Organization Structures

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Introduction

Management is the most important aspect of an organization. Management influences a company’s cultures and structures. It is very important in determining employees’ motivation, how technology is utilized in a company, and a company’s social structures. In return, all these factors are very critical in a business and play an important role in determining the success of a business. Management structures in many businesses are based on what has worked or failed in the past, as well as management trends present in an industry at a particular time.

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Organization structures allow a business to implement and sustain its cultures and practices by having a pattern in which tasks are allocated, coordination and supervision are done and organizational aims are achieved. Different organizations have different hierarchical structures while some have adopted models which allow them to achieve proper operations easily.

Organizational cultures and structures

Leadership is the most critical part of an organization. It is responsible for structuring and maintaining an organization’s values, purpose, and vision (Diana, 2002). Leaders are supposed to set examples through their behaviors and actions. Values in an organization would not mean much if they were not adhered to. Values form an organization’s culture, an element that many businesses today are willing to invest in. Organizations whose cultures are properly codified enjoy much more customer and employees loyalty.

Organizational cultures are determined by the history and ownership of an organization. The automobile industry would make a good basis for studying different organizational cultures. Toyota and Ford are two companies that have seen significant changes in different times and have had to adjust to suit different demands for changing markets. Many companies in this industry, for example, have cultures based on what has worked and failed in the past. Ford is today more focused on having few profitable models than having many models with less profitability. Toyota on the other hand has many models and tries to make all of them as profitable as possible.

Since organizational cultures are made up of leaders’ values and beliefs, senior leadership is very influential. A good example is Ford, whose practices and cultures have been transformed by their new CEO, Alan Mulally. The CEO has influenced the company’s business culture since he went into the business four years ago. Labor costs have been slashed by 22%, meaning fewer employees and more work for those who are left. The CEO also can in with new ways to raise capital such as borrowing from the bank rather than the government like it has been in Ford.

An organization’s culture substantially affects the ability of managers to execute their responsibilities. It also influences how an organization meets its goals and objectives. A culture of recognition gives employees reason and motivation to work harder. It is also used by organizations as a lagging indicator and allows them to give training to people who have had low recognition due to lagging performance (Deresky, 2008). A culture of appreciation on the other hand ensures that employees are recognized for their good and productive efforts.

Toyota is very famous for its continuous improvement culture. The company achieves this by coming up with and implementing systems that make it possible. A good example is the Toyota Production System where everyone from the executive to the shop-floor worker can put their creativity to work and learn from it. Their 5S system is a culture that allows less access time for tools and documents by arranging them in a certain way.

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Different factors influence an organization’s management structure. They include job designs, formalization, arrangement of functional activities, and coordination of organizational units (Cole, 2002). Status, power, role, liking, and leadership also play a role in how organizations’ structures are formed and their management. The role structure of management is divided into action-oriented, cerebral oriented and people-oriented roles.

Toyota has a hierarchical structure where the CEO, who is also the chairman, is the senior-most executive in the business followed by a general manager. The commercial, financial, after-sale and administrative managers are all under the general manager and report to him. The chain then continues, breaking down to different heads of departments and different projects managers.

Ford adopts an organizational structure that has a president and two vice presidents, who also serve as the marketing and finance managers. The director of sales, research manager, and customer service manager reports to the marketing vice president. The finance vice president has the planning, information technology, and accounting managers under him. Other managers and projects coordinators then follow.

Approaches to management in Organizations

There are different types of management styles. The most commonly known are authoritarian, democratic, and Laissez-faire management styles. These styles of management determine the area of freedom for the managers as well as the subordinates. The authoritarian manager does not allow for any forms of negotiation but instead makes decisions and announces them to everybody else. The Laisez-faire type of management is where a manager presents decisions but at the same time, the subordinate is free to make decisions and do what they want to. In the democratic style of management, subordinates are allowed to function and make some of the decisions but do so within defined limits (Alvesson, 2002).

In this management style, the difference is the level of power. One is more formal and legitimate, one is charismatic while the other is manipulative and exploitative. The level of relationship between the manager and the subordinate varies. Authoritarian management has a one-way form of communication where the manager passes orders and decisions to the rest of the team and the decisions cannot be questioned. The laissez-faire allows very little communication between the two levels of management as people do what they want while the democratic form of management allows full consultation and the communication channel is very open.

