OB assignment essay: Organizational Structure
Organization is a place where people joining hands come together to achieve a common objective. It is created to carry out the roles and the responsibilities with mutual coordination. The organizations have their own mission, vision and their goals. Organizations act as a system which is known as close and the open system (Oxford University Press 2012). The objectives of Organization are it will provide efficiency at work, help in proper commanding, improve the productivity, and managing the change. Creating the organizational structure either hinders or helps in achieving its goals. The requirements of the Organizations can be matched with the structures. Organizations have been divided into different structure on the nature of their business and its locations. Functional Organizational structure is a type of structure composed with different departments known as finance, marketing, HR, Information and technology. Divisional structure is a type of structure created with the help of several divisions at different geographical locations. Matrix Organizational structure is a type of structure created with the combination of divisional and functional structure. Project based organization are those organization which has been formed for completion of particular period of time. These organizations structure are being designed for smooth functioning of the business (Hearst Communications, Inc 2012). The organizational structure determines the hierarchy related with the reporting system. It will help to identify the commanding and the communication system. It is stated that the structure explains the systematic flow of the work. The organizations might also have flat or the taller structure for distributing the authority. It will help in evaluating the performance by aligning it with its mission and vision. Every structure has got its own advantages and the limitations while carrying out the business activities.
In this paragraph we will explain functional Structure in detail as our current Organizational structure. Functional Organizational structure is being formed by the big organizations. The employees are differentiated on the basis of different departments such as finance, marketing, human resource, information and technology to complete the tasks. The employees of one department will be responsible for the particular department. This helps the employees to become experts in their domain area. It has got horizontal structure where the networking or the communication is in a formalized manner. It is highly structured and employees follow the formal approach to operate their work. The power is centralized and the decisions are pushed downwards by the top managements. This type of organization can operate well environment does not change frequently and stability is there. The products and services of such organizations are standard and do not change frequently in terms of technology, taste and preference. The head of the organization directs the head of the several departments to follow his decisions (Business Mate 2010). The employees who work in functional organization have specialized knowledge. The governance approach is that few managers are at the top position to control the bottom line. The mission in such organization will clearly identify the career paths of the employees. The performance of the employee’s contributed to the business strategy for improving the future performance of functional organizations by providing the platform where the resources cannot be duplicated and there is visibility of the individual skills. Since the power lies with the top management so the long term efficiency of the managers is doubtful which cannot confirm to relate with the mission and its strategy. Since the functional structure cannot relate itself with the fast changes in the environment therefore the shareholders do not have reliability towards such structure and there is poor accountability. Since the control lies in one hand therefore there is autocratic leadership and the employees cannot make any decisions in such organization. The behavior of the employees and management is very formal. The structure believes investing in such technologies where standard goods and services are produced at low cost. It has been explained that in future the mangers with narrow skill sets handle the top positions which is a kind of issue faced by the functional Organizational structure (Edraw Soft 2012). The important information gets restricted due to the departmental boundaries. It provides stability and increases the economies of scale. The problems can be resolved easily because of clear lines of business. Employee’s get clarity regarding what management expects from them. There is less coordination between the department roles and responsibilities. Ego problems and lack of motivation can be there due to clash in the inter departments of functional structure. The employees are organized in traditional pattern. The reporting is done to the single authority and employees become specialists in particular fields. The employee’s start to focus more on other aspects that dilutes the main objective of an organization. There is more division of work and scope of expansion is more there (Buzzel.com 2012). Therefore at present the current state of the functional organizational structure has been explained properly.
