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Challenges That Face A Organization Structure Business Essay

Paper Type: Free Essay Subject: Business
Wordcount: 5322 words Published: 1st Jan 2015

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“An organizational structure consists of activities such as task allocation, coordination and supervision, which are directed towards the achievement of organizational aims. It can also be considered as the viewing glass or perspective through which individuals see their organization and its environment.”

Challenges that face a Organization structure:

In an organization there are two types of structures on which the business operate formal and informal but right now I am emphasizing on the formal structure of a business such structures are used in businesses where individuals are established in a network of relationships because the authority and responsibility and

communication can be controlled such organizations are more centralized such functions are assigned to individuals or to particular departments in which they are answerable for completing the task one can see such tasks in many organization small business or new entrepreneurs are more inclined towards centralized kind of structure e.g. like large stores they have one department for buying goods and dealing with prices and one department which would do marketing here I am referring to just advertisement as marketing for a small business like make broachers and throwing flyers giving promotion on sales for customers to buy a particular product for a certain time period these all decisions are made by the owner or the ceo a more task oriented organization most of the very large firms also apply such structure in there businesses like tesco wall mart .

Organization structure consists of different things which are as follows

Work specialization


Tall and Narrow structure

Flat and Wide structure.

Matrix structure.

We are going to discuss each characteristic below step by step

Work specialization:

Any one having work experience according to the requirements of the organization can be taken in an organization according to their rule .they should be having a work experience to work in an organization.


When a person is selected in an organization he will be put in such a department in which he is specialized to do work for the organization for example: a man knowing to make accounts can be sent to finance department .there are different type of departmentalization’s

1. Functional departmentalization

This deals with the group activities performed according to the function.

2. Product departmentalization

This deals with products introduced in the organization

3. Process departmentalization

Is that which deals with a task given to an organization and they have to perform on it .

4. Geographical Departmentalization

Is that in which standards would wary from one area to another. In this there can be a strong relationship between a customer and an organization. But there is a disadvantage of it also and that is too much cost will come on traveling, collecting information etc.

5. Customer departmentalization:

Customer departmentalization is totally linked with the customers .to collect customers informationManufacturer can handle different types of customers i.e. Industrial buyers and consumers. For example Manufacture can handle different types of customers i.e. buyers, consumers etc.

Elements of Organizational Structure:

Span of control

Chain of command

Formal or informal

Centralized or decentralized



Types of organizational structure:

Flat Structure:

A flat organization is one which, in relation to its size has a small number of hierarchical levels. The structure is simple with a fast access of communication. Decision making is quick. The structure is in expensive to maintain and the chain of command is easily identifiable. While on the other hand it is risky in a way that it’s too hard for one person to handle many responsibilities.

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Figure 1

Tall Structure:

A tall organization is one which, in relation to its size has a large number of levels of management hierarchy. There is close supervision among the employees and this keeps them motivated. The role of individuals is clear and well defined, activities are standardized and they take place in an efficient manner. Tall structure is criticized to be expensive with slow decision making and slow communications. Often there is a conflict between sub units.


The operation manager has a close eye on every employee and tasks that are assigned can be fulfilled completely

Interaction between the employees they can help out each other in their work.

There are no conflicts between the employees if there is it can be resolved easily.

The policies are easier and quicker to implement


The disadvantage is that organizations have to cope up with the challenges of greater flexibility in the form of opposing views of team members.

The group and team conflicts need to be handled efficiently.

Work load on the on the individual employee.

Matrix structure:

Matrix structure is the combination of Product, customer and functional departmentalization. This means that every department working in an organization is responsible for his work .All of the departments work on a project and when it finishes they go on the next project.


The advantages for matrix structure are as follows:

1. All of the department work together

2. All specialized people work on a single project

3. There is flexibility in the work


The disadvantages are as follows:

When too many people are working then there is slow decision making for the project.

There is no loyalty between the managers

When too many people are working on a single project many managers are required in which cost for those managers go high.


