ORGANISATION AND MANAGEMENT



 

Table of Contents

 

Introduction                                                                                                                            

Organizational Structure                                                                                                        

Contemporary Management                                                                                                  

Strategic Management                                                                                                           

Conclusion                                                                                                                             

Bibliography                                                                                                                          

 

 

Introduction

Organizations are formed by a number of people, who share a common purpose of attaining goals that are often difficult to realize alone. (Tran and Tian, 2013) Organizations are prevalent in our society and have been in existence for thousands of years. However, the organization theory started making rounds only during the start of this century. Organizations are established in a specified manner to achieve different objectives and the organizational structure could assist or hamper its progress toward achieving these objectives. Irrespective of its size, organizations could accomplish higher sales and other profits by suitably aligning their needs with their organizational structure. (Lunenbur, 2012) Management is the process of estimating and planning, organising, controlling as well coordinating while running an organisation with the aim of achieving its goals. (pp. 6, Cole, 2004) It constitutes the most essential part of an organisation. A crucial feature of the management function is the decision-making of the people running it. The managers in an organisation should be capable of taking decisions and solving problems so as to be effective and useful. Management theories are applied to an organization to assist it to enhance the productivity of the business and its services. However, no manager relies on one single theory of management to apply to the organization. They usually employ an arrangement of a number of theories, which are contingent on the conditions of the organization, their goals as well the stakeholders of the business. (Mahmood, Basharat, and Bashir, 2012) this paper intends to discuss the various organisational structure and their strength and weaknesses. Further, it also attempts to explore contemporary management and the popular approach to it. Lastly, the term strategic management is explored and applied to a start-up organisation.

Organizational Structure

Regardless of the objective of establishing an organization, it can either be pronounced as successful or a failure. To accomplish these goals, organizations build internal environments catering to various roles and relationships among them which are widely known as organizational structures. (Tran and Tian, 2013) There exist three types of organizational structure: functional, divisional as well as a matrix structure

Functional Structure - Functional structure is established so that each section of the organization is grouped according to its function. (Analytical Comparison of Flat and Vertical Organizational Structures, 2014) For example, in such a setup, there could be a marketing department, a sales department as well as a production department. The functional structure works exceedingly well for small-scale businesses wherein each department is able to rely on the skills and knowledge of its workers and sustain itself. In a functional structure, the entire decision-making lies in with the top management thereby ensuring that top-level management has complete control over the organization. Moreover, it offers a clear career trajectory for employees, rising from junior-level positions and eventually making it to top-level decision-making positions. A functional structure facilitates solidity and efficiency, more so in larger and more multifaceted organizations, as invariably everyone uses similar processes. It also enables large businesses to derive benefits from the advantages of economies of scale. Nevertheless, this type of structure has its pitfalls as it could lead to poor communication/co-ordination between departments, thus creating a situation wherein departments are not working together or there are inter-departmental conflicts. Clients could get frustrated due to the lack of cooperation and coordination in case they have to deal with more than one department.

Divisional Structure - Divisional structure generally is found in larger companies that operate across a vast geographical area or have distinct smaller organizations, associated with the umbrella group, that cater to different types of products, market segments, or geographical locations. For example, the American division of an organization would manage all of the company’s business within the US and have its own accountants, sales force, R & D team, and HR – all of whom would be reporting to the Division Head. This enables the organization to respond promptly to client requirements as well as helps more employees enhance their managerial skills. However, it has its grey areas since communication is limited as employees in different divisions aren’t working together. Divisional structure is expensive owing to its size and scope. (Steiger, Hammou and Galib, 2014) Small businesses could use a divisional structure on a smaller scale in the form of having separate offices in different parts of the city. For example, having separate sales teams to handle different geographical areas. Moreover, there could be duplication of efforts and competition between divisions.

Matrix structure- The third principal type of organizational structure is known as the matrix structure which is a hybrid of functional and divisional structures. Organizations functioning on a matrix structure have no chain of command. Employees usually work in teams and could change teams in order to work in areas where they are required or are interested in working. This structure works exceedingly well in smaller organizations as well as in businesses where resources are limited and specialists scarce, as each one is kept busy and shuffled to where they are most needed. (Schnetler, Steyn and Van Staden, 2015) Generally found in large multinational companies, the matrix structure enables the benefits of functional and divisional structures to prevail in one organization. This structure enhances employee skills as well as involvement but may also create confusion and frustration in the minds of employees since the reporting lines aren’t very clear. This leads to power struggles as most areas of the organization would have a dual management--a functional manager and a product or divisional manager working at the same hierarchy and overseeing some common managerial territory. It could also be difficult to set priorities due to competing projects.

Contemporary Management

The concept of management has evolved over a period of time. Contemporary management pertains to the modern, present-day approach in the field of management. (Rana, Ali and Saha, 2016) The manner in which businesses were being managed some 100 years ago has undergone a total transformation and the management today has a more modern take on managing the daily affairs of the business. (Hendry, 1999) The two popular contemporary styles of management are explained below:

The system approach in management lays emphasis on the interaction as well as the interdependence of external and internal factors of an organization. It is generally used to evaluate the market elements which impact the profitability of businesses. “A system is composed of related and dependent elements which when in interaction from a whole Unit.” A change in any unit would result in changes in the others parts of the units as well. (CHECKLAND, 1994) The system approach knows that irrespective of how efficient the production department is, the marketing department is the one that is able to better anticipate the changing customer tastes and team up with the product development department to create products that the customers want else the organization’s performance would have suffered. (Mele, Pels and Polese, 2010) A closed system is one that is neither influenced nor interacts with the environment. The production line is one example of a closed system within an organization. Employees engaged in an assembly line are usually responsible only for completing their tasks on the line. On the other hand, an open system is one that interacts with the environment. An organization is an open system, which encompasses various functions such as planning, organizing, and controlling among others to run a business effectively.

