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Every organization has some basic parameters upon which the structural pyramid stands. The organization has certain goals and targets to achieve. Organizational structure is a systematic series of planned actions which handle by the upper level in order improve organizational objectives and goals. Organizational structure plan will vary when there is an external factor affecting the plan of the organization which they made to achieve the target or objectives organizational structures has long term approach that increases the organizational performance and effectiveness. The organizational structure emphasizes on the entire system. Organizational structure is mainly supported by the upper management to take decisions effectively and efficiently. Organizational structure maximize the organizations healthy ,its fundamental goal is to improve the operations it is involve in and make than more efficient in order to sustain their business in the competitive environment by listing their objectives and by making standards according to the society needs, it also involves in the quality management, strategic planning, and building team spirit,
It defines job tasks and subtasks in organization, and divides the work between employee to fulfill those goals and targets every organization works that's the main theme of any organization around the globe and they all work on some basic structure that is followed by every employee working in it, organizational structure is filled by different organizational designs that have an organization design which includes six elements which are: work specialization, departmentalization, chain of command, span of control, centralization and decentralization, and formalization. Every organization has different organizational structure, and therefore different from each other. There are many types of organizations like formal and informal and follows different structures. Knowing the organizational structure help understanding any organization in a better way and that can be very influential to know as i am doing this assignment is to increase the knowledge from organizational point of view, organizational structure is only a sketch of how an organizational will work. Its colors are the employees and the goals and targets they achieve (DR Dalton, WD Todor, MJ Spendolini 1980).
Classical/Traditional organizational Structures
Frank and Lillian Gilbert
Mary Parker Follett
Contemporary Organizational Designs
The Boundary less Structure
Today's Organizational Design Challenges
Keeping Employees Challenges
Building a learning Organization
THE ORGANIZATIONAL CONTEXT:
There are six elements in organizational design:
The name itself indicates it that the work is done by the specialists as the person who is specialist in the specific field will do the work off it, or we can say that the work is divided into parts and every part is done by specialist in that particular area, instead only one individual do the whole task it is divided with in the experts of their own job, we can say
It is considered as to divide works of employees into different job tasks and each task is carried by an expert of that field (OB Martinson 1983).
The name indicates that to make departments in this particular design organizations grouped different tasks together and form a job so in other words we can say that it is the criteria of putting jobs together and forming groups (O Neurath & Erkenntnis 1937)
CHAIN OF COMMAND:
Primarily chain of this order is the line (chain) which starts from the upper organizational level and goes up to the lowest organizational level, the main idea behind chain of command is that who reports to whom. There are 3 more aspect connects to this concept of chain of command, which are
Authority: who has the power (authority) to tell people what to do and expect that they will do it?
Responsibility: The responsibilities to form any assign task.
Unity of command: it is one of the principles of management that each and every person should have to report to only one manager.
(M Leslie 2006)
SPAN OF CONTROL:
The name indicates that it is related to control and the word span means period/ duration. It tells the number of managers and levels are their in an organization moreover it also determines how many number of employees a manger can handle efficiently and effectively fulfilling organizational goals (GD Bell 1967).
CENTRALIZATION AND DECENTRALIZATION:
Centralization states that the entire decision making in the organization is done at the upper level of the organization, whereas decentralization is as the word states by itself that more decision making is done at the lower level of the organization (F Cillie 1940).
As the word itself depicts that to be formal how much an organization is formal to its daily dealing like to its goals and achievements and to what extend employees of the organization are following the rules and regulations of the company (P Aghion, J Tirole 1997).
CLASSICAL SCHOOL OF MANAGEMENT THEORISTS TO UNDERSTAND ORGANIZATIONAL STRUCTURE
Commence with the Fredrick Taylor in 1878 Midvale steel company hired Taylor. Taylor developed that production and wage were inefficient and waste were accustomed. The most companies had greatly useless potential. He discovered that the management system is not in chaotic manner, no research, and they have to analyze the efficient means of production existed.
Hence in response, Taylor discovered another approach to management, which is said to be scientific management. This idea vindicates the implementation of scientific methods to determine work and to demonstrate how to complete production goal effectively.
Taylor discovered four principles of scientific management:
Management should establish a punctilious, scientific approach for every element of one's work to replace general guidelines.
Management should carefully select, train, teach, and analyze every worker so that the right person will get the right job.
Management should corporate with employees to make sure that job match plans and principles,
Management should make sure a perfect dissemination of work and develop sense of responsibility between managers and worker.
