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Every organization has some goals to achieve and these goals can be achieved only by combined efforts of various resources, this includes division of work and grouping of numerous activities performed in an organization, according to the required need and specialization. And to attain these goals it is important for an organization to have a proper organizational structure. In order to achieve maximum performance organizational structure has to be appropriate and matched with the rate of change in the environment. (Burns and Stalker, 1961)Size of organizational structure depends on the size of the business small organizations have small structure and as it grows becomes mega structure. Structural development are of two types vertical and horizontal, line of authority and reporting channel comes under vertical structure while the horizontal structure is about the division of work and specialization. Tiers of organizational structure are indicative of power structure, positions and its inter-se relationship, roles, channels of reporting, delegation and accountability. For the effective organizational structure it must be reviewed time to time and modified particularly for the current state where the cut cost is the most important order for an organization to be competitive (Kondalkar, 2006).
Organizational structure is defined as 'the establishment of authority relationships with provision for coordination between them, both vertically and horizontally in the enterprise structure' (Koontz, 1994).
Indicators of good organizational structure
The structure must have formal reporting hierarchy from lowest to the highest level.
Identical activities should be grouped in one department so that equipment, machines, processes and expertise should come under one departmental head and with other department formal reporting can be used.
Coordination of various activities and coordinating authority must be specified.
All departmental goals must be specified with the time frame.
Superiority between the departmental heads is mostly the point of organizational conflict proper monitoring is essential for this.
Standing orders, polices, procedures, drills and regulation should exit in an organization. These are obligatory to be placed in detail, duties of each and every job reduces operating problems (Kondalkar, 2006).
Organizational structure of Marks & Spencer
M&S follows a flat organizational structure; this type of organizational structure has limited levels of management between administrative level and front-line employees. This structure is followed in organization to encourage employees in more decision making process. This structure is followed basically to decrease bureaucracy and make employees more skilled by authorizing them to make decisions. And due to less management levels communication between upper managers and base line employees become easy which allows rapid change and problem solution (Strinfellow, 2010).
Flat organizational structure has pyramid shape, but unlike traditional one it's broader and flatter this is because there are fewer levels of management between top and bottom of pyramid it also may have different departments with head and manager leading each unit with the executive management at top of pyramid.
Source : The Times 100
Marks & Spencer have a flat organizational structure as a result of reducing the layer of authority through delayering which increased the individual responsibility of employees and their departments. Due to this employees have to take quick decisions from time to time with the preparation to explain and justify their decisions and this increases there accountability without increasing the organization's expenditure (Appendix A).
There are around 3000 people employed at Marks & Spencer Head Office in London. All these employees are specialist of their own field and work for organization on their given task these people are involved in managing stocks and their layout within stores and working in marketing, managing and accounts. Around 65,000 people work in M&S stores, many in management roles, lead and motivate their team and people. M&S also got franchises outlets overseas. (M&S, 2010)
This new flatter structure increased the demand for more training so as to come over it M&S started developing staff within the organization. It also recruits managers from outside the organization at three different levels:
Trainee managers passed A level will have 24 months training
Pick graduates from university and gives 12 months training
Experienced managers from other operations have trained for 3 months.
Each of these managers is supposed to have important managerial skills like working in team, leadership, financial skilled etc.(The Times 100).
Significance and benefit of flatter organizational structure
In large organizations, traditional organizational structure is basically used but due to many levels of management between top-level and baseline staff, decision making have to go through these process, leaving front-line staffs to answer the delay to customers which decrease productivity. While the flat organizational structure has less middle management, allows the whole organization work with ease and less resistance. This increase the productivity of organization as well as using a flat structure can decrease the budget by cutting the middles men cost and decrease the communication barriers (Borkar, 2010). Organization that analyse function of middle managers can allocate necessary tasks to other members by giving lower level staffs more responsibility or assigning some duties to upper management. Beside these there are lots of activities which are actually a burden on organization can be eliminated by eliminating middle managers (Strinfellow, 2010).
A flat organizational structure is good for small organizations, because in there it is possible to decentralize some decision-making while corporate integrity is maintained, though it is hard for a big business organization because it can result in loss of control of upper manager in the functioning of business. Flat organizational structure can be used by large companies only by setting up in different divisions but corporate control and final decision at executive level is important at the end. M&S followed the flat organizational structure so as to cut the overall cost of organization and speed up the working. They achieve this but still there are some block holes like increase in bosses makes lower level to report 2 or 3 different bosses this can create confusion and communication problem. Overall M&S followed a good organizational structure but because it is vast organization so they have to make and follow more suitable organizational structure for better future of company.
Borkar, R. (2010) Flat Organizational Structure.
Burns, T. and Stalker, G. M. (1961) The Management of Innovation.
Accessible from: http://www.buzzle.com/articles/flat-organizational-structure.html
Kondalkar, V.G. (2006) Organizational Behaviour, New Age International Edition.
Koontz. H (1994) Management, Mc Graw Hills International Edition.
M&S (2007) Organisational structure and careers.
Accessible from: www.thetimes100.co.uk
M&S (2010) Student Information.
Accessible from: http://corporate.marksandspencer.com/aboutus/student_info
M&S (2010) The Official Board.
Accessible from: http://www.theofficialboard.com/org-chart/marks-and-spencer-group
Strinfellow, A. (2010) About Flat Organization Structure.
Accessible from: http://www.ehow.com/about_5087590_flat-organization-structure.html