There is no single organizational design and structure, which can be applied to all businesses; though all businesses show some level of organizational design and structure, which define the groups, and offers coordination for the different roles to be performed in the business.
This paper is a review of the organizational structure and the design of Veema Ltd., a business specializing in the delivery of IT appliances, including computers, across the host state. Things to be discussed include work specialization, centralization and decentralization, departmentalization, formalization, chain of command, and the span of control at Veema Ltd (Adair 134).
Discussion
The field of work specialization
Different jobs, roles and tasks, are assigned to the various departments within the design, after being grouped into classes, placing those that are closely related together, and assigning them to the relevant departments. At Veema, the employees working at the administrative centers are those trained and skilled in administration, thus may not be able to work at the business units, for example, the technical department.
An example here is the case of Janet Walters, who was required to work at the marketing department, during an internal case study, designed to evaluate the ability of different workers to operate at departments, other than those which they are specialized in. Ordinarily, she worked at the technical center; and had maintained top performance since her appointment. However, when placed at the sales department, she could not perform well, as comparable to the performance of the sales team members recruited one month before.
The promotion of top management takes place, often, within the division or the department, which the workers operate under, as these are the fields that they are specialized in. For example, 3 months ago, John Smith, who was the marketing manager, was promoted to become the president of marketing, which fall under the same department of sales.
These two variables under work specialization, show the importance of specialization, with regard to roles and skills of workers at Veema. The study offered insights into the management of operations and resources at the organization, as well as the significance of teams in pursuing organizational goals (Adair 134).
Departmentalization
Veema Ltd. runs on a design characteristic with mixed product and functional departmentalization. These can be split into two: the administrative units and the business center units, which are further split into different divisions and departments. Business units and subunits, are distinguishable on the basis of product departmentalization, which is simply the line of products that they trade in or supply.
These include the computer sales division, which deals in computers and laptops; the internet set up and supplies division, which offers the services of internet installation and maintenance; the software division, which deals in the supply and trading of software applications; and the parts and accessories section, which trades in the parts and accessories of computers.
These divisions create specialization zones, which allow for effective addressing of the needs of the customers. The administrative unit consists of a number of departments, which are departmentalized on the basis of the functions they play at the business. These include marketing, human resource, financial, technical, and global development (Handy 76).
The marketing department is responsible for all the marketing activities of the venture, these including any sales promotions to be carried out by the business, and the allocation of sales staff and representatives, as well as the creation, communication, delivery and exchange offerings carried out between the business and its customers.
Other minor roles are not listed here. The human resource department is responsible for the selection, assessment of performance, training, sourcing of workers and the rewarding of employees. This department further plays the role of overseeing organizational culture and leadership, as well as guaranteeing compliance to the laws on employment and labor at the areas of operation.
The financial department is responsible for business budgeting, administration of funds, the employment of expenditure and economy measures, manning all monetary activities and checking tax compliance. The technical department is responsible for the technical functions of the venture, these including software and hardware testing, as well as the checking of faulty products still under warranty.
The global development department is responsible for the standardization of the processes and operational levels of the company, to ensure that they keep up to date, with reference to global levels of technical and software advancement (Covey 47).
The chain of command
Like at many other modernly run organizations, the chain of command has less significance at Veema Ltd. This is because the role of authority managers and supervisors is kept at minimum; as the employees of Veema are trained to act at exert levels across the different operational zones.
Therefore, different from the traditional chain of command model, which runs orders from top to bottom, managers at the different operational centers engage in the oversight of the performance and the progress of the employees. At Veema, the expectation and obligation towards performance is expressed at the teams or individual levels. This is to mean that at Veema, the managers will oversee the operations of workers, without assigning roles and tasks to each worker.
This is the case, as the teams take full responsibility for the division of work amongst the different players, who carry out their roles towards the realization of the common goals. On the basis of the account offered, unity of command is virtually not existent at Veema, as the majority of employees, who operate under teams, will report to the oversight manager or the managers from related departments (Handy 76).
The span of control
The trends in the structure and design of organizations are moving towards the establishment of larger control spans, as this helps reduce the costs. Also, this is helpful in speeding up decision-making and is a factor leading to an increase in the flexibility of organizations, with regard to change or other change demanding situations.
The wide control spans, further help the business in drawing closer to its customers and the principal impact of empowerment and the motivation of workers, which play a critical role in determining organizational success. The span of control for Veema is similar to the one described above, as depicted by the operational functions of the different oversight managers and other support management staff, including the top staff at the business.
For example, Dr Jacob Jones, who is the managing director of the venture, is a player in the oversight of 8 dissimilar sectors, these including the internet services provision division. Dr. Jacobs is also an active player in corporate marketing, the technical support division and the global development division. The wide span of Dr. Jacob’s duties draws from his high competence in running such ventures, as he has run five different companies in a span of 25 years.
Therefore, he is capable of offering support across a major number of the different departments and sectors. The second case is that of Janet Walters, who acts as a player and the oversight manager in charge of the technical department. She is also responsible for the running of three other divisions, including the software development, the parts and accessories department, as well as the computers sale section, as she is highly proficient with the running of technical application and operations.
Miss Janet Walters has also been accorded the wide range of contribution, responsibility and oversight authority, as she has worked under the technical department for 3 IT establishments, over the past twelve years. However, the wide span of control does not mean that one worker can operate efficiently at every sector, as from her example, she was not able to perform at the sales department, which implies the need for a careful selection of the extension spans (Boddy 145).
Under span of control, Veema calls for highly developed skills and intensive training, especially from those working at the key product sectors. As a result, the company offers further training to every worker on a two months basis, after which, it administers a skills-base evaluation to evaluate the level of competence.
This is evident from the fact that, at the business units of Veema, the workers are able to arrange themselves into teams and arrive at decisions in a quick effective manner. At these centers, the workers also show that they are capable of carrying out their duties and responsibilities in an effective manner, without the supervision of top management or oversight control.
Further, considering the wide coverage of the venture; the huge number of employees and the variety of operational locations which are operated from four reference departments, the operational abilities of the different workers is skilled and effective. This shows that the different workers at Veema are highly skilled and proficient (Covey 47).
Centralization and Decentralization at Veema
From The operational design and the duty execution lines of the company, the company is fairly decentralized. The operational teams under the different departments and divisions at Veema formulate their own plans regarding projects. However, all these are done with reference to their skills and knowledge base, towards the realization of the goals set by the divisions, departments or the company as a whole.
The managers at Veema rely on the experience and the expertise of the team members at the departmental or divisional levels of decision-making, these including those on goal setting. Additionally, the roles of the managers are more restricted to the oversight or progress and the provision of suggestions to the players when necessary. Decentralization is also evident from the mutual dependence of the different departments and divisions, which may request for the provision of the resources available at others.
From this case, it is also evident that decision-making at the organizational level cannot be carried out by one department, managerial level or other positional leaders. From the appearance that decision-making at Veema is not concentrated around certain departments, divisions or authorities, it is clear that Veema is operated on a decentralized mode of operation (Collins 145).
Formalization at Veema
From the account of Veema, it is clear that the company has spent a considerable effort, towards ensuring that the working environment available to its workers is highly flexible, and one with less boundaries. Further, the company encourages and promotes their employees to live a learning-process, whether at work or outside, as the company operates principally, on the highly developed employee skills-base.
From following this approach, the company has created a highly skilled and intelligent workforce, which offers it competitive advantage, towards the meeting of company goals at a considerable level of freedom. From the account therefore, it is clear that job behaviors are considerably not structured, which offers employees a substantial level of freedom as they do their work, thus are highly capable of exercising creativity and developing more effective problem-solving tactics (Handy 76).
Conclusion
There is no single organizational design or structure, which can be applied and used at different institutions or organizations. This is the case, as the design or structure adopted, depends on the needs of the organization, the area of coverage and the extent of service to be offered. For instance, a sole proprietorship may rely on the input of one individual, and still meet its obligations, while a company must have a large number of players working in harmony.
This paper is an analysis of the organizational structure and design of Veema, an IT supplies company. Under work specialization, different departments and divisions are assigned different roles and responsibilities. Under departmentalization, the company has an administrative and a business unit, which are further split into different divisions, which are the socialization zones.
At Veema, the chain of command is virtually non-existent, as there are no definite lines of authority. In the area of span of control, the company’s management covers a wide coverage of duties, which are run through the input of the lower level employees.
