Most giant companies started small. Standardized with an appropriate organizational structure, their mission and vision have subsequently succeeded as years go by. Coca Cola Company for instance, started in 1886 sold in a glass of a fountain drink. By the year 1906, it began to be popular in international market since they begun bottling operations of the product in Cuba and Panama a year after, in Hawaii, then next in Philippines, France, Belgium, Bermuda, Columbia, Honduras, Italy, Haiti, Mexico, and Burma. In 1940 the famous soft drink was bottled in 40 countries.
Organizational structure is like a skeletal framework of any firm which serves as the foundation to move and work each part towards the accomplishment of its goal. Or for some, like the article I've read, it is referred to as the "viewing glass" through which employees see their organization and its environment. It is designed accordingly to incorporate the functions, relationships, responsibilities and communications of each individuals involved in an organization. Nonetheless, it displays the organizational design, chain of command, work specialization, span of control degree of centralization and departmentalization.
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A typical representation of the structure is through an organizational chart. The bigger the company, the wider or the taller the chart can be. It is shaped like a pyramid where the top is the head or the owner of the company going down the bottom is also going down the designated hierarchical position. The shape indicates whether it is centralized or decentralized. Spread of authority gives a wider shape and short which embodies decentralization. A tall and narrow shape is a form of centralization where the authority is centralized by the head of the company.
Effective management requires a proper organizational structure. Abiding as such, a set of standard operating procedures can be achieved and could easily determine how each individual should participate in which decision making processes they are involved with. It merely caters task allocation, coordination and a good supervision towards success.
1.2 A Venture to Event Management
"Event management is the practice of incorporating business logic into labeling events, communicating events, and handling events." It involves a subjective research, planning and coordination of all the detail parts of any occasion or festival. Proper research provides good result in identifying the audience's expectations and satisfactions. Planning will simplify organization of goal setting to achieve every objective. Coordination is putting up all together in action what had been planned. Managing events could be organizing occasions such as Olympics, dinners, family day, conferences, product launches, birthdays and anniversaries, weddings, concerts, festivals, and many others.
If I were to manage an event I would like to work on with occasions like birthday parties for all ages, weddings, annual dinners, and team buildings. I will put it up in Philippines since there are larger numbers of prospect customers in my country compared here in Malaysia. In addition to that I'm already familiar with the way we celebrate each occasion and I find it that Filipinos are more likely to celebrate birthdays and other occasions extravagantly.
The four types of occasions, birthdays, weddings, annual dinner and team building will have their own departmental manager and coordinator who would have the same level of position below them are financial personnel, marketing personnel, human resource personnel, planner, designer/activity designer, food caterer, equipment and furniture personnel, light director for parties, audio/ video/photographer experts, printings personnel that would work for making banners; invitation cards; thank you cards, and photo albums. A talent personnel and management who would supervise and choose talents such as emcee, disc jockey, band, singer, dancers, musician for weddings also including staffs such as utility, waiter and waitresses.
1.2.1 Application of Organizational Structure
Companies can be categorized to their organizational structures. A variable to be considered is the nature of the projects they are into. We characterized this through the number of employees needed to perform the workload and some number of tasks which are fundamentally different in nature.
There are four common structures to mention. First is Entrepreneurial structure, which is highly centralized. Here the decision only comes from the chief executive who has the control over the organization. Second is functional structure where duties are divided into different functional areas and having their own management structure. Most common example for functional is construction company. It also practiced hierarchical since this has many levels and is also centralized. Third is divisional structure. Divisional focus much on products or a geographical area. This type of structure is suited to a multinational corporations or conglomerates since each country's product specialization has its own organizational structure. A very good example for this is Disney organizational structure where it has 3 different lines of command namely, attractions, studios and consumer products. Finally, the fourth is the matrix structure. Different from the first two organizational structures, matrix structure is a complex structure which involves multiple lines of authority rather than being hierarchal. Here, employees report to more than one boss. Each boss has the same level of authority.
