Strategic Adjustment and Organizational Structure Implication

Introduction

Strategic adjustment is a recurring task for managers in all organizations. It involves reassessment of existing goals and objectives laid by the organization against the prevailing conditions in the business environment. The purpose of this process is to improve the means of achieving the goals by designing the plans to reflect on new changes and reassure the probability of achieving them. From the initial establishment of an organization, through its growth and development, managers have leant that strategic adjustment is a never ending process as it is the benchmark against which the performance of the organization is judged. Recently, the emergence of globalization has heightened the challenge of strategic adjustment by presenting the new changes to organizations very rapidly.

In the 21st century unlike any other time since modernization of both local and international business, managers have to contend with rapid changes in the business world as they make decisions on and adjust company strategies to accommodate the changes and guide the company to yield desirable results. As managers of various companies put up measures to cope with this trend, the effects of globalization in businesses brought about by managers readjustments on existing policies, frameworks and structures forms the core of discussion in this essay. Focus is put on the extent of globalization on local companies before a conclusion is drawn based on the extreme challenges that this trend is putting on international organizations’ organizations structure.

Organizational outlook

A typical local organization is usually divided into departments. Each department is responsible for a limited number of jobs which are further broken down into certain tasks. Therefore, some of the common department in an organization include, finance, sales and marketing, production, human resource department, transport or equally applicable is logistics and procurement and customer relations among others. All the departments in an organization are coordinated to function with employee motivations in a so called organization structure.

The process by which managers isolate and manage different aspects of organizational structure is called organizational design. The design must therefore produce a structure that motivates employees and builds team work. The nature of the organizational structure is related to the culture that it produces in the work environment. Managers’ decisions (strategic adjustments) against rapidly changing scenarios in the market place, as remarkably impacted by globalization, has produced variedly many results.

The challenges of globalization to managers

From scaling of the number of departments to drastically regulating the number of employees, globalization has sometime even meant amalgamation of organization as the struggle to command a wide market share remains the key force behind globalization in studies conducted by Rainey (2009). In the first instance, globalization was triggered by trade liberalization which perpetrated opening up of new markets in nations which initially practiced protectionism in Kubr’s (1976) observation. Therefore, globalization policies and practices which intends to expand international market by granting access for products from other nations in to local markets, and easier export of goods and service for trade in foreign markets heightened organizational design by presenting increased competition, one major challenge which must be constantly addressed promptly in the analysis of Kapoor (2008). Amidst these developments, the drive for profits remained the motive of organizations to operate in the market place either nationally or internationally. Fligstein (2002) observed that, part of the managers’ strategic adjustment options included merging departments which have similar or overlapping functions and deleting departments which may not be necessary. (p.386)

In order to keep abreast with globalization, David (2006) observer that, managers find it more daunting than before to economically adopt mechanisms aimed at reducing costs in order to earn the desired profits (p. 243). For example, a design that depends on relocation to new markets or laying-off some employees in order to put up a mechanised system which can be manned by few highly proficient workers implies expensive and extensive undertaking which may be non existent in the short run. The cost of running an organization profitably in the course of these changes is may require relocation to other markets close to the consumers, thus necessitating expansion of an organizations’ structure but managers have to strictly adhere to the principle of centrality as demanded by the supervisory function of managers as recorded by Fritz (1999).

In cases where globalization has lead to the discovery of new markets elsewhere in the world a part from the region where the business is situated, Davarzani et al (2009) learnt that, the supervisory authority of managers’ may require that the various departments of an organization be subdivided further and the company open a new branch in the new gold mines. The managers’ roles in monitoring the company operations and making strategic adjustments whenever it is deemed necessary notwithstanding, all the functions will have to be monitored from a central office be it in the home nation, USA or in the country where supervision is cheaper as indicated by Fenton and Pettigrew (2000). Managers’ are here again faced with the challenge of redesigning the existing structures to fit into the new design that can guarantee the organization profits and survival in the future.

According to Miner (2006) globalization also intervenes in an organization’s path to achieving its targets in the long run; quarterly or annually. This case is particularly clear in regard to the tasks assigned to staff in the production department, sales and marketing departments which may be forced to do with just so much in the midst of doubled work load aimed at meeting specific targets. Therefore, managers’ should be ready to cope with shrinking departments as witnessed by few number of stuff retrained to be migrated to these busy departments. Consequently some departments may remain with fewer people that usual and the stuff hired for jobs in the “shrink” departments are expected to multi task most of the time.

Besides, globalization has immensely impacted on the distribution channels of various organizations, all of which depend on the organizations structure for effective functioning as noted by Su and Kouvelis (2007). A directly affected component of most international firms as a result of this trend is the transport or logistics and procurement department. While transportation of products and raw materials may continues normally within the country and through foreign markets, channelling the product through the market since the advent of globalization has significantly called for strong networks. To this effect, managers sometimes have to cope with amalgamation as one concentrates on production the other focuses on transportation and distribution of the former’s commodities as suggested by Clegg.et al (2005).

Conclusion

Managers have learnt that success based on workers’ motivation, actually takes a lot of division of labour in companies’ structures and specialization of organizations’ functions in the era of globalization than before. Similarly, joining in the new trend of companies partnering in business and going international with both acting to synergize the other may be the best viable strategy in responding to globalization in the market place.

Reference

Clegg. S et al (2005) Managing and organizations: an introduction to theory and Practice. London, SAGE Publications Inc.

Davarzani et al (eds) (2009) Supply Chains and Logistics in National and Governmental Environment. London, Springer.pp. 44, 45, 106.

David, F. (2006) Strategic Management: concepts and cases.9th edition.Taiwan, Pearson Education Asia Limited and Tsinghua University Press. pp. 14, 243.250.

Fenton, E. and Pettigrew, A. (2000) Theoretical Perspective on New Forms of Organizing. London. SAGE. p. 14

Fligstein, N. (2002) The Spread of Multidivisional Form among Large Firms. London, SAGE. pp.378-386.

Fritz, R. (1999) The path of least resistance for managers: designing organizations to succeed. San Fransico, Berret-Koehler Publishers, Inc. pp. 13, 91.

Fritz, R. (1996) Corporate tides: the inescapable laws of organizational structure. San Fransico, Berret-Koehler Publishers, Inc. pp. 13,33, 59.

Kapoor, P.et al (2008) Business. Boston, Houghton Mifflin Company. pp. 260,263.

Kubr, M. (1976) Management consulting: a guide to the profession. 4th edition. Geneva, International Labour Office. p. 88

Miner, J.(2006) Organizational behaviour: Essential theories of process and structure. New York, M.E. Sharpe, Inc.pp. 249,255.

Rainey, H. (2009) Understanding and Managing Public Organizations.4th edition. San Francisco, John Wiley & Sons, Inc. pp. 119-124.

Su, Ping and Kouvelis, Panos. (2007) The Structure of Global Supply Chains. Hanover, USA.p.93

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