Under centralization, the company’s decisions are made at the different levels of operation and the different authority and functional roles, thus the company adopts a decentralized operation model. Under formalization, Veema is low; therefore the employees work in a highly free environment, which promotes personal responsibility.
Organizational change has always been a challenge for all medical establishments. However, readiness to introduce shifts to the management process is imperative for an organization to sustain a competitive advantage over other centers (Kovner, R, 2009).
While restructuring Wise Medical center it is obligatory to think over effective strategies of resources allocation and finances because expenditures is an important conditions of reorganization. Paul Bones’ arguments against changes are logical, despite all the benefits of the identified strategic plan.
Identify the Individual and His or Her Management Position in the Organization
Paul Bones is a chief of medicine at the center who takes care of research and teaching programs that should also be financed in case of new changes to be introduced.
The problem of reorganizing touch upon many unsolved problems, particularly on the concept of patient care, as well as the training programs and education (Kovner, McAlearney, & Neuhausaer, 2009). His primary concern is to learn more about these strategies because, according to his opinion, they are the key ones in transferring from one quality level to another.
The Role of the Individual and Defend His or Her Argument Whether Or Not You Agree With the Concerns Expressed
Patient care is largely premised on the roles and responsibilities imposed on nurses and physicians. Their interaction, as well as information exchange is indispensible to ensuring safety and quality of patient treatment. Moreover, introducing modern methods of research and evidence-based practice is also significant for advancing the center’s potential. Therefore, Bones’ concerns are fully justified.
Literature and Field Experience Observations to Support the Individual’s Argument
In order to ensure consistent and successful management of the hospital, four factors should be considered, including community, control, cure, and care (Glouberman & Mintzberg, 2001a). The last two aspects are assigned to doctors and nurses respectively who should fulfill their obligations in order to meet the requirements and standards of high quality treatment.
Regarding the care of patients, it should be premised on the information received from researches, but lack of sufficient funding can lead to disinformation and shortage of resources to introduce high quality medical intervention (Glouberman & Mintzberg, 2001b).
Mr. Spellman’s Perspective in terms of the Concerns That Might Be Addressed in the Restructuring
The problem of research and practice can be effectively met with regard to the existing technological introductions. In case four factors of effective management are considered, the idea of restructure will not be a problem from the center. Spellman’s ideas, therefore, are quite consistent and logical, but too radical and the first step here will be oriented on educating the staff and making them sure of the necessity of introducing changes.
Considering external factors is also indispensible to advancing the quality of care. Social, economic and political perspectives should be regards in a wider context, but not based on individuals concerns of the members of the center (Glouberman & Mintzberg, 2001a). Moreover, introducing significant shift to the organization of the center will provide a fresh insight into change management, as well as enrich the strategies aimed at improving the overall organization and staff development.
Moving forward to restructure and new organization should also increase the nurse turnover and provides a new outlook on the culture of retention within a hospital. In addition, looking at the changes occurred to hospital, one should also consider the issue of cultural diversity, which is also at the core of successful management.
References
Glouberman, S., & Mintzberg, H. (2001a). Managing the care of health and the cure of disease—Part I: Differentiation. Health Care Management Review, 26(1), 56–69
Glouberman, S., & Mintzberg, H. (2001b). Managing the care of health and the cure of disease—Part II: Integration. Health Care Management Review, 26(1), 70–84.
Kovner, R. (2009).Short Case 12: A Proposal for the Restructuring of Wise Medical Center. In R. Kovner, A. McAlearney, & D. Neuhausaer (Eds.). Health Services Management: Readings, Cases, and Commentary. US: Health Administration Press.
Kovner, R. McAlearney, A., & Neuhausaer, D. (2009). Organizational Design. In R. Kovner, A. McAlearney, & D. Neuhausaer (Eds.). Health Services Management: Readings, Cases, and Commentary. US: Health Administration Press
According to Vargas, Hernandez & Bruque (2003), from the start of the computer era, a large number of studies have been conducted which have made a prediction of a number of positive effects that come up from the IT implementation.
Looking at it from the strategic perspective, information could have an effect on each of every competitive strategies presented by Porter, “whether it be cost leadership, differentiation or specialization in a market niche, or efficiency in activities involved in the value chain” (Vargas, Hernandez & Bruque, 2003, p.246).
In the course of the 1980s as well as in the 1990s, there was publication of several cases and articles in the professional press which made a prediction of a net increase in the business results of the business organizations that made an investment in the information technology (Vargas, Hernandez & Bruque, 2003).
Basing on most recent findings a big portion of the positive effects of information technology on business results tends to be inherent in the fact that technology boosted organizational changes like restructuring into “interdisciplinary workshops, an increase in decision making autonomy, and a support for worker training” (Brynjolfsson & Hit, 2000, p.25).
In addition, there has been identifying a number of human and management factors that offer a complementary effect together with technology, such a perception is in the line with the so-called “strategic necessity hypothesis by which IT is a necessary but not sufficient factor in improving competitive position” (Vargas, Hernandez & Bruque, p.246).
However, the link between information technology and competitive advantage goes on to be greatly argued over. Most of the studies that were conducted earlier were carried out on the basis of the stock market results evolution of the companies that heavily utilized information technology, so that they could not feel the effect of fluctuations in the market (Vargas, Hernandez & Bruque, 2003, 246).
Such companies realized a strong rise in their worth in the last decade but eventually suffered an abrupt and sharp change tendency (Lee, 2001).
However, in the current day, business organisations can be in a position to realize sustainable competitive advantage if they use IT in the most suitable way in dealing with business requirements. These organisations have to be aware of the way to apply IT in their own organizational activities as well as processes. Such awareness is very essential to the success of the organisation.
According to Talebnejad (2008), evidence that has been presented by studies that were conducted in the recent times indicates that implementing successful business strategies by making use of IT has contributed to the improvement of the efficiency and effectiveness of the organisations.
He points out that in the year 2004, the relation between the investment in IT and the sales performance of five hundred big firms in the U.S were studied (Talebnejad, 2008). Following this study, it was indicated that a direct positive relationship between the amount of money invested and the performance of sales of these firms existed (Talebnejad, 2008).
In another survey that involved the top managers of several companies in the U.S indicated that about 80 percent of the managers that were contacted held a belief that information technology played a very important role in the success of the organisation.
This paper is going to look in detail at information technology as an element of competitive advantage for business organisations. The ‘Information technology’ and ‘Competitive advantage’ concepts are first of all going to be looked at and this will be followed by a comprehensive discussion of information technology in relation to achieving competitive advantage by business organizations across the world. The paper will end with a conclusion in which the summary of the discussion will be given.
Information Technology
According to Talebnejad (2008), “characteristics of the information era have led us to a new set of technologies called ‘information technology’ or IT. Information technology or IT is a sequence of various implements that encompass information networks, software, hardware, workstations, information theories and artificial intelligence that utilize various information forms as “a systematic process to carry out activities” (Talebnejad, 2008, p.60).
The attention to this kind of technology started to be paid in the course of the 1980s and its initial organizational functions lay in the automating the productive as well as official jobs and carrying out routine tasks. Making use of the intra-organizational networks as well as internet, IT has brought in improvement in intra-organizational communications via the extranet and intranet communications (Talebnejad, 2008).
IT has contributed to realization of fast, accurate and large-scaled information publication in different regions at all times. Information circulation having these characteristics has led to reduced costs, “saving in localities, expedition in doing activities and thus increasing profitability and efficiency and effectiveness of technology” (Talebnejad, 2008, p.60). Swift IT development resulted in the focus of the special attention being put on informational knowledge (Talebnejad, 2008).
Competitive Advantage
According to Talebnejad (2008), competitive advantage is the focus of strategy and the fundamental concept in the field of strategic management. This form of advantage is set up by engaging in the differentiating of a firm in a special business in comparison to its competitors in the point of view of the stakeholders, especially the clients.
The customer has to have it in mind that the firm under consideration is in a position to engage in the creation of more value for him or her as compared to the other competitors. In a situation where a firm does not have a competitive advantage, it can not survive in the long run. The bigger the difference between the firm and its competitors, the higher the sustainability and strength of its competitive advantage will be.