Culture is a collective self image and style. Policies and practices style of the organization. it is shared value and beliefs norms and symbols like army in Pakistan the system is very centralized .there are many factors going in organization culture as follows:

1. Economic conditions

2. The nature of business and its tasks

3. Leadership styles

4. Policies and practices

5. Structure

6. Characteristics of the work force

Economic conditions

They are very important in culture in a stage of recession too much money chasing to goods or as depressed or challenged situation. very strong decisions are taken to deal with the competitors .

The nature of business and its tasks:

Type of technology used in a business to complete its tasks and be co efficient is different from business to business as a business has to create pace and priorities associated with different forms of work e.g. nasdak is very different genre than a person who researches in Africa or in an advanced lab.

Leadership styles:

The approach used in exercising authority will determine the extent to which sub ordinate feel alienated and uninterested. Leaders are known as the entrepreneurs they play a very vital role in the organisation culture all the descion making is under the leadership. This is an important factor because issues like who will do the job, how to do the job and when to do the job is be resolved for this a team need a formal structure and a leader. Furthermore leadership is also important because leader motivate the employees. If the employees are motivated then the output is more then the input.

Policies and practices:

Level of trust and understanding that exists between all the members of an organisation e.g. employees and managers can often be seen in policies, these are the major factor of an organisation culture, relationship between the members of an organisation is known as policies and in such relationship brings different tasks which have to be achieved and that are known as practises. In such practices have to be achieved.


They way in which work is organised authority exercised and people rewarded will reflect and emphasises or control flexibility or rigidity

Characteristics of work force:

Organisational culture will be effected by the demographic nature of the work force e.g. age sex and personality.


Analyze the relationship between an organization’s structure and culture and the effects on business performance.

An organization cannot work without both the factors that are culture and structure. Its like they are linked with each other if there is structure in the organization and there is no culture so there will be a very big mishap in the organization .The organization will down as quick as it can because there is a big need for having culture in the organization .There should be respect for every one, there should be someone who could lead an organization, there should be a leader who could make decisions.

There are many factors and advantages of culture relating with structure .If there is a structure and people working in that organization don’t know how to talk to the managers even though they are given departments in which they are specialized to work for they can never succeed in that project assigned to them .Many other factors like leadership which is a must ,if its not there will be no one making decisions in the organization every one will become a leader himself so at the end there will be big setback for the organization. There are policies which have to be followed which give a boost to the organization because it shows the way to the workers how the work is done

Same goes with structure if suppose there are is culture in an organization, every one is giving respect to every one plus there are leaders, polices every thing that comes in culture but there is no structure involved like departments , different types of structures for different types of tasks the project if assigned to them will go down the drain because no one will know where to work and whom to work for .specialized people are meant to be set there in which they are specialized e.g. a person specialized in doing a work for finance if he is sent to do marketing he will fail simply because he is not specialized to do that work, if there was a structure he would have been sent into the finance department .

Even though in different types of businesses there is culture and structure involved because without it a business cannot run .Any business running with culture and structure will be the best business in the market because they will be following different rules and regulations, they will be set in that place in which they are specialized to do work for .e.g. if a company wants to make a product then it will go through different departments there will be decisions taken and hence it will be brought in the market step by step .So structure and culture is really a must in any type of organization , business etc.


Analyze the factors which influence individual behavior at work.

There are many factors that influence individual behavior at work but one the of the most important are as follows


Perception .

1. Personality:

Personality is defined as the distinctive traits and the characteristic of a person and the relation to others. Personality plays a very important role in individual behavior of work in an organization. It shows the character of a person in the organization. Personality is jugged by other people in two ways mentally and physically. Personality in an organization makes tells the person who he is .Personality can be in a good way as well in a bad way. Its not necessary that personality of a person in an organization while doing work is in the positive way it can be in a negative way also e.g. If a leader has lead the organization in a good way that shows his personality in a positive way but if a leader could not lead the organization in a good way so that shows his bad personality .Personality in an organization has some following factors:

1. Neuroticism.

It plays an important role of showing emotions in a body .If it is high in a body then it shows tension on a persons face .It makes a person get nervous and he becomes sensitive and on the other hand if it is low it show activeness in a person and gives a fresh look on a persons face.

