An organizational structure is a concept which shows how integrated entities in an organization interact to achieve an organizations goals and objectives. These can be departments and relates with the way different positions in an organization are identified or levels of management and the reporting relationships between these positions or hierarchies commonly referred to as the line of command (Organizational Structure 1).
Communication or the flow of information is usually upward, downward, and horizontal. An organizations structure determines the responsibilities and roles of organizational employees. An organizational structure also consists of organizational culture and organizational behavior as in the case study.
Types of Organizational Structures
According to the article Organizational Structure (1) these structures depend on what the organization wants to achieve and their core functions.
Pre-Bureaucratic Organizational Structure
These structures are those without specific benchmarks or standardized activity definitions. (Organizational Structure 1). These do not have formal structures in place and standardized task and sub-task allocations and responsibilities.
Functional Organizational Structure
A functional structure is specifically meant for large organizations. Such a structure has the advantages of better allocations of tasks and responsibilities. In addition, it is a cost effective manner of carrying out tasks and sub-tasks for efficient use of an organizations resources.
Within each entity employees find it easy to work together since communication between them is efficient. However communication from the outside of a specific department may be slow. This structure has the advantage of efficient employee and resource utilizations but slow interdepartmental coordination.
Divisional Organizational Structure
Different regions have different market needs. In order to meet the needs of a market, an organization can be structured after the needs identified with different geographical divisions or marketing needs. The functional requirements for each division are integrated into organizations such that they are met (Organizational Structure 1).
Matrix Organizational Structure
Sometimes organizations are structures such that different organizational structures are amalgamated to form a single structure. This kind of structure may be an integration of functional structures, divisional structures, pre-bureaucratic organizations, and bureaucratic organizations.
Each organizational entity is grouped according to the product it produces, the functions it performs and standards established. A matrix structures strength is teamwork. Here, each team is required to exploit and capitalize on its key strengths to best achieve an organizations goals.
In addition to these, a matrix organization is characterized by decentralized management. This reduces the effect of tall and short organizational structures.
Organizational activities
For an organization to efficiently perform and put to efficient use the human resources and other organizational resources, tasks and sub tasks have to be identified and differentiated. In addition to that, the tasks have to be standardized in line with an organizations goals and objectives aligned in its vision.
Then a strategy must be laid to achieve that vision. Therefore an organization must be designed according to its strategy, the level of available technology (Organizational Structure 1). Environmental issues which touch on corporate social responsibilities for the organization are vital.
An organizations structure is usually shown on an organizations chart. Organizational activities include coordination, communication, task assignments, departmentalization, and employee motivation among many others. Each organizational activity must be communicated well to elicit understanding. Good communication within the organization in the case study leads to employee motivation and performance improvement.
Organizations operate in a dynamically changing environment. The changes can be organized or chaotic. Kurkato (2007) argues that an organic structure works with an emphasis on the integration and coordination of organizational entities to achieve an organization’s goals and objectives in a turbulent or dynamic environment.
Simple and complex organizations fall into decentralized organic and centralized organic structures. Coordination of activities includes “direct supervision, standardization of work processes, standardization of outputs, standardization of skills and mutual adjustment” (Clayton, Fisher, Bateman, Brown &Harris 2005).
Therefore a structural approach in aligning an organization strategy to an evolving and unstable or turbulent environment remains a key component, as identified in the Abernathy/Utterback model.
While previous organizations remained static and had no innovative strategies to operate in such environments, organic organizations were characterized by decentralized approaches to organizational structures and management with identifiable and distinct levels of complexity.
Organizational strategy was projected on controls and formalization of tasks. However, measures were put in place to ensure organizations did not become wholly mechanistic, a trend that could evolve as organizations evolved.
Clayton, Fisher, Bateman, Brown and Harris (2005) identify various elements in the change and evolution process within an organization. According to Kurkato (2007), organic organizations rely upon employee initiatives and innovation in task performance.
Kurkato (2007) argues that in an organic organization, employee tasks are not well defined and problem solutions are a prerequisite of an individual. This also depends on a variety of structures with different characteristics. These include simple structures, functional structures, divisional structures, professional bureaucracies, innovative organizations, and matrix structures.
According to Kurkato (2007), the Abernathy/Utterback Model characterizes the change process in organic organizations where the first phase, also referred to as the fluid phase, is marked with a turbulent market, characterized with product innovation to fit the changing trends in a changing market.
Innovation and change in a dynamic environment place emphasis on individual skills and abilities in task execution. According to the model employees in an organic organization identify available opportunities and execute them according to their abilities and skills.
The fluid phase of the organization is marked with a lack of standards, procedures, and well-defined policies in aligning an organization to changing market and product trends. The operational environment is characterized by fluid and flexible approaches to product innovation, while competition remains low with little or no direct competition.
Change in Technology
According to the Abernathy/Utterback Model changes in technology and approaches to organizational evolutions rely on managers as change agents. However, approaches to organizational change vary depending on the type of organization and stage of evolution.
Entrepreneurial organizations are characterized by centralized management and lack of standardized task execution. However, such organizational structures are more suited for small industries and organizations. Leadership solves problems on a one on one basis.
Overcoming Mechanistic Drift
According to the Abernathy/Utterback Model the transition stage for an industry is characterized by architectural approaches to product innovation. Products are mass produced.
The strategy at this stage is to gain a competitive edge on competitors and market dominance. Kuratko, D.J. (2007), this stage is characterised by a formal organizational structure with mechanistic and rigid processes. Kuratko (2007) argues that organizations at this stage are characterized by task specification, and specialization and an inherent mechanistic characteristic drift.
A company starts to gain a broader market base while product innovation, with the objective of dominating the market, remains the key strategy and dominant factor. At this stage tests are done on an organization’s design to ensure alignments to its strategy. These tests include fit tests which examines issues of a marketing strategy, corporate-level activities, organizational responsibilities, and constraints.
These ensure an organization remains in track and keeps it from drifting into a mechanistic organization. In addition to that, these tests are valuable measure in preventing organizations from mechanizing themselves. Organizational executives continuously apply other tests such as good design tests which help align it to its culture, flexibility and efficient communication.
Organizational executives continuously design and introduce new changes appropriate with new trends in the operating environment. At this stage, industries do not introduce new products, but maintain original products but with characteristics and features which apparently remain the same across a company’s similar product range. Kuratko, D.J. (2007) argues that Abernathy/Utterback model emphasizes on dominance where monopoly and intellectual property rights act as sources of revenue for an organization.
While standards are not rigid, product development focuses on product enhancements and market domination. An Industry like Microsoft used its dominant position in the market to competitively stay and gain a strong position in the market when it introduced operating systems with graphical user interfaces that were user-friendly and which were tailored to dominantly address user needs.
Decision making in an entrepreneurial organization follows structures that are not formal but which are highly dependent on interactive approaches with a critical emphasis on the available opportunities and competitive threats. Asserts that “as environments become more dynamic, threatening and complex, organizations find competitive survival forces them to become more entrepreneurial” (Kuratko 2007)
As organizations continue to evolve, organizational executives continuously create standards against which they apply tests of compliance for their organizations (Elsevier 2010). The ability of an organization to design products and services to meet people’s needs are a vital aspect in identifying and determining whether a product meets and reflects the people’s strengths in terms of supporting them.
