Organisational design

What are some of the recent changes in organisational design made by organisations which have made a headway in corporate. Give Industry example with link of the source (Like website,newspapers,articles etc.)

There are many companies who have recently made many organizational changes. Some of these companies are Starbucks, Paytm, HUL, Toyota etc. Today I am going to discuss about automobile industry- Toyota and recent changes in its organizational design. Toyota Motor Corporation is a Japanese Automotive Manufacturer. It initially followed the traditional Japanese organizational structure consisting of strong central global hierarchy in which all the major decisions were made in company’s headquarter, Japan and all communications had to made through headquarter.

In 2013 organizational restructuring was done where geographic and product based divisions were made. More power was given to regional heads and business unit heads. It made Toyota less centralized but still these heads had to report to the global headquarter. These changes were made to provide flexibility and aimed at achieved real competition and growth.

In April 2016, again few changes took place. Toyota shifted from regional divisions to product based divisions. These divisions will look after product strategy and development.  It will decentralize decision making and streamline business operations. This step was taken to address quality issues and simplify work processes as it used to take a lot of time in cross-functional coordination. This step is taken to increase efficiency which in turn is hoped to increase production and sale in the year 2016.
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With the changing market trends and competition the organizations have to evolve accordingly. Organisation structure is the base which need to be modified as required as it decides various aspects like job roles, design of work. Nowadays changing the organization structure has become very prominent. Be it the Indian railways,  the largest organization has changed with changing technology. With increasing digitalization and globalization it has also increased its dependency on technological applications whereas earlier it was more of manpower oriented.
Similarly there is the example of STARBUCKS, it is the largest coffeehouse chain in the world. It has evolved to have an organization structure that matches the current business needs. It shifted from a conventional type of organization structure into matrix organization structure. They now focus more on geographical and product divisions, Customer satisfaction cells, team building and departmentalization. By 2007, the company was expanding rapidly, such that it shifted focus away from customers toward strategic global expansion. However, Starbucks experienced significant decline in sales in 2007.This decline was worsened because of the lack of focus on customer experience. When Howard Schultz resumed the CEO position in 2008, he changed Starbucks Coffee’s organizational structure to bring back focus on customer experience. New regional divisions were created, and teams at Starbucks cafés were given better training. Thus, the current organizational structure of Starbucks is a result of this reform to improve customer experience and the employees’ performance. This change resulted into an exponential growth of the organization.

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Some recent changes made by organization in organizational design is from conventional structure to matrix structure and this made the company headway in the corporate. A company’s organizational structure influences management and leadership, communication, change, and other variables critical to business success. And the best example that I found is the example of Starbucks because Starbucks has evolved to have an organizational structure that matches current business needs. it succeeded because its organizational structure grows with the business, enabling the company to optimize processes and the quality of its goods and services.
Starbucks has a matrix organizational structure, which is a hybrid mixture of different features from the basic types of organizational structure.
In 2007, company focus shifed away from the customer to the strategic global expension and due to that the company had to bear the huge loss only because of the lack of focus on customer experience. When Howard Schultz resumed the CEO position in 2008, he changed Starbucks Coffee’s organizational structure to bring back focus on customer experience. New regional divisions were created, and teams at Starbucks cafés were given better training. Thus, the current organizational structure of Starbucks is a result of this reform to improve customer experience and the firm’s financial performance.
Link of the source- website(http://panmore.com/starbucks-coffee-company-organizational-structure)

When the climate changes the organisation structure has to be changes as per the compatibility of the market condition. Due to the need of the market when any company do not work more effectively then this become necessary to change the organisational structure of company.
Some recent changes which i have observed or seen in the organisation is from decentralized to the matrix structure in HUL.
In 1990, when company has just been established that time they were running the organisation through decentralization structure but after certain time period due to the market was becoming more competitive and Its decentralized structure was working against them -Competition was fierce and Unilever was lagging behind (especially against P&G and Nestle) -Unilever failed to bring new products into markets due to their business structures inefficiencies -the decentralized structure caused many product duplications particularly in manufacturing -lack of scale of economies and high operating costs was really affecting their business and due to that the company needs to change the organisation structure to sustain in the market and they changed it into the matrix structure.
LINK-http://www.studymode.com/essays/Unilever-67642510.html

Organizational structure defines how activities such as task allocation, supervision and coordination are directed towards the achievement of organizational goals.Since change is inevitable, every business faces a time when it needs to inculcate certain changes in its organization structure so that it can survive in the competitive environment. There are various such organizations, one of which is discussed below:

General Electric is a 124 year old American conglomerate organization incorporated at New York. It’s presently into Aircraft engines Appliance,  Electrical distribution, Electric motors Energy, Health care, Lighting Locomotives Oil, Software, Water Weapons, Wind turbines etc.
When GE brought in John Flannery to head its operations in India as the President and CEO three years ago, it signaled a fundamental change in its organizational structure and like any other conglomerate it had the Matrix structure. Now it has been dismantled and everyone reports to the country head. General Electric used to have 29 levels, but today it has only a handful of layers.

