The purpose of this research is to identify different organizational designs within different organizations. You will do this by looking at different company’s organizational designs and structures and how that design and structure helps the organization to achieve its business objectives.
Instruction
In the Response row, each team member must identify at least two companies that have different organizational structures and designs.
- In the Response row, identify whether the company has been successful or unsuccessful.
- In the Response row, explain how the company used its structure and design to achieve its business objectives.
Response
The two companies chosen for analysis in the current paper are General Electric Company and Dow Chemical Company. Both companies have properly developed organizational structures and manage to succeed in the markets they operate in due to this fact (Ashkenas, R., Ulrich, D., Jick, T., and Kerr, 2002, p. 67).
General Electric is a US-based company specializing in offering electronic goods and services to its customers around the world. The data presented by Grant (2004) prove the fact that General Electric has lived through certain hard times in its development connected with the global economic recession and the crisis in the company’s organizational structure (p. 337). The point is that the reform of the organizational structure, the change of the CEO, and the new approach he used to the electronic goods and services business allowed General Electric to recover from the crisis and to currently be one of the most successful companies in the world. The strategies allowed General Electric to become successful and earn over $7 billion in goods and services sold by the end of 2002 (Grant, 2004, p. 350). To achieve this success, General Electric reduced the number of employees, especially at the senior management level, eliminated the obviously unnecessary intermediary levels of management that slowed down the communication of employees with the CEO and senior management, and introduced a more vertically oriented structure in which HRM and resource allocation decision-making rights were equally distributed among the corporate structure levels involved (Grant, 2004, pp. 344 – 345).
The case of Dow Chemical is somewhat different as this company has been successful and permanently developing through many years dealing in the market of chemicals around the world. According to Davila, Epstein, and Shelton (2006), innovation is a sure condition of the company’s success because if the company’s management is not afraid of change it can always catch up with the modern market reality (p. 87). Thus, Dow Chemical has been on the wave of success due to the regular innovation introduction to its organizational structure. Bontis (2001) discusses two of them including the use of patents for measuring the intellectual capital of the company and the reform of the organizational structure of the company that made Dow Chemical into a mix of the horizontal and vertical organization with the predominance of the vertical structure (Bontis, 2001, p. 56). Thus, the timely reforms of the organizational structure and the introduction of adequate modern business policies, like intellectual capital measurement, allow Dow Chemical to stay at the top of the international chemicals market.
The conclusion that can be drawn from the above data is that the properly managed and timely modified organizational structure is the major factor conditioning the organizational success in the market. The examples of General Electric and Dow Chemical prove to illustrate how the proper organizational structure can either help recover from the hard times or develop business success further.
References
Ashkenas, R., Ulrich, D., Jick, T., and Kerr, S. (2002).The Boundaryless Organization: Breaking the Chains of Organization Structure, Revised and Updated. Jossey-Bass.
Bontis, N. (2001). Assessing Knowledge Assets: a Review of the Models Used to Measure Intellectual Capital. International Journal of Management Reviews, 3(1), 41 – 60.
Davila, T., Epstein, M., and Shelton, R. (2006). Making Innovation Work: How To Manage It, Measure It, and Profit From It, First Edition. Pearson Education, Inc.
Grant, R. (2004). General Electric: Life After Jack. Robert Grant Copyright, 336 – 353.