Business Essays - Organisational Structure

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Organisational Structure

The organisational structure in any business is important. To survive, all organisations have to be able to accomplish tasks and this requires carrying out certain duties. Structure splits the tasks of the whole organisation into smaller and more practical chunks, and allocates them to sections of the organisation that are held responsible for its completion. It also ensures that all the different sections are coordinated and controlled in a way which it has to achieve something. For example, to distinguish the structure of Jaguar - an organisation chart could be used; however this is a very crude representation of the organisation and does not show how the organisation communicates or the flow of work, which may be crucially necessary for it to succeed.

I believe that Jaguar’s structure is a Product grouping; mainly because a Product grouping is most often established where an organisation has a number of specific product lines (in this case the different models/makes of vehicles). Usually in this sort of structure each individual section is operated separately giving it a number of advantages. For instance, everything in a certain product line is brought together in the one central area making it easier for communication and coordination. Due to Jaguar’s product development nature, such an advantage is especially relevant as it allows for a specific team to be able to convey information between each other much faster. It is, therefore, easier to understand the information as it is easier to understand the information as it is directly being talked about directly, rather than in a document where visualisation may be required. However a Product grouping also has disadvantages, for example, team members can become to focused on their own product and lose sight of advances made in other product groups. Again this could pose a problem in an organisation like Jaguar as it could potentially cause disillusionment between product groups by group members choosing to use their own way to achieve objects instead of listening to information from group members out with their product group which could aid them.

Centralisation is another key feature in the structure of an organisation. This underlines the locality of decision making in an organisation and through this develops an understanding of the authority and responsibility in the organisation. Everybody in an organisation has responsibility, but when it is used in terms of the structure it refers to those who have a larger effect on the overall managerial aspect. In Jaguar, for instance, it is assumed that the CEO (Commanding Executive Officer) is responsible for the performance of the company; at the next level down would be the marketing director, who would be held responsible for achieving marketing objectives and so on.

In centralised structures decision making tends to be retained in the hands of a small number of people at the top of an organisation, while those that are decentralised, decision making authority is delegated. From my point of view I think that Jaguar is a decentralised, as decisions are made at a point closer to operational levels. By being able to make these important decisions closer to the operational aspect of the product groups it makes a decision on the problem at hand quicker to solve, and also develops leadership skills of those lower down in the organisation. It also frees up the top management to devote its attention to long term strategies, which a company like Jaguar has to take into account due to the constant changing market direction and the type of customer who is attracted to its products.

Formalisation reflects the extent to which the formal rules and procedures govern activities in an organisation and, in particular whether the nature of the work is prescribed in rules that specify what shall be done and often how it will be done, rules and procedures can be implicit as well as explicit, and can be used to either prescribe what should be done or proscribe what is forbidden. To some extent increased formalisation is a function of organisational size. Once an organisation grows beyond a certain point it becomes almost impossible to rely on interactions used to control and coordinate a smaller company. For a larger company, such as Jaguar, there tends to be more specialists higher up in the hierarchy allowing it to focus more on the long term strategic issues. Thus procedures and rules become the main way of controlling activities and introducing a degree of predictability into the organisation (Mintzberg 1979). This is a large disadvantage for the smaller product groups within Jaguar as it means there is a larger degree of predictability into their activities as well as a large distance between the groups and the management level.

Organisational culture is used to try and describe the experiences of people within the organisation. It usually describes their beliefs, habits, manners, self-image and they way tasks are undertaken. To current employees the culture within their organisation will go unnoticed.

The culture within the organisation is important as it key to the company functioning at its best as well as developing leadership throughout the company. A key role for the culture of an organisation is to differentiate its own specialised culture from another organisation. From my point of view, I think that Jaguar has a Task culture. This is because the management could be seen as having a series of problems to be solved. For example, Jaguar may have to make new car models to keep up with new advances in car safety and new legal regulations, which would require a team to be formed and to deal with the problem. However this has a slight disadvantage in that the teams can become easily bored with predictability and repetitive tasks.

To be successful a business must continually modify to its competitive background. There are certain central ideals which stay steady and provide a sense of direction in the decision making process. These unchanging ideals form the company vision and help in identifying the company’s mission.

The mission conveys the belief s and objectives (vision for future), which is made up of three main elements:

  • Values
  • Purpose
  • Objectives (Vision)

The values and purpose together create the beliefs of the company and usually remain the same in the long term.

The values central to a company are limited to a small number (usually no more than five). They reflect the principles of the organisation as a whole. One way to identify a value would be to see if it would stay the same if the organisations situation changed. It would be counted as a value if it did stay the same. Also, if the organisation changed into a different industry, the values that were carried over would be the central values. For instance, a central value that I believe Jaguar employs is innovation. Now, as unlikely as it may seem, if Jaguar was to change its market area and this key value was no longer an advantageous aspect of the company then it would be detrimental to the company. But if Jaguar were to change its market then I should change to one where its value of innovation would aid in Jaguar’s success.

The purpose is the reason that the company exists. It is shown through the company’s mission. Similar to the company values, the purpose of the company is relatively unchanging and lasts for long periods of time. This purpose is what sets the organisation apart from similar organisations. Since the main priority of a company is to turn over a profit, however this should not be part of the company’s main mission as it does not offer a suitable path for employees to follow. For example, one of Jaguar’s purposes would be to provide excellent customer service when dealing with potential clients. This would be especially important to the management of the company as it would show how the whole company treats individuals and would also influence employees on how to treat others – not just with clients.

Both the purpose and values are not directly selected but are exposed. The beliefs of the company should not be goal orientated but instead, it should reveal the company as it is

The objectives (or vision) are what the higher management (such as the CEO of the company) decide to try and achieve. The vision dictates an objective that the company will set as a long term goal. This contradicts the central beliefs of the company as the vision is directly chosen.

Due to the vision being long term goals, they are much more demanding than other goals. The organisation has to realise that there is a reduced chance of successfully achieving the vision, but to initially begin to compete these goals the company must believe the vision can be achieved. The goals should be challenging enough that it motivates staff into increasing efforts to reach them.

The majority of visionary goals come under four main categories:

  • Target – e.g. sales targets
  • Common Enemy – e.g. overtaking rival companies in the market
  • Role Model – e.g. to emulate companies of a similar type
  • Internal Transformation – e.g. becoming number one company in the market

Even though a company’s vision may take a large amount of effort to achieve, most companies that have employed a long term vision have become very successful. But once the goal has been achieved, a company which would like to continue its success usually employs a new vision to keep the organisation motivated. For instance, a long term vision that could be employed, especially for a car company such as Jaguar, would be to reduce the carbon footprint of the company. This would be seen as a long term goal as it would take a long amount of time to successfully convert from fossil fuels to renewable energy as well as to research new way in which to power cars cost effectively.