2. Extraversion:

It deals with the energetic levels of the body. If it is high it shows a person to be fully energetic but if it is low it shows that the person is not energetic plus he is a bit shy and quite.

3. Openness to experience:

Openness is about the imagination. High openness has wide range of imagination and low openness has low range of imagination.

4. Agreeableness:

Agreeableness derived from the word “agree”. It is necessary to have high level of agreeableness which can boost up ones personality .e.g.

To agree on different ideas etc


It deals with the attention of which a person is working if conscientiousness is high the person is always going to focus on the job assigned to him he will try his level best to fulfill that job but if it is low then he will show signs of carelessness and will not be willing to do the job so its better that one should have high level of it.


Perception plays a very vital role like personality does in the organization Perception the word means to perceive.

P4:-Analyze how organizational theory underpins principles and practices of organizing and of management.

The organizational theory underpins the principles and practices of organizing the management so first we will discuss what management is


“Management is the strategy of getting people together to work on a task given to achieve a certain goal in the limited resources.”

If we divide management:


{which gives the image of human resources }


{which tells us about the time }


{M stands for money}


{ Ent stands for enterprise }

So combining them we can see that to earn money at a given time in the human resources. Management is the key to leading an organization .Culture and structure are linked with management .Management shows the art of working in an organization. Management is necessary because it guides the person for achieving the goal.

Different theories are given which are further discussed below :

1.Fayal’s theory about management :

Fayal gave a theory about management and it has five steps as follows:

1. Planning:

Planning is the first and the major part of management in an organization .Planning has to be done because no goal can be achieved without a plan. Plan is a short tem thinking when the plan has been accompolished then strategy takes place.Whenevr some new work comes into an organization first it has to go through a plan of how to achieve that goal

2. Organizing

Organizing deals with establishing the internal structure of an organization. Even though a plan has been made but it cannot be accomplished so easy, there are teams made to achieve that goal according to the plan so these all aspects have to be organized in a way so that the goal is easily achievable. Different managers are made they futher bring more employees for the work they organize each and every thing.

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3. Commanding

Commanding is derived from the word command which means to motivate. Fayal has given a light on commanding in management because there is need of motivation when there is a task given to the people in an organization. Without motivation every thing is going to be dull and no one will be willing to do any type of work.

4. Coordinating

Coordinating deals with monitoring the activities done by people, employees working in the organization for a given task. Each individual work is brought together coordination takes place by checking the time , given resources etc.

5. Controlling

Controlling the last step of fayal’s theory discusses about performance of an organization and establishing it according to the standard of the firm .This is the last step and in this step what ever the work has been done in the organization and whatever the goal has been achieved it is then controlled in to get the best outcome result.

The manager’s role theory by Henry mintz berg:

Henry Mintz Berg discusses three main points in his theory about management and they are given as follows:


Informational roles

Decisional roles

Interpersonal roles:




Figure Head:

The first point is figure head .Figure head gives a light on the manager which means that a manager is the one who represents the organization. Manager is a character in an organization that every one follows. And he is the one who leads from the front.


Manger then leads an organization .He works as a leader .He then appoints different employees working for him.


It deals with communicating and building a relationship. Manager’s duty is communicate with outside the organization and motivating them to work.

Information roles:





Monitor means to observe .Manager plays an important role in monitoring an organization where he keeps an eye on the whole organization and keeps his employees updated and share information’s with every one.

2. Disseminator:

Manager shares information from outside the organization and from other employees working outside the organization.

Spokesman :

As manager shares information inside the organization he also shares his information outside the organization .His plans ,ideas , policies etc .

Decisional Roles


Enterpenurers are thought to be leaders they are those people who give ideas and bring co effiency in there staff trough different ways by using different theories e.g theory x and theory y they utilize the resources and the time given to them to make their team more efficient an effect which is just like synergy 2+2=5 but in reality enterpenurers are idea givers or the people who pioneer ideas e.g steve jobs of apple , bill gates are all thought to be great enterpenurers

Disturbance handler:

Manager is the only one who can handle any disturbance created in an organization. He takes necessary steps to resolve any type of problem inside the organization. E.g any unseen problem surgeon etc.

