The Organisation Structure And Communication Channel Business Essay

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In this report we researched for the Business Communication to describe about the dollar shops which is small business in itself but overall a growing business in market. In this research I am going to describe the organization structure, culture, ethics/social responsibility, decision making and our opinion what we believe would enable for this organization to success in the future.


Dollar stores, once considered dusty, out-of-the-way haunts, are one of the few niches of retail continuing to expand in a dim economy.Dollar Store is one of the fastest growing and most profitable business opportunities are today even without previous retail experience. The first Dollar General store opened in Scottsville, Kentucky, on June 1, 1955 and the concept was that no item in the store would cost more than one dollar.  In 1959, Family Dollar originated and owned by Leon Levin. In 1986, to compete with this a $1.00 Company opened its first five stores and, in 1991, the company decided to focus exclusively on the growth of the dollar store concept. The company came to be known as Dollar Tree Stores. Then 1, 2 and 3 Dollar shop also started their business worldwide. The 2n'5 Franchise" is the largest fixed price department store retailer in New Zealand.

In New Zealand lots of stores can be seen selling products at cheaper prices but under different names (Company's name). One of them is Cheap to buy which is in Glen Eden in west Auckland and other branch in Glen Innes in south. Both the stores are owned by one Person Mr.Varun Makol.These stores are doing business from last 1.5 years and performing very well in the marketing.

Growth of Dollar Shops

Consumers largely remained careful about expenses in retail channels in New Zealand during 2011 due to the ongoing economic downturn. The recovery from the global financial crisis has been slow, and New Zealanders were encouraged to improve household balance sheets by increasing their savings and reducing debt, or at least not taking on new credit. Grocery retailers outperformed non-grocery retailers in terms of retail value sales growth in 2011. Groceries are generally regarded as more essential than non-grocery items; therefore grocery retailers tend to perform better during times of economic uncertainty or downturn. However, non-grocery continued to outperform grocery in terms of retail value sales growth in supermarkets.

Overall in retailing, non-grocery sales remained higher than those of grocery sales in value terms in 2011. According to Clark (2011) while many retailers have been closing locations and struggling with sales, dollar stores have been in growth mode, with more consumers trying to stretch smaller incomes and higher-income consumers trading down in price.  A recent report by Colliers International found, that there are more dollar stores nationwide than drugstores (Moore, 2012). Dollar stores have grown into a $56 billion industry, a 43 percent rise since 1998, according to the industry research firm IBIS World.

Finding and Analysis

The organisation structure and Communication channel

Findings and Analysis

Organisational structure refers to the levels of management and division of responsibilities within an organisation. In an organization of any size or complexity, employees' responsibilities typically are defined by what they do, who they report to, and for managers, who reports to them (Mullins, 2005). Over time these definitions are assigned to positions in the organization rather than to specific individuals. The relationships among these positions are illustrated graphically in an organizational chart.

The structure of the Organisation is base from which everything is built. The Company (Cheap 2 Buy) follows simple vertical structure in which owner is on top position followed by manager. Manager is appointed by owner. After manger comes assistant manager. He works like manager in his absence and he is appointed by both owner and manager. After that position is grabbed by staff members (Interview with Manager).

When looking at a small business such as a local law firm, landscaping company or a retail company like Dollar store, it is evident that while they all offer different products or services, the structure their business is built on is the same. The design processes as well as the design dimensions of small businesses always follow simple structure configuration (Nelson, 2010). The company structure is designed to prevent chaos through an orderly set of reporting relationship and communication Channels. The Company follow bottom to top line communication. If staff have any problem. They need to talk with assistant manager and assistant manager will talk to manager. This is the way communication occurs in this company.

A communication channel is both formal and informal according to manager's answer. Formalization refers to the formal documentation of an employee's role. The employee's role is usually described or demonstrated by owner and sometime by manager. It depends upon the activities of the day.

Understanding the working environment requires an understanding of the key design processes. The main design processes are differentiation: deciding how to divide the work, and integration: coordinating the different parts. Differentiation in a simple structure consists of low vertical differentiation. There is little to no room between the employer and the employees, a small business operating under the simple structure would see very low amounts of vertical differentiation (Dobbins, 2005). The power in a simple structure is in the upper level. The boss makes the decisions and usually relays them to the employees who will conduct the task; employees usually have little decision-making authority.

As per manager's answers the company is following both formal and informal communication channel. From my point of view the company is following more informal communication because the formal structure is only followed in those organisations where there are departments and each department has manager. In other words where there is complex organisation structure. The lack of formalization allows the position to expand and contract as needed. The low vertical differentiation in a simple structure explains the high centralization. Small businesses are centralized because the upper echelon makes the decisions. The authority is centralized around the owner or boss. Also Nelson (2010) said that the fewer the number of employees, the broader the job description is and the job description may change depending on what is going on that day. This will lead to informalisation.The lack of formalization allows the position to expand and contract as needed. Typically the vertical structure will have these characteristics:

Specialised Task

Hierarchy of Authority

Rules and Regulations


Simple to establish and operate

Promotes prompt decision making.

