Organization Development Model
Organization Development Model
Top begin with, an organizational model or organizational structure is a tool used to define an organization in terms of its framework. It highlights the authority lines, communication channels, duties of individuals, and how to allocate resources. The organization goals always define the model. However, models vary depending on the nature of the business in question. This, therefore, translates to a dictation in the employee requirement standards. Through an organizational model, individuals are able to see their environment and the organization in aggregate. Through the organizational structure, processes and functions of various entities are explainable and identifiable. Some of the entities in reference above include branches, departments, work-groups, and sections. This, therefore, means that, it lays the standards of operating procedures and highlights the individuals to participate in the said procedures. Organizational models are traceable to the ancient times of royal kinship power, to industrial models and even today’s post industrial models.
There is a wide acceptance that, organizational models improve on efficiency of a company, when, used wisely. Since organizational models consist of model elements, it identifies complimentary jobs and relates them together through a specific chain of command. For example, if a business has sixty employees, this composition would mean that, maybe, there are six managers, each with 10 workers under him or her, working as different professionals, to achieve the targeted company goals. The 21st century organizational theorists include Lim, Griffiths, and Sambrook. They both propose that organizational model development depends extremely on strategy expression, management behavior, and worker behavior. It is, however, significant to note that, organizational models fall into the categories of either functional, divisional or matrix. In the case of functional organization models, they are traditionally company hierarchies where clustering of duties was based on functional area. Examples include sales, production, administration, marketing, finance, engineering, and even customer services. They are remarkably effective especially in business companies where execution of routine duties occur. In an accounting firm, for example, it would essentially have to distribute the other roles such as marketing, administration, and even sales, to professionalized departments within the said company. The matrix organizational model combines the functional and product model elements. This is realizable using various cross-functional teams where employees work on projects under a functional manager, and, on the other hand, a project manager.
There are various organizational structure types such as the bureaucratic structures, functional structure, divisional structures, and matrix structures. For purposes of this discussion, focus is on the divisional structure/model or “product structure”. This model groups every organizational function into a specified division. Each specified division is normally within an identified divisional structure which contains all the mandatory resources and mechanisms. The categorization of the said divisions is based on the difference in points of view. It could be on location basis or commodity/service basis. For example, a vehicle company with a divisional model might have a SUVs’ division, Jaguar division, a Ford division, and a Range Rover division for their cars. Under the above said car divisions, each division may have a separate sales division, engineering division, marketing departments, and finance departments. A divisional organizational model, therefore, usually entails several parallel groups focusing on an individual product/service line. It should be keenly noted that, unlike departments, divisions are seriously autonomous. This is because; each division has its own top manger to manage their hiring needs, budgeting, promotions, and advertising.
Divisional models are, however, not common with small businesses. It only works well for large organizations such as advertising agencies. This is because they have dedicated staff and budgets focusing on key customers or companies. Other disadvantages include office politicking by various departments at the expense of sound and clear strategic thinking. This normally affects the allocation of the available company resources. For instance, one division, will in some instances, act to undermine another. Divisions can also lead to compartmentalization, which can lead to incompatibilities. This is normally common in the software industries. Divisions are also advantageous in a number of ways. Divisions work well because; a team focuses on a single product/service.
Focusing allows building a common culture by dispersing duties across multiple departments in the organization. Large organizations, who would want to focus on a division, could instead prefer a free-standing subsidiary model. While smaller organizations, can work on substantial projects through departments dedicated to serious tasks, or even ad-hoc cross-functional task groups. Good management of divisions is, however, exceedingly vital in order to be successful. To be successful, divisions must be well managed. Leadership is a crucial success determinant factor in any industry that employs divisional model. Each division needs to be understood, and proper directions should be given at all times. The allocation of resources for use should be carefully done at all levels and departments. This can be done through having a shared pool of resources managed by a central body that oversees divisional processes.
The divisional model has in many cases succeeded. This is true because various companies such as Hastings Mall, Kin Incorporated, G & H Wire Company, and Southwire, have continuously led in their business practices based on a divisional model. Emphasis should be placed on the art of managing the company well and focusing on cost reduction. Modifications are necessary, based on the organization’s type of business. Divisions should be encouraged to integrate and work for the betterment of the organization. Company goals and objectives should act as the driving force behind any operations of a business. Divisional healthy competitions should be encouraged to enhance attractive gross margins. Lastly, company mangers should be keenly vetted to enhance a smooth synergy between divisions. Divisional structures can also be merged with product models to create the matrix model, and so, it acts as a crucial component for the other models, as well. Either way, a conclusion can be drawn that, despite the inefficiencies of the divisional model, it still proves to be an effective model due to the many success stories of companies that employed the use of the said model. It should not be discarded, but rather, it should be improved to facilitate its growth and development as a useful management structure. Growing companies should incorporate the use of divisional structure in order to enjoy its benefits.
References
Chron.com (2012) Retrieved from: http://smallbusiness.chron.com/organizational-model-22014.html on 15th December 2012.
Pugh, D. S., ed. (1990).Organization Theory: Selected Readings. Divisional Structure Model for American Companies, Harmondsworth: Penguin.
Lim, M., G. Griffiths, and S. Sambrook. (2010). Organizational structure for the twenty-first century; Divisional Structure as a Key Component. Presented at the annual meeting of The Institute for Operations Research and The Management Sciences, Austin.
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