Structural Issues to Be Considered by the Two Merging Organizations - Coursework Example

Title: Management Student name/ id: Supervisor name: Institution: Date submitted: 27th August, 1023 Introduction A structure, according to Scott & Davis, (2007), can be defined as a framework which organizes a certain group of people and which enables them to function efficiently. According to Scott & Davis, (2007), the structure of an organization describes how leadership is arrived at, recruitment of staff, division of labour, flow of information, research and development, the various departments and the kind of approach that is employed in decision making within the organization. An organization can be defined as a group of people who work interdependently in order to achieve a certain goal (Scott & Davis, 2007). Organization structure therefore can be defined as the division of labour, the patterns of coordination, communication, workflow and the power that direct organizational activities (Scott & Davis, 2007). Scott & Davis, (2007) further states that, in other words, it is the organization structure that determines the shape of the organization. The process of developing the organizational structure is referred to as the organizational design (Scott & Davis, 2007). The elements of organizational structure include the various tasks assigned to individuals; joining individuals to form units, units to form departments, departments to form larger units in the hierarchy of management; and the approaches used in the management i.e. either the vertical approach also known as top-bottom approach or the across or called the horizontal approach. The importance of having an organization structure is that it helps the members in solving conflicts as well as maintaining order, serves as an identity to the organization, determines coordination of affairs and sharing of tasks as well as determines how the future of the company will most likely be (Morrill, 1991). According to Morrill, (1991), an organization should develop an organization structure at the start of its life i.e. when it is beginning. The elements of an organization structure include the body that governs that organization, the various rules that are going to govern its operations and a breakdown of tasks/ the division of responsibilities among the members. Structural Issues to Be Considered By the Two Merging Organizations A strong organization structure in a company helps it to have improved communication and unity within the company (Waddel, Devine, Jones, George & Jennifer, 2007). However, an organizational structure can create problems which can lead to decreased productivity/ low performance or conflicts (Waddel et al, 2007). According to Waddel et al (2007), identifying these problems and dealing with them immediately is therefore important to maintain a strong organization structure of the company. The new organization will therefore need to invest more time in identifying possible source of conflicts and come up with a strong problem solving mechanisms in order to settle on a strong organization structure. For example having several departments may create problems within the organization. The different groups in the various departments may always have conflicts due to the mentality of competition and forgetting the core mission of the company. Each department therefore feels that its work is more relevant than the others or they deserve more resources than the others which can cause breaks in communication and poor coordination leading to low productivity (Morrill, 1991). The two companies that intend to merge will have to consider their differences in management style, leadership and decision making approach (Morrill, 1991). Morrill (1991) further argues that the partners of the new organization will also have to consider their new strategic plan and goals of the organization. This will therefore call for new management, new employees and new organizational structure. If the company is new, then the company will tend to settle on a new management system. This can also strain the organizational structure since it is a first trial with the partners each having his/her different idea of carrying it out. This will bring confusion which will lead to decreased organizational productivity. There therefore should be consultation which should also feature in goal making (Morrill, 1991). Role of Organizational Structure in Its Efficiency and Effectiveness Bartol, Tein & Sharme, (2008) defines organizational effectiveness as the extent of the organization meeting its goals and objectives. Efficiency of the organization on the other hand is the ability in which the organization succeeds in its task by using the minimal resources possible (Bartol, Tein & Sharme, 2008). According to Bartol, Tein & Sharme, (2008), the effectiveness and efficiency plays a part in the success of the organization. Other factors that need to be put into consideration are the social factors of the partners which include the power, prestige and the status of the management which can bring about difficulties in sharing information and resources, different approaches towards the functions and communication barriers (Bartol, Tein & Sharme, 2008). Bartol, Tein & Sharme (2008) further states that the organizational structure depends on its objectives as well s the long term goals. Choosing an Organizational Structure for Indigo Company Before settling on a specific organization structure, the partners involved will have to consider the formality as well as the functionality of the company (Scott & Davis, 2007). The partners will therefore have to decide on the organizational structure that is fit to achieve the goals by making a decision internally and thinking about it critically to arrive at a common choice. Organic vs. mechanistic organizational structure Organic structure is a form of organizational structure that is characterized by least hierarchy and specialization (Bartol, Tein & Sharme, 2008). This form of organizational structure is also known as organistic organizational structure. In this form of organization structure, the decision making is decentralized hence the management need to adapt to changes within the internal as well as the external environment. Decentralization means that major decision making is distributed from top to bottom and across all departments hence the top executive does not have to be the one involved in the decision making of the organization (Waddel et al, 2007). The two merging organizations will therefore need to adapt to changes in the market quickly, all workers also have equal levels, no job description and the organization thrives on the basis of relationships and personalities. This is the most adaptive form of organization structure since it can react to changes in the environment. Decision making arises from needs that are felt by members, discussed and propose changes. There is a lot of team work in such kind of structure since the organization will take into consideration the views of the partners. The limitation of this structure is that it will require cooperation and both parties must be ready to adjust. Mechanistic structure uses a centralized approach and maintains strong loyalty in management. Centralization is where the major decision authority is the top executive (Bartol, Tein & Sharme, 2008). Junior staffs therefore do not contribute to issues that affect their organization. Unlike the organic structure, mechanistic structured organizations will not need any adaptation and changes due to no need to quick decision making, lack of creativity and innovation. Members of such organizations therefore have to maintain a lot of loyalty and obedience towards the management (Bartol, Tein & Sharme, 2008).  