ORGANISATIONAL STRUCTURE
Organisational structure is the internal, formal framework that shows the way in which management is organised and linked together and how autority, rights, duties and responsabilities are passed through the organisation.
A structure depends on the organisation’s objectives and strategies. There are many types and features of organisational structures, but before looking at the different types of these and at what kind of organisational structure Tantum will adopt, lets see the terminology we need to know.
Levels of hierarchy
Hierarchy refers to the levels of management in any business, from highest to lowest. Those on a higher level have more decision-making power and control than employees who occupy a lower level in the hierarchy. Level of hierarchy refers to the stage of the organisational structure at which the personnel on it have equal status and authority.
Span of control
Span of control indicates the number of subordinates reporting directly to a manager.
Bureaucracy
A bureaucracy structure of an organisation has two characteristics. First, the structure is hierarchical (clearly ordered levels of management), second, the organization is governed by a set of objective laws, rules and procedures as the basis of authority and direction.
Delayering
Delayering is the process of removing one or more levels of hierarchy from the organisational structure. Delayering tyically removes middle managers. It usually increase the average span of control of senior managers within the business.
Delegation
Delgation occurs when someone in the company with authority confers upon another person the authority, the power and the responsability to do a particular task. It is usually a one-way street – superiors delegate authority to subordinates.
Chain of command
The term chain of command refers to the order in which authority and power in a organisation is wielded and passed down from top management to every employee at every level of the organisation.
Centralised vs Decentralised structure
In a centralised structure head office will retain the major responsabilities and powers, all the important decision-making powers are within the centre of the company. On the ther hand decentralised organisations will spread and pass down responsibility to enpower subordinates.
TYPES OF ORGANISATIONAL STRUCTURES
-
Tall/vertical structure vs Flat/horizontal structure
The vertical organization has a structure with power emanating drom the top down. There’s a well-defined chain of command and the person at the top of the organization chart has the most power. Employees report to the oerson directly above them in the organizational structure. On the other hand horizontal structures have less-defined chain of command. Instead of each person having clearly defined duties, employees may work in teams, with everyone on the team having input. Also, employees may perform many different functions and may report to several supervisors, rather than a single boss. Both horizontal and vertical organization structures have advantages and disadvantages in helping an organization operate efficiently. Vertical organizations are efficient, they can make decisions quickly, because responsibility lies with people highest in in the chain of command. Employees have clearly defined duties and each position involves specialized tasks. However, vertical structures can be rigid, with many rules. Some employees may feel that their input is not important. Horizontal structures have fewer rules and put more power in the hands of employees, which can increase motivation levels. However, flat organizations are less efiicient, taking more time and resources to ake decisions.​
( http://smallbusiness.chron.com/definitions-horizontal-vertical-organizations-23483.html )
-
Hierarchical Structures
A hierarchical structure means having a structure consisting of multiple levels, the chain of command looks like pyramid, with a large base of workers, who are directly supervised by the smaller level above them, who are in turn supervised by the level above them, continuing on to the top ranking officer such as the company president or CEO.
this hierarchical type of structure can be organised by product, function or region.
- By product
An organisational structure based on products consists on several parellel teams focusing on a single product or service line. This type of structure gives a larger business the ability to segregate large sections of the company into semi-autonomous groups. These groups are often self-managed and focus on a narrow aspect of the company’s products or services. Product divisions tendt to be autonomous, each with its own top executive. Own recruitment, budgeting and advertising.
As with any organisational structure, divisions have both strenghts and weaknesses.
Product divisions can work well because they allow a team to focus on a single product or service, with an appropriate leadership structure. Also, this type of structure contributes to higher morale among the employees and a better knowledge of the division’s range of products. However, product divisions may compete with each other fro available financial resources and this might reduce cooperation between them.
( Business Management textbook, page 148)
- By function
Hierarchical structures organised by functions contain specialized units that report to a singla authority, usually called top management. These specialised units contain personnel with various but related skills gropued by similarities. Each functional unit handles one aspect of the product or service provided: marketing, development, finanace, etc. Top management is responsible for coordinating the efforts of each unit and meshing them together into a organised whole. The benefits that this type of structure could bring to the company include is that grouping employees by functional skills can improve efiiciency. Specialists are clustered together, which promotes collaboration and the opportunity for the further development of professional expertise. However such a structure tends to suggest that one-way communication is the norm. in addition there few horizontal links between the departments, and this can lead to lack of coordination between them.
