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Management Summary

The report has explained and analyzed the six key elements that constitute the structure of an organization. These six core elements such as work specialization, departmentalization, span of control, chain of command, decentralization and centralization and formalization have been explained with examples from the selected organization of Apple Inc. In addition, the contingency parameters influencing the environment of the organization has also been explained from the perspective of the organization of Apple Inc.

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Introduction 

The term organizational structure typically defines or depicts the key organizational activities including coordination of tasks, allocation of tasks and supervision of the tasks. These activities are seen to be effectively directed towards the attainment of the significant objectives, goals and vision of an organization. From the perspectives of the management, organizational structure and design are said to be crucial for the success, growth and sustainability of an organization in regards to its operations in the relative industry market of choice. The use of organizational structure can be proved to be beneficial in the context of enabling an organization in effective streamlining of their core operations or activities. Division of the organization into different operational or functional levels and departments, thereby help in operations streamlining in addition to much improved and enhanced process or system of decision making. In addition, a typical organizational structure also significantly results in better productivity and performance of the workforce, which in turn helps organizations to supervise and monitor the operations of their multiple business locations (Jones, 2010). Organizational structure also helps an organization in the generation of a higher and improved focus over the overall services and support offered to the customers in addition to better forecasting and management of the sales and revenues. The following report will analyze and de4fine the six core elements that define an organizational structure along with analysis and identification of the contingency factors that can influence the organizational environment. The overall analysis showcased in the report will be supported with the example considering the organization of Apple Inc. in regards to their global business operations. 

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Analysis of the Six Core Elements Defining Organizational Structure and Design

From a management perspective, the overall structure of an organization is largely characterized by six specific core elements, which in turn constitutes the overall organizational structure and design. These six elements have been discussed in detail as below;

Work Specialization

This element signifies the overall degree or limit to which the tasks or operations within an organization are segmente4d into different job roles and responsibilities. In other work, specialization is also seen to be expressed to the overall labour division resulting in the breaking down of organizations into individual job roles and responsibilities. In this specific context, it can be said that the individual employees or staff, highly specializes in sections of the overall operations and tasks rather than completing the whole task individually. In the context of work specialization, a higher degree is considered to offer an organization with high levels of benefits and advantages. This is due to the fact that it specializes, the employees in different areas of tasks which in turn have a positive influence over their levels of productivity and performance (Zheng, 2010). ON the other hand, having a lower degree of specialization can offer more flexibility to the organization, on grounds of the employees tackling larger task arrays.  On historic terms, this element of work specialization was suggested by the management theorist Henry Ford by demonstrating the fact that the overall efficiency and performance of the staffs and employees of an organization can be improved by dividing the organizational tasks into smaller units and assignment the units as per the skill and competency levels of the employees. 

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For example; now when considering the organization of Apple Inc., the organization is seen to follow a higher degree of work specialization. In this context, the job tasks are effectively separated into the individual staff and employees specializing in different task areas.  This process is the key for Apple Inc., in the enhancement of the overall work outputs through higher employee performance levels. Now consider the role of Scott Forstal, the senior vice president (VP) of the IOS software has been only assigned with the role of working on the software of iPhones. This leads to better management of the IOS platform for Apple Inc.                                               

Departmentalization

The element of departmentalization effectively depicts and explains the overall degree or level to which the organizational tasks are seen to be divided into specific separate job roles and responsibilities. Now the element of departmentalization can be of various types namely functional departmentalization, product departmentalization, geographic departmentalization, customer departmentalization and the process departmentalization. In functional terms the job roles are seen to be effectively grouped as per the functions performed. Product departmentalization is seen to be grouping the jobs as per the overall product line (Eppinger, 2012). Considering the geographical; aspect the grouping of the jobs are seen to be based upon the respective territory of the organizational operations or activities. In terms of process, the job groupings are done based upon the product flow while in context of customer departmentalization, the job roles are seen to be grouped as per the flow of the customers. In historical terms the departmentalization management strategy was seen to be suggested in the year of 1937 by Gulick and Urwick. 

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For example; consider the example of Apple Inc. the organizational structure is seen to be highly departmentalized. In this context, the organization is seen to be focused upon implementing functional and geographic departmentalization. In the context of functional departmentalization, the organizational activities are seen to be grouped as per the functions so as to pursue higher economies of scale through the placement of the staff and employees as per shared knowledge and skills into different functional departments. On the other hand in respect to geographic departmentalization, Apple focuses upon grouping their jobs based upon geographic locations in relation to the dispersed customer groups across the global markets.                  

Chain of Command

The element of the chain of command is basically the specific line of administration or authority, which is seen to be extending from the upper levels of an organization to the lower levels of the organization along with clarification of the overall reporting. In this aspect the chain of command has some specific concepts which can be explained as below;

  • Authority: This essentially refers to the specific rights that are specifically inherent to the concerned managerial position for telling people what is expected and what is needed to be done. 
  • Responsibility: This is basically the specific obligation in performing the specifically assigned duties. 
  • Command Unity: This is basically the management principle that effectively states that individual employees are needed to be reporting to only one single manager (Ashkenas, 2015). 

