The structure of an organization affects not only the functionality of its departments but also how well the employees interact within it. A well-defined administrative structure creates an internal process, establishes reporting lines, and increases workplace transparency so that employees can work more efficiently. The type of structure that is best for a company is determined by different factors, including size, goals, products, and individuals.
Companies often use hierarchical or matrix organizational structures to separate internal operations and how work is distributed among teams.
The pyramid-shaped hierarchical organization is built on a vertical chain of command, with the chief executive officer at the top and numerous tiers of management below him. High enterprises and government agencies with large numbers of people frequently use hierarchical structures to better adapt to size and explain reporting relationships. Amazon is an example of a hierarchical organization due to its scale (Yuan et al., 2019, p4). The company employs around 560,000 people worldwide as the world’s largest online retailer. All Amazon employees report to Jeff Bezos, the company’s founder and CEO, in a hierarchical structure (Lee and Day, 2020, p12). There are several levels of management under Bezos across multiple divisions, including:
Amazon’s hierarchical organizational structure works because the company is divided into several subgroups with different management. This structure allows managers to collaborate more directly with their team members while retaining authority over their department.
Each corporate organization employs a variety of strategies to achieve a competitive advantage over its competitors and, as a result, increases the market share (Yuan et al., 2019, p4). Determination of the structure is a crucial strategy that has an impact on many elements of the company’s operations, including: the leadership styles, communication, and other factors that are important for its growth.
Starbucks is an excellent example of a corporation that has modified its management structure to match modern commercial objectives. For example, the company changed its organizational structure as it expanded after the acquisition of Seattle’s Best Coffee and Teeswater. Founded in Seattle in 1971, Starbucks has grown into one of the world’s most famous and fastest growing companies (Mulawarman, 2021, p10). The organizational structure of Starbucks coffee is the matrix. This is a hybrid structure that combines the different characteristics of the four main categories of management structure. The structure is characterized by the exchange between individual units. For example, Starbucks product departments are linked to both regional and functional departments that also work with other parts of the organization. Functional hierarchies, geographic units, product-oriented units, and dedicated teams are key components of the company’s management structure.
|
Definition |
Advantages |
Disadvantages |
|
|
Hierarchical Structure |
Where people have different ranks or positions depending on the level of the importance. It is like a tree where all branches are related to main root. in Hierarchy structure the power is on hands of one person on top of the structure with subordinate levels under them |
· It helps to understand the duties and responsibilities · Clear lines of authority · It helps to take good decision without any interferences of others · Reduce the workload · Reduce contradiction and confusion among employees · Distribution of tasks to in accordance with people efficiency |
· Disconnection of employees from Top management · Lack of communication · Inconsistency among management |
|
Matrix Structure |
Many organizations opt for this type of structure where there is more than one boss for each department with different managers |
· Effective communication: every employee can talk to Top Management · Reduces communication issues · Break of monotony · Helps to work in effective manner and solves problems ·Increase team spirit and teamwork |
·Ambiguity may come within this structure because employees never know to whom they report due to many bosses ·This may result to impact the employee’s effectiveness · More expensive since it employs more managers · May create conflict between managers |
BMC data structure is based on the hierarchical structure that is suitable for the product development and effectiveness as well. BMC IT Business Management supports hierarchical data management and data access control. After determination of the organization’s hierarchy, it is crucial to specify the data access restrictions required to run BMC business (BMC, 2022, p11).
The hierarchical structure of the company makes it easier for employees to determine different command chains. This allows them to see how they grow within the organization over the time. Experienced employees are more likely to have these senior positions. Employees may find the promotion prospects attractive, and as a result, they may be more motivated to do better, thereby increasing the productivity of the company (Yuan et al., 2019, p4). An organization with a hierarchical structure has several departments and teams who are working to foster the spirit and loyalty of the team. This helps ensure that the company is working towards the same goal.
In general, teamwork and departmental loyalty can have a significant impact on a company’s success. Hierarchy structure allows employees to understand better many levels of the management. This is because the role of leadership is more clearly defined in this form of pyramid structure. Different levels of control make the operation smoother.
Matrix organizations often include various structures along lines of departments or functions, as well as projects or product lines. As a result, many “supervisors” can collaborate in the same area, with one person driving product development and another occupying a functional position such as sales, marketing, IT, or accounting. One or more managers have the power to coordinate activities, allowing multiple departments to collaborate.
