Organisational Structure Function And Reason Commerce Essay

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This paper will attempt to draw on theories for analysing and describing the organisational structure, function, and reason for existence of the Adidas shopping outlet at the Westfield shopping centre. In relation to this, the paper will aim to explain why organisations exist, provide a description of organizational structure and design, and carry out an analysis of some of the factors that influence how organisations function. This will include an overview of the shop, including an explanation of why it exists. Firstly, an outline of the Adidas retail store will be given, followed by an explanation to justify why the shop is classified as an organization. Subsequently, some of the theories of organizational structure will be introduced to analyse the functional processes of the shop, as well as explaining the impact of the external environment in which the shop operates. Furthermore, the paper will attempt to analyse how such organisational theories have influenced the structural design of the shop, followed by a brief conclusion to the study.

overview and aNALYSIS

The Adidas shop at the West field shopping Centre is very unique and fantastic for buying sporting outfits and workout needs. The layout of the store itself is very friendly and simple with men and women's section on opposite sides, and trainers registered at the front and back. The place is fairly new, and the staff is considerably friendly. The shop operates predominantly in one industry segment- the distribution and marketing of athletic and sports lifestyle products mostly designed by Adidas. In order to understand how the structure of this shop has been laid out, it is important to understand what an organization represents.

First of all, organizing is a way of establishing working relationship and structures amongst workers to enable them achieve the goals of the business in an effective and efficient manner. Furthermore, the structure of an organization is the formal system of reporting and task relationship which will determine how workers will utilize resources to achieve the objectives of the firm. Also, the design of the organization is how managers specifically make certain organizational choices which results in constructing a particular structure for the organization. Hence, the structure of an organization is the platform that helps in building management. Furthermore, it has a relation with building a framework that helps to divide the general work into components which are manageable, in order to facilitate the achievement of goals and objectives. Thus, an organisation is the mechanism or structure which helps a group of people to work together.

In order to determine whether the Adidas shop at the Westfield shopping centre is an organization or not, it is important to determine the main features or characteristics of an organization. Firstly, an organization should have an outline of objectives. Upon doing some investigations, it was realized that the shopping outlet has its objectives of making sales on products. Also, there are other objectives that have been established by management in supporting the main objectives. Another finding was that, management has identified the overall risk involved and divided activities that are closely related to be performed by different individuals in the shop. Moreover, duties have been assigned to shop floor workers whilst authority has been granted and defined to other line or assistant managers and supervisors who have relationships with the shop workers in a professional manner.

According to the contingency theory of management, organizational structures are designed by managers to fit the circumstances or factors which affect the company and cause them the biggest uncertainty. After a little research, it was also realized that the structure in the Adidas shop is constantly been changed by the manager in order to fit the retailing situations of customers and the shopping centre in general. Hence, the organizational explanations and contingency theory proves that the Adidas outlet at the Westfield shopping centre can rightly be confirmed as an organization. However, the question is whether it is a formal or informal organization. The findings shows the most salient features of the shop as the laid down structure of the shop by the managers, specialization and division of labour to individuals to make them more efficient, and the concentration on jobs to be performed rather than individuals. These are some of the features of a formal organization which makes the shop more suitable as one.

When it comes to their recruitment process, investigation shows that the shop has a very rigorous process of hiring dedicated and smart individuals who have experience in the sporting industry. They recruit very skilled workers and innovative brains from the London areas. Moreover, the shop has very flexible hours. For example, they consider hiring women where men are mostly employed. The structure of their leadership style is mostly participative rather than autocratic. According to Jewitt, (2009), participated leadership style is one in which a mental and emotional involvement is created by the leader to motivate followers in accomplishing objectives or goals set by the business. In regards to this, the Adidas shopping outlet is very innovative and follows the participative style by involving its workers in all aspects of the business. According to one of the workers, the shop floor workers are all involved in assimilating, evaluating, and assessing new ideas for the shop and not just the managers. Also, the manner in which the shop accomplishes their goals is what the neoclassical theory of management classifies as human relations and group or individual behaviour in determining productivity. This is because the shop uses functional benefits, team building and participation within the workforce in accomplishing their goals. This is all done within the chain of the shop and not implemented in the working partners outside.

Maslow suggested that a human is motivated by his or her desire to satisfy various levels of needs. Similarly, the theory by Hertzberg emphasizes on the fact that a good employee is well satisfied. Also, the other factors are hygiene factors that have a relationship with the environment and the job itself. Maslow's hierarchy of needs are self-actualization and esteem, social belonging, safety, and physiological needs.

