Organizational Structure and Culture at Foresight Technologies

Overview of Foresight Technologies

Foresight Technologies Co. is a medium-sized company formed in 2006 as a result of the merger between two small companies — Sight Technologies and ForeScan Ltd. — both dealing with software solutions. The company is located in Portland, Oregon, and employs approximately 300 people. The organizational structure of Foresight Technologies can be described as an "organic structure" with a typical decentralized design and a low level of formalization. Like most organic structures, Foresight also employs a matrix management structure. Communication is mostly informal, multi-level, and lateral, often without resorting to written interactions. However, the legacy of the two earlier firms from which this organization evolved has persisted, as most employees were sourced from those companies, and the existence of two distinct groups within the organization cannot be ignored. (Organisation Behaviour: Structuring the Organization, p. 21)

The functions and form of all the activities conducted in an organization define its structure. In other words, the scheme of authority relationships and the procedures involving tasks and reporting within an organization is referred to as organizational structure. One of the central concerns in this analysis is the relationship between organizational structure and organizational goals. The fundamental rationale of organizational structure is to control and synchronize the activities of workers in order to attain those goals. (Griffin; Moorhead, 2009, p. 407)

Organizational Structure and Departments

Foresight Technologies, in its early days, witnessed a clash of organizational cultures due to a variety of factors. This left a trail of internal disturbances which, while not always apparent, continued to affect the realization of the organization's collective goals. One reason for this internal conflict was the comprehensive restructuring of the organizational structure undertaken as part of a "cultural change" program initiated after the merger of the two previously loss-making firms. Despite apparent strong support from top management, this restructuring was only partially successful. (Section 2: Organizations & Culture, p. 67)

An attempt has been made to base the current organizational structure of Foresight Technologies on Contingency Theory, according to which the design of an organization depends to a large extent on the environmental contingencies it faces. The effectiveness and survivability of an organization rests on how well its internal structure complements those environmental contingencies. (Organisation Behaviour: Structuring the Organization, p. 24) Top management also recognized that organizational effectiveness — in both social and financial terms — requires well-designed and rationalized structures, and thus embraced the need to adopt "best practices" from the managerial domain. (Organisation Behaviour: Structuring the Organization, p. 1; Banerjee, 1995, p. 109)

The current organizational structure at Foresight is a matrix one, which means it incorporates two types of departmentalization — product-based and function-based. Both have their own merits and drawbacks. Departments at Foresight include traditional ones such as marketing, HRD, and finance, alongside specialized departments: software engineering, system administration, web development, copywriting and documentation, quality assurance, research and development, and customer care. (Gitman; McDaniel, 2009, p. 190) These departments are horizontally arranged by work function, though some are arranged vertically in terms of time or project phase. The customer care department has a special unit called "remote assistance," which provides software and limited hardware support to offshore clients. (Kmetovicz, 1992, p. 106)

The software engineering department is responsible for designing, coding, and testing new software products, system integration, and providing evaluation support. System administration is responsible for maintaining the hardware and software platforms on which all projects run, as well as providing overall hardware and software support to other departments. The web development department oversees the maintenance of websites and the provision of resources, including support software and associated documentation. (Kmetovicz, 1992, p. 110)

The copywriting and documentation department creates and maintains libraries, project documentation, and user manuals. The quality assurance section checks the safety and reliability of products, maintains process statistics, and confirms regulatory compliance. The R&D department is responsible for product innovation. The marketing department formulates strategies for promotional campaigns, advertising, and market research. The HRD department manages recruitment, placement, career development, salaries, and employee benefits. The finance department handles cost accounting, financial analysis and reporting, and the accounting of individual projects. (Kmetovicz, 1992, p. 112)

Most departments are composed of "Team Members" who report to their respective "Project Leaders," who in turn report to "Group Leaders." Group Leaders report to one or more "Program Managers," who are accountable to a Board of Directors headed by the CEO. At Foresight, only the Program Manager can work across disciplines in both horizontal and vertical directions, collaborating with other management teams as well as with top management. However, none of these arrangements is absolute; all are flexible to varying degrees. For instance, a team member with an innovative "first-of-kind" product idea may be placed in the R&D department to develop that idea further. (Kmetovicz, 1992, p. 116)

Special projects often see the convergence of talent from diverse departments. A specific project may include a member of the R&D team, several members from the software engineering section, documentation experts, a marketing representative, and a hardware engineer from the system administration department. A team member working on product development in the software engineering section may also be shifted to the quality assurance team for later phases of the same project, a different project, or a new product development initiative in the R&D department. Hierarchy at Foresight is a simple, multi-layered structure with no more than four or five levels in most departments. However, departments such as marketing, finance, HRD, and customer care do not follow the same arrangement and often report directly through their respective heads of department to the board of directors. (Kmetovicz, 1992, p. 117)

Communication and Leadership

Effective communication within an organization is known to be highly motivating for employees and can facilitate the decision-making process. It also helps employees express themselves while simultaneously shaping employee behavior. Management at Foresight recognizes that successful communication is essential not only for motivation and performance management, but also for transmitting new ideas and information, conveying organizational goals throughout the organization, providing effective job training, achieving employee coordination, communicating rules and regulations, and increasing employee commitment and involvement. (Section 5: Organisation Communication and Control, pp. 116–117)

Foresight faced the unique challenge of managing a section of employees — those from one of the two predecessor companies — who were accustomed to traditional, formal, and largely written communication methods, while the rest were more comfortable with informal interaction, resorting to written or digital communication only when strictly necessary. The cultural change program initially created some friction, as informal methods were not always given due importance. This was addressed when management arranged a series of workshops on the importance of communication and the value of various communication methods for both groups of employees. (Section 5: Organisation Communication and Control, p. 165)

Another significant development was the replacement of the former CEO — who had previously worked with Sight Technologies — by an external hire in 2008. This change in leadership brought considerable improvements. The entire organizational structure at Foresight was overhauled in line with the organization's goals and vision. The new CEO provided the appropriate managerial direction, striking the right balance between creativity, performance, and productivity. His approach was long-term, ambitious, and at the same time entirely practical and feasible. (Section 7: Leadership and Management, p. 243)

Having previously steered a struggling company onto a successful path, the new CEO faced an uphill task at Foresight. He had to substantially reform the organizational culture and structure while reducing conflict within a highly talented workforce and providing employees with a unified direction. He was also expected to reduce organizational uncertainty and leverage the "countercultures" inherited from the two predecessor companies to foster innovation and creativity, thereby building a competitive advantage for the new organization. (Section 2: Organizations & Culture, p. 64)

Conclusion and Recommendations

Foresight Technologies, a relatively new medium-sized company arising out of the merger of two smaller firms, appears to possess most of the organizational ingredients required to become a successful enterprise. It has a pool of highly talented employees, mostly retained from the two predecessor companies, reflecting management's commitment to preserving its workforce. It also has a leadership team that is considered progressively minded and committed to implementing best practices in organizational design and structure to attain its business objectives.