderately standardized its business services since there are certain stores that may possess unique products while others do not. Care is usually taken to ensure that consumer demands are met through incorporation of their cultural differences. Nonetheless, their stores have a certain degree of formalization especially when one considers their interior designs. The same can also be said of their policy on specialization. To a certain extent, the company has ensured that their employees are well equipped for the challenges that come with each job line. Overly, because the telecom industry has a large number of external elements that affect Company X, then the rapidity, unpredictability and frequency of all changes sometimes lead to a complex and unstable work environment. Comparison between mechanistic and organic structures in company X Company X would most likely fall within the matrix organization. In other words, it possesses both elements of the mechanistic and organic organization, however, the organic aspect is slightly more pronounced than the mechanistic one. This is because when one visits this company; one is likely to find a fluid structure that frequently changes with the prevailing circumstances. (Pang 112) However, since employees still have higher authorities to respect, then there are some mechanistic elements that still prevail. Appropriateness and efficiency of technology The use of technology is quite appropriate in company X. First of all, the company usually carries out their respective day to day activities through technology. For instance, they often do their inventory, book keeping and email through technology. In other words, communication costs have tremendously diminished thanks to the use of technology within this firm. Besides routine activities, company X has embraced the use of technologies in preparing their employees to carry out their duties. This is normally done through the use of commercial training software. Aside from that, the company has also embraced technology in trying to penetrate new markets. They have done this by changing the manner in which they track correspondence and requests between different types of branches. Consequently, the business has grown tremendously. However, the major drawback that has emanated out of the use of technology in this firm is declining skills development that emanate out of laziness for skill development since a huge chunk of the work is done through technology. (Reppenning 45) Analysis There are a number of situations that need to improve within Company X so as to smoothen its organizational design. First of all, the company’s rapid expansion into various locations can bring problems because there are a series of challenges that must first be dealt with when considering these respective ideas. Aside from that, the company also needs to boost its skill levels within different regional branches that may increase the coast. Communication lines between employees and staff need to be strengthened too especially given the fact that the latter organization is operating within a matrix culture. There is also a need to boost the amount of opportunities available to managerial staff within the same geographical setting. Recommendations Company X needs to match its ambitious growth strategy together with the necessary training and resources required to make expansion work. It needs to do more research prior to entering certain areas because it has been forced to close down some stores as a result of this fast expansion. Besides that, the company needs to boost skill levels by creating a strict regime for training and development. This should not just be a prerogative for employees as it could lead to minimal levels of development. Aside from that, the company needs to empower its employees to communicate with their superiors by conducting regular feedback sessions with them. Lastly, it needs to grow its employees by discussing their career goals with their employees more candidly and more frequently. (Robins 94) Conclusion Company X has a flexible organization design with some structural elements which is a suitable strategy in today’s competitive field. However, it needs to empower its employees a little more by offering them long term career goals with the company especially in the regional branches. References Pang, L. Boundary less structures. New York: Random House Business Publishers. 2002 Robins, S. Organizational behavior. London. Pearson Education Publishers. 2007. Gratton, L. Democratic enterprises. New York: Prentice Hall. 2004. Grey, C. Control, trust and post bureaucracy. New York: Sage Publishers. 2005. Reppenning, N. Understanding the dynamics of organizational innovation. London: McMillan. 2003. Read More