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Traditional hierarchical structure and its shortcomings

Question:

Discuss about the Critical Analysis of HiTechIndustry Structure for Goals.

HiTechIndustry processes and deploys high performance and high-end technology that is used in all telecommunication firms in the whole world. The organization produces Products that assist mobile phone stations to add more values to their range of brands and signal strengths to their esteemed customers without necessarily adding more power. The firm is located in Brisbane but conducts business networking all over the world. Over the previous years, it has been using the traditional hierarchy. The above type of organizational structure is outdated and despite its advantages, it also has several implications that have made the organization to think of changing the structure. The first impact is that the innovation is stagnated as communication flows from the top going downwards. When innovation deteriorates, the management suffers, and collaboration seizes to exist, (Hatch & Cunliffe, 2013). The business also becomes sluggish as creativity is not embraced. Management functions in this organization involve solving problems critically, motivating the workers and ensuring that the firm realizes its goals and objectives.

This is a hierarchical type of organization structure, whereby information flows from top management to the subordinates and vice versa, (Bolman & Deal, 2017). In this structure, there is a lot of rigidity in decision making, and most of the times the subordinates only follow the decisions made by the top-level management, (Bolman & Deal, 2017).

Traditional organizational structure relates closely to the bureaucratic theory of management, whereby the decisions made by the top managers are to be followed, and the subordinates must observe strict adherence to the rules, (Foss, Lyngsie & Zahra, 2013).

HiTechIndustry uses a traditional organization structure. Therefore, it is primarily exposed to the shortcomings of this type of structure as discussed below:

Message distortion within the organization: As orders move from top level of the management to the lowest level in the traditional structure, the message may be interpreted in different ways such that every supervisor can understand the original message differently, (Hatch & Cunliffe, 2013). In case the employees have issues that they want to raise concerning the organization, the problems and complaints may reach the top level management after going through so many steps leading to delays, (Hatch & Cunliffe, 2013). The employees may, therefore, feel dissatisfied with their complaints have to pass through the supervisors and managers before they are looked into by the management. This complicated process may make the message to be lost or get distorted along the chain.

Recommendation for a project-based structure

Lack of individual authority: The authority in traditional organization structure is given to the position one holds rather than to an individual, (Csaszar, 2012). Therefore, the individual managers who run the organization do not earn the personal respect they deserve but instead inherit it due to their positions. It also calls for regular checking of the effectiveness of the persons working in different positions in the organization to affirm whether they have the skills that are required for the job, (Csaszar, 2012). This demotivates the managers, causing lack of commitment to the firm.

Long decision-making time: The decision-making process is always slow in the traditional organization structure as there are many management hierarchies, (Bolman & Deal, 2017). Businesses that have many levels of management take time before coming up with the final Decision, (Bolman & Deal, 2017). Managers in different offices also take time while trying to weigh the issues. In HiTechIndustry, the organizational structure is the traditional hierarchy that has various channels of management thus is affected by the longtime decision making. This made some managers propose that the senior managers come up with some decisions without consulting the rest of the managers. However, the proposal did not work as some of the managers in the lower levels felt that their opinions were being ignored.

Inhibition of globalization: In the traditional organizational structures, decisions are always made in the headquarters, (Gulati, Puranam & Tushman, 2012). This is disadvantageous to the global economy since the people on the ground in different local countries require the authority to make decisions to adapt to any proposed company strategy. Such issues are likely to drive away the global customers leaving the firm with the choice of becoming a local company, (Bolman & Deal, 2017). Therefore, HiTechIndustry being a global company needs to change its organizational structure to maintain its global business structure.

Over-specialization: In a traditional organizational model, the employees tend to limit themselves to one responsibility leading to over-specialization, (Hatch & Cunliffe, 2013). The phrase-' it's not my job' will become familiar as the employees will only concentrate on what they feel they can do best, (Hatch & Cunliffe, 2013). This creates spontaneity. Also, to earn good performance reviews, employees will concentrate on one task thus leading to over specialization since they are reluctant in taking other responsibilities.