Competitive advantage is a product and sustainability in a situation that is brought about ‘after the failure of imitative and patterning attempts of the factor causing the competitive advantage” (Talebnejad, 2008, p.61). A company can not buy sustainable competitive advantage from any particular market but rather, it has to acquire it through engaging in the creation of superior capability in the managerial activities.
Barney (1991) points out that “valuable, rare, imperfectly imitable, and imperfectly substitutable resources could generate sustainable competitive advantage for the firm with the pre-requisite of heterogeneity and imperfectly mobile of resources among competing firms” (p.99).
Developing more on this notion, Peteraf (1993) has directed attention to rest on “heterogeneity, ex ante limits to competition, ex post limits to competition and imperfectly mobile as the characteristics for strategic resources in creating sustainable competitive advantage for a business organization” (Peteraf, 1993, p.179).
The fame of the ‘competitive advantage’ concept has been boosted by Porter’s ideas (Jones, 2003) before the creation of Peteraf’s and Barney’s framework. The notion of ‘competitive advantage’ basically concerns measuring of the success of a business organization in relation to its competitors. The measurement of relative achievement of a business organisation could be carried out by ‘economic value’ which that organisation is in a position to generate (Peteraf & Barney, 2003).
The ‘economic value’ refers to the differences that exist between the perceived benefits of the buyers and the “economic cost of enterprise through provision of goods and servcies” (Peteraf & Barney, 2003, p.310). For the reason that the focus of economic value is on giving an explanation for relative success of the firm, this implies that there is no need for the firm to be the best player within the industry for it to gain competitive advantage (Peteraf & Barney, 2003).
In agreement to Porter’s notion, CA within the context of resource based perspective can be realized through “lower cost or differentiation” (Ong & Hishamuddin, 2008 p.65).
It is pointed out that where lower cost is coming out from a firm’s efficiency in the production of goods and services goes in line with the market competitive rate of pricing, then there can be transferring of the lower cost into superior return and on the other hand; differentiation advantage is where a firm produced superior or unique value goods or services that command premium price within the market, goes in line with “competitive cost of production then premium price can be transferred into superior return” (Ong & Hishamuddin, 2008, p.63).
According to Xavier (1997), Porter pointed out that competitive advantage springs from the value a business organisation is in a position to generate for its customers, which is more than the cost incurred in its creation. Value refers to what the customers have a willingness to pay for what is offered by a firm. Higher value comes out from charging the prices that are below those offered by the rivals for the same utility, or offering distinctive benefits which are more than compensate a higher price, referred to as differentiation.
The measurement of value is carried out by the overall value, and a business organisation is gainful where the value it commands is more than the costs that are involved in the creation of the goods and services. It is quite imperative to utilize value, rather than cost, for carrying out the analysis of the competitive advantage since business organisations usually increase their costs intentionally so that they can obtain a price premium through differentiation (Peteraf & Barney, 2003).
Putting into consideration the ideas presented by Porter, some researchers have presented discussions about a number of ways for realizing differentiation as well as cost leadership. For instance, Garvin (1988), in the study, conducted in which he carried out a comparison between the Japanese and the U.S companies, made a conclusion that quality was a very vital factor for the Japanese companies in attaining competitive advantage in the global markets.
In fact, as pointed out by Xavier (1997), in the course of the 1980s, the search for competitive advantage was greatly given shape by the emphasis on quality as being a source of differentiation. This was a consequence of the stiff competitive business environment that came up from the oil crisis (Xavier, 1998).
However, in the course of the late 1980s, researchers such as Stalk (1988) and Keen (1988) came to notice a shift in the relative significance of the competitive advantage sources. These researchers presented an argument that because of the emphasis in quality in the course of the past years, the leading organisations had already attained such high levels of “product conformance” to the extent that they had reached a point where quality was not an issue any longer, “although still an important priority” (Gerwin, 1996, p.400).
Considering the empirical evidence which these researchers had thoughts about as being long-lasting and reliable, they made a prediction that the source of competitive advantage that would follow would be time. In essence, the business organisations seeking competitive advantage have to be in a position to engage in the reduction of the lead times to substantial levels at different value chain points. Consequently, flexibility would turn out to be a key element of competitive advantage.
Flexibility is dependent on how well the integration of different activities is carried out within organizations and how well information exchange is carried out (Xavier, 1998). Therefore, increasing of flexibility can be carried by improving the communication channels through the development of information systems. It is pointed out that modern information technology can be utilized in reducing communication costs and can also be used to bring improvement in the quality and speed of processing the information.
Information Technology Competence
Information technology has received remarkable research attention beginning from the last several years. Starting from the middle of the 1980s, IT began to bring in a strategic impact (Bassellier, Benbasat & Reich, 2003). Following the pattern, the researchers commenced on putting focus on the integration between IT experts and managers of business organizations in creating IT capability and effective use (Ong & Hishamuddin, 2008).
A larger number of the researchers conducting studies in the field of “resource-based view” pointed out the need to have integration of human factor with IT in generating sustainable competitive advantage (Ong & Hishamuddin, 2008). The focus of the discussion here would be on the “IT competence of the management personnel in the firm” (Ong & Hishamuddin, 2008, p.63).
For one to be an instrument in the integration of IT with the organisation in an effective manner, the person must have adequate IT capability. On the other hand, knowledge alone can not be enough.
Being applicable to the individual level, an agent who is active has to have knowledge in IT and also have the willingness to use IT in the day to day operations, and be offered IT facilities as well as IT supports. These “co-specialized resources will be indicated in terms of the ability to understand and utilize the IT for the benefit of the firm” (Tippins and Sohi, 2003, p.74).
The IT knowledge refers to the level of technical knowledge on objects like the computer-based systems. There can be conversion of such knowledge into competence when it is effectively utilized. On the other hand, information operations give an indication of the use of IT in the day to day operations of a business organisation.
But on the other hand, there can be information technology knowledge as well as information technology operations in case the business organisation prepares a stage for the information technology. Therefore, as pointed out by Tippins and Sohi (2003), “information technology objects refer to availability of hardware, software, and personnel to support the performance of information technology operations” (p.750).
Having IT knowledge, as well as IT operations and IT objects give an indication of the capability of the firm to engage in acquiring, deploying and leveraging IT functionality in combination with other resources in order to give shape as well as support to the business procedures in ways of having value addition (Ong & Hishamuddin, 2008).
There are those people who engage in researching that have encompassed experience as well as education in IT as being a portion of IT competence. Bassellier et al (2003) give a definition for the experience in IT as “the activities taking place in a particular organization which includes experience in information technology projects and experience in the management of information technology” (p.320).
According to UcBasaran, Wright, and Westhead (2003), experience will offer skills, resources as well as competence for the future. For that reason, this implies that experience in IT is expected to facilitate the supply of knowledge in IT, to enable individuals to have more eagerness to use and carry out investment in the IT amenities.
Information Technology Competence and a Firm’s Competitive Advantage
According to Ong & Hishamuddin (2008), “following the frameworks in resource-based view, in order to achieve sustainable competitive advantage, a firm must possess a resource that is valuable, rare, imperfectly imitable, and imperfectly substitutable or heterogeneity, imperfectly immobile, ex ante limits to competition and ex post limits to competition (Ong & Hishamuddin, 2008, p.64).
Thus, researchers in ‘resource-based view’ have no general agreement among them that IT alone can give sustainable competitive advantage for a business organization. Bharadwaj (2000) points out that sustainable competitive advantage can be realized through the IT facilities for the reason that these facilities are usually formed by multifaceted and hard to comprehend and imitate set of workings, but this argument seems to have overlooked the subject of value.
Sense that can be seen here is that even if a business organization had the most refined IT facilities which are not easy to be imitated and substituted by the rivals, having no workforce that is well-informed in the organization and who are willing to use these facilities, these facilities can not produce any value for the organization. It is clear that in order to attain sustainable competitive advantage, there must be co-existence of the availability of facilities and the readiness and capacity to make use of them.
The practical as well as hypothetical investigations that were formerly carried out have given an indication of dependable results about the impact of having integration between IT capability and sustainable competitive advantage of a business organisation.
For instance, according to empirical analysis carried out by Mata et al. (1995), and Powell & Dent-Micallef (1997), on business as well as human and technology resources, only matching of human resources on IT was recognized to be remarkably positively linked to IT as well as general performance, the level of profit and increase in sales. On the other hand, Tippins and Sohi established that organizational learning “intervene the association between firm’s information technology competence and performance” (Tippins & Sohi, 2003, p.750).
