Organizational Structure and Effectiveness Having

Organizational Structure and Effectiveness

Having been in the industry for more than 20 years, Airstar's history is solid, and a large amount of its strength lies in the fact that it is well-known in the market. Internally, a further strength lies in employee loyalty, with most managers having been part of the company for the majority of its lifetime. Concomitantly with changing top management, a problematic factor for Airstar is the rapidly changing industry. The same 20 years that serves as a strength in terms of customer and employee loyalty is also a threat in terms of newly arriving competition and a changing business environment. The problem appears to be that Roy Morgan has assumed that the business could continue as it had for the almost two decades prior to his appointment as president of Airstar. In the past, each employee and manager assumed his or her duties as stipulated by the first president. The current environment however dictates a change in duties and management practices. While many of these have been adopted, there is a lack of adequate communication regarding the new duties and how to streamline them for the greatest efficiency. This is a threat in the current business environment, as effective communication is vital to growth and development in a business. A lack of effective communication appears to be at the root of Airstar's problems.

Issues

One of the significant issues for Airstar, Inc. is the threat of the changing environment. To survive, the company needs to not only adapt to, but also to influence the changing environment, and in this way create value for the owners, customers and employees involved in the business. Ongoing challenges such as diversity and ethics have to be met by motivation and coordination. According to the case study document, there is a significant lack of coordination.

This issue is dealt with by the third and fourth principles suggested by Jim Robinson: the third suggests that suitable personnel should be assigned to each specific task, while the fourth focuses on the same coordinating principle for supervisors: duties are to be clarified in writing. These two points pertain specifically to organizational structure and how this should be focused towards organizational goals and efficiency.

The current system at Airstar, Inc. is neither cooperative, nor goal directed. Furthermore, there does not appear to be any communication or determination of specific goals and values for the company as a whole. Instead, it appears that the values determined by the founder were never reconsidered in the light of either internal or external changes. This issue is addressed by the first principle suggested by Robinson. Communication is also vital in this regard.

As mentioned above, the external environment is not stable. This also influences the goals, plans and tasks of the company. One of the main problem is that new tasks have been assumed on an as-needed basis, with little communication among departments or employees. The result is an unsurprising lack of focus and overlapping tasks that could be divided more efficiently. Robinson addresses this by his second point: that specific tasks should be determined for the purpose of assigning them to the most suitable employees.

Another factor of the external environment is the threat posed by new competitors. Being new to the market, competitors will make every effort to follow sound business principles to create value for customers. This is where the issue of age comes into play: Airstar, Inc. is no longer the sole service provider of its kind, and finds itself in an environment that is rapidly changing. Its internal environment however has not evolved to match the new requirements of their customer base, and hence value creation suffers. As such, the competition with potentially more efficient internal environments are in a better position than Airstar.

As a solution, Robinson's six principles are mainly directed towards better focus in terms of task assignments and internal structure. Communication should however not be overlooked in determining solutions for Airstar, Inc.

Recommendations

Generally, Robinson's principles appear to focus on internal changes that would provide Airstar with a better position from which to handle external environmental changes. Concomitantly, Morgan should consider how internal structural factors relate to the six principles. Because of the long lifetime of the company, for example, formalization in terms of written rules and regulations seems to be lacking. Communication is an important factor in this as well.

It is recommended that Airstar, Inc. begins its internal transformation process by creating a list of recommended rules, regulations and policies. It is suggested that these initially be communicated in writing, providing employees and managers with the opportunity to comment. Meetings can then be held to discuss the comments, after which implementation takes place. Before the specialization process, it is recommended that the company creates a mission and vision statement, a number of goals for the future that relate to these, and strategies to reach these goals. This will set the stage for specialization.

As per Robinson's recommendation, the various tasks to reach the above-mentioned goals can then be assigned to appropriate personnel members to avoid the overlapping that has occurred as a result of the changing environment.

Furthermore, the external environment needs to be monitored on a continual basis so that necessary responses can be implemented in a timely manner. This monitoring process can also be assigned to specific personnel members, who can communicate with top management via meetings or writing such as email.

A further recommendation is that the hierarchy of authority should be established and streamlined according to the variety of strategies and tasks within the company. Managers and divisions, according to Robinson, should be kept to a minimum. This is a sound principle. The structure of the company should be as simple as possible in order to focus on goals rather than on attempting to manage personnel members and their many duties.