Action Realty Inc. V.S Dimitry Baked Goods

Both, Action Realty Inc and Dimitri Baked Goods, are organizations that were founded by entrepreneurs who were dynamic leaders and are seeking control over their financial freedom.

Structure:

"The manner in which an organization divides its labour into specific tasks and achieves coordination among these tasks" (Johns Gary & Saks M. Alan, Organizational Behaviour (fifth edition), Pearson Education Canada Inc., 2001). In contrast with Action Realty Inc., Dimitri Baked Goods is a very centralized organization. It is extremely flat and has little horizontal differentiation. Leakos, who is the owner, handles all the staff functions of personnel, planning, budgeting and sales.

When comparing the two organizations, Action Realty and Dimitri Baked Goods, are different in their functional departmentation. Dimitri Baked Goods has a production department, sales department, two office workers, plus the retail outlet. Action Realty has an administrative department, property management division, residential department and the commercial real estate division. After tasks that assist the organization achieve its goals have been divided between individuals and departments, they must be coordinated in order for those goals to be achieved.

Unlike Dimitri's, all the departments at Action Realty are independent of each other, which makes coordination among tasks more difficult. At Dimitri's, Leakos is the "liaison role" of the organization. This helped him succeed in achieving integration and created an environment that does not require standardization. He promotes an informal structure, by commuting with them on a face-to-face basis.

At Dimitri's, there is little supervision that is required for coordination of jobs. Leakos's organization characterizes standardization of work processes. Some of the jobs are so habitual that technology by itself supplies resources for coordination. Yet workers are allowed to specialize in many skills (creating skill variety), and also rotate their positions among themselves in order to keep themselves interested and motivated.

Dimitri Baked Goods also has a lower vertical division of labour. Leakos at the top and the line workers are at the bottom (Leakos has total control over his business). He thinks that centralization will make his business more pliable. When problems arise, he can make decisions immediately without hindrance. Leakos is a dynamic person who seizes power through hard work. A workaholic you can say.

Leakos does everything around his plant and more. He is the owner, plant manager, production manager, sales supervisor, marketing manager, product development supervisor and a production line worker non-the-less. By doing that he is able to keep a close watch on the performance of his workers without involving more hierarchical levels.

On the other hand, Action Realty has three people who are involved in the decision making process (Harvey, Paul and Merry), yet each manager makes decisions only in his/her field. In Action Realty, Merry, whose approach is different from Harvey and Paul's, uses direct supervision to coordinate the work of her subordinates, while the two Brokers give their agents freedom of action. Despite the centralized decision making at Action Realty, it is considered a relatively flat organization.

Paul and Harvey posted some ethical rules that the agents should follow in order to keep the company's reputation, but no real formalization was enforced. On the contrary, they encourage their agents to "do their best", believing that people are not intrinsically lazy and are willing to work hard. Therefore, the managers assign each department goals that need to be met in order contribute to the overall profit of the organization, thus creating standardization of outputs.

While the Brokers adopt the organic structure of management, by favouring wider spans, fewer levels of authority, flexibility and encouraging learning by doing, Marie on the other hand, who is responsible for the accounting and clerical personnel, facilitates the classical approach of scientific management and bureaucracy that together with her lack of formal education and her insufficient experience is inadequate for her position. In regard to the above and the deficiency of upward communication, employees feel frustrated, resentful and demotivated because they have no one to report to or complain about, because Marie is Harvey's wife.

At Action Realty the Brokers create a homogeneous environment through hiring. Everyone seems to have close affiliation with the Brokers either through social contact or family ties. As a result management feels that it needs to operate the system on an impersonal basis, without any bias preference, so that decisions regarding employees can be made fairly.

One of the main differences between the two organizations is the adaptivity to growth. In general, the bigger an organization gets the more it drives towards decentralization, departmentation and a taller span of control. Both organizations planned

to expand, and both of them saw it is not that easy.

At Dimitri Baked Goods, Leakos was planning to expand to the U.S, with the help of his two children, which just finished school. When he was ready to expand, he encountered domestic pressures from consumers to produce, which required him to concentrate on that so he could keep production high in order to remain in business. These pressures resulted in postponing the expansion until the production gets back to normal.

At Action Realty, on the other hand, there was a different problem. The sudden downturn of the Vancouver market of the late 1990 resulted in sales drop and serious economic decline. Unlike other firms, Action Realty was extremely influenced by the depression. Not only they left their goals of expansion, but they also began to concern if the current business level will even support the existing size of the organization.

The lack of management orientation is the perfect explanation for the structural reason behind why Action Realty does not ready for expansion and change. It facilitates exactly the opposite of strong structure that can withstand the revolution of growth.

Communication:

Communication is a major issue in large organizations. Being able to commute on a sufficient level is very important to a functional organization. At Dimitri Baked Goods, the manager is working on the floor with his employees, creating a family like environment, which results in horizontal communication between management and staff. He takes