1.1 Overview of A.M. Marketing Co. Ltd.
According to Harvard Business Review (2013), organizational behaviour is the study of the attitude and working culture of the organization. Its goal is to understand how a company can gain a distinctive competitive advantage in any market by creating a positive organizational culture.
A.M Marketing Co. Ltd is doing its business in the Automobile parts and accessories division. The main business focus of the company is within the Lubricants, Truck Equipments and Tract parts. It is a small company but the current operation and the existing expertise have the ability to take this company to the top of the list within Trinidad & Tobago (T&T).
1.2 Problem Statement
According to Trinidad Express Newspaper (2014), the car market in T&T is growing at a good pace of 6.7%. In this fast-growing market, the demand for accessories and lubricants will also be very high.
However, A.M. Marketing is currently following a flat organizational structure under the CEO’s leadership. The other issue is that as the CEO is not from an automobile background, it takes him time to provide or develop solutions for any issues.
Therefore, the main problem for the company is the longer decision-making process due to its lack of formal organizational structure.
1.3 Purpose of the Study
The purpose of the study is to understand how the organizational structure affects organizational performance.
1.4 Objectives
The objectives of the study are:
- To analyze the current organizational structure of A.M. Marketing Co. Ltd.
- To propose a suitable organizational structure for the company that will improve its business performance in the short and long run.
1.5 Methodology to be employed
This study is related to organizational structure, and to understand the organizational structure of any company, a detailed study of the organization is required. Therefore, the exploratory study will be done by collecting primary data from two of the senior-most staff members, and the collected data will be analyzed using qualitative data analysis techniques.
Chapter 2: Literature Review
2.1 Introduction
A literature review is the most critical part of any research study. According to Tan and Mansor (2014), the literature review provides in-depth knowledge about the research topic. This knowledge will help the researcher analyze the relationships between organizational structures and organizational performance.
Throughout this section, related theories of organizational behaviour and leadership will be described to help readers better understand the research topic from a wide range of perspectives.
2.2 Organizational Theories
2.2.1 Frederick Taylor’s Scientific Management
The main aim of this management theory is to increase productivity through the division of work. According to Scott & Myers (2010), the best part of this theory is that it approaches to the division of the work according to the capacity and the capability of the employees not considering any other criteria.
However, Biemann & Datta (2013) stated that the division of work according to the employee capacity is best fit when the size of the organization is very large and it has a good employee base.
Guerrero et al.‘s study (2014) stated that the best part of this theory is that it first divides the entire task into dependent tasks and then fits the compatibility with the existing workers by imposing the period to complete the job.
However, Rizwan et al. (2014) criticized this thought by saying that as the entire workflow is dependent upon the time frame, if any department fails to deliver the service within the time, then the entire chain fails to maintain the allotted time, and the product becomes unscheduled.
2.2.2 Weber’s Bureaucratic Theory
Figure 1: Weber’s Bureaucratic Theory
(Source: Scott & Myers,2010, pp. 100)
The main root of this theory is in the American psychology. According to this theory to improve the productivity of any organization it requires to have a formal hierarchical structure and the hierarchy should be dominated by the knowledge rather than only experience.
According to Onyishi (2010), this theory’s best feature is that it allows the organization to develop a formal relationship structure dominated by knowledge, which achieves the intended performance.
However, Snape & Redman (2010) stated that the main problem of the hierarchical structure is that if the organization is large and the persons involved in the hierarchy do not show support to the lower-end staff, then the entire organization suffers. The same thing happens when the non-cooperation comes from the lower end.
According to Zheng et al. (2010), the problem with this structure is that the success of this model completely depends on the leadership quality. Therefore, any organization that is following this theory needs to be very careful about its leadership practice.
2.2.3 Fayol’s Goal Management
According to Ford (2010), the fayol’s management is totally intended on the goal oriented. The main concept of this type of management practice is concentrated on the fourteen management principals. The principals are:
- Labor Division
- Discipline
- Authority
- Direction Unity
- Command Unity
- Salary
- Subordination
- Order
- Scalar chain
- Stability
- Equity
- Esprit de corps
- Initiative
- Centralization
According to Robbins & Judge (2013), fayol’s management is very much appropriate for that type of industry where it is possible to do any forecast about the production of service demand.
2.3 Organizational Structures
2.3.1 Centralization
The main advantage of the centralized structure is that it uniformizes decisions. The top management remains responsible for the decisions made.
However, the main disadvantage of this structure is that decision-making time becomes very prolonged due to the level of hierarchy, and the main deciding power remains in the hands of the top management (Dimitros, 2014).
