Organizational Design of Bega Cheese - Case Study Example

Organizational Design Name Institution Date Course Organizational Design Case Study: Bega Cheese Introduction Organizational design plays a significant role in determining how an organization will be able to achieve its core qualities as outlined in the vision of the organization. The design is also important in terms of providing an infrastructure for deploying the business processes. The success of the organization is dependent on its design. This is considering that it outlines how the operations are carried out within the environment. The relationship between the management and the employees is also determined by the organizational design. Different types of organizational designs are in place depending on the goals and objectives of the organization (Etzioni-Halevy, 2010). An organization can also be mechanistic or organic depending on how it carries outs its operations and its structure. A mechanistic organization is mainly associated with rigid hierarchy and rules which makes it more bureaucratic. On the other hand, an organic organization is characterized by high levels of flexibility and low levels of formalities and hierarchies. Bega Cheese is the leading manufacturer of cheese in Australia and it has been in operation since 1889 (Bega Cheese, 2014). The organizational design of the company has played a vital role in contributing to its success. The company has various manufacturing plants mainly in the rural areas and it works alongside the local people in the countryside. The public image of the company is exceptional due to its organizational design. This paper critically discusses the position of the company in terms of mechanistic-organic continuum. Discussion Bega cheese should be positioned in the middle within the mechanistic-organic continuum. This is because the company displays some of the characteristics of an organic organization as well as those of a mechanistic organization. The company usually produces an excess of 200,000 tonnes of carious products every year. This is an indication that the company is involved in the mass production of its products which is a characteristic of a mechanistic organization in the mechanistic-organic continuum (Mawritz, 2010). However, despite the mass production of its products, the company also emphasizes on the quality of its products for the purposes of ensuring that the customers are satisfied. The insistence on quality is a characteristic of an organic organization in the mechanistic-organic continuum and hence an indication that the company is position between in the mechanistic-organic continuum. The company has a high level of automation for the purposes of ensuring that it is able to produce high amounts of it products. On the other hand, the company has also put in place measures to ensure that its products are able to meet the required standards. This has played an essential role in ensuring that the company is able to maintain high quality during the production process and hence satisfying its customers. It is important to note that the high emphasis of the company on both the quality and quantity of the products is an indication that it has the characteristics of both mechanistic and organic organization. It is due to this reason that the company has been able to meet the demands of the customers over a long period of time. The company has been in operation since 1889 and a lot of changes in the market have been taking place since then. The company has been able to meet the demands of the customers over the years due to its ability to adapt to the change. This makes it adaptive which is an important characteristic of an organic organization. The company has the abilities to respond to the changing demands in the market. This is also considering that the company has been operating in different continents including Asia. Different markets have different demands and the company has been successful in meeting the demands in all the markets that it operates and hence it’s high addictiveness which is an important characteristic of an organic organization. The company also displays a mechanistic characteristic in terms of its efficiency which is usually is high (Schroeder, 2014). High levels of efficiency are associated with mechanistic organizations. Despite the difference in demands in the different markets, the company has been able to maintain a high level of efficiency in terms of production and customer satisfaction. This therefore places the organization between the mechanistic and organic in the mechanistic-organic continuum. It is also important to note that the company has been able to maintain a high level of discipline in terms of its financial resources. This has played an essential role in ensuring that it is financially stable. High capital and cash management is important and also common in mechanistic organizations. The level of formalization in the company is also low which is an essential characteristic of an organic organization is. At Bega Cheese, the level of formalization is quite low. This is because the employees are usually encouraged to interact freely with the members of the management. On the other hand, the staffs who work with the farmers interact with them directly. This is considering that the farmers are important stakeholders of the company. Five of the board members of the company are also farmers and this includes the executive chairman. The low level of formalities is also important in ensuring that the employees are able to consult the managers freely (Schroeder, 2011). This is an important factor that has contributed to the good performance of the company. The low levels of formalization have also played an important role in ensuring that the employees can freely interact with the farmers and the local community. The working behavior of the employees is however governed by instructions or decisions from the superiors. This is an important characteristic of a mechanistic organization. The decision from the superior is for the purposes of ensuring that the employees perform their functions effectively or as required. This is also for the purposes of ensuring that errors are reduced during the operational processes. Although the employees usually consult their superiors from time to time, the have to follow the decisions that have been made by the superiors and hence making the organization mechanistic. The organization therefore displays both mechanistic and organic characteristics in terms of its operations and interactions. At Bega cheese, more insistence is placed on the internal knowledge and skills as opposed to the external knowledge. During the recruitment process at the company, most of the careers are usually advertised internally. This is an indication that the company prefers working with the people within the organization as compared to hiring employees from the wider job market. This is therefore an important characteristic of mechanistic organization. The mechanistic organizations prefer developing the talents internally. This reduces the chance of carrying out the external recruitment and hence the relying on the employees of the company to fill up any vacant position (Jones, 2010). This is also an indication that the company prefers the employee loyalty and hence the reason for recruiting the internal candidates to fill up different vacant positions. On the other hand, it is also important to note that the company is highly innovative. It also encourages its employees to be innovative when carrying out their duties. The commitment to the task is also valued with in the organization and hence the high levels of innovations in the company. This is associated with an organic organization as innovations are important in ensuring that the organization is able to meet its goals and objectives. The company also contributes to innovations in the dairy industry by providing innovative ideas to the local community and the farmers. Through the high levels of innovations within the company, it has been able to meet the demand of different segments of customers. In terms of the decision making process, the management is highly involved. This makes the organization highly centralized which is an important characteristic of a mechanistic organization. Most of the decisions within the organization are usually made by the board. This is for the purposes of ensuring that uniformity is maintained throughout the production process in the different manufacturing plants. On the other hand, it is