The organization structure has now become FLAT. The power of decision making is decentralized to much extent and there’s a wide span of control. The chain of command has got shorter than what it previously used to be and there’s high degree of formalization practiced within the organization.
The objective of this change in the organization structure was to make General Electric more nimble and to improve communication. This has however given the company the capacity to respond effectively to new challenges.


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ORGANISATIONAL DESIGN
Unlike winning an Olympic gold,where the problem is well defined, building a successful company is actually more like a science, where you need to follow the trail wherever it leads. But Companies that adapted changes in their strategies, and organizational designs over the years have reached new heights. Few of the companies that I’ve come across while doing this assignment are : PayPal; Google; Facebook; Starbucks; Nikon are few of them.
Ill be focusing on Nikon’s change in organization design. Nikon have reorganized their organization design to build a foundation to support sustainable growth and to establish a more strong corporate culture, by focusing more of their core business that is imaging and precision equipments. It was after almost 15 years they’ve reorganized themselves. The objective was to strengthen HR management and increasing the creation of new business in the areas of health and medical care. I think for any organizational design to be effective should clarify accountability and move the organization in its chosen direction irrespective of its shape. Let’s see how they have reformed their organizational design….
1)they’ve changed their former Corporate Planning HQ into new Corporate Strategy Division which now take care of long term strategies; management processes; corporate organization and governance; brand strategies; CSR activities
2)Their Business Admin Center is changed to HR & Admin Division which look after the management of group wise Hr and Admin matters.
3)Their new introduction of Medical and Health care division will look after the responsibility in generating and nurturing in this area.
4) The Imaging Company is reorganized onto Imaging Business Unit.
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Change in Organization Design
“Without change there is no innovation, creativity, or incentive for improvement. Those who initiate change will have a better opportunity to manage the change that is inevitable” – William G. Pollard
Organizations redesign themselves due to these environmental factors: competition, technology innovations, professionalism, and demographics.
Coca-Cola North American(CCNA Unit) changed its organization design in order to accelerate growth. On January 2014 the Company in its North America Business made few organizational changes in its traditional company and bottling operating unit.
CCNA will be led by J.A.M Douglas as group President---Reporting to Chairman and CEO Muhtar Kent---The North American Brands-foodservice-Brand Commercial-Retail Sales- R&D- Venturing and Emerging Brands-Strategy-Franchise leadership and Transformation- Canadian Franchise operations----Reporting to Douglas as he is also a Global Chief Customer Officer. Earlier they had Tall Organization Structure and Centralized Power structure which they changed into Flatter Organization Structure and Decentralizing
For a big company like Coca-Cola the change they adapt for the division of work among members of the organization are effective and successful.
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Many organizations redesign their organization structure due to different reasons. such as-
General Electric in July 2002 announced that it was breaking its financial subsidiary – GE Capital – into four units. Simultaneously, it ditched the chairmanship of GE Capital, saying the managers of the four newly independent units would report directly to the parent company’s chairman.
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Southwest Airlines have added social networking department, to counter negative posted on blog. It is at the center of the entire company’s operations. The people in the unit also work with every single department at the company, including operations, logistics and even human resources.
Source: “Organizational Behavior” –Pearson;

