Organizational Structure Essay
To be successful in today’s world, organizations must quickly respond to a competitive and continuous changing environment. In most cases that means being innovative, reinventing themselves’ and changing many of the established ground rules of their own industry. Organizational leaders can’t allow their staff to settle and be content with ideas of the past. Organizations must challenge its management staff to embrace change while continuing to look for ways and methods to improve. In many instances, an organization’s structure can impact the degrees of its successes. For instance, an organization with a decentralized structure, which has open communication system, tends to be more innovative.
Organizations that are more highly centralized with most of the decisions being made at the upper level, tend to be much slower in their actions because of decisions that are handed down from level to level, where as the decentralized organizations tend to react faster because it empowers its employees and allows them to make decisions at all levels of the organization. An organizational system that is being used world wide by many organizations is that of the cross-functional team. This team concept brings together employees from various functional units within the division and it enables them to implement and integrate new ideas more rapidly, because of the upfront teamwork that limits the amount of trial and error normally associated with change. The cross-functional team approach provides an upfront opportunity to research the impact decisions will have on each functional area and modify them accordingly.
The organizing function of management is the deployment of organizational resources to achieve strategic goals. The deployment of resources is reflected in the organization’s division of labor into specific departments and jobs, formal lines of authority, and mechanisms for coordinating diverse organization tasks. Organizing is important because it follows strategy. Strategy defines what to do, and organizing defines how to do it. The organizing process leads to the creation of organization structure. Organization structure is a tool that managers use to harness resources for getting things done. Organization structure is defined as the set of formal tasks assigned to individuals and departments; formal reporting relationships, including lines of authority, decision responsibility, number of hierarchical levels, and span of managers’ control; and the design of systems to ensure effective coordination of employees across departments.
Parker Powertrain primarily utilizes a decentralized organizational structure. Although we are part of a six billion dollar organization, most decisions that impact our division are made within our division. The organization does have many centralized strategic goals that are handed down to all divisions, but each division also has its own internal strategic goals that apply to and impact only that division and its customers and product markets. Parker Powertrain also utilizes the cross-functional team concept within its division for most of its continuous improvement ideas. We have cross functional teams that work on product design, six sigma, scrap reduction, new product launches, cost reduction, and productivity improvements. We even have teams that focus on improving communication, along with recognizing and rewarding employees for outstanding performances and behavior. Depending on the tasks at hand, employees are chosen from all vital departments within the division, and on many occasions some employees are chosen from non-vital departments, just to offer a little diversity to the team.
We have several formal cross-functional teams which are part of the organization’s formal structure. These teams usually consist of the same members all the time, and their primary focus is usually planning the strategic goals within the division. We also have special purpose teams, which have a specific purpose and once that purpose is complete the team disbands. An example of our special purpose teams would be our communication and our rewards and recognition team. They were brought together to help fix or improve a problem, and once they are finished the team will dissolve. Another type of cross-functional team that our division uses is a problem-solving team. This type of team usually consists of hourly associates from within the same department who voluntarily meet to discuss ways of improving quality, scrap, and productivity. These teams continue to focus and work on those types of problems as they arise.
Although our organization is already utilizing many of the tools mentioned in this article, I still believe we at Parker Powertrain can benefit more by implementing more of the problem-solving teams. We have several of our departments that currently don’t utilize this method, and they could improve many of their daily tasks if they would evaluate them and look for improvements. Unfortunately, we still have several managers that seem to be from the dark ages and don’t realize that our employees are our greatest asset, and that usually they can develop ideas and methods that can greatly improve processes because they can bring the knowledge that comes from first hand experience. My challenge to my divisional staff would be for them to either replace those managers that are holding the rest of us back, or convince them to seek the training and the skills necessary to enable them to brace change head on.
Buhler, Patrick M.,The Manager’s Role in Building an Innovative Organization, Supervision; Burlington; Aug 2002.