Organizational transformation is a hot topic in the corporate world. Variations in a business may be regulated or unregulated. Changes occur in daily practices both inside and outside of an organization. In most cases, human resource workers and management bear the brunt of dealing with shifts in a business (Brisson-Banks, 2009). The representatives in the corporate hierarchy are in charge of transforming, reorganizing, and re-evaluating the company unit in order to ensure that it can deal with the changes brought on by variations both inside and beyond the firm. A business’ reorganization is vital since the prevailing conditions experienced at an earlier day may not apply to the current or future activities of a company.
Awareness of the top management. However, the company has now expanded, with various products offered and it is time to embrace a different structure. In the functional organizational structure, the company will form several divisions in which people will be grouped according to their skills and areas of specialization (Tosi, 2009). This structure will enable decentralization of powers to the various departments and not only on the top management as it is happening.
Kelvin-Plank is the founder of Under Armour Company who started by peddling spandex T-shirts to Maryland football players University. The company had diversified its line of athletic wear to 13,000 stores as at the end of 2007. Armour has made significant efforts to attract children and women, and they are currently known as one of the fastest growing companies in the United States. The company has made several attempts to quit from the simple organizational structure but have never been successful (Peter, 2017). As they are developing new products and get into the global market, it is essential to adopt the functional structure to ensure excellent performance for a higher competitive advantage.
Why the change is necessary
Among the reasons for the need to change the organizational structure is to decentralize powers from the top management to the various members of the organization. Armour is not alone in the industry, and there are many other competing firms offering similar products. It is, therefore, important for the company to come up with new strategies that can help them conquer the increasing competition and stand at the top. With the functional structure, tasks will be divided according to areas of specialization and experience (Lewis, 2011). Every department will have their leader who will enable the right leadership instead of the one manager leading the whole organization.
A plan to enforce the change
Building the case for change: This step would involve creating awareness in the organization through the management concerning the need for change. It is to ensure that every member of the company understands that Armour is not doing well with the current form of structure and there is a need to change (Aquinas, 2010).
Sharing the vision: After creating awareness, the next step will involve communicating the future vision that is intended to be achieved through the functional organizational structure. This is to inform the members on how the company would look like with the functional structure (Bierman, Gaspar, Hise, Kolari & Smith, 2006). This stem will also highlight the various types of improvements that will be realized as a result of the new structure and how the company will benefit.
Resources and information: After communicating the vision behind the functional organizational structure, the next step would be to identify the resources necessary for the change. Resources would include finance, people, technology, and facilities. Failure to recognize such resources makes the change implementation process difficult. Identification of the required resources can be done with the help of the management team as well as other members of the organization (Poole & Van, 2004).
After going through all the above listed stages, it is time to effect the change. It could take approximately one month to start the change implementation process given that Under Armour is not a massive organization and communication can be done quickly without consuming much time (Nagarajan, 2005).
People: The change to a functional structure will mainly involve the internal stakeholders and specifically the employees in the various levels. Therefore, people are one the major internal resources that will be required to implement the proposed change. People will be required to supervise the implementation process (Poole & Van, 2004). For instance, the company manager can take the role of ensuring that everything is done as planned. Also, there will be a need for professionals to train members of staff on the new roles and responsibilities that come with the new structure.
Funds: Apart from people, the organization will need enough funds to cater for the various expenses as the organization shifts from the simple structure. Lots of recruitment and selection practices will be performed to find the most suitable people for the various created job positions such as finance manager, IT, production, and human resources manager (Tosi, 2009). New machines and equipments will also be required for effective implementation of the proposed change.
Space: As pointed out earlier, the new structure will require the organization to train employees to equip them for the new methods and techniques (Peter, 2017).For effectiveness, training programs will be necessary for appropriate knowledge and education. For the training to take place effectively there will be a need for an additional space where the training can be done.
More equipment and machines: While using the functional structure, every department will have to perform their work individually and not as whole as it has been. Therefore, there will be a need for additional equipment and machines such as computers among others (Lewis, 2011).
