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Quality Structure Organization

According to the Robbins and Barnwell (2002), an organization is a consciously coordinated social entity, with a relatively identifiable boundary, that functions on a relatively continuous basis to achieve a common goal or set of goals.

Edunburgh Elevator Co., LTD. (Edunburgh Company) is an integrated multinational company which includes R&D, manufacture, sales, installation and maintenance. This company was established in 1997, the headquarters are in Shanghai, China. The company is located at Pujiang industry zone, Shanghai, around 30 acres manufacturing plant which involves manufacturing, testing, R&D centre and distribution center, which is more, this company has some 60 meters height multi-controlling elevator experiment tower, automatic escalator production line and professional measure and testing, mechanical manufacturing facilities. Currently, Edunburgh Company produces around 10,000 uprightness elevators, around 1,000 escalators and also it produce about 10,000 car parks solid parking facilities per year. Our products are mainly sold to Chinese Mainland, but Europe, Middle East and South Asian countries as well.

As same as other elevator companies, Edunburgh Company contains manufacturing plant, electronic assembly plant, painting plant, measure and testing plant, packing plant, delivery plant, standardized components inventory and outsourcing inventory. In addition, our company has several departments such as Sales, HR, Production planning, R&D, Manufacturing, and After- Sales. Edunburgh has a very successful way on its organization structure. Moreover, it is becoming a famous Top 10 elevator company in China with its developing design and sales strategy.

I have worked in this company for one and half year, in this assignment, I will describe the company's organization structure, Mintzberg's theorem in Edunburgh, how organization's structure facilitates its goals, the merits of four approaches to organizational effectiveness and the significant structural problem in Edunburgh.

2.0.0 Edunburgh's organization structure

According to the website, the definition of organization structure is a mostly hierarchical concept of subordination of entities that collaborate and contribute to serve one common aim. Organizations are a number of clustered entities. (http://www.conceptdraw.com/en/products/cd5 06/08/08).The structure of an organization is usually set up in one of a variety of styles, dependent on their objectives and ambience. The structure of an organization will determine the modes in which it shall operate and will perform.

Figure 2.0.1 Eduburgh's organization structure

In the Edunburgh Elevator Company, the organization structure is divided by 18 departments, which are Legal (service), Marketing, Sales, Contract, General services, HR, R&D, Planning and Control, Quality, Data Room, Installation, Maintenance, Suppliers Management, Financial, After Sales, Logistics, IT and Manufacturing Department.

In this company, it has the different relationship between each department. It should be the cause and effect or step by step relationship, such as Marketing, Sales and Contract department. The function of Marketing department is to search and exploit the markets or new customers. Sales department continues to sale the elevator products to customers who require and satisfy the products, after that, Contract department responsible for signing contract between company and customers. Moreover, it is also a step by step relationship from R& D department design the elevator products to delivery the final products through Logistic department to customers.

The organization structure can be divided into three components, which are complexity, formalization and centralization.

Complexity is the extent of differentiation within the organization. Complexity can be measured in the following three factors: Horizontal differentiation, Vertical differentiation and Spatial differentiation. First, Horizontal differentiation is to consider the degree of specialization or division of labor. For example, what is the function or responsibility of engineers, team leaders, managers and workers in the organization? Second, Vertical differentiation is the number of levels in the organization's hierarchy, for instance, in Edunburgh Company, there are four levels in the organization's hierarchy, the top level is the General Manager office (Boss), the second level is the president level, such as the Marketing and Sales president, the third level is department, the last level is branch department. The final aspect is Spatial differentiation which to include the extent to which the organization's units are dispersed geographically. For example, the assembly workers work in the Electronic assembly plant, the location of Sales department is on the level two in the company and the location of welding machines in the manufacturing plant in Edunburgh Company.

Formalization is another component in the organization structure. It refers to the degree to which jobs and procedures within the organization are standardized. The jobs are standardized can also be considered by rules, which means they tell employee what they should or should not do, moreover, the rules is the strict regulation in company. The procedures are a sequential steps or process which workers should follow in order to achieve their jobs. Also the procedures are established to ensure the standardized work processes. In the Edunburgh Company, it has the standardized rules, for example, the work regulation for elevator installation, the CNC using regulation and elevator electronic components testing and measuring regulation. Furthermore, the Edunburgh Company also has the standardized procedures, for instance, the elevator installation procedures and painting procedures in the painting plant.