In addition to that, other tests include feasibility tests which are designed to identify bottlenecks that impede an organization in meeting people’s needs. Other tests include specialized culture tests, redundancy hierarchy tests and the accountability tests.
The Abernathy/Utterback model organizations evolve and reach a specific phase with an emphasis on product performance and cost-benefit analysis. At this phase, the company specializes on standardized products. Incremental integration of quality and value addition are important elements at this stage. Competition remains oligopolistic, while threats from competitors continually disrupt product innovations.
Other Models
Deducing from the above models and illustrations, other models tend to concur on the observed change in organizational structure. One of the comparisons is based on the Westbrook Stevens model, which constitutes three phases of organizational evolution.
The model identifies distinctive features in an organization’s structure before a change is introduced, during a change, and after a change. A critical analysis identifies all changes in the Abernathy/Utterback model as inherent in the Westbrook Stevens Model. These elements include dynamism, organizational hierarchies, the environment, and product innovation.
The above model illustrates the different phases through which an organization evolves and offers a comparative analysis to the Abernathy/Utterback model.
References
Clayton, B. Fisher, T. Bateman, A. Brown, M. & Roger Harris, R. (2005). Organizational Culture and Structure. Web.
Elsevier, B. V. (2010). Journal of Economic Behavior & Organization. Volumes 74.
Kuratko, D. F. (2007) Structuring the Company for entrepreneurship. Web.
Different organizations manage workforce in different ways. Some value workforce indefinitely while others do not. According to Ford, it is very difficult for top management to treat employees as commodities.
He observed how workers were punished when they committed simple mistakes and performed tasks like a machine while they kept silent. This made him comment that “A great business is really too big to be human”. Though Ford was not pleased by how the employees were working, Green (2008) points that a business as an entity cannot exist without workforce
The main feature of personnel management involves coordination within a department as well as collaboration with other units in the organization. Human resource management is a challenging function.
Different personnel have different personalities, and they all have to be catered for by the human resource management. It is up to the human resource management to note the difference between the different employees and make use of those abilities for the personal development of the employees and for the development of the organization as well (Willard & Hitchcock, 2006).
Corporate organizations have different structures that are suited for the management styles of the particular organizations. It is up to management of the organization to determine the organizational structure that would lead to achievement of the mission and vision of the organization, while at the same time ensuring that the human resources are efficiently utilized.
The employees of a company should be made to feel that they are appreciated and valued so as to increase their productivity. One of the ways of ensuring this happens is through establishing of clear roles through an effective and well defined organizational structure (Fisher, 2009).
Nowadays, businesses face more challenging tasks since many of them have been set up and are always coming up with new competitive ways so that they can try and stay afloat of the competition in the market. One of the best ways that has been repeatedly used by businesses is the employee retention strategies by human resource departments.
Once the best of employees have been selected from a pool of applicants, organizations must put effort to ensure that they retain those employees and that the employees remain as highly productive as possible (Florence, Henderson & D’Amato, 2009).
Establishing the best possible organizational structure, hiring and retaining the best employees should be accompanied by the constant renewal of the values, mission and objective of the organization.
Leaders in corporate organizations should make use of management styles such as management by walking around (MBWA) to ensure that the employees on the ground feel valued and to make them feel that leaders are aware of the progress of work and are informed in time of any problems in the organization so that solutions can be found in good time so that focus remains on achievement of the goals and objectives of the organization (Florence, Henderson & D’Amato, 2009).
Development and training helps employees to perform their tasks in an effective manner in translating ideas into products. Business Corporations provides a base for provision of essential human quests. Corporate organizations have been providing a better way of acquiring skills and experiences that can be competitively rewarded in the market.
Thus, it provides a means through which employees can achieve prosperity beyond their expectations, a role which was majorly played by churches and cultures. Overall, creating a corporation structure that is built on capital and talent increases the individual’s ability to create wealth (Fisher, 2009).
Directing and controlling human resources is one of the major tactical tasks in an organization. Human resources in an organization are responsible for making their own congruent decision on all that they see as best for their life. Directing human personnel in an organization should be done in a skillful manner to ensure that the personnel are satisfied to perform their tasks in effective and efficient manner (Galea, 2004).
Poor treatment of employees is one of the major reasons that cause some organizations to develop poor reputations. Corporate organizations should strive to achieve high reputation in their line of business so that they can be able to attract the best and highly qualified employees in an organization. The human resource policies that are established in an organization should clearly indicate and be proof of the commitment of the corporate organization to the quality performance of the employees (Fisher, 2009).
Nowadays, business sustainability is a prime factor in the longevity of business organizations. Consumers are more aware and demanding of responsibility and accountability of organizations to the environment. Most scientists have emphasized about the importance of treating the environment in a manner that will not deplete the available natural resources.
Corporate organizations are encouraged to promote good use, cleaning up and conversation of the environment. Those organizations that are involved in environmental conversation are able to use the same concept in attracting of consumers (Galea, 2004).
Managers should always understand that humans are not machines; hence, they should be handled with a lot of care. Control and directing of the work force should always be accompanied by good communication relationship in an organization. The gap between managers and the workforce should always be minimal to enhance better relationship between managers and employees (Florence, Henderson & D’Amato, 2009).
Managers should handle employee grievances in an effective manner to ensure that employees are satisfied with the managers’ decision. Any action directed to the employees should be put forth in a proper way to avoid complaints and dissatisfaction by employees.
Some managers treat employees as liabilities instead of treating them as valuable assets as they really are. When employees are treated in a humane way, they feel more confident when they approach employers. Such an environment can inspire motivation and creativity which is critical in the organizations (Galea, 2004).
The long term success of organizations is dependent on decisions that managers make in regard to the organizational structure, the mission of the company, the human resources of the organization and the management style used by the manager. A lot of time should be spent on the organization and the relevant tools that are needed in running the organization so that it survives in the long run and not just in the short term (Florence, Henderson & D’Amato, 2009).
Different leadership models affect the organizations success in different ways. Managers should always use different leadership styles which could enhance organization success. Human effort to control institutions should be made through decision making and giving room for challenges. Employees do not fixed thoughts and emotions that guide them, but they should be treated in different ways because that is one of the ways of increasing their productivity at the workplace and increasing their morale (Holden, 2007).
Large numbers of leading organizations in Japan, China, US and Europe have had an increasing commitment to the future growth and sustainability. They have been launching different programs to enhance social and environmental performance of their products facilities, processes and services (Holden, 2007).
One of the greatest challenges facing the companies is the way of tracking their progress and communicating it to the employees and other business stakeholders. Opportunities for growth are coming up indefinitely. Future business sustainability depends on how business leaders will use the necessary information available to them in anticipating for the future growth and sustainability (Galea, 2004).
For businesses to remain competitive in the global market, they should come up with strategies that put them on top or afloat of the existing competition in the market.
