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When you think of manager what sort of person comes to your mind? Do you see someone like Mr. Gordon Watson, Managing director of Watson Engine Components or Mr. Theo Wolf, the Chief Executive Officer of H&M Consulting determining the prosperity of their company? Though both of these individuals are working in different sectors they have one similarity to achieve organizational goals and growth for their respective companies. In achieving these goals they both take different approaches which we will discuss later but before delving into this discussion we must reflect on some concept. Organizations are collection of people who work together and coordinate their actions to achieve a wide variety of goals. Management is the planning, organizing, leading and controlling of resources to achieve organizational goals effectively and efficiently. In course of our discussion we will evaluate and compare two firms Watson Engine Components and H&M Consulting in terms of their organizational structure, culture and design, their approach towards leadership, management and teamworking.
Organizing is the process in which the manager establishes the structure of working relationship among employees to allow them to achieve organizational goals. Organization structure is the framework, typically hierarchical, within which an organization arranges its lines of authority and communications, and allocates rights and duties.. Organizational design is a manner in which a management achieves the right combination of differentiation and integration of the organizationHYPERLINK "http://www.businessdictionary.com/definition/organization.html"'HYPERLINK "http://www.businessdictionary.com/definition/organization.html"s operations, in response to the level of uncertainty in its external environment. Any manager has a duty to establish an organizational chart or structure in order to address different factors affecting the company. Design depends on the specific situation the company faces. Four factors are important in determining an organizational structure of a company they are: Organizational environment, Technology, Strategy and Human resources.
In general the more volatile and uncertain the external environment the more difficult is for managers to get access to the scarce resources. In this situation decision making should be prompt and quick so for effective communication and getting greater access to resources the managers usually keep a flexible organizational structure. The managers will decentralize the decision making and will empower the lower-level managers to make important operational decisions as to remove the unnecessary obstacles and bureaucracy. If the external environment is stable then less coordination and communication is required to obtain resources. The manager will create a hierarchal decision making and will define a clear set of rules and regulation to govern the activities.
In case for Watsons Engine Components the market is getting really competitive where they now have lesser time to deliver orders, contract prices are decreasing with an increase in quality standards. The problem for Watsons Engine is that their decision making is highly centralized where there managers maintain close control over their departments. They take very little input from their low-level managers who have fairly better idea of improving production processes. Though they still maintain their market share but increasing competition in business environment will create problem for them in future. On the other hand H&M consulting encourage their employees to take initiatives and responsibility. Due to the expanded network and the range of projects which are undertaken by their employees, H&M consulting empower their staff to take innovative approaches towards decision making.
Once the management devises a strategy they have to must choose right kind of organizational structure to implement it. Different strategies call for different organizational structures. For example if the company strategy is to increase the value of its goods and services in customer's perception it is imperative for the management to choose a flexible organizational structure which aims at increased cooperation and communication at the departmental level as well as with the customers. In contrast, if the strategy is to reduce costs in all functions of the company it requires a more formal structure, which gives the manager greater autonomy and power over departments.
As far as Watson Engine Components are concerned there is an absence of strategy with the attitude of its managing director "If it ain't broke, don't fix it!" depicting that there is an absence of a concrete strategy there is minimal communication between different departments which represents that organizational structure of the firm is outdated and bureaucratic. On the other hand H&M consulting is concerned the management is clear about the strategy and organizational structure required to support business growth. Its mission is to achieve customer satisfaction through employee fulfillment meaning that employees are directly geared to achieve the company goals. For this purpose the company has opted for correct organizational structure that encourages contributions and innovations made by the employees in decision making.
Technology is the combination of skill, knowledge and machinery in order to design, produce and distribute labor. Watsons don't have state of the art machinery and don't have enough capital to buy new machinery in addition to that they aren't able to fulfill the existing orders due to lack of flexibility on floor shop. This happens when the workers don't have flexibility to take initiative and solve basic problems due to hierarchical managerial structure. However, the production manager Ahmad khan knows these problems and has recommended suggestions but they weren't considered due to the formal organizational structure. For H&M consulting because there line of work require taking initiative and unique problem solving the management has a flexible structure to facilitate quick decision making.
The final factor concerning the organizational structure is human resources. Watsons Engine have about 125 semi-skilled labor whose skill set have huge demand in the market. Here you need people to work together in teams or groups in order to create an environment in which an employee has more freedom and autonomy. Another drawback for Watsons is that they don't have strong professional values and norms of behavior as part of their training mandatory for all employees. On the contrary H&M consulting has clearly defined there set values which are acronym to PRIDE which encourages employees to take responsibility for their own growth and development. The role of HR department is crucial here where for Watsons should invest more on his people because they will create value for the company.
As far as teams and teamworking is concerned it can help an organization gain competitive edge over its competitors because they can enhance the performance by creating synergies, increase responsiveness towards customers, increase employees motivation and increase innovation. In Watsons Engine you don't find any form of team or groups working together which are causing troubles in the overall productivity of the company. The important thing about creating a synergy is that people working in a groups or teams are able to produce more in terms of quantity as well as quality than working separately and then combing their individual work. In Watsons Engine you don't find any synergy created among employees rather they are at loggerheads with the management over union issues.
In contrast H&M consulting work in teams and groups on different projects because the nature of every project is different in nature they have devised a network structure with project teams each having relevant skill sets required for their project. This is very important because any manager need to keep in mind when devising a group that each member should have complementary skills and expertise appropriate for the group's work.