Easy to control as the managers have direct control over their subordinates.

Communication is fast and easy as there is only vertical flow of communication.


Lack of specialisation

Managers might get overloaded with too many things to do.

Failure of one manager to take proper decisions might affect the whole organisation.


The structure of an organisation directly affects the productivity and economic efficiency but also the spirits of the workplace. In an organisation structure, getting the right structure should be the first step. Structure should be designed; therefore, so as to encourage the willing participation of the members of the organisation and effective organisational performance. The overall effectiveness of the organisation will be affected by both by sound structure design and by the individual filling the various positions within the structure.Buliding an organisation involves more than concern for structure, methods of work and technical efficiency. Managers, therefore, need to be conscious of the ways in which methods of work organisation may influence people's attitudes and actions. There should be proper communication channels like in Cheap 2 buy the employee is not directly allowed to talk with owner. This can only be done if there is formalisation in organisation.

Organizational Culture

Finding and Analysis1

Organizational culture is a common phrase that one encounters in the business world. Organizational culture is not tangible. It can be best understood by studying the behavior, the attitudes, the values and belief system of the employees. It characterizes and colors our perception of the business entity. Any employee however efficient will be a misfit if he is unable to adapt himself to the work culture. Organizations are laying emphasis on culture since growth and success depends on the kind of culture prevalent in the company.

Rokeach (1972) said that ethics is the common agreed upon practice of different moral principles or values. It concentrates on the general nature of morals and the specific moral choice an individual makes in relationship to others. It represents the rules and/or standards governing conduct of the member of a profession.

Organisational factor affect a lot to the value systems of managers. Cheap 2 buy is all about Integrity, courage, passion and for family. In this Company they have special qualities like a true worker has heart, believe in faith, justice and Good Luck that makes cheap 2 buy an Ethical organisation. All this things provide a manager basis for their ethics. Manager has to use standard of conduct and moral judgement in their business that they learn from the Organisation where they work. Manager has some duties or criteria to follow or solve the issue and to work for organisation. By using the rules of a organisation he always looking for a bright future for the company. Organizational structures that are inorganic and less versatile tend to cause miscommunication in the overall strategy of the organization. Miscommunication largely affects the execution of tasks and objectives and the organization's performance.

The culture of Cheap to buy store can be tiered into 3 levels based on their visibility and how closely they are adhered to in the organization.

The first level is Artifacts and Behavior: Artifacts and behavior are the most visible components of organizational culture. They include the physical layout of the workplace and observable behavior of its employees. Cheap 2 buy has store where there are lots of dollar shops. Even then they are able to compete their neighbours because of layout and how employees are dealing with customers.

The next level is Values: Values are less visible than behavior but they can be seen as they influence observable behavior of the individuals working in the organization (Schein, 1985). Manger is always ready to hear employees. For example if employee is feeling sick, has an urgent work. Manager is always ready to help employees in busy time like attending customers, taking payments. We can also include social responsibility in the values.

The responsibility of an organization's management towards the welfare and interests of the society in which it operates is a kind of values that exist in an organisation (Murphy, Hildebrandt & Thomas, 2008). At the same time society is affected by the policies and the actions of the company. In other words, social responsibility is the way your company gives back to and takes care of the community it is located in and the greater society we are all a part of.

Assumptions and Beliefs: They cannot be actually seen, but they are so well ingrained in the employees that they come out quite naturally because that is the way the organization thinks. The main aim of company is to make profit by satisfying customer's needs.

These are the strongest held components of culture as they are not influenced, but are evolved and affect behavior and values of employees of an organization.

Thus these 3 components make up the personality of the organization - the organizational culture. An organizational culture is the outcome of both the management's initial beliefs and employees' adoption of those beliefs.


Culture and ethics are interrelated and intertwined in such a way that it makes it difficult to know which factor is guiding/motivating the behavior arising from a given situation. Mullins (2005) said that most studies on ethical issues in business, while focusing on moral philosophies, merely provide descriptive statistics about a ethical beliefs and significant results of selected variables, in the context of theory building, there are number of models, that have been offered, however, few empirical tests of these models have been attempted and none have valued examined the culture dimension.

Codes of ethics are probably the most visible sign of a company's ethical philosophy. In order for a code of ethics to be meaningful, it must clearly state its basic principles and expectations; it must realistically focus on the potential ethical dilemmas which may be faced by employees; it must be communicated to all employees; and it must be enforced. Further, a meaningful code of ethics cannot rely on blind obedience. It must be accepted and internalized by the employees who are required to implement it. This means that managers must attend not only to the content of the code but also to the process of determining that content. To be most effective, a code should be developed disseminated in an open, participative environment involving as many employees as possible.

Work Teams and group dynamics

Finding and Analysis

Team dynamics are the unseen forces in which different people or groups are working in a team. Team dynamics strongly affect how a team behaves response, or does, and team dynamics effects are often very complex.