Substantiation has been made by the analysis of literature and reasonable evaluation that a business organization is in a position to realize sustainable competitive advantage through combination of knowledge and utilization of the IT objects. Such combination would generate important and exceptional resources for the business organisation because not all business organizations are in a position to take pleasure in the helpfulness and efficiency that is brought in by information technology.
Since this combination may be informal ambiguity that is barely comprehensible, the competitors can scarcely duplicate it. Even if rivals might be in a position to engage in the replacement of the co-specialised set of IT capability with similar IT applications, this replacement would not imply that it is not possible for the business organization to achieve sustainable competitive advantage (Barney, 1991).
According to Vargas, Hernandez & Bruque (2003), a number of theoretical approaches in the business administration disciple have attempted to give an explanation to the link between information technology, value creation and maintaining competitive advantage. Among these, the industrial organization, transaction cost economics, the resource-based view and the “inter-organisational network approach” can be pointed out (Vargas, Hernandez & Bruque, 2003).
Looking at the industrial organisational approach, information technology has an effect on the services that are offered in the marketplace, the industry structure, “competitive forces and production economies, improving the efficiency of the activities of the value chain” (Vargas, Hernandez & Bruque, 2003, p.246). From the strategic point of view, information technology may boost gaining advantages in focusing, cost leadership or differentiation.
Considering the transaction cost economics, information technology could assist in reducing the coordination cost between the activities and risks that are intrinsic to the transaction, in the manner, making it possible for the creation of value for the customer, which make up a foundation on which to improve the competitive advantage of a business organisation (Vargas, Hernandez & Bruque, 2003).
But, on the other hand, the ‘transaction cost economics’ only considers those transactions which occur between hierarchies and the market, leaving out other relationships like those which appear in “networks formed by various organisations” (Vargas, Hernandez & Bruque, 2003, p.247).
It is pointed out that the ‘inter-organisational networks approach’ itself makes an attempt to study this question by finding out the formulas by which the network can generate advantages for those participating; advantages in regard to technology, access speed to information and markets (Vargas, Hernandez & Bruque, 2003). In such a manner, the economies of scale can be created, which offer benefits to the business organisation which make up the network (Vargas, Hernandez & Bruque, 2003).
On the other hand, the resource based view has given suggestion of fresh ideas that assist to give an explanation to the information technology function as a strategic tool within the business organisation. In line with this approach, the business elements which are susceptible of turning out to be strategic resources like information technology might be of great value, rare, and hard to imitate (Vargas, Hernandez & Bruque, 2003).
A fourth condition was added by Barney (1996), which consists of the element being complementary to other elements or organisation’s resources. This leads to the synergy or complementary effects which would give an explanation to improvements in the “competitive position that are more than appropriate when the resources operate jointly, compared to when they operate separately” (Vargas, Hernandez & Bruque, 2003, p.248).
Carrying out the application of the assumptions which are made by the resource-based view, information technology when considered separately may comprise of a value-generating resource; in its most advanced form, it may be rare, but it can barely be referred to as hard to imitate (Vargas, Hernandez & Bruque, 2003). Furthermore, because of the current day rapid distribution of technological innovations, information technology would be closer to the commodity concept than to the idea of the differentiating element. On the other hand, when information technology serves in combination with other management or human elements, it can create a positive synergy effect which the rival firms find very hard to substitute or imitate (Keen, 1993).
However, the central question as posed by Vargas, Hernandez & Bruque (2003) is: “what are the factors that produce a positive combinatorial effect alongside information technology?” (p.248). Attempts to give an answer to this question was made by a number of researchers.
For instance, Neo (1988) made identification of ten factors and among these are such factors as “the existence of fluid communication between management and technical staff, harmony between a firm’s strategic planning and IT, and previous experience in technological development” (Neo, 1988, p.192).
Moreover, Kettinger et al (1994) made identification of the upper commitment of management to information technology implementation as well as the existence of a powerful learning effect linked to technological development as being the key elements.
In addition, Mata, Fuerst & Barney (1995) identified the executives’ capability to conceive, set up and exploit the applications that are based on information technology. Powell & Dent-Micallef (1997) presented nonexistence of conflict, a fluid internal communication, organisational flexibility and particular management techniques as being the key elements. In summary, there is a possibility to engage in dividing resources complementary to information technology in to two categories.
In the first category, these would be elements that are related to the human factor within the organisation and these may include “existence of an open and receptive climate in the organization, the fluidity of communication between management and technical staff, and the leadership among upper management of the implementation of new technologies” (Vargas, Hernandez & Bruque, 2003, p.248).
In the other category would be the resources which are related to the business administration techniques like the utilisation of inter-departmental work groups, a commitment to training in the new technologies and also the joint planning of “business and technology” (Vargas, Hernandez & Bruque, 2003, p.248).
In addition, and referring to the work presented by Ross et al (1996), it has been noted that a third component is linked to the way organizing of technology is carried out within the business organisation (Vargas, Hernandez & Bruque, 2003).
These researchers point out that this body of resources is linked to the existence of “an unmistakable design of the technological infrastructure, which allows the distribution of information between the different departments and functional areas, and to the existence of standard procedures for the manipulation and management of data” (Vargas, Hernandez & Bruque, 2003, p.248).
Gaining Competitive Advantage by Use of IT in Customer Service
According to Domegan (1996), “within the conceptual and methodological domain marketing, the issue of attracting and retaining customers is of concern to managers “(p.52). The associated question of how to bring improvement to customer service, its range and measurement as well as its management, has received attention in the last few years. In practical terms, customer service has shifted from “disruptive and reactive activity of the 1970s to proactive management task of the 1990s” (Lalonde et al, 1988, p.5).
Some evidence presented in the recent past indicates that bringing improvement in customer service quality is key to realizing a competitive advantage; “a good product is necessary but not sufficient to compete in today’s marketplace” (Barnes, 1993, p.47). As a direct consequence, the business organizations are engaging in active cultivation of customer service as an asset that is valuable in differentiating strategically their goods as well as servcies (Domegan, 1996, p.52).
In line with this, remarkable wide-reaching developments have been taking place in the IT field. The strategic utilisation of IT, as being part of the corporate strategy of a company, can bring about remarkable competitive advantages. IT is a strategic resource which makes it possible to realize great changes in competitive behavior as well as in customer service and marketing.
In the actual sense, IT makes it possible for a business organisation to attain competitive advantages. IT is a resource that creates a connection between ‘marketing exploitation’ and ‘marketing orientation’ of a firm, which apparently has to be controlled and managed in the right way (Domegan, 1996).
Domegan (1996) points out that one of the main contributors to the marketing success in the future, for both large and small business organisations, which will ensure facilitation of the utilization and management of information. By making use of information technology, business organisations are engaging in the reengineering of the manner in which they carry out their business and also engage in the marketing of the goods and servcies.
The marketing functions lend themselves in an easy way to automation and IT (Mertal, 1989). Most of the marketing functions require a business organization to engage in constant monitoring of information from the environments and the business in which it takes part. Information like this gives room for the company to carry out adjustment of its offering to match with the needs of the customer at a profit.
For the reason that information technology is as well about information, it can and has to facilitate marketing management as well as customer service. In the actual sense, IT can serve as a strong catalyst for bringing improvement and advancement in customer service. Barnes (1993) pointed out:
“uccessful marketing practice must tackle the dual challenges of marketing information and customer service. Marketers will have to place their emphasis on obtaining accurate and timely information about customers and markets and on providing precisely the type and level of service that customers want” (Barnes, 1993, p.45).
Business organizations have to recognize the need to set up long-term relationships with their clients in case they have to survive. Marketing technology management as well as customer service is essential and critical to business organizations, just as customers who are loyal, “critical to long-term profitability are as important, if not more so, as attracting new customers” (Reichheld & Sasser, 1990, p.105).
However, a difference between theory and practice is clearly seen, exemplified by the approach taken to customer service and the linked use of IT, particularly among firms that are smaller in size. The information regarding the ever changing customer needs and the shifting competitive responses, in general terms, exists in pockets all through a larger number of business organisations. However, mainly, “such information is either effectively or efficiently utilized by organisations, thereby decreasing its strategic potential” (Oasis, 1989, p.2).