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The type of structure that I would like to use for my company is matrix structure. I find it the most suitable with the way I would like to run and standardize my company. I would name my company AREE Festivity Solutions.
1.2.2 AREE festivity Solutions (Matrix Structure)
There are several main points that brought me to follow matrix structure. One thing is that I want a categorization of each product. As what am I aware of, matrix would have the same types of product but has its categorization. Same with my products (event solutions services), all belongs to one class of solution which is event but is being categorized according to the type of occasions. Next is that I would like each group of event to develop an outstanding team work so that they could also provide an outstanding service to our clients. I also want a decentralize type of organization to boost each employees creativity and boost their self esteem knowing that taking their part responsibly is crucial to the company. All ideas are welcome and important for any improvement. Everyone should deserve same level of respect as professionalism requires, however the hierarchical position will be compensated and felt through their pay. All will be given a chance to get promoted according to their performance and potentiality, except for talents. Talents will be encouraged to get improved and perform their best through increase of their talent fee.
In addition, matrix structure would have a good control since it is categorized accordingly to their expertise or specialization. I want each position to focus and concentrate with their specialization. I also believe that it will provide a strong foundational structure since it won't be only one person or group in one field of specialization rather will depend on the number of product categorization. Employees will have a clear job description and can easily be kept well informed and supervise.
AREE festivity Solutions Organizational Structure: Matrix
Matrix Structure has four main advantages. First is, it provides good control of the company. This is because of the practice of specialization and having a close relationship to their immediate bosses. Secondly, it provides a strong structure. This is apparently observable since the authority and stress of responsibility is being distributed therefore it won't get easily be fallen apart in case one had become idle. Like the authority and responsibility given to the group coordinator and event manager. A loss of the manager won't paralyze the functionality since there is another one boss which is the group coordinator.
Enabling the employees to be kept well informed is the third advantage of matrix structure. Settled to be next with their superiors, information reaches them directly. Fourth, matrix encourages good team work. Perceptively employees are required to work as a team in one look on the organizational chart structure. This is probably to be able to produce a good quality of work, product or service.
All organizational structures have their own drawbacks or disadvantages. With matrix the first drawback of its structural formation requires a strong management effort. This is because of having a dispersed authority; as a result the head or owner needs to get in contact with all the managers and coordinator he/she had delegated. Second is that the designed structure reacts slow to changes because of a much focus and distinctiveness of their specialization. Third is that communication is complex and time consuming. Due to the structural complication and differences, employees has less contact with other employees belonged to other group. Fourth is that conflict between bosses is likely to happen. Although they are in distinct position, having the same authority but different ideas towards their employees might cause a problem.
For me matrix structure is the best. Though there is no perfect decentralized organizational structure but it does try to balance the authority in the company. As a result it promotes wellness and humanitarianism among its employees not to mention the fact that it leads to a strong foundation of an organization. Nonetheless, people will be likely to excel knowing that everyone was given a special role to be part of the qualitative output.
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As the nature's balance of things, if there is a presence of strength, there would also be weakness. Awareness of weakness is a great advantage. Knowing the common problem that might arise as I have discussed previously, we can get prepared and adjust ourselves to avoid as such. As for the head of any company, he/she must be a leader who does an example to his/her subordinates. He should be creative and be able to simplify things how he can get into contact with all the managers and coordinators easily. In my previous company, we had our own quick com as we call it to communicate to any company site member. This is to minimize the effort and time needed for the boss to get feedback or result. We also practiced spirit of commitment therefore we can't say no on any changes at times we needed to adjust ourselves. We were provided with good training and personal development seminar. Very often we go for team outing or any refreshment as a get away from the serious job in the office also to have a chance to talk with one another. This would eradicate communication problem and conflict between bosses since you would also develop a friendly relationship with one another.