The chain of command is among the basic elements or building blocks of the structure of an organization and represents the overall unbroken line defining authority from the top to the bottom level of the organization. In historical terms, the element of the chain of command by suggested by the management theorist Max Weber, whose theory of management, known to be a bureaucratic theory of management was based upon the scientific management theory as suggested by Frederick Taylor. 

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For example; considering the organization of Apple Inc.,  the organizational structure effective showcases a specific chain of co0mmand starting from the upper levels of the organization to the lower levels of the organization. IN this context, it can be said that Apple Inc., has a long chain of command starting from top-level to bottom level.          

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                   Fig: Chain of Command in Apple (source: research.net)

Centralization & Decentralization

While considering an organizational structure or design, centralization specifies that the overall power in regard to decision making in an organization is largely concentrated over a single point or level. In this context, the organization is said to be having a centralized structure and design. ON the other hand, in regards to decentralization, the overall power in regards to the decision making is seen to be spread out across different points or levels within the organization (Fan, 2013). This can help in the promotion of a highly democratic process of decision making but at the same time can reduce the pace and efficiency of the process of decision making. 

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For example; consider the example of Apple, the company is said to be following a highly centralized structure. This makes it one of the largest technology organizations across the global market. The overall decision-making process of the organization is seen to be highly effective and efficient, which leads to the implementation of high-end strategic decisions resulting in high business growth and sustainability in the market. The centralized structure can be depicted with the following diagram;

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Fig: Centralized and Decentralized Organizational Structure (source: blog.hubspot.com)

Formalization 

 The element of formalization is seen to be similar to that of specialization, with the difference that it specifies the degree or level to which the overall activities, tasks and operations are seen to be governed by the different sets of procedures, rules and others (Marquardt, 2011). The approach of formalization is seen to be seeking in separating individuals from their position and roles. This is associated with the management theorist Henry Ford.

For example; the organization of Apple is seen to focus upon higher formalization of their organizational structure. The CEO of Apple Tim COOK has nearly 13 departments working under him. Every one of these departments has its different job specifications and does not interfere with the tasks of other departments within the organization. In this context the example of a formalized structure can be explained or identified as the following diagram;

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        Fig: Example of Formal and Informal Structure (source: blog.hubspot.com)

Span of Control 

The element of the span of control effectively specifies the overall present number of levels or managers within an organization. In other words, it also determines and identifies the overall subordinate number with an organization that a superior effectively manages and maintains (Chen, 2010). From an organizational perspective, the span of control can be of two types’ a wider span of control and a narrower span of control. This specific element was seen to be suggested by Sir Ian Hamilton in the year 1922. The different spans of control can be depicted as per the following figure:

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                 Fig: Different Span of Control (source: blog.hubspot.com)

For example; now considering the organization of Apple, a wider span of control is seen to be implemented. 

Analysis of Contingency Factors Influencing Organizational Environment 

The overall environment of an organization is seen to be largely influenced by some specific contingency factors. From the organizational perspective, the respective managers have the responsibility of analysis of the contingency factors influencing the organizational environment and develop the organizational structure for fitting in the specific contingency factors. The contingency factors with detailed analysis and reference to the organization of Apple has been explained as below;

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Strategy

The implementation of the corporate level strategy within an organization is said to influence the shape and development of the organizational environment. Failure of an organization in aligning their corporate strategies with the objectives and goals or missions of the organization can lead to negative influences on the organizational environment. This can result in poor streamlining of the operations leading to lower productivity outputs (Bratton, 2010). 

Considering the example of Apple, the organization excels in the implementation of accurate corporate strategies which are considered to be among the key success parameters for the organization in the global market. In addition, the organization also successfully aligns their strategies with that of their business objectives, missions and goals that foster higher growth and development. 

Size of the Company

The overall size of the company is also said to be among the determinant factor behind the organizational environment.  The size is determined by the total number of employees working for an organization. Observations effectively suggest the overall fact that bigger organizations exhibit higher differences from the small scale organizations. These differences are in the form of labour division, regulations and protocols, budgeting procedures, performance appraisal and others. 

In relation to the selected organization of Apple, the company is among the biggest corporation across the globe. At present, the employee strength of Apple is seen to be over 120000, which makes it necessary for the organization to implement a higher degree of labour division of work specialization, better managed and monitored protocols and regulations along with implementing a wider span of control in relation to the organizational structure and design. This helps the organization in obtaining a highly positive and enthusiastic organizational structure, catering to their overall growth and development across the global markets. 

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The Business or Market Environment 

The overall environment in which the organization operates largely influences the overall organizational environment. This can have a substantially large impact on the process od decision making within the organization. This can significantly help an organization in the context of making valid and reliable decisions during times of unpredictable and uncertain business and market environment changes or variations. In addition, the overall predictability, as well as the specific stability considering the business environment, can also have a direct positive influence over the functional and operational capabilities of the respective organization. In this context, it can be said that the instability of the business environment needs to be adopted by the organizations by making them much more flexible as well as responsive (Wilson, 2013).