In addition, despite the fact that technology is facilitating transformation of the marketing environment, hence, putting emphasis on the crucial need for improved customer service, a large number of business organisations remain to be ignorant about the tactical as well as strategic benefits brought in by IT in marketing as well as in customer service.
Organisations like these, in case they do not adjust to the challenging and ever changing marketing world, encounter grave losses and competitive disadvantages (Earl, 1989). IT and customer service, in relative terms, are new strategic tools for business organisations. The concerns of the two are on the information deployment. Both of these concepts are related to setting up and maintaining long-term profitable relationships between the seller and the buyer.
Way back in 1976, a study conducted by Lalonde and Zinszer indicated that customer service sophistication is dependent on the communications systems as well as on the related information orientation within a business organisation. It was pointed out that in the absence of good control information flow in an organisation and between the organisation and its customers, “customer service function is usually relegated to reporting performance level statistics and reacting to special problems (Lalonde & Zinszer, 1976 p.14).
This result was further validated by Lambert and Lewis (1981) in their findings of the study they conducted. However, the notion of linking IT and customer service remained to be widely prevailing up to the 1990s when it was suggested by Keen (1991) that within the 1990s business environment, “customer service, operations, products, marketing strategies and distribution are heavily, or sometimes even entirely dependent on information technology” (Keen, 1991, p.23).
Here, the main message is very clear. It is indicated that it can be utilized to bring improvement in customer service, although the IT use depends on the knowledge about customer service, marketing as well as on information orientation of the business organisation under consideration.
Indeed, in the current day, the IT concept is being considered as a business tool that has the capability to provide competitive advantages to the business organisations if harnessed in the correct way. However, as pointed out by Domegan (1996), the strategic utilisations of IT “are only one of the three ways in which IT can be deployed as business weapons; it can also be used in routine data processing and internal operations efficiency” (p.56).
Bringing together the two concepts (IT and customer service), it is found out there is no specific consideration of the process of adoption in a specific way (Domegan, 1996). Yet, it is clear, basing on the documented materials, that there are two likely ways of evaluating the development of the IT utilisation in customer service. First, there exists the accepted IT development path usually defined as “paperwork/routine activities, middle management operations/internal processes, and strategic purposes” (Domegan, 1996, p.57).
Basing on this point of view, a larger number of firms are making use of IT in customer service to handle the everyday paperwork activities like accurate billing (Domegan, 1996). The use like this either raises the level of efficiency of activities or brings down the level of costs. Moreover, there is utilisation of IT in the internal management operations which as well brings about higher internal efficiency and reduced costs.
Conclusion
Each and every business organisation is seeking to achieve a competitive advantage over the competitors. The organisations are aware of the fact that lack of having a competitive advantage is a big hindrance to business survival. The companies are using the available tools to achieve the competitive advantages.
One of the most important current tools that a company can use in the present day to achieve a competitive advantage is information technology. The organisations can be able to achieve sustainable competitive advantage if they make use information technology in the most appropriate ways possible. The business managers need to have adequate knowledge about how to apply information technology in their own organizational activities as well as processes. Such knowledge is very important to the success of the organisation.
Over time, the subject of Information technology has received significant research attention. Starting from the last two decades or so, information technology began to bring in a strategic impact. Following the tendency, the researchers who are concerned about this field began putting focus on the integration between IT experts and administrators of business organisations in creating IT capability and effective use.
A larger number of the researchers in the field of RBV gave a suggestion of the necessity of having incorporation of human factor with IT in producing sustainable competitive advantage. For a business organization to achieve sustainable competitive advantage, it must have a resource that is valuable, rare, imperfectly imitable, and imperfectly substitutable or heterogeneity, imperfectly immobile, ex ante limits to competition and ex post limits to competition. This is achieved by using information technology.
It is also important to point out that a large number of the marketing functions require a business organization to engage in constant monitoring of information from the environments and the business in which it takes part. Such information makes it possible for the business organization to engage in adjusting its offering to match with the needs of the client, but still gaining a profit. Because IT is also about information, it can facilitate marketing management as well as customer service.
In the actual sense, IT can serve as a strong catalyst for bringing improvement and advancement in customer service. Successful marketing practice has to deal with the dual challenges of marketing information and customer service. Those who engage in marketing will have to put their focus on getting accurate and timely information about customers and markets and on providing accurately the type and level of service that customers want.
Business organizations have to recognize the need to set up long-term relationships with their clients in case they have to survive. Customers long to have good service from the firms from which they purchase their goods and services.
By business organisations recognizing this and offering better customer service than the competitors, through using information technology will enable them to stay ahead of the competition. Therefore, it is very important for the business organisations to come up with the best strategies that will enable them to use information technology effectively in order to achieve sustainable competitive advantage over their competitors.
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The traditional and contemporary views of the key elements of organizational design
It is possible to distinguish such elements of organizational design as departmentalization, work specialization, chain of command, formalization, centralization, and span of control (Robbins & Coulter, 2012). Traditionally, departmentalization and work specialization has been critical for allocating duties and specifying the activities of individuals or business units. Yet, contemporary managers believe that in many cases, companies have to eliminate departmental barriers. Moreover, employees are required to develop new skills. In turn, centralization, chain of command, and span of control have been important for the implementation of decisions. Nevertheless, modern managers note that in any case, these elements of design slow down the functioning of organizations and make them too bureaucratic. Similarly, formalization has been important for describing how tasks are performed. However, some modern organizations often empower workers and take an individualized approach to the completion of different tasks. Overall, the six elements of the design have become less relevant because contemporary businesses have to adjust to external stressors, and organizational design has become less rigid.
A quick change of an organization’s structure
Organizational structure cannot be changed quickly because frontline managers and employees cannot quickly adjust to new workplace procedures, accountability standards, or power relations. Overall, the organization should be quickly changed only if it is necessary to adjust to urgent external stressors or eliminate some important weaknesses that undermine the work of the enterprise.
Mechanistic and organic organizations
Mechanic organizations are very formalized and bureaucratic. Moreover, they incorporate a rigid workplace hierarchy, and employees are not supposed to make independent decisions. In contrast, organic organizations continuously have to adapt to changes, and they encourage the decentralization of decision-making (Robbins & Coulter, 2012).
Overall, I would prefer to work in an organic organization because businesses enable workers to take independent initiatives and seek creative solutions to various problems. This is one of the opportunities that I value.
The contingency factors that affect organizational design
There are several contingency factors that affect the organizational design. For example, the changes in the external environment, such as increased competition, can prompt companies to become less bureaucratic. Additionally, technologies used by businesses also shape their organizational design. For instance, companies involved in the use or development of information technologies tend to be more decentralized and less bureaucratic. As a rule, such enterprises encourage independent initiatives of workers and foster their creativity.
The traditional organizational designs
There are three types of organizational design. At first, one should speak about simple organizational design, which means that there are few departments within a company. Furthermore, the workplace hierarchy is relatively flat because the most important decisions are taken by a small number of people (Robbins & Coulter, 2012). Additionally, one should speak about functional design. It is more complex because the enterprise includes a greater number of business units that have to cope with specific tasks that do not overlap. Yet, these units are dependent on one another. In this case, workers with similar skills are grouped. Finally, one should speak about divisional design, which means that the enterprise consists of units that are responsible for the design, manufacturing, and distribution of a product. Such divisions are usually self-sufficient.
Organizing as an important managerial function in the age of information technology
Organizing is still an important managerial function even despite the rapid development of technologies. This activity is important for increasing the efficiency of people’s work. In particular, organizing enables workers to understand the overarching objectives that an enterprise should attain. Thus, employees can better coordinate their efforts.
Negative results of simplification of work tasks
The simplification of tasks can lead to negative effects only if workers do not fully understand the outcome that should be achieved. For example, employees may be required on separate parts of a project. They can cope with their tasks relatively quickly. However, the results of their work cannot be integrated into a single functioning entity. This is one of the pitfalls that should be avoided.
Reference
Robbins, S., & Coulter, M. (2012). Management. Upper Saddle River, NJ: Prentice Hall.
Organizational structure and design play an important role in defining the management approach of a firm. This is clearly evident at LPA Group Plc, one of the leading manufacturers of electromechanical, electronic, and LED lighting systems in the world. This firm has been very successful in the recent past following the restructuring of its organizational structure. The top management realized that the firm was expanding very fast, and the traditional structure that was used before could no longer be effective enough to help in the normal operations.