In this paragraph the transformation process form the current functional organizational structured is going to be transformed to the Project based organization. The reasons for changing organizational structure is diversify the business and explore it in global location. It will be closed after completion of the projects which is being managed by several teams and mangers. Project based organization is more effective and organized as compared to the functional Organizational Structure (Marcus Goncalves Consulting Group 2003). The vision of the Functional based organization is to explore the business for all the consumers located globally providing them quality product and services with the help of better technologies. The engineering companies basically have a project based organization. The employees are selected for the particular jobs in a project based organization. It is a kind of team based concept where there is flow of synergy and the departmental cross lines are being removed. The cross cultural training is required to work in project based organization. Also after changing the current organizational structure into project based Organization the experts or the employees can do multitasking activities and handle different projects (Information and Organization 2007).It will help in building the knowledge and the competencies of the organization by handling and managing different projects. The employees will enjoy autonomy and their project based organization will provide them flexibility. As in functional structure there is change of duplication of the resource but in project based organization there is effective sharing of information and the resources. The technical expertise can be interchanged between the experts for the better result. The exisiting company wants to move out form the mass production concept. Project Based Organizational structure is created when the management wants to diversify the business. The priorities in this new type of Organizational structure is that it will be a time bound activity, more skill set is required in diverse field, team work is required, transparent communication channel is required(Imperial College Press n.d). The work requires pacing because structured working style will be developed in this type of new Organizational structure. The outcomes of this new type of project based organization are it helps to align with the goals of the overall organization, support is being provided by the management till the completion of the entire project, systematic flow and responsibilities is there to avoid the wastage of resources, and effective results is being produced, multi cultural capabilities can be developed, and movement of employees from one project to the other project will be there with a learning environment (Elsevier Science B.V 2000). The benefits of project based organization are conflicts are resolved easily, there is sharing of responsibility and authority, effective management of time is there, work is being performed in a team by the help of all members, cost is minimized, and higher employee’s performance is there, communication process takes place between the same type of co-workers. From the stakeholders point the suppliers will help the organization in its new product development process. In the era of globalization stakeholders have been changing their opinion regarding project based organization in terms of their goodwill in the global market, the technology being used for producing goods and services. The projects are being evaluated in term of investment being done in several geographical locations, the technology being used, and the cost of manpower being used for completion of the projects. The evaluation criteria will be done by selecting the employees who are having multitasking competencies with better learning approach and flexible attitude. The benefits of this structure are that it will be involved in researching for the undiscovered product and services. The career path of the employees is much enhanced because there is exchange of knowledge in terms of using the technologies and efficient utilization of the resources. Senior management can be convinced by preparing a proper formal report of the management and explaining about how to function it in particular locations. Following details such as the cost of land, technology and required manpower and the interest of the stakeholder’s can be explained. The viability of the project should be explained by matching the requirements with the resources in the available locations. The investors can be identified and convinced for the funding process. It should not harm the community where the project is being carried out and must be completed in the proper time frame to avoid the several other costs. The better understanding of project based organization will help to explain the context, capabilities and intervention process. Context refers to the innovation process of the new project based organization which means it will differ from time to time as per the requirement of the environment. It is creation and implementation of new ideas in producing the products and services using better technologies. Capabilities refer to the required skill sets for the development process. It will also represent the behavior of related to the tolerance power, risk taking attitude, decision making process, integration and matching the roles with the required tasks. Abilities in such organization are explained to manage the market conditions as per the required situation. The long term vision of such organizational structure is to be the global leader in accomplishing the project in best way with a stipulated period of time. The short term actions will be based on carrying out the activities on day wise plan. The relationships between the employees are carried for short duration but it remains healthy till the project is being carried on. The learning’s after transforming the functional based organization into project based organization are it provides broad range of practical experience is there, the reasons for success and the failure of business is being identified, competence of the employees can be truly organized, study of multi cultural aspects is there, complex work can be resolved easily. It will integrate all the activities related with production, marketing, finance, personnel, with the given resources and limited time. It is like a matrix structure where functional lines are carried out in a proper manner. The project managers are there to control and direct the activities and avoid risk. It will provide a better model of business where the projects will be successfully carried on by coordinating it with suppliers and clients. Project based organization is a form of open system where there is interaction and it is related with future prospects. This type of organizational structure is very suitable in changing environment, where technologies changes quickly (Akiba Products 2008).
When the functional organization is being converted into project based organization the basic structure will be working in systematic manner by delegating the roles and responsibilities for the employees who have been working in several projects at different locations. It can be integrated with the help of several technologies to complete the projects in proper time using the resource in an efficient manner. It will be governed by several project leaders who will work in a team by coordinating and collaborating with each other so every individual’s performance will be aligned with the mission and the vision of the project based organization. The value can be generated by such organization in terms of gaining competencies in several aspects to compete with the competitors and cross cultural learning will be there to manage the business globally. The problems arising in project based organization is being solved because the employees have autonomy and they are being empowered to discuss the issues by using open communication channel. It has been used by several companies such as Sony, Canon, Samsung and etc. The projects are being organized in several locations and people work with focus attitude because the profits are earned after completion of the projects. The employee’s behavior is very friendly because most of the times the projects are being outsourced with better communication with the consultants. It deals with flexible approach and is related with the contemporary organizations. The one who work with such type of Organizational structure must have different qualities to work in several projects, must have ability to take the risks, and must have ability to handle the global clients. If the projects are not being understood by the managers as per the geographical locations then there are chances of failure which might show the less confidence towards the stakeholders. The structure will help to identify why investment should be done and which place will be appropriate to get the maximum benefits from the projects. It should also identify the locations to find the resources that used for completion of the projects. The project based organization must have high capacity to take and manage the risks. It deals with more formal approach as compared to other structures. Failure can also be there if the technologies are being obsolete while the projects are carried on various locations (Research Policy 2000). Thus it is not easy task to frequently change the organizational structure. It requires time and lateral thinking process to strategically frame such structure. All business cannot have the same organizational model because it depends upon the nature of the business. In project based organization the projects must be tracked on timely basis to avoid the risk and minimize the wastages of human and other resources. In today’s time, companies have been focusing to explore their business globally. It is possible with the help of project based organization to develop new products and services keeping in mind the changes held in the environment in term of technology and resources.
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