Indigo group is a new company that will be started by merging the two organizations. Therefore it will be better structured through the organic structure. This is because of the unstable environment and the need to adapt to several changes accordingly. Decision making within the new company will also be through consultation by the two partners. The new company will use a decentralized form of structure hence they will encourage lower rank employees to contribute in decision making and this will lead to more creativity and innovation. The organization will therefore end up developing new products. This organizational structure will also encourage open communication and contribution of tasks. The managers will also view the problems facing their organization from a broad perspective as compared to when they are the only people involved in evaluating the organization’s effectiveness and efficiency. The best structure for indigo organization will highly depend on the external environment. The external environment is the surroundings outside the organization. These may include government, the suppliers, the resources, information and the competitors. Product structure vs. market structure vs. geographic structure A product structure is a structure in which the management has set a specific division and organized activities and functions in that division to handle a specific product line (Scott & Davis, 2007). This division is usually complete with its own departments which include research and development, finance marketing etc. The advantage of this is that it allows for specialization which there after leads to expertise. The division will therefore lead to faster delivery of products and also at a lower cost. The managers in these divisions will therefore invest most of their time in creating the best improving on the strategy which helps in increasing the efficiency as well as effectiveness. Geographic structure is the organization structure that divides into divisions based on the geographic locations e.g. different regions, provinces, cities etc. this comes as result of expansion of the business hence the need to split the management. Market structure on the other hand is the organization structure that has segmented market based on the targeted customers and is elf contained in terms of management. These may include low class customers, middle class customers and high level customers (Bartol, Tein & Sharme, 2008). The product structure will be highly recommended for Indigo Company since it is a new organization. It can therefore start with having different product lines and setting a management for the different divisions. However, it can later advance to market and geographic time after expanding its business. Effect of Technology on the Organizational Structure Technology can be defined as the work that an organization performs (Scott &Davis, 2007). This means that technology is not limited to the hardware used in performing the work but also the skills, knowledge and the arrangement of the physical devices and the human resource (Scott & Davis, 2007). Scientific development has led to technology changes in terms of function and form hence growth of the organization in terms of innovation. Organizational structure should be designed in a way to reduce uncertainty, deal with complexity and enhance coordination of tasks (Scott &Davis, 2007). Technology therefore plays a role in organizational structure since the uncertainty; complexity and coordination are all dimensions of technology. Therefore the organization will require being flexible to accommodate these dimensions. The relation between technology and structure is determined by social-cultural factors (Barley, 1990). By the two interested parties/organizations looking at the different forms of organizational structure, the conclusion is that as complexity increases, technology becomes more advanced (Scott & Davis, 2007, p131; Barley, 1990). As technology is advanced, the division of various tasks within the organization will be more complicated but the organization will expand their boundaries (Scott & Davis, 2007). Scott & Davis (2007) further argues that as the organization structure expands, it is more preferable to its complexity, network flow as well as centralization of its activities. Conclusion An effective organization considers five interrelated components. These include: leadership, decision making and structure, people, work processes & systems and culture. The indigo organization will therefore have to consider these components, align them with one another and also align them with the strategy and structure of the organization in order to come up with a strong organization structure, increase the organization’s effectiveness and efficiency hence increase its performance and productivity. The top management in indigo company will therefore need to seek a balance between decentralization and centralization form of authority. The factors to consider in order to work towards increasing on the organization’s effectiveness and efficiency are to have a stable environment, use of top technology which is well known to the users and production of quality products (Barley, 1990). References Barley, S, (1990). The alignment of technology and structure through roles and networks. Administrative Science Quarterly, Vol. 35:61-103. Bartol, K, Tein, M & Sharme M B, (2008), Management of pacific focus, Boston, Mc Graw Hill Morrill, C, (1991), Conflict Management, honor and organizational change. American Journal of Sociology, Vol. 97:585-621. Scott, W.R. and Davis, G.F. (2007). Organizations and Organizing: Rational, Natural, and Open System Perspectives. Pearson, Upper Saddle River: NJ. Waddel, D, Devine, J, Jones, George, Jennifer, (2007), Contemporary management, Boston, Mc Graw Hill Read More