It was considered necessary to come up with a new strategy that would address the issue of geographic expansion following the decision of the board of directors to go global. According to Schein (2010), organizational structure and design largely depend on the nature of the business, geographic coverage, and the control that a firm has over its overseas subsidiaries. LPA Group Plc has embraced a decentralized organizational structure as the best way of dealing with the challenges of global market operations. The diagram below shows the organizational structure of this firm at the top management unit.
Organizational Structure
Implications of the Current Organizational Structure on Organizational Behavior
As shown in the diagram above, the chief executive officer of this firm has four managing directors who help him in the top management unit. Each of the four managing directors heads the four main production units at this firm. The chief executive officer heads the council of the directors, but each of the four managing directors has the power to define how his or her department is run as long as the approval of the chief executive officer is obtained. In this organizational structure, the managing directors have mid-managers who are responsible for various tasks within the units. Although they work towards achieving the overall vision of the organization, each of them has specific strategic objectives in line with their area of operations.
The current organizational structure of this organization has some implications that directly affect organizational behavior. The top management unit has struggled to create an organizational culture that is uniform across all the departments. The organization is finding it difficult to have a uniform organizational behavior for all the employees of the firm. This problem is a direct implication of the semi-autonomous structure embraced by the firm.
Each of the four managing directors has been given the authority to come up with strategies that will make their units successful. For this reason, each of them would formulate policies that they consider appropriate. The organizational behavior that is favored by one director may be abhorred by the other directors. Over the years, the four directors have been working to create a behavioral pattern that they believe would make it easy to manage the employees. Because of this, there has been a consistent drift of the organizational behavior in departments. At first, the top management did not realize that this was happening.
No one suspected that the decentralized organizational structure would decentralize the organizational culture. Even the managing directors themselves did not realize that this was happening. In the meantime, the more they emphasized on the specific behavioral pattern, the more they created a drift in the organizational behavior at the four units. The management realized that this was happening at a time when each of the four units had become unique in their employee management approach.
This brought some pertinent problems to the organization that the management unit had never anticipated. A situation was created where the employees of one unit could not cross over to the other unit very easily. The organizational behavior on each of the units was so distinct that it required some training to make an employee from one department to fit in the other departments. This was a big problem for the firm because some of the engineers were expected to work in all the units based on their demand.
There have been complaints from some of the employees that have led to low morale at this organization. These employees are complaining that the management unit is creating an unhealthy competition among the employees in different units. Each of the units always strives to be at the top when ranking the overall performance by the end of the financial year.
As a result of this, sometimes the employees are forced to work for extra hours in order to meet the specific objectives. This is creating a culture where employees pretend to be committed to their work when they realize that their supervisors are around. This behavioral pattern has reduced the productivity of some of the employees. Others have even considered moving to other companies where they believe their interests will be taken seriously. As Bate (2010) says, losing valuable employees to the competitors can hurt the profitability of a firm.
This organizational structure has some positive implications on organizational behavior. According to Maon, Lindgreen, and Swaen (2010), organizational behavior should be uniquely defined by the nature of the tasks involved within an organization and the industry in which it operates. For instance, the organizational behavior that is expected of a doctor is very different from that of an engineer.
While a doctor should remain positive to regular late-night calls when there is an emergency at the hospital, these calls will be very strange to an engineer. This means that in each industry, and within a particular field of work, it is necessary to have unique organizational behavior that is relevant to the organization. This is what the decentralized system of management offers to the four managing directors. They have the mandate of defining the organizational behavior of their units based on the tasks that the employees need to address.
Implication on the Group and Interpersonal Processes
The organizational structure used in this firm has fundamental implications on the group and interpersonal processes. It has promoted teamwork within the organization. Members of each of the units have realized that they need to work as a team in order to ensure that there is an overall success at their unit. The structure has also impacted on the interpersonal processes. Within each of the units, the employees know that they have to work together in addressing various tasks. This has promoted interpersonal processes. However, there has been a negative impact on individual career development. This structure used at this firm has limited the ability of the employees to explore related fields other than the one assigned to them.
Implication on Communication
Communication is one of the most important processes within an organization. The organizational structure and design that the management of LPA Group Plc has embraced promote effective communication within the system. The bureaucracy that existed before has been eliminated. Initially, there was a strict vertical communication protocol that had to be observed by all the employees. No employee was allowed to pass an official message if not through the immediate supervisor. However, this structure changed this bureaucratic communication approach. It is now possible for the junior employees to communicate directly with the senior managers in order to address issues that affect their normal workplace environment. This new approach has helped in promoting the morale of some employees. It has also promoted innovation in this firm.
Implication on Decision-Making Process
The decentralized management system has helped in promoting an effective decision-making process at this firm. According to Linnenluecke and Griffiths (2010), the decision-making process that follows numerous channels is always detrimental in coming up with effective strategies. The process should be simple, straightforward, and less time-consuming. This is what the structure offers at this firm. The Decision-making process has been decentralized.
The managing directors can easily collect relevant data from the units operations, and with his or her team of mid-managers, come up with decisions on how to address some of the issues affecting their operations. The chief executive officer will only be needed to approve the policy that the department has developed. This approach is good because the decision made always focuses on specific problems within a particular unit of the firm.
Implication on Power
This organizational structure has serious implications on the center of power within the firm. In many organizations, the chief executive officer is the center of power that is expected to define the strategies to be implemented. However, this is not the case at LPA Group Plc. Power in this organization has been decentralized. The chief executive of the firm has delegated some of the powers to the unit managers.
The unit managers now have the power to make important decisions concerning their departments. The mid-managers have also been given the mandate to make operational decisions on the daily operations of the firm. These mid-managers do not need to consult the managing directors when coming up with tactical decisions on how to approach different tasks. The only thing they need to worry about is the need to achieve the goals set by their superiors. This approach eliminates cases where some managers wield excess power, while others are left without any power.
Implication on Political Behavior
According to Dunbar and Starbuck (2006), organizational politics plays a role in defining the organizational behavior within a firm. The organizational structure that a firm uses always defines the political behavior of the employees. When a firm has a system where the power rests with the chief executive, then the top management becomes an easy target by the political units. However, this is not the case at this firm. Power has been devolved, limiting the political window.
Implication on Stress Management
Stress management within a firm is always the role of the human resource unit. Stress management can be affected by organizational structure and design. At LPA Group Plc, management units at lower levels have the mandate to make decisions that are in the best interest of the firm and its employees. This makes stress management an easy process to undertake.
Recommendations
The management should consider the following recommendations in order to address some of the identified challenges.
There should be an attempt to develop organizational behavior based on the mission and values of the firm.
The chief executive officer should be more involved in the activities taking place in all the departments.
The unit managers should make an effort to ensure that employees’ interests are taken care of in order to boost their morale.
References
Bate, S. P. (2010). Strategies for cultural change. London: Routledge.
Dunbar, R. M., & Starbuck, W. H. (2006). Learning to Design Organizations and Learning from Designing Them. Organization Science, 17(2), 171-178.
Linnenluecke, M. K., & Griffiths, A. (2010). Corporate sustainability and organizational culture. Journal of world business, 45(4), 357-366.
Maon, F., Lindgreen, A., &Swaen, V. (2010). Organizational stages and cultural phases: a critical review and a consolidative model of corporate social responsibility development. International Journal of Management Reviews, 12(1), 20-38.
Schein, E. H. (2010). Organizational culture and leadership. New York: John Wiley & Sons.
Analyse and critically evaluate the historical and theoretical basis of organization design and development and their context in terms of value and contribution to organizational life.
The functioning of any organization is a complex issue that depends on numerous aspects. That is why it is fundamental to manage a unit in the most efficient way. Under these conditions, organizational design as one of the ways to attain success by identifying the most significant aspects of workflow becomes crucial for the sphere. At the moment, specialists are able to use numerous theories and tools which exist in terms of this methodology. However, it took a long to create the needed approaches and ensure their efficient implementation in the functioning of different organizations.