As mentioned earlier that one of the most famous cafes in the world Starbucks has a matrix structure. It profits from the sale of a variety of coffee and tea beverages, as well as the sale of roasted foreign coffee beans. However, the company’s core product is freshly brewed coffee, with additional products such as hot and ice-cold espresso drinks, coffee-free drink mixes, taco teas and smoothies (Mulawarman, 2021, p10). The company also sells coffee makers, grinders, mugs and other accessories, household espresso machines, fine chocolates and CDs. Starbucks also offers fresh items such as sandwiches, baked goods, salads and yogurt parfaits. After all, there are other consumer goods around the world, such as Starbucks liquor and various super premium ice creams.
Starbucks HR Management ensures that selected candidates are aware that their position fits their goals. The company invests in education and training after hiring the right people to work efficiently. Company management provides high-quality services that motivate employees and provide customers with key decisions such as employee recruitment, types of training offered, salary levels, and employee performance assessments. It has a great impact on the organization performance.
Essentially, an organizational strategy is a strategy for allocating resources to support the company’s operations. The company’s long-term goals are outlined in its strategic objectives, which serve as a roadmap for how it plans to accomplish its mission.
It’s common for strategic goals to have performance targets, such as releasing new products or increasing profitability. To achieve its goals, a corporation has first to determine how will do it. Usually, the senior executives develop the business- level strategy which is the framework of the company to manage its activities (Abrate et al., 2019, p12) . However, business-level tactics include things like cutting costs and standing out from the competition.
Businesses that sell a single product or a wide variety of products employ these strategies.
For example, a small company running a coffee shop, the owner is in charge of all business decisions. He is responsible to create the company’s vision, purpose and how the store will be operating.
As consequence, the company may have chosen to provide either quick and inexpensive coffee or a more expensive (Distanont and Khongmalai, 2020, pp4) but more comprehensive, cup of coffee as part of its cost leadership strategy (differentiation).
How the store is designed and how many employees are needed to offer customer service are all influenced by the choice of suppliers (Abrate et al., 2019, p12). It is a company’s business strategy that determines how it approaches value chain activities.
When operations are a cost leader, they priorities efficiency; when they are a differentiator, they priorities generating value.
Depending on the strategic goals, the owner will decide whether he wish to increase, retain, or reduce the clientele (expansion or contraction). As an example, if he wants to grow his business, he should set a specific objective, such as increasing sales in the next year.
External factors have a great impact on organization’s performance and thus on its success. It does not have any control of them (Politze, 2021, p14); however, the organization needs to adapt and take the necessary actions for adjustment.
Brexit has been difficult for human resource department of any organization as free movement between the UK and the European Union has been suspended. Businesses can no longer rely on cheap labor and may need to invest more in training and existing staff (Arfi et al., 2018, p40). Non-UK citizens arriving in the UK after 1st January 2021 will also need a work visa. The main issue arise to businesses is lack of sufficient manpower and human resources.
The global COVID-19 pandemic has dramatically changed the experiences of our customers, employees, communities, and individuals, and consequently our attitudes and behavior. The crisis is not only accelerating large-scale structural changes such as the consumer goods industry, but also fundamentally changing how and what consumers buy (Hughes, 2022, pp21). Once the immediate threat of the virus is gone, businesses must evaluate the impact of these changes on the way they design, communicate, develop, and deliver to their customers. Businesses must rethink how their employees provide meaningful customer experiences, where they work, and how they can use digital channels to ensure business continuity during and after a crisis
Since the external environment may change at any time, managers must constantly monitor and adapt to the external environment, so that proactive adjustments can be made earlier rather than later (Bhatti, et al., 2022, p6). During covid-19 a shift to the situation of work from home, make the organization move over digitalized platform and this helped them communicating and ensuring co-ordination in work during the tough situation of lockdown. For instance, use of video conferencing applications made the interactions and meetings easier.
Despite that economic sustainability is not a recent topic but its discussion has been remarkably increased among businesses. It emphasizes the good practices to ensure the growth of the economy without negatively affecting the society or the environment (Bhatti, et al., 2022, p8). Business growth should support the performance of the economy for future generations.
Organization Priorities and Associated Issues and Causes (AC1.4 & 3.3)
The issue of Covid-19 pandemic has increased the level of redundancy and affected the work conditions. As consequence, remote working is gaining popularity around the world due to the current situation (Keiningham et al., 2020, p24). It dramatically changed the workplace environment. The employees work outside the standard office environment, and they do not have to perform from a specific location. Many companies around the world have asked their employees to work from home whenever possible. Lockdown has been introduced in several countries, which has had a significant impact on the economy. The coronavirus pandemic has had a remarkable influence on global production systems and supply networks since transportation and distribution networks between suppliers, production sites, and customers have been interrupted by the COVID-19 epidemic. Most of industry executives and officials are seeking for the best tactics and policies to restructure production patterns and meet customer demand.
Another issue is lack of the workforce due to Brexit. Some sectors have concerns about labour supply, where there is shortage of staff has been noticed especially in the types of roles that lower-skilled EU nationals would have traditionally been free to fill.