In order to apply these principles Taylor used techniques e.g.: time-and-motion studies. In these techniques the task was divided into its initial movements, and find different ways to determine the time in order to complete the task effectively and efficiently.
The best ways to identified to perform the task Taylor intensify the significant of hiring and training the proper work to do that job. Taylor advocated the chaotic tools, and use cards to instruct the worker, and break to eradicate fatigue.
Another important element of Taylor's approach was the differential. Piece-rate the system and it's used. The Taylor developed the thought that the workers were motivated by reward and that is money.
Hence, he developed a wage system in which the employees received additional pay when they increased a standard level of output for each task.
Henri Fayol introduced five functions and fourteen principles of management. Fayol discovered these five rules as a universal truth for management, fayol basically wanted them to implement these principles flexibly. These principles support today's world managers that how to supervise and organize the departments in the chaotic manner. Though later on this idea has created controversies on few of the principles define by Henry. The principles consist of division of work that is the worker should be divided into specialized tasks and assigns responsibilities to specific individual. The authority and responsibility based on giving the power to the right person who perfectly fits the job, and the authority will be base on personality, intelligence, and experience of the individual who has sense of responsibility. Discipline illustrate that respecting individual in the organization play an important role. Perfect discipline in the organization needs a good manager so that manager will be implementing when morale of the individual violated. The unity of command ascertains that the worker will get orders from only supervisor which means only the superior authority could instruct its workers. The unity of direction designates that the organization structure will be based on centralization that have only one action plan. The subordinate of individual interest to general interest determine that the interest of employees should be meeting with the interest of the organizational goal. Compensation of personnel illustrates that employees should receive the fair pay which provide them job satisfaction to them and lead them towards job commitment. He believes that the centralization is an ideal implementation of personnel. The scalar chain demonstrates the pyramid type of structure which starts from the upper level and ends with the lower level. Organizational command to each employee who perfectly fits the job is essential for organizational function and operations. Equity is the conjunction of generosity and fair play. Treat equally each of the employees in the organization. Stability of tenure of personnel is important to get maximum production of personnel; there should be firmness in the position of the organization. Initiative illustrates to think out of the box and motivate good decision makers give them zeal and boost them up at higher lever. Esprit de corps ascertain teamwork which play an important part in every organization and encourages effective communication within a teams in the workplace
According to the Weber bureaucracy is the most ideal approach of management. The concept of Weber was that bureaucratic structure eradicates the variability that concludes managers in the same corporation having different skills, abilities, knowledge, experience, and objectives. Weber advocated that the task themselves be benchmark so that the personnel variation would not disrupt the organization. Weber focuses on a well-structured, formal network of relationships among specialized positions in the corporation. Make rules and regulations set benchmark of behavior, and authority to instruct every individual in the organization.
Frank was basically interested in standardization and method study. Frank exposed that every bricklayer have a different design of movement to lay bricks. Frank investigated that the initial movements is essential to do the task and eradicate useless motions. Worker had increased their productive outcome from 1000 to 2700 bricks per day. It was elementary motion study configured to confine the best possible technique to performing a given task. They developed new benchmark techniques to do the task. They bring out the inspiration towards work and collaboration between employees and management to make sure that the employees are following the policies and procedures. They also proposed that the task should be divided equally between the worker and the management.
Henry had his contribution of Taylor's, he developed the Gantt chart, and a bar chart which proportionate the planned and completed task defining each of the stage. His approach was dependent on the time rather than the quantity, volume, or weight.
Mary parker Follett intensifies the essential of an organization during establishing its goals and objectives. Moreover she also looks forward and actualizes the common hierarchical organization where employees will be treated as robot. She also come up with the concept of involve employees in decision making; her main focus was on the stressed the importance of workers instead of techniques. This fundamental goals and objectives established more than 80 years ago.
Barnard came up with the idea of the formal organizational design. Barnard thought that this formal organization will play an important role in communication function and on the whole organization which also help organization to achieve their targets and objectives. Barnard observes manager should have sense of responsibility or purposes which inspire the organization and innovation takes place. The acceptance theory of management focus on the compliance of workers to acknowledge that the manager have the authority to act.
Barnard has developed four factors influence the eagerness of employees to capitulate the authority:
Communicate in such a way that employees have clear idea about the goals and objectives.
Organization should implement the formal way to communicate which does not violate morale of any individual.
The performances of the employees will be persistent if objectives would be clear to employees.
To make employees feel that they are the most important assets of the corporation, and they able to perform the task in execute the order from the authority (WG Scott 1961).