Businesses should also ensure that the strategies that they come up with are solid so that they are sustainable in the long run and they lead to long term success and presence in the market. Successful businesses recognize that the strategies or tact that they come up with reflects on their integrity and therefore, determines the kind of consumers that they attract and or retain (Holden, 2007).
Organizations should acquire the skills and tact of experienced managers who are ready to work hands on to ensure long term goals are achieved and that the missions and objectives of the organization are implemented in a manner that promotes long term sustainability of the organization (Holden, 2007).
Most business leaders lack the foresight to anticipate the future making it difficult for them to develop future organizational strategy to solve the adverse changes in market demand. Addressing the future market demand has been a great challenge to the business leaders in developing their strategies for the long term business sustainability and future growth due to the increased emergence of new entrants in the market which could pose a threat to the business (Galea, 2004).
Customers have also become more rational than before, thus, sustaining the market share in the market becomes a great challenge to the business. New entrants compete extensively with market leaders by offering products at reduced prices to attract potential customers. This action has resulted in unpredictable changing profits for businesses. Some companies have had their post tax profits decrease below an average estimated rate.
Environmental pressure and global change in population has posed threat to the business leader’s success in sustainability. These pose organizational challenges that leaders should tackle for organizational success to be achieved (Willard & Hitchcock, 2006).
Leaders require clarity in articulating the vision and making a clear picture for the future. The right amount of capital should also be made available to leaders so that they can carry out the necessary organizational objectives that are necessary for the organization to run and achieve long term sustainability (Willard & Hitchcock, 2006).
Business leaders are therefore, required to lead their business with confidence and have courage in taking a stand. Different environment variables should be expected and prepared for. For example, Motorola Company has been experiencing global changes challenge. The company has however been trying to remain competitive in the industry through provision of new innovative equipment as a technology company.
Good business leadership is one of the most important factors that are necessary for an organization to remain in the market even when the competition gets very stiff. An effective leader in an organization should ensure that he or she motivates the employees to raise their morale and positively impact their productivity (Philip, 2010).
Future growth and sustainable growth depends on organizational leaders’ ability to anticipate changes, embrace social responsibility, demonstrate leadership and exercising and use of their talent power to the maximum. In terms of corporate social responsibility, corporate organizations’ leaders should organize events that portray the organizations as being responsible and accountable of the contribution of the environment to their performance (Willard & Hitchcock, 2006).
For example, companies could organize to have tree planting events in areas that have been identified as prime for tree planting by the government. The organization could also pay company participation fees for employees to take part in marathons that have a theme that helps members of the community such as heart and eye surgeries for those that can afford the surgeries in the community (Nurdin, 2008).
Business environments have changed to being global. More networking and cross culture leaders and employees are present in markets. Leaders in corporate organizations should indeed look for the best ways of encouraging the workforce in a collaborative and creative manner. An environmental impact makes it difficult for the business market demand to be sustained, hence, the organization should ensure that it uses the correct skills and talent to help translate new demand forces to skills requirement.
If the talent becomes more competitive, it becomes difficult for the business to retain the potential people in the organization. Therefore, organizations should maintain high levels and standards of performance so that they remain competitive to employees (Tittel, 2000).
Funds are needed in organizations for many functions including the financing of initiatives and projects training of employees. This requires transferring investment funds to construct a road for knowledge and management skills. An increase in the rate of baby boomers exiting the workforce impacts the business talent pool. The business leaders should ensure that they maintain the organizational talent to enhance business growth and sustainability in future (Willard & Hitchcock, 2006).
Business leaders have been cited as not working extra mile in sustaining the top performing employees thus, having difficult in building the competitive strategy which would enhance the organizations existence in the market.
Raymond, (2010) argued that innovation is very crucial in an organization as it equips employees with new ideas which are very crucial for successful business growth. To some leaders measuring sustainability performance in relation to the business process has been a big issue in determining the path that should be taken for the success of their organizations.
It is necessary for business leaders to have sustainability performance measurement methods which could help them determine their business performance and level of sustainability. Business leaders and mangers can use performance results to make changes to the organization strategic plans to ensure sustainable performance is achieved in an organization (Raymond, 2010).
Corporate organizations’ leaders have the challenging task of being on the lead in promoting sustainable use of resources in the environment by reducing waste and pollution to the environment. Employees that are hired should be aware of sustainability not just in environmental perspective but also in economic and social fields.
If and when employees understand and appreciate the vision of an organization, they are more likely to be committed to the achievement of that organizational objective. Organizational structures that are established and implemented should reflect the need and objective of the organization to stay in the market in the long run.
References
Fisher, D. (2009). Corporate sustainability planning assessment guide: a comprehensive organizational assessment. Washington DC: American Society for quality press.
Florence, S, Henderson, S & D’Amato, A. (2009). Corporate Social Responsibility and Sustainable Business: A Guide to Their Leadership Tasks and Functions. New York, NY: Center for Creative Leadership
Galea, C. (2004).Teaching Business Sustainability: From theory to practice. London: Greenleaf publishing.
Green, C. (2008).Entrepreneurship: Ideas in Action. London: Cengage learning.
Holden, E. (2007). Achieving sustainable mobility: everyday and leisure-time travel in the EU. Canada: Ashgate publishing.
Nurdin, G. (2008). International business control, reporting and corporate governance. Oxford: Elsevier.
Philip, S. (2010). Sustainable Growth in a Post-Scarcity World: Consumption, Demand, and the.Canada: Gower publishing ltd.
Raymond, W, Y (2010). Sustainable economy: corporate, social and environmental responsibility. London: World scientific publishing company.
Tittel, P. (2000). Ethical issues in business: inquiries, cases, and readings. Canada: Broadview press.
Willard, L & Hitchcock, D. (2006).The business guide to sustainability: practical strategies and tools for Organizations. London: Earthscan publishers.
Having identified the supply gap in the new type of bread in Australia, Sam and his partner George have a chance to create the demand for the product, and potentially become the sole producers of the unique product. It is divine for the two business persons to go into a partnership business structure (SBA, 2014). A partnership would be the best business structure for their new bakery because each of the partners has unique assets required by the new business.
While George has available cash to start up the business, Sam has ample knowledge and skills in accounting, which will come in handy in budgeting for the business and keeping track of the financial performance of the business. The experience gathered by George in working at a bakery will also come in handy in the management of the production process. George and Sam have a better chance of succeeding if they engage in a partnership business.
A general partnership would work for the new bakery. This business structure entails two people co-owning a business developed to generate profits. In this business structure, both parties involved have to bring assets to the table before the business can start. Assets include capital, intellectual property, and material assets for the business. George and Sam are in a perfect position to execute a general partnership because they need each other to implement their business idea.
The two business persons complement each other’s strengths and weaknesses, and together they have the ability to make a strong foundation for their new business. In general partnerships, the partners normally build their business without any formal partnership agreement (Spadaccini, 2009). The partnership is normally sealed through a handshake because they usually involve close friends. It is also possible to have a signed agreement between business partners for responsibility purposes.