Resource allocate:

Managers are responsible for allocating human, physical or monetary resources etc

Negotiator :

Managers have the ability to negotiate. They have an ability to discuss problems of different departments and then solve those problems by getting different ideas and sharing them with the employee’s .After the problem has been solved then he gets a profit from that unit.



Case study 1:

In the first case study we have seen that the organization was suffering very badly due to its culture. The organization was going down day by day .Their employees were not satisfied from the organization culture because whatever they used to do they couldn’t get a feedback .The employees were not given attention E.g. whatever they uses to do was disliked by the organization they were not given the proper information they needed to work on .

It was a big setback and had to be solved .it took one year to change the prevailing culture of the organization by the managers and different consultants working in the organization. They planned to rebuild the culture of the organization by first giving training to the employees and letting them know how to build up a team and work on any project .The training had to be done because they were totally lacking it .

There was another training given to the executives of the organization because they were the biggest setbacks for the organization because they didn’t know how to reply to the their employees so proper training was given to them in which they learnt how to discuss the major problems occurring to employees and to solve it in a decent way

Then there was a research done in the organization in which a meeting was held to take interviews from every individual working in the organization . Every employee , top level managers , low level managers participated in this interview. The interview that was taken from them was all about the past culture. Every one working in that organization gave their views on how the culture was and what changes should have been made to bring the organizational culture on the top .This interview gave a very good result to the researchers.

After some time when interviews were taken and trainings were given then a positive sign could be seen in the organization .Every employee working and managers etc every one was loving and feeling the new culture of the organization. Employees were satisfied as communication between them and the mangers was good .

Case study 2:

In this case study there is a light given on the structure of an organization .there are many structures in an organization but over here we are studying about the matrix structure an its conflict. Conflict means a clash and matrix structure is that structure in which there are different departments and everyone is allowed to work in his department only this would lead to a conflict because in each department there are managers and those managers will focus on their departments only.

It was a very big issue so the researchers had to be called up and when they started researching they found out that the employees were facing problems with the management which was of two types

No.1 Functional mangers

No.2 Project managers

So the researchers’ started taking the interviews from 46 people working in the organization. When the interviews were over they got to know that as the authority was equally divided among the departments so managers had the power of changing the rules and the regulations of the department . What conflict they were facing was that when the rules were changed the employees were not properly informed .the rules and the norms of the organization as the authority was equal divided among all the departments.

So the researchers came up with a very simple plan and that was tactical decisions were made by involving both the departments. The goals were clearly defined to employees from which the employees became happy because the task that were given before to them were not clearly defined to them. Hence after all this research about the matrix structure and defining goals to the employees with decision taking from both the departments resulted in a positive sign.

So it is clear that command and authority should be taken properly in the organization and letting the employees know about the decision taken by the managers and inform them clearly.


Task for M1:

This task should be taken as continuation of your answers to P1 and P2, Here you will discuss what is the prevailing structure and culture in the organization. This will be seen with the view that you can see the application of the concepts in real life:

The organization that we have taken is Tesco.

Background of TESCO:

Tesco is a supermarket .it was brought up by Sir Jack. His vision was to have large number of variety of products in his store and to sell those products on cheap rates .The first store was opened in 1929 in a place called Burnt Oak Edgware. Tesco is the biggest supermarket chain in Britain and also have expanded their businesses in foreign in E.U. They are no trying to cover all the small shops available in any city just to expand their business.

Organizational structure of Tesco:

There are two types of structures involved in TESCO and they are as follows:

1.The structure of a Tesco store.

2. the structure of a company.

Store structure:

The structure of a store is really easy to understand because the employees know who their managers are and they get to know who the charge of each department is and who they are working for. There is only one head manager and then the employees.

The organizational structure of Tesco Company:

Tesco company has found more efficient ways of handling the tasks Technology nowadays plays a very important role in the organization. Tesco has advanced its technology so much that the problems that were being faced by the employees earlier have been left back. E.g stock odering etc.

The company is giving a free hand to the general staff and allowing them to deal with the customers themselves.

