Introduction
Management of an organization refers to a wide range of activities which are directed at an organization’s resources (Griffin 3). It requires diverse technical skills, excellent communication and interpersonal skills, and time management especially if the organization is rapidly increasing in size. W L Gore is an organization that specializes in industrial processes that produce electronic products, medical products, and other industrial products. Management of these activities ranges from extensive planning to adoption of an effective organization structure.
Purpose of the report
The purpose of the report was to analyze different types of organizational structures that are applicable in various types of organizations in order to establish the most effective form of organization structure to be adopted by W L Gore after the merger.
Objectives
- To explain varying types of relationships within organizations
- To outline authority and responsibility in line relationships
- To analyze the organization structure currently adopted by W L Gore
- To establish a more effective alternative structure to be adopted after the merger
- To explain the effectiveness of alternative approach using contingency approach
Procedures
Data was collected from the company’s website which provided information regarding the scope of the company and an interview with an associate from a plant based in UK which revealed considerable amount of information regarding the company’s internal operations. Data was also gathered from other published materials.
Findings
Relationships within Organizations
Line relationship exists when authority flows directly from the boss to the staff in an organization (Untitled article, p 145) In line relationships, authority flows from the manager in line of command down to the surbodinates. At W L Gore, team leadership emerge from various situational needs such as technical leadership or business leadership. However, W L Gore has over the years avoided line relationships in preference of teamwork which promotes innovation, personal initiative and constructive interaction between the associates. Line relationships within W.L. Gore & Associates would speed up the decision making process but leaders would be over burdened with numerous responsibilities which would limit their efficiency (Dale 28). It would take the form as attached in Table 1. Table 1 represents a model organization that incorporates line relationships.
Table 1: Line relationships
Staff relationships describe the relationship between assistants of senior staff and other staff members (Untitled article, p 146). These assistants lack direct authority but act as representatives of their seniors. At W L Gore, New associates in the company are assigned to sponsors who assist them to adjust to the company’s operations. These sponsors motivate new associates by ensuring that they are recognized for exceptional performance and that they are fairly paid. Staff relationships hence provide an opportunity for innovation and diversity at W L Gore.
Functional relationships exist where there are specialists who advise support managers and have authority over specific activities of a particular department (Untitled article, p 146). W L Gore utilizes product specialists to establish direct links with the consumers. The product specialists identify the customer’s requirements and their response to the company’s new products after which they advise the associates accordingly.
Lateral relationships exist between staff at the same level in the organization and are essential in the coordination of various functions in the organization (Untitled article, p 146). At W L Gore, all employees are referred to as associates and work on general projects under the guidance of their sponsors. In industrial filtration for instance, the company assembles a team to develop office automation technology equipment. The team has to incorporate production people, engineers, and administrative support in order to achieve this objective.
Authority, responsibility and delegation with reference to line relationships
Authority refers to the right to direct the actions of others while responsibility is the obligation placed on a person holding a specific position in an organization (Untitled article, p 145). In an organization, authority is delegated to managers who in turn exercise such authority in the management of operations of subordinate staff. In line relationships authority flows down from the management down to the subordinates in a chain command (Loudon & Stevens 27). In some instances, business leaders and operation experts at W L Gore make decisions regarding task allocation on behalf of the associates. These leaders are appointed on the basis of their past leadership performance and possession of skills required in a specific area of work.
Delegation refers to the act of passing responsibility of delivering a task to another person (Untitled article, p 145). Effective performance of an organization requires appropriate delegation of duties which improves efficiency. In line relationships, line managers delegate work to the subordinates who then execute the tasks under the manager’s supervision.
Responsibility refers to the obligation placed on an individual holding a specific position in an organization to perform a specified task or function (Untitled article, p 145). In line relationships, the managers are charged with the responsibility of governing the operations of subordinate staff. This is also evidence at W L Gore where the product specialist is charged with the responsibility for establishing the link between the company’s products and the consumers. For instance, the fabric plant has product specialist in charge of fire industry, police and military and the sky. Line relationships in WL Gore can take the form shown in Table 2 which shows the flow of authority within the organization.