According to Robbins and Barnwell (2002), Centralization is the degree to which the formal authority to make discretionary choices is concentrated in an individual, a unit or a level (usually high in the organization), thus permitting employees (usually low in the organization) minimum input into their work. Centralization only can be concerned in the formal structure. Generally, the organization structure is more formal when an organization utilizes lot of rules and regulations. In the Edunburgh Company, there are two different methods for decision making, centralization and decentralization. In the most of departments, the decision making on the top level, general it is decided by the department managers or the boss. In some special cases, some activities of decision making should be controlled by the employees, such as when the employees who work in the Marketing and Sales departments deal with the marketing activities.

3.0.0 Mintzberg's theorem in Edunburgh

Edunburgh Company has the advanced research and design technologies and also it has the developed management experience in the elevator manufacturing field. As I mentioned in the first part of my assignment, there are four levels in the Edunburgh organization structure. This is due to its own management structure. For the most of departments, it is centralized decision making.

According to the website (http://www.12manage.com/methods_mintzberg_configurations.html 06/08/08), the professional bureaucracy relies for coordination on the standardization of skills and its associated design parameter, training and indoctrination. It has the following characteristics, standardization with decentralization, professional expertise, knowledge explosion, multi skilled and social specialization rather than functional.

Machine bureaucracy can be another style in the organization design options. It includes the highly routine operating tasks, formalized rules and regulations, tasks grouped by functions, centralized authority, decision making follows chain of command, large administration staff and line and staff sharply defined. In the Edunburgh Company, it is the Machine bureaucracy. It has the highly routine operating tasks. For example, in the manufacturing plant, there are several CNC machines which should be operated by three work shift everyday. Moreover, the company also has he formalized rules and regulations, such as the regulations for the CNC daily maintenance. The tasks grouped by functions, there are some different tasks in the CNC machines according to their functions, such as the different tasks on cutting and welding machines. Furthermore, in the Edunburgh, the authority is centralized and also there are a lot of administration staffs works in the different departments.

Figure 3.0.1 Five basic parts of the organization

http://www.12manage.com/methods_mintzberg_configurations_zh.html 07/08/08

According to the Robbins and Barnwell (2002), Mintzberg argues that there are five basic parts to any organization which are the operating core, the strategic apex, the middle line, the technostructure and the support staff. The operating core is employees who are the basic elements working in the production of products and related services. In Edunburgh Company, it has different responsibility of employees, such as the manufacturing workers who work in the plant, the design engineers who work in the R&D department. The strategic apex is the top level managers. In Edunburgh, there are one boss and several deputy managers who responsible for the whole organization. The middle line is the managers who connect the operating core to the strategic apex. In the Edunburgh Company, there are several department managers who deal with the connection between the employees and top level managers. The technostructure is the analysts who have the responsibility for effecting certain forms of standardization in the organization. In the Edunburgh, it also has some analysts who work in the marketing department to handle the certain forms of standardization. The support staff is the people who can provide the indirect support services for the organization. In the Edunburgh Company, it has some support staff that can supply the indirect technical services.

4.0.0 How Organisation's structure facilitates its goals

In the Edunburgh Company, it has eighteen departments. Each department has its own function and responsibility. During the last five years, the company's revenue increased dramatically. The main reason is due to the organization's reasonable structure.

It has the reasonable organization structure in Edunburgh Company, form the marketing investigation which related to the customers requirement to the manufacturing process, finally, delivery our elevator products to customers. The follow parts will illustrate more details about how the Edunbugh Company's organization structure facilitates it goals.

Different organizational functions need to be evaluated using different characteristics. Moreover, the effectiveness must consider both the mean focus and ends focus. For the mean focus, it is the processes, for the end focus, it is the outcomes for each phase. In the marketing and sales phase, the sale engineers focus on the marketing investigation with customers need to determine what kind of elevator do customers really require. After the selling process, R&D engineers design the elevator product according to the previous customer's requirement, and then the blue print is transferred to the manufacturing plant to produce. Quality department is to test and inspect the elevator products whether under the quality control. After the quality testing, the eligible elevator products are delivered to customers. The most important strategy is the after sales services, which means, customers could get guaranty or services when the elevator products have quality issues after they purchasing. Good products quality and good after sales services is the key to success in the Edunburgh Company.

5.0.0 The merits of four approaches to organization effectiveness

According to Robbins and Barnwell (2002), they list four key approaches to considering organizational effectiveness, which are Goal Attainment, Systems Approach, Strategic Constituencies and Balanced Scorecard. Each has particular benefits and suits particular situations and may meet the interests of specific stakeholders (EM520/MANU1373 BUILDING QUALITY ORGANISATIONS P49).

