Organizational Design and Structure Essay Example
Organizational Design and Structure Essay Example

Organizational Design and Structure Essay Example

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  • Pages: 13 (3472 words)
  • Published: December 16, 2017
  • Type: Case Study
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The text discusses the importance of organizational structure in determining reporting relationships and how it is influenced by an organization's strategy. It provides an example of how different businesses may adopt different structures based on their workforce needs. The assignment focuses on BBC Ltd., an IT company, and its organizational structure, job design, and other aspects of the corporate system.

All organizational structures have two fundamental requirements: division of labor and coordination of that labor to achieve common goals. BBC Ltd. is a large IT company with a divisional organizational design that is organized around products, projects, and markets. Each division has its own functional specialists who are typically organized into departments. The company has divisions such as North American, exploration, marketing, production, and others (Machines and Steen 362-364).Divisions within BBC Ltd. are relatively independent and offer unique products and services compared

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to other divisions. The executives of these divisions play a crucial role in selecting leaders for the product-market and financial divisions, granting them decision-making authority to swiftly adapt to changes in their specific markets or areas of responsibility. These divisions may also compete against each other for resources and market position, similar to external business competition.

BBC Ltd.'s divisional organizational structure enables the company to segregate large sections of its business into semi-autonomous groups. These groups are primarily self-managed and concentrate on a narrow aspect of the company's products or services. This divisional structure brings numerous benefits, including allowing each division to specialize and focus on their respective products, services, or markets without disruption from conflicting interests.

Moreover, since each division operates semi-autonomously, operational decisions are made by employees who have the closest proximity to specific

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issues and problems. This closeness not only enhances understanding but also brings forth specialized knowledge and skills that are best suited for resolving those issues. The divisional structure provides flexibility as it allows each division to operate independently with a focus on its own concerns instead of being centrally managed.The corporate headquarters manages the overall strategic management of the company, allowing division leaders to focus on their specific goals. This structure also promotes accountability within divisions and helps identify organizational problems. However, maintaining a balance of power between central authority and divisions is challenging. The headquarters must retain enough control to direct business strategy without hindering the flexibility provided by semi-autonomous divisions.

Divisions should have freedom to achieve their goals while adhering to the overall strategy from headquarters. Nonetheless, this can lead to function duplication such as having duplicate financial departments, research and development departments, sales and marketing departments, and operational facilities. Consequently, competition may arise among divisions rather than cooperation towards strategic goals. Additionally, global companies face challenges in meeting the demands of global customers who prefer a single point of purchase instead of multiple regional ones.

In order for a company with a divisional structure to succeed, it is essential for top leaders to have knowledge of each division's activities and provide guidance on aligning with new strategic directions or fostering effective partnerships between divisions. Executives also need to understand resource utilization in order to reduce costs and organizational complexity. The implementation of shared centrally-managed resources such as administrative support or office equipment can help achieve this goal. Job design involves assigning tasks to a job while considering their interdependency with other jobs (Machines

and Steen, p.161). Jobs can vary greatly in terms of required skills and complexity, leading to differences in work efficiency and employee motivation (Machines and Steen, p.161). When jobs are well-designed, employee motivation tends to increase. Managers at BBC analyze each job carefully to ensure that it effectively engages and motivates employees while meeting business needs. Motivation is enhanced when a job requires a variety of skills, involves different tasks, gives employees responsibility for the entire job rather than just part of it, and helps them understand the significance of their role.

Senior executives at BBC have a crucial responsibility in designing the organization systemically, as it gives them a competitive advantage in the face of challenges. The organization design at BBC follows the principle that interconnected groups collaborate to accomplish tasks. BBC follows the scientific management design approach, which impacts work practices and management methods. Motivation theory principles at BBC include setting goals, involving employees in goal design and agreement, utilizing "stretch" goals to enhance performance, linking rewards to performance, and increasing self-efficacy. Recognition and employee involvement are key motivating strategies employed by BBC Ltd., achieved through programs like "employee of the month" or well-designed incentive schemes. Involvement and participation are fostered by allowing employees input in decisions affecting them and granting control over aspects of their work. Responsibility is given to employees with a history of taking on additional tasks so they can make customer-benefiting decisions. Granting employees autonomy in resolving customer issues independently is important, along with providing feedback. When giving feedback to employees, Abs's managers prioritize positive feedback both written and verbal forms.The text discusses the strategies implemented by BBC Ltd., a

company, to motivate its employees, such as job enlargement, job enrichment, and job empowerment. These strategies aim to create three psychological states that are crucial for motivation: a sense of meaningfulness in their work, a feeling of responsibility for the outcomes of their efforts, and access to information about the consequences of their job.

