Organization Theory and Design: Case Analysis on Organization Structure and Strategy

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Introduction

The organisational structure is a highly imperative and often undermined consideration when it comes to factors that contribute to organizational performance and success. A successful business is one that keeps evolving and adapting to its needs. This cannot be done without relevant changes made to the organizational structure. In this context, this assignment is based on analysing the case study based on the culture and strategy at A.P Nichols.

Changes required in supporting changes in strategy

The increasing complexity and the accompanying requirements of greater and more integrated strategies prompt for several changes in organisational structure. It is clear from the case study that A.P Nichols was wrong in focusing on the initiative of technology over client service (Gandz, Thornhill & Mark, 2011).

However, the former cannot be undermined as the current scenario of global business is highly technology focused. Despite this, it is mandatory for the organization to make amends in its structure to suit new strategies. Hence, the following departments or entities should be incorporated in the organisational structure of A.P Nichols.

CSR Department

It is vital that an integrated and internally run Client Service Representative CSR department is set by the company, According to Shank & Robinson (2019), client service representatives are vital regardless of high satisfaction levels of customers due to unpredictable nature of risks and sudden market changes. In this context, it can be noted from the case study that despite the company’s high brand equity and customer satisfaction, its competitors were rising faster in terms of performance and revenue.

This is rooted to their prioritization of CSR. Customers are becoming highly strategic in terms of their investments and expenditures. Hence they require representatives from a company in order to feel confident about their spending (Høgevold & Svensson, 2016). Moreover, the primary change, in terms of strategy, is based on CSR. A separate and internally run CSR department can benefit the company to implement its customer service strategy to a much greater extent. This will also remove any need for external CSRs.

Communications Manager

In establishing better and more midget CSR department it is vital that a communications department is also formulated. As per Stverkova & Pohludka (2018), a growing business must have a communication department in order to liaise with every department as per ideals of collaboration, cooperation and transparency. An independent communication department can help in making CSR strategy more effective and efficient. In addition, this department can oversee different media used by CSRs and ensure that the most appropriate channel is used for different customers

Technology department

A.P Nichols may not have achieved greater success than its competitors by focusing on technical strategy before 2011, but it is imperative for current business environment. Increased adoption of technology for the cause of customer service in companies all over the world prompts for the need of a technology department in the company (Zakrzewska-Bielawska, 2016). This can help in CSR strategy by implementing Artificial intelligence (AI), Internet of Things (IoT) and other advanced technologies for CSR operations. Overall, addition of this department will result in a more advanced and globally competent organizational strategy (Heinonen et al. 2019).

Contribution of Organization structure in strategy

Assessing the case study, it can be seen that the success of a company is highly dependent on its strategies. Since A.P Nichols’ competitors and concentrated on CSR strategy, their performance was increasing at a higher price than its performance. In this context, it should be noted that the company structure reflects its priorities. According to Cai et al. (2017), the structure of an organization’s is a direct reflection of its primary strategies. A company not having a certain department, hence, shows that the role of that particular department is not prioritised.

Regarding this, since A.P Nichols’ concentrated on technology more than CSR, customer service was prioritised below service quality. While this is a highly advantageous strategy, due to low demand of advanced technology before 2011, this strategy did not help A.P Nichols. Consequently, the absence of an independent and large scale CSR department also resulted in slower pace of company’s growth. This shows that organizational structure affects strategy of a company which in turn impacts organizational performance (Worley et al. 2016).

The 70/30 strategy implemented by A.P Nichols is clearly a reflection of its priority towards CSR. This also reflected that the company did not measure its needs correctly as most people joined their CSR team for the 70 basis point sales payment. Overall, there was poor alignment of strategy, organizational culture and organizational structure (Muafi-Grabara, Sudiyarto & Siswanti, 2019).

The organizational structure of a company impacts its strategy by three ways – monitoring, control and implementation (Shank & Robinson, 2019). Prioritization of a strategy is reflected by higher levels of vigilance and monitoring. Since CSR was not monitored vastly by the company, it can be said that the structure was unsupportive of its full potential (Madden, 2018). As a result, the company fell short against its competitors. As per control, structure of a company is headed by leadership and as leaders, control over a certain operation or strategy indicates their perception of company needs (Arikan, Kirci & Zengin, 2015).

In A.P Nichols, due to their prioritization of technology for service quality rather than CSR, it can be said that the overall organization had undermined the need of CSR. Hence, it can be said that wrong perception of members or departments of an organization can lead to wrong strategy implementation and poor organizational performance.

Conclusion

This study was based on the case of A.P Nichols and the issues faced by it in terms of strategy and organizational structure. Here, the changes required in organizational structure for the cause of supporting strategy changes were discussed. After this, a thorough insight on organisational structure and its contribution towards strategy were provided. It was concluded that A.P Nichols requires three major changes in its organizational structure – CSR Department, Technology department and Communications department. As per how organizational structure contributes to strategy, it was learned that structure of a company contributes to monitoring, control and implementation of strategy. Overall, it has been concluded that organizational structure is in direct link with organizational culture and strategy.

Reference

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