Organizational Design

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There are six elements in an organizational design, or the formal process in which we integrate the information, people and technology of an organization. The first design is work specialization, or the dividing of work activities into separate job tasks. This can also be referred to as the division of labor examples can be found in companies such as Ford, Dell, Apple, Acura and many others where the count on factories to make a product. The second design is chain of command, which is, the line of authority extending from upper levels to lower levels, which clarifies who reports to whom.

This is most associated with a military structure where commands come from either a base commander down to the brigade commanders to pass down to battalions and companies. This can also be explained in the structure of management you have employees, supervisors, and managers. Next, is departmentalization or the basis by which jobs are grouped. All fortune five-hundred, “blue collar” companies will have some basis and variation of departmentalization. You will see these departments broke down into categories, such as human resources, finance or accounting, Advertising, Human resources, and sales.

Span of control is the number of employees a manager can effectively and effectively manage. In companies the span of control varies from company to company and the size of the company can be a contributing factor of their span of control. For instance, smaller companies with not as much revenue or prestige will have a larger span of control because they cannot afford to have so many higher paying managerial positions where a larger more established company will have many managers in charge of different aspects in the success and control of the employees.

Centralization happens when the decision making process is limited and concentrated at the top levels of the organization. This control can either hurt or help a company prosper. It can also be considered the dictatorship of the business community. Where you have a “Fidel Castro” making all decisions; possibly reprimanding and stifling someone’s creative or innovative ideas to help the company stay on top or move in a new direction to attract a different demographic of customers. Whereas, decentralization happens when a company will allow their lower level employees, to help, and also encourage input in decision making.

If centralization is the dictatorship of business decentralization is the democracy of business. You have a president or CEO and congress best known as shareholders working together to come up with new ideas and strategies to help the company succeed. The majority of companies who have shares are now offering them in benefit packages or even discounted by ins for lower ranking employees so they have the say so in the company they work for thus being a part of the decision making process. Read about Apple organizational structure

Finally, there is formalization or how standardized an organization’s jobs are and the extent to which employee behavior is guided by rules and procedures. Starbucks is a good example of formalization though they have adapted, just as many companies have, all aspects of the organizational structure. Starbucks prides itself on employees with ethical and moral values. To the point they have manuals given to each employee of the standards of business conduct which can be found on their website as well.

You will also find manuals on Cooperate social responsibility and Business ethics and compliance. This strategy seems to work well for the company. An area that I would say Starbucks needs to work on would probably be chain of command, when you walk into a Starbucks you have your baristas greet you but if trouble should come up a customer has a hard time distinguishing who is in charge. Sometimes if you even want to compliment the excellent service you received who would you tell to ensure that management is well aware?

Other companies have a distinguished uniform to separate managers from employees. Starbucks loves to consider their job a passion an often instead of the term employee is replaced by partner. They encourage employees to be themselves the nurture their individuality so you may walk in to find what most people will consider an unorthodox looking manager; one with a spiked blue Mohawk with piercing and tattoos. This will sometimes hinder a customer from taking them seriously or even the company as a whole.

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