also important to note that the levels of centralization within the organization is for the purposes of ensuring that the authority is in full control of the operations at the company. High levels of centralization within an organization promote bureaucracy and it may have some negative impacts on the organization (Ramezan, 2011). This is because the employees may feel that they are not part of the company. The level of complexity in the organization is also high. This is because the organization is involved in the manufacture of different products. The company produces about 100 different brands which are consumed by the customers. The high level of specialization within the organization is also important in terms of increasing the complexity of the organization. The company has been able to establish control in terms of the manufacturing process through the high levels of centralization. The success of the organization can therefore be attributed to its policies with regards to decision making by the authority. The high levels of centralization have also enabled the organization to make proper decisions with regards to the finances of the company. Most of the employees of the company are satisfied with their jobs. This is due to the initiatives tat has been pout in place by the company to ensure that job satisfaction is achieved. It is also important to note that the company has about 1600 employees who are mostly from the local community where the organization operates. The company understands the needs of the employees and hence the high levels of job satisfaction and low turnover rates. The high level of job satisfaction is associated with organic organizations. A lot of professionalism is also maintained by the management when dealing with the employees. This has thus impacted positively on the company and it has also encouraged the employees to be innovative. The level of stratification in the organization is however, high which is an important characteristic of a mechanistic organization (Lam, 2011). In a mechanistic organization, the salary range of the executives is much higher as compared to that of the low level employees. Prestige is also high among the top executives in a mechanistic organization. Although the company pays wits employees well, the top members of the management receive a much higher salary. This makes the organization more mechanistic as compared to being organic. The difference in status is usually created when there is a high level of stratification within the organization. The company has been able to retain its employees due to the characteristics of an organic organization that it has portrayed which has contributed to the employee satisfaction. Implications for managers The survival of the organization in the long term is dependant on the organizational design. Since the organization is positioned in the middle within the mechanistic-organic continuum, the mangers should be more involved in the decision making with regards to the operations of the company. Allowing the mangers to make decision will play important role in ensuring that tasks are accomplished within a shorter period of time (Yang, 2011). On the other hand, the managers will be in a position to ensure that that the communication process with the managers is enhanced. The decision making process by the managers plays an essential role in determining the long term survival of the company. This is because it will determine its efficiency. The influence of the decision made by the manager on the other employees is also important in terms of determining the survival of the company in future. This is considering that the organization requires a lot of loyalty from the employees. The future of the company is also dependant on the employees since the company relies on the internal recruitment process to fill any vacant position within the company. The decision of the managers regarding the performance of the employees is thus influential to the organization in terms of determining the employees who requires promotion and hence determining the future leadership within the company. The efficiency and effectiveness of the organization will also be dependant on the decisions made by the managers since the company is highly centralized. Since the company has both the mechanistic and organic characteristics, the organization of the work is carried out by the managers in order to ensure that the aims and objectives of the company are met. The long term survival of the organization is dependant on how the communication flows within the organization. This is important in determining the relationship between the managers and the employees and hence impacting directly on performance. Vertical communication is used in the organization and this means that the information flows from the managers to the employees. The communication process has to be enhanced in future for the purposes of ensuring that the employees obtain information within a short period of time. This will play an essential role in ensuring that the employees are aware of the goals and objectives of the company. The communication process will thus enable the managers to ensure that the performance of the employees is aligned to the future goals and objectives of the organization and hence impacting positively on the future of the organization. The motivation of the employees is important in ensuring that their performance is improved (Auh, 2010). This is considering that the managers on the organization are responsible for the motivation of the employees. It is thus important for the managers to ensure that the employees are empowered in order to improve on their performance. Since the company has flexible characteristics, empowering the employees will be important in ensuring that their future performance is improved. Conclusion In conclusion, it is evident that the company is position between a mechanistic and organic organization in the continuum. This is because the company has both the characteristics of an organic and mechanistic organization. The characteristic of an organic organization plays an important role in ensuring that the company carries out its operations in a professional way. The mechanistic characteristic on the other hand plays an important role in ensuring that the authorities in the company are in control of the operations. It is also evident that the company has a good relationship with the stakeholders due to the high levels of professionalism that is usually maintained within the organization. The position of the organization in the mechanistic-organic continuum also has some implications on the managers in terms of ensuring that the company is able to survive in the long term. The position of the company has major impacts on the decision making process by the managers in the organization. This is for the purposes of ensuring that organization is able to respond to any future challenges. On the other hand the managers are required to enhance its communication process to improve on its long term survival. It is evident that the organizational design is important in ensuring that the operations of the company are carries out in an effective manner. References Auh, S. (2010). Development and return on execution of product innovation capabilities: The role of organizational structure. Industrial marketing management, 39(5), 820-831. Bega Cheese. (2014). Bega Cheese tastes victory. Retrieved on 13 August 2014 from, . Etzioni-Halevy, E. (2010). Bureaucracy and democracy. New York, NY: Routledge. Lam, A. (2011). Innovative organizations: structure, learning and adaptation. In Paper presented at the DIME Final Conference (Vol. 6, p. 8). Mawritz, M. B. (2014). Transformational leadership, psychological empowerment, and the moderating role of mechanistic–organic contexts. Journal of Organizational Behavior, 35(3), 413-433. Schroeder, R. G. (2011). Organizational structure and continuous improvement and learning: Moderating effects of cultural endorsement of participative leadership. Journal of International Business Studies, 42(9), 1103-1120. Jones, G. R. (2010). Organizational theory, design, and change. Pearson. Ramezan, M. (2011). Intellectual capital and organizational organic structure in knowledge society: How are these concepts related? International Journal of Information Management, 31(1), 88-95. Yang, H. J. (2011). Organization structure, competition and performance measurement systems and their joint effects on performance. Management Accounting Research, 22(2), 84-104. Read More