Structure that Tesco follows:

Tesco is a big company and runs centrally so it does not have that type of a structure but mainly according our knowledge about management Tesco is following matrix structure because mostly every person working in the company is linked with his own work and works in his own department..e.g. employees working in the store have their mission to serve their customer. There are manages board of directors etc.

Span of control:

The span of control is given to the managers and they are doing their work with their workforce. This means that each manager will have more employees to communicate with. There are team leaders managers night managers are different than day managers stock taking is done by night managers but the waste is checked by day managers there is a head manager which is accountable for the budget working hours and job appointments.

Board of directors:

There are board of directors in Tesco. Board of directors appoint Tesco’s managers’ which means all the decisions that have to be taken will be done by the board of directors. Tesco’s board of directors are in a place called Cheshunt.


There are different departments in Tesco company .e.g. like finance, ordering, etc but as the company is running centrally so it minimizes the cost of having different departments and offices etc. The finance department deals with the money if it is in Tesco’s company or in their small stores. Tesco believes in providing services they have booklets which have items which are customers see and order from the book from by barcodes and the order is posted and the good deliver on the other way there objective is to all the items available for the customers Ordering of the products for the stores is dealed with the ordering department.

Culture of Tesco:

Tesco never takes anyone for granted. Tesco knows that their customers don’t have to shop in Tesco. Tesco has to do everything that they can to give an experience to their customers that they should come again and become their regular customers. Tesco knows about one thing that if one becomes good with the customers and give them a healthy sweet environment of doing shopping they can get the best feedback.

That is the biggest reason that it has been like 25 years some of their regular customers come and shop because they know it what ever they want they can get it from Tesco.

When there is Easter or Christmas when there are those busy days their staff from the head office also comes to help out so that they can keep their customers happy and satisfied.

Customer satisfaction really brings Tesco on the number one chart.(tesco)


Give your recommendations on Tesco structure and culture:

Tesco’s problem in the structure:

As we know that Tesco doesn’t have proper departments because it is run centrally .There are no proper departments finance and high level managers, low level managers etc. The biggest problem in this kind of matrix structure that they can face is it that if one shop of Tesco fails in any of the most important factors like finance, ordering etc they won’t be having a backup plan for it .As there is a matrix structure and everyone is willing to do his own job if any problem will occur so no will care what will happen and this can may result in a very big loss.

Our recommendation should be that they should open a small office which can be given any name but its main purpose should be that in any type of problem they should be up to it whether it’s a finance issue or supplying, ordering etc.

There should be high level managers on top after that then the lower level managers and every one should be in touch with all of the shops and the super market .This not only will lead them into out of a major problem but also in decision making and stuff will become much easier. Wide range of experience will come in because they will be in touch with each department and let every department be updated with full information.

Tesco has issues regarding the supply chain some times as the part delays in the supply of items from the ware houses to the stores most of the items are import e.g they buy nuts from chitral to Africa latece which comes from Romania , the pit time which is just a window of 5 hours in the morning shift have to comply with the stock as in it uses last in first out the rule of lifo and fifo last in first out first in first out

Supply chain management must address the following problems:

Distribution Network Configuration: number, location and network missions of suppliers, production facilities, distribution centers, warehouses, cross-docks and customers.

Distribution Strategy: Operating control must be centralized or decentralized according to the situation .There should be direct shipment delivery scheme . cross docking which means direct store delivery should be checked. Mode of transportation should be checked in which motor carrying is involved including truck loading etc is also included . and questions of operating control

Trade-Offs in Logistical Activities: The above activities must be well coordinated in order to achieve the lowest total logistics cost.

Information: There should be held different kinds of processes through the supply chain to share valuable information,in which demand signals can be taken .information about transportation can be known .There can be a daily forecast report for the transportation. .

Inventory Management: Quantity and location of inventory, including raw materials, work-in-progress (WIP) and finished goods.

Cash-Flow: There should be an arrangement scheme be brought and different methods should be adopted for the cash flow. Proper payment process should be done and continuous information should be taken of cash inflow and payments.


Here you will apply the concept of organizations theory and and apply your knowledge to the organization under study:

As we know that there are different types of theories of management which include some


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