I would like to start by saying that any corporate organizational structure depends on the product line and the industry in which the company operates. The companies belong to the continuum of either the functional or project organizations. Functional companies are organized around different technological processes. The top management of such organizations is responsible for the resource allocation, with the responsibility for the final output is not being tied to one single person.
The use of rules and procedures, instructions, details and organizational traditions among the company’s management and workers is vital for the company’s functioning. The products belong to the high level of specialized knowledge which is created in this organizational structure (Matteson, 53). Light weight matrix organizations are functional and specialized. The product manager is usually added to this structure to coordinate the product creation and to serve as a liaison for the management-workers-customers. This new key person is used for collecting information, conflict resolution, and project objectives achievement.
Product managers have less status and influence than functional managers, namely because they do not directly contact workers (Hersey, 88). Heavy weight matrix organizations possess dominant project structure and minor functional departments. The company’s product manager than possesses greater reasonability while the manufacturing, and marketing concepts are present in this organization (Berger, 144). Project organizations are located on the other end of the spectrum and have the following features: teams and projects. The project workers share the same location and concentrate on the same projects.
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The professional workers, on the other hand are supposed to have broader tasks and associated skills and responsibilities. In the project organizations the functional managers are responsible for the human resource development and technological implementation in the functional groups. The companies can also be classified according to the nature of their business and project undertaken. The projects can be characterized by the number of employees involved to perform numerous tasks, the workload on each employee. One can also classify the organizations in the following 4 categories: I.
The company’s product is not complex and comprehensible for a single person, thus one person is likely to have enough knowledge to produce it. The companies that develop these kinds of products (shoes, clothes industry) usually have small development department. If this company has more than one individual department, then it usually structured as a functional organization as noted earlier in the essay – research paper (Matteson, 57). II. The company’s product is of low complexity, yet the total work is high. Such products, therefore, can be developed most efficiently within one functional department.
A research department is usually the very department where this type of product is created. AS the company starts to have more departments, it would usually use the light weight matrix organizational structure to enjoy efficiency. The employees involved in this product creation are expected to work full time, and many tasks are expected to be performed simultaneously which contribute to the overall sequence design to be called Design Structure matrix (Hersey, 92). III. The company’s product is of high complexity of intangible, tangible, or mechanical nature.
This kind of product is still in the engineering phase, making it rather clear what needs to be done to get the product into mass production and distribution. One should use numerous skills and disciplines to create this product, and these tasks do not have high workload. It is almost impossible to cause the employees to work fulltime on the very one product, thus creating the ‘job shop’ logistics situation (Schermerhorn 120). One should not forget that manufacturing and product development is not accepted by all product managers, it still usually yield decent result.
The Product development process is constantly learnt and improved to remove bottlenecks and reduce the product variation. One should focus on the process rather than on the list of tasks and duties. This type of organizational structure has to follow the following three laws (Berger, 147): a. Taking smaller steps at one time usually boosts quality and effectiveness. b. Elimination of bottlenecks drastically improves productivity and efficiency. c. Elimination of variation will remove delays and distractions and thus will free some of the corporate resources.
It is of importance to note that cross functional simultaneously run engineering squads is the common practice for the product development in such organizations. It would be a mistake to assign the same person to 5-6 different projects because it would result in congestion. One should not forget that by working at 100% of the product development capacity will increase the product development lead. Thus, one should deploy about 80% of the product development capacity and focus on the bottlenecks. IV. The company’s product is very complex while the total work is high.
These kinds of organizations require their workers to work full time and the project organizational structure would be ideal for this very situation (Matteson, 59). Speaking about the company’s strategies that are vital for the corporate survival in the long run, one should remember that they would also depend on the corporate structure and thus would be broken down into three main categories of strategies that promote corporate values, corporate culture, corporate goals, and corporate missions (Hersey, 94): Corporate level strategy encompasses all strategies and sets the company’s mission and general guidelines.
Functional strategies comprise Marketing strategies, financing strategies, and the strategies of each department participating in the given product development depending on the organizational structure. The focus in on mid and short term. One should remember that many companies would find it useful to use strategic business units rather than functional structure of organization to derive competitive advantage and thus govern the semi-autonomous units of organization that have their own budgeting, product development, hiring etc.
Operational strategy is located on the lowest level of each organization simply because it is very narrow in focus and has daily scheduling criteria. This strategy obeys the higher level strategies present within the organization and adhere to the Management by Objectives principles (Berger, 150). Management by objectives (MBO), one should note, is the systematic scientific approach that allows the existing companies to focus on the attainable goals to reduce the costs and with the improved efficiency survive the competition.
The MBO focuses on results, rather than on the process. The MBO would delegate tasks by dictating the proper final result without the detailed roadmap of how to achieve that. MBO strives to assure that everyone in the company has clear goals and objectives that coincide with the company’s goals and then by empowering others will have the goals achieved. One should still remember that MBO can fit only the knowledge-based companies.
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