Imagine you have ideas for clothing stores that will directly compete with Abercrombie and Fitch. What will your strategy be? How will that impact your choice for organizational design? In order to effectively compete with large and established firms like Abercrombie and Fitch in the clothing business, I would adopt a single product strategy. This would entail opening a number of stores in high market areas where, expectedly, Abercrombie and Fitch will probably be having one or two outlets too.
The single product strategy will be relevant to my organizational design because my firm will only be dealing with a line of clothing stores. Having a multiple number of stores dealing in the same product will make it necessary to have a functional departmentalization system to cater for all management structures I will have in place. I would also need to be widely diversified in my operations in order to spur growth. To maintain an effective management system, there will also be a need for effective coordination among the different stores.
For this approach to meet its target of measuring up to the competition provided by established companies like Abercrombie and Fitch, each of my company’s stores will have a relatively autonomous management structure but major decision-making latitude will remain with the top level. This type of decentralization will give each unit the opportunity to devise its own independent strategies of operating in the face of competition. Question 2 Briefly describe the matrix form of organization design. List its advantages and disadvantages.
This structural form is most likely to be used under what conditions? As a form of organizational design, matrix design is based on overlapping sets of product departments on an existing functional organization. It relies on a structure composed of multiple command levels. In a matrix design, employees working on a project are both members of their respective functional departments like accounts or engineering and the project as well. In a matrix design the project managers are always in coordination with teams of employees who belong to different departments in the same organization.
The main advantage of a matrix design is the enhancement of flexibility because the teams can easily be formed, modified, and disbanded depending on the requirements of the project. Secondly, the assumption of responsibility in decision making processes within the team motivates and improves commitment among the employees. Employees working in a matrix design structure have a better opportunity of learning new skills. The fourth advantage is that a matrix design provides an opportunity for the organization to efficiently utilize its human resources.
By members being involved in both the functional unit and in their respective teams, there is increased cooperation and efficiency between the two levels. Lastly, a matrix design has the advantage of giving the top management a means of decentralization. Its main disadvantage is uncertainty among employees when submitting reports and is seen by some managers as an ingredient for anarchy because it gives employees an unlimited freedom. This design is most appropriate during cost allocation among different departments of an organization.
Question 3 The State Department and Department of Homeland Security issue travel warnings and alert levels for activity around the world. If you were the CEO of Coca-Cola, a global company, how would you use that information in your planning? Travel bans and high alert levels on security related matters can be an impediment to most operations of a multi-national company whose employees, especially the top management, are required to make frequent trips between the company headquarters and the subsidiaries internationally.
As a CEO of Coca-Cola facing the consequences of a travel ban and security alerts I would need to make emergency strategy plans based on the Lewin model which identifies three phases. The first is referred to as unfreezing where the affected employees, in my case the ones stranded in foreign countries, are made aware of the existence of the problem. It would be imperative to identify the exact level of operational limitation the travel ban will have on the company.
This step will also involve identification of management strategies aimed at making the company subsidiaries to run in a semi autonomous way due to limited contact with the Atlanta Headquarters of the company. The second phase would involve implementing the change itself in coordination with the independent subsidiaries. The third step would be the refreezing phase in which I shall use the information from the State Department and the Department of Homeland Security to identify the most affected countries and regions in order to isolate specific areas where the emergency plans will require prioritized reinforcement and support.
The information will assist in knowing which areas are high priority concerns and which are not. Question 4 Define the term reengineering. Discuss why an organization might need to engage in it. Reengineering in business refers to the basic rethinking and major redesign to the existing resources of an organization. It goes beyond the usual business improvisation by making radical redesigning of all the aspects of the company’s operations. Successful reengineering must first involve a high-level comprehensive and systematic of all the important aspects of the organization.
At this stage the important question to ask is whether the strategic goals of the organization are in line with its mission. Reengineering becomes necessary in an organization when it is seeking to improve its mission in an effort to reduce costs. Reengineering can also be made necessary when an organization finds itself on assumptions that do not address the needs of its customers and has to redefine its operations to solve this problem.