Financial services: As earlier explained, the new structure will demand for more equipments and machines, more recruitment and selection services, additional space among other requirements. All these resources will require more funds which the company may not be able to provide. Therefore, financial services will be required from financial institutions as a source of finance (Aquinas, 2010). Apart from providing funds, the financial institutions will help in offering financial advisory services to the various projects that will be taking place as a result of the new structure.
Trainers: Where will the trainers come from? This is another factor to be considered in determining which resources the new structure will require. It is important to identify in advance some of the most appropriate experts to avoid confusion when the need for them comes (Bierman, Gaspar, Hise, Kolari & Smith, 2006).
Suppliers: The new equipments and machines, stationary, furniture among other resources will come from suppliers. This means that suppliers will be required as another resource for the company to effectively implement the new structure. It is important to identify who will supply such resources in advance. This will help the organization identify the best and cost friendly suppliers.
Employee resistance: The major resistance that would be encountered is from the company employees. Shifting from one structure to another is not easy and specifically to the employees. Some of the employees may not be willing to go through the process of training and new learning (Nagarajan, 2005). Others would not be comfortable with the new methods and techniques such as the new technology, facilities, and machines. People like staying in their comfort zone and asking them to change to something else, may not be easy.
Shareholders: The primary aim of shareholders is to maximize wealth through the returns they earn in the form of dividends and other benefits. In the hearing of the change, the first question that would come to them is how the new structure would affect the company profitability (Tosi, 2009). Therefore, some of the shareholders might not support the new structure due to the fear of what it may bring. Given that they are owners of the company and posses a right to participate in decision making, the shareholders might make the implementation process difficult.
Top management: The other group of stakeholders that would cause resistance is the senior management. In the simple form of organization structure, powers were centralized in the hands of the senior management, and they had all the authority to implement any strategies they wished (Peter, 2017). However, in the functional structure, powers will be decentralized to the various departments and the top management will not have all the authority they used to have under the simple structure. As a result, they may resist in implementing the change.
How to minimize resistance
Providing sufficient information: According to Lewis 2011, providing adequate information concerning the new structure would be helpful to reduce resistance from the various stakeholders. For instance, by understanding that the new structure will make work easier, employees would be in support for the functional structure. On the side of stakeholders, knowing that the new structure will take the company to a higher level of growth can motivate them to support the new structure (Aquinas, 2010). Finally, if the top management can understand how the new structure will result to growth and development, they will not look at their loss of authority but support the functional structure. Therefore, providing sufficient information prior to the implementation process will help in minimizing resistance.
Participation: According to Bierman, Gaspar, Hise, Kolari and Smith 2006, it is important to allow almost every stakeholder to participate during the implementation process. People feel honored and valued when they are involved in performing critical organization practices. For instance, some of the employees, shareholders, management team among other stakeholders can be allocated different duties in the implementation process. Instead of hiring trainers from outside, the company could choose some of the employees to participate in the training process. Another thing, some of the supervision roles could be allocated to the shareholders. In this way, every stakeholder will feel involved and part of the organization. As a result, everyone will be willing to support the change and hence success of the implementation process.
Communication: Communication is a key in getting full support from the employees and other stakeholders for success of the change. It is important to ensure that every member of the organization is clearly aware of how the implementation process will take place. At the same time, communication should be done effectively even within the process of implementation in a way that members are always aware of the progress. This can be done by creating a platform in which members can provide their ideas, comments, and complaints concerning the ongoing process (Lewis 2011). The company can make use of social media such as WhatsApp, Face-book. Twitter and Instagram. WhatsApp groups are among the best platforms for discussions. As a result, everyone will be motivated to continue in support for implementing the new organizational structure.
Continuous training: As pointed out earlier, employees will at times resist the new organizational structure due to the fear of how they will carry out their duties and responsibilities. Possibly, the employees are used to a specific system and switching to a different system can be a problem. To deal with this problem, the employees can be provided with free training frequently (Poole & Van, 2004). This will assure the employees that their operations will not be affected by the new system given the knowledge gained. At the same time, employees would enjoy the free training as it adds knowledge on them and this could be a reason for them to support the change.
