- April 15, 2020
Individual Organizational Structure
Theorganizational structure of the organization is functionalorganizational structure. The structure embraces the categorizationof the tasks in terms of functional departments. Some of thedepartments that are found in this type of the structure are such asthe sales, customer service, production and marketing departments.The company embraces this structure due to the proper division ofduties and separation of responsibilities and held by thedepartmental heads (Ashkenas,Ulrich, Jick, & Kerr, 2015).One of the main difference of this structure and that of thehierarchical structure is the notion of the high level ofdecentralized management system. In the functional structure, everydepartment head has the responsibility of making strategic decisionsthat affects their departments. On the context of the hierarchicalstructure, the notion of the top down authority is quite embraced.The role of the middle level managers and the subordinates are tofollow instructions and do exactly as they have been instructed(Wong,Hebert, Justice, Liu, & Rinne, 2015).
Mostof the decisions are made by the top level strategic managers whohave the final say on every action taken by the company. Conversely,the functional structure embraces the notion of slice diagonalmanagement where the decisions are made from all the quotas ofmanagement. Here, it is the responsibility of the departmentaltogether with the subordinates to come up with informed decisionsabout their departments that would ensure that the strategicobjectives of the company are met (Ashkenas,Ulrich, Jick, & Kerr, 2015).The meeting of the strategic objectives of the company here iscollective responsibility which indeed goes a long way in ensuringthat every employee is committed in carrying out their duties andobligations of the company. Another important difference betweenfunctional structure and the hierarchical structure is that for thehierarchical structure, the decision-making process is quite slow andcould lead to the delay in various production processes (Withey,& Gellatly, 2015).While in the functional structure, there is much ease on decisionmaking since the departmental head have to the authority and themandate of ensuring that they maximize on the potentiality inknowledge and wisdom in giving profound decisions about the companyoperations. In the event that the decisions they make do not meet theobjectives of the company, they would be held responsible for anydiscrepancies brought forward. In this context, it would be quiteevident the probable success would be seen in the context ofexpertise, experience and the knowledge base of the employees atevery department (Ashkenas,Ulrich, Jick, & Kerr, 2015).
Thedifference between the functional organizational structure and the ofthe divisional structure is in terms of the departmentalization.While the functional structure groups its department in terms of thefunctionality, the divisional structure categorizes the departmentsin terms of the products that they product. therefore, all theactivities that relate to a specific product is grouped under onedepartment. The departmental head here is therefore responsibility ofmanaging a product from its production to the sales of the same. Thistype of departmentalization has the effect of understanding theprofitability of a specific production line allowing for proper costbenefit analysis for each product in a stand-alone way. The criticaladvantage that the functional structure has over divisional is thatthere would be a reduction in the expanse of the human resource costssince similar activities shall have been grouped together hencereducing the number of personnel assigned to these tasks (Joseph,Klingebiel, & Wilson, 2016).
Inthis structure, organization is divided into departments thatconnotes their functionality. These functionalities involve theproduction, marketing, manufacturing and sales among others. In mostcases, the structure adopts a bureaucratic structure in which everydepartment is managed by a departmental head. The reporting lines arewell stratified in such a way that the chain of command is welladhered. Delegation of duties is also used as tool of ensuring properscheduling of responsibilities and profound accountability in everydepartment (Wong,Hebert, Justice, Liu, & Rinne, 2015).To this effect, each departmental head is responsible for the makingof strategic decisions of the department with keen attention to theoverall objectives of the firm. The departmental heads also have theobligation of reporting to the top level strategic managers on theprogress of the department. it should be noted that the strategicmanagers have the mandate of influencing the decisions made by thedepartmental managers. The overall objectives of the firm are made bythe strategic managers who have the mandate of making sure that theshareholders’ wealth is maximized (Ashkenas,Ulrich, Jick, & Kerr, 2015).
