Organizational structure is the hierarchy of the lines of authority and communication lines in an organization. An organizational structure defines how power and responsibilities are assigned to the employees and where responsibility has been delegated (Business Dictionary, 2009). The company chosen for this assignment is British Airways which is the UK’s biggest corporation and one of the world’s biggest airline companies.
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Current Organizational Structure
British Airways is governed by 6 members of the leadership team. These leadership posts include the posts of Commercial Director, Chief Information Officer, Director of Engineering, Director of Investments and Alliances, Director People and Organizational Effectiveness, and General Counsel (British Airways, 2009). These leaders basically make executive decisions but for the decisions which are not on the executive scale, the leaders are supported by 11 directors. Further along the hierarchy, the authoritative responsibilities are trickled down and a cross-functional team structure is prevalent within the organization with project-based workforces. This is generally called the matrix or network organizational structure.
In a network organizational structure communication problem are bound to exist if there isn’t understanding between the employees. And developing an understanding is difficult since every time an employee works with a different team thus problems such as de-motivation exists. Also, the time taken to settle in a new team is higher without guarantee if the team members can understand each other. The team leader needs to be assigned and thus this creates a chance for internal conflict.
For this kind of problem, it is recommended to assign a leader for a team depending on the rank in the organization and this person would lead the team always. Several of these leaders need to be identified so that chances of conflict diminish. Also, it is recommended to build a single cross-functional team for different projects rather than breaking and forming new cross-functional teams again and again.
Degree of Centralization
For this form of structure highly centralized decision making is recommended since the team leader would be making new teams all the time, it is imperative to keep the responsibility of tasks with the leader.
Alternative Organizational Structure
Alternatively, British Airways can use a simple functional organizational structure which would simplify the processes a lot by creating separate and complete business units for the type of work being done in that unit.
Although this scenario would solve the problems of team building and understandings, a greater problem of integration between different business units will be created. Since all business units will be working independently, the requirements from other units will be hard to understand and even meet them. Since only the top-level management will be communicating across units, they will find it harder to communicate the goals to the subordinates as more people would come in between the communication of that objectives thus will distort the message.
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Solutions for these problems are being found in the usage of technology in the shape of Enterprise Resource Plans like SAP. This would enable the communication channels between all business units to remain open at all levels of the hierarchy rather than only at the top level.
Degree of Centralization
A higher degree of decentralization can be exercised here since all the members of the team are from the same business unit thus have the same goals in mind thus they can be trusted and responsibility can be delegated easily.
There is no generically good or bad organizational structure. The type of organizational structure to use depends on factors such as the culture of the organization, skills of the employees, type of work, etc. British Airways has found that a cross-functional team-based structure is ideal for them and this is how they are succeeding. Problems of communication can exist in these structures however they can be solved as well with proper vision and leadership.
- British Airways. (2009). Leadership Team. Web.
- Business Dictionary (2009). Organizational Structure.