( Business Management textbook, page 149; http://smallbusiness.chron.com/functional-organizational-structure-advantages-3721.html )
- By region
A geographic organizational structure is used for companies that have offices or business units in different parts of the globe. It defines a reporting and functional system across multiple locations. Each geographic location is overseen and directed by one or several executives. These executives oversee and direct the functions of the location and have responsibilities for the entire operation and its finances. This type of structure allows for each business unit to operate as its own entity based on where it’s located. The advantages that this structure has include the communication between representatives than can be very direct and personal. Also, this structure allows the company to recruit local management that offers the company the advantage of having leaders who are familiar with the local business environment, culture and legal climate. Some disadvantages of the geographical structure may include the dublication of personnel between head office and regional offices. There might also be conflict and unhealthy competition between different areas.
(Business Management textbook, page 149; http://smallbusiness.chron.com/models-organizational-structure-3821.html)
CHANGES IN ORGANISATIONAL STRUCTURES
When a company, like Tantum, changes drastically its prospectives and strategies, is possibe that it changes its organisational structure as well. In fact we decided to move from a hierarchical structure to a matrix structure. Here are the details of the advatages of this structure.
Matrix organizational structure
Tatum decided to adopt a matrix organizational type of structure. This is a company structure in which reporting relationships are set up as a grid, or matrix, rather than in the traditional hierarchy. The matrix structure is a combination of the functional and geographical structures.
One of the advantages that convinced our company to choose this structure is that it can lead to an efficient exchange of information. Departments work closely together and communicate with each other frequently to solve issues. Also, the matrix structure encourages a democratic leadership style, each employee brings his expertise to the table. a possible disadvantage of the matrix structure is that it can result in the internal complexity. Some employees may become confused as to who their direct supervisor is. For example, an employee may receive different directions concerning the same thing from supervisors in different departments. Miscommunication and ineffective managing can result in employee dissatisfaction and low morale.
We decided to keep HR department and finance department centralized while marketing, sales and development departments are both under control of the head office and the different geographical sectors.
Handy's Shamrock organisation
Another possible organizational structure is Handy’s Shamrock organizsation. It’s characterized by the employees division in core workers, flexible workers and outsorced work. Core managerial and technical stuff, are employees who must have full-time and permanent contracts. These workers are central to the survival and growth of the organisation. In return for high rewards they are expected to be loyal and work long hours and work long hours when needed. Flexible workers on temporary and part-time contracts, are called on when the situation demands their labour. Some functions are ousourced by indipendent providers, who may once hav ebeen employed by the company.
(Business Management textbook, page 154)
How cultural differences and innovation in communication technologies may impact on communication in an organisation?
The effectiveness of internal communication can have an impact on many areas of business. For example, an efficient communication could improve employee motivation and labor productivity, also, the speed of decision-making is directly connected with the efficiency of communication as the more people who have to be communicated to, the slower the decision-making system is.
Poor communication, on the other hand, will lead to demotivated workers, uncoordinated departments, poor customer service and a lack of overall direction of the organization.
Two of the main communication issues that most business must focus on are the impact of different cultures and innovation in technology.
(Business Management textbook, page 155)
Cultural differences
Understanding cultural differences and overcoming language barriers are some of the aspect every business should consider when dealing with companies with people of various cultures. Often business deals are lost because the parties involved did not take the time to learn about their each others’ cultures prior to interacting.
When doing business with an affiliate from another country, consider the cultural differences that may be presented, such as basic customs, mannerisms and gestures. For example, if a salesperson appraches a meeting with knowledge of a customer’s cultural background, then his words, body language and actions can all be adapted to better suit those of the customers. This in turn may lead to being better liked by the customer, ultimately increasing the salesperson's opportunity to close the deal.
Also, when interacting with people from different cultures, speaking in a neutral tone and making a conscious effort to be considerate of others' input, even if it is given in a manner to which you are not accustomed, can help foster effective business communication.
In addition When launching a marketing campaign or advertising to members of a different culture, always research the target market prior to beginning the campaign. Levels of conservatism, gender views and ideologies can vary greatly between cultures.
Tantum will try its best to consider and respect these differences in Asia.
(http://smallbusiness.chron.com/can-cultural-differences-affect-business-communication-5093.html)
Technological innovations
Technology has changed business in many ways, but its affect on communication is arguably the most significant. However, while technology did make business communications faster and easier, it has also made, at times, communication more distracting and less clear.
Whether you need to speak with an employee who is traveling in another state or country or you need to communicate with your supplier half way around the world, technology allows you to do so instantaneously. In fact, thanks to email and text messages, you can now send messages to people in other time zones before you forget without worrying that you will wake them up.
Technology allows individuals to communicate and carry on a business relationship without ever meeting face to face, so people in all parts of the world now have the chance to interact even with the most remote parts of the globe.
(http://smallbusiness.chron.com/effects-technology-business-communications-23045.html