Therefore, organizational design theories appeared in the first attempts to investigate the functioning of different organizations and enhance their results (Corkindale 2011). However, they lacked depth and comprehension of primary aspects that drive changes in companies. Furthermore, the emergence of commerce and the industrial revolution an efficient approach to organizational design appeared. The leading theory rested on the idea that the primary aim of any organization was to accomplish production and reach particular economic goals (Shafritz, Ott & Jang 2015). For this reason, their functioning should be managed in a way that helps to succeed. Moreover, the only way to attain the best outcomes was to conduct a systematic, scientific investigation and introduce specialization and division of labor (Shafritz, Ott & Jang 2015). Under these conditions, employees had to perform their tasks in accordance with the basic principles peculiar to these theories.
The rise of these studies and organizational design, in general, is also connected with Frederick Taylor and his method called Taylorism. He suggested the idea that scientific management and a systematic approach to planning critical operations within the company were the best way to increase profit and guarantee better outcomes (Shafritz, Ott & Jang 2015). It is desired to achieve the maximum job fragmentation by breaking every task or action into small segments to simplify their analysis and guarantee better efficiency (Corkindale 2011). The theory is also called scientific management and is an essential element of organizational design.
The further evolution of the theoretical framework resulted in the increased importance of management and reconsideration of the role of people. For instance, Henri Fayol and his fatalism emphasized the role of workers and their managerial functions (Corkindale 2011). He suggested the idea that the elaboration of managerial principles and their improvement could enhance the functioning of an organization, decrease the number of misunderstandings, and help to attain better results (Shafritz, Ott & Jang 2015). In fact, he was the first to develop the comprehensive theory of management which could be applied to various organizations and improve their functioning.
Therefore, the classical organizational theory represented by these scientists was changed by the neoclassical one which stated that organizations could not exist isolated from their environments, and for this reason, it is crucial to devote attention to them (Corkindale 2011). Finally, the modern structural organizational theory appeared. It encompasses the main ideas suggested in previous approaches and is used to attain the best possible results.
Discuss the role of HR in implementing the balanced scorecard in the health industry (hospitals, healthcare centers), justify where it would be necessary to use external consultants.
The importance of the sphere of management results in the creation of numerous tools that are used to attain improved results and acquire a significant competitive advantage. Therefore, the balanced scorecard could be considered one of the efficient approaches that drive performance and stipulate positive outcomes. It could be defined as a strategic planning and management system which is used to prioritize different goals and improve the understanding of a current organizational structure (Kaplan & Norton 1992). This tool could be fundamental for the improvement of job design, enrichment, and data collection. First, it provides managers with a unique opportunity to look at a particular organization from four important perspectives: how shareholders see a company, what managers should do, the further improvement, and customers point of view (Kaplan & Norton 1992). These aspects are crucial for the functioning of any unit as they show its current situation, perspectives, and the areas of change. In other words, a manager who is interested in the continuous development of a particular organization might benefit from using the balanced scorecard to assess all existing problems and create the environment which will guarantee the further evolution. At the same time, the use of the given approach helps to avoid information overload (Kaplan & Norton 1992). There are diverse factors that impact the functioning of any organization. However, it is critical to distinguish between them and find the most important ones to create the basis for the further evolution. Under these conditions, the balanced scorecard helps to improve the functioning of the company significantly.
Furthermore, the increased efficiency of the balanced scorecard stipulates its use in the most important spheres of human activity. For instance, the healthcare sector could benefit from the implementation of the approach and improved outcomes. At the moment, it passes through the change procedure and aims at the decrease in unnecessary spending. In this regard, the balanced scorecard will help to determine available resources, the need for additional costs, and patients demands on new practices. At the same time, numerous excessive pieces of data will be disregarded, and no additional payment will be needed. However, the complexity of the healthcare sector and multiple issues which might appear when working with financial questions demand the high level of competence from a person who tries to introduce changes. For this reason, external consultants who can share their improved vision on spending should be invited to create the most efficient approach regarding the balanced scorecard method. First, this framework demands the in-depth investigation of the research issue which means that an outstanding competence is needed to guarantee positive results (Ross, J 2001). Second, it is crucial to create conditions appropriate for the implementation of this approach. Under these conditions, human resources and management play a central role in the process as they become the main actors to drive change and guarantee that all requirements which exist at the moment will be met. Altogether, the BSC approach could become efficient in improving care delivery.
Reference List
Corkindale, G 2011, ‘The importance of organizational design and structure,’ Harvard Business Review, Web.
Kaplan, R & Norton, D 1992, ‘The balanced scorecard—measures that drive rerformance,’ Harvard Business Review, Web.
Ross, J 2001, ‘Fiscal health an quality care: Montefiore Medical Center scores with the BSC,’ Harvard Business Review, Web.
Shafritz, M, Ott, S & Jang, Y 2015, Classics of organization theory, Cengage Learning, Boston, MA.
In “Herbert A. Simon on what ails business schools: More than ‘a problem in organizational design’”, Khurana and Spender (2012) discuss Simon’s key ideas regarding the organizational design of American business schools in the period of Ford and Carnegie Foundations. Simon’s core idea related to business administration and education is in his approach to these issues. Namely, the scholar considers management as a creative art that defines the organization’s design. Social ethics and human creativity are the two elements that play a significant role in Simon’s vision. It should also be noted that interacting with a complex environment, the scholar was able to view art and design in the most difficult conditions and reflect them in decision-making and problem-solving issues, thus composing a comprehensive approach to business management.
Khurana and Spender (2012) state that contemporary management educators neglect the considerations of Simon while they serve as an essential source of establishing the appropriate educational agenda. Beginning with the introduction, the authors point out the contributions of various studies from a chronological perspective. After that, they identify the post-war context to show a reader its key aspects and emphasize that WWW2 made a huge impact on management research. Scientific validity could not be proven in the framework of post-war difficulties. The next section of the research is devoted to the creation of the Graduate School of Industrial Administration (GSIA) and the contemporary business school that created the basis for the modern US business education. The third section refers to Simon’s theory of organizations as well as his experience. Ultimately, Khurana and Spender (2012) focus on change that was made due to Simon’s views as well as his overall impact.
Reference
Khurana, R., & Spender, J. C. (2012). Herbert A. Simon on what ails business schools: More than ‘a problem in organizational design’. Journal of Management Studies, 49(3), 619-639.
Each person in an organization has different kinds of behaviors, interests, and a way of thinking which is distinct from the rest of the employees and dictates why the person has a certain character that is different from the rest. Organization behavior carries out a study of individuals and groups in organizations with the aim of understanding their behavior and know the reason why they act the way they do. Organizational behavior interprets the relationship between employees and the organization it terms of an individual as a whole, an entire group of people, the whole organization and the society as a whole. The purpose of undertaking this process is to build better relationships in the organization by use of the human, organizational and social objectives. (Richards, 2007).
Integration of people, information and technology of an organization through a formal guided process is the process referred to as organization design. Its main aim is to match people’s capabilities and skills with the work that they are best at, and ensure collective effort of members. The managers work closely with the employees and create a system to achieve success of the organization. Designing new organization structure, improving and analyzing the existing ones, using improvement programs, carrying out a bench mark exercise both outside and inside the organization and designing and analyzing roles and jobs of individuals are other ways of achieving a good organization design. (Davis, 1997).
Innovative changes
Innovativeness in an organization includes radical changes in products, processes and services of an organization; it is the entire process of idea generation to idea implementation. There are various ways in which an organization can use to ensure that its organizational design helps in achieving innovativeness. The organization needs to design the organization for innovativeness in such a way that not only will there be technical and managerial innovation but its systems and processes are robust too. The organization therefore needs to be unique by ensuring distinctive vision, values and practices. It should have a competitive strategy, an entrepreneurial management style and an innovative based growth; all these are designs for innovativeness. The organization structure should have profit centered leaders, high potential leaders and have a cross functional teams for innovations implementation and use of other creative techniques for solving problems in the work place. Innovativeness is achieved by use of extensive brainstorming sessions, questions checklist, reverse brainstorming and grafting attributes into individuals and groups.
What is quality management
Quality management in an organization is a way of ensuring that all the processes and activities which are necessary to design, develop and implement a product or implement a service are efficient as well as effective with respect to the system that carries out the process as well as its performance. Quality management involves use of standardized measures in the industry to compare the organizations performance with others and know whether the organization is performing well or not, improvement of customer satisfaction by improving the quality of the processes in the organization is another way of ensuring quality management. Others are continuous improvement of organizations quality and performance; ensure quality by aiming at the ISO9000 and total quality improvement of the entire organization.
When an organization has a good design in its management, quality management will be easier to implement and the company will shine among the others in terms of management. (Richards, 2007).
