An examination of Good Sport revealed that its organizational structure is decentralized. Decisions-making occurring at various levels of the organization indicates a disbursement of decision-making authority. For example, the simulation began with the scenario that the marketing department had done a market segment report and that based on that report the newly appointed designer, Frazier O’Donnell had developed a prototype machine. Frazier believes in his machine and shows it to the Senior Manager of Research and Development (me) and I have the authority to decide whether to move the machine design forward or not. However, my decision alone was not the determining factor regarding whether or not the designed actually moved forward, I had to convince the Sales department to accept the design and the Production department to produce the design. Based on these findings, I have determined Good Sport’s structure to be decentralized.
Formalization: Formalization is “the degree to which organizations standardize behavior through rules, procedures, formal training, and related mechanisms.” (McShane and von Gilnow, p. 453) Formalization generally occurs in larger organizations with a high degree of production involved. For instance, automotive manufacturers organize on the formalized structure because the processes used to manufacture an automobile are highly specialized and therefore a company can standardize meaning to weed out variations in these processes. Standardizing processes can lead to efficiency and high productivity.
In examining Good Sport, I did not find any formalization. There were no hard and fast rules regarding practices and procedures. The organization has a very relaxed structure. Employees are expected and trusted to do what is best for the organization and the customers they serve. The disbursement of decision-making authority gives the departments within the organization the power to make its own decisions causing the departments to work interdependently.
Departmentalization: Departmentalization refers to the grouping of employees into various units of service or operation. Additionally, through departmentalization the chain of command within an organization is established. The most common method used to establish departmentalization and chain of command is the use of an organization chart. An organizational chart shows the various levels within the organization and indicates who has responsibility for each area of the organization at the various levels.
There are several different forms of departmentalization. McShane and von Gilnow (2004, p. 455) identified five pure types of departmentalization as being: simple, functional, divisional, matrix, and team-based.
Most organizations begin small and therefore generally start out using the simple structure of departmentalization. The simple structure applies to a company with only a few employees and offers one or two products or services. Using this structure a company’s hierarchy consists of a few employees reporting directly to the owner of the company.
Another structure of departmentalization is the functional structure. This type of structure is the basis on specific knowledge or expertise clustered together. For example, in many organizations you will find workers with engineering expertise clustered within the engineering department, and those workers with welding expertise clustered within the welding department, creating pools of like talent.
A divisional structure divides employees according to geographic areas, product or services, or client type. For example, when I worked at AT&T the structure of departmentalization used was geographical. I worked in the Southern Region. However, we had other regions called the Central Region, and the Northern Region. Within each of these regions were several states located in the geographical area.
The matrix structure is a complex organization structure that combines two organizational forms in order to reap the benefits of both forms. The two forms of structure combined depend upon the needs of the organization and can be as diverse as an overlapping of a functional structure with a divisional structure.
A team-based structure is a flat structure with few levels. Using this structure are self-directed work teams organized around delivering a service or producing a single good. An organization of this type may have as few as two or three management levels.
In my opinion, Good Sport uses a functional structure. In reviewing its organizational chart, I observed that the company has four departments: production, research and development, sales and finance. These departments are typical departments with a company that has grown out of the simple structure yet is not large enough to structure along divisional lines.
Labor and Coordination of Work
No organization can exist without the two fundamental components of labor and coordination of work. Someone has to do the work and the work must be coordinated to meet the needs of the organization so that goals are accomplished. Labor is the human capital necessary to perform the activities related to the work assignments within an organization. The division of labor is according to the requirements of skill levels and expertise of the workforce aligned with the needs of the organization. “Within most organizational structures work is divided into specialized jobs because this potentially increases work efficiency.” (McShane and Von Gilnow, 2004, p.446) I found this to be the case at Good Sport. The division of labor occurred according to employees’ expertise and/or skill levels, pooling talent in an effort to achieve efficiency and in some case i.e., production, to achieve economies of scale. .
Organizational Culture
Defining culture: It is generally accepted definition among theorists that, culture is an integrated set of values, beliefs, and practices accepted by a society or group of people. Bounds, Dobbins and Fowler (2004) defines culture as, “a pattern of artifacts, behaviors, values, beliefs, and underlying assumptions that is developed by a given group of people as they learn to cope with internal and external problems of survival and prosperity.” It is widely held belief that the values, beliefs and assumptions of a culture give meaning to the organization’s way of doing things.
