1. What are the different types of organizational structure and how to adapt them to the structure?
In order to classify different organizational structures, we first need to define what an organizational structure is. Will Kenton (6 feb, 2020) defined it as a system which outlines how certain activities are directed in order to achieve the goals of an organization. A company structure also dictates the flows of information between levels and teams. Having a company structure helps organize a company and work more effectively towards a common goal.
As a general grouping there are two different types of company structures: Centralized and decentralized. A centralized company structure is associated with a defined hierarchy within a company and has been used for a long time by big companies, departments and departments heads are clearly defined with a defined chain of command. This has changed recently to where companies are expected to be agile and be able to respond rapidly to changes in the market.
Start-ups have been using a decentralized form of management. This style has been used most often in tech start-ups where rapid change and flexibility is key. Here employees have a high degree of independence, which is needed to play to the strengths of the few employees a start-up has. Tasks are shared by different people and roles are not always clearly defined. Recently you can see big companies trying to adopt this kind of management style and try to make it work into their centralized way of managing. I experienced this during my internship at Lidl Belgium where I was part of a start-up style department investigating and trying new business models and technologies to see if they would fit with the company. This was a small team of 6 people each with a different type of specialization and generally out of the company structure, directly reporting to the CEO.
These 2 main ones can divide in a lot of more general types of structure, I’ll be discussing the main 4 types which are used in real life.
The first one is used in most small to medium sized companies this one is referred to as a bureaucratic structure. Different tasks such as sales and marketing have their own department and stick to their own assignments. These departments can also be seen as business units with their own tasks and department head. This leads to a pyramid style of hierarchy.
Secondly there is the flat hierarchy, this is used in smaller companies and start-ups. As the name implies these different teams directly report to the CEO. This structure manly works in small companies. When the company grows managing all these business units becomes too much to handle for a single person therefor the structure might evolve to a more vertical hierarchy.
The third form was a common structure but has recently fallen out of favour, this is the matrix structure. This was a structure where some employees worked and managed different structures, some employees might be doing procurement and logistics. This structure fell out of favour due to the complexity of leading these types of organizations
The last main structure is the use of business units, this form is manly used in big companies and multinational companies. This is used to divide companies in their different product lines, subsidiaries and supporting divisions. This is an effective way to deal with the wide range of activities big companies can have.
2. What are different processes to support a growing company and how to implement them
A staple in process development and Improvement is the Toyota production system. This system is the base for continues improvement. The system was born in post-world war 2 Japan. Resources like metal and other material to produce cars were scarce. Eliminating waste was the goal, using the available resources as efficiently as possible. These types of waste can be defined as follows: Excess inventory, which is stock management, to much steps in a process, defective elements or mistakes and much more. These wastes effect management and the bottom line of a company. Sakichi Toyoda believed that workers should have the ideal conditions in order to make good products, his follow-up Kiichiro Toyoda set out to make the ideal conditions to produce their products.
In order to implement standardized processes in a company you first need to define the processes. This is laborious process. First, you need to chart out what every person is doing in your company. This can be done with interviews and observing your employees. Personally, I have done this a few times during previous studies as a project. After the observing and interviews you start drawing the process flow step by step, every step needs to be included. After the first draft of this flow we went back to the respective people we interviewed to verify if this process was correct. Usually there were some errors which we corrected after. It´s important to include everyone to get the best possible view of the workflow. Employees must also not feel like they are under pressure or criticized as to get a as realistic view as possible.
After these steps we could go back to the Toyota production system with the concept of Kaiwen and jidoka. Jiidoka is a principle where you stop what your doing when an error occurs and find the root cause. Kaizen is a name used for incremental and continuous improvement. When the process is drawn out you can see where waste occurs and where the inefficiencies are within a company. When you find these, you stop what is going on and try to fix it in cooperation with all the people involved in the process. If a solution is found this process can be changed and eventually become the new standard. Every company should look at their process no matter which one and try to improve them. Even big established companies keep changing their processes in order to be more efficient and stay relevant.
https://global.toyota/en/company/vision-and-philosophy/production-system/
3. What different types of leadership and management styles are there?
There are a lot of different leadership styles, everyone has their own style. I´ll be talking about a few styles which I have found online in an understandable graph.
On this infographic you can clearly see what effects a general leadership style. You can focus on people or on the task in a perfect world you would focus on both the subjects for the best result.
The first style I´ll discuss is the autocratic leadership. The leader pulls all the decision making towards him and makes the decisions on his own. After making the decision the leader expects the others to execute the plan. Having an autocratic leader can have some advantages: decision making is faster, relieves stress for the subordinates as the leader shoulders the responsibility and it can improve performance in certain situations.
There are a lot of negatives with this leadership style. It can cause frustration due to poor communication; it can cause resentment and fear as people don´t always like being bossed around. If the leader is absent it can paralyse an organisation as the leader makes most of the decisions. This also can lead to missed opportunities as one person makes the decisions and might miss key elements other people did see. Still this can be used in companies who need quick and decisive decisions. For example, in a production setting where workflow is extremely streamlined, and a lot of supervision is needed.
The second style is the democratic style. This does not mean that the employees make all the decisions however, the leader listens to his employees and they can speak freely. Decision making is shared across the team, but the leader has the final say and responsibility. This creates a nice working environment where people can voice their opinion leading to a better performance. The risk of a catastrophic failure also decreases as the decisions are not made or influenced by one person. It has it negatives; decision making could be slowed down. An overdependence on the team can lead to issues when decisions need to be made fast.
This style can be used when working with people who have a lot of experience and are experts in their field. When ownership of certain things is needed involving a team creates a good atmosphere to work in.
Thirdly there is the transformational is where leader leads his team towards a change. This can be a lot of things, but the leader needs to have a clear goal and communication in order to get his team to that point. This leader type can be quiet and lead by example. Knowing you people is key, encourage and motivate them in order to change behaviour to the desired goal.
The communication is vision focused with balanced goals and trust in mind. Implementing this isn´t done in one day and in the beginning it will be inefficient.
Lastly there is the laissez-faire style, here the leader doesn´t get involved in the teams and lets them do everything. This is a very hand of approach. However, they are more concerned with the creation and articulation of the ideas. This creates personal responsibility, fast course direction and high employee retention. The negatives are big it creates lack of accountability, high stress levels and missed deadlines. This should manly be used in creative groups like marketing.
Sources:
Expert program management. Leadership styles. https://expertprogrammanagement.com/2017/02/leadership-styles/. Accessed on 20/02/20
Geoghegan, D. The successful leader part 1. 2020. Accessed on 20/02/20
Kenton,W. Investopedia. 9/02/2020. Organizational Structure. https://www.investopedia.com/terms/o/organizational-structure.asp. Accessed on 20/02/2020
Toyota. Toyota production system. https://global.toyota/en/company/vision-and-philosophy/production-system/. Accessed on 20/02/20
Davis, Stanley M. Lawrence, Paul R. Harvard Business Review. (1978). Problems of Matrix Organizations”. Accessed on 20/02/20
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