Executive Summary
Recently, BMC Company purchased a large contemporary city Centre licensed food premises in Manchester. The motive behind this is that the firm wanted to add to the company’s portfolio of acquisitions in Leeds, London, Glasgow, and Nottingham. Initially, the firm has been used to operating a strict centralized policy on all its premises; however, during the period of Covid-19, the CEO considers that an outdated business strategy and opens up new ideas to improve it.
Therefore, the aim of the report is to address how organizational performance will be improved by different cultural practices. The initial strategy had rejected the people side of the business, and thus, the report aims at enlightening the managers on how organizational culture may be improved to ensure good performance and customer satisfaction together with high employee turnover.
Based on the report findings, it can be concluded that a good business strategy has to incorporate a good cultural practice that favors all the stakeholders of the firm, beginning from the CEO to the customers. For example, it has been established that a functional operational structure is very effective and most applicable in the case of BMC Company as long as it needs to thrive in the market.
Introduction
This report aims to prepare BMC company managers for their forthcoming strategic management planning meeting, which will entail discussing the new business strategy to be implemented. As a member People Practice Team for BMC, I understand the processes and operations of the company before and after the incidence of the Covid-19 pandemic. The new business strategy must address the business’s current situation during the Covid-19 pandemic such that the business will be able to adapt to the new environment.
The CEO of this firm is aware of the focus of the new business strategy to be implemented as he understands that BMC has had a legacy of staff turnover and low employee satisfaction. Therefore, the goal of the CEO in the new business strategy is to ensure that the management team appreciates the link between the organizational structure, strategy, and wider environment of the business. He also aims at ensuring that the management team understands the organizational culture, behavior, and the way individuals uphold the accomplishment of the business objectives and goals.
Organizational structures
Functional organizational structure
The functional organizational structure starts with the positions with the top degrees of responsibility at the top and goes down from this point (Topchiy and Tokarskiy, 2018). Amazon is an example of a company that uses this organizational structure due to its large size because its employees are more than 560,000 employees. Basically, Amazon has two different sets of customers who are the seller customers and the developer customers. This is an implication that Amazon customers are online users.
There are different products that Amazon offers to its customers, which include Retail goods, Amazon Prime, consumer electronics, digital content, and many others. The mission of Amazon is to continually raise the bar of the customer experience by using the internet and technology to help consumers find, discover, and buy anything and empower businesses and content creators to maximize their success. It is also a type of organizational structure where workers are organized based on their certain skills and their corresponding roles. In this type of organizational structure, all departments are separately managed. Some of the advantages of this organizational structure as listed below;
Advantages
- helps workers concentrate on their jobs;
- promotes specialization among employees;
- It makes the teams and departments feel self-determined in achieving their goals.
Disadvantages
- may lead to silos in the firm.
- It also reduces interdepartmental communication.
- Finally, it hinders the processes and approaches for various products of the firm.
Hierarchical organizational structure
It is a type of organizational structure that is the most common in most modern organizations like BMC. An example of a company that uses a functional structure is Starbucks Coffee. For instance, in this company, you will find different departments, which may include the Human Resource department and the marketing department. This company uses this form of organizational structure for the purpose of dividing the major functions of a firm into different groups. The Starbucks firm offers products like coffee beverages, smoothies, tea baked goods, and sandwiches.
The mission of the firm is to inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time. The customers of this firm. As far as their customers are concerned, this film aims at high-income, high spenders, and those who are urban-ish or on the go.
Advantages
- the levels of command and responsibility are well defined.
- It also indicates who every individual reports to and who must address specific projects in the firm.
- It also motivates workers with vivid career paths and promotion chances.
Disadvantages
- It is very terrible as it can slow the firm’s innovation.
- It may also make employees act in the section’s interest rather than the organization as a whole.
Organizational Strategy
The connection between the organizational strategy and the product is that the strategy is more focused on promoting and advertising the product. It will have a great market share in the market. Without an organizational strategy for its products and services, it won’t have a market, and thus, the firm would only be making losses every time. The firm’s strategy entails making the product and services known to the customers wherever they are (De Araujo et al., 2021). For instance, an organization may opt to use social media and Search Engine Optimization to increase the reach of the millennial generation who are ever using social media platforms and search engine devices.