George and Sam should write an agreement and sign it in the presence of an attorney to ensure that there are terms involved in their partnerships (SBA, 2014). As it appears, their new businesses will have to be managed by both partners, and they must have ground rules on their individual responsibilities in the company. A written agreement in the general partnerships will also attract a professional atmosphere between the partners, and this will provide George and Sam with a platform away from their friendship.
Advantages and disadvantage of a general partnership
A general partnership structure in business eliminates the need for lengthy legal paperwork prior to the starting of a business. It saves partners the time required to pursue an agreement signing, and the cost of hiring an attorney to review the agreement. The entire process avoids hectic formalities. The main disadvantage of this business structure is that both parties in the general partnerships are accountable for their partner’s irresponsibility in the business.
It is a risky business for structure and for George and Sam’s case, irresponsible behavior may lead to a big loss, especially for George. For this reason, they should look into a more secure structure. A general partnership may provide loopholes for either of the members to become negligent in their workstation (Spadaccini, 2009). The partnership in question provides a unique situation whereby one of the partners has monetary assets, whereas his counterpart only has intellectual property; thus, a structure that has lesser risks should be applied.
Limited Liability Partnership (LLP)
A limited liability partnership shares principles with a general partnership, but there are terms and conditions involved in the partnership. This business partnership dictates that partners have a signed agreement with the conditions that exempt either of the members from being held accountable of their partner’s negligence in the business process. This form of partnership compels the members of the business to uphold ultimate competence in their business processes (Business Licensing Service, 2014).
It also has provisions clearly highlighting the responsibilities of the partners. In the case study in question, it is clear that George has more to lose in case the business fails. He is the sole provider of the start-up capital for the business; hence, he should avoid the risk of losing it through his partner’s incompetence. This business structure is popular among professionals looking to form partnerships with their friend, and this is the exact case between George and Sam. While George is an expert in operating a bakery, Sam is a professional accountant. The two partners should invest in a limited liability partnership to ensure they are both motivated to protect the business from failure influenced by their negligence.
Advantages and disadvantages of LLP
The provision that the negligent partner is responsible for the consequences that follow is the main advantage of this business structure. The legal agreement places the partners in a situation where they must employ their highest competence level in their work stations in a new business. The new business for George and Sam is bound to face the usual start-up challenges like harnessing a large market share to hasten the attainment of a breakeven point for the bakery.
These challenges may lead to losses if either of the parties fails to deliver their required effort level. Using an LLP structure will compel the partners to work hard toward the success of their business (Business Licensing Service, 2014). The disadvantage of this business structure is that it may lead to conflicts between partners when the business entity faces unavoidable challenges. The parties involved may blame each other for failure, whereas the underlying issues do not necessarily emanate from their negligence.
Conclusion
George and Sam have a unique opportunity of introducing a new product to the Australian market. Their business idea is viable because they have a chance to harness a large market share, and compete aggressively with the existing bakeries. Their individual assets for the new business are also unique, and this implies they have to fall into a partnership in their new business.
George’s money and skill in working at a bakery are essential for the start-up process, and Sam’s professionalism in accountancy is required to keep the business in line financially. The partnership is bound to yield success if the two business persons are committed to achieving growth. A general partnership may work if both partners have the passion required to help them maintain high performance and responsibility, but a limited liability partnership would be more plausible.
References
Business Licensing Service: Types of business structures. (2014). BSL. Web.
Incorporating a business allows the owner to enjoy numerous benefits that may be inaccessible for businesses established as sole proprietorships or partnerships. Using the structure of a company enables the creation of a business characterized by a separate legal entity, limited liability, reduced corporate taxes, increased access to capital and continued existence upon the death or exit of shareholders.
The rights and obligations of a company are the same as those of a natural person, which means that a corporation can acquire assets, become indebted, enter into contractual agreements and can sue or face charges relating to a criminal offense. The assets and money associated with a company belong to it and not the shareholders, which eliminate interference with the operations of a corporation due to the transfer of its property. On the other hand, the lack of separation between the owner and business entity for sole proprietorships or partnerships requires the transfer of individual assets and documents to the new party. The status of a separate legal entity allows the centralization of the management of a corporation in a board constituting of experts, which eliminate the direct influence of shareholders in the business operations and decision-making.
Establishing a business as a corporation protects the shareholders on their responsibility to the company’s debts, which is not the case for sole proprietorships and partnerships where creditors can attach the personal property of owners to offset business’s debts. Corporation shareholders can only lose their investment in the event that a corporation goes bankrupt, and are not legally liable for the debts. The only time a shareholder in a corporation can lose more than his investment is when he has provided a personal guarantee for the corporation’s debts or under certain circumstances as a director of the corporation.
On the other hand, owners of sole proprietorships and partnerships stand to lose personal wealth such as a house if the assets of a business are not enough to clear the incurred debt. The taxes paid by corporations are separate from the owners’ income, which allows them to operate with lower corporate tax rates than sole proprietorships and partnerships whose owners incur individual taxes rates. A corporation does not incur the cost of self-employment taxes, which sole proprietorships and partnerships must incur based on their share in a business.
Incorporating a business enhances the ease of raising capital through measures such as issuing investors with bonds and share certificates, which is not the case for sole proprietorships and partnerships whose sole source of capital is the owners’ money and loans. Financial institutions perceive businesses established within the structure of a corporation to be less risky compared to sole proprietorships and partnerships, which allows corporations to obtain loans at lower rates than the other enterprises. A business established as a corporation has a higher capacity and ability to expand compared to a sole proprietorships or partnership due to the restrictions on capital access.
The status of a corporation as a separate legal entity remains in place even with the death or exit of a shareholder, and only ends with the dissolution of the corporation. The ownership of a corporation transfers to the shareholders’ heirs giving the entity greater stability compared to sole proprietorships or partnerships, which cease to exist once the owners die. The high assurance regarding the continuous existence of a corporation allows long-term planning on business operations and promotes favourable financing.
Organizational restructuring is a critical element, which defines a company’s success in the turbulent business environment (Morgan, 2006). In this case, it could be said Apple Inc. can be referred to as one of the examples of the firms, which determined the correlation between external fluctuations and organic networking. Initially, Steve Jobs, the leader of the company, faced numerous obstacles on Apple’s way to success (Bolman & Deal, 2013). Proposing changes to the business culture was a requirement, as the company lacked the internal integration of the business units. At the same time, the competitors such as Samsung and Sony started their active marketing campaigns and shifted their market shares (Bolman & Deal, 2013). In this case, Jobs modified the internal structure of the company and consolidated engineering and programming departments while adjusting his actions to the changes and contingencies of the rival firms (Bolman & Deal, 2013). Thus, his charismatic leadership style and the focus on innovative ideas were the primary goals of the company’s increase in market share. Consequently, the critical aim of the paper is to discuss the application of contingency theory in this context and determine the strengths and weaknesses of this approach.
Theory and the Correlation between Turbulence and Organic Networking
In the context of Apple, this case pertains to contingency theory. In this case, Steve Jobs recognized the importance of externalities and the need to adjust the collaboration with the employees and modify business objectives and the ways to ensure compliance with the initial business strategy (Morgan, 2006). The representatives of this theory see a clear connection between the changes in the external environment and the sufficient flow of information due to the redesigned structure. The ability to detect these modifications helps enhance the company’s competitive edge, as it pertains to the actions of the rival firms. Understanding this link was one of the critical reasons for Apple’s ability to regain its position in the market, as Jobs was able to provision changes and modify the leadership modes to shape a competitive edge.