Theoverall objective of the company is disintegrated into various facetsgoals in accordance with the specialty of the various departments.The fact that these departments are categorized into specialty makesit quite easy for the formulation of the objectives of the company.for example, the main aim of the sales department is to ensure thatthere is maximization of the sale volume in the company. on the otherhand, the customer service department is to give much priority to themaintenance and growth of a high clientele base in the company. Thecoordination of these departments is very critical as it will help inthe meeting of the overall objectives of the firm (Wong,Hebert, Justice, Liu, & Rinne, 2015).The fact that each individual department is dedicated to a singletype of function makes specialization to be quite effective allowingfor more corporation with the whole context of management ofworkflows. In this structure, the roles, duties and responsibilitiesof every department and staff are clearly defined. The cleardefinition is based on the fact that the company has grouped therelated activities together and hence creating an advent of much easeand profound accountability in every undertaking. The fact that thecompany embraces the functional organizational structure makes tohave a proper chain of command within its structures. The structuresare designed in such a way that the proper authority is bestowed uponthe right personnel for proper accountability (Ashkenas,Ulrich, Jick, & Kerr, 2015).
Variousorganizational designs help to determine the structure that best suitthe organization. The organization departmentalization is asignificant determinant factor as it helps in understanding how bestthe company can reduce the various costs that are associated with thebureaucratic structure of the company. On the account of the wholecontext of managing human resource, the most efficient way ofreducing the work redundancy is through ensuring that the relatedactivities are put into one department and qualified personnel areput to task to handle these duties. In this context, all theactivities that relate to one another are put into one department.For example, it is important for the activities that are related tofinance to be grouped into finance department for it allows forefficiency in the workflows. For most companies, the most importantfactor is cost minimization. In the event that the grouping ofrelated activities into one department can reduce the operationalcosts, it would be best for the firm to embrace the functionalstructure (Varpio,Gruppen, Hu, O`Brien, Ten Cate, Humphrey-Murto, &Durning, 2016).
Anotherpertinent factor is the customer based design which places thecustomer at the center of every transaction. One the way in whichcustomer based design will influence the structure to be institutedin the company is the priorities of the customers at hand. There arecustomers who would prefer a high social class than others. Forexample, in the production of alcoholic drinks, Diageo internationalhas various brands of beer and spirits. There are those that aretargeting the high-end customers while there are those that focuseson the low medium end customers. In this context, the divisionalorganizational structure would be best suited this firm since everydepartment will be concentrated in maximizing the sales for variousmarket niche (Ashkenas,Ulrich, Jick, & Kerr, 2015).The niche here is defined by the taste and preferences of each marketsegment is question. For example, the divisional structure helps inmaking sure that the company not maximize sale in viceroy but also inJohnnie Walker. The fact thatthesedepartmentsarecategorized into specialty makes it quite easy for the formulation ofthe objectives of the company. for example, the main aim of the salesdepartment is to ensure that there is maximization of the sale volumein the company. on the other hand, the customer service department isto give much priority to the maintenance and growth of a highclientele base in the company. In summary, the organizational designhas a far-reaching effect on the type of organizational structure acompany is to embrace. This stems from the need to minimize cost tothe need to maximize sales and increase profitability (Varpio,Gruppen, Hu, O`Brien, Ten Cate, Humphrey-Murto, &Durning, 2016).
Ashkenas,R., Ulrich, D., Jick, T., & Kerr, S. (2015). Theboundaryless organization: Breaking the chains of organizationalstructure.John Wiley & Sons.
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Varpio,L., Gruppen, L., Hu, W., O`Brien, B., Ten Cate, O., Humphrey-Murto,S., … & Durning, S. J. (2016). Working Definitions of the Rolesand an Organizational Structure in Health Professions EducationScholarship: Initiating an International Conversation. Academicmedicine: journal of the Association of American Medical Colleges.
Wong,E., Hebert, P., Au, D. H., Justice, A. C., Liu, C. F., & Rinne,S. (2015). Organizational Factors And Risk Of Readmission AmongPatients Hospitalized For COPD. In C13.ACCOUNTING FOR COSTS AND RESOURCE UTILIZATION IN RESPIRATORY HEALTH(pp. A3888-A3888). American Thoracic Society.
Withey,M. J., & Gellatly, I. R. (2015, January). OrganizationalStructure, Situation Strength and Employee Commitment: Test of aProcess Model. In Academyof Management Proceedings(Vol. 2015, No. 1, p. 14587). Academy of Management.