2.3.2 De-Centralization
According to Peyrat-Guillard & Glińska-Neweś (2010), decentralization is very suitable for organizations where innovation is the key driving force.
This structure provides the flexibility of thinking, and as the decision-making power is de-centralized, it allows the organization to provide better solutions under any circumstances. Thahier et al. (2014) stated that the main advantage of this structure is that it motivates the employees as they can take decisions.
2.3.3 Organic Organization
The main feature of this structure is that it allows the organization to change its formation according to the needs of the task. According to Alvesson (2013), the most attractive point of this structure is that it shuffles the employees according to the task’s demands, helping the organization develop multitasking ability within the employees and managers.
2.3.4 Mechanistic Organizations
The mechanistic organization is very much a static kind of organization. It consists of predefined roles for all levels of employees. The major disadvantage of this structure is that there is no flexibility in the job, and the system is very much monotone (Harvard Business Review, 2013).
2.3.5 Departmentalization
According to As.wiley.com (2014), the best organizational structure is the departmentalization. The main advantage of following this structure is that it allows the business process to be divided into independent functional parts and the cumulative effort of the departments helps the organization to achieve the organizational goal.
According to Guerrero et al. (2014), the best part of this structure is that people are assigned jobs according to their expertise, and the department is headed by knowledgeable people capable of providing solutions under any circumstances.
2.4 Leadership
Leadership Styles
(Source: Dimitros, 2014,pp.34)
2.4.1 Autocratic
In the autocratic leadership style, the main deciding power remains with the managers and the top management. The employees have no flexibility in this leadership style. Their role is only to follow the instructions of the managers (Hayes et al., 2013).
2.4.2 Democratic
In the democratic style, the decision-making process is shared among the managers and the employees. The manager produces the situations in front of the employee group and takes the decision through discussing the matter with the groups.
According to Thahier et al. (2014), democratic leadership not only helps the organization develop solid decisions but also helps employees gain confidence by allowing their participation in the decision-making process.
2.4.3 Laissez-faire
In this kind of leadership style, no formal leadership format is mentioned here. The working group makes the decisions while working together. According to Peyrat-Guillard & Glińska-Neweś (2010) this leadership helps in improving the job satisfaction.
However, according to Dimitros (2014), this kind of leadership can only be performed when all the members are competent enough to deal with issues.
According to Miller (2014), the proper selection of the research methodology helps to attain the desired research outcome. This chapter will present the research design and data collection method, along with the data analysis plan.
3.2 Research Design
To continue this research the qualitative data will be collected. The main reason for going with the qualitative data is that it will provide a wider spectrum of information to the researcher.
3.2.1 Primary Data Collection
According to Newman (2014), the primary data is the most valuable and genuine data, which helps the researcher to draw a better conclusion than the secondary data. Through the face-to-face interview, the primary data will be collected. The collected data will be stored through a recorder for further use.
3.3 Data Analysis
The collected data will be analyzed through qualitative data analysis by exploring aspects which has been found while interacting with two senior employees of the organization.
3.4 Research Ethics
The interview will be conducted only after receiving permission from the CEO of A.M. Marketing Co. Ltd. While conducting the interview, no-unfair activities will be adopted to collect the favourable data. Moreover, this collected data will not be disclosed to anyone during the research or even after the completion of the research.
3.5 Research Limitations
The main limitation of the research is the very little time allotted for this. Other than this, as this research project is a non-commercial project, the senior employees refused to provide longer time during the interview.
Data Analysis and Discussion
4.1 Introduction
In this chapter, the collected data will be analyzed through the qualitative data analysis. The research findings will be summarized with a proper graphical presentation.
4.2 Organizational Structure
Figure 3: The proposed Organizational Structure for A.M. Marketing Co. Ltd.
(Source: Created by Author)
Through interviewing the two senior employees, it has been found that the company is operating through the flat organizational structure without having any working supervisor.
The CEO is operating the entire workflow keeping it directly under his belt. According to one of the employee due to not having the any supervisor, the CEO is feeling over worked and this work stress is hampering the entire decision making for the company.
The other employee said that the major problem happens when the problem comes from technical areas. According to him, the CEO is very young and due to his excessive workload, he talks long time to resolve the technical problems.
According to him, it has been seen that often due to this delayed decision making the customers gets frustrated and they stops coming for a repeat service or buying from the company. According to both of them, it is very much necessary to change the organizational structure to increase organizational performance.
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