Existing Structure and it Misfits and Resulting Problems - Brocher Pty. Ltd.

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                Kirrily Van Riel

Kirrily Van Riel


Table of Contents

        

1        WEEK 1        

2        WEEK 2        

3        WEEK 3        

4        WEEK 4


  1. Existing Structure and it Misfits and Resulting Problems (30%)

  1. Background:

After many successful years as a leading veterinary pharmaceutical development and manufacture company, Brocher Pty Ltd made the decision to centralise their Research, Development and Manufacturing Businesses into one purpose built facility in Brisbane.  The change did not serve to bring about the desired effect of continued growth based on the development of groundbreaking “miracle” products as in years past. In fact, along with the change, new organisational structures were implemented that ultimately hindered the company innovation levels and staff motivation resulting in operational problems and poor company performance.  This report details the misfit between the organisation’s operational contingencies and its current structure, linking misfit to the downturn in company performance.  An alternative structure is recommended to improve the fit and enhance organisational performance.  This report focuses on the evolution of the

  1. Existing Structure

Brocher Pty Limited consists of two complimentary sectors, the Research and Development division (R&D) and the Manufacturing Division.  R&D’s responsibilities were three fold, including responsibility for the invention of new veterinary drugs, the further development of existing drugs in their portfolio and the development of veterinary varieties of human drugs on the market.  The manufacturing division were responsible for the efficient and effective production of high quality pharmaceuticals engineered by the R&D team.

As a result of consolidation, both of these functions had been brought together under the one roof.  The organisation adopts a Functional Structure headed by a Corporate Body.  Corporate is lead by the Managing Director (Fred Hartford).  Reporting to the Managing Director is Bill Neal, the General Manager of Operations.  Under this, the organisation is broken into two functions, R&D and Manufacturing headed by the Research Manager and Production Manager respectively.

Until recently, the research manager had two Assistant Research Managers (ARM) reporting directly to him, giving him a span of control of 2.  Each ARM was responsible for another six laboratory staff giving them a span of control of 6, with the division being made up overall of three levels.  However, as a result of the recent departure of both personnel occupying the ARM roles, the decision was made not to replace the ARM’s and reduce the Research divisions number of levels to 2 and increase the span of control of the research manager to 12 thus reducing the Overhead in the division to 0.08.  (In addition, the research manager had a number of support staff (3 technical staff and 3 secretaries reporting to him as well.)

The Manufacturing Division followed a similar three level structure only the Production Managers span of control extended to 7 Production Supervisors, each to who approximately 12 factory workers reported.  This resulted in an overhead of 0.095.

It is difficult to draw conclusions about the structure of the marketing function and how the Marketing Director influences decisions in the company.

The Burns and Stalker (1961) theory of organisational structure can be drawn on to characterise the existing structure within Brocher Pty Ltd.  Burn and Stalker distinguish between a Mechanistic and Organic structures and highlight key attributes that distinguish between them.  

In additional to the functional structure the organisation operates highly mechanistically across both functions.  Overall, authority is centralised and corporate has the responsibility of providing strategic direction, and allocating funding.  The operational decisions supporting the strategic direction are made at the General Manager level.  It is then the responsibility of the functional managers to ensure execution of such decisions via their team of factory or laboratory workers.  Role responsibilities of these subordinates are clearly defined and monitored and behaviour inappropriate to the role is discouraged.  Employee participation in decision making in low.  This reflects the centralised, command style nature of the operation.

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Information flows in a vertical direction down (and up) the clearly defined hierarchy and co-ordination (which organisational success relies on) between the two functions is the responsibility of the General Manager.  There are mechanisms in place to ensure communication is standardised and information flow continues in a vertical nature.  Tasks are highly formalised resulting in low task variability and low levels of innovation.

  1. Contingencies and Misfit at Brocher Pty. Ltd

How an organisation is designed is dependent on many internal and external factors called contingencies.  The degree of uncertainty surrounding these factors dictates how an organisation should ...

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