Strengths and Weaknesses of the Approach
Despite a bright example of Apple, the application of contingency theory has its advantages and drawbacks. Firstly, this approach uses multiple modes of leaderships (Morgan, 2006). It pertains to the fact that Jobs was able to adjust his styles to the external contingencies and respond to the actions of the competitors while increasing Apple’s recognition. Alternatively, applying contingency theory implies a high level of flexibility. In the context of Apple, the company always followed its initial strategy of being the innovative leader in the market. It differentiated itself by high-quality products and exceptional design solutions. Nonetheless, applying the concepts of contingency theory allowed the firm to modify its objectives and organizational structure to comply with the initial mission statement. Overall, the described advantages pertain to Apple’s shift in its innovative initiatives (Morgan, 2006). Nonetheless, the primary weakness is its reactive nature, as this contingency theory implies high responsiveness to changes (Bolman & Deal, 2013). In the majority of cases, using these concepts limits company’s development (Bolman & Deal, 2013). However, Jobs minimized its consequences and created a balanced blend of proactive and reactive concepts.
References
Bolman, L., & Deal, T. (2013). Reframing organizations: Artistry, choice, and leadership. San Francisco, CA: Jossey-Bass.
Morgan, G. (2006). Images of organization. Thousand Oaks, CA: Sage.
Sam and George want to start a business. They want to open a bakery to produce a type of bread that is new in Australia but resembles a similar product from the Middle East. George is a qualified baker with a four-year of experience. He also has a readily available sum of money ($100,000) which he inherited. Sam is an accountant with extensive knowledge and all the required accounting equipment but no valuable assets except for his car. Sam has found a suitable bakery that is leased for $20,000 per annum with a three-year lease option.
Based on the available information, the most viable business structure will be the sole trader structure. It has several advantages over the structure of the company, such as reduced cost, taxation, paperwork, and ease of set-up. The sole trader structure allows for full control over the business. At the same time, the liability for financial and tax debts is also personal, so greater risks are involved. The structure allows for staff employment. The set-up costs are also low: the only step that requires payment is business name registration while obtaining an Australian Business Number (ABN) is free, and a separate business bank account is not compulsory. The tax is calculated as an individual tax, and there is a tax-free threshold of $18,200, which is important for a small-scale and young business. Another advantage is the accounting paperwork: the expenses and income of the business do not need a separate tax return – just a separate schedule within the individual tax return, an easy task for Sam considering his expert knowledge.
George can employ a role of a production manager, considering his experience as a head baker, granting him both the food production knowledge and ability to cope with other employees. This also suggests he suits best for personnel recruitment. The accounting obviously is handled by Sam, who will probably manage to handle the affairs solely on the initial stage. The distribution and sales departments may require additional staff depending on the expected volumes of sales, which leads us to one important point. The absolutely crucial part of such a business is the marketing department. Neither Sam nor George has the expertise to assess the market for the unusual product, so they will need to employ a specialist to conduct marketing research. The suggested structure is primary qualitative research, as it focuses on feelings and attitudes while making use of a small target group (both are within the framework of the said business). Once the research assesses the projected demand, the need for separate distribution and sales departments can be determined. It goes without saying, however, that an extensive marketing campaign is required to promote a product that is unknown in Australia unless the owners decide to rely on word-of-mouth as promotion means, which will severely limit the scope.
One final sensitive point is the question of ownership. It is unclear if “going to business with each other” suggests the structure of the partnership, which is also preferable to a company, offers similar liabilities and control but requires a separate Tax File Number. Considering only George has enough assets to start a business, it is logical to assume that he would employ Sam as a senior manager if they can come to terms with it.
Understanding the basis of a company’s lifecycle is critical for its successful operation. A company’s structure serves as the foundation for all of its actions, while its strategy serves as the blueprint for the foundation. However, strategy is what defines forward vision, while structure allows its proper execution. Strategy is more adaptable to the industry changes, as leaders incorporate new knowledge into the processes, forcing the structure to change accordingly (Muafi, Grabara, Sudiyarto, & Siswanti, 2019). However, structures without sufficient flexibility can be detrimental to such changes (Muafi et al., 2019). For example, prominent changes in Southwest Airlines’ top management positions imply significant adjustments in the company’s strategy (“Southwest Airlines announces several leadership changes,” 2019). Such periods can occur in many companies and are a regular part of a firm’s evolution and adaptation.
The exemplary chief executive officer (CEO) that I believe possesses the qualities necessary for a company’s long-term success is Elon Musk, the CEO of Tesla and SpaceX. His planning and forward-looking strategies provide these companies with a constant stream of investors and innovative ideas. Musk utilizes a scientific approach to strategy-making, which allows him to efficiently and gradually move forward with the wildest ideas his company presents (Torres, 2019). He poses questions to resolve, seeks credible supporting evidence sources, analyzes them, as well as their counterarguments, and only then proceeds with putting his plans to action (Torres, 2019). As a result of his actions, many projects of these companies are delivered later than expected, but they possess the quality that is rarely achieved by their competitors (Torres, 2019). Their success brought Musk worldwide celebrity status, as his concepts continue to shape the future of humanity through ideas that are worth waiting for. In conclusion, the structure of a company serves as the basis for its future success, while CEOs serve as those who choose the direction, pace, and speed for this structure to move forward.
References
Muafi, M., Grabara, J., Sudiyarto, S., & Siswanti, Y. (2019). Business strategy, organizational structure, work processes: Are the alignment? Quality-Access to Success, 20(1), 399-404. Web.
Requires relatively less capital to start and operate.
The sole trader can be flexible due to the small scale of operation.
The sole trader owns all the assets of the business.
The trader can hire and employ workers under the business name.
A sole trader requires minimal regulations
The business is inherently risky because the trader is not a separate entity from the business. In other words, the liabilities of the business are borne by the sole trader.
Sole traders are only suitable for small-scale investment, and scaling up may be difficult.
As an unincorporated business, a sole trader has limited sources of finances besides personal savings and small loans and grants. Sole traders can not raise equity finance through the issuance of shares.
Unincorporated association
An unincorporated association is cheap, quick, and easy to set up.
It does not require the payment of fees.
It does not require the services of a registrar.
The business does not have to submit accounts.
It is run by members, which means no expensive labor needs to be hired.
It can be relatively flexible in terms of aims and business activities.
It can be registered as other forms of legal structures, including charity or company.
An unincorporated association is not a separate legal entity, which means their liabilities are borne by the members.
It cannot own assets in its name.
Legal proceedings are only carried out by the members and not in the association’s name.
Banks are reluctant to lend money as most insist on incorporation.
Contracts are also hardly available for unincorporated associations.
Partnership
A partnership is less formal, which means it has fewer legal obligations.
It is relatively easy to set up since the partners can agree verbally or in writing.
The partners share the burden of running the business where the tasks are shared among the partners.
