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Integrated Case on Organization Structure

Every organization to be effective must have an organizational structure. But what is an

organizational structure? It is the form of structure that determines the hierarchy and the

reporting structure in the organization. It is also called organizational chart (Bateman-Snell,

2008). Organizational structure is typically hierarchical, within which an organization arranges

its lines of authority and communications, and allocates rights and duties. Organizational

structure determines the manner and extent to which roles, power, and responsibilities are

delegated, controlled, and coordinated, and how information flows between levels of

management (“Organizational structure-Wikipedia, the free encyclopedia”, 2011).

In Structure in fives: designing effective organizations, Henry Mintzberg opens with a

question: “What could be more important to the effective functioning of our organizations . . .

than the design of their structures?” (1993, v). Organizational structures examine all aspects of

the organizational structure: the various components, the formal lines of authority and

responsibility, the communication flow, as well as the management and leadership style and

capabilities.

In the case of I.M. Tycoon, the main objective is to assure that the companies of Harold

and Jane will still have healthy financial status. Basically, its primary concern is with the

division of labor and the coordination of work processes (Mintzberg, 1989). Designation of

tasks is vital in the success of the operations in an organization. Poor organizational structure

can cause certain problems that might hinder working in an efficient and effective way.

Delux Machine Tool can be considered as one of the good players in the industry of

automotives. Based from the current organizational structure, there are four divisions namely

production, sales, finance and research and development. The tasks from the sales division
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should be narrowed down (see Appendix 1: Recommended organizational chart). Thus, the tasks

per region should be distributed and handled by all divisions. Each region must have the four

divisions to cover business functions. The Research and Development division should conduct a

thorough market study to know if launching RoboTool is feasible. At the same time, the finance

division should coordinate with the research division to know the expenses in production.

As for the case of Safe Buy Insurance Co., the organization lacks centralization of

command. The president handles all the agencies directly. The managers should be handled by

at least two heads who are not local people but those who came from the home office (see

Appendix 2: Recommended organizational chart).

Lastly, the organizational structure for MicroAge Software should be amended by adding

vice presidents for other business tasks and not just be solely handles by the Vice President for

Operations. The heads per division should be knowledgeable in both business and technical

aspects (see Appendix 3: Recommended organizational chart).

References:

Bateman-Snell. (8th ed). (2008). Organization Structure. In Management: Leading and

collaborating in a competitive world. McGraw-Hill.

Mintzberg, H. (1979). The structuring of organizations, Englewood Cliffs, NJ: Prentice Hall.

Minztber, H. (1993). Structure in fives: Designing effective organizations. Englewood Cliffs,

NJ: Prentice Hall.

Organizational structure. Wikipedia, the free encyclopedia. (2011). Retrieved April 19, 2011
from http://en.wikipedia.org/wiki/Organizational_structure

Appendix 1
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Delux Tool Organizational Chart - Recommendation

Delux Tool
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President

Production R and D

Production R and D
for all regions officers
(N, S, E ,W)*

Sales Finance

Sales Finance
Representatives managers

Accountants

*assume that all positions are provided for all regions

*N- north

* W- west
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*E -east

*S- south
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Appendix 2

Safe Buy Insurance Co: Organizational Chart - Recommendation

Safe Buy Insurance

Home Office

1st agency 2nd agency

cluster Sales cluster

Accounting
Agency Agency

Claims
Agency Agency

Policy processing
Agency Agency

*assume that the tasks of the home office are performed by all agencies
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Appendix 3

MicroAge Computer Organization Chart - Recommendation

MicroAge CEO

VP VP VP VP Research and VP
Business Finance Operations development marketing

Mail order/ Bookkeeping Dealer sales New product Advertising

website sales for east and development
west areas

Word processing
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