Through these two strategies, the firm will stand a chance to make its products known to internet users and social media platforms users such as Facebook, Twitter, and Instagram. Thus, it is the implication that without the firm’s strategy, the organization will not be able to promote and sell its products. It will also not reach out to the respective potential customers of their products and services.
The connection between the organizational strategy and customers is that the strategy entails making the potential customers aware of a certain firm’s products and services in the market. The strategy informs the audience or the customers of the firm about what they can find in the market (Milliman, Gatling, and Kim, 2018). Finally, the only main connection between the organizational strategy and the firm’s revenues is that, when the products are promoted through the firm’s strategy, they increase the market share for their products.
External Factors and Trends in Organizations
Currently, there are various political, social, economic, technological, and even environmental trends in the organizational structure. We are amid the Covid-19 pandemic, which has impacted organizations both socially and economically. Covid-19 has led to other policies such as social distancing policies, lockdowns, and curfews in different geographical areas. Such policies as lockdowns and social distancing policies have reduced the firms’ operations, especially in the firms that are unable to implement work from home strategy (Pramono et al., 2021).
Most of the firms which are unable to adhere to the Covid-19 regulations have been forced to shut down. Politically, nations like Iran, Iraq, China, and United States are being faced with political tensions across their borders. For instance, the conflict between China and the United States, which has led to the introduction of import tariffs from China, is an example of both political and economic factors affecting some organizations such as Huawei in China.
The factor is also political because Donald Trump’s administration introduced it. These tariffs are still an external factor affecting most organizations that use products from Huawei because up-to-date they have not been lifted. Again, there is a technology that has transformed many aspects of organizational structures (Kim and Yoon, 2020).
For instance, an organization that has embraced the current technology is now enjoying improved automation of the processes in the firm. Current technology is also another trend that has facilitated operations of the organizations by automating all the processes. As seen in the table below, there are different factors that affect contemporary organizations.
PESTEL Analysis of External factors
Issues and Priorities Within Organizations
Supply chain Management
Normally, there are those priority issues in every organization that can affect the delivery of the products and services and hence the individuals’ practice and solutions. For instance, one of these priority issues is poor supply chain logistics. Supply chain management is the key element for every product or service to reach the final consumer. If the supply chain logistics are poor, the firm will not deliver the service and products to the right consumers in time. There will be a breakdown in the distribution channel, which implies that the consumers will be faced with a scarcity of the products.
Delivery and the reaction of the customers
Another factor that affects the delivery and reaction of the customers is the management of the organization. Especially the customer service department of the organization plays a pertinent role in the delivery of the products and services to the customers. Take an example of a case where the client has placed his order, and the customer service desk is not willing to process the order in time. This would be a great challenge and disappointment to the client. In his thoughts, he might opt never to order any product again from this firm (Milliman, Gatling, and Kim, 2018). I would say that the customer service desk plays a key role in the delivery of the services and products.
How These Issues Affect People’s Practice
The issue and causes of current organizational priorities are the emergencies of a pandemic like Covid-19, which has forced organizations to make some changes in their preferences (Ivanova et al., 2019). The rapid technological advancement has led to changes in organizational priorities. Trade tariffs set by some countries have helped organizations change their suppliers to a tariff-free country, thus minimizing losses and extra costs. Employee engagement has proved to be a crucial strategy that has yielded many positive results for organizations and proved to be worth adopting.
Solution
The first solution I give is for the supply chain management issue, which has been facing so many organizations in the contemporary world of business. There is a need to establish proper logistics which will ensure that the customer receives the products and the services from the firm at the right time. When there is a proper supply chain in a firm, a company is able to establish a proper relationship with the clients. This is where the clients become loyal to the firm, and thus the company gets a high customer base that offers high revenues.
The second solution is for the delivery and reaction of the customers. The management of the firm should ensure that the goods which it produces are of a very high quality which would improve the client’s satisfaction. Generally, when a client is highly satisfied, will always give reviews and recommendations for the products of a certain firm. The communication between the clients and the firms should also be given priority because it shapes the customer relationship with the business. When all the above are ensured, then the business will definitely prosper.
How People’s Practices Impact Organizational Systems
People’s practices are based on their culture, and through the culture, their behavior impacts the organizational structures and systems. The people’s practices and culture dictate the organization’s products and services. For instance, in a Muslim-dominated community, products like pork will not be highly appreciated to impact the company’s bottom line. The leadership style of an organization will depend on the people’s practice and way of administration.