A choice of organizational structure depends on the nature of the projects being undertaken. For an event type of business which is merely providing solutions is somewhat the same with customer service business that also provides solutions to customer's queries. Based from my experience, it is effective knowing how to overcome its weaknesses.
2) SWOT Analysis Application
Organizational environment are the factors which affect organizational behavior and performance in reaching its goal. Some of these are controllable and some are not. There are two classifications of environment from which we can identify these. They are external and internal environment.
External environment are factors outside an organization which affect the business' decision. It reveals organization's opportunities and threats. They comprehend these external factors through some suppliers, competitors, media and government which normally categorized into four aspects of the external environment. First is the political factor which refers to the degree of government's intervention through tax, policy, labor law, environmental law, tariffs, trade restrictions and political stability of the nation. Second are the economic factors from which the organization considers economic system used in the country, economic growth, unemployment rate, exchange rate, interest rate and inflation rate. If the business is situated in a developed country people also have a higher rate of expenditure capability. Third are the social factors. These are the norms, attitudes, beliefs, behaviors and related demographic trends in particular area. It is important that your product or service is acceptable through your customer's values, preferences, attitudes and ethical issues. Fourth are the technological factors. As such are the automations, methods of work, equipment, human knowledge, technology incentives and rate of innovations. Those days it takes weeks to get in touch with someone from afar. Now, it's only in a click on your computer.
Internal environment are mostly controllable. These are the factors coming from within the organization. This is referring to the business culture and the climate or degree of working together among the employees. To enumerate, they are the stakeholders such as employees, managers, shareholders, some customers, and the public. Organization can decide how much to produce and for whom to produce therefore they also control customers and the public.
Internal and external environment leads an organization in finding solutions. External factors reveal the threats and opportunities while internal factors show its weaknesses and strengths through which we analyze the organization's competitive situation.
2.2 Business Report
As a practical application of SWOT (strengths, weaknesses, opportunities and threats) analysis, I have interviewed a proprietor of a hair salon shop. I've found the business interesting due to a high level of competency in the area. The name of the salon is HDC International. It is located at F18, 19 1st Floor, Holiday Plaza, Jalan Dato Sulaiman, 80250 Johor Bahru, Johor. The shop's telephone number is 07-3314201 and the proprietor's name is Alice.
HDC International is a franchise type of business. They have four other branches in Singapore, one in Cambodia and two branches in Johor Bahru. The firm's managing director is Mr. David Liew Y. P. who is a London trained hairdresser and achieved a Golden Physique International Doctorate of Hairstyling (No. 20021215390). The salon had been running for more than 25 years in Holiday Plaza according to Ms. Alice. Currently, the shop has three professional hairstylist, two stylist assistants and another two trainees. It occupies two shop lots and is situated in front the escalator at the third level of the mall. All the staffs are Chinese and can speak English. The shop inside was well facilitated. The architectural interior design can accommodate twelve customers but six of which are not in use. It has a cozy sofa at the entrance lobby which seemed to be inviting and gives class upon a glance at the shop. Miss Alice is friendly and so the rest of the shop's employees.
The services they offer are that of a common salon services like hair rebonding, different types of treatment, hot oil, hair cut, hair spa, hair dye, hair highlighting, hair blow dry, Hair wax, and they even sell hair products and offer face make up service. The price rate depends on class or hair solution to use. Rebonding for instance has two types. They have the lower price Rm130 shoulder level and they also have the special rebonding which uses branded products and costs Rm200 shoulder level. The hair products they are selling are ranging from Rm60 to Rm70. For hair dye, my self paid Rm120. The staffs are paid through salary but it depends on the years of experience and expertise. The professional hairstylists had four to five years working experience.
2.2.1 SWOT Analysis
SWOT analysis is a method used to analyze an organization's competitive situation. It assesses the strengths, weaknesses, opportunities and threats from which it gathers the information to form a solution. A profound evaluation of HDC International will be challenged through this method of analysis. Please note that such observations are based only from my own findings.
