Organizational Structure and Design Essay

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Organizational Structure

There is one structural issue that will be examined. The hierarchical structure of CI is causing problems that affect the contingency factors most important to the CI organization including, Strategy, Sales cycle, and culture (Cengage, 2010). In the case study, Daly has assessed internal and external weaknesses and threats due to strategic direction.

The analysis reveals two internal threats to the organization that stem from the hierarchical organizational structure and communicating strategic goals and objectives (Oshagbemi & Gill, 2004). Without knowing what the goals for the company are, sales production and customer care has diminished.

Solution One Satisfaction Survey

One solution that supports restructuring the company from a hierarchy to a Matrix organization involves the sales team working with customers to develop and complete a customer satisfaction survey. Based on the response, goals will be addressed to improve business relationships, growth potential, profitability, and refocus on the customer.

Solution Two Transformation into a Matrix Organizational Structure

A second solution will be primarily for the leadership team at CI to meet with the entire workforce (management and sales employees) to develop a strategic business plan for restructuring the company into a Matrix organization (Bradford & Burke, 2005).

At present CI is a hierarchical organization that needs to consider a matrix structure vs. A top down approach that provides a more customer focused enterprise. The use of organizational development processes such as Six Sigma and a Balanced Scorecard can provide Daly with much needed direction of what is working for other top computer service firms in the industry (Greiner & Cummings, 2004, p. 377). By formulating a vision and mission that can be clearly shared with the entire organization, all members can take ownership of their respective work toward better performance (Oshagbemi & Gill, 2004, p. 93-97). A balanced scorecard will result in development of a strategic business plan with the assistance of all departments (finance, sales, business processes, OD) which will allow CI to dismantle the bureaucracy that paralyzes its communications and responsiveness (Oshagbemi & Gill, 2004, 93). Thereby improving its responsiveness both internally between departments and externally with the customer. Additional steps based on the solutions are pointed out and reviewed along with recommendations and a summarized conclusion of how to move forward.

2.0 Overview of the Organization

Computer Innovations (CI) manufactures electronic products such as printer, computer hardware and periphery equipment. The CEO Sarah Johnson has focused on expanding the company by acquisition of smaller businesses. The companies chosen have not always been the best suited for the hierarchical organization structure at Computer Innovations. In fact the most recent acquisition led to a major conflict of core competencies, this in turn led to the firing on the CEO. The new CEO, John Daly comes from a computer firm, Global Tech and has recognized the internal organization problems that have led to less than 30% communication between sales department and customers (Cengage, 2010). Problems that have slowed down the hiring process that takes 90 days due to the number of managers required to get approvals. The company lacks a common vision and mission and there appears to be no long-term strategic business plan in place with achievable goals and objectives designed to improve efficiency, increase sales productivity, and reduce costs company wide.

Hierarchical structure Advantages (Learnmanagement.com, 2012):

Lines of authority are clearly defined (Cengage, 2010).

Areas of responsibility are understood and controlled by management.

Employees understand managerial protocol due to micromanagement.

Employees are generally promoted from within the organization based on tenure.

Employees are told what their responsibilities are within their job descriptions.

CEO John Daly comes from a technical company therefore having experience in working with a computer-based organization of similar size and structure.

Computer Innovations is a global company and possibly an industry leader, therefore there are resource available in terms of talent, capital, and suppliers to make the necessary changes.

Daly recognizes internal problems within the sales department.

Daly is aware of problems with management structure.

Hierarchical structural disadvantages (Learnmanagement.com, 2012):

Response to customer is slow due to bureaucratic process in gaining authorization for changes. Authority kept at top levels of the organization.

Vertical communications that give employees little voice in making changes to day-to-day processes though they have the most knowledge and experience (Edwards & Gill, 2012, p. 25-50). A hierarchical structure has centralized authority and decision making (Cengage, 2010).

Communication barriers in sharing knowledge across departments and to the lower levels of the company to upper management. Blocks ability to achieve a balanced scorecard that benefit's the entire organization, instead a single business component.

Communication limited from upper management to lower levels and withheld in order to retain information or power within managerial ranks. Decision making remaining at the top levels (Cengage, 2010).

Departmental rivalry due to managers more concerned with departmental success rather than the productivity of the corporation as a whole.

Lack of strategic direction that has been communicated throughout the organization (mission, vision, and value proposition).

Issues in the diminished amount of time sales force spends face-to-face with customer.

Spending of resources on non-productive activity such as paperwork and getting authorizations (IBM, 2005).

Less than 36% productivity from 700 members of the sales force (Cengage, 2010).

Lengthy time to get HR hiring approvals (three months).

3.0 Structural Issues

The hierarchical structure of management is definitely a factor in causing the problems with improving customer relations (Inbretson, 2012). One of the key structural issues affecting the organizational culture and productivity at Computer Innovations is the fact that open communication between sales team and customers is less than 36%. Having a bureaucracy of several layers of management requiring approval before making changes causes the sales force to lose valuable time in meeting customer demands. This internal weakness within the structure of the organization can open up the door to lost sales to the competition. It is important to maintain an open line of communication with the customer in order to earn their trust. It is also necessary to respond to the customer in a timely manner. With such a low customer satisfaction rating in this area it is certain that the customer is dissatisfied with Computer Innovations level of service. Daly needs to address this issue by getting feedback from the customer to learn their must important concerns. They can then formulate a plan to address these concerns and establish a communication strategy that allows the customer to get the products and services they need in the most efficient and cost effective manner.

The current bureaucratic system of running the company opens the door for competition to take advantage of Computer Innovations mismanagement and target their customers. Due to the slow turnaround time in getting issues addressed, other competitors can enter CI customer market. The current structure of the organization is outdated and results in redundant systems, slow response to customer, and lost productivity.

4.0 Ways to resolve the structural issues

Use a Customer Feedback Survey to Restructure the Sales Force

One is to get feedback from customers through an external customer survey to determine areas where the sales force needs to improve. The Customer Satisfaction Survey will allow the customers to respond to the same questions throughout the organization, thereby getting a uniform direction on the areas the customers want addressed. For example, the survey should have a series of questions that are directed to each of the departments that a customer interfaces with (Wirtenberg, Abrams & Ott, 2004, p. 465-470). Questions about the sales department, procurement, finance department, and managerial authorization or approval policies. Understanding the roles of the various managers and the process of how they plan to work with the customer (Oshagbemi & Gill, 2004, p. 103). The survey questions could possibly come from the sales team as they work with the customers and can get the type of requests customers complain about most often.

Understanding customer value or customer satisfaction and service is very important to ensuring the ongoing success of the business. Without customers seeing value in Computer Innovations products and services, the corporate objectives set out by the CEO for the organization mean little. Attracting the customer, gaining their trust and satisfying their key needs requires a sales force that is knowledgeable, accessible, and in tune. The ability to retain customers requires constant contact and feedback. The customer's perceived understanding of the sales relationship must be maintained for the long-term and communicate value over the competition. The survey will help to get the pulse of how the customer views the organization and the sales relationship.

Use Six Sigma and Communication to Restructure the Organization

A second way to resolve problems is to have the organization undergo Six Sigma process improvement training. Daly needs to have a series of meetings designed to establish a strategic business plan to communicate the direction CI is heading. This most likely lead to restructuring CI from a hierarchy to a Matrix organization (Ingbretson, 2012). In order to accomplish this, Daly needs to share his vision for the organization. The members…[continue]

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