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The structure of an organisation can be describe as the ways an organisation organise and distribute responsibilities among its work groups so that their activities are best connected to achieve its goals and objectives (Brooks, 2006, p181). In other words, an organisation should be so structured, so as to function effectively allowing it objectives and strategies to be achieved. Organisation structures help improves communication and sharing of knowledge (Holker, 2012:p128). If the organisation is properly structured, Individuals are able to work together as a team to achieve success for the organisation. Without a sound structure, people in the organisation could lose their focus or culture and strive to accomplish their individual reward rather than that of the organisation.
An efficient structure can benefit the organisation in several ways; this includes making it easier for the business to delegate responsibility and effect change throughout the organisation. According to Mills et al (2007:p459), “structures enables management to define lines of responsibility and authority, control work activities and accomplish organisational goal”. In other terms, it is important that a business get its structure right, as this will encourage good coordination and close relationship in the workplace.
Poor organisational structure can result to individuals not being clear of their responsibilities in the organisation and this can lead to confusion which will slow down the performance of employees in achieving the business goals (HavardBusinessReview, 2011). Also, the poor organisation structure can lead to lack of coordination among departments, poor communication and this can lead to restriction in new ideas (EHow, 2011). Furthermore, poor structure does little to foster the concept of teamwork. Individuals may be unwilling to cooperate with each other and this can result to slow response in meeting organisation goals.
Organisation can be structured in different forms, this includes, functional structure, divisional which is also referred to as product, geographical and markets based structure. Other areas of structuring an organisation involve matrix, projects and network structures.
The most common or traditional form of structuring an organisation is the functional structure. “Individuals and groups are located together based on the function their tasks have for the more general objectives of the organisation” (Mullins, 2007:p345).This means that the organisation is structured based on its sectors and areas of specialisation. For example most organisations will have marketing department responsible for research and promotion, customer services department will handle customer queries. Also, a human resources department will be responsible for recruitment and selection of new employees, training and motivating them. Additionally, “there will be other cross-functional areas like administration and Information Technology departments that service the functional areas of the company” (The Times, 2013).
Functional organisational structure brings together people with similar expertise in such a way that they are able to support and advice each other to carry out a given task. Other benefits include making efficient use of resources, thereby allowing economies of scales to be achieved in the organisation (Stilettos, 2011:p25). Also, a functional structure normally encourages loyalty and growth of personnel expertise, thereby developing their skills to accomplish better goals as departments. Some weakness associated with this type of structure includes, the fact that the individuals focus on their goals rather than the goals of the organisation. Functional groups can easily develop conflicts of interest and this can lead to poor communication (Holker, 2012:p130). Also, slow decision making processes and low innovation problem can be associated with functional groups.
For some businesses, having a functional department have helped them achieved a lot but for other businesses, they have had to made shift from this organisation structure to a much better option profitable for the organisation. Example of a business that adapted a functional structure is the Electrolux Home products. The Times100 (2009) describes the business as a well-known Swedish leader in home appliances such as air-conditioners, washing machines, cookers etc. The business grown from a Swedish multinational company to become a dominant player in Europe through its restructuring. The company felt that the traditional geographical structure had lost its relevance and needed to new structure that will help them gain better advantage over their competitor in the European market. The business set off to develop four functional departments, this includes, purchasing, production and product development. This department was responsible for the supplies of raw materials for the end products.
Also, the supply chain managements and logistics, the responsibility for this department was to get the product to the customers. The product businesses, brand managements and key account managements were responsible for the marketing of the products and brands. Lastly, the sales department was responsible for selling the products. The introduction of the new structure helped Electrolux improve its efficiencies where their employees became specialists within their own realm of expertise. The repositioning of the structure increased growth and profitability, as the business brought in more simplicity and uniformity into the organisation by giving the employees an avenue where they can focus their specialism on, thereby increasing their effort to help the business gain success in the European market.
Furthermore, a case study article from (TheTimes100,2009) proved that not all business gain success from having a functional structure. For example, a business known as Syngenta, a world leading plant science business. The aim of the business is to promote sustainable agriculture through innovative research and technology. Well qualified innovative scientists are the core strength of the business. Syngenta is committed to empowering its staff and a functional structure is not suited to its innovative style and as such, the business like many large businesses operating both national and international level, Syngenta adopted a matrix structure.
A matrix structure is often referred to as the project team structure. In this structure, team leaders manage specific tasks and projects. Each team will consist of members from different functional group, each with their own specialisms and expertise related to the task (Enotes, 2012). The advantage of this type of structure is that it takes employees out of their usual comfort zone to work with other employees with different expertise and specialisms. This ensures that the project has all the expertise it needs to achieve its target. Also, the employees may benefit from each other’s abilities. Syngenta uses a matrix management structure, as this is best suited for them bringing together people with diverse skills into project teams to achieve a task. This works better than having a functional structure, as team leaders in charge of this project teams are trained and supported to help their teams perform to the highest standards.
Furthermore, the divisional structure is grouped into sets of subunits; this includes products, region and markets (Martin and Fellenz, 2010:p345). Each of the division has its own sets of functional structure such as marketing, finance, human resources etc and its operates independently. The divisional structure improves communication and coordination across functional groups compare to a single functional structure because each division attends to particular audience and has a clearly defined goal (Holker, 2012:p130). Compared to a single functional structure, changes to customers’ needs are met quickly and decision making processes speeded up as a result to fast response to changing environmental conditions( Martin and Fellenz, 2010:p345). In other words, customer satisfaction is typically higher because employees are more focused on their customers’ expectations and experiences. Some of the drawbacks of the divisional structure include inefficiencies due to repetition of roles across divisions; poor coordination, typically lower technical knowledge and specialist skills in divisional functions (EHow, 2012).