Table 2: Line relationships at W L Gore
W.L. Gore & Associates organization structure
W.L. Gore & Associates is a manufacturing company which is organized around team principles. Due to the complexity of its business operations, W.L. Gore & Associates has a flat structure which gives the associates a great deal of discretion to directly and independently meet consumer demands. A flat organization structure refers to an organization with few layers of reporting and hierarchical authority (Hills & Jones 215). This structure is associated with limited bureaucracy that translates into faster decision making, efficiency, as well as profitability (Hill & Jones 215).
The flat structure in WL Gore is described by an associate from a W.L Gore plant in United Kingdom as shown in the organizational structure in Figure 1.
Evident from the chart, W L Gore and Associates structure is relatively flat and follows the principle of minimum chain of command which dictates that an organization should choose a hierarchy with minimum number of levels necessary to achieve its objectives (Hills & Jones 218).
In the flat structure, associates at W L Gore are organized under the three-legged principle of sales, product management, and manufacturing. Decision making is based on associates’ consensus. For instance, decisions regarding additional staff are made on consultative basis and the associates are encouraged to be innovative in their operations. However, any significant financial commitments to such innovation are only made after a thorough review by other associates. Leadership emanates from possession and demonstration of natural leadership traits, appointment, and technical expertise. Decision making process is collective but it is based on individual’s contribution to a specified task.
W.L. Gore & Associates benefit considerably from a flat business structure. Apart from being ranked as one of the best employers in major charts, the organization has substantially reduced communication and coordination problems associated with tall hierarchies (Hills & Jones 218). Upon acquisition of W.L. Gore & Associates by a tall structured organization, the new establishment would have to be redesigned in order to meet the structural demands of the two organizations. The company may choose to adopt a hybrid structure which combines both matrix and functional structures in order to reach its objectives.
Alternative form of structure
Due to the complex nature of the new establishment, the new company formed after the merger should adopt hybrid structures. The new organization requires the strength derived from combination of various organizational structures in order to operate effectively. Hybrid structures combine both matrix and functional organizations (Untitled article, p 135). This structure has the inherent ability to solve arising organizational problems without adhering to pure theoretical solutions which may not be applicable to specific problems (Hills & Jones 218). As shown in Figure 2, administration functions are controlled at the headquarters while other functions are controlled in the divisions.
By adopting a hybrid structure, it would facilitate the transition from a single entity into a merger which is much larger in size and comprises of more complex tasks. In order to promote competitiveness, the organization can ensure highly specialization through hybrid structures. For instance, specialized activities may be centralized at the headquarters while other self contained operating units such as manufacturing are operated independently. This provides organizational groups with the functional support that they need and also enhances technological innovation.
Its easy implementation and the principle of specialization simplify tasks and boosts creativity and innovation in the manufacturing and engineering sector. In addition, the structure facilitates the achievement of economies of scale through central provision of common services. Hybrid forms of organizations shifts the legal boundaries thus enabling the establishment of an independent business unit from the acquisition. Hybrid organization structure is more suited for the new establishment (Untitled article, p 135) relative to a flat structure due to its ability to group work under different functions which promotes specialization, product improvement, invention, and further minimizes work overload.
Assessing the appropriateness of alternative structure using contingency approach
The contingency theory suggests that the structure of an organization will depend on the various factors influencing the institution (Montana & Charnov 11). An effective organization should adjust its structure in order to respond to the changes in the environment, technology, and other prevailing circumstances (Untitled article, p 148). Consequently, the organization structure of a particular firm has to adjust itself depending on varying contextual factors.