Contemporary Organizational Designs
It is one of the contemporary designs which is like that the organizations have only team base work assignments and follow it as to fulfill the organizational goals efficiently and effectively.
The good thing about this structure is that it can achieve the goal with in the required period of time and more over it help to motivate the employers. And the only disadvantage is that there will be a problem in reporting as the chain of command will not be clearly defined in the organization as it is a team structure (RH Chenhall 2003 )
It is a structure that is project base means they assigns different projects to employees to do and as soon as they are done with their projects they move to another one but they are specialists in those areas which they are working in. advantages of this structure is that it is very flexible and can change with the environmental changes like as they using different people for different tasks they can work with in different situations and the disadvantage is that it is really difficult to find the right person for the right job like tasks and projects more over one can come up with conflicts while working with in for the projects (EW Larson 1989)
The Boundary less Structure:
As the name itself indicates that it has no boundaries, boundaries in a sense that organizations which are into e-business that is which are web based organizations. The positive factors in this kind of organizational structure is that it is highly reactive to the queries they are into more over they can solve problems related to their customers it will be highly flexible and encore low cost more over they can change with the environmental changes and customers will easily access them from their homes, more over it has some disadvantages like they should have proper securities setups for payments and all, and it's sometimes hard to control situations and to communicate the right problem so communication difficulties are there in boundary less structure (R Leifer 1977).
Today's Organizational Design Challenges
Keeping Employees Connected:
In today's world the organizations are increasing rapidly and having large number of operations that required good and highly control able organizational structure, now a days the structures are so complex that it is sometimes hard to keep a record of having a span of control within the organization so it is one of the important factor to keep your employee connected and working to meet the organizational goals and targets efficiently and effectively (R Galliers 2003).
Building learning Organization:
It is one of the core factor to make your organization the best in the sense that the employee who come to work in your organization should learn something new like they should have some workshops and training sessions for them just to cope up with the environmental changes and it helps organizational to be stable and too work for long term profits and benefits with fulfilling their goals and targets efficiently and effectively (DA Garvin 1985)
Key features of different factors which affect change in organizational structure in the current economic climate
The social and cultural factors prominently affect the change in the organizations, corporations should remain productive and lucrative as possible as they can. The recent economic situation is greatly affecting the purchasing power of the consumers and rapid change in the buying behavior of consumers that changes accordingly change in their lifestyle. The enormous changes took place in social and in culture and most of the consumers running towards the healthier products (AA Armenakis, SG Harris 1993).
Unilever is one of the best examples of these changes:
Unilever has good understood of society and their market globally and locally. They try to cope with the changes occur in the products like many of the people have different product needs such as slimming food, nutritional food, carbohydrate free food, and many other changes which takes place due the rapid change in consumer lifestyle. Unilever take care of its society and also involve in the societal benefits through its different products according to the society need.
As Unilever manipulates in developed and in developing countries extensively where the political circumstances in different countries is sustainable that revitalize more investments. The legislation of these countries also supporting free market economy, and have little governmental intervention.
Most of the economic condition is not sustainable in the recent time because recession is greatly taking its position in many countries. The European market has been shifted to a single market therefore; it is growing rapidly the market for Unilever products. In many regions the inflation rates has been immutable hence not even contriving the prices of its products or any subsequent investment.
Unilever is consistently moving with the technology, and giving quality product. Their objective is not only maximizing the profits but they are greatly anticipating their customers with loyalty, trust, good response, and content changes according to the consumer lifestyle.
Unilever is leading in multifarious food products such as culinary category, soups, packet tea, spreads, margarine, ice cream, olive oil, home care products for example cleansing, hygiene products, and frozen food in Europe. They are famous for best seller of various brands. Unilever has the ability to modify products according to the consumer demands. They have the good understanding of its diverse market and they are consistently engage in innovation of the products for each of the market segment. They have the kind of culture that they also listening to the consumer demands and catering them in an efficient manner. Unilever is also focusing on social responsibility to shareholders and their employees. They are constantly growing and concentrating on the core brand. They are also demonstrating the power of rapid growth in Italy and Britain. Their market shares are successfully increasing in Africa, Middle East, and Turkey. They are giving their best on the large range of brand by considering variations in its consumers.
