Organizations in Global Environment Business Management

Question: Discuss about the Organizations in Global Environment for Business Management. Answer: Section 1 The assignment is about organisational structure and design. Organisational structure is the combination of the co-ordination among different departments, task allocation and supervision to achieve the organisational goals. Flow of information towards different tiers of the hierarchical structure is determined by the organisational structure. In case of centralised organisational structure, the decision making power are mostly accrued by the higher authority (Goetsch and Davis 2014). The study focuses on different types of organisational structure. The lecture talks about the different key elements of organisational structure such as work specialisation, departmentalisation, chain of command and span of control. Work specialisation leads to the need of department segmentation within the organisation. The chain of command flows from the superiors to the subordinates. The superior heads are functional head of the organisation, project manager and department head. The span of control de pends on the size of the team member (Laguna and Marklund 2013). The span of control is stronger if the number of employees is small. Organisational structure can be distinguished as mechanistic structure and organic structure. The characteristics of mechanistic structure are existence of high specialisation in each department, rigid departmentalisation with clear chain of command (Morris et al. 2012). Formalisation of rules and regulations are high in this structure. High formalisation leads to the centralisation of power in this organisation. The main characteristics of the organic structure are presence of cross hierarchical team in each department. This structure facilitates the organisation by allowing free flow of information across the hierarchy. Decentralisation of power is another important characteristic. In this structure, span of control is wide unlike the mechanistic structure. Main difference between these two types of structure lies in the internal environment. The in ternal environment of the mechanistic environment is stable and that of organic structure is dynamic. Organisation design provides a platform to the organisation in which it can exercise its goals and objectives. The main contingency factors for organisational design are environmental uncertainty and organisational structure, application of technology, organisational strategy and size of the organisation. In the changing external business environment, organic structure is more suitable. Based on the organisation hierarchy, the structure can be distinguished as simple, divisional and functional structure. The study has highlighted the presentation of matrix structure, which includes co-ordination among workers, team effort, dual chain command and requirement of specialists. Hofstedes classification of culture influences the team building in an organisation. The classification is done based on power distance, time orientation, comparison between quality and quantity of life, avoidance of uncertainty and comparison between individualism and collectivism (Wilden et al. 2013). The study highlights holacracy structure, which is characterised as self management in the organisation. This structure increases accountability and transparency in the organisation system. This structure differs from team based and bureaucracy structure as unlike these two structures, holocracy system is independent of hierarchy management. Therefore, decision making process is more flexible compared to other two. Section2 IBM took decision to enter into the business of personal computer during 1980. At the initial stage, the company started with 12 people. However, with the expansion of business, the number employee has increased. IBM is a learning organisation. It has improved its organisation structure and design responding to changing business needs. It has dynamic organisation culture and hierarchy. IBM started its business with mechanistic structure and its limited resources. However, with the expansion of business, the organisational structure has changed to organic. Free flow of information has changed the internal business environment. Divisional structure is followed in IBM. The hierarchy is divided according to geography. Decision making Section 1 The lecture is about decision making process of different economic agents. Different group of individual has different perspective of decision making. A loan manager of a bank takes decision based on profitability. However, the profitability depends on the liquidity in the economy. The decision making leads to benefit of the society (Glimcher and Fehr 2013). A treasurer takes decision to make profit. In order to make profit, the treasurer has to expand the business. The business expansion requires investment in large equipment. Decision making process of every agent has three processes such as choosing among the alternative, implementation and evaluation (Scott and Davis 2015). The decision has to identify the best possible options before undertaking a project. For optimum decision making, the decision maker has to make a cost benefit analysis. The project, which has least cost, needs to be undertaken. For example, a car company can take decision to stop the car or alternatively chos e to launch new type of SUV. The reason behind this decision is either dropping demand in car market or the supply may have exceeded than demand (Snyder and Diesing 2015). Therefore, there would be a specific reason for every decision making. Three perspectives of decision making are ration, bounded and intuition. A payoff matrix helps in optimal decision making. In the view of Simon, economic man takes decision to maximise utility. However, the administrative man satisfies the decision maker rather than maximisation. Rational decision maker chooses mini-max strategy. The bounded decision maker uses simplified model and satisfactory decision. In contrast, intuition is based on experience. Intuition is cognitive and value based. The pessimist decision maker chooses maximin strategy, the optimists choose maximax strategy and the neutral chooses minimax strategy (Dane, Rockmann and Pratt 2012). Decision making conditions are certainty of event, risk of occurrence and uncertainty. In ca se of certainty, the outcome is known. In case of uncertain event, the outcome is not known. Therefore, uncertain event is associated with risks. The type of various decision-making is described as ill structured and well structured based on programming. Section 2 In the market of personal computer, there are numerous firms. Dell is popular computer manufacturing firm. Consumer chooses the product based on quality and price. In competitive market, there are other factors that can influence demand for PC and laptop. Reliability, warranty, weight, screen size and resolution and price are the determinant factors. Consumer considers the factors before purchasing laptop. In this case, consumes are the rational decision makers. On the other hand, the manager of Dell applies intuition in decision making. Intuitive decision maker applies past experience in the market of PC and laptop. References Dane, E., Rockmann, K.W. and Pratt, M.G., 2012. When should I trust my gut? Linking domain expertise to intuitive decision-making effectiveness.Organizational Behavior and Human Decision Processes,119(2), pp.187-194. Glimcher, P.W. and Fehr, E. eds., 2013.Neuroeconomics: Decision making and the brain. Academic Press. Scott, W.R. and Davis, G.F., 2015.Organizations and organizing: Rational, natural and open systems perspectives. Routledge. Snyder, G.H. and Diesing, P., 2015.Conflict among nations: Bargaining, decision making, and system structure in international crises. Princeton University Press. Goetsch, D.L. and Davis, S.B., 2014.Quality management for organizational excellence. pearson. Laguna, M. and Marklund, J., 2013.Business process modeling, simulation and design. CRC Press. Morris, W., Volosskiy, B., Demir, S., GaÃÅ' ndara, F., McGrier, P.L., Furukawa, H., Cascio, D., Stoddart, J.F. and Yaghi, O.M., 2012. Synthesis, structure, and metalation of two new highly porous zirconium metalorganic frameworks.Inorganic chemistry,51(12), pp.6443-6445. Wilden, R., Gudergan, S.P., Nielsen, B.B. and Lings, I., 2013. Dynamic capabilities and performance: strategy, structure and environment.Long Range Planning,46(1), pp.72-96.