Research has indicated that the size of an organization is a key variable in determining the shape of the organization (Untitled article, p 147). The increasing size of W L Gore requires the organization to adopt a structure which will accommodate its increasing organizational needs. Hence, the new establishment formed as a result of W L Gore’s acquisition should adopt a formalized structure with clear lines of authority to cater for its increasing size. After merging with a tall organization, its structure would have to be altered in order to effectively manage the activities of the two organizations. A hybrid structure creates authority at different levels of the business operations and project execution hence effectively managing company’s operations.
External environment is constantly changing in terms of market conditions, competition, and political as well as economic conditions (Untitled article, p 147). These changes may directly or indirectly affect the organization structure hence the need for restructuring. Since the external environment of the merger will be changing with increased competition, a new form of structure is required. W L Gore faces competition from other companies specializing in the production of electronic products, industrial products, medical products, and fabrics in Europe and other international markets. The sales and marketing department regulated in division 2 should engage in extensive promotion of the company’s products in the market in order to acquire and maintain competitive edge.
W L Gore utilizes process production methods in its operations. It is therefore important for these processes to be managed under specific department in order for them to meet their objectives and promote competitive advantage through product improvement and product innovation. Under hybrid organization, a leader is appointed in each department and is charged with the responsibility of ensuring that the department achieves its objectives in an effective and efficient manner.
The nature and scope of task is also a major determinant of the organization structure to be adopted (Untitled article, p 147). Since the contingency approach, the dictates that an organization should adjust according to the tasks involved, complex tasks require complicated structures while simple tasks can be effectively managed in simplified organization structures. Since the new organization has an increased range of operations to deal with, the hybrid structure plays a key role in incorporating both specialization and project management which enhances business operations in the new organization.
Technology, which incorporates the approach and techniques used in production process highly influence the organization structure (Untitled article, p 147). Production of electrical products in WL Gore coupled with the technology needed to perform the operations of he acquiring firm would drive the structure towards hybrid system which is more diverse and complex making it more suitable for dealing with a wide range of organization activities.
Conclusion
Good performance achieved at W L Gore confirms that flat organization structures promote performance of a company. The organization promotion of team work and cooperation has served to promote participation and increase associates output leading to improved business performance. However, the structure is effective in small enterprises and upon the company’s acquisition by a tall structured company, the contingency theory dictates that it would have to restructure itself to meet the needs of the new establishment.
There exist numerous structures that a company can choose from in order to improve its operations. When choosing the most appropriate structure, the organization has to put into consideration the factors that influence the company at a particular time. The case of WL Gore is a clear demonstration of the importance of restructuring due to organizational change whereby the organization adopts a hybrid structure in order to cater for the expanding number of functions and to enhance performance of the merger.
Recommendations
After the merger, WL Gore should abandon its current structure in preference of a hybrid structure which is more situated for the increasing size and functions associated with the new establishment. The organization should seek increased specialization and role specification in order to promote innovation and responsibility among the employees. Indeed, the roles of each associate should be clearly outlined in order to avoid role confusion and increase the output of technology. For instance, production process should be delegated to those qualified in engineering and manufacturing while administration should be delegated to associates equipped with the necessary administrative skills.
Through the hybrid structure, the new establishment should ensure that various roles are delegated to specific departments in order to promote perfection. The company should establish a marketing and brand management department which should be charged with the responsibility promoting the company’s products, ensuring their competitiveness and dealing with other issues emanating from the external environment.
Further, the new establishment should avoid bureaucratic procedures in their operations since they slow down decision making and communication within the organization. Since the new establishment is characterized by complex tasks, they should adopt hybrid structures to enhance their operations.
References
Dale, Ernest. Management: Theory and Practice. St Quezon City: Rex Bookstore Inc, 1969. Print.
Griffin W. Ricky. Fundamentals of Management. New York: Cengage learning, 2007. Print.
Hill, Charles., & Jones Gareth. Essentials of Strategic Management. New York: Cengage learning, 2008. Print.
Loudon David., &Stevens Robert. Marketing Planning Guide. London: Routledge, 2005. Print.
Montana J. Patrick., & Charnov H Bruce. Management. New York: Barron’s education series, 2000. Print.