Goal Attainment approach an organization's effectiveness is appraised in terms of the accomplishment of its goals. The merits of this approach are to achieve profit objectives or meeting budgets, achieve certain quality outcomes, help a certain number of disadvantaged people, attain health objectives or wining a sports competition. In the Edunburgh Company, it has a department to analyze the annual profit in order to identify whether achieve profit objectives or meeting budgets. This approach can reduce the cost waste. For the quality outcomes, the quality department test and inspect the products especially for the damageable components in order to improve products quality.

According to the Robbins and Barnwell (2002), Systems approach evaluating an organization's effectiveness by its ability to acquire inputs, process the inputs, channel the outputs and maintain stability and balance. The advantage of system approach is to improve the long term survival of the organization. For example, the organization's ability to acquire resources, maintain itself internally as a social organization and interact successfully with its external environment. In the Suppliers management department in Edunburgh Company, systems approach is utilized to keep a long time to contact with suppliers, and acquire the resources at first time.

The Strategic-constituencies approach is another approach of the organizational effectiveness. Strategic-constituencies approach proposes that an effective organization is on that satisfies the demands of those constituencies in its environment from which it requires support for its continued existence. In the Edunburgh Company, it focuses on the different customers with different requirement. According to these requirements, the company provides the different model of elevator products for the customers.

Balanced Scorecard seeks to balance the various demands on the organization with its capabilities.

It can be measured into the following four perspectives, which are Financial perspective, Customer perspective, Business process perspective and Learning and growth perspective. The benefits of the balanced scorecard are focusing the whole organization on the key things needed to create breakthrough performance, helping organization to deal with project plans such as quality management, workflow recombining and customers services plans, another benefit for the balanced scorecard is to break down the strategy, so that the department managers and normal staff clearly understand what are the requirement of different positions according to the excellent organization performance. In the Edunburgh Company, it has used the Balanced Scorecard since the company was founded. In the Financial department, the Balanced Scorecard is used to monitor the present performance especially for the financial performance. In the After Sales department, the Balanced Scorecard is utilized to monitor the importance of customer focus and customer satisfaction. Moreover, the Balanced Scorecard is used to carry out business process in the Marketing and Sales departments also it is used to determine the staff training and corporate cultural attitudes related to both individual and corporate self improvement in the HR department.

6.0.0 The significant structural problem in Edunburgh

Even through the Edunburgh Company has a very good organization structure and the company's benefits increase every year. It still has some problems in the structure. These problems could lead to the resource and cost waste, and also decrease the working efficiency. The significant structural problem in Edunburgh Company is the department function conflict.

In the present organization, the Marketing department and Sales department are functional separated. Notwithstanding they are separated departments, they still have the same function when sometimes dealing with routine tasks. For example, the function of Marketing department is to develop new market, and also search the new customer's requirements or concepts. The function of Sales department is selling elevators to customers. Actually, the employees who work in the Sales department sometimes do the same function job which to search the new elevator market. Furthermore, there is less communication between Marketing department and Sales department. So they always do the same job between Marketing and Sales department.

As same as the marketing and sales departments, R&D department and Planning and Control department sometimes handle the same issue, such as the elevator configuration. This could result in decreasing working efficiency.

The best solution to deal with those problems is to adjust the organization structure, which is to combine the Marketing department with Sales department to be a new department to fulfill the market investigation and selling the elevator products. As same as the Marketing and Sales department combination, the R&D department should undertake some tasks such as elevator configuration in order to decrease department function conflict.

7.0.0 Conclusion

In this assignment, I illustrated the organization structure in the Edunburgh Company, the description of each element and their relationship between each of element. According to the analysis, it is clear that how Edunburgh Company has complexity, centralization and formalization components.

In addition, Edunburgh Company is a Machine bureaucracy company. It has the advanced R&D technologies and also developed management experience in the elevator manufacturing field. Moreover, there are four approaches are used to organizational effectiveness in the company, which are goal attainment, systems, strategic constituents and balanced scorecard. They are the keys to success in the Edunburgh Company.

Although Edunburgh Company is a successful elevator company in China, it still has some department function conflict such as the repeated working between Marketing department and Sales department in its organization structure. In my point of view, Edunbugh Company should change the organization structure, such as combination the Marketing department with Sales department as a new department in order to improve the working efficiency.

8.0.0 References

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