It is also notable that there are different management perspectives. Classical management is more concerned with scientific management and the pursuit of higher productivity (Schein, 2010). This form of management is also very focused on how the organization is designed. Behavioral management places much significance on human relations, groups, and the social context of an organization. It places priority on organizational behavior and puts more effort into it.

Quantitative management is the mathematical modeling part of management which is more concerned with mathematical modeling and operations management (Cole, 2002). The main aim of this form of management is to ensure efficiency in the organization. Finally, there is the integration perspective of management which deals with systems and the social context of the organization. It is also concerned with how an organization governs its functions.

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Motivational theory

Motivation calls for use of incentives to achieve higher output and productivity. The argument behind motivation theory is that “a motivated workforce will generate much more than a demotivated workforce” (John, 1999). The results are higher output and more satisfying quality. Employees can be motivated using different types of incentives. The most common forms of incentives today are financial. Motivation is also deemed a very critical factor for producing high-quality work and minimizing wastage. Motivated staff will tend to be more proactive and have a bigger sense of seeing things happen (Hoffmann, 2006).

Different philosophers present different motivational theories and give different arguments as to why they support motivation. One of the most significant motivational theories is Frederick Herzberg’s motivational theory. Herzberg argues that “satisfaction and dissatisfaction arise from different factors at work and they are not opposing reactions to the same factor” (Hoffmann, 2006, Pg. 11). Those factors motivating people are not the same that dissatisfy them. Satisfaction comes from factors that are involved in accomplishing a task. Dissatisfaction on the other hand comes from factors in the job context.

According to Herzberg, a human being’s needs can be categorized into two sets needs. One is to grow themselves psychologically and the other is to avoid pain or suffering (Hoffmann, 2006). He also explains the need for safety, food, shelter, and even hygiene which he illustrates through a biblical example. According to him, an employee needs status, policy, proper work conditions, security, a good salary, and a relationship with both the supervisor and the subordinate to be motivated.

Another motivation theory is that of Abraham Maslow. His theory explains the human need hierarchy. He arranges the human needs in the form of a hierarchy from the least to the biggest. According to him, the most important human need is the physiological needs, followed by security and safety, social, esteem, and self-actualization need in that order (Weiner, 2002). He argued that any time a need is satisfied, the next need on the hierarchy becomes dominant. He also acknowledges that no need can ever be fully satisfied but if an organization wants to motivate its employees, they need to understand their level of need in the hierarchical order.

In Toyota, the company keeps its employees motivated by implementing a big percentage of their shop floor employees’ ideas. The company has an active rather than passive motivation process. Through team leaders, employees can develop their problem-solving capacities by handling different problems on their own. If the senior management trusts its employee in problem-solving activities, employees develop self-esteem and trust, which motivates them to tackle more challenges in the future.

Every idea, whether small or big, is respected in the company. After employees have submitted their suggestions, they go through vetting and the company develops most of them, which allows employees to feel appreciated. There are awards and tokens, given based on how outstanding an idea is. Motivation in Toyota comes from employees being allowed equal participation in the company.

Ford has in the past had a huge success in hiring and retaining the best employees. The company uses both cash and non-cash incentives to motivate its employees. Sales employees, for example, receive bonuses depending on how many volumes they have moved. Non-cash incentives include awards, recognition, promotions, and sometimes penalties for poor-performing employees.

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Organizational social factors

The social factor of an organization is the basis for relationships, communication, and teamwork. An organization that is open to different social factors is bound to develop more loyal employees who feel like part of a family. Social factors in an organization provide a common purpose (Miner, 2007). Different social factors in an organization include relationships between employees, employees and managers relationships, and managers-executive relationships.

An important social factor is team building. It is used Toyota as one of the company’s biggest strengths. Team building can be among employees of the same level or can be between senior and junior employees. Toyota has led for many years in team building by investing heavily in skills testing, measuring the results of each exercise, and reinforcing a value of mutual respect (Schein, 2010). According to their CEO, Akio Toyoda, team building has been important in improving their organization’s performance since it encourages communication and it creates friendship and loyalty towards each other. In so doing, everyone does their best at their level to make it possible for someone else at a different level to achieve the desired results.

