Company Structure

Structure is the pattern of relationships among positions in the organization and among members of the organization.

Company A and company B are both the business organization in term of manufactures. They manufactured different kind of product. Shirts and blouses in a limited range of tradition styles are Company A’s products and B is a specialist producer of Health, Fitness and Beauty products. Therefore, the structure is not the same between them.

Company A’s operating in functional structure because it only makes shirts and blouses, and it needs to keep a high standard and a uniform production. In addition, the functional structure keep each department centralizes on its well-defined roles and operating procedures. The functional structure best suits this company because it needs its employees adept and efficient at making blouses and shirts, which should results in higher productivity and higher profit margin.

Jack Pitts, who started the company in 1977, has consistently developed the company’s organizational culture, which is a combination of values and beliefs of its employees. He faithfully followed the principles of Scientific Management. The worker was paid on a “basic + bonus” system. In addition, Jack Pitts is a strong character, who runs his company in functional structure to maximize productivity and efficiency.

As a Managing Director, Author Pitts wants to change the organizational culture of the company by trying to introduce “softer” management style than that of his father’s.

Span of control which “refers to the number of subordinates immediately reporting to a superior official”. Company A has 580 employees with a managing director, while company B has more than 1,000 employees. The span of control is wider in company A than company B. The reason is that the superior in company A is in charge of fewer subordinates than in company B.

The division of work in company A is divided by function: production, marketing and sales, finance, research and development, and personnel. Following a formal structure, each department has its own manager department and report to the managing director. “The span of control concept and the scalar chain of command or organization hierarchy have implications for the shape of an organization”. Based on this, in company A there are four levels of managements. There are MD, Department managers, Supervisors and Workers. This is the flat organization with small level of hierarchy and a wide span of control. The flat structure in this company brings them some advantages. Firstly is the communication easier between managers and their staff. Secondly is more opportunity for delegation and also lead to the efficiency teamwork. Moreover, the fewer level of managing, it helps the company in saving cost, speed up communication, as well as easier to control.

Company B, established over one hundred years ago, employs more than 1,000 people and has three divisions: Healthcare-Hospitals and Primary care, Healthcare-Consumer Retailing, and Sports and Fitness. Each has departments for Accounts, Production, Marketing, and Personnel. The managing director, Felix Addison, has oversight of all three divisions. This company operates in a matrix structure because there is a strong emphasis for teamwork and project. A person working on a project can have many bosses, and the project can cover the span of the whole company, division, or department.

Felix Addison feels that all activities within the company are interdependent, meaning they connected and linked to one another. Thus, clear policies and procedures, which minimize miscommunications, across the company increases efficiency and productivity. Moreover, transactions between other organizations will be effectively handled with minimum errors. Through teamwork and project, company B, operating in a matrix structure, operates efficiently with effective communication and system of management.

In brief, both of them are good structure. However, the matrix structure is more flexible. Within the functional structure, expertise is pooled