We have been told that organizational structure and strategy are two critical co

Question

We have been told that organizational structure and strategy are two critical components that every business must manage and manage well if they are going to be successful. In addition to this, we also believe that there is a symbiotic relationship that exists between these two components. Please answer the following questions in light of this relationship.

Identify and explain the major characteristics of organizational structure that a manager needs to understand if he/she is going to develop an effective strategy?? (Identified and fully explained 4 different characteristics of organizational structure that managers need to understand.)

What do you believe will be the greatest structural challenges for organizations as they more forward in the 21st century? Be sure to explain what problems these challenges will create for an organization and discuss how an organization should respond to these challenges?(Identified and fully explained at least 4 major structural challenges of the future and the problems they will create and how a firm should respond)

Identify and explain why most firms continue to eschew vertical integration and explain how they should overcome these obstacles that prevent a firm from monetizing vertical integration? Be sure to be specific on what steps need to be taken.(Identified and fully explained at least 4 reasons why firms do not pursue vertical integration and explained how to overcome these obstacles)

Explanation / Answer

Characteristics of organizational structure that managers need to understand are:

- structure should be clearly defined and documented- The organizational structure of every company is different and depends on the company's nature hence for creating an effective startegy and increasing productivity of the company the structure should be well defined and clearly understood by the employees at each level. The jobs, their functions and their reporting should be clearly defined in the framework of the structure.

- clear and open communication- The employees at each level should have access to their superiors and subordinates to communicate their message openly. Asking doubts from seniors and reporting work to them, reviewing work of juniors and suggesting improvements are few tasks that become easy if the organizational structure is effectively communicated to the employees.

- engagement and development of employees- The structure should be framed in a manner that keeps an equal involvement of employees at every level. They should get motivated by the responsibilities they are given and appreciation of the work they do. The structure should allow all employees to contribute their skills and work better towards developments of their personal skills and the company.

- strong and effective leadership- A perfectly framed organizational structure will also be a failure if it is not implemented in the workforce effectively. For this a strong leader is required to delegate the duties to the employees as per their structural level and review and advice them on giving their full towards the accomplishment of the goal. A strong and effective leader can be helpful for this as he will not only know how to implement the structural pattern but also how to run it efficiently.

The challenges that the organizational structure will face in future and how to meet them can be explained as follows:

- communication- With the organizations being diversified and globally expanded following a strict communication pattern becomes a challenge. The employees find it tedious and time taking to report to the different levels of superiors for reporting their work. They may sometimes want to unfollow the structure and skip the reporting to the immediate superior. This can cause problems in following up of the job, involvement for scope of improvement and mismanagement of work delegation. This challenge can be solved by keeping an open and easy communication link between all levels. For example if a subordinate writes an email to his superior for some task update, he should be allowed to cc it to the other higher level managers too. Strict pattern of hierarchy should be avoided.

- folowing traditional hierarchy- The young employees do not support the traditional pattern of hierarchy in organizational structures. They believe in performance and experience based growth and not simply based on the herarchial pattern being followed from the past. Because they condemn it they do not want to follow it too. And disagreement to such structures and make them less dedictaed towards their work. They will not report their work timely to their seniors and not want to listen to their advice believing them to be on that level just for the cause of hierarchy and not talent.

- limitations to work profile- In organizational structure the job and responsibilities of that job are predefined and allows the employee to work in that dimension only. Young employees believe in working in a diversed culture and learn new things different from their regular profile. Hence they may not like to stick to the traditional pattern and work as per their defined job but discover new ways of learning through different work. This may leave the sturcture unfollowed and undefined not allowing the organization to run on a proper and strict pattern to yeild results. The employees will be concerned about their skill development than the company growth. To avoid such a situation the employees need to understand the importance of their job profile and show dedication towards it. This can be done by the manager being effective in implementing the structure pattern effectively.

- Globalisation- globalisation is a growing factor for the business on the whole but just looking at the implemention of an effective organizational structure it can become a challenge. The cultures and behaviors of people working at different locations is different. Following the same structure for all could be difficult for employees at certain places to follow and keeping a different structure for each location can become tedious for the organization to implement. Hence this challenge can create a criticl situation in effective implementation of the strcuture. To overcome this challenge the manager has to keenly review the demand of the location and the people based their while the expansion of the business. The growth depends on the employees hence their dedication to work is most important. Thus the organizational structure should be such that they are comfortable to work in and accept readily.

The reasons why firms do not persue vertical integration are:

- expensive procedure- As vertical integration demands setting up of own factories and maintain a running plant this requires huge amount of money as running cost which firms can not always bear. To overcome this proper budgeting is required and comparion of this integration with other has to be done before implementing it.

- market entry barrier- if the manufctures limit the access to raw materials and other componenets then entering new markets becomes a challenge. Even if the brand information is limited the market entry and expnsion of business is difficult.

- reduces flexibility- Working with limited vendors and suppliers limits the operations and chains which does not allow flexibility in the process. Making changes better for the growth is a challenge in such situation.

- complex pattern- involving in new supply chains is required for this process which becomes complex to follow and adapt. The effective use of vertical integration is successful after a period of time but at the start is seems a complex procedure and can become a failure if not implemented correctly.

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