Flipkart moved from being a hierarchically-flat start-up to a company with around 2,000 employees. Through this process, it brought in layers of senior vice-presidents, vice-presidents, senior directors, directors, and managers.
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Back in 1981, British Airways brought on a new chairperson who noticed that the company was operating very inefficiently and wasting valuable resources. To increase profits, he decided to restructure the entire organization by reducing its workforce.
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Firstly, we should know what is organisation design. Organisation design means the manner in which the management achieve the right combination of differentiation , integration of the operation going on in the organisation , in response to the level of uncertainty in its external environment.
Structural changes within the organisation might grow from external or internal factor. Efficient change management requires the ability to identify what causes structural changes within an organisation. It may b e good for the company and sometimes bad too.
Marissa Mayer becomes new Yahoo CEO , this recent change in the organisation has made positive impact in the organisation. As the data shows that stocks have increased quarterly earnings have improved. Under the Mayers leadership employees who has left the Yahoo were coming back. She played alot of energy on managing talent in the company and getting employees excited for working in Yahoo.This change in organisational structure created good impact upon employees and even in the working environment.
Changes in the organisations have both good and bad impact it all depend upon the way company is reacting for the change.
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Firstly I want to tell what is organizational design, so basically Organizational design is:
The manner in which a management achieves the right combination of differentiation and integration of the organization's operations, in response to the level of uncertainty in its external environment.
Organisation structure is the base which need to be modified as required as it decides various aspects like job roles, design of work.
Organizational structure defines how activities such as task allocation, supervision and coordination are directed towards the achievement of organizational goals. Since change is inevitable, every business faces a time when it needs to inculcate certain changes in its organization structure so that it can survive in the competitive environment.

Organizational change has been in the news a lot lately, from new CEOs at Apple, Microsoft, and Yahoo to the CIA director’s recent announcementthat the agency is considering major restructuring.
These organizational changes shouldn’t just be another headline; they should act as valuable lessons and case studies. We should all be following these changes to see how they pan out and how leaders communicate to their workforce.
We can learn a lot from organizations that have already done all the hard work and made all the mistakes for us. To get you started, here are three successful examples of change management and what the companies did right (make sure to take notes!).
Marissa Mayer becomes Yahoo’s new CEO
Mayer’s transition has improved Yahoo’s business from almost every angle. Stocks have increased and quarterly earnings have improved. But, more importantly, employees are embracing their new leader. Under Mayer’s leadership, employees who had previously left Yahoo were coming back, and she has said Yahoo’s workplace standing and employee belief in the company has improved.
What she got right: Mayer placed a lot of energy on managing talent in the company and getting employees excited about working at Yahoo. In 2013, she said there had been at least 560employee-focused initiatives implemented to bolster morale, including a new program designed to encourage employees to test products. As a new leader, Mayer understood the need to make sure her employees were happy and felt valued.
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Organizational design is a step-by-step methodology which identifies dysfunctional aspects of work flow, procedures, structures and systems, realigns them to fit current business realities/goals and then develops plans to implement the new changes. The process focuses on improving both the technical and people side of the business. For most companies, the design process leads to a more effective organization design, significantly improved results (profitability, customer service, internal operations), and employees who are empowered and committed to the business.
A company’s organizational structure influences management and leadership, communication, change, and other variables critical to business success.
In my example I am showing BRITISH AIRWAYS RESTRUCTURES ITS ENTIRE ORGANIZATION.
Back in 1981, British Airways brought on a new chairperson who noticed that the company was operating very inefficiently and wasting valuable resources. To increase profits, he decided to restructure the entire organization by reducing its workforce.
What they got right: Before the chairperson began announcing layoffs, he explained his reasons for the restructuring to the entire company to prepare them for the upcoming change. Without his transparency, British Airways could have experienced employee backlash and negative press around all the layoffs. But, the chairperson always communicated honestly and frequently to manage the change.
Learn from these successful examples of organizational change so you are prepared when the time comes: Put your employees first and redefine roles during a system or process change. And, your new mantra should be “communicate, communicate, communicate.”
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Most organizations have to change as part of keeping up with the competition or adjusting to new market trends or technologies. Things such as mergers, restructuring, technological advancements, changing customer demands and new product lines are fairly common in today's business environments.For ex. Apple
Not long ago, Apple was on the brink of burn out. From about 1993-1997, Apple found itself struggling to find a consistently profitable source of revenue, trying and failing to market everything from digital cameras to portable CD players to TV appliances. With Steve Jobs ousted due to internal squabbles, the company attempted to right ship with a revolving door of temporary CEO . Finally, in 1997, Jobs returned as CEO and instituted a bold change of direction.
Instead of continuing to aimlessly follow marginal product ideas down the rabbit hole, Apple began to focus once more on creating beautiful consumer electronics, starting with the iMac in 1998. Apple also acquired several companies in the video editing and digital production space, which comprises much of its customer base. The iPod was an even bigger success, selling over 100 million units within six years of its 2001 launch according to the BBC. The iPhone, another smash hit, recently produced a 100% year-over-year rise in sales according to CNN Money. None of this would have been possible without a drastic change in organisational structure.
And now Apple’s organizational structure is one of the factors contributing to the company’s successful innovation. A firm’s organizational structure can create opportunities for business growth.
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Organization design can be defined narrowly, as the process of reshaping organization structure and roles, or it can more effectively be defined as the alignment of structure, process, rewards, metrics and talent with the strategy of the business. Organization design may involve strategic decisions, but is properly viewed as a path to effective strategy execution. The design process nearly always entails making trade-offs of one set of structural benefits against another.

