Keeping extra stock of swimsuits in the nearby retail stores of Water Park does make any type of sense? If the size 11 is selling big in Chicago so would it be relevant to have same size shoes for women stocked in Chicago stores? CEO, Terry Lundgren after facing 16 long months of declined store sales has decided that it was the right time for restructuring organization for ensuring proper decisions by the retail team. Thus tried making the organization even more centralized as well as more focused one. The redesigning seems more fruitful than this. The CEO has also made purchasing, marketing along with planning as seven operations for regional offices that to the one headquarter of New York. In fact he tried replacing regional managers with those of local one for more number of stores. They had a single job of figuring what is selling more profitably. Designing of an organization is quite vital. In Exhibit 10-8 it is clearly stated about organizational two basic forms.
Combination of six element of the structure would lead to mechanistic organization. While adhering towards the chain of commands would let you to be sure of existence of formal hierarchies of all authorities. Here all people are there to supervise the other. At the increasing level of organization the span of controls was created tall along with impersonal structures. The distance of top and bottom organization started to expand as the top managers tries to impose strict rules. This was done as the top managing level teams were not able to control the lower level through proper and direct observation. Thus they also tried ensuring standardized practices. Management writers from previous era believed in higher degree of working specialization and also created job which were simple, standardized along with routine. The specialization through departmentalized surprisingly increased the rate of impersonality along with need for layers of the management for further specialized departments.
Another one is organic organization that is highly adaptive and is loose along with flexibility for rigid mechanism through organization. Even after having the standardized regulation the loose structure of an organic organization allows for a rapid change as per requirement. Various division of job exists but all of them are not standardized. The employees are made to handle problems in a professional manner with perfect training courses. This needs the support of rules and regulations for better handling at training processes. For example, it is not required for specific process to be followed by an engineer of petroleum for locating miles of oil source. All problems can easily be solved by the engineer by conversations being done with colleagues. Some of the professional standard would guide the behavioral. Organic organizations are lower at their centralization such that professionalism can be easily responded. This is done as the top managers are not seen to help with their expertise solutions.
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