Organizational structure is defined as the formal configuration in regard to responsibilities, the allocation of tasks, and authority within the organization between individuals and groups (Galbraith, 1987; Greenberg, 2011). An organization’s structure allows it to accomplish its functions by linking its departments. These departments can be characterized by aspects such as marketing, sales, advertising and manufacturing. These jobs are grouped and there are many distinctions between the jobs people perform (Nelson & Quick, 2011). Both the strategy of the firm and the situations of subunits and individuals within the firm are affected by the organizational structure, and failure to recognize the importance of the organizational structure of a firm would be detrimental to the firm’s performance (Amir-Atefi, DeCanio & Dibble, 2000).
Zara, founded in 1975 by Amancio Ortega, is the flagship chain group of the Inditex group and is one of the world’s most successful fashion retailers with 2000 stores found in 77 countries. The organizational structure chosen by Ortega is a flat structure which has few levels of middle management between executives and employees. Ortega rejected stringent organisational structures in favour of a more flexible approach which flourishes within the highly integrated, fast and efficient form of communication between its global network of outlets and central hub of operations in Spain. This reduces supervision and gives the staff at Zara more involvement in the decision making process, making them more productive. This structure is typically used in smaller organizations but has proved to be successful for Zara.
The flat structure encourages staff involvement using a decentralized decision-making process. ...
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...s decentralization techniques, we will further examine the chain of command implemented in this organization. Chain of command is the involvement an organization has with the flow of information and authority with the same organization. As a principle, chain of command is the manner in how information and authority should progress in a hierarchal style, without overlooking an intermediate level. The chain of command style in Zara differs from other organizations, as its product and store managers have been placed in the same work environment. To avoid interdepartmental miscommunication, Zara’s stores and factory are closely interconnected across the commercial desk. Vertical integration does not encourage coordination within Zara, but it is the design of the organizational and human interface that provides the integration which the report will now go on to examine.
The Organisation structure of a company addresses the fact that every organisation has specific units that are responsible for different roles and actions in the organisation and that no department within the organisation stands alone, they are intertwined. The organisational chart or structure should be designed to divide up the work load, responsibilities and roles to be done
Organizational structure is the linking of departments and jobs within an organization. The idea of self managing teams was a significant insight gained into organizational structure. Bolman and Deal state that self-directed teams typically produce better results and
Every small or large business requires a structure to grow successfully and in return be profitable. This structure is what defines the way a company and its employees work together to support their common vision. There are different types of organizational structures depending on the type of business (Burke & Litwin, 2002). The main ones that are related to this study are hierarchy, cross-functional and matrix. Costco Wholesale Corporation is the main focus of this research paper. It was founded in Seattle, WA in 1983 but has the headquarters in Issaquah, WA. It was founded by James Sinegal and Jeffery Brotman. Costco operates 698 warehouses in ten countries, Puerto Rico been the recent one. The company also operates an online website as well as receiving revenue from the membership fees. It earns about 3% of its revenue from the e-commerce website, about 2% through membership fees and generates approximately 95% from their in-store sales. It employees about 200,000 full time and part-time staff worldwide. The recent figure of annual revenues $116.2 billion
Organizations are initially structured around tasks, and as the organization continues to grow, the structure within the organization takes on many characteristics. Not all structures are advantageous, especially if they are lacking in some areas. There is a relationship between structure and size of the organization that affect the centralization of the organization. At the highest levels, the personality of the chief executive may amend the organizations' structure. The structure within an organization helps define the roles and responsibilities among the members from each department and work group. The four general types of organization structure are functional, divisional, matrix, and project based. “Organizational structure is the skeleton of an organization” (Feigenbaum, 2013) and how these individuals relate to each another. Structure is a statement of the current affairs, not the ideas, intentions or improvement within an organization. When business leaders develop their initial plans for an organization, he or she looks at how to design a company and takes inventory of all the tasks, functions and goals of the business. The leader then develops groupings and ordering of job positions, departments, and human resources to effectively and efficiently perform these tasks. Technology, size, environment, strategy and goals affect an organizational structure and effects, whether they are categorized as mechanistic or organic.
and will work their best to achieve them. With this management style, IKEA can use various methods of communications (see E5). However this type of management style could make decision-making slow and is not appropriate to some businesses such as, manufacturing industries. The organisational structure, culture and the management style of IKEA have to perform successfully so that, together they can achieve the company’s objectives. For example, to increase profitability: the communication within the organisation have to be clear so that, staff can understand what jobs have to be carried out; staff have to be motivated to perform the job; the relationship between managers and staff have to be strong and committing; the organisation have to encourage staff to create new ideas and share them amongst others; democratic managers have to listen and act on the opinions of workforce, democratic managers have to make sure that the workforce is well aware of the objectives of IKEA, etc.
