Leader In Actions

Leader in Actions

Hai Ho Nguyen

University of Phoenix

ORG 502--Human Relations and Organizational Behavior

Siamak Moayedi

Grey Scott

October 3, 2005

MEMORANDUM

To: Seagraves, Irene, chief executive officer of Smith and Falmouth

Cc: Moayedi, Siamak

From: Nguyen, Hai Ho

Subject: Organizational structure and leadership

Date: October 3, 2005

According to McShane and Von Glinow, "organization structure refers to the division of labor as well as patterns of coordination, communication, work flow, and formal power that direct organization activities" (2003, p. 446). The purposes of this memorandum are to identify and describe the formal organizational structure of the Smith & Falmouth (S & F) company. The S & F is a tele-shopping and mail order network that has operation in the United States and Canada. The memorandum also compares S & F's structure with other organizational structures, analyze the effectiveness of the S & F organization's informal culture with the formal structure. The memorandum also assesses the informal culture of the S & F's company, determines its impacts on the formal structure, and discusses the role of power and politics within the organizational culture. In addition, the memorandum will demonstrate the power and politics within the S & F culture and recommend the most effective leadership style to Irene Seagrave, chief executive officer of the S & F.

In terms of labor and coordination, the formal structure of S & F was coordinated through informal communication under a formal hierarchy that included sharing information on the mutual task between the three managers and the chief executive operation. According to McShane and Von Glinow (2004), the Hierarchy assigns legitimate power to individuals for directing the work flow. In terms of elements of organizational structure, S & F was a flat structure with a wide span of control. Even though the structure was centralized, S & F had been operated as a decentralized company, in which the operational manager and the logistics manager coordinated with each other and did not report directly to the chief executive of operations. In terms of departmentalization, S & F created a division structure under product and service structure, which the chief executive operation has legitimate power toward operational service to operation manager, marketing manager, and logistics manager for production purposes. The S & F was also operated under the matrix structure. According to MsShane and Von Glinow (2004), a matrix structure creates the unusual situation in which employees have two bosses. For example, both the logistics team and the operational team employees have to report to two managers: the operational manager and the logistics manager. In summary, The F & S's formal operational structure was constructed under matrix, centralization, hierarchy, and flat structure, with concentration on the production.

The organizational structure of S & F was less coordinated management compared to the mechanistic structure that was used by McDonal's. Mechanistic structure has a narrow pan of control and high degree of formulization and centralization (MsShane & VonGlinow, 2004). If the S & F applies this structure, the CFO can limit the decision making of the operation manager and logistic manager, which give him more control over the entire operational process. This structure will benefit the company highly when the company has smart and fulfilled management capacities leaders. Mechanistic structure also has a tall hierarchic structure with vertical communication flows (MsShane & VonGlinow, 2004). This structure assists the company to divide the management power and specialize the duties toward the middle and operational management levels. However, mechanistic structure requires higher investment in management. In contrast, team-based (lateral) structure requires much lesser management investment.

The organizational structure of S & F had a lower degree level of employee empowerment compared to the team-based (lateral) structure. According to McShane & Von Glinow (2004), lateral structure was applied by the Criterion Group. The lateral structure has few organizational levels, so it is a very flat structure with horizontal communication. This organizational structure benefits organization finance because it enables the company to save budget in managing the human workforce. This structure is also adopted to create a self-directed work team and empower the company's employees.

Besides formal organization structure, informal organizational structures can influence the effectiveness of the formal structure. According to Cesafsky and Morton (2005), formal cultures are rules, regulations, and company's structures. Informal cultures set of the tone and atmosphere in the workplace. In order to best fit in a new informal culture, one should be aware of the way other employees act and dress, casual or formal? Who does the company serve? And who is one's team? Without acknowledging the informal culture of the company, an employee will look lost and be isolated from others. The different informal culture of one employee creates a barrier in communication between the employer and other employees, which can lead to lower productivity or failure in the operational role of that individual. Failure in operation directly leads to formal culture productivity goals.

According to Jack Welch (2005), the most famous leader of General Electric, a leader needs to recognize not only him- or herself. "It's about building a team and recruiting and keeping the best players. It's all about them. Energize them, challenge them, execute, and get the job done. Show more passion, care more... Pick great talent. Weed out the losers" (p. 1). Welch has applied the informal culture action to empower his employees which has led to the long-term success of General Electric. Welch was also one of the few leaders who have focused on recruiting and training good leaders who had passion, intelligence, energy, edge, execution, and engagement. He believed that an employee who did not share company values needed to go. Again, these informal cultural strategies lead to the successful