Major Individual Assessment 1
Case Study 1
The contribution of the lower-level employees to the strategic direction of the business is beneficial to the business since it encourages innovation through the inclusion of the ideas of everyone in the organization. The contribution of lower-level employees is contrary to the usual functioning dynamics in an organization where the highest-paid person makes the decisions. Allowing lower-level employees to contribute to decisions on the strategic direction of the business overturns the strict organizational format for the potential to strike gold through innovative ideas presented by lower-level employees (Spreitzer & Mishra, 1999). An organization is dependent on the human personnel working therein; therefore, every person in the organization is responsible for steering it towards its goals. A company that allows lower-level employees to have a say in its strategic direction can essentially tap into all parts of the organization through the opinions of lower-level employees and make appropriate strategic decisions. Since lower-level employees are more involved with the circumstances of the day to day functions of the organization, they are in a better position to understand a situation and provide a suitable solution (Hamdan & Alheet, 2020). Therefore, the potential for innovation is one benefit of allowing lower-level employees to make decisions about the strategic direction of the organization.
Additionally, allowing lower-level employees to contribute to strategic decisions breeds inclusivity and belonging among the lower-level employees. Once a business shows all employees that their ideas are all considered with the same weight, it gives everyone a sense of importance and value. When all the employees feel valued, they are more loyal and work harder towards the attainment of the business’s strategic goals. Inclusivity allows the employees to feel part and parcel of the business and hence increases the potential for success (Spreitzer & Mishra, 1999). Lower-level employees may also help the top-level management in considering ideas that may not be apparent due to different interactions in the company and different positions of observation. A lower-level employee understands the day-to-day challenges experienced in the business, which may not be the case with the senior employees.
However, including the contribution of lower-level employees to a company’s strategic direction is time-consuming. Decision making is a complex process that, in some cases, demands the leader to make urgent choices (Park, 2015). Suppose the organization would have to include or listen to the contribution of all employees with proposed solutions in the event of an emergency. In that case, the organization will miss the small window of opportunity for making that decision. Such a time-consuming decision-making process is likely to cause losses to the organization, although it breeds inclusivity and teamwork. Additionally, an organizational culture that allows for the inclusion of employees’ contribution demands that all employees be treated equally (Hamdan & Alheet, 2020). This form of equality does not work well in the contemporary bureaucratic employment environment since it either brings about insubordination or creates cracks in the system. Some type of employee discrimination is justified. For instance, some confidential information about the company should not be availed to all employees due to the notion of equality. Therefore, such an organizational culture places the company at risk of exposing confidential data to the public.
The innovative strategy employed by Shutterstock’s executives exposes the company to reputation and compliance risks. Reputational risk is a threat to the goodwill of a business, and it can occur either as the direct result of a company’s actions or as the result of the action of an employee (Hillson, 2006). Shutterstock’s collaborative experimentation encourages the involvement of lower-level employees in decision making. This strategy is contrary to the strict and organized bureaucracy of modern organizations. The bureaucracy in place has the capacity to streamline the company’s objectives to ensure that the entity portrays a suitable image to the rest of the world (Hillson, 2006). Therefore, a strict and structured organizational culture plays a crucial role in creating and enforcing the company’s reputation. Shutterstock collaborative experimentation poses a reputational risk since it intends to try out innovative and experimental ideas.
Although some of the company’s innovative ideas may prove profitable, some ideas are likely to generate losses and additionally damage the company’s reputation. This reputational risk can be minimized by a functional and critical assessment of all innovative initiatives (Nielsen & Randall, 2012). Additionally, when the initiative is assessed, and the company decides to move on with it, Shutterstock should roll a test initiative or program out to a select group of individuals to receive feedback before extending the initiative to the general market. This test launch will allow the company to obtain as much feedback and reaction as it needs to make sure that the initiative does not threaten the reputation of the company (Hillson, 2006). Shutterstock’s collaborative experimentation also poses a compliance risk. Since the company intends to set itself apart from the rest of the competition innovatively, it will most likely venture into industries or sectors that are regulated by specific laws. Therefore, Shutterstock should ensure that they are not fined or locked down for failure to comply with the legal regulations of the sector to which the initiative belongs. Shutterstock should either have a competent legal department or hire competent lawyers to ensure compliance and avoid compliance risk.
Case Study 2
After WWII, Coles experienced rapid expansion and adopted a more advanced horizontal organizational structure. With the rapid expansion of Coles into a series of self-service stores, some additional activities became the company’s concern. For instance, logistics, warehousing and distribution became increasingly critical to the success of the business. Therefore, these activities required more of the business focus.