Decision-making plays a vital role at all levels within an organization. Managers should not assume the correctness of their decisions and must adapt different decision-making approaches based on the specific situation. At Abs, managers emphasize the importance of accurately identifying and understanding the problem at hand before making any decisions. This is because incorrect decision-making outcomes can arise from a failure to do so (Machines and Steen, p.166, p.182).

To address issues within his department at Abs, the manager evaluates them with all employees involved to ensure everyone is informed. Based on past successful approaches if applicable, he then makes a decision. This decision-making process can be transformed into a computer program with predetermined rules to handle problems effectively.

In certain cases, utilizing multiple perspective analysis proves to be the most effective approach for making decisions as it compels managers to break out of their usual thinking patterns.According to Abs's manager, Alex, diverse thinking approaches can be achieved by considering different options. It is crucial to take into account how others will react to the decision and creativity plays a significant role in the decision-making process. Inputs from customers, clients, or colleagues from different departments provide different viewpoints for making decisions. The BBC also employs the short-term approach, known as operational decisions, which aim to address immediate problems through employee actions. This method involves

practical steps for achieving quick outcomes. After a decision has been made, it is important for the manager to ensure its correct implementation by communicating with all involved employees. Gathering feedback from those directly affected by a decision is also important for leaders and managers in an organization or department as it helps determine if the right decision was made and guides future important business decisions. The management at BBC utilizes scenario planning strategy to anticipate and react to potential outcomes and also practices divergent thinking to explore different approaches to issues. Improved communication occurs when everyone feels that their input is respected.The BBC management believes that employee motivation can be negatively affected by unfair treatment, as it leads them to seek equity. This can result in reduced inputs, increased demands from the company, a survival mode approach, resistance towards other issues, competition with colleagues, increased absenteeism, or ultimately quitting. These outcomes have a detrimental impact on the organization's performance and result in economic and talent losses. Equity theory sheds light on how employees determine fairness and respond accordingly. Therefore, addressing these concerns is more beneficial for managers at BBC than ignoring them.The solution to improving communication within an organization lies in leaders adopting a more open and engaged approach and effectively managing unrealistic expectations. It is also important for leaders to address valid concerns expressed by employees and approach change initiatives thoughtfully to prevent employee resentment. While management strives to establish trust with employees, they are aware of the role psychological factors play in shaping employee perceptions, attitudes, motivations, and behaviors. The BBC prioritizes treating employees fairly and with respect to achieve successful organizational

results regardless of market conditions. Expectancy theory is applied across departments at the BBC, enhancing employees' can-do attitude by assuring them of their necessary competencies (Increasing E-to-P Expectancies). Employees receive regular performance evaluations at the BBC and are rewarded based on higher job performance (Increasing P-to-O Expectancies). Therefore, employees believe that higher performance leads to greater rewards.According to Alex D., the manager of BBC, it is the responsibility of the manager, not the worker, to ensure productivity at work. The organization's culture plays a significant role in influencing employees' ethical conduct. This culture dictates how tasks are performed and interactions take place among employees. It consists of beliefs, values, rituals, and symbols that guide the company's operational style. By unifying the workforce and providing direction, corporate culture is essential for the company's success. Following commitment, ownership, customer focus, innovation, and leadership as core values, BBC demonstrates these values through their actions.

Similarly important in Abs's culture is being a socially and environmentally responsible business. This aspect is deeply ingrained within their organizational culture which includes shared understanding among members regarding expectations and ways of doing things. Abs believes that when employees view their jobs as more than just work but rather as a cause or purpose they are motivated to work hard and innovate. To support this belief Abs provides ample opportunities for employees to make a meaningful difference in their everyday work. Moreover Abs upholds its core beliefs through achievement accountability alignment and agility.
The company values its accomplishments through the lens of its company culture and ensures that they were achieved following the BBC way. Employees at Abs embrace challenges and push boundaries, driving innovations

that overcome technological barriers. This drive and dedication from employees energize the industry, help customers succeed, and promote continuous learning and improvement within the business. BBC employees contribute to industry innovation, help customers succeed, and foster lifelong learning. The company recognizes that investing in organizational culture positively impacts performance. Aligning organizational culture is key to implementing effective improvement strategies and solving organizational issues. The impact of organizational culture on employee performance and motivation levels can vary. When employees identify with the corporate culture, they tend to work harder towards achieving organizational goals. Organizational colonization is the process through which individuals acquire necessary values, behaviors, and social knowledge to fulfill their roles within the organization. In BBC, newcomers undergo a critical task of understanding responsibilities and goals while interacting with others to establish company values, goals, and work/life balance.

