The issues of Organization and strategy
An organizational structure is the hierarchical concept in entity’s subordination which collaborates in an attempt to attain a defined goal. In this concept, entities are classified into clusters. Organizations differ in their structural styles, based on defined objectives and ambitions. Structure is the concept that allows for responsibilities allocations among varied processes and obligations to the varieties of entities such as workgroups, individuals, branches or even departments (Maguire 2003, p. 143). For example, when allocating responsibilities to individuals, considerations are given to work orders, time limits, permanent employments, program orders or work contracts. Organizational strategy on the other hand involves creation of value in the customers’ eyes, sustenance and building of strong standpoint within the market.
Organizational structure being a formal system assigned with the responsibility of controlling, coordination and motivation of an entity’s employees, it enhance corporation in attainment of organizational goals. Effective organizational structures and a well planned strategy leads to timely delivery of set obligations. Structures need to be altered frequently to enable adept flexibility and creativity mainly associated with innovative organizational strategy. Interrelating organizational structure and strategy allows proper delivery of services among the employees, resulting into satisfying performances. Organizational structures have evolved from those of ancient days, consisting of hunters and gatherers, via clerical and royal power structures to industrialized structures and lastly to modern post-industrial structures. The final elements of an organization strategy focus on the objectives, goals and initiatives of the entire organization. When structures are being implemented, the strategy used need to articulate the entity’s ability to achieve its objective driven goals. A strategy must be defined in away that it easily clarifies the perceived direction, by aligning the available resources defined organizational accountability procedures. There are different types of structures such as pre-bureaucratic structure, characterized by responsibilities’ standardization and high centralization. It’s paramount to note that structures are common within smaller organizations, normally useful for simple assignments (Punnett 2004, p. 126).
Pre-bureaucratic structures’ key decisions and most communication are done by the organization’s top leaders. Responsibilities lie mainly on the executives who manage growth and development of the organization. Such structures possess great charismatic or even traditional domination. Literature-Bureaucratic structures on the other hand, have some degree of standardization, normally suitable for larger-scale or complex organizations. Post-bureaucratic structures have a generic and a specific aspect. Generic sense will involve matrix and cultural or total quality management, among others (Parent et al 2005, p.126).Both generic and specific senses have held high the aspect of bureaucracy in the sense that hierarchies exist, authority is legal and Weber’s rational, and the organization is bound by rules. In classic theory, regulations or rules enforcement, codification and formalization shift their focus from structural organization to organization’s culture. In post-bureaucratic organizations, consensus and dialogue is used in decision making (Hodgetts 2007, p.215).
One of the benefits of structural organization is its usefulness in enhancing organizational adaptations. For example, simple structures can be used to provide improvisational outputs in product development. In functional structure, employees specialize in tasks, according to their field of professionals. Such functional divisions will ensure operational efficiencies within that set of a group. Functional structure will promote production of standardized products and services in large amounts and at reduced costs. In this kind, specialization and coordination centralization makes production of limited volumes of goods or services predictable and efficient (Repa 2007, p. 341). The effectiveness can also be achieved through integration of activities enabling faster and cheap sales and distribution. Functional structure may result into communication deficiency between the functional groups in an organization, leading to departmental inflexibility and low performance levels.
Effects of Decentralization to Managers
Decentralization normally entails assignment of delegations in decision making to smaller units. Decentralization process ensures that more managerial decisions are made at a lower level. This process normally performs well where subunits operate autonomously and with costs and profits being independently measured. Decentralization benefits the managers in delegating decision making procedures to the subordinates, thus offering them an opportunity to develop vital managerial skills (Standing1999, p. 116). Since managers as well as subordinates are offered a great opportunity to participate in decision-making, the process tends to be motivational to the members of the organization. Similarly, managers give the final word, since they have more control on the expected results. However, the process tends to be disadvantageous as the managers specialize on their division, thus forgetting the overall goals of the organization (Daft 2009, p. 456).
Decentralization facilitates duplication of services because each division manages its own operations. In addition acquisition of satisfactory information within decentralized environment is uncontrollably high. Due to a few tiers in a decentralized structure, processes such as control and decisions making or ideas largely run from bottom-top (Galloway 2004, p. 98). For example, decisions to outsource a service by an organization should consider whether their managers would spend much time on operations which are contrary to the strategy. In such circumstances, outsourcing would be the best strategy. Organizations chosen to undertake the services will have efficient experts to perform the duty. For example, main airlines normally outsource in-flight meals while they concentrate on availing their main obligations such as marketing and sales, timeliness, and logistics. Outsourcing is beneficial in facilitating symbiotic relationships between the primary organization and the outsourced company.
