A Model for Leading Change    

A Model for Leading Change

University of Phoenix


A Model for Leading Change Introduction

In this 21st Century high-powered business world we live in, the survival of a business venture is contingent upon many influencing factors and the ability of the leader of the business to establish and maintain an environment conducive to success within an ever-changing marketplace.  Due to the constantly changing environmental forces that affect businesses day by day, organizations must prepare well initially for success and remain flexible enough through the ages to change with the times in a manner that supports continued success.  

        This paper examines organizational design and sustainability from a change perspective based on the simulation of a company named Good Sport, a manufacturer of health fitness equipment, and the issues faced by leadership and management of the company, and the choices they make and consequences of their choices and actions.

Organizational Design

There are several different organizational design structures from which to choose when designing an organizational structure.  An organizational structure is the framework for all activities engaged in to realize or achieve a vision.  In striving to construct an organizational design or structure that lends itself to growth and efficiency, one must give thought to what is the best design for an organization such as the one under construction.  The structure of an organization defines for all employees the hierarchy of the organization, the levels at which decision-making takes place and by whom, the workflow, and who does the work.  McShane and von Gilnow (2005) defined organizational structure as, “the division of labor as well as the patterns of coordination, communication, work flow, and formal power that direct organizational activities.”  

According to McShane and von Gilnow (2005) there are four basic components of an organizational structure including (1) span of control, (2) centralization, (3) formalization and (4) departmentalization.  

        Span of Control:  Span of control deals with the number of direct reports reporting up to the next level within an organization.  Employees within an organization commonly refer to this structure as the organization’s chain of command or hierarchy.  The span of control of an organization may be narrow or wide depending on the size of the organization.  In his early theory on planning and organizations, Henry Fayol strongly recommended a narrow span of control of no more than twenty employees per supervisor and six supervisors per manager.  (McShane and von Gilnow, p. 449)  Today, organizations have challenged the recommended span of control and have proven that span of control within organizations can be much larger that Fayol recommended, and still be effective.  This enlarged span of control has been known to be as wide as 75.  (McShane and von Gilnow, p. 449)  

        Based on information about the organizational structure of Good Sport, the company used in the simulation, the company uses a narrow span of control.  Good Sport has four vice presidents directly reporting up to the CEO:  one over Production, one over Research and Development, one over Sales and one over Finance.  The next level down are four Senior Managers each directly reporting up to one of the vice presidents.  Then the next level down are four Team Managers each directly reporting up to one of the Senior Managers.  Therefore, Good Sport has structured its organization according to a very narrow span of control.  

        Furthermore, based on the size of the organization and the span of control, I believe that the company has a “Tall” (McShane and von Gilnow, p. 450) organizational structure versus a “Flat” one.  A company's structure is either tall or flat depending on the number of layers of hierarchy between the top and the bottom of the organization.  Companies today are trending toward a flatter organizational structure and removing several layers of management in the process called delaying.  (McShane and von Gilnow, p. 450)

Centralization:  An organization can be centralized or decentralized.  In a centralized organization, only a few members have decision-making authority versus in a decentralized organization where decision-making authority is a privilege disbursed among many.  Smaller organizations tend to be centralized organizations with decision-making authority resting at the top of the organization with the owner or CEO.  Conversely, larger organizations consisting of one hundred or more employees tend to be decentralized organizations with decision-making authority disbursed.  Decentralization offers larger organizations flexibility in carrying out daily activities.  Otherwise, achievement and progress would suffer due to need to lost time waiting to receive a decision.

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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 ...

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