The fundamental business strategy of Zara is very simple which is linking customer demand to manufacturing, and liking manufacturing to distribution. Zara has been running their business in fashion industry which is susceptible to seasons and quick changing customer tastes. Zara has been approached to and considered their business as a perishable commodity business just like a fresh baked cake or bread to be consumed quickly.
Simple structure is widely used by small businesses in which the owner directly manages the day to day operations. The benefit of using the simple structure is that it is simple. One person normally calls the shots and takes full responsibility for the businesses success and failure. “It’s fast, flexible, and inexpensive to maintain, and accountability is clear” (Judge & Robbins, 2007, p.546). Unfortunately, using simple structure as an organizational design limits the business of its full potential, as it grows, it becomes more difficult for one individual to oversee the daily operation and make quick executive decisions. Once an organization reaches this point, it must change its organizational design in order to remain competitive within its market.
Organizations can be configured in many different ways. Their overall classifications can be summarized by characteristics of complexity within the system, the level of formalization, and the centralization of decision-making power. The structure of each organization is influenced by many factors. Such factors include; the goods and services provided, the overall individuality of the staff providing the service and producing the products. The overall beliefs and values of the individuals performing the services that are being delivered, the technology that is utilized to help deliver the services and aid in product production, as well as the needs, desires, and generalized characteristics of the consumer population that requires or demand the product or service. (Yoder-Wise, 2007, p. 145) The organization will have different operating priorities based on its ownership. The main goal behind most business is to make money. The private owned institution strives to make its shareholders money, while a non-profit institution reinvests all of its revenue back into the orga...
In order for one to evaluate and identify with the diverse business structures, he/she must be aware of the meaning and standards that makes that structure. Various businesses functions in different ways as the world is full of technology and new structures, company cultures and new ways in which companies are run. In order to fully grasp the concepts of Organizational structure and culture in the movies, I will use the Movie Up in the Air and The Devil Wear Prada movies to analyze a business scenario from them.
Matrix structure is first introduced in the aerospace industry in the 1960s and become one of the popular organizational design options in today’s business and industry (Derven & Alexandria, 2010). Burns and Wholey (1993) poinited out that matrix structure were used in advertising agencies, aerospace firms, research and development laboratories, hospitals, government agencies, and universities. Matrix structure is the combination of two or more different structures and take the advantages of the pure functional structure and the product organizational structure (Robbins & Judge, 2011, p. 497). The employees in the matrix may have two bosses: their functional department managers and their product managers. For example, all engineers may be in one engineering department and report to an engineering manager, but these same engineers may be assigned to different projects and report to a project manager while working on that project. In many organizations, a matrix structure is implemented to address the requirement to do more with less and become more agile. The matrix structure, which focuses on horizontal as well as vertical management, has become more widespread as a result of globalization and the...
The business model of the company could be categorized into formal and informal. As the name implies, the formal aspect of the Zappos was concerned with all the traditional aspects just like that of other companies. The formal aspects of Zappos had included Human resources, policies, procedures, operations, measurement of performances and compensation to employees on the basis of their performances. The informal aspect of the company dealt with the behavior of employees in an organization which was highlighted by Zappos in their corporate philosophy. According to their philosophy to get happy customers it was important to have happy employees and for happy employees an inspired culture was essential.
Therefore the structure of a company is an important factor to achieve a rapidly growth. This paper aimed to describe the IKEA’s organizational architecture and provide analysis that whether any recommendations or changes have to make based on current information. IKEA has a slightly different organizational structure compared to other large worldwide company. Ingvar Kamprad founded IKEA in Sweden in 1943 when he was 17 years old. The company vision is ‘To create a better everyday life for the many people’ (Inter-IKEA Systems B.V., 2014).
Business structure is a critical factor to determine a company 's success or failure. Generally, larger organization has a more complex organizational structure. In the case of H&M, they had adopted matrix structure, one of the traditional organizational structure, into their business. As shown in figure 1, range of functional groups is listed horizontally across the table and on the other is product/task with a manager taking control of each. The functional structure is divided
Organizations are established in specific ways to obtain different objectives, and the structure of an organization can help or restrain its advance toward accomplishing these goals. Organizations of different sized and types can achieve higher sales and other profit adequately by identifying their requirements with the structure they use to operate.
Organizations must operate within structures that allow them to perform at their best within their given environments. According to theorists T. Burns and G.M Stalker (1961), organizations require structures that will allow them to adapt and react to changes in the environment (Mechanistic vs Organic Structures, 2009). Toyota Company’s corporate structure is spelt out as one where the management team and employees conduct operations and make decisions through a system of checks and balances.