Unilever is facing decrease in the revenues due to the strong competition. Their store brands is increasing which is threat for the company, and the business climate is getting tougher as Marks & Spencer, and Sainsbury also started high quality of eatable items. Changes in the external environmental also may present threats to the firm closely related to the government variation and their policies at which they directly targeted to the taxes because it is the major revenue generator for the country not for the company, which may effect on to their small markets and hopelessly of geographic market and their targeted consumer may change their taste and way of using it. Increasing trade barriers, variation on foreign currency also differ, and evolution of substitute products. Their customer is losing confidence and trust in their products and most of the consumers switching to reduced-fat product. Retailers are also failing to make sales by not stocking enough stock.
Unilever one of the weakness is reduction in the R& D budget, their incompetency to maximize remuneration, and the inefficient management of products. Absence of certain strength in the company viewed as a weakness. Their high cost structure affects due to the import of raw material, advance technology, and which also create frequent fluctuation in foreign current. They are recently facing weak distribution channels in some countries which cause low customer retention and their inefficient management giving unsatisfactory services which have direct impact on effectiveness and unavailability of products. Unilever is facing decline demand from America. The reputed perfume, frozen food and other products is not performing up to the mark while the benchmark target is 5%. Decline in sales is due to the inflation. The organizational structure is not suitable for them. They are also facing competition from Marks & Spencer, and Sainsbury also started high quality of eatable items.
They are also focusing on the research and development in order to meet the requirements, the advance technology, and effortlessly introducing modified products so that is how their stakeholders will also satisfy.
WHY BUREAUCRATIC ORGANIZATIONAL STRUTURE IS NO LONGER IMPLEMENTED:
Bureaucratic organizational structure is no longer undertaking by any organization. The new approach that is decentralization is mostly adoptable and flexible for most of the organization now-a-days. Many of the organizations involve in the partnership, mergers, and non- governmental organization which involve diversity and lead the corporations towards the decentralization (RB Denhardt 2000)
Reasons for individuals and organizations tend to resist change:
Our whole society in turning with the change they are facing that is very natural for any individual and organization which move with the variability whether it is the external change or internal change. We are moving toward the unhealthy spending. The common list will be implemented to the common situations.
When the objective is not clear the change will takes place. When there is no defining purpose of the organization there will be anxiety creates within an organization and the corporation will lead downward. It always create confusion and unrest situation. When there is a desire or passion to work for honor the organization will not face any unusual circumstances but in case of any variability in the organization their determination will lead them towards accomplishing their objectives. Organization should make its management feel that how much they respect its most important assets that is people working in the organization. The resistance to variation when there is no specific content of behavior in the organization. The organization should make standards and keep in mind its norm and morale of the workers in the organization. When there is clumsy process the people get confuse and their productivity lead them towards fatigue (MT Hannan 1984).
Organizational structure is essentials of any organization like it is the basic design of any organization, performance of employee, satisfaction, experiences, work tasks and jobs individual personality and differences, individual are more attracted or likes to stay with organizations which attracts their personality more. Organizational structure is the one which matter most in organization as it clarifies who has to be placed where and what duties must be done by him or her in the organization and how the goals will be met efficiently and effectively, in this whole report we studied many organizational structures and how they are implemented in all organizations and what similarities they have more over what are the differences between them which organizational structure is mostly used and which organizational structure is now not in use what are the reasons behind it. The main idea of this report is to analytically examine the organizational structure and more over to know how an organization works. Organizational structure is the main idea of how the organization works like it truly depicts the image of any organization, its norm and values, and whether they are followed or not.
As today's world is moving very rapidly and to control it the organizations have to change with the environmental changes and as simple the organizational structure is the change can be meet easily and the complex the organizational structure is the changes will be more complex. Organizational structure helps a lot ion motivating, guiding the employees to achieve the goals and targets with in the required time limit, efficiently and effectively. The organizational structure helps a lot in critically analyses of any corporation, its target, and objectives, as organizational structure also shows that it more over tells that whether the organization is formal or informal. Why Weber's Bureaucratic organizational structure is no longer in use why organizations are moving towards decentralization. Organizational structure are barely ever, if ever completely normal. They reflect not only objectives factors such as the entity's atmosphere, mission, size, resources, and technology, but also the knowledge and preferences of the entity's leaders and the compromises through which internal power struggles have been resolved. Organizational structure more over helps a lot in motivating employees as if the chain of command and unity of command exists in the organization as they will be knowing who to report and when to report, organizations having not clearly defined structures suffer a lot regarding who to report and who is the person we are working for. After doing this report I believe that organizational structure matters a lot in any organization as it is the main key to any organization and how it is working and achieving its goals efficiently and effectively. More over organizations should build up a good organizational structure which should be simple and easy to follow as it would be more profit generating and completing the tasks with in the required given time.