Mutual support means the partners can have access to shared knowledge, experience, contacts, and skills.
With more than one person involved, there is better decision-making.
Partners can raise more capital as compared to other forms, including sole traders.
Ownership and control are combined among the partners
The lack of independent legal status means that the partners are can be personally liable to the partnership’s obligations.
Partnerships also have unlimited liability, which means the partners bear the obligations of the business.
Partnerships have limited access to capital since they rely mostly on partner contributions.
There is potential for differences and conflicts among the partners regarding business matters.
Decision-making is slower because all partners have to be involved.
Revenues and profits are shared among the partners.
Limited Partnership
Limited partnerships can raise more capital from the partners.
There is a limited partner who faces limited liability for losses incurred.
The responsibility for the work is distributed among partners.
General partners bear maximum liabilities for the obligations of the partnership.
Conflicts and differences among partners may emerge.
Limited partners have little influence on the decision-making.
Limited Company
Limited companies are more tax efficient.
Separate legal status protects the shareholders from the liabilities of the company.
As a separate entity, a company runs all business affairs in its name.
Limited companies can have access to a wider pool of finances.
A limited company is complex and complicated to set up.
Decision-making can be time-consuming due to the many shareholders involved.
Company names are subject to certain regulatory restrictions.
Strict procedures have to be followed when withdrawing funds and accomplishing other tasks.
Limited Liability Partnership
All partners are protected from the liabilities of the business because limited liability partnerships (LLPs) are separate legal entities.
LLPs are more flexible in terms of the operation and distribution of profits.
LLPs can do business in their name.
Partnership names are protected through registration as the Companies House.
LLPs are subject to public disclosures.
The revenues are regarded as personal incomes and are taxed as such.
Profits cannot be retained in the same manner as companies limited by shares.
Relatively limited access to capital as compared to limited companies.
Community Interest Company
Community interest companies (CICs) have a clear commitment to social goals.
CICs offer access to more funds, especially from donors.
Owners and managers are protected from the liabilities of the CICs
The structures of the companies are more flexible.
CICs are quicker to set up.
CICs have fewer governance requirements.
CICs follow the same incorporation procedures as other companies, which can be complex.
Ongoing company compliance can be a challenge as the social purpose has to be maintained.
CICs do not benefit from tax breaks granted to other forms of charitable organizations.
Access to funding can also be limited.
CICs face restrictions on the payment of dividends.
Charitable Incorporated Organizations
Charitable incorporated organizations (CIOs) are not subject to dual regulations because they only need to be registered with the Charity Commission.
Trustees of CIOs benefit from limited liability.
No minimum registration threshold.
CIOs can be subject to similar regulations as companies.
Relatively difficult to register a CIO.
CIOs have structures not familiar with many lenders, which restricts the funding sources.
CIOs encounter many delays before they can begin operations.
CIOs cannot offer securities for borrowing.
Cooperative Society
Membership is voluntary.
Cooperatives are easy to form and operate.
They are operated on a democratic basis, which means the interests of all stakeholders are met.
Surpluses are equitably distributed.
They offer limited liability to members.
They often receive government supports.
Taxation is low.
Funding is often limited.
Cooperatives often over-rely on government funds.
Mismanagement can result from a lack of proper management skills.
Operational inefficiencies can lead to losses.
Table 1: Summary of Legal Status of Business.
The table presented above highlights the major legal statuses of businesses in the UK and their strengths and weaknesses. The first and easiest form of business is the sole trader because it can be started and operated by a single individual. Depending on the scale, a sole trader can also hire a few employees to help with the operations of the business. The key strengths include that a sole trader can gain full control of the business. Additionally, it requires relatively less capital to start and operate. A sole trader can also be flexible because the nature of operations is small scale. Lastly, a sole trader faces minimum government regulations, which makes it easier to run. A sole trader also has several weaknesses, some of which are summarized in the table. First, the business is inherently risky because the trader is not a separate entity from the business. In other words, the liabilities of the business are borne by the sole trader. Second, sole traders are only suitable for small-scale investment, and scaling up may be difficult. Lastly, as an unincorporated business, a sole trader has limited sources of finances besides personal savings and small loans and grants. Sole traders cannot raise equity finance through the issuance of shares.
The second form is an unincorporated association, whose first strength is that it is cheap, quick, and easy to set up. Additionally, it does not require the payment of fees, does not require the services of a registrar, and does not have to submit accounts. Other strengths include that an unincorporated association is run by members, which means no expensive labor needs to be hired. Lastly, it can be relatively flexible in terms of aims and business activities.
A partnership is another legal status that can be adopted by an entrepreneur. Its strengths include that it is less formal, which means it has fewer legal obligations, and it is relatively easy to set up since the partners can agree verbally or in writing. Additionally, the partners share the burden of running the business where the tasks are shared among the partners, and the mutual support means the partners can have access to shared knowledge, experience, contacts, and skills. Lastly, with more than one person involved, there is better decision-making, partners can raise more capital as compared to other forms, including sole traders, and ownership and control are combined among the partners. The weaknesses of a partnership include it lacks independent legal status, meaning that the partners are can be personally liable to the partnership’s obligations. Partnerships also have unlimited liability, which means the partners bear the obligations of the business. They also have limited access to capital since they rely mostly on partner contributions, and there is potential for differences and conflicts among the partners regarding business matters. Lastly, decision-making is slower because all partners have to be involved, and the revenues and profits are shared among the partners.
Limited partnerships involve a business with general partners and limited partners. The key strengths include the fact that Limited partnerships can raise more capital from the partners. Additionally, there is a limited partner who faces limited liability for losses incurred. Lastly, the responsibility for the work is distributed among partners. The weaknesses include that the general partner bears maximum liabilities for the obligations of the partnership. Additionally, conflicts and differences among partners may emerge and, lastly, the limited partners have little influence on the decision-making.
Another option for an entrepreneur is to establish a limited company, whose key strengths include the fact that it is more tax-efficient. A separate legal status protects the shareholders from the liabilities of the company and allows the company to run all business affairs in its name. Lastly, limited companies can have access to a wider pool of finances. A limited company also has weaknesses, for instance, it is complex and complicated to set up. Additionally, decision-making can be time-consuming due to the many shareholders involved. Company names are subject to certain regulatory restrictions, and strict procedures have to be followed when withdrawing funds and accomplishing other tasks.
The strengths of a limited liability partnership (LLP) include that all partners are protected from the liabilities of the business because LLPs are separate legal entities. Additionally, LLPs are more flexible in terms of the operation and distribution of profits. LLPs can do business in their name, and the partnership names are protected through registration as the Companies House. LLPs also have weaknesses, for example, they are subject to public disclosures. The revenues are regarded as personal incomes and are taxed as such. The profits cannot be retained in the same manner as companies limited by shares, and LLPs have relatively limited access to capital as compared to limited companies.