Job satisfaction becomes apparent as part of this third process.

In the process of turnover, an employee leaving the company can occur due to various reasons. Formal colonization occurs through mentoring, where a more senior employee communicates values, skills, and habits to a new hire. The goal is to align the behavior and values of the new employees with those valued by the organization. Informal colonization in BBC happens through informal channels like peer interactions and informal interactions with management.

This is where effective and lasting colonization takes place. New hires observe and interact with fellow employees in break rooms and around common areas, observing accepted behaviors of peers and superiors in different workplace situations. This helps them understand the true values of the organization and adjust their behavior accordingly. Organizational colonization involves both learning and adjustment (Machines and

Steen, p.396).

Organizations cannot avoid change as it promotes growth for them and their members (Machines and Steen, p.410). Changes occur within BBC for several reasons such as new staff roles, funding changes, technology acquisition, new missions or goals, or expanding membership or client base.However, there are individuals who resist these changes, which can be met with criticism. This resistance can take different forms, from work stoppages to subtle attempts to continue with the old ways (Machines and Steen, p.410). To better manage these changes, Abs's management introduces them gradually into the organization. The process of organizational change management starts with a systematic diagnosis of the current situation to assess the organization's need and ability to change. Managers oversee transformation projects and work on aligning group expectations, communication, team integration, and training. Areas that require change are identified through interviews, focus groups, observation, and other research methods both internally and externally. In the BBC, leaders define the desired culture clearly and develop a change process to implement it. BBC offers various types of organizational changes such as mission changes, strategy changes, operational changes (such as structural changes), technology changes, changing attitudes and behaviors,and restructuring.These changes have the potential to threaten the workplace's organizational culture including core values,misson,and work environment which naturally evokes fear.According to Abs's executive employees sometimes create a sense of group identity in their company forming opposition teams against perceived threateningchangesUnderstanding that employees have both personal and professional stakes in these changes can assist managers in implementing organizational restructuring. One reason why employees resist changes is their lack of clarity about their roles during the change process (Machines and Steen, p.412). As a result,

employees in a post-restructuring context are understandably hesitant about the organization's future direction and their roles within it.
The social-psychological impact of organizational restructuring on trust and job satisfaction must be taken into consideration. BBC management takes organizational changes seriously and ensures thorough implementation through multiple stages. Communication is given the highest priority and is considered the initial strategy for any organizational change (Machines and Steen, p.414).
The leader of the BBC motivates employees by informing them about the advantages and disadvantages of a change. Employee involvement in decision-making creates a sense of personal responsibility for successful implementation (Machines and Steen, p.416).
Before introducing any new additions to the organization, thorough research is conducted from various perspectives. Whether it involves implementing new software or creating a new department, a trial group is established to observe how well the change fits within the organizational structure.After gathering the research data and conducting a trial run, a preliminary roll-out plan is created. It is recommended to implement the change in phases to address any issues that may arise when it goes live company-wide. Training for the change should begin at least 30 days before implementing the preliminary roll-out plan. A designated group of people should be available for employees to approach with questions, and their input should be welcomed as the change unfolds.

Management in the company conducts ongoing monitoring of the progress of any introduced changes to limit negative effects. The supervisors who directly manage employees serve as change agents and are trained to handle the change. Their feedback is evaluated throughout the process. This communication is crucial for employees as transparency promotes security and helps address resistance. Additionally, leaders address

individual concerns regarding job security, wages, and loss of control. Having a strategic vision plays a key role in leading change as it reduces employee fear of uncertainty and provides clarity on desired behaviors for the future (Machines and Steen, p.418).

Work Groups and Teams: According to Machines and Steen (p.212), teams are groups of people who influence each other, are accountable for achieving common goals associated with organizational objectives, and perceive themselves as a social entity within an organization.