An organization needs to focus on its investments and develop ways and strategies in which to use to ensure that its long-term investments are running well and are bringing good profits to organization. A good organization design helps in achieving and realizing the value of a long term investment. Creating groups that have common knowledge of investment and use of professionals helps an organization to invest in areas where value is easily realized. The organization should also use of good technology; workforce and information based on long term investments. (Clark, 1999).
Social responsibility to the community and the environment is a major role that an organization needs to look into. Corporate social responsibility (CSR) to the people and the environment by an organization helps it to gain a positive reputation from the society as well as other organizations around it. An organization therefore needs to have a good designed system which integrates CSR in its day to day operations so as to ensure that its operations bring beneficial effects into the people and not detrimental effects. Helping in the development of schools, churches, social areas and making sure that the waste from the organization is well dispose to prevent negative environmental effects are some of the ways the organization can use to help the community around and therefore gain a good reputation. (Finch, 1997).
An organization needs to have a good organizational design for it to have the ability of attracting and retaining talented people. A good remuneration design, good working conditions, motivation and recognition of employees are some of the things that should be considered in order to ensure a good work force that will work with the company for a long time. The managers need to ensure that they have a attractive pay for their employees; this will definitely attract qualified people who will be willing to take the job. Once skilled persons have been acquired, the organization should provide a conducive working environment where the employees are free to interact with others as well as the managers; they should also be allowed to participate in decision making.
This will make the employees feel appreciated in the work place and feel free to air their opinions. The management should also motivate them by giving medals to the best workers, offering bonuses and offering more training on the job. Promotions should also be done based on merit as a way of recognizing the performance of the employees. Once all these are put in place, the company is likely to attract and maintain qualified personnel who will be of positive help and development of the company and help it to achieve its set goals and objectives. An organization design integrating all these considerations for employees will therefore ensure an organizations good performance and reduce the rate of employee turnover.
Quality of products and services in an organization can be achieved if the organization has a good organizational design which put emphasis on quality of products and services. Organization design should ensure up to date technology for effective production of products and services, people with skills related to the particular service provision or product production should be put in place, processes and designs of making the final product should be up to date and effective so as to ensure good quality of the final product or the service. (Clark, 1999).
A good organization design ensures financial soundness of an organization. The managers and all the people concerned in running the organization should focus on making maximum profits for the company so as to avoid cases of bankrupsy or fall of the company due to lack of funds to pay off debtors, employees and the organization processes. The design put in place should focus on ways in which the organization can be financially sound, quality products and services, effective and efficient processes, skilled people, profit making methods and best ways of achieving finances are ways in which an organization can maintain financial soundness.
A design that ensures good use of assets, use of the right tool for the right job, and good handling and maintenance practices of assets ensures a wise and responsible use of corporate assets. If the organization does not put in place ways of maintaining the assets, it may lead to failure of the assets, poor and ineffective processes which can lead to the failure of the entire system of the organization.
Effectiveness in doing business globally can also be achieved by an organization if it has a sound organizational design. The design should focus on ways in which the organization can be able to venture into other countries, it should be able analyze the market outside, opportunities, competition and whether it will be a viable idea.
Conclusion
In conclusion, a good business design helps an organization in achieving its goals and objectives. It helps it to be innovative, attain and retain good work force, produce quality products and services, be financially viable and be able to venture into other, markets outside the region.
References
Clark, A.P. (1999), organizations in action, ISBN: 0415182301. Rourledge.
Finch, L. (1997), success of Csr, ISBN: 1560524502. Thompson crisp learning.
Organizational design is a comprehensive process required for a compelling business organization. This process is essential in creating a comfortable environment necessary for achieving common goals and perspectives. Corporate design covers the administration and regulation of strategic planning required in business processes. Vulpen (2021) states that strategic organization design connects effectiveness outcomes, strategic direction, external environment, and internal situation.
This system allows for determining the vision, mission, goals, and future perspectives of the company. Vulpen (2021) states that variation in the system could facilitate a fluid and flexible design, decentralized structure, employees, and customer satisfaction. Each design could include variations in forms, culture, roles, systems, tasks, and strategy. Vulpen (2021) differentiates the five main principles of effective design organization. Specialization, coordination, knowledge and competence, control and commitment, and innovation and adaptation principles. Internal and external environmental factors influence these principles.
As these factors influence organizational design, it is critical to combine and integrate the compulsory elements for these settings. Aronowitz et al. (2018) highlight the importance of a company’s redesign and the possible outcomes of this process. According to Aronowitz et al. (2018), the first step focuses on long-term strategic aspirations. The second step is to timely research the scene and perspectives. Next, it is essential to follow the structure and select the target.
Moreover, it covers all opportunities beyond the area of occupation (Aronowitz et al., 2018). Also, the redesign pattern needs to be rigorous in drafting talent and exploring new chances. Lastly, redesign requires changing the mindset and helping employees to transform from one setting to another. Successful examples of strategic redesign include big companies such as Amazon, Google, Facebook, Microsoft, Apple, and Oracle (Li, n.d.). Their redesign campaign allowed them to enter a new market and increase revenue.
Organizational design (OD) involves the exploration of connections between organizational efficiency and models promoting alignment between internal organizational processes, structures, human resources, and values in the psychological dimension. Multiple emerging technologies are capable of altering business owners’ structuring-related preferences, thus affecting the future of OD. This essay seeks to summarize and analyze Jordan’s (2019) unstructured literature review on the implications of additive manufacturing (AM) for OD.
By combining previous researchers’ insights with qualitative notes from the manufacturing field, the author argues that AM, widely known as 3D printing, could join the ranks of previous inventions, including the introduction of hydraulic power and assembly lines, in revolutionizing OD. There are four central themes that explain the practice’s possible implications for OD. Firstly, AM’s widespread use will increase managers’ decision-making freedom in determining the degree of productive capacity’s centralization or decentralization (Jordan, 2019). Secondly, in supply networks driven by demand, AM will enable a smarter and more profitable mass customization of goods (Jordan, 2019). Thirdly, the so-called “additive-native organizations” can emerge, giving rise to new OD models, the demand for agile generalist specialists, and sunk costs’ reduction (Jordan, 2019, p. 5). Finally, the most interesting point touching upon the psychology dimension of OD is that AM can become a hindrance to organizational learning due to being a risky approach with unclear returns that also involves “a departure from established norms” (Jordan, 2019, p. 1). These four hypotheses illustrate the possible OD-related large-scale reverberations of only one innovative production practice.
The source contributes to the discussion of OD’s future in many ways by reflecting larger trends and proposing new directions for OD research. To start with, AM’s supposed ability to alter centralization-related decisions deserves close attention. Jordan’s (2019) hypothesis aligns with a larger body of OD research, stating that the replacement of top-down hierarchies with flexible, non-hierarchical, and decentralized organizations, which is the already existing phenomenon, will continue in the future and define the new forms of OD. Aside from that, with new organizational forms’ emergence discussed in the source, OD as an academic field will need to adapt by incorporating the revised operational definitions of factories or product life cycles. From the researcher’s perspective, the need for such reconceptualization stems from the existence of new poorly categorized organizational forms, including “software-driven custom manufacturing partnerships” (Jordan, 2019, p. 7). With that in mind, the changing realia of mass production and business organization will eventually require the OD academic field to stay current and continue expanding OD theories to anatomize some new forms of organizational structure effectively.
Another implication for OD’s future relates to the academic understandings of organizational learning in innovative business models. Aside from encouraging OD scholars to introduce new concepts to reflect the increasing diversity of approaches to business process organization, new trends, such as AM, could dictate the need for new models of organizational learning that would apply to high-risk and uncertain environments with insufficiently studied pitfalls (Jordan, 2019). Finally, the psychological underpinnings of learning in innovative decentralized organizations may need to be considered to gain a full picture of organizational knowledge generation in businesses with peculiar structural designs.
In summary, by emphasizing the case of AM, the reviewed source sheds light on the future of OD, both in academic and practical contexts, linked with innovative production technology. Some hypothesized trends pertaining to OD’s future are the continuous departure from centralization in production, organizational structures conducive to profitable customization, innovative OD models’ and job positions’ emergence, and risks linked with organizational learning. Apart from altering the reality of production businesses, such trends may require changes at the theoretical level, including reconceptualization and theory development efforts.
