Ways to Improve Your Company’s Efficiency
There have been numerous personas that should be discussed when it comes to the topic of running a company such as the difference of culture, decision making, and motivate the whole company into shape.
Improving a company’s efficiency has always been one of the most discussed topics by executives and ones that were responsible for running the company. To run a company, it is the first priority to organize the company and collecting pieces of positions altogether and structured in order to make the greatest value for the firm.
By organizing a firm, it could divide works and job queues from different sectors and eventually speed up the whole producing process. It could also allocate all the resources efficiently into the right place.
Even though that nowadays, all dominant firms in the world have well organized company structures, those firms do not share the exact same structure and design. It differs between the goods that they provide and the targeted marketing segments. To begin the discussion, the paper mainly focus on some of the well famed and ranked international companies as Apple Company and McDonalds , accompanied with further elaboration of the similar and different traits of organization.
Firstly, discuss the identical traits of the company’s organizational structure from the course content. For an international firm, it is an important to determine the degree of complexity for each step of production. The Apple Company and the McDonalds Company have shared the same structure within the material production process in the production department. The labors were divided into different small and easy jobs and each of them do not have to learn complex skills to complete the section of their work.
As a result, the labor in the production plant is highly flexible and predictable. However, there might be some disadvantages that overspecialization would cause. Overspecializing the work could result in human diseconomies from lack of motivation. They may feel fatigued and end up producing low quality products and the efficiency of a firm will be greatly damaged.
Secondarily, we have to discuss the authority level and types of departmentalization in a firm. There are five different ways to differ and allocate jobs into different departments and a firm is not restricted to certain types of allocations due to different circumstances. The first type to divide departments is to group jobs by their different functions. Take the Apple Company for instance, they produce computers and they have to sell it. For the Apple Company, it is necessary to divide the firm into sales and production department for the better.
The advantages of this kind of allocation would be more efficient by letting people get together by their similar specialties and skills. This would enhance the efficiency in each department since each person in their department have shared similar knowledge and skills to solve problems and would eventually benefit the company. However, as a whole, there might be some disadvantage faced to do functional departmentalization. If the functions of each department have too less similarity with others, it would be likely to generate communication difficulties and it is difficult to coordinate across departments.
To solve this problem, it would be crucial for a company to share information just in time to avoid the bullwhip effect. For McDonalds, with its shops spreading all over the world, it is a better plan for this international company to have a geographical departmentalization segment as it is almost impossible for a worldwide company to efficiently operate. Moreover, different as the Apple Company, the McDonalds is a fast food company and it is a urgent need to keep up on the price of food and the preference of local needs. For example, at China, there are rice burgers provided to their customers and in Japan, there is a Miso-soup flavored pork chop burger provided to their needs and food preference.
As a firm grows bigger, the chain of command would become clearer and longer. The hierarchy between the supervisor and employees should be steady and clear. Each level of employees should only have one supervisor in command and the numbers of employees that each supervisor take responsibility should be consistent and evaluated by their abilities and skills to leadership.
The next attribute to a firm would be the determination of centralization. It is commonly faced due to various reasons such as expanding operating regions or changing product to sale. Moreover, a same firm would experience different organization structures in their different product stages. There are benefits and disadvantages to both organizing structure. Allow me to further deliver the difference and perspective to apply companies in their different circumstances.
The Apple Company is an extraordinary model for a centralized structure. This contributed to the product they provide such as computers, smart phones and most importantly, software. What the Apple Company provided couldn’t replace the high-knowledge based engineers and authorize employees to make decisions and develop their own systems on their own. However, when it comes to the sales part, the Apple Company has its own unique distribution path.
As a globalized company, it is crucial to have different sales strategies and ways to market in different regions. As a result, they strictly selected and authorized local electronic distributors to sell their products and promote their products in advance. This strategy divided the technical part and divided the sales division into different regions to stay competitive due to the competitive and rapid sales realm. The centralization operation seems to be the right decision to make, however, they may have some disadvantages and difficulties that lower managers in a lower hierarchy would have the will to comment and advice.
Each decision that the higher managers make would affect all stores in the world and they may face a crisis of the company’s failure On the other hand, the McDonalds Company has different products to produce and there is no core technical parts to maintain for the company. Instead of centralizing, the McDonalds have currently opened over 30,000 stores all over the world and each store may be geographically isolated. In order to efficiently operate each restaurant, the company completely decentralized the main company from the United States and gave authorities and the right to make decisions to different regions from the world.
This strategy gave the McDonald Company the advantage to greatly expand the scale of its market share. Notwithstanding, the weaknesses of this strategy is obvious that since lower level managers have the right to speak and make decisions, it might be too complex when it appears to have many different suggestions it would bewilder the decision makers and eventually made the wrong decisions.
There are two kinds of organizational designs that are mechanistic and organic organizations. Undoubtedly, in the production department of the Apple Company, it is a highly controlled structure to the production labor. Each labor is perfectly distributed and all the works they do would be not complex and they have low decision participations. However, there is also an organic organization structure within the Apple Company. The centralized technology department has a similar organic structure. In their department, they could freely communicate with others and has lower formal rules.
To conclude, different companies may result in applying different organization structures and design. For those firms that provide services or software products, it is preferred to have a centralized organization structure. A firm that provides mass production requires decentralizations to authorize local managers and boost up the production process. Companies like McDonalds and Apple Company, the structure of those firms should be more complex.
For the Apple Company, the technology department structure would be centralized and the production sector would be mechanistic designed and highly regulated. For the McDonald Company, the structure of the organization would basically be decentralized. In different occasions, the size of the firm, and the products of the firm will have various organization strategies. By having the company organized, it would be much easier to successfully operate a company.