Organization Design and Effectiveness Issues
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Vision and mission of an organization forms the central factor in making a decision on design of the organization, operations, and decision execution in the organization. An organization’s design is affected by the choice of goals and strategy (Daft, Murphy & Wilmott, 2010). To maintain the organization's vision and mission despite the changes experienced in technology, globalization, deregulation, and worldwide competitions which control reassessment of the organization, organizational design remains a continuous activity (Burton, Obel & DeSanctis, 2011).
The organization requires assessing its goals and defining the scope within which it works. The environmental factors around the firm should be considered to ensure that the firm’s main goal is not suppressed during redesigning of the organization. Organization’s objectives are defined by the investing parties. The investing parties in a profit-oriented business is the board members, investors, founders and, in some instances, the creditors (Daft, Murphy & Wilmott, 2010).
Royce Consultancy is a firm controlled by partners. Communication of the firms goals are made to the newly hired workers and it is ensured that they hold onto the goals. The firm’s commitment is client-centered according to the CEO. The training offered to new employees aims to ensure they have a clear understanding of the culture and methodology that the firm runs on. The managers’ practice also forms a part of communicating culture to the newly hired employees. The essentials of the firm are its clients, its people, and reputation. The firm employs directive management style, and partners are the final decision makers.
Royce Consultancy has an increasing number of staff with limited office space. It forms an enormous challenge to the firm in working space and offering clients the attention required from the office. The firm had tried resolving the issue by assigning two managers the same office. To avoid complexities, one manager remained in the office while the other sent on long-term project out of the office. The firm’s growth could not be resolved with the resolution; hence, the problem remained unresolved.
The economic challenges have brought about escalating costs on running the firm. The accounts of the firm are recognized to be above the required rates and are increasing at an alarming rate. The firms did not optimize on the offices they paid for; most of the managers spent time at client sites, and the analysis shows that the occupancy of the firm was 40 to 60 percent. Therefore, lease charges are considered uneconomical and increasing the running costs. Therefore, the escalating charges identify a serious problem to the firm, which needs resolution so that the firm runs on low costs.
There are four main organizational theories defined and used within organizations. The classical organization theory is a fusion of scientific management, administrative, and bureaucratic theory. The basics of the scientific management theory include finding the one best way to perform each task, matching each worker to each task, close workers supervision, and planning and control as a task of management. The bureaucratic theory emphasizes on the need for hierarchical structure of power recognizing the importance of labor division and specialization. The administrative theory is designated in establishing management principles applicable to all organizations. Classical theory is identified as rigid and mechanical (Walonick, 1993). The second theory is the Neoclassical Organization theory recognized as displaying genuine concern for human needs. The theory emphasis is on the ability to control and manipulate employees and the environment they operate. The third theory is the Contingency theory which views conflicts as inescapable but manageable. The theory views effectiveness as management’s ability to adapt to changes in the environment. The last theory is the Systems theory in which all components of an organization are interrelated, and the change of one variable would impact the other variables. It views organizations as open systems that interact with environment continually: there exists an established pattern of relationships among the units in the organization (Walonick, 1993). The Open and Closed System theories are also recognized in organizational design. Closed System theory proposes each employee has a private space in terms of office and storage of files. The Open System theory employs centralization of files and the use of a given space area by the employees as offices with the lack of private space area for an office.
Classical theory is employed by Royce Consultancy through its administration, execution of duties, and relation of employees to their duties: the managers, partners and other of its parts. Contingency theory is recognized when the managers realize on the rapid growth of the company with limited office space and the escalating prices on them. The expected change to shift to non-territorial offices employs the systems theory: expected change would have a reduction of costs and optimization of the office space, but some think that the centralization of filing system would have an adverse effect on them. The firm currently uses closed system theory in design of its office but the suggested non-territorial office would embrace open system.
Non-territorial offices are proposed to reduce the leasing costs and optimize on the space of hotel hence be economical through reservation or drop-in basis. Centralization of the files would also reduce on space. The firm put into thought an upgrade to a large electronic office technology. It would feature managers to have notebook computers with updated communications to use Royce’s integrated and proprietary software. The information regarding clients and proposals would then be kept in an electronically filing system. The proposed system would have managed the problems defined and increase the effectiveness of the firm.
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