Organisational Structure, Contemporary Management, Leadership, Strategic Management - Essay.

A. Explain three different types of organisational structure.
B. What are the advantages and disadvantages of each organisational structure

A. Explain what is meant by the term "Contemporary Management".
B. Explain any two Leadership Theories. 

A. Define what is meant by the term "Strategic Management"
B. Using a start-up organisation of your choice, outline 3 strategic objectives for such organisation.

The Importance of Organisational Structure

Attainment of fixed objectives is the reason for organisation’s coming into existence. Organisations need to control and direct their activities for proper fulfilment of these objectives (Baligh, 2011). Organisational structure is the line through which authority travels with in an organisation (Nelson, 2013). Communication about tasks, rights and duties etc. also travel through organisational structure. Power, role and responsibility of each member is assigned through organisational structure and accountability and responsibility is also assigned through it.

Organisations structure helps these organisations to channelize their activities properly in order to achieve the objectives. It also helps in horizontal and vertical communication with in an organisation  (Baligh, 2011). Organisational structures can be managed through effective decisions at the management level. For this purpose organisations formulate strategies (Jex, 2014). Strategizing for the organisation is the role of strategic management. Strategic management is the function of the organisations which formulates objectives and ales plans for the implementation of these objectives (Bamford & West, 2012). Management of an organisation entails all such activities which help in achieving the strategic objectives.

Hence, it is important for any organisation to understand and implement proper objectives and strategies along with and effective organisational structure to achieve the objectives.

Organisational structure defines the framework in which an organisation functions and tasks are allocated to the workforce (French, 2011). Proper organisational structure also helps in coordination of all the organisational activities.  Different organisations follow different types of organisational structure. Chief among them are-

Functional Organisational structure- Under this structure organisation has smaller groups having independent functions. For example, finance, IT, Operations or Marketing (VanDan, 2012). All functions are headed by a functional heads. Generally, all functional heads report to the managing director or the CEO. Functions are also termed as departments in some organisations.

Divisional organisational structure- Under this structure, organisational activities are grouped into divisions (Cummings, 2015). These divisions can be products or geographical areas. Each division would have its own functions or department. For example, a multinational company can have divisions based on countries and each division pertaining to individual country would have its own departments like marketing, IT or sales. Divisional structure is very useful for big companies as it makes the operation manageable.

Matrix Structure- Under matrix structure, reporting relations with in an organisation are set as a grid or a matrix (Jones, 2013). Generally, employees need to report their activities and get directions from both a functional manager and a divisional or a product manager (Daft, 2015). For example, an employee working in product design may have to report to a country specific division manager and to the product manager of the product he designs.  

Types of Organisational Structure and their Advantages and Disadvantages

Organisational structures are chosen based on need and size of the organisation. Smaller organisations use functional organisational structure while large organisations use divisional and matrix organisational structure.

Firms choose a structure which is suitable to their size and objectives (Baligh, 2011). Each organisational structure has certain advantages and disadvantages.

Major advantage of functional structure is that specialized departments handle the activities and firm moves towards realisation of objectives in a unidirectional way (Cummings, 2015). It can help in attaining high level of efficiency from staff members who are very skilled in their functional areas (Cummings, 2015). A major disadvantage of this structure is that when different departments have to work in coordination, workers may find it difficult to coordinate and cooperate with other departments.

Divisional structure is advantageous to large organisations because these divisions are self-sufficient and focus one product or country (Cummings, 2015). It also leads to work culture of cooperation with a division. Divisions may become disadvantageous if they start competing with-in themselves instead of focusing on organisational goals (French, 2011).Additionally, divisions may propagate compartmentalisation which may lead to incompatibility while working with other divisions.

Matrix system has come into effect to remove compartmentalisation of decisions (Daft, 2015). It leads to dual focus by employees on both divisional goals and functional efficiency. Matrix structure allows for sharing of information among functions in a division. The disadvantage of this structure is that, dynamism and dual reporting of this structure may give stress to the workers. Also dual authority may lead to conflict of task allocation and appraisal of tasks

Therefore, various structures have their own merits and demerits. Firms should choose a structure based on its needs and size.