These factors dictate the organization’s organizational structure and how the goals and objectives of the organization will be achieved. The relationship between the organizational structure and culture is that the organizational culture in some ways defines the organizational structure of an organization but the structure also partially defines the culture of an organization. It can also be said that the structure is a framework for the culture to be implemented, while the culture dictates how the company should be structured.
People’s patterns impact employment, like in the case where some communities value some jobs more than others. You find that a given society may down look some jobs, and some are considered worthless. In such a case, the organizational structure must be formulated to be inclusive and favors the immediate community (Babin et al., 2019).
The management and development of people are based on training, providing necessary skills, offering better wages, and providing a conducive environment. People are also developed through the provision of better health care services to promote their well-being. The people’s behavior in an organization dictates the type of organizational structure, employment, and how much people can be developed based on their beliefs.
You find that the practices of the people in a firm define the kind of organizational structure the business is. For example, in a firm where the operations or duties and responsibilities are segregated or where people work independently, this can imply that the company uses a functional organizational structure.
Impact of Technology on People
Technology has consistently changed the way workers across every industry do their jobs. People’s performance in their jobs has been improved, and working together has become more accessible. Technology has improved working conditions and has streamlined tedious and environmental wasteful processes, and in turn, it has spontaneously increased productivity in the organization (Beck et al., 2017).
Technology has increased efficiency and speed in how activities are conducted in the organization. Communication in the organization has been made easier and faster where relaying of information has been facilitated, and all stakeholders in the organization can receive urgent information at a glimpse (Habjan, 2017).
Despite technology having positive impacts, negative impacts cannot also be neglected. Overdependence on technology has interfered with employees’ capabilities to work on their own. Cybercrimes have also increased. Thus, CIPD has partnered with over 400 organizations, and through this, it entails building their skills and technological capacity such that they will be able to embrace the latest trends laid out by the Covid-19 pandemic. There have been more than 3 million people who have turned to CIPD to seek technological guidance on how they can perform better in their businesses during this period.
Conclusion
In conclusion, based on the above findings, it can be said that a functional organizational structure is more effective than any other organizational strategy in the contemporary world. This is because it is a type of organizational structure where workers are organized based on their certain skills and their corresponding roles.
This means it concentrates employees into their specialized departments and thus increasing the productivity of the firm and the quality of the work. A good business strategy is responsible for increased marketing and thus the customer base. When the firm has a high market base, then it will have more sales and increased revenues for the firm as more customers will be aware of the products of the business through a good advertisement and promotion business strategy.
Recommendations
It is recommended for the BMC Company to establish improved technology in its processes and especially in its business strategy. For instance, to reduce the problem of people’s neglect by the company, there is a need to introduce social media marketing and search engine optimization. Again, it can be recommended that the firm installs very effective supply chain logistics.
References
Babin, M. et al. (2019) ‘Patterns of organization and methods of development’, English 100 Course Readings, 18(31) 39-44
Beck, R. et al. (2017) ‘Blockchain technology in business and information systems research’, Commerce Books 12(3), 23-31.
De Araujo et al. (2021). Digital leadership in business organizations: an overview. Digital Approach 34(63), 3-11.
Habjan, K. B., & Pucihar, A. (2017) ‘Cloud computing adoption business model factors: does enterprise size matter’, Engineering Economics, 28(3), 253-261.
Ivanova, I. A., et al. (2019, December) ‘Digitalization of organizations: current issues, managerial challenges and socio-economic risks, ‘Journal of Physics: Conference Series, 22(11), 30-38.
Kim, W., & Yoon, Y. J. (2020). Trump tariffs and firm relief: winners and losers from the steel tariff exclusion request. Applied Economics Letters, 3(21), 1-6.
Milliman, J., Gatling, A., & Kim, J. S. (2018) ‘The effect of workplace spirituality on hospitality employee engagement, intention to stay, and service delivery’, Journal of Hospitality and Tourism Management, 35, 56-65.
Pramono, C. at al. (2021) ‘Factors affecting start-up behavior and start-up performance during the COVID-19 pandemic in Indonesia’, The Journal of Asian Finance, Economics and Business, 8(4), 809-817.
Topchiy, D., & Tokarskiy, A. (2018, June) ‘Designing of structural and functional organizational systems, formed during the re-profiling of industrial facilities’, IOP Conference Series: Materials Science and Engineering 29(9), 13-17.