Strength can be considered assets or things that an organization does well. HDC International, Holiday Plaza Johor Bahru, has five strengths that could be listed. First is their locational advantage. The shop is in the mall and is the very first shop you will be headed to going up the third floor. (Note that there are five hair salon shops located at the third floor.) Second, it has an experienced and proven management since the shop had been running there for twenty five years. Third, it has a distinctive competence in terms of size. Compared to other salon shops, it's the only one who occupied two shop lots. Also, all its staffs can speak English. Fourth, the management able to conceive a well operational strategy by assigning the most trained and expert stylist on weekends where there are more working group and larger number of customers. I also noticed that they can't put on sour face no matter how tired they are or how complicated the job may seem. They are also able to complement with different types of customers. When I went there, at first they are playing Chinese songs but when they got to know that I not a local, then they played English songs.
Weaknesses are the organization's incompetence or activities that it does not do well. One of the shop's weaknesses is the facility arrangement. Inside, it looks like the last time it was painted was three years back. The shop has a division at the middle where each division has six service chairs, three each side facing the wall mirror but other three of each division are not in use. Another thing is that the number of hairstylist they have is not proportional to the size of the shop and cannot accommodate more than six customers in one time. Next is a lack of a marketing strategy. I noticed that they are not taking the particulars of the customers and get time intervals of their salon visit so that at least they can give their clients a call reminder and get a chance to have them back. That could also be considered having a poor track of records.
Opportunities are positive external environment factors from which an organization may take advantage of any chances. With the proprietor, Miss Alice' managerial experience and financial ability, there are many opportunities that goes along its way. The business can serve additional customer groups with a proper marketing strategy. Second, it can also have a faster market growth using the available resources like the six chairs which are not in use. Third, it also has an ability to move to better strategic market where the business can cater a larger number of customers. Fourth, she may also have the ability to diversify into related courses or services like nail care (pedicure/manicure).
Threats are the negative external environment factors which may bring conflict to the business. There as only one threat Miss Alice mentioned which was, if there won't be anyone to visit her salon shop. That could be a severe economic crisis. Based on my observation a loss of staff could also be a threat since right now the shop only having three professional hairstylists. There would also be a threat of a slower market growth. Another is government intervention on the products they are using. Most of tem are from China. The last thing I could think of is growing of substitute products. It could be a very effective hair lotion that people will no longer need to go for hair treatment or even for hair rebonding.
I have eight recommendations to enumerate. First, I would suggest having the shop painted and rearranged to make it more attractive. Second, do a little renovation for improvement and to maximize the space. Third, is to make a good track of records of the customers. Fourth, is to make sure to call back the customer reminding them to have their hair care treatment by looking back at the records. Fifth, the proprietor may venture into additional service like nail care (manicure/pedicure) if the space is too big for hair care service. Sixth, is that she may also try a marketing strategy like giving membership to the customers for them to earn certain points on certain services and use it as a discount card. She may also attract more customers by giving inducements like free coffee or milo and biscuits especially to customers who are having hair treatment for couple of hours. If she can't afford to do it to every customer then she may have a bracket that may have this type of inducement.
Through an application of SWOT analysis, strength defines firm's competitive existence that makes an entrepreneur see the good things she might use to overcome the business' weaknesses. The importance of knowing the weaknesses gives a directory of what needs to get worked out on. Opportunities identify the firm's potential to exceed while threats analysis can give you cautions that would avoid you having a problem.
Having the experience of analyzing a business, I felt the inclination of being into it. The experience gave me a hit of what a business management really is in practical. It was fun and challenging. It was also an accomplishment for me that I have learned this thing called "SWOT analysis". I think this would be the very basic knowledge an entrepreneur must know in order to run a business. It shows the pros and cons of all the situations in business. Therefore SWOT analysis gives answers and solutions in every business matter. It is how each entrepreneur takes it weather to just look at it or make use of all the findings out of it.