An example of a business with a divisional structure is the Body Shop. The business uses this structure based on its major operating regions around the world. As stated by Mills et al (2007:p467), the business products face different markets in different parts of the world. The structure is based on the principle that marketing Body Shop products in United Kingdom is different from marketing skin and hair products in America or Asian region. In other terms, as each customer is different, each functional group will focus solely at tailoring every marketing strategy to meet the needs of their customers.
Furthermore, leadership and managements are two terms that may be synonyms in terms of the set of skills and behaviours that are closely linked between the two positions. But, it is essential to understand that there is a distinction between management and leadership. Managements are describes as “doing the right things” and leadership as “doing the right thing” (Martin and Fellenz, 2011:p196). In shorts, this describes a manager as someone who follows daily guidance, that is, a particular system to get things done around the organisation. Managements are more concerned with solving short term problems, meeting deadlines and target. Also, they are comfortable prescribing roles and duties to others in the organisation.
According to Hannagan (2002), management’s roles are to organise, supervise and control people, so there is a productive outcome to work. They ensure that people achieve the organisation objectives by creating and implementing plans that will help the organisation succeed in the marketplace such as gaining competitive advantage. Along these lines, managements are categorise as those who achieve organisation goal by assembling other people to carry out the tasks required and do not necessarily carry out these task themselves.
Unlike managements, “leadership is increasingly associated not with command and control but with the concept of inspiration, of getting along with other people and creating a vision with which others can identify” (Mullins, 2007:p363). In short, managements tend to exercise authority over people to in pursuit to achieve a goal but on the other hand, a leader influences, motivate and inspire people to produce a change in the organisation. This in return gives the individuals the desire to put more effort in helping the organisation achieve that specific goal that will help them stand out amongst their rivals. Hannagan(2002:p37) describes leadership as having the sense of responsibility and authority, in terms of deciding the way ahead and being held responsible for the success and failure of the achieving the agreed organisational goals and targets. Leaders must be able to operate under complex and uncertain conditions. As stated by Martin and Fellenz (2007:p197) this view was coined from the traditional and aptly named “great man” view of leadership, as at that time they were mainly men which propose that in every situation, mostly in times of crisis great men would emerge to lead through leadership. Presently, such attributes are expected in every leaders, they should be able to stand through difficulty times, encouraging their staff and ensuring that they do all they can to get things right.
There are number of approaches to understanding leadership and managements, this includes theories that explains how the terms works. In the case of leadership, the trait theory was the first developed by theorist. The theory suggests that leaders are born and not made, its consist of certain characteristics and traits which made the leader different from their followers (Mullins, 2007:p367). According to Mullins (2007), Drucker initially quoted in 1955 that “leadership is an utmost importance, Indeed there is no substitute for it. But leadership cannot be created or promoted. It cannot be taught or learned”. This indicates that the individuals leadership comes naturally, their job positions does not make them leaders but their personalities, traits guarantees them as a leadership.
However, research studies have been carried out to identify common traits of leadership. The research has been carried out on good successful leaders but this has had little success, as each individual is different. An example of a leadership theory is the theory X and Y developed by Douglas McGregor. The theory describes the potential for leadership in two opposing set of assumptions that managers might have about their employees (Hannagan, 2002:p57). The theory X managers believe that people have dislike of work because they are lazy and will do everything possible to avoid getting any responsibilities. These type of people needs supervision and direction from the manager to fulfil a task. For the theory Y, the people enjoys having responsibilities, see’s work as natural phenomenon, derive satisfaction from their job and want to work hard to achieve organisational goals (Mullins, 2007:p444).
Furthermore, the management theory includes administrative theory which focuses on those activities designed in the running the organisation and the practices a manager should follow while the scientific management tried to control the best way to perform a job, this involves matching the employees to the job requirements and motivating them to maximise output(Martin and Fellenz,2010:p39).
In conclusion, it’s important that a business have a good organisation structure, as this helps to improve coordination, build good working relationships amongst departments in the organisation. Also, there is good communication and team spirit, this can result to the organisational aims and objectives achieved in a fast pace of time. Also, every business should know the right structure to adopt. In other terms, the structure suitable for one business might not be useful in another; it’s important that the organisation creates a structure that will help them achieve success rather than cause problems such as confusion among employee, as this will slow down the growth and performance of the business.
Furthermore, it’s clear that leadership and managements are not the same. Basically, managements focuses on daily activities such as budgeting, planning and maintaining the formal processes to get things done around the organisation rather than influencing or motivating individuals to get the job done. Leadership focuses on people rather than the structures and system of the organisation; in short, leaders make the personal development of their followers their number one priority by providing them with supports and guidance. It’s believed that leaders are not necessarily good organisers like some excellent managers but at the same time, these excellent managers may appear to be rather mundane in leadership. In practice, the most effective managers are leaders and the quality of leadership has become an increasingly important part of managements.
Also, when organisations have high competencies in management and leadership, they are able to overcome any challenges they might have been facing. However, most organisations are usually lacking one or the other. When management exists without leadership, there is no change in company and when leadership exists without management, the company is only as strong as its charismatic leader. When an organisation is over populated with managers, they can lack leadership to help deal with constant changes.
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