There are different levels of organizational culture according to Bounds, Dobbins and Fowler (2004, p. 352): “(1) Artifacts and Behaviors, (2) Values and Beliefs, and Basic Underlying Assumptions.”
Artifacts and behaviors are associated with the actions of the employees within the organization. Behavior directly correlates to a person’s actions. Bounds, Dobbins and Fowler (2004) believe that, artifacts result from people’s behavior, and include any product of human behavior such as written and spoken language, dress, material objects and plant and furniture arrangements. In evaluating a company’s culture, artifacts and behaviors are easily observable but are hard to interpret.
Values and beliefs represent the convictions and perceptions people hold regarding what is right or wrong or how objects and events relate to each other, respectively. Values and beliefs are not directly observable but can be distilled from how people relate why they make the decisions they make.
Basic underlying assumptions are deeply held and ingrained values and beliefs about the organization in the minds of the people in the organization. This aspect of culture is so widely shared that people are largely unaware that it exist.
The organizational culture at Good Sport initially was worker friendly. Leadership and management appeared to care about the well-being of employees. In one instance of the simulation, the Senior Manager of Research and Development (me) receives a promotion to the position of Vice President of Production causing low morale at the company. The new position was a position that one of my peers, Matt Fernandez, had hoped he would receive through a promotion. When Matt did not get the promotion, he was unhappy and so were the members of the production team that reported to him. Eartha, CEO and my chain of command, advised me to find a way to smooth things over with Matt and the production team so that we could all work well together. Prior to this incident, morale at the company was up.
Most recently, the company experienced a cultural change under the leadership of Karl Anderson, CEO after Eartha. “Karl was autocratic and attempted to gain power over his peers and subordinates by controlling information. He treated power as a zero sum game. He was not able to inspire and motivate his subordinates and rarely promoted talent. Productivity declined and the performance of the company suffered.” (Managing Across Organization Simulation, UOP) Instead of showing support to subordinates, Karl withheld information from them making it hard for them to do their jobs. He changed the power structure within the organization so that he alone had decision-making authority and was the only one privy to certain information.
However, the company is rebounding and is currently working on reestablishing its worker friendly environment due to my promotion to CEO. The first challenge faced as CEO was to address and improve morale, and correct the operational issues created by Karl’s leadership style, which was not conducive to growth, profitability and employee satisfaction. As a result, of this type of leadership, the company’s profit suffered right along with the morale of the employees.
A Model for Change: Transformational Leadership
The most important dimension of organizational change is leadership. Leadership for change must be inspiring, motivating, and energizing, causing people to take desired action to realize a commonly shared vision. Lenka and Suar (2008, p. 63) states that, “Four components, known as the four I’s, makeup transformational leadership: (a) idealized influence or charisma, (b) inspirational motivation, (c) intellectual stimulation, and (d) individualized consideration.” They further state that, “Transformational leaders inculcate change in their organization’s culture with a vision of shared values that help in fostering a sense of purpose and belongingness to the organization. A supportive work environment results in greater employee commitment and involvement.” (Lenka and Suar, 2008, p. 63)
My personal experience with transformational leaders leads me to believe that they are interested in the well-being of all employees and demonstrate this by seeking input from them and then acting on that input. Transformational leader are not level conscious, they are just as interested in the workers at the bottom of the organizational chart as they are in the ones at the top. Robert Allen at AT&T during the eighties proved to be an excellent transformational leader. He took a huge organization of over 24,000 employees through a restructuring without igniting a union strike due to the deregulation of the telephone industry by the government.
Create a Compelling Vision
A vision need to be uplifting, inspiring, compelling and worthwhile. Good Sport seems to have a goal rather than a compelling vision. As CEO, I would enlist the input of employees to work with me and an outside consulting firm to develop a compelling vision for the company. Karl had developed a vision and strategy for the organization but he did it without any input for the others within the organization. There was no support for the vision by others in the organization because there was no buy-in. I would work to establish a vision with a mission statement based on the final product from meeting with staff and would communicate that vision regularly, and post it in places throughout the organization as a constant reminder to employees.