After considering the above issues, I came up with the recommendations and the favorable organization structure that HiTechIndustry should adopt. The firm should adopt a project organizational structure to escape the problems posed by the traditional model.

Benefits of a project-based structure

In a project organizational structure, the organization identifies a specific project and allocates it to one project manager, who oversees the whole process of project development and execution, (Too & Weaver, 2014). HiTechIndustry majors on innovation as its key capability. Therefore, it comes up with different innovative technology systems which need to be carefully developed, monitored and maintained. Therefore, each system developed should be put under control of a specific project manager. This can be represented in a chart as follows:

The above organizational structure allows vertical coordination rather than the horizontal relationships. The flow of work depends on the distribution of the employee's talents and abilities, (Too & Weaver, 2014). It adopts an administrative theory of management as each project will be put under one administrator. There is also a division of labor, whereby each employee is assigned duty. For instance, in the above chart employees duties may be informed by developers, analysts, testers, and designers. As explained by Too & Weaver (2014), the structure has unique features that make it appropriate for most firms. These features are discussed as follows:

There are specific goals and target dates for completing different tasks: This eliminates any confusions and misinterpretation of duties.

Each work is special and unique to a specific group: The individual tasks are assigned to various project managers, who conduct the whole process of planning and executing the particular functions.

Division of labor and specialization: This makes the employees more conversant with their duties hence encouraging creativity and innovation.

There is no repetition of work in this kind of organizational structure due to high specialization involved: In traditional organizational structure, the employees are picked randomly, and some may not be familiar with the tasks being issued to them, (Hatch & Cunliffe, 2013). However, in project organizational structure the project manager explains to the employees what they need to do and the time that the task will be performed. This will help the employees in HiTechIndustry to be more conversant with their jobs hence reduce chances of making errors.

Conclusion

In a nutshell, the traditional organizational structure is faced with several weaknesses such as message distortion, lack of authority, delays in decision making, globalization problems and overspecialization. It is, therefore, not appropriate for HiTechIndustry. As the firm has grown over time and relies on innovation as a significant competitive strategy. However, I have found out that the company can escape these limitations if it adopts a project organizational structure. This finding has been necessitated by analyzing the benefits of the project organizational structure which include: specification of goals, a division of labor, and avoidance of repetition of work. The primary assumption used is that the firm needs to escape the weaknesses of a traditional organization structure.

  • The firm should abolish the traditional organizational structure. This will enable it to escape the challenges posed by the traditional model. It can do this by discussing with the management and consulting the employees.
  • The firm should adopt the project organizational structure. It can do this by actively involving all the managers who will be assigned specific projects and identifying relevant employees who will be allocated to each project.

References

Bolman, L. G., & Deal, T. E. (2017). Reframing Organizations: Artistry, Choice, and Leadership. John Wiley & Sons.

Csaszar, F. A. (2012). Organizational Structure as a Determinant of Performance: Evidence from  Mutual Funds. Strategic Management Journal, 33(6), 611-632.

Foss, N. J., Lyngsie, J., & Zahra, S. A. (2013). The role of external knowledge sources and  Organizational Design in the Process of Opportunity Exploitation. Strategic Management  Journal, 34(12), 1453-1471.

Gulati, R., Puranam, P., & Tushman, M. (2012). Meta?organization Design: Rethinking Design in Inter-organizational and Community Contexts. Strategic Management Journal, 33(6), 571-586.

Hatch, M. J., & Cunliffe, A. L. (2013). Organization Theory: Modern, Symbolic and Postmodern Perspectives. Oxford University Press.

Too, E. G., & Weaver, P. (2014). The Management of Project Management: A ConceptualFramework for Project Governance. International Journal of Project Management, 32(8),  1382-1394.        

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