The strengths of community interest companies (CICs) are that these businesses have a clear commitment to social goals. CICs offer access to more funds, especially from donors, and the owners and managers are protected from the liabilities of the CICs. Additionally, the structures of the companies are more flexible, they are quicker to set up, and have fewer governance requirements. CICs have weaknesses, include that they follow the same incorporation procedures as other companies, which can be complex. Ongoing company compliance can be a challenge as the social purpose has to be maintained. CICs do not benefit from tax breaks granted to other forms of charitable organizations. Additionally, access to funding can also be limited, and these businesses face restrictions on the payment of dividends.
Lastly, cooperative societies have such key strengths as voluntary membership. Cooperatives are easy to form and operate. They are operated on a democratic basis, which means the interests of all stakeholders are met. Other strengths include that surplus are equitably distributed, they offer limited liability to members, they often receive government supports, and taxation is low. In terms of weaknesses, funding is often limited, and cooperatives often over-rely on government funds. Additionally, mismanagement can result from a lack of proper management skills, while operational inefficiencies can lead to losses.
Sources of Finance
Starting a business as an entrepreneur means determining the sources of capital. Currently, the ongoing Covid-19 pandemic has meant that funds are scarce. The three most likely sources of finances include startup business loans, government startup loans, and venture capitalists. Business startup loans are often unsecured personal loans intended for business purposes only. The main strength is that these loans do not require any securities, which means entrepreneurs with promising business ideas can easily access them. A second strength is that they have low-interest rates, often around 6% p/a (Watts, 2021, para. 6). Additionally, these loans make it possible to protect personal wealth from the losses of the business. Lastly, the entrepreneur can retain ownership of the businesses. The weaknesses include the fact that only limited funds can be offered as loans for startups, often ranging from £500 to £25,000. Startups that require additional capital will be required to raise using alternative sources. It is hard for entrepreneurs to qualify because lenders often perceive startups as risky ventures (Fora Financial, 2021, para. 13). Lastly, loan repayment restricts the cash flow, which can disrupt the progress of the venture.
The second source of funds is grants from the government for entrepreneurship purposes. Many governments across the world, including the UK, are seeking to fill the funding gap for startups through loan guarantees and subsidized personal loans (Bertoni, Marti, and Reverte, 2019, p. 371; Marti and Quas, 2018, p. 397). The main strength of this source of funds is that it does not need to be repaid. Therefore, an entrepreneur can save personal finances or reinvest them to grow the business further. Additionally, the absence of loan repayments means that the cash flows are not disrupted. An entrepreneur can focus on growing the business as opposed to repaying the loans. Most importantly, government-backed loans are often targeted towards certain initiatives. Therefore, the entrepreneurs whose businesses are aligned with the interests of the government can easily access these loans. In times of Covid-19, ventures that are designed to help the country ease the burden of the pandemic can easily be supported by the government.
The main weakness of the government-backed loans is that they do not cover all the startup costs, which means that the entrepreneur has to get finances from other sources. In many cases, startups are exempted from government grants because these funds are sources from the taxpayers. Without a track record, the government may not risk the taxpayers’ money. Government-backed loans are also highly competitive, making it difficult for entrepreneurs to access them. Such difficulties are expounded by the inability of the startups to align their agenda with the interests of the government.
The third source of capital for a startup is venture capitalists. By description, venture capitalists are a collective investment in a venture that often engages in innovative activities. The gains of the business are shared between the business and the investors (Lyasnikov et al., 2017, p. 112). The main strength is that an entrepreneur does not necessarily need a track record, especially where the investors have faith in the business. The main weakness is that the proceedings are sharded between the entrepreneur and the investor. The payment of these proceeds means the entrepreneur does not have full control of the business, and the revenues gained from the businesses cannot be easily reinvested. Investors are often more focused on recovering their investments, which means a conflict of interest may occur.
Sectors in the UK Economy
Three sectors within the UK economy where a business can operate include the services sector, agriculture, and construction. The services sector is one of the fastest-growing and most important for the UK government. According to Elliot (2021a, para. 4), the services sector accounts for approximately 80% of the national output of the country. The sector comprises such businesses as hospitality, leisure, and other activities that involve directly serving the customers. Today, it is estimated that the services sector in the UK employs about 16.1 million people, which accounts for 50% of the country’s workforce (Sutton-Parker, 2020, p. 517). Therefore, it can be argued that the UK heavily depends on this sector for both employment and revenue generation. Additionally, several other trends can be observed in the sector, one of the most important being the proliferation of information technology and sustainability practices. These elements, it should be noted, as common across all sectors, especially at a time when businesses are under pressure to minimize carbon footprints.
The construction sector in the UK is also an important one for the country. However, the sector accounts for an estimated 6% of the total UK output, which means that it is nowhere near the services sector in terms of size and contribution to the economy (Elliot, 2021b, para 2). However, the progress of the construction industry may depend on other sectors. For example, the growth of the hospitality sector may result in growing construction efforts, which fall under construction. Expansions and government investments in certain facilities, as well as private commercial ventures such as housing, are also key to the growth of the construction sector. Therefore, it can be argued that the sector plays a supporting role to others. Regardless of how it is perceived, it is expected that the construction industry will continue to grow. Its diversity means that the sector is involved in such aspects of the business as buildings, infrastructure, and manufacture and supply of products. Additionally, operation, disposal, and maintenance of the infrastructure, buildings, and products also fall under the construction industry.
The agricultural sector is another critical sector in the UK, which often responsible for feeding the country’s population. Among the key facts regarding this sector include that it employs over 4 million people and contributes an estimated £120 billion to the country’s economy (Countryside, 2020, para. 1). Agriculture can be described as a driving force behind other economic activities, which give similar characteristics to construction. For example, such activities as food production and restaurant businesses may depend on agriculture to provide the basic raw materials. In a recent government report, it was estimated that agriculture contributed approximately £9,435 million in terms of Gross Value Added at basic prices to the economy (Department for Environment Food and Rural Affairs, 2021). The most important aspect is the fact that the sector helps improve UK’s food self-sufficiency, which currently stands at 64% (Countryside, 2020, para. 6). Therefore, it can be argued that this sector has the potential to make a critical impact on the country’s economic wellbeing in the long run and to address the issue of scarcity in the country’s food resources.
The main difference between these three sectors is in terms of how much they contribute to the total output of the country. The facts presented above indicate that the services sector is leading the race of the most valuable sector in the country. The rate of growth of the services sector may also be a key difference considering other such sectors as construction grow at a very low rate. Therefore, it can be argued that the services sector offers the best potential for any startup. Additionally, the current growth of the services sector is fueled by advances in technology. As mentioned earlier, all sectors have benefited from new technology, which offers operational efficiencies and cost-saving capabilities. For example, robotics and global positioning satellites in agriculture and new machinery and computer tools for design in the construction industry have significantly helped develop the sectors. However, IT helps in the development of new business ideas and ventures, including such online services as payments and communication. Therefore, technology has had different impacts on the three sectors.
The value of each sector to the UK economy can be perceived in terms of the contributions to gross domestic products (GDP) and other such economic benefits as employment and food security. For the services sector, the rate of employment is massive, as illustrated by the fact that 50% of the country’s workforce is employed here (Sutton-Parker, 2020, p. 517). Agricultural is also extremely valuable to the UK because it is the main source of the food consumed in the country. Without this sector, the UK would be forced to import food from other countries. This value is in addition to the millions of sole trader farmers in the rural areas and the contributions to the GDP. Similarly, the construction industry provides the basis for the country’s development agenda.