Strategies for Change
In today’s business world, change is a part of doing business. Every organization has to change or be ready to change when the situation calls for change. However, change is not easy to accomplish because people naturally resist change. They tend to be married to “the way things are” or “the way we do things here.” However, companies must constantly stay in touch with the changing wants and needs of its’ customers and be responsive to those wants and needs.
I recommend that Good Sport consider making some changes. I think the company would benefit greatly from hiring a consulting firm to come in and do an assessment. The benefit of this would be to communicate with leadership and staff and get their points of view on how to make the company more successful and worker friendly. Many time some of the best ideas for change come from the staff doing the daily activities involved in producing a product or providing a service. .
One thing that I think an assessment will reveal needs changing is the process for getting plans approved. Currently, there is no prescribed method or channel for submitting ideas for approval. In the simulation for every decision needed the manager had to go to a different department to gain support for her ideas. In order to advance she had to learn the culture of that department and its manager in order to be able to influence them to support the idea. I have experienced this type of process first hand and have seen how some good ideas are stalled or rejected because perhaps the person presenting the idea was not charismatic enough to influence others or because others already had too much on their plate and had no more room for anything else to do to be added. I think it work much better to assemble a when a manager can go directly to a person in leadership with decision making authority and influence that person of the good of the product or service and gain support for the idea, and based on available resources, having the idea become a system goal which everyone supports.
Another option for change would be to increase the span of control within the organization. Today’s organizations have moved away from the narrow span of control in favor of a wider span of control and a flatter organization as opposed to a tall organization with many levels of hierarchy. Organizations have proven through experience that one manager can direct or lead as many as thirty-one plus employees and be effective. I think that Good Sport need to reconsider its organizational structure.
Another strategy would be for Good Sport to consider moving toward a team-based structure, so that the organization can be more effective in coming up with designs and taking the product through its various stages until it reaches the market. This way the company could have several designs at once at various levels of development, which would expand business and grow the company. The company could inject a spirit of business ownership into the organization, thereby boosting employee morale and motivating staff to be creative in their approach.
Reward and recognition are motivating factor of change. Many companies today use reward and recognition in order to influence good behavior and to hardwire desired behavior within the organization; and uses discipline in order to expel or discourage undesirable behavior. Reward and recognition can also give a big boost to employee morale and spur creativity.
Another strategy is that of structuring the company according to product line. Currently the company has a functional structure. Grouping the employees according to product lines would create pools of talent and focus that talent more toward a streamlined common goal instead of the broader goal of exercise equipment but rather a certain type of exercise equipment.
In the simulation, there was only one designer. In order to build the business the company needs at least three to five designers on staff. The company needs to hire more designers. In today’s society health and fitness is at the top of the list of most people. Today, a fitness gym is located within a mile of most communities in major cities. Exercise equipment is changing everyday. Technology is available today to make better equipment than existed yesterday. In order to be successful in as ever changing world like this one we live, a company has to be prepared to seize the moment and the opportunity.
Technology is another strategy that pays big dividends to an organization. Good Sport should consider adding a technology department to its organizational structure. Technology can reduce cost as the company grows and expands as well as increase the capacity to improve processes and increase productivity.
Conclusion
Good Sport is a good company with lots of potential for becoming an even greater company. Leadership is a key factor in bringing the company through the necessary change process. Opportunities abound for the company. The company has some good loyal employees who are waiting to be lead to achieve greatness. Through the strategies mentioned in this paper and countless others available, this company can grow large and become wildly successful.
References
McShane, S. L., & Von Glinow, M. (2005). Organizational behavior: Emerging realities for the workplace. New York: The McGraw-Hill Companies.
Lenka, Usha & Suar, Damodar (2008). A holistic model of total quality management in services. ICFAI Journal of management research, Vol. 7 Issue 3, p56-72, 17p. Retrieved April 8, 2008, from EBSCOhost database.
University of Phoenix. Management foundations: Managing across the organization simulation. Retrieved on April 8, 2008, from Apollo.website
Bounds, Gregory M., Dobbins, Gregory H., & Fowler, Oscar S. (2004). Management, a total quality perspective. Ohio: South-Western College.