Maslow Hierarchy of Needs

Source of diagram: Albrecht (1983)

The question is how this relates to the structural procedures of the Adidas shop. First of all, it was realized that the management do a review once in about six months to explore the needs of the workers and try to satisfy them. For example, in an attempt to satisfy their needs physiologically, they try to pay them better, and give them flexible shifts that suit their lifestyle. They also give them rewards in some easy ways like clothing once in a year from their own work. In terms of safety, the company has good security men around the shop floor and health and safety rules in place. The organizational structure has also been designed to accommodate the self-esteem of workers. It was realized that customers, assistants, and cashiers are respected by their teams and authorities in each part of the shopping floor.

In using the above diagram to explain, all the members of the shop are encouraged to share a central fundamental concept around which the retail shop is based on. These common goals and values make the workers a coherent team. This can almost be reflected or similar to something like the diagram below.

Source of diagram: Albrecht (1983)

However, there is no doubt that the external environment has an impact on the Adidas retail outlet. There is a huge rivalry amongst similar competitors all around the Westfield shopping centre with huge amounts of other retail shops that deal in similar products. In an attempt to explain how this affects their organizational structure, some of the porter's five forces theory will be used. There are a huge number of shops in the shopping mall that are competing against the Adidas shopping outlet. Hence it affects their sales structure and they have to always re-adjust to defeat this competition. Also, the clothing and shoes industry has been consolidated in recent years. As such, all the shops want to grab this opportunity. Another problem is the low differences in products. Hence, every brand in the Westfield shopping mall have similar products to the one sold by the Adidas shop. This changes the structural pattern of the way they import new goods from overseas and other Adidas outlets.

For example, due to this reason, the management introduced a key performance indicator into their structural requirements. This is something which reflects the factor for success in the business. They have established their KPI in the form of a balance score card in order set the standard of performance according to the process of control. Below is a similar card which they have recently established.

Source of diagram: Jewitt, (2009)

However, despite this mechanism, the design of the shop is still influenced by certain factors. For example, the organizational theories by (Taylor, 1947; Weber, 1947; Fayol, 1949) deal with the concepts and formal organization to increase the efficiency of management.

One of the main theories that have a great impact on the structure of the shop is the modern theories. These theories are based on the concept that an organizational system has to adapt to environmental changes. Also, a close look at their structure showed some of the characteristics that are notable to the modern theoretical approaches. For example, the shop is trying to become multidimensional and multileveled, multidisciplinary dynamic interaction process, and adaptive to changing situations in the shopping environment.

Modern understandings of the organization can be broadly classified into the systems approach, socio-technical theory, and a situational or contingency approach. According to Pasmore (1988), the socio-technical systems approach is based on the fact that all organizations contain technical systems, environment and people. Hence, in regards to the socio-technical theory, the organization is considered as a collection of technical system, social system, and its environment. There is an interaction amongst these components which is important to balance in order for the organization to function properly. In relation to this theory, it can be noted the Adidas shop turned to suppliers of ICT for electronic systems to give support to the new vision of the shopping process. There has now been an increase in the enterprise systems that incorporate a range of communication and processing, information storage to support the functions of the shop.

The systems approach views an organization as an interconnected composed system which mutually depends on sub systems. According to Albrecht (1983), a system can be viewed as a composition of processes, functions and components. Furthermore, Bertalanffy (1951), significantly contributed by suggesting a general systems theory component which is acceptable as a basic premise of modern theory. Based on this theory, it can be said that the environmental factors which compels management of the shop to re-structure the shopping procedures are the competitors, suppliers, customers, and the government. These factors can effectively change the future of the Adidas shop management. These are the interconnected components which mutually depend on sub-systems as suggested by Albrecht (1983).

The contingency approach (Woodward, 1965; Burns and Stalker, 1961; Selznick, 1949; Lawrence and Lorsch (1967) is based on the assumption that different situations require different adjustments. The systems in an organization are interrelated with the environment. Similarly, Hellriegel and Slocum (1973), suggests that different organizational relationships require different environments to become effective, considering various technical, political, legal, and social economic factors. This factor has been very influential on the shop structure. This is because as the shop is growing bigger and making daily expansions, the structure of the shop is becoming more formal. They are now using more complicated and indirect mechanisms for control. This comes in the form of more specialized job, units and staff on the shop floor.

Also, the scientific management approach is based on the work planning concept in order to achieve standardization, efficiency, simplification and specialization. The question is how this approach has also influenced the structure of the shop. In regards to this, it was realized that the shopping outlet has started to deskill as they have different individuals to scan products, stack clothing and trainers, and handle queries which has also adapted some aspects of Taylor's division of labour.


This paper has used the Adidas shopping outlet at the Westfield shopping centre to demonstrate that organizing is a way of establishing working relationship and structures amongst workers to enable them achieve the goals of the business in an effective and efficient manner. Furthermore, the structure of an organization is the formal system of reporting and task relationship which will determine how workers will utilize resources to achieve the objectives of the firm. Also the design of the organization is how managers specifically make certain organizational choices which results in constructing a particular structure for the organization. Finally, the paper has proven that certain theories of an organization have a substantial influence on the organization structure of a business or management procedures.