Organizational Structure – Virgin America Virgin America is the newest airline created by the well-known businessman Sir Richard Branson.
He started announcing his plans to create a brand new airline in United States back in 2004. He wanted to have a major airline center in San Francisco international airport. Numerous financiers were not sure if virgin America was right place for their investments. Because of these thoughts virgin America had a tough time getting financed. After some time and problems with financing, Virgin America decided to submit all the required paperwork to the US Department of transportation so they could start flying. Many established airlines were against the Virgin America, so they decided to influence the US government against the new airline. Today, virgin America is one of the leading airlines in the US and because of the way it is structured, it is very successful. The organizational structure of Virgin America is known for being very functional. In a functional organization, jobs are specialized by department such as marketing, human resources, finance and more. This type of structure is common for both large and small business. There are three levels of upper management within Virgin America. On the board of Virgin America is Chief Executive Officer (Co-CEO) David Baxby and Co-CEO Johsh Bayliss along with Co-CEO Richard Branson. From here, there are many other CEO positions such as the CEO of Virgin Australia, CEO of virgin America, and CEO of Virgin Atlantic Airways to name a few. There are many benefits to this type of organizational structure. Since departmentalization exists within this company, executives do not have to deal with administrative work and can focus on specific tasks related to the success of the company. In addition, each functional group can focus on development within its own field. Therefore, professional standards will be higher and easier to maintain as individuals with similar job training share similar values for good job performance. However, there are also some disadvantages to a functional organizational structure. For example, since individuals within a department are specialized, individuals may be more attentive to their job function and lose sight of the company’s big picture. In addition, individuals may lose sight of quality control and customer service. However, the functional organizational design requires managers to make fewer decisions related to the success of the company and allows them to focus on their particular function which will make the company run more efficiently. The functional organizational structure is very similar to that of a matrix organizational structure. The main difference is that some managers report to more than one superior. In a matrix organizational structure, those in higher management levels also do not have to focus all of their attention on operational decisions because they delegate these types of decisions to the appropriate levels of management. This type of organizational structure is also better for employees, due to more frequent interactions with management. Since employees and managers will be able to meet more frequently and focus on specific tasks, employees will be able to learn many collaborative skills needed to function in a fast paced environment. Although a matrix organizational structure has many advantages, it also has some disadvantages. Since employees have more than one superior to answer to, they may be confused as to what their primary responsibility may be. In addition, this type of design may encourage managers to fight for power and give employees false belief that decisions are made as a group. As a result, this may slow the decision making process. In a divisional organizational structure, departments are grouped around units, products, customers, region and more. As organizations grow, functional managers may find it difficult to manage a wide variety of areas. Therefore, functions may be re-grouped into a single function and duplicate functions across the division. For example, some companies are organized by product divisions in which one manager is in charge of functions for a particular product. This comes with many advantages. For example, employees may be able to spend more time working closely on one product and not need to worry about the production of other products. Unlike a functional organizational structure, each division has several employees with different fields of expertise such as those in marketing, design, production and more who contribute to the particular division. Also, since employees have a full-time commitment to a particular product, they may be able to see the big picture of the company more clearly. Unlink the matrix organizational structure, task responsibilities are clear and managers are able to be more independent since they have the resources necessary to complete the job. Some companies are also divided by customer or by geographic regions. There are many factors that influence what type of organizational structure will best fit the needs of the company. The size of the company may determine which structure is best. For example, a manager running a small business with few employees may be able to perform all of the management functions necessary for the business to succeed. This includes marketing, finance ect. Larger businesses may require more structure to allow different functions of management to communicate and operate effectively. In addition, the stage of development of the company is an important factor in determining the appropriate organizational structure. Another important factor in determining the best organizational design is the type of business and service they offer. For example, a company such as Chevron which is one of the world’s largest corporations and they have several departments including environmental health and safety, finance, human resources, downstream, lubricants and more. It would be nearly impossible for one manager to oversee the entire business operation. Instead, functional managers are assigned specific tasks, and have employees with specialized training and expertise to work under them. By doing this, managers in higher positions can focus on other tasks. Virgin America is considered one of the leading airlines in the US. The main goal of this airline is to operate with a high frequency and with low fares and provide comfort and reliability to its customers. The success of this company is dependent on the organizational structure in which it operates. Its functional organizational structure allows for higher standard of operation since employees of similar expertise and training work together. In addition, functional managers can focus on specific tasks and not have to worry about excessive decision making. Because of this type of structure and it flexibility, Virgin America is one of the leading airlines.