HR Policies
Human resource (HR) policies are critical for the effective management of personnel in the workplace. Two of the most important policies include health and safety and anti-discrimination policies. Health and safety policies tend to define occupational health in the workplace and mitigate against accidents and other health risk factors (Jonathan and Mbogo, 2016, p. 1). In the modern workplace, there are many reasons to ensure that the employees remain safe. Using the concept of opportunity costs, it can be argued that the employers are liable for the accidents and the resulting injuries to employees, which could mean expending more than what could have been used in the development and implementation of health measures. The costs of insurance and medication for injured workers, as well as other such risks as reputational, may have significant detriments for the businesses. The HR managers are, as a result, required to help the organizations in the governing of workplace safety through health and safety policies.
Depending on the nature of the workplace and the industry, the degree of necessity of health and safety differ, as well as the costs of noncompliance. In such industries as construction, the workers tend to work in dangerous environments. Building and other construction sites are always hazardous, which means that critical and effective safety and health measures are needed. According to Jonathan and Mbogo (2016, p. 1), it is not only the employers who are responsible for compliance with the health and safety policies. The employees are also bound by certain rules and regulations, especially focusing on their codes of conduct. For example, laboratory workers or those working with dangerous chemicals must use the appropriate safety gear and clothing. These guidelines can be enforced and closely monitored by the HR department to prevent the occurrence of incidents.
The second HR policy is anti-discrimination, which is often a key legal requirement by governments across the world. In the modern workplace, there have been heightened efforts to fight discrimination against vulnerable groups of people. Examples include the members of the LGBT (lesbian, gay, bisexual, and transgender) and people with such health conditions as autism. Additionally, racial and ethnic discrimination in many western countries is a major challenge. The anti-discrimination HR policies are also founded on the principle of equality, a major provision in the constitutions and legislation of many countries. Roughly interpreted, equality entails offering all people equal opportunities in the workplace (Amirkahni and Tabghi, 2016, p. 97). However, anti-discrimination policies go beyond the opportunities, which are often expressed through such HR practices as recruitment. In essence, the treatment of people based on their differences, for instance, lower wages for certain ethnic groups or harsh treatment of women in the workplace, are all addressed in the anti-discrimination policies. Modern society embraces equality, more so because cases of inequality and discrimination have become highly political and controversial. Therefore, it is critical that an organization has a policy in place to address this issue.
Just like the health and safety policies, the anti-discrimination policies are intended to guide and correct the behavior of the employees towards others. Modern workplaces have become increasingly sensitive with many legal battles against employers. Reputational costs in an era where there is a scarcity of talent can be extreme. The modern generation, comprising mostly the millennials, tends to prefer more reputable organizations, especially those that address some of the major issues, including sustainability. The new generation also understands that they have a key role to play in making the world better. Therefore, it is possible that the most skilled workers could refuse to take jobs in certain businesses because of their discriminatory practices. Additionally, it is important to acknowledge that modern businesses use diversity as a form of competitive advantage (Ensari, Gurel, and Alay, 2017, p. 105). The global nature of modern corporations means that HR managers need to manage diversity better. However, their efforts may fail to materialize if the workplace is discriminatory in nature or where certain workers are not treated right. The anti-discrimination policies could be the best approach to diversity management.
Reference List
Amirkahni, A. and Tabghi, R. (2016) ‘Comparative study of anti-discrimination laws of the UK, the United States of America and India’, Mediterranean Journal of Social Sciences, 7(3), pp. 96-111.
Bertoni, F., Marti, J. and Reverte, C. (2019) ‘The impact of government-supported participative loans on the growth of entrepreneurial ventures’, Research Policy, 48(1), pp. 371-384.
Ensari, S., Gurel, P. and Alay, H. (2017) ‘Does diversity management provide competitive advantage?’, The International Journal Of Business and Management, 5(1), pp. 101-113.
Jonathan, G. and Mbogo, R. (2016) ‘Maintaining health and safety at workplace: Employee and employer’s role in ensuring a safe working environment’, Journal of Education and Practice, 7(29), pp. 1-7.
Lyasnikov, N. et al. (2017) ‘Venture capital financing as a mechanism for impelling innovation activity’, European Research Studies Journal, 20(2B), pp. 111-122.
Marti, J. and Quas, A. (2018) ‘A beacon in the night: government certification of SMEs towards banks’, Small Business Economics, 50, pp. 397-413.
Sutton-Parker, J. (2020) ‘Quantifying resistance to the diffusion of information technology sustainability practices in United Kingdom service sector’, Procedia Computer Science, 175, pp. 517-524.
This company’s organizational structure is currently in a complete state of disarray. The arrangements focus on keeping departments like marketing, finance, and accounting separate. Each employee in this system is overworked, but because they handle tasks from several areas, they do not have a specific boss to whom they must report. They may reorganize the business to address the communication challenges between teams and the entire organization because many managers and project managers are not interacting with one another and are not distributed effectively. Both divisional and matrix structures will be used in the reorganization. A divisional structure assigns a department to each business’s distinctive goods or services. Each employee will report to a department manager and a project manager in addition to the matrix organization. The company’s interaction channels are open due to the union of these two organizational systems, and productivity has increased. The study will assess an organizational structure that permits communication and information sharing between all departments.
Chaos will first reign over the entire corporation as information is spread. More managers will be present, and they will need a dependable communication method that does not entail face-to-face participation; thus, the framework will be crucial. Initially, they should mainly communicate via email and face-to-face meetings. They should make sure a trustworthy email network system is set up. Because it enables users to share emails and files, Gmail is a sound system. Employees can change the documents that another user emails them while exchanging papers with them. Although face-to-face communication is frequently preferred, because of the pandemic and the hectic schedules of most people, it is impossible to know precisely what is going on at any given moment.
The company’s new organizational structure dictates that communication will occur hierarchically, starting with managers, then product managers, and last to regular employees. There are more managers at the firm’s core to balance the workload and better manage the personnel and functions. Everything always starts with the CEO, then moves on to supervisors. Despite having more fairly divided duties throughout their teams, marketing and technology professionals will still report to their managers. When deciding which duties are most suited for particular employees, HR managers increasingly play a more significant part in helping managers allocate these jobs daily and project-by-project basis. The project, their specialist, and the HR managers are the people the staff members must report to.
Even though it might not appear necessary at first, it is essential to ensure that everyone is on the same page about the assignment and that no jobs are skipped. There is a more open line of contact due to this arrangement; for instance, if employees are dissatisfied with one manager, they can talk to another manager or even the HR manager. It allows for a better flow of information. When things get complicated, more people are willing to lend a helping hand if a group has a higher level of engagement. I have established a new organizational structure to address the current issues, including overworked management and a lack of communication regarding ongoing activities. In order to do this, I have reorganized the company. The prior organizational structure did not include a direct message system; thus, employees of the company had the impression that they did not receive sufficient or timely updates to the information provided to them in their working environment.