In the context of the chosen organization of Apple, the organization is seen to be highly responsive towards the changing market and business environments considering their business activities and operations across the global markets. In this context, prior to establishing business across global markets, the organization conducts a depth survey and adjusts to the changes in the market culture, trends and ideologies. However, the interaction among the departments within Apple is low with a higher degree of formalization in the organizational structure. This can create issues during unwanted market changes. The new CEO Tim Cook however has proposed lower formalization for better adjustability to the business environment. 

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Age of the Company

The company age is one of the key factors that influence the organizational environment. With age it is observed that an organization is able to incorporate or implement standardized procedures, systems or regulations. Just as people, the organizations are also seen to be evolving through different stages of life cycle that includes foundation, early years, middle years and organizational maturity. The different stages of the life cycle of life stages passed by the organization helps in shaping up of the organizational environment through changes in the organizational structure, policies, regulations or design that leads to organizational maturity in the market. 

In relation to the selected organization of Apple Inc, it was founded in the year of 1976 and has been operating in the global market for over 40 years. From its starting point, the organization has passed to different stages, have implemented new organizational structure, policies, regulations or design, which have to led to a higher organizational maturity in the respective market. In this specific context, it can be said that owing to its higher experiences in the market, the organizational environment in Apple is highly stable which is considered to be one of the key driving factors behind the growth, development and sustainability of the organization, Under the new CEO Time Cook some specific structural changes such as higher democracy that can help in strengthening of the business and organizational environment for Apple Inc. 

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The Use of Technology 

The use and implementation of the technology is considered to be one of the key essential contingency factors that can influence or impact the overall environment of an organization. These are deemed to be essential as it enables the effective conversion of the resources into valid and desirable outputs for the company. In this context, the use of technology also influences the overall production system of the organization (Zhang,  2013.). 

Now considering Apple Inc, the organization is well renounced for their use and implementation of higher-end technology for production and manufacturing of high-end technological devices for their niche customers in the market. The organization has a highly developed and well-equipped research and development (R&D) team that focuses upon the incorporation of higher levels of technical innovations that enables the organization to behaving properly organized and structured production and manufacturing processes which in turn differentiates them from that of their competitors in the market. In addition, the use of technology also facilitates Apple in maintaining a learning environment and culture within the organization that leads to the success of the overall organizational structure and design implemented. In addition, Apple also focuses upon continuously improving their technological resources that in turn helps in a smooth flow of the work operations as per the organizational structure and generates a positive environment that fosters high business growth and development.     

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Conclusion 

The above report has been significantly successful in analyzing and defining the six major or core elements that are seen to effectively define the structure of an organization. In addition, the report has also successfully identified and analyzed the different contingency parameters and their potential impacts or influences on the environment in an organization (David, 2011). The analysis has been explained with examples from the selected organization of Apple Inc. In this context, it can be said that the analysis effectively suggests the fact that Apple Inc. has been successful in the development and implementation of a robust organizational structure that has promoted the growth and development of the organization. In addition, the organization also effectively responds to the different contingency factors as discussed resulting in higher stability of the organizational environment.   

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References  

Aktaş, E., Çiçek, I. and Kıyak, M., 2011. The effect of organizational culture on organizational efficiency: The moderating role of the organizational environment and CEO values. Procedia-Social and Behavioral Sciences24, pp.1560-1573.

Ashkenas, R., Ulrich, D., Jick, T. and Kerr, S., 2015. The boundaryless organization: Breaking the chains of organizational structure. John Wiley & Sons.

Bratton, J., Sawchuk, P., Forshaw, C., Callinan, M. and Corbett, M., 2010. Work and organizational behaviour. Palgrave Macmillan.

Chen, C.J., Huang, J.W. and Hsiao, Y.C., 2010. Knowledge management and innovativeness: The role of organizational climate and structure. International Journal of Manpower31(8), pp.848-870.

Daft, R., 2012. Organization theory and design. Nelson Education.

David, F.R., 2011. Strategic management: Concepts and cases. Pearson/Prentice Hall.

Eppinger, S.D. and Browning, T.R., 2012. Design structure matrix methods and applications. MIT press.

Fan, J.P., Wong, T.J. and Zhang, T., 2013. Institutions and organizational structure: The case of state-owned corporate pyramids. The Journal of Law, Economics, and Organization29(6), pp.1217-1252.

Jones, G.R. and Jones, G.R., 2010. Organizational theory, design, and change.

Marquardt, M.J., 2011. Building the learning organization: mastering the five elements for corporate learning. Hachette UK.

Wilson, F.M., 2013. Organizational behaviour and work: a critical introduction. Oxford University Press.

Zheng, W., Yang, B. and McLean, G.N., 2010. Linking organizational culture, structure, strategy, and organizational effectiveness: Mediating role of knowledge management. Journal of Business Research63(7), pp.763-771.

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