Organizational Structure

1. Introduction.

2. Comparative analysis of S & F Company's formal organizational structure with other organizational structures.

3. Impact of informal culture on formal structure.

4. Role of Power and Politics.

5. Recommendation.

Introduction:

In the face of a technological revolution, the tele-shopping and mail-order

industry must develop new and more convenient ways for their customers to

purchase their goods. In the last six months the Smith & Falmouth Company

has launched an e-tailing division: Smith & Falmouth On-line. This division

is crucial to S & F's growth strategy over the next three years.

Organizational structure refers to the division of labor as well as the

patterns of coordination, communication, workflow, and formal power that

direct organizational activities. An organizational structure reflects the

organization's culture and power relationships (McShane, 2002).

Comparative analysis of S & F Company's formal organizational structure with other organizational structures:

The current organizational structure at the S & F Company is a formal

hierarchy mixed with limited informal communication between teams. In a hierarchical structure legitimate power is given to individuals who then use this power to direct work processes and allocate resources. There is direct supervision within groups. The corporate structure here is a hierarchical one, where the chain of command flows downward. This structure is different from other structures such as complete informal communication, and standardization because they are less rigid in there processes.

Many organizations try to improve the quality and consistency of a product or service by standardizing work activities through job descriptions and procedures.

Standardization coordinates work requiring routine and simple tasks, but

is not effective in complex and ambiguous situations. Additionally, informal communication is a coordinating mechanism in all organizations. It includes sharing information on mutual tasks as well as forming common mental models so that employees synchronize work activities using the same mental road map (McShane, 2002).

Impact of informal culture on formal structure

Informal communication permits considerable flexibility because employees

transmit a large volume of information through face-to-face communication

And other media-rich channels, but it can be time-consuming. Consequently,

as organizations grow, they develop a second coordinating mechanism in the

shape of a formal hierarchy. The formal hierarchy has traditionally been

applauded as the optimal coordinating mechanism for large organizations (McShane, 2002).

To achieve S & F's goal: to become a leader in the Online Sales Channels, and become a profitable unit, management must recognize the organizational structure, assess the current situation, and work together to allow for innovative achievements.

Within large organizations exists an informal culture that influences the

effectiveness of the formal hierarchical structure. Although culture is

traditionally thought of as a characteristic of the organization, and not of

individuals, it is nevertheless manifested in and measured from the verbal

and/or nonverbal behavior of individuals - aggregated to the level of their

organizational unit (Hofstede, G, 1998).

The term organizational climate refers to a set of measurable properties of

the work environment, perceived directly or indirectly by the people who

live and work in this environment and assumed to influence their motivation

and behavior (Hofstede, G, 1998).

There are many different work environments within an organization. This evident with the different tasks that teams are responsible for. Distinct "ways of doing things" are established within groups that work closely together. This may be manifested in informal behavior, beliefs, attitudes, and communication between others, especially with their superiors. As the term, informal culture, is most commonly used, it seems to stand for the basic beliefs that people in the organization are expected to hold and be guided by -- informal, unwritten guidelines on how people should perform and conduct themselves. Once such a philosophy crystallizes, it becomes a powerful force indeed. When one person tells another "That's not the way we do things around here," the advice had better be heeded (Bower, M, 2003). Too often, these values tend to be taken for granted. My point in mentioning them is to urge executives to actively seek ways of making high principle a more explicit element in their company philosophy. No one likes to declaim about his honesty and trustworthiness, but the leaders of a company can profitably articulate, within the organization, their determination that everyone shall adhere to high standards of ethics. That is the best foundation for a profit-making company philosophy and a profitable system of management (Bower, M, 2003)

The informal culture at the S & F Company is marked by group member's allegiances to certain individuals. There are cliques, clusters, and collations that are driven by a particular group leader who is entrusted as a key decision-maker. Because of S & F's new growth strategy: (to consolidate operations to increase the reach of the online sales channels and make S & F Online a profitable strategic business unit), a shift in the levels of organizational hierarchy has taken place. This