Introduction:
Structure of an organisation can impact on effectiveness and efficiency of the company, also it will influence on employee’s motivation and productivity. This will directly connect to the loss or profit of a firm. That is the difference between a company which achieves success through its appropriate systems and the other company that struggles with unwanted severe time during its activity. Organization structure is the way that a firm carry out its activities and the levels of hierarchy that people within an organization report, receive orders and the level of autonomy among the organisation’s workers. This essay will look at the case study’s primary structure, the matter of transition from that structure to a new structure after sold out, influence of the later structure and finally advantages of the recent structure.
With an attention to the ICY Foods’ start-up plan and its activity during 1999 to 2005 and then from 2005 to 2010, it is clearly identified that the ICY Foods which was a commercial family company managed by an organic structure. (Theory of Burns and Stalker 1961)
An organic structure is an informal organisation with a flat structure in which there are few level of management, not much rules and procedures, very flexible to changes, and large number of employees work under span of control of few managers, as can be seen in ICY Foods. In such organisation information is shared quickly between workers because of horizontal interaction among workers rather than vertically between levels of managers, also employees contribute in decision-making to adapt to quick changes, for example in ICY Foods managers were keen to gather new ideas from employees to improve the operation (and tasks). For example to meet the orders on-time ICY Foods operated in very casual shift rotas of night time and weekend-where needed- and encouraged employees to be multi-tasking and work in different departments depending on daily operational needs. This enables managers to be very flexible and accept any order regardless of quantity or order time, and this is a strength point of the ICY Foods in terms of providing a good service to customers which kept the customers satisfied.
(When an organisation fail to move with its environment needs it is convicted to fail) Likewise because ICY Food didn’t evolve its organisational structure during its growth to a more functional and beneficial one, during the period of 2005 to 2010 while its environment was changing, ICY Foods was not successful to find customers among large supermarket chains which were growing their share of the market - probably because of lack of appropriate Marketing department- and also receiving a few fines because of breaching new food hygiene legislation in that period of time-probably because ICY Foods didn’t have an adequate related section, the company’s sales decreased and Smiths family decided to sell it out to Megastores plc. Megastore decided to approach Icy food with a bureaucratic structure because of number of reasons. (Bureaucratic structure is defined by its formalisation, centralisation, standardisation and division of labour.)
First, new ICY Foods produced only four products to be sold only at Megastores shops and this promised fairly a stable and predictable number of orders, while a bureaucratic approach to an organisation works highly efficient, because of repetitive works with unchangeable and stable environment, and Megastores use ICY Foods as mass production line for its numerous stores. (What else?) For this purpose, they appointed directors and managers and decision making only was done by megastores head office to centralized the company’s decision, also keeping record of every activity to formalized the procedures, issues, tasks, procedures and rules (what?), each job was analysed and specialized based on division of labour(Examples?), supervisors were employed to observe every procedures. Also human resource policies and procedures were formalized regarding issues such as annual leave and employee absence.
By all of this changes, Megastores changed ICY Foods’ organic structure to a bureaucratic structure. Bureaucratic structure is where routine tasks are highly standardised with fixed procedure and rules set by technostructure section which according to mintzberg (1991) is a part among four parts of every organisation that design each job and procedures within an organisation, decision making is highly centralized where top senior managers make important decisions regarding use of action planning systems, division of labour in which each tasks and procedures are clearly specialized and be given to the operating core which is the part within an organisation who are workers that actually carry out the organisation tasks, and formalised in which generally sets the formal operations on an official basis to ensure things are done how they supposed to be done and run the business smoothly without breakdowns. (This structure usually is found in public sectors, some industry such as car industry and mature organisation which a large number of repetitive tasks are done by workers and environment is stable. (Where else?) and it is efficient because …)
The impact of this change is that efficiency within the company is improved by 35 percent, because same high quality food produce in a production line with specialized procedures and supervisors’ observance and company spent its fund on managerial advantages rather than high wages to casual and temporary staffs. Also favouritism reduced and company treated fairly and equal to all its staffs while work pressure was not an issue, because of completing big orders in short time which occurred repeatedly in ICY Foods before sold out, after Megastores take control of it.(What a weird sentence, change it please)
However staff motivation significantly decreased and it led to increase in absenteeism and labour turnover over last 6 months. It seemed that managers needed to work out how to motivate workers by using different ways such as work rotation to maximize productivity, although this is not going to be discussed in this essay.
Conclusion:
Using different approach to the organisational structures in a company can produce different results. Organic structures give a flatter structure which “empowers individuals and teams to provide continuous improvement through flexible adaption” and promotes high involvement among the staff… In the other hand a bureaucratic structure provides efficiency in production and also formalizes rules and procedures ensures the same quality, to promote control which frees managers and their subordinates from making routine decision and fastens decision making. In such a structure staff motivation can be very low which needs to be considered by managers.