The term contemporary management refers to management practices which are used by organisations in the current times (Georg, 2016). The term contemporary management refers to a shift in current management practices as opposed to the past. The present times are extremely dynamic. Consumer choices have become varied and information travels very fast due to revolution in information technology (Griffin, 2016). Therefore, in modern times firms have to be vigilant while formulating policies and have to strategies and plan based on current and counterpart trends.

With rapid globalisation and fast changing fashions and trends along with major growth in e-commerce, firms can no longer think in the terms of older compartmentalised single strategy for a group of customers (Handy, 2011). There is a paradigm shift in competition and consumer choices due to the digital revolution, leading the firms to come up with better management and marketing methods.

Contemporary Management Practices

Earlier, firms used to manage themselves based on role culture. People were given roles and they had to perform a specific task. But in changing times firms have to motivate employees to think out of the box and generate new ideas in order to meet the ever changing expectations of the customers (Handy, 2011). In the new digital driven world the firms have to come up with new marketing strategies like online marketing, social media marketing, hosting online seminars etc. to woo new customers (Jones, 2013). Therefore, in the modern world firms need to be more efficient and proactive to survive.

Leadership is an ability of a person to guide, lead and influence a group of individuals or an organisation to follow his view, thinking and philosophy (Boonstra, 2012). Different scholars have given different theories to explain the phenomenon which makes people follow a particular leader (Northouse, 2012). Trait theory and behavioural theory are the most widely cited to explain leadership attitudes and quality.

Trait theory of leadership believes that people are born with certain traits or qualities which attract other people to them (Northouse, 2012). These qualities can be charisma, sense of responsibility, compassion etc. This theory makes an attempt to understand the personal, social and mental characteristics which make a person a good leader (Northouse, 2012). However, the theory fails to explain why various leaders have different types of qualities and still are able to lead people. No one ability or quality can be pinpointed on all leaders.

Behavioural theory on the other hand rejects the notion of inborn traits shaping the characters which cause people to follow a particular person (Boonstra, 2012). Behavioural theory considers leadership as  a result of an action that a leader takes which intrigues and appeals to a set of individuals (Northouse, 2012) .This theory believes that with adequate experience and training people can learn to behave in a particular way which attracts others to follow  their philosophy (Northouse, 2012). Behaviourism considers upbringing, environmental factors, experience and knowledge as the reason for making a leader. Therefore, both trait and behavioural theories oppose and give different reason for leadership characteristics.

Strategic management involves the formulation of objectives of an organisation and planning for their smooth implementation (Bamford & West, 2012). Additionally, the aim of strategic management is to plan all the strategies and activities which help in achieving the purpose of the organisation. In addition to setting objectives strategic management assesses competition levels, external environment, internal environment and strengths and weakness of the organisation (Frynas & Mellahi, 2015). Strategic management is executed by the upper level management of an organisation based on assessment of resources, assets and external environment affecting the firm.

The Role of Leadership in Organisations

Basic aim of strategic management is to give direction to the employees so that they can function in a focused and manner with proper direction (Griffin, 2016). Through strategic management the firm specifiers its goals and objectives to the employees and sets the roadmap towards their attainment (Bamford & West, 2012). Designing and developing plans and allocating resources for the attainment of these objectives is also another function of strategic management.

Strategic management defines the purpose of an organisation. Purpose is the reason for which a firm has come into existence (VanDan, 2012). Purpose can be profit making or maximisation of sales or any other purpose specific to the organisation (Bamford & West, 2012). Most organisations specify their purpose through a vision and a mission statement. A mission statement is the statement of intent of the organisations (Frynas & Mellahi, 2015). It describes the basic aim of the organisations and what it is doing. Strategic planning is done to achieve the mission of the firm (Griffin, 2016). Vision statement talks about how the firm will go about achieving the mission. Alternatively, it can mean a reflection on what the company wants to achieve in the future (Bamford & West, 2012). Both vision and mission are important parts of strategic management and help in creating the strategic plan for the organisations.