Benefits of the functional organizational structure
To the organization
Specialization: One of the major benefits Under Armour Company will enjoy from the functional organizational structure is specialization. With this new structure, tasks will be allocated according to one’s area of expertise and experience. As a result, every employee will be working on the areas in which they are best suited. Unlike in the simple organizational structure, the manager would allocate work without much concern for individual areas of specialization (Tosi, 2009).). With the new structure, employees will enjoy division of labor and specialization. They will be able to specialize and expertise in their various areas of specialization. Employees will be more comfortable in handling their assigned tasks than it used to be in the simple organizational structure.
Efficiency and productivity: As previously stated, tasks are allocated according to the individual’s area of specialization and experience. This means that every employee will be able to deliver quality work. At the same time, the organization will stand a chance to minimize errors and mistakes that comes as a result of allocating tasks to the wrong people. Another thing, the functional structure will create a higher level of accountability among the various departments. Each of the various departments will be working hard to achieve to come out as the most performing (Nagarajan, 2005). At the same time, departmental manager will impose close supervision to towards their subordinates to ensure that tasks are performed appropriately. Therefore, the company will stand a chance to realize a higher level of efficiency and productivity as a result of the new structure.
Easy management: with the functional organizational structure where the organization is subdivided into various departments management becomes easy. The finance manager will take charge of the finance department, production manager will ensure that all the production processes are effectively performed, the human resource manager ensures appropriate recruitment and selection as well as in the other departments (Tosi, 2009).As compared to the simple organizational structure, the top management was tasked with managing all the different tasks including finance, recruiting and selection, production, IT among other areas of work. It is, not easy for the management to effectively manage all the other tasks and especially where there is fast growth. Therefore the functional structure will make management work much easier and hence a higher level of success.
To the community
Creation of more jobs: Among the major benefits the community will enjoy from the functional organizational structure is the creation of job opportunities. According to the above findings, Under Armour Company will have recruit more workers in implementing the new structure (Peter, 2017). Division of labor in the various departments will create a need for more work force. At the same time, the company will have to recruit more casual workers and so the need for people. As a result, there will be a higher availability of jobs in the community leading to a higher level of growth and development.
Easy access to products and services: Consumers are part of the community. Armour has a huge percentage of their customers from the community and the improvement in operations will be of a great advantage. As different tasks are handled in the various departments, it will be easier for a customer to get what they want (Lewis, 2011). When it comes to consultation, the customers will know who to go to and hence connecting with the right people. Therefore, the community will enjoy quality services and products as a result of the functional structure.
Increased demand for some suppliers: The functional organizational structure requires the company to buy more facilities, machines, among other resources. These resources will come from the community. The producers or owners of such resources will benefit from increased demand and hence, more sales in their business and hence another benefit that comes with the new structure (Aquinas, 2010).
Reduction of crime: Though at a lower rate, the new structure is mostly likely to reduce the level of crime in the community. As more jobs are created through the new created job posts, the level of unemployment in the community will reduce. This means that the population of idlers in the community will reduce and people get busy and hence low chances of participating in criminal activities. Another thing, the creation of jobs will reduce the rate of poverty which is among the causes of stress that lead people to committing crime. As the people are getting something for living and support their families, it will not be easy for an individual to perform robbery or other forms of crime in the name of poverty (Bierman, Gaspar, Hise, Kolari & Smith, 2006). Therefore, the functional form of organizational structure will benefit the community as it benefits the organization.
According to the above explanations, Under Armour needs to change from the simple organizational structure to a functional structure. The new structure will decentralize powers from the top management to members in the various levels of the organization. The functional structure will benefit both the company and the community. The company will enjoy increased productivity, specialization and easy management. On the other hand, the community will enjoy job creation, easy access to services and products and reduction of crime. However, resistance from various stakeholders is expected to take place during the implementation process such as the employees, shareholders and the top management. To overcome resistance, the company needs to ensure effective communication, provide a room for participation and offer free training continuously. Through these measures, the change implementation process will be successful and hence, taking Under Armour to a higher level of growth.
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