The horizontal organizational structure is a simple organizational format with two or three layers of command. The top position in this structure is occupied by George Coles, the owner of Coles; the second layer is occupied by different managers, while the third layer is occupied by the employees who report to the second layer managers. The horizontal organizational structure is a simple structure that is exceptionally functional in small startups and is usually maintained by these businesses even as they expand until when it becomes necessary to switch to a different organizational structure (Lunenburg, 2012). Coles used a horizontal organizational structure from its inception due to its simplicity, and since it was a small startup, the structure was functionally efficient. The middle layer level of the organization had fewer managers since food retailing was Coles’ central function. After WWII, Coles experienced rapid expansion, transforming it into a self-service grocery store. Therefore, the organization necessarily developed new functions such as logistics, warehousing and distribution. Coles increased the number of managers to include a logistics, warehousing, and logistics manager to cater to these functions.
Although they experienced rapid expansion, Coles retained the horizontal organizational structure since the requisite functions had not yet exceeded the structure’s capacity. Additionally, this structure eliminates the need for a middle man and hence was the cheaper option for the expanding Coles. The horizontal organizational structure is appropriately flexible and can be adapted to suit any situation that the organization faces (Lunenburg, 2012). In this case, Coles only had to adjust the number and functions of managers to maintain a functional organization after expansion. Finally, the horizontal structure is employee-focused and hence contributes to a sense of belonging in the employees, which nurtures the attitude of collaboration in the organization. This attitude contributed to the further success of Coles.
The product organizational structure best describes Coles structure following the incorporation of the internet and the eventual diversification into Coles service stations. Coles had expanded beyond a specific region and could access a significantly larger market than before these significant advancements. Expanding into a different venture increased the complexity of Coles organization and, therefore, justifies Coles use of a product organizational structure (Lunenburg, 2012). A product organizational structure is similar to a functional organization culture; however, it is more suitable to organizations with multiple differentiated products.
Coles operates grocery stores and service stations; therefore, these form the two divisions into which its product organizational structure is divided. Under these two divisions are separate and distinct functional departments such as sales, marketing and such departments as are necessary to operate Coles adequately (Cabrera et al. 2003). Coles is likely to have selected the product organizational structure model since it allows the business to operate as a single entity while its grocery and petrol station services are differentiated. This differentiation shields the organization from complete failure in case one division fails. Failure in the Coles service station does not affect Coles grocers. Therefore, this structure assists in minimizing the risk of failure.
In addition, a product based organizational structure facilitates the flexibility of the organization. Although Coles activities and operations are becoming increasingly complex, the selected organizational structure allows the company to exercise flexibility. By dividing Coles into two major divisions, the grocery stores and the service stations, these divisions can function as separate entities in their day to day functions since they will all have departments responsible for the core functions of each division. Every division is responsible for its success; hence this facilitates the overall success of Coles. Product organizational structure is essential since it allows employees to specialize in one product hence increases the employees’ experience and expertise to serve the company. Therefore, Coles is likely to select the product organizational structure due to the numerous benefits guaranteed by this organizational structure. Coles is likely to merge the technological innovations with the product organizational structure in place. Since the internet is essential in marketing and advertising, Coles marketing departments in each division will have a social media marketing sub-department to exploit the potential of the internet.
Cabrera, E. F., Ortega, J., & Cabrera, Á. (2003). An exploration of the factors that influence employee participation in Europe. Journal of world business, 38(1), 43-54.
Hamdan, Y., & Alheet, A. F. (2020). Influence of organisational culture on pro-activeness, innovativeness and risk taking behaviour of SMEs. Entrepreneurship and Sustainability Issues, 8(1), 203.
Hillson, D. (2006). Integrated risk management as a framework for organisational success. In Proceedings of the PMI Global Congress.
Lunenburg, F. C. (2012). Organizational structure: Mintzberg’s framework. International journal of scholarly, academic, intellectual diversity, 14(1), 1-8.
Nielsen, K., & Randall, R. (2012). The importance of employee participation and perceptions of changes in procedures in a teamworking intervention. Work & Stress, 26(2), 91-111.
Park, R. (2015). Employee participation and outcomes: Organizational strategy does matter. Employee Relations.
Spreitzer, G. M., & Mishra, A. K. (1999). Giving up control without losing control: Trust and its substitutes’ effects on managers’ involving employees in decision making. Group & organization management, 24(2), 155-187.