Week 5: Organizational Design
Read the issue for debate in Chapter 10 on page 323. A number of high-profile firms, including Tata Motors and Tesla, have taken steps to flatten their organizational structures. In removing layers of management, these firms are trying to improve the flexibility and responsiveness of the firm. But critics of these actions argue that managers are left with a wider scope of authority and are too taxed with their communication responsibilities to be effectively engaged in organizational initiatives. Also, some argue that long-serving middle managers are highly knowledgeable and serve as a steadying influence in the firm. This issue for debate looks at the opportunities and challenges of flattening organizations.
Solution
Week 5: Organizational Design
What are the benefits and costs of flattening the organization? In your view, do the benefits outweigh the costs? What industries or firms are most likely to benefit from flattening? In what situations does it not make sense?
The benefit of flattering the organization are stated below-
Firstly the flattered organizational structure will able to boost the independence among the employees and help to reduce uncertainty and confusion (Sonawane, 2021, p.207).
Secondly, the flattered organization helps to manage the performance of the employees effectively
The cost of flattering the organization is stated below-
Firstly sometimes the responsibility of the manager also increased which led to a fatigue situation for a manager.
Secondly, less focus on the motivation and performance management of the employees.
In my opinion, the cost has more weightage the benefit. The smaller organization are most likely to get benefit from flattening. It does not make sense when the manager is overweight with responsibility and not able to manage the employees properly. If the work is not done properly and confusion is created then also.
Why is it important for managers to carefully consider the type of organizational structure that they use to implement their strategies?
It is important for managers to carefully consider the type of organizational structure that they use to implement their strategies because the proper structure insure that the organization uses the resources effectively. The firms also need the structure to divide the task into meaningful groups.
Briefly trace the dominant growth pattern of major corporations from a simple structure to a functional structure to a divisional structure. Discuss the relationship between a firm’s strategy and its structure.
In the simple structure, the owner and manager make the decision. In the functional structure, the corporation divides the problem so that work can be done properly. The work is here divided among the employees (DiRomualdo, El-Khoury & Girimonte, 2018, p.10).
The relationship between the firm strategy and the structure is that the structure supports the strategy. It can be said that if the organization changes its strategy then it must also change its structure to support the change strategy. It shares a positive relationship where both are interdependent on each other.
What are the relative advantages and disadvantages of the types of organizational structure—simple, functional, divisional, matrix—discussed in the chapter?
Simple Structure
Advantage
The main advantage is that the coordination of the activities is efficient and effective.
Disadvantage
The main disadvantage is that lots of misunderstandings take place in the task due to frequent unwritten things and conflicts taking place.
Functional structure
Advantage
It helps in decision making and the decision which is made is clear and centralized
Disadvantage
One of the disadvantages is difficulty in coordination due to the functional-specific perspective in each department.
Division structure
Advantage
It helps the division manager in setting the strategies which are effective for the organization and also for the business environment.
Disadvantage
There are Major competition arises between the division of the organization
Matrix Structure
Advantage
The main advantage is to provide organization flexibility and provide responsibility to the manager which helps to develop their skill and competence
Disadvantage
Conflict can take place in the organization due to the performance evaluation or the resources.
When a firm expands its operations into foreign markets, what are the three most important factors to take into account in deciding what type of structure is most appropriate? What are the types of international structures discussed in the text, and what are the relationships between strategy and structure?
When a firm expands its operations into foreign markets the three most important factors to be considered are stated below-
Factors
There are three factors. The first factor is the type of the strategy. The second factor is the degree of product diversity and the third is the extent of international expansion.
Type of international structure
The different types of international structures are International division, Worldwide product division, Geographic area division, and Worldwide functional.
Relationship between strategy and structure
The relationship between the firm strategy and the structure is that the structure supports the strategy. It can be said that if the organization changes its strategy then it must also change its structure to support the change strategy. It shares a positive relationship where both are interdependent on each other.
References
DiRomualdo, A., El-Khoury, D., & Girimonte, F. (2018). HR in the digital age: How digital technology will change HR’s organization structure, processes and roles. Strategic HR Review.
Sonawane, A. Y. (2021). The Change in Nature of an Organization and Its Work. In Critical Issues on Changing Dynamics in Employee Relations and Workforce Diversity (pp. 206-221). IGI Global.
