Introduction
Northway Lodge Limited is a family business established to provide logging services. After producing remarkable financial results, the company diversified its operations to include construction services, plane services, and lodges. However, depleted wood stands affected negatively on logging business and the proprietors had to respond. Harry Johnson, who was the president at the time, responded to this development by starting camps where people would fish and hunt. This development forced the management to convert three logging camps into lodges.
The business experienced numerous operation problems due to a lack of an organizational structure. An organizational structure explains the mode of recognizing individuals, style of leadership and decision-making process. Everybody in the business reported to Jim who had increased his responsibilities in the management of the business. A business structure ensures effective administration activities in a company. Indeed, there is no organizational structure in Northway Lodges Limited.
Organizational structure
An organization refers to persons who make up a body for administering something through the division of labor. People possess limited abilities, thus the importance of organization in meeting various needs. Advantages of applying an effective organizational structure include clearly defined roles, cohesion and increased productivity.
At Northway Lodges, the situation is different because a single individual handles most responsibilities. There are no clearly defined roles and responsibilities for workers. Using cabin girls as waiters clearly evidenced this argument about the organizational structure applied in the company. This happened because the structure at Northway Lodges lacks a clear definition of roles for various employees.
Katz and Kahn developed key concepts relating to open systems theory. This theory entails strong input into businesses, development of input, strong output, and recycling. Three features that define an organization are a division of labor, clearly defined rules, and a decision-making structure. Northway Lodges Limited applies a top to bottom structure in its operations.
This structure involves making key decisions at the top-level and extending the task of implementing decisions made to the junior staff. Jim was responsible for hiring, firing, maintenance, guiding, payroll and all the other financial responsibilities. Any decision made by the President was final and no one could contest.
Jim delegated responsibilities to some individuals in all of the three lodges, but they lacked independence in making decisions regarding the lodges. This structure bases on believing that Jim has to contribute to every decision made regarding the company. This manifests its self after Jim’s hands over the Presidency of the business to his son Arthur.
However, Jim continues to hold certain responsibilities as well as his position on the board of directors. This structure appears to be a tradition for everyone who leads the business as its President. Though the division of labor has improved with successive leadership, one individual controls the decision-making process. This denies other people in the business a chance to make their contributions.
Strengths and Weaknesses of the Structure
The structure applied at Northway Lodges Limited does not exhibit three universally identified features of organizational structures. Therefore, it is right to say that Northway Lodges Limited lacks an organizational structure. However, the company operates as usual meaning that a certain structure applies. The system applied has more weaknesses than strengths. First, there is no proper division of labor. Everybody in the company reports to the President. Lack of a bridge between the management and employees has caused many problems.
Organizations divide labor in two ways. The first method is vertical, which involves all stages of a business from production to distribution. The second method is horizontal, which involves dividing labor in line with the baseline of business. Vertical division of labor constitutes the top level, middle level, and bottom level. Top-level develops strategies for a company as well as supervising middle level. Middle-level guide operations in a company in addition to implementing the designed strategy. Bottom level performs tasks needed to keep an organization alive. Horizontal division of labor entails identifying and allocating tasks to groups within a company.
Another weakness with the structure applied in the company is lack of proper communication. This problem links with the poor division of labor. Arthur was handling numerous responsibilities that denied him a chance to communicate regularly with his workers. This demoralized the employees for they had to do some of his assumed duties.
The company lacks a formal method of communication. The structure applied by Northway Lodges Limited is not participatory. The success of an organization relies on the participation of all members of the organization, management, and decision-making processes. Another weakness of the structure is that various leaders and managers lack independence in decision-making.
Possible Solutions
The situation at Northway Lodges needs improvement to achieve proper structuring of activities. The management does not handle certain functions effectively. In an organizational structure, two divisions applicable are functional structure and divisional structure. Functional structure organizes companies in departments with defined roles.
Examples of departments include finance, marketing, production, and customer care in some companies. Functional structure applies specialized labor, and individuals find it easy to understand. On the other hand, the divisional structure organizes companies into units depending on the activities and services provided by the company.
One strength related to the divisional structure is that it enhances expansion as a company can easily add an extra unit if it increases services or products. The divisional structure also allows the participation of all members in decision-making. However, this structure encourages replication of efforts by other people as well as a poor communication environment.
These two structures are applicable in solving the situation at Northway Lodges. These structures would bring organization in terms of dividing labor, involving individuals in the management process and decision-making process. If Northway applies these structures, it is imperative to ensure that all departments are well coordinated for maximum productivity.
Conclusion
Northway Lodges does not have an organizational structure that defines operations in the company. The nature of operations provides a communication barrier between management and employees. All functions in the company can be structured in a similar style and still achieve its objectives. Communication in business ensures coordination of activities and information management. The President of Northway Lodges assumes numerous responsibilities that deny him the chance to relate with employees and meeting some of his responsibilities.
Some structural changes could apply to improve operations in the company. The first recommendation for the company is to restructure its decision-making process. Decisions in business should involve all members to ensure there is no bias towards some employees. At Northway Lodges, the President makes all decisions.
The second recommendation for the company is to restructure its criteria for dividing labor. Division of labor is crucial in any organization. However, if the roles and responsibilities of various departments and employees are not well defined, there is a high likelihood of conflicting interests among employees. At Northway Lodges, employees perform various duties that end up demoralizing them.