Ford has for long utilized the group training culture and is uploaded as being among the first companies to develop the idea. It allows people to know each other’s strengths and weaknesses. Working with this knowledge makes it easier for employees to identify who needs help and support more. It also makes it possible to establish whose strengths can be utilized most to achieve the desired results in a team. Training together also allows people from different teams to know each other, share knowledge and broaden their knowledge about the organization.

Impact of technology on both management and the workforce

Technology influences management and workforce in organizations by analyzing production, resource impact, routine to non-routine operations, structure impact, industry impact, and work impact as well (Schwalbe, 2010). It allows the managers together with the workforce match the resources available with technology through different approaches. The management can run operations more easily by changing techniques and processes to better and modern ones.

Technology has helped develop and drastically improve the automobile industry. Toyota for example has been able to significantly utilize technology to improve its security. Through technology, it has been able to produce cars whose level of safety is not dependent on different conditions. Since the company is all about the customer, information technology plays an important role in the company. It supports and enables the business to operate more effectively, minimize their waste and operate with minimum inventories. The company is also able to utilize modern technology to employ one of the best supply chains there is in the industry. Testing and quality technologies allow it to correct defects on time and achieve continuous improvement.

Ford has developed its models to give the world some of the best cars in the industry. From its 1960s famous models such as the Thunderbird, the 1962 Ford Galaxie 500, and the Mustang among others, the company’s sync technology is expected to be the best and most surprising invention in the industry. The company is in the process of transforming its cars into powerful “smartphones” which will allow drivers to have their digital world customized as per their specifications. By taking the phone’s features and technology and fixing it into their cars, the CEO says it will allow drivers to operate in their digital world safely as they drive.

Recommendations

Management and leadership in a company, affect every aspect of the business. For a business to be successful, a company’s structures and cultures must create a tradition that recognizes the best and most loyal employees, while at the same time motivating those who have not reached there yet. Leaders must be people who agree with a business’ cultures and beliefs, otherwise, it will be hard to implement the organization’s strategies.

Motivation is a big part of any business. An organization must be able to not only identify its employees’ needs but also be able to meet them in a way that benefits both them and the business. Management styles must be able to encourage democracy in a business and give employees an avenue to present their suggestions, views, and complaints. When this is in place, it becomes easier for a business to operate as a team. The motor industry especially needs to keep employees motivated and appreciated to avoid losing employees, which could affect the consistency of quality.

Organizational social structures are important to encourage teamwork. In a business in which employees work together as a team, it is easier to solve problems and support each other in different tasks. Team building, training in groups and allowing easy communication at all levels of management create openness. Technology is a big part of business success today. This is evident from how it has revolutionized the motor industry companies to produce the most competitive and efficient industry today. Toyota and Ford have proven that investing in technology is an asset that every business must value.

Conclusion

The automobile industry has developed from very conservative and traditional leadership styles to have the most vibrant and competitive management and leadership structures. With increasing competition, different auto-mobile industries have had to adopt different cultures to stay relevant. A good example is the now-famous continuous improvement Toyota culture, which ensures zero waste, practical solutions to problems, and continuous innovations by employees. Organizational cultures, structures, employees motivation and technology, are factors which a business must invest in if it has to stay successful today.

Reference list

Alvesson, M., 2002. Understanding organizational culture. London: SAGE.

Cole, G.A., 2002. Management: Theory and practice. London: Continuum.

Deresky, H., 2008. International management: Managing across borders and cultures. Upper Saddle River, NJ: Pearson Prentice Hall.

Diana, P., 2002. Organizational cultures. Routledge Publishers.

Hoffmann, S., 2006. Classical motivation theories: Similarities and differences between them. Norderstedt: Druck und Bindung publishers.

John, M., 1999. Role of motivation theories. New York: Routledge Publishers.

Miner, J. , 2007. Organizational behavior:Theory to practice. Armonk, N.Y.: Sharpe.

Schein, E., 2010. Organizational culture and leadership. San Francisco, Calif.: Jossey-Bass.

Schwalbe, K., 2010. Information technology project management. Boston, MA: Cengage Learning.

Weiner, B., 2002. Human motivation: Theories and research. Newbury Park, California: Sage Publishers.

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