A good example of this took place at Hospira, the $3.9 billion pharmaceutical company spun out from Abbott Laboratories in 2004.

In 2008, Hospira embarked on a major change program. The program included an effort to build new decision capabilities across the company. The top 80 executives attended innovative training workshops that showed them how to identify an organization’s critical decisions and outlined Hospira’s new approach to effective, efficient decision making and execution. Executives learned to use tools that would help them get the who, what, when, where, and how of each decision right. The workshops also helped leaders learn and adopt the specific behaviors that would be required to make the changes stick.
Hospira’s senior leaders began to track the company’s changes in decision effectiveness at their bimonthly team meetings. They also began to gather survey data that could help them assess progress in building and sustaining decision capabilities. Since 2008, CEO Chris Begley and his team have seen significant improvements in Hospira’s financial and stock price performance, which they attribute largely to improved decision making.

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Organisation structure defines how job tasks are formally divided, grouped and coordinated. The way a company connects its culture, control systems, management systems and employees can have an impact on the efficiency and effectiveness of a company.
If company is not performing well, change in organization structure may help organization in again growing up.
When the trend changes organization structure have to be changed according to time . According to me NOKIA is a best example of organization structural change.
IN 2002 nokia was facing a dramatic slowdown in sales of mobile phones . needing a new king of strategy and business model nokia took a dramatic step. In line with a strategy focused on products and technology dominance, Nokia broke its monolithic phone unit into nine business units.
This new structure provided each business unit with its own R&D and Marketing. This change enabled business unit to function rapidly. Structuring the organization in this way enabled Nokia executives to make more refined choices about allocating resources to execute its strategy.
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ORGANISATION STRUCTURE Is the base which needs to be modified according to the changes in environment as it decides various aspects like job roles, design of work.
Many companies have changed there organization structure such as paypal, google, british airways etc. I HAVE CHOOSEN TESCO case study for an example of organization structure change. TESCO is a multinational chain of stores for retail.
Recently, TESCO has come across a significant change in terms of introducing and implementing a self-service check out system throughout its network. The implementation of this new payment system at Tesco is undoubtedly a strategic plan change. Self check out system differs from the traditional system of carrying out transactions. The use of the new system serves customers in a better way and provides better service without having to spend so much time in the store. The purpose of the system was to accelerate check out processes and reduce labour costs associated with retail outlets.
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First of all let us know what is organisation design. It means the manner in which the management achieve the right combination of differentiation, integration of the operation going on in the organisation, in response to the level of uncertainity in its external environment. It is the base which need to be modified as required as it decides various aspects like job roles, design of work, process of the work, perfect combination. Some experts believe that the organisational framework consists of a series of design policies that is controllable by management and can influence the behaviour of an employee.
For example, when talking about Flipkart. In February 2015, there was a power sharing arrangement between Sachin bansal, Binny Bansal and Mukesh Bansal being in charge of different departments. Sachin for Advertisement and payment business, Binny was incharge of supply chain, Mukesh responsible for core commerce platform, giving Flipkart a "divisional organisational structure". But now all the units, like, advertisements, payments and logistics, commerce, etc. are reported directly under Binny Bansal and Sachin Bansal to just find raising and industrial relation, structuring it more of a "centralised organisational structure". Binny Bansal has changed the flipkarts management structure to allow leaders to engage in all steps in the projects of the organisation and improve customer experience.

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As we all know that in this competitive environment, we need to manage the organizational structure well, so that we can set up the goals, manage the teams and maintain the coordination for achieving the targets or goals.

I am taking the example of india’s biggest firm i.e. the Indian Railways. With the new technology or we can say that change In the technology has led the indian Railways to be more dependent on the technology. As today Computers are used to do the reservations of the passengers, internet is now a days widely used and it is the base of this digitalization.