In the BBC, there are five main types of work teams. Problem-solving teams are assembled to solve specific problems or improve activities within their own department.

After conducting research and arriving at a proposed solution, they present their findings to the proper Formal self-managed work teams. These teams operate independent of a supervisor and have the authority to complete assignments, coordinate across departments, and allow team members to select tasks they would like to undertake. This means that they both manage and execute themselves while being equally accountable.

On the other hand, cross-functional teams consist of members from diverse specialized backgrounds.

For example, a content delivery network account representative may invite a solutions engineer, a channel sales director, an account development representative, and a professional services member for a conference call with a customer. The expertise and information brought by each member will aid in a smoother and more efficient sales process that can potentially encourage the customer to request a purchase order.

Work groups, also known as natural teams, are formed by individuals who share responsibility for a specific process. These groups aim to identify how their process can best support the organization. They consist

of employees from the same department or working on the same product and are permanent teams that meet regularly.

On the other hand, virtual teams are self-managing and composed of members located in different areas. Despite their physical dispersion, technology enables them to collaborate effectively and achieve communication goals across space, time, and organizational boundaries.

BBC leaders recognize the importance of teams in enhancing organizational effectiveness. They believe that teams facilitate knowledge retention through information sharing and experiences exchange among team members. Additionally, teamwork enhances individual power, satisfaction, trust relationships, knowledge sharing, understanding, and accountability within the group.

Overall, working collaboratively as a team allows individuals to achieve objectives more efficiently while ensuring equal contribution from all members.In addition, teams have the ability to combine individual talents, resulting in a collective effort that surpasses the sum of its parts. Furthermore, teams create an inclusive environment where every person's input is valued, regardless of their organizational level. By collaborating and learning from others, teams can generate new knowledge and provide a platform for multiple perspectives to address complex problems. This fosters the development of fresh ideas and insights while promoting innovation and support for novel concepts. Additionally, teams can amplify their impact while minimizing resource usage. Ultimately, teams empower individuals, the team itself, and the organization as a whole.

It is important to note that all teams are groups but not all groups are teams. Work groups typically focus on individual tasks whereas teams collectively strive towards shared objectives. However, this does not mean that individuals are overlooked within a team; rather, their work is coordinated to contribute to the greater good. Groups may consist of individuals who come together

without interdependence or specific organizational goals.

(Source: Machines and Steen)

Informal groups are commonly formed within the BBC due to social relationships and serve as sources of empowerment for individuals while also helping alleviate workplace stress by providing emotional support.Employee satisfaction and productivity are crucial for organizational effectiveness. Conflict is an inevitable part of the BBC, occurring between departments, senior management, and even other organizations. Occasionally, interpersonal conflicts arise when individuals do not get along. If they are not forced to work together, these individuals may have polite conversations as acquaintances. However, regular collaboration or sharing workspace can lead to friction. In such cases, managers must act as mediators and counselors to resolve conflicts or make decisions regarding team members who cannot function well in a team.

According to Machines and Steen (p.300), this conflict is known as relationship conflict where individuals focus on others' characteristics rather than the actual issues causing the conflict.

Managerial expectations can also contribute to conflicts when employees misunderstand them. BBC managers address this by clearly communicating their goals to employees both verbally and in writing. They also encourage questions about goals and hold regular meetings to discuss the best approach for achieving them.

Conflict between teams and departments, referred to as inter-group conflict, often arises due to differences in roles and functions. Both parties are simply trying to fulfill their job responsibilities but end up encountering each other frequently.An example of conflict within a company can occur between the sales and information technology departments. The sales department requires specific software to support their sales and invoicing processes, but implementing these changes would impact other parts of the company's database, which poses a challenge for

the IT department. This creates tension or conflict that is not anyone's fault. Resolving this conflict requires mediation or a decision from management. If left unresolved, it can be damaging to the organization and those involved. However, there are situations where inter-group conflict can be beneficial. For example, two competing sales teams may engage in taunting and nudging each other, ultimately motivating both teams to perform better and resulting in higher commissions for everyone and improved outcomes for the company. Conflict theory sees this type of conflict as healthy and constructive. Therefore, prompt resolution of conflicts with a focus on achieving mutually beneficial outcomes is crucial for BBC management.

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