Good Example Of Modern Organizational Structures Essay
Modern organizations are large and complex bodies. For the organizations to function effectively and efficiently they require work to be divided into efficient units. This division of labor and the relationships that arise out of the different units working towards the attainment of common goals forms an organizational structure. It enables the creation of defined positions that ensures that every employee n the organization has clear responsibilities and accountability for their role as part of the whole. Early organizational structures utilized scientific methods to define roles in the structure, and these evolved into what modern organizations use today. This paper studies modern organizational structures through a comparison of the structures of three of the largest groups available today namely; Nike, the Body Shop cosmetic company and Starbucks coffee.
Nike Incorporated is the world’s biggest retailer of athletic clothing and shoes (Brenner, 2013). It has to employ a suitable organizational structure to retain such a high position in the industry. Nike has worked hard to create an original brand that has been continually evolved. These constant innovations combined with proper organizational design have allowed the company to grow exponentially over the years (Brenner, 2013). This growth causes the need for changes in the companies’ structure to meet global as well as local demand. The largest market for the company is found abroad In Europe and Asia. However, the local US market also plays a crucial role for Nike sales. Geographically Nike is a global company with facilities and employees on six continents.
The company uses a matrix organization comprising of 44 subsidiaries, all but a few of these, design, market and distribute the companies’ products (Brenner, 2013). It uses well-planned strategies such as the five year 2006 to 2011 growth and sustainability strategy. They are a leader in their industry and have stayed there through constant product innovation. The matrix structure presents multiple lines of authority which may prove problematic. However, they have overcome this using effective managers and leaders who rally support for decisions and organize employees to achieve quick and flexible decision-making.
Starbucks is a coffee franchise that was started in 1971; it is the world’s biggest coffee company. Starbucks coffee houses are found in more than fifty countries in the world; they have created a brand that is synonymous with great coffee, serene atmospheres, and socially responsible business. Their marketing campaign sets the brand apart by appealing to the customers want for comfort, variety, and personalized service. Where large franchises are a scary notion for communities, Starbucks strategy has been to endear themselves to the customer by being an active part of the community (Wire, 2011). Social responsibility and ethical practices, as well as community projects, have enabled the company to avoid the stereotypical bad light cast on large franchises.
Starbucks has a matrix organizational structure such as Nike; this is better equipped to handle large scale operations in different regions. They have three main regions, including; China and Asia, Americas and Europe, Africa, and the Middle East (EMEA) (Wire, 2011). The leaders here control business in the region as well as liaise with partners and the parent companies research and production team.
The final organization is a cosmetics company called The Body Shop; it is one of the top three cosmetics companies in the world. It has over 2000 locations in more than 50 countries producing and retailing cosmetics. This company has created one of the most popular brands in the world while maintaining a high degree of social corporate responsibility. The company’s founder Anita Rodrick has stated the need for hierarchy and organization developed as the company expanded (Kelly, 2009). However, it is seen that overdependence on formalized organization causes bureaucracy and stifles creativity. This why the organization utilizes a more fluid organizational structure that changes often as the need arises, this allows the organization to respond promptly to changes in its environment. The cosmetics industry is characterized by changes in demand and taste. The same makes finding a good organizational design a continuous process. The body shop has seen many structural changes over the years in its attempts to stay relevant in the industry (Roy, 2008). It is a good example of how changes in strategy are a large part of any organizations structural design process.
This is the contingency approach to organizational structure; it involves the application of contingency plans to solve problems as soon as they arise. It is an attractive strategy in modern society as it helps an organization react to environmental changes such as technology, competition, among others. The contingency approach and the Matrix organization are good examples of modern organizational structure as they are designed to handle problems arising in modern organizations. The contingency approach increases a companies’ response to changes; this is especially useful where the business environment is dynamic and unstable maybe due to demand changes or other problems. The Matrix organization approach allows organizations to group related activities into convenient departments that may be based on function, geography product or other suitable criteria.
Brenner, B. (2013). Inside the NIKE matrix. Institute for International Marketing and, 1-20.
Kelly, P. (2009). Organization structure Changes at Body Shop. Case Media, 1-7.
Roy, S. (2008). “Business As Unusual” A Case Study Of The Body Shop. Journal of Applied Case Research, 1-23.
Wire, B. (2011). Starbucks Announces New Leadership Structure to Accelerate Global Growth. Retrieved from www.bloomberg.com: http://www.bloomberg.com/apps/news?pid=conewsstory&tkr=SRB:GR&sid=anMwwrOYvTw0
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