Organisations need to formulate objectives in order to justify their existence (Bamford & West, 2012). All organisations need an objective to clearly define the direction of its functions and activities. A start up organisation is a newly emerged organisation offering an innovative product which can lead to huge growth potential for the company (Carroll, 2012).

Coniq is a small Information technology and software company established in London (Coniq, 2017). The firm provides marketing software to its clients. The firm has been founded with the purpose of enabling business organisations to conduct their marketing activities with ease and efficiency through the use of digital platforms and software (Coniq, 2017). Firm has a potential for fast growth because there is huge demand for such software in the market.

Following objectives have been designed for Coniq to help it to grow faster in the field of software and digital platforms. These objectives are specific, measurable, achievable, realistic, and time bound so that they give focused direction to the firm

• To become one among the top 20 software development companies of UK within the next three years.
• To develop and expand operations to involve software development for brand management, marketing information system in addition to current software with in one year.
• To create more sophisticated software for more high profile companies like banking software and aviation software and market them effectively with in the next five years.
• To acquire more high profile clients including bigger companies like banks and airlines with in next five years.

These objectives are achievable and are time specific. Therefore, theses objectives will give direction to the company and allow it to grow and expand in the direction which has been envisioned.  

Trait Theory and Behavioural Theory of Leadership

Conclusion

An organisation and its employees need to know the purpose of the firm and its objectives with clarity in order to function properly. Vague objectives can lead to chaos and direction less work. Strategic management helps in understanding the strengths and weaknesses of an organisation in order to formulate specific, measurable, realistic and time bound objectives. These objectives should be communicated clearly to the employees at the onset of any task and activity. Firm should keep communication channels open so that employees can consult and discuss the objective attainment methods with each other.

An organisational structure which suits the firm can help it in driving and managing all the activities for smooth implementation of the organisational objectives. Organisational structure gives proper line of authority and channel of communication to an organisation. Therefore, it helps in proper and timely achievement of goals set by the strategic management of a firm.

An organisation should try to set up a structure which best suits its size, employee needs and goals. With measures to properly motivate employees and manage performance efficiency the firm can propel the organisation on the path of achievement of the objectives with in the set organisational structure.

References

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Bamford, C. E. & West, P. G., (2012) Strategic Management : value creation, sustaínability, and performance. New York: Cengage Learning.

Boonstra, J., (2012) Cultural Change and Leadership in Organizations: A Practical Guide to Successful Organizational Change. New Jersey: John Wiley & Sons.

Carroll, D., (2012) Managing Value in Organisations: New Learning, Management, and Business Models. Hants: Gower Publishing, Ltd..

Coniq, (2017) About Us. [Online]
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Cummings, T. G., (2015) Organization Development and Change. New York: Cengage Learning.

Daft, R. L., (2015) Organization Theory and Design. New York: Cengage Learning.

French, R., (2011) Organizational Behaviour. New Jersey: John Wiley & Sons.

Frynas, J. & Mellahi, K., (2015) Global Strategic Management. oxford: Oxford University Press.

Georg, J., (2016) Contemporary Management. Sydney: McGraw-Hill Education Austrailia.

Griffin, R. W., (2016) Management. Newyork: Cengage Learning.

Handy, C., (2011) Gods of Management: The Changing Work of Organisation. London: Souvenir Press.

Jex, S. M., (2014) Organizational Psychology: A Scientist-Practitioner Approach. New Jesrsey: John Wiley & Sons.

Jones, G. R., (2013) Organizational Theory, Design, and Change: Global Edition. Essex: Pearson Education Limited.

Nelson, D. L., (2013) Organizational Behavior: Science, The Real World, and You. New Yprk: Cengage Learning.

Northouse, P. G., (2012) Leadership: Theory and Practice. London: Sage.

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VanDan, N. v. D., (2012) Organization and Management: An International Approach. New York: Routledge.