Functional areas of a business

Outcome 1

Avril Montgomery

1) Open System

An open systems approach is a business approach that emphasizes commercially supported practices, products, specifications and standards. Motorola is an open system. Using this approach assists their long term success. They are able to produce an appropriate output as they know the importance of gaining input from their surroundings. As a global leader in a wide range of technologies, the most important aim of Motorola is to maintain their position. Motorola is knowledgeable to the fact that technology develops rapidly and in order to access these technologies customers will require the latest modern products. They aim to distinguish themselves from their competitors by creating cutting edge designs that meet the expectations of the customers. The launch of the worldwide marketing campaign ‘Mobile Me’ which includes innovative design and wireless features has set them apart from their competitors. Their range of Bluetooth wireless devices enhances the mobile experience for customers. Motorola is aware of the effect mobile phones and other electronic products have on the environment. They apply technical skills to decrease negative effects to the environment at each stage of the product life cycle. One of their goals with regard to the environment is to produce products which contain minimal amounts of poisonous chemicals or to cut them out completely.

2) Structure

During the 1980’s, due to other mobile phone companies such as Nokia, Samsung and Sony creating strong competition, Motorola struggled to keep up. In order to reverse the slump in sales, top managers at Motorola decided to improve the quality. This change was needed due to global competitors and changing technology. The plan was to aim for zero defects in the production. Motorola implemented a system called Six Sigma. Six Sigma is a business management strategy which attempts to identify and eliminate the causes of defects and mistakes in the manufacture and business process. The program was stretched out from operations to the other functional areas – sales and marketing, personnel and human resources.

Reorganising into four business areas during 2005, allowed Motorola to improve their response to the needs of the customers and environmental changes that have taken place. As 58% of the company’s total sales were made up from mobile devices, Motorola views this as a significant contributor to their organisation.

3) Organisational concepts

Motorola’s structure is based on their products, these are:

• Connected home solutions
• Connected home solutions
• Government and enterprise mobility solutions
• Networks

Motorola’s functional areas are:

• Research and development
• Sales and marketing
• Personnel and human resources

Functional areas were set up by Motorola to support the product areas. Marketing is a very important area as the views of customers can be obtained to determine what they want. It is essential for the marketing and the research and development areas to work together to meet the needs of the customers. Technology is always advancing which means that the research and development area must stay ahead to include these advances in their design. To adjust to environmental changes, it is necessary for all functional areas to work together.

4) Advantages of Motorola’s structure

• Continual development of knowledge in dealing with Motorola’s complex products
• The structure allows Motorola to react quickly to environmental changes. This allows the company to respond to technological change.
• This form of structure allows Motorola to be extremely client orientated

Disadvantages of Motorola’s structure

• As the emphasis is the product, Motorola may have a problem of coordination
• They may be an apparent redundancy of effort and not much cooperation between product areas
• Managers may focus on their line of work to the disadvantage of the company as a whole.

5) Internal stakeholder

Motorola’s business unit is managed by Ronald Garriques. He is responsible for the mobile devices business unit and has the authority to guide the business unit for defining the strategy for mobile devices. He must guide the mobile device business to succeed otherwise he will be responsible for any failure and have to accept that responsibility. He has authority in the organisations formal structure. In terms of the informal structure of the organisation however, his authority is limited as this is normally governed by a group of individuals. His power could be undermined by the group of individuals, which could perhaps be detrimental to the business.

External stakeholder

Greenpeace is a worldwide campaigning organisation that acts to change attitudes and behaviour, to protect and conserve the environment. As an external stakeholder in Motorola they could have a big effect on the formal structure of Motorola. Although Greenpeace have no power in the formal organisation, they have influenced Motorola’s behaviour in terms of the environment as Motorola have a policy and commitment regarding this issue. They can exert some degree of authority, by persuading Motorola to train their staff on environmental issues and getting them to have an environmental policy. Through education programmes, they have the power to influence groups of individuals, making them aware of the harmful effects that the substances in mobile devices has on the environment.