Relationship between organization structure and strategy
To achieve the best results, an organization should match the structure with its strategy, using activities that promote the set strategy. For a new strategy implementation, new skills and resources are crucial. While strategies change with the external environment, the structure must also change in line with the strategy implementation (Hoskisson & Ireland 2008, p. 274). Just as any organization’s strategy needs to change with changing external environment, so must any organizational structure change for proper strategy implementation. Since there are no perfect organizational structures, care need to be taken in application of a new strategy which requires radical change of the existing structure. Normally when a strategy is being chosen, the organization structure has to be modified such that it matches the strategy. For example, a CEO of an organization needs to decide on the amount of authority to be accorded to every manager. Evaluation of freedom to be issued to the employees in making various decisions need to be adhered to. Front-line employees should be equipped with the authority of decision making since they emulate closer familiarity to the organization environment. Decentralization can be used to strategize on empowerment to those individuals who are familiar with the status of the organization. Observations reveal that, a centralized organization is not fit in strategy implementation in modern technological era. Empowering of employees by an organization is challenging since it’s not evident at what point the business is being placed at a risk. Hiring and retention of virtuous employees can overcome this kind of a challenge (Parent & Slack 2005, p. 104).
Organizations should employ the process of nurturing relationships to successfully implement strategies. The benefits of growing and developing relationships will be revealed after a long time. The truthfulness of this can only be expressed in employees recruited and strategic partnerships formed, whereby employees can be termed as strategic partners (Ginter & Swayne 2006, p. 742). Open discussions on trouble spots and conflicts would form a good basis for nurturing essential relationships. Therefore in matching organization’s structure and strategy, concentration on primary activities and key assignments is advisable. Secondly, proper co-ordination of activities should be employed especially when centralization of activities en-routed to one manager appears to be worthless. Determination of the degree of authority to be assigned to every unit for efficiency purposes need to be adhered to. Similarly, in identification of any firm’s strategy-critical operation, there’s need for determination of which activities need to be performed excessively well and on time to enable competitiveness (Weintraub &Hunt 2006, p. 198 ).In assigning strategy-critical activities to the departmental units, a strategy-critical activities need to be conducted. Such activities should be in-line with the organizational structure and managers should be assigned on their influential position. Correspondingly, group attachment value operations should be coordinated under a single executive.
More often than not, de-centralized actions posses less management layers, highly rated employee participation and faster feedback. Structures generally follow strategies because their changes may require totally new strategies for efficient implementation. Also, research reports show that organization structure impacts heavily on performance as per the strategy adopted by the organization (Kaplan & Norton 2001, p. 189). Whenever a strategy changes, review of structure is necessary since new strategy comes along with specified skills requirement. Usually, a structure is a device for strategy execution assisting in success of the organization. Additionally, structures harness personal efforts and coordinates presentations of completed assignments. Competitors may develop similar strategies as those of the primary organization and in such circumstances, structures act as a major weapon in performance (Drucker 2006, p.113).
For every successful organizational performance, the strategy should be analyzed in a way that its implications are not harmful to the business progress. An alignment of strategy-structure follows four stages starting with an assessment of organization activities. Assessment starts with data collection and evaluation of the organizational external forces. Moreover, design process is aligned in a way that it executes the organizational strategy. At the same time the design process addresses the cultural issues and organization problems. Any organizational structure requires trade-offs, and therefore need to be aligned in a manner that it matches the organizational requirements. Effects of any strategy implementation should be measured before any implementation procedures are undertaken (Gold & Bratton 2001, p. 329).
Under organization’s strategy managers choose and coordinate the different components and dimensions of firm’s structure, as a deliberate move to assist in goal attainment. Within organizational structure, a manager is entrusted with the responsibility of motivating employees by perhaps creating team-work. Any structure in an organization impacts on performance, conduct, motivation, team-work among employees, and interdepartmental as well as intergroup relationships. The pattern in which a structure is designed affect to a great extent the behaviors of individuals and groups in any organization (Garden 2000, p. 223). Structure and strategy used in any firm ought to focus on identified goals and contingences faced by an organization which are primarily considered at planning phases. Such contingences may include technological progress, prevailing environmental forces and the perceived organizational strategy (Crosetto & Jorge 2005, p. 156)
In conclusion, it’s important to note that every organization planning without a strategy means a non-achieved dream. An organization should always consider its structural arrangements in-order to easily identify with an appropriate strategy that aligns with the venture’s objectives. Interrelating organizational structures and its strategy promotes good performance from individual level to the entire organization’s level. While setting-up defined structure, divisions and grouping is an important aspect since it promotes specialization. This ensures total delivery and effective performance in an organization assisting it in goal achievement. Wrong planning in an organization develops poor implementation of strategies. A good structure should enable an organization to achieve its goals and must also be in line with the organizational strategy.
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