As result, people are less productive, and employers often required to outsource training which will be an additional cost for them.
Businesses that do not provide training to their employees can expect to incur additional costs including defective products which require customer compensation; injured employees due to lack of training might file a case against the company where needs to bear the cost of defense. Moreover, the cost of defending against lawsuits filed by unsatisfied and damaged customers.
Dissatisfied clients will select a competitor who can give quality items and satisfactory service, reducing the company’s sales.
Spurka and Straub discuss the impact of the COVID-19 pandemic on the work and careers of people who use flexible work practices. They explain the potential impact of the pandemic on the careers of these employees (Shtal, 2018, p32). During the lockdown, most office workers have been forced to work 100% remotely in innovative ways to work online and take full advantage of digital work tools such as collaboration platforms and video conferencing.
In other side, HR professional are keen to look on mental wellbeing of their employees as the pandemic has a negative impact. Different activities can enhance their mental wellbeing starting from promoting work-life balance, encouraging employees to discuss their mental issues, and helping them to improve their well-being. It is important that they feel their company is supporting them.
In a highly competitive world characterized by changing organizational concerns and priorities, it is important for HR professional to introduce new solutions, show more responsibility, and give employees the room to develop and support their needs to achieve long-term success.
Strategic human resource management has a positive impact on company productivity and profitability which is basically influenced by employee motivation. People practices are significantly associated with high level of organizational performance and employee engagement which in return, reflects on the quality of services (McAdams, 2021, p23). In particular, the recruitment of talents and the implementation of Learning & Development policy should respond to the company needs in terms of required skills and allow the retention of its talents.
Further HR practices such as job design directly affects the operations performance. The way the tasks are assigned should reflect the flexibility and the responsibility (Shtal,
2018, p32). It influences the employee motivation by increasing the work efficiency. So, in case the job was not meaningful to the employee, it will affect negatively on their performance.
Traditionally, IT has operated outside the company’s main goals, simply checking the checkboxes to ensure that the IT project is accomplished. Just recently, with the introduction of cloud technology and digital transformation, organizations have realized that their IT goals go far beyond creating user access, managing devices, and diagnosing problems (BMC, 2022, p3). Today, the IT department is the business unit that lays the foundation for a successful corporate business and is at the heart of all goals and objectives.
Technology has an immediate impact on people at work in different level. First, it improves their efficiency at work and simplifies some complicated functions (Piccoli and Ives, 2005, p13). This will result to increase their performance.
Second, with the recent pandemic of Covid- 19 the companies had opted to work remotely which will allow employees to keep work-life balance and spend more time with their families. This will increase their wellbeing.
From the job perspective, technology influences the way people do their job. For example, HR people are using the HRIS to keep all employee’s data accurate and available all the time. Also, training sessions and meetings are done online through webinars in different time schedule. As a result, the cost of training has been reduced (McAdams, 2021, p23). Learning and development became available for employees anytime and anywhere with the fact that schools are providing online learning.
The way people professionals utilize technology to support their people practices has changed. as result of the increasing number of employees working from home and firms adopting a hybrid approach to work.
There must be a shift in the way that practitioners handle people considering new technologies like online learning and employee self-service (Piccoli, 2008, p92). It’s our job to find out how technology will affect the workforce, how jobs will evolve, what new skills and talents will be required and how technology can be used to strengthen the people offer as things change. Technology has made a positive impact.
Since technology has an impact on different levels such as people, job, and practices; it certainly impacts the organization which needs to adapt quickly on the development of technology (Lee and Day, 2019, p12).
The IT has significantly affected the organization structure, its management, and functions. As a result, new work criteria are considered which requires the revision of the job design. It has changed not only the role of individual but also the role of the team and groups. As consequence, the supervisory level of the manager is also affected.
References
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Arfi, W.B., Hikkerova, L. and Sahut, J.M., 2018. External knowledge sources, green innovationand performance. Technological Forecasting and Social Change, 129, pp.210-220.
Bhatti, A., Akram, H., Basit, H., Khan, A. and Raza, S., 2022. E-commerce trends during COVID19 Pandemic. International Journal of Future Generation Communication and Networking, [online] 13(3), pp.1449-1452. Available at: <https://file:///C:/Users/System0030/Downloads/24523-Article%20Text-37312-1-10-20200616.pdf>.
BMC, 2022. What is Technology Business Management? TBM Explained. [online] BMC Blogs.
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Keiningham, T., Aksoy, L., Bruce, H.L., Cadet, F., Clennell, N., Hodgkinson, I.R. and Kearney, T., 2020. Customer experience driven business model innovation. Journal of Business Research, 116, pp.431-440.
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