Nowadays a customer can do online reservations, spot his/her train, check the availability of the seats in the train, watch the entire route of the train, timing, PNR, and many more things. Apart form these things, there is no effect of demonetisation on the railways and the most amazing thing is that railways has also launched a scheme of insurance which is offered in only 92 paise.

Some links are given below:-

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ORGANISATION STRUCTURE Is the base which needs to be modified according to the changes in environment as it decides various aspects like job roles, design of work.
An organization can be structured in many different ways, depending on its objectives. The structure of an organization will determine the modes in which it operates and performs.
An organization may be of tall structure and also flat structure.
Back in 1981, British Airways brought on a new chairperson who noticed that the company was operating very inefficiently and wasting valuable resources. To increase profits, he decided to restructure the entire organization by reducing its workforce.
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For a big company like Coca-Cola the change they adapt for the division of work among members of the organization are effective and successful.
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Organisational structure defines how activities such as task allocation, supervision and coordination are directed towards the achievement of organisational goals. Structural changes with in the organisation might grow from external and internal factor. A company's organisational structure influences management and leadership, communication and other variables critical to success in business.
For example i have observed recent changes which have occur in the organisation is from decentralized to the matrix structure in HUL. In 1990 when company was just established, they were running the organisation through decentralization structure but after certain time period due to the market becoming more competitive and its decentralized structure was working against them, and it was lagging behind. The decentralized structure caused many product duplication particularly in manufacturing and high operating cost was really affecting their business and due to that the company needs to change the organisation structure to sustain in the market and they were forced to change it into the matrix structure.

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Starbucks has reformed its organizational structure over time. By 2007, the company was expanding rapidly, such that it shifted focus away from customers toward strategic global expansion. However, Starbucks experienced significant decline in sales in 2007. This decline was worsened because of the lack of focus on customer experience. When Howard Schultz resumed the CEO position in 2008, he changed Starbucks Coffee’s organizational structure to bring back focus on customer experience. New regional divisions were created, and teams at Starbucks cafés were given better training. Thus, the current organizational structure of Starbucks is a result of this reform to improve customer experience and the firm’s financial performance.
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There are many companies who have recently made many organizational changes. Some of these companies are Starbucks, Paytm, HUL, Toyota etc. Today I am going to discuss about automobile industry- Hindustan Unilever Limited (HUL) is India's largest Fast Moving Consumer Goods Company with a heritage of over 80 years in India and touches the lives of two out of three Indians.

HUL works to create a better future every day and helps people feel good, look good and get more out of life with brands and services that are good for them and good for others.

In 2005, Unilever decided to leverage its global reach effectively and transformed its organizational structure from a multi-domestic organization to a global matrix structure.
Hindustan Unilever (HUL) has kicked off a new operating framework which deals in distinct consumer clusters that are expected to make the organization future ready.
Hindustan Unilever (HUL) has many firsts to its credit. Now, it adds one more. India’s largestfast-moving consumer goods company has found a new way of keeping in touch with itsemployees — present and former.

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Organisational structure is need to be change according to the change in environment. Many organisation did changes according to the environment. I am going to discuss about the changes which is taken by SNAPDEAL.
SNAPDEAL is move to a business unit structure where all category managers, key account managers, brand partnership managers and most other functions pertaining to a category will become a part of the same business unit.The restructuring at Snapdeal comes in the backdrop of the most critical month for all e-commerce players which sees heightened buying due to festivities like Diwali.the latest changes have been executed after the Diwali sales where the company remained behind bigger players such as Flipkart and Amazon in terms of sales. Snapdeal, has been losing market share to rivals , especially to Amazon which has been moving aggressively in the Indian market to challenge Flipkart's leadership position.Snapdeal has been in the market to raise fresh funds to fight off Amazon and Flipkart but has found it difficult to rack up fresh capital.

In order, to prepare itself for the festive season the e-tailer launched a much-publicized brand campaign, changed its logo with plans to spend Rs 200 crore in an attempt to regain market share. Snapdeal also runs Freecharge, a digital wallet. The Kunal Bahl and Bansal-led Snapdeal, which started off as Money Savers in 2007 has gone through many pivots in its from running a coupon book business to doing daily deals and then an online marketplace.

Earlier this year, the Gurgaon-based e-tailer lost out to Flipkart when its Bengaluru-based rival snagged Jabong for $70 million. People aware of company's plan then had said it was actively chasing Jabong as its acquisition of Exclusively.com did not take off as planned. The company recently decided to shutter Exclusively altogether.

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