A.P3 Explore the organization structures, aims and objectives of two contrasting
businesses
[Organizational Structure: An organizational structure is a system that outlines how
certain activities are directed in order to achieve the goal of the organization. They
can involve roles, duties and responsibilities. The system also determines how
decisions and information are transferred between the levels of the organizational
structure. Having an organizational structure put in place for an organisation allows.
them to be more efficient and focused. Starbucks is a matrix organizational structure
which is a mixture of different features from the different types of the basic
organizational structure.]
Starbucks’ organizational structure, in the functional structure section, involves employees
taking responsibility in different aspects and categories, such as finance, marketing or sales
department.
Geographic Divisions
Focuses on the main geographic divisions which are China and Asia-Pacific, America and
Europe, Middle East, Russia, and Africa. Each region of Starbucks' organizational structure
is required to report to their senior vice president with their decisions. Each Starbucks store,
store managers have the responsibility as the chief, they must report their decisions to the
Starbucks Corporation directly. Next after the store manager, are the store supervisors who
perform as managers, when store managers are absent/not present. Next in line are
employees who are often known as baristas, also each lower level manager reports to 2
heads - function & geographic head. Flexibility is enhanced in each geographic division, they
are allowed to design products in accordance to their region, and the preference of the
customers. This is the reason why different countries have various offers of different
products.
Product based divisional structures
Are structures that are most visible at the lower organizational levels of the hierarchy, most
specifically at coffeehouses. This section divides employees into different groups, in order
for each group to work on a different product. Starbucks has divisions for specific goods,
such as mugs, books and bakery items like pastries and coffee/beverages. This enables
each store to be able to offer effective and efficient goods and services to customers.
Advantages and Disadvantages of Starbucks' organizational structure:
Starbucks has a matrix organisational structure, this allows them to meet the specialised
needs of customers from various countries, through the geographic division sector.
In addition, the products based on every division makes it possible for each sector to focus
on their individual product.
A matrix/hierarchical type of structure allows Starbucks to improve on the communication
process, also increasing the progress of waiting time on decision making.
The disadvantages of having an organizational structure for Starbucks, more individuals
such as the CEO's, managers and store supervisors, can become involved in the decision
making which leads to the process to slow down due to many individuals having to report
their decisions. Another disadvantage, is although the decision making is quick, the
, individual making the decision may act on the future of a specific store and not on all the
stores as a whole.
Chain of Command:
This is the order in which authority and decisions in a firm are ranked from top management
to the lowest sector in a business. Similarly, to the formation of the matrix structure,
instructions are flown to decrease, whereas the power increases. In order to determine if the
decision making is going well and efficiently, the business then upholds, the chain of
command is then present, also known as straight. As the chain of commands in the system
increases, this decreases the speed of decision making and communication between the
levels.
For the structure of a company such as Starbucks,there are positives and negatives
associated with the chain of command, and how they may affect the organization. Having
the chain of command allows employees of Starbucks to see where they are associated,
regarding the organizational system. However, the chain of command also varies.If the
system is long, then this results in the communication and decision making to not be as
effective and decreases in speed.
Span of Control:
Span of Control refers to the amount of employees a manager can supervise as efficiently as
possible. When the manager has fewer employees, it is then thought that the manager is not
doing its duty to the best of their ability. A large span of control permits for lower costs as it
aims to ease the organisational structure and therefore could be an advantage for a
business to consider a large span of control. A small span of control however involves the
requirement of more managers in order to supervise the larger amount of employees and
therefore leads to more expenses. Starbucks' span of control is wide in terms of each district
manager having the responsibility of 8-10 stores.
Functional Areas:
In a business context,
A functional area refers to the group of employees that share similar knowledge and skills in
a specific category, (e.g sales department, the employees working in this department, work
together sharing similar skills and knowledge in order to make better and more improved
products for the company.
It is beneficial for the organization to have functional areas as this allows them to categories
staff with similar skills and group them together. This also allows the manager to review the
work done by the members. Functional areas also play a significant role in terms of
achieving the businesses aims and objectives, as these highlight the specific areas which
are responsible for specific parts of the aims and objectives. For example, the finance
department would be in charge of monitoring the costs low to improve profitability.
