The three levels community, technical and managerial can be represented in a diagram to show the interdependence and authority levels. The diagram highlights the fact that each level could not survive without the other levels.
Wyncraft
Memorandum
To: Harry Roberts
From: Ryan Johnson
Date: 5/12/04
Re: The importance of good organisational structure
Although there are many factors and constraints, which can affect a company structure there is a need to establish a framework of order and system of command by which the work to be undertaken is accomplished successfully. This implies that attention be given to the design and implementation of the company structure.
“Structure can make or break an organisations” (Mullins 2002 p.536) Organisations are groups of people brought together for a specific purpose, for this to be achieved successfully people need to be organised within the best possible structure. (Mullins 2002)
In relation to Wyncraft it is necessary to organise and formalise the company into a structure in order to expand successfully and attract and recruit new staff. Good organisational structure can be a means of dividing responsibilities and tasks equally and fairly amongst executives to ensure a simple, effective and functional process for Wyncraft.
At present it would appear that Harry Roberts has a higher responsibility level than his co-owners, it can cause pressure for one person to have the majority share in responsibility. It is not good for the company or Harry to oversee all departments and company functions, the role should be shared to ensure that quality is being produced within Wyncraft. If there were shared roles in high responsibility tasks then this could guarantee service and production are of an acceptable standard for Wyncraft.
Furthermore specialist staff within managerial department roles could provide Wyncraft with higher standards and production leaving the executives more time to concentrate on further selling and expansion.
Wyncraft Proposed Organisation Chart
There are many possible structures for organisations to use when considering producing an organisational chart, function, area, process, product and customer.
-
Function - most common structure used, involving the company being split up into departments or specialisations.
-
Area – used by large national or multinational businesses, the concept being that co-ordination is implemented from Head Office to ensure that efforts are not duplicated when different locations carry out similar activities.
-
Process – this is used when requirements for different skills are needed, for example when product is manufactured it passes through several stages requiring different skills for the stages of the process.
-
Product – This is used in large organisations or for companies that have wide product ranges.
-
Customer – this is used when a business has different types of customers who need different and specialised treatment or modified service or products.
Most organisations will structure themselves in a way that a variety of structure options are used, different departments could be structured using a different format.
In relation to Wyncraft it is appropriate to consider using chart structures that are relevant to its production and process. Although all options should be considered I propose that Process and Function are more practical in terms of Wyncraft.
Looking at the above descriptions of structure options Product, customer and area can be ruled out, this is due to the size of the company being relatively small in comparison to large multinational companies and the product range generally quite limited.
It is important to remember the main function of the company: production of environmentally friendly quality home wear, which leads on to the need for clear process and function management.
Proposed Process chart for Wyncraft:
How Wyncraft’s product is manufactured requires different departments/functions with different skills etc. The diagram above illustrates the process in which the product is made which highlights the need for a clear functional process. With a sufficient functional chart or structure then the process above can be implemented.
Departments such as personnel are necessary to be part of the company but are not necessarily part of the process involved in the production of the product. Therefore although personnel and marketing etc. need to be considered a separate structure chart is not necessary at this stage.
Proposed function chart for Wyncraft:
Organisation Functions
An organisation consists of departments they usually take the following format:
-
Personnel – the function of Personnel is typically to control recruitment, provide staff training, promote legal and safety requirements and create policies and procedures.
In relation to Wyncraft personnel Yvonne manages issues and although she does not work full time for the company she takes a leading role in this department. Harry oversees this department and manages this role if necessary to cover any period of time Yvonne is not present. Being a company that only employs 48 people many of the typical functions of a Personnel department are not carried out. The kind of issues Yvonne would deal with within Wyncraft would be the less formal and personal aspects of Personnel for example staff absence etc.
-
Production – typically the function of the production department includes manufacturing the product, establishes priority order for consumer demand, works within standards and budgets and maintains flow of production.
In relation to Wyncraft the main focus for the company is production, the list above does reflect the function of this department in Wyncraft well. The production department is responsible for cutting; shaping, drilling and preparing all the wood used in the production of their home wear products. They are heavily reliant on machinery and control machinery maintenance and must adhere to safe practice as well as storing and controlling materials.
-
Sales – typically this department sells the product and continually looks to expand and increase sales for the company.
In relation to Wyncraft Harry mostly undertakes this role and concentrates on targeting major department stores and smaller (high quality) independent china/gift stores. Sales for Wyncraft is different to most organisations as selling direct to customers would actually most likely loose custom for the company. Sales for Wyncraft are expanding overseas due to the success of their web page; the main function of this department now is to concentrate on expansion overseas to supplying to the major department stores.
-
Marketing – generally consists of establishing consumer demand, promotes the product, examines the market and conducts market research.
In relation to Wyncraft it seems apparent that there is no actual department for this function. Harry oversees this role and perhaps as part of his sales he also implements some form of marketing, however as Wyncraft is a small company it is realistic that there is no specific marketing department. Strong client relationships with major department stores could provide Harry with enough knowledge on consumer demand and market research etc.
-
Finance – this department deals with all monetary aspects of the company. Typical roles include, balancing accounts, planning and expenditure, wage and salary administration and account management.
In relation to Wyncraft Yvonne is responsible for wages and accounts Harry takes control of the company accounts, all companies no matter what size need to manage their accounts and obviously pay their staff. Wyncraft does not have a specific finance department due to the small size of the company.
-
Purchasing – this department would generally be in charge of buying in materials required for production.
In relation to Wyncraft all wood is bought from sustainable Norwegian Forests and quantities are provided from the production department, the product range for Wyncraft is small and therefore no specific department is required to buy repeat materials.
-
Research and Development – this department usually provides improvement for production methods and processes through research, identifies new technology and researches new products.
In relation to Wyncraft there is no research and development department although progress has been made on the technological aspect with the implementation of the successful web page.
Interdependence between these departments can vary between companies in the case of Wyncraft where not many specific departments exist then it could be assumed that the dependence occurs without recognition. The finance department will provide obvious constraints to all departments because without funding they cannot function. The main function of Wyncraft is obviously production and without this the other functions would have no purpose. Sales department is reliant upon production and vice versa because without demand production is pointless and without production sales are not attainable.
Relationships within Wyncraft:
= Line relationship
= Functional relationship
= Staff relationship
= Lateral relationship
Staff can operate with more than one relationship an example of this is Harry who operates in a staff relationship with his secretary, a line relationship with JR and Jack Roberts and also a lateral relationship with many of the other members of staff.
