Introduction
This paper will examine which organizational structure is appropriate to accommodate executive board members of a successful 50-partner firm to diversify and sustain a competitive advantage. This firm already provides accounting services to corporate clients but this firm is also interested in offering management consulting services and expanding these services to smaller clients. Considering a simple, a functional, or a multidivisional organizational structure the firm may be able to diversify, sustain a competitive advantage, enhance information processing, coordination, and control by implementing one of the aforementioned structures.
Decisions about how to select an appropriate organizational structure is a way for this firm to gain or keep a competitive advantage. The importance of organizational structure for these executives is to improve the firm performance by enhancing the firm’s information processing, coordination, and control through service expansion. The relationship between the organizational structure, competitive strategy, and the firm’s goals will be analyzed using each structural approach.
Simple Structure A simple organizational structure is ideal for small businesses. This is because a small business structure may not have several departments or more than one level of management. A simple structure is when the manager makes all major decisions, while their staff executes those decisions (Hitt, Ireland, & Hoskisson, 2015). This simple
Organizational structure determines how activities such as task allocation, coordination and supervision are direct towards the achievement of organizational goals. It can be considered as the viewing class through which individuals see their organizations and itsenvironment. The structure of the organization can be in different forms depending on
The relationship between an organization’s strategy and structure are extremely important because it “directly impacts a firm’s performance” (Rothaermel, 2013, p. 309). Also, as an organization grows, it should reevaluate the current strategy and structure to ensure that it remains the optimal choice for the organization (Rothaermel, 2013). The four types of organizational structures, listed in order of least to most complex according to Rothaermel (2013), are: (1) simple, (2)
Organizational structure refers to the way that an organization arranges people and jobs so that its work can be performed and its goals can be met. According to USA their structure states in order to provide clear alignment and focus for the planning process of USAA’s organizational structure, a planning team was assembled with strategic-thought leaders to author a strategic market outlook.
Organizational structure indicates the company's formal reporting relationships, procedures, controls and authority, & decisions making process. An organisation's strategy is its plan for the whole business that sets out how the organisation will use its major resources. An organisation's structure is the way the pieces of the business fit together internally. It also covers the links with external factors such as partners and other parties. For the company to deliver its plans, the component of the structure must cooperate with each other
An organization must align its strategy and structure to allow itself to achieve performance improvements over time. The four different structures, simple, functional, multidivisional, and matrix, are all suited to allow companies with different strategies to succeed but the company must decide which of these is correct for itself. A small start-up company will overburden itself with excessive cost if it seeks to implement a functional structure because it clearly will not have the talent on hand to create whole departments of HR employees or accountants. On the other hand, a company that grows to become a large multi-national
small business can use one of three primary organization structure options: functional, divisional or matrix. Essentially, the organizational structure creates a business hierarchy to increase the efficiency and effectiveness of the business operations. Different small
Organizational Structure is necessary to run any company effectively and efficiently. There are six key elements that a company should be following for success and those elements are as follows:
All businesses have organisational structures, even if they are small or big, they have some type of structure so they can operate productively.
The structure of the company also has an influence on the organization. Organizing the company by department allows the employees to build strong teams. It also allows the teams to support each other’s daily functions. The structure of the organization also effects number of personnel hired into the company. The structure also effects departmental and organizational hierarchy. The departmental organization within the company is also important as it helps to determine departmental collaboration as well as the role of each person in the department (www.smallbusiness.chron.com 2013).
To attain sustainable competitive advantage, organizations need to be flexible, caring, efficient and innovative. Organizational structure can also be defined as the perspective through which individuals see their organization and its environment. Tata communications follows a functional structure in its organization with different verticals for sales, marketing, finance, human resources. Below is a representation of a functional structure.
An added bonus - this business model is inherently sustainable. This type of structure needs a powerful leader whom the staff look up to as power is centralized and he gets to be more involved with the running of the company.
The capacity of an organization to survive in the present, intricate and competitive business environment is strongly grounded on the nimbleness and flexibility of the established organizational structure (Shafieem Razminia & Zeymaran, 2016). Furthermore, the effectiveness of the organizational structure is a significant aspect of obtaining a competitive advantage in the industry. Unfortunately, at Aristocrat, the establish structure is ineffective and creates a cumbersome environment and therefore acts in a preventive manner rather than as a source of competitive advantage. The ineffectiveness of the organization structure at Aristocrat appear to be a result of at least two significant inadequacies.
Aside from educating a manager through formal training in managing an organization through change, there are many ongoing activities that will increase a manager's awareness and aid them in supporting a more complex organizational structure as it develops. A company's organizational structure is a road map of its communication patterns. A well-designed structure can also make it easier to identify inefficiencies and new problems as the organization grows. Reviewing the organizational structure on a regular basis will help ensure that the organization set up for optimal growth well into
In a study by Bhardwaj, B. R., & Momaya, K. (2006), it was stated that in order to achieve competitiveness in the global markets, one of the key elements that an organization needs to focus on is corporate entrepreneurship. This would thus require an organizational structure that allows flexibility.
The results of data analysis indicated the priority of structure on other mentioned obstacles. Inappropriate structure may decrease flexibility and may also weaken organizational ability to be in harmony with the environment especially whenever the organization needs alteration in the strategic priorities in order to improve its competitive place. Allocation of the highest priority to the structure may show inefficiency of the efforts of contractual companies managers in order to prepare structural sequences which may help execution of strategies in addition to facilitate activities of the companies in the field of contractual works. The inefficiency, may show its effects on decrease in flexibility against the changes, in the shape of increase in organizational costs, and inability to attract market opportunities. Among the set of obstacles under study, resources allocation received highest priority after structure. The negative results of this factor on strategy implementation in contractual company may refer to its role in decreasing creativity and innovation in organizations. Third priority is belonging to operational planning. Inability to interpret organization strategy to the operational plans has been always one of the most important issues, under attention of the researches and delivered the most damages to the goals sympathy in different organizational stages. Weakness in operational planning, similar with inappropriate structure, may decrease ability of coping with