Introduction
Organizational structure is an important determinant of the organization’s performance. Depending on the size, scope, and character of the operations, the structure can improve or disrupt the product’s quality. The following paper analyzes the organizational structure of a small business organization.
Chart Description
The chart used for the paper is a reconstruction of the organizational structure of a small business involved in the production of customizable goods. The company distributes its products online. As can be seen from the chart, the organization utilizes the vertical organizational structure. At the top of the organizational hierarchy is the company’s CEO, who is responsible for the firm’s overall success and ensures the consistency between the planned direction and the actual performance. The CEO in the organization in question has the authority to make decisions on a strategic level. An administrative assistant provides necessary assistance to the CEO, mostly in the domains of documentation. An administrative assistant in the company in question also serves as a representative of the CEO in the cases where it is necessary to communicate certain information to the staff (Reitzig & Maciejovsky, 2015). Since the assistant works mostly with the CEO, the position has the only horizontal link in the chart.
The production department is responsible for manufacturing the products by the customers’ instructions. The company does not own facilities, and the manufacturers operate in several workshops in different locations. The instructions are initially processed by the customer service department, responsible for receiving feedback and handling quality complaints. These are the only two departments that operate in coordination due to the high volume of tasks and information processed daily. Also, the company’s product is highly customizable, which introduces additional complexity to the production process and necessitates the existence of reliable communication channels between the customers and the production team (Yinan, Tang, & Zhang, 2014). The main bulk of communication is done remotely.
The remaining departments operate independently of one another and communicate either with their manager or, in rare cases, the CEO. These departments include delivery and logistics, IT and web design, human resource management, and marketing. Except for the marketing department, whose tasks include the promotion of the company’s products on the Internet, these departments are comprised of no more than four employees. The likely cause of such a policy is the current scale of the firm.
Functionality and Observations
It should be mentioned that the current organizational structure has several disadvantages. The main area of concern is the lack of meaningful communication between most of the departments. In some cases, the production department is forced to comply with the quality criteria that are irrelevant to the manufactured goods. In the same manner, the customer service department may be unaware of the planned changes in the pricing or timeframes of the production process until immediately before the implementation phase. The design of the order placement form has also been suggested to be flawed, but due to the lack of communication with the IT department, the problem remains unresolved. While the vertical structure does not discourage employees’ feedback, the organization does not have a system or individual responsible for the delivery of the feedback in a consistent manner. As a result, the majority of suggestions remain unaddressed, compromising the quality of the final product.
Conclusion
As can be seen, the selected organizational structure is only marginally compatible with its business model. The strict hierarchy, combined with a lack of communication channels, creates considerable setbacks in the value chain. Considering the scope and scale of the firm’s operations and the highly customizable nature of the product, a flat structure can be considered as an alternative.
References
Reitzig, M., & Maciejovsky, B. (2015). Corporate hierarchy and vertical information flow inside the firm: A behavioral view. Strategic Management Journal, 36(13), 1979-1999.
Yinan, Q., Tang, M., & Zhang, M. (2014). Mass customization in flat organization: The mediating role of supply chain planning and corporation coordination. Journal of Applied Research and Technology, 12(2), 171-181.
Appendix A