Contingency management theory is a behavioral theory that states that there is no best way to organize a corporation, lead a company or make decisions. (Betts, 2011) Rather, the optimal course of action is subject to the internal as well as the external situation. Contingency management assumes that activities in an organization are a result of the match between numerous aspects such as framework, stakeholders, technology, approach, and values(Tosi, 1984) The contingency management approach considers organizations as open systems requiring vigilant management to balance internal needs as well as adapt to environmental circumstances. The most suitable form would be a factor in the nature of the task or environment one has to deal with. Management should be concerned majorly with accomplishing alignments and good fits. The contingency model of leadership is based on the relationship between leadership style and the favorableness of the situation. Situational favorableness has been described by Fiedler in terms of three empirically-derived dimensions:

Leader-member relationship:

  • Probably the most crucial variable which determines the situation's favorableness
  • Reflects the extent of mutual trust, respect, and confidence between the leader and the followers.
  • The leader is usually accepted and respected by the subordinates

Degree of task structure:

  • The second-most essential factor in the favorableness of the situation
  • Implies the extent to which group tasks are clearly defined and structured
  • The task is very structured

Leader’s position power:

  • Acquired through formal authority and is the third-most crucial dimension
  • Refers to the inherent power in the leader's position
  • Whether abundant authority and power are formally accredited to the leader's position

(Leadership-Central.com, 2017)

Strategic Management

Strategic management is a systematic and long-term process. The concept of strategic management has been evolving over the years. Strategic management is defined as a set of actions and decisions undertaken to develop an effective strategy or strategies for the achievement of corporate objectives. It is a dynamic process assessing both present and future environments and accordingly aligns the organization decisions in order to achieve the organizational objectives. (Nag, Hambrick and Chen, 2007) Strategic management is extensive and incorporates all functions of an organization. It isn’t restricted by functional boundaries and strives to integrate the knowledge as well as experience from various functional areas of management. This not only creates awareness of how policies are framed but also makes the employees appreciate the complexities the top management face in framing policies. (Dutton and Duncan, 1987)

A start-up company is a new venture that intends to develop or create a new space in the marketplace through innovative concepts, products, processes, or services. (Forbes.com, 2017) These companies are generally in the stage of progress and market study. This is a current trend, with more and more people trying their luck in the entrepreneurial genre. The start-up company I would focus on would be to formulate a parking app, which uses the GPRS to track free parking spaces. The strategic objectives they would focus on are as follows:

Growth and Expansion

An objective for such a start-up organization would be the company’s growth and would include the location, office size, and the number of clients initially. The biggest challenge for entrepreneurs would be to allocating time for the various aspects of business, from meeting clients to handling competition, building a workforce to ensuring profitability. In this regard, building a competent team to take care of various aspects of the business will be a great strategy. Another aspect of the growth strategy would be to shift the business from home to a rented office. Further, the business needs to be contemplated to expand in numerous locations in the state by renting offices, giving it a presence all over the state.

Getting Funding

Several entrepreneurs have no money to expand their businesses and hence seek funding. While a parking start-up doesn’t need a lot of capital to invest, it still does need some to take care of the daily operations. Further, it is being too optimistic to think that money will readily flow from the sales generated and that the expenses will be taken care of from the accruing profit. It takes quite a while for the break-even point to reach. Keeping these factors in consideration, funds could be sought from friends, family, or banks. (?alopa, Horvat and Lali?, 2014) It is advisable to start small and keep loans to a minimum as there are risks associated with starting and growing a business. Hence it is essential to avoid unnecessary leveraging and keep the liabilities within manageable limits.

Sales and Marketing

In all probability, a start-up business could experience fluctuation in sales as it is a new concept and people are just beginning to learn about the parking business. Since it is a new concept, spending on marketing activities around the state would be a good strategy. Additionally, identifying the target segment is a crucial step in formulating the marketing campaign. However, just identifying a market is not going to help, in-depth study and profiling of the customers are essential. The strategy would be to position the business in a manner that appeals to the majority of the targeted buyers. Next, communicating with prospective customers and promoting the business will help to garner more awareness for the start-up.  

Conclusion

To conclude, an organisation main purpose is to accomplish the objectives for which it was founded. People sharing common goals come together to create an organisation. They take crucial decisions on the behalf of the organisation. An organisation has three main structures namely functional, divisional, and matrix. Functional structure is established so that each section of the organization is grouped according to its function. Divisional structures cater to large organizations which function across a vast geographical area or have separate smaller organizations. Organizations functioning on a matrix structure have a hybrid of functional and divisional structures without any chain of command. Management ensures the accomplishment of the organizational objectives by performing various functions such as planning, organizing, coordinating, controlling, and also providing feedbacks for improvement. Management has evolved into a modern version of management practices which are referred to as contemporary management. On the other hand, strategic management is the process of weighing all the conditions of an organization and taking decisions that best suits the achievement of the organizational goals.



 

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