netrashetty
Netra Shetty
AmerisourceBergen NYSE: ABC is a Chesterbrook, PA based Drug Wholesale company that was formed by the merger of Bergen Brunswig and AmeriSource in 2001. They provide drug distribution and related services designed to reduce costs and improve patient outcomes, distribute a line of brand name and generic pharmaceuticals, over-the-counter (OTC) health care products and home health care supplies and equipment to a wide variety of health care providers located throughout the United States, including acute care hospitals and health systems, independent and chain retail pharmacies, mail-order facilities, physicians, clinics and other alternate site facilities, as well as skilled nursing and assisted living centers. They also provide pharmaceuticals and pharmacy services to long-term care, workers' compensation and specialty drug patients. It is a market leader in pharmaceutical distribution and ranked 24th on the Fortune 500 list for 2010 with over $71 Billion in revenue.
Organizational arrangement depends on the result to be industrial as Wheelwright and Clark define scale executive structure among two boundaries; functional organizations are planned according to industrial regulation. Higher functional manager is responsible for apportioning assets. The accountability for entire creation is not owed to a solitary human being. Harmonizations occur all the way through system and events, thorough stipulation, shared customs between engineers and meeting. Thus, light-weighted matrix association remain functional and height of occupation is analogous to that establish in the practical mode. The position and influence puts value to the functional managers, since they have direct right of entry to functioning level community. The project members depart their functional subdivision and dedicate full time to the development, “share the same location. The professionals are less specialized and have brioader tasks, skills and responsibilities.
acquire the “best” project support staff from the finite pool of available people. And a great deal of valuable time is expended in meetings to coordinate staff for two or three or more concurrent projects.
But don’t dismiss the positive elements of the Matrix Structure. While this type of organizational structure is more demanding and perhaps more stressful than others, it is also very, very efficient.
Horizontally Linked Structure
The last type of organizational structure that we’ll examine, the Horizontally Linked Structure, is somewhat of a newcomer in the business world — making its first appearance only three or four years ago, to my knowledge — but it is gaining momentum and finding more and more acceptance today, especially among IT departments in the high-tech community. Plan Build Run (Often adopted by IT Departments)
Figure 10: The Horizontally-Linked Organizational Structure
Under the Horizontally Linked Structure, an organization groups its people along the value chain of activities and processes that produce, market, deliver, and service the firm’s offerings. 14
Horizontally Linked Structures
A Horizontally Linked Structure groups people along the value chain of processes that produce, market and service the firm’s offerings.
A very basic way of illustrating this type of organizational structure is seen in Figure 10, a simple Plan, Build and Run model. Let’s say a company will group its people and resources from R&D or Finance for the express purpose of planning projects or programs in the company’s interest; these plans are passed to the next group comprised of Manufacturing personnel for actual production; and then another group of IT personnel maintain and perpetuate the projects or programs. This is an interesting and growing trend in organizational structure, and it’s one that is well worth watching in the future. Organizational Structure:
A Critical Factor for Organizational Effectiveness and Employee Satisfaction 16
Classical vs. Neoclassical Theories
of Organizational Structure
There are two overriding theories of optimal Organizational Structure that hold forth in the business world, known as Classical Organizational Theory and Neoclassical Organizational Theory. As the names suggest, the former is a traditional approach while the latter is a more progressive approach.
The Classical Organization Theory assumes that there is a single best way to design organizations — that managers should have tight control over their subordinates, and that calls for designing organizations with tall hierarchies and a narrow Span of Control. Classical Theory entails a high degree of written documentation and rules and procedures intended to direct and control employees. As such, the Classical Theory advocates a decidedly functional type of organization.
The flip side is an attempt to improve on the classical theory. Today we know this as Neoclassical Organization Theory, which argues that employee satisfaction, as well as economic effectiveness, should be the ultimate goal of an organization. Neoclassical Theory assumes that managers do not tightly control their subordinates and calls for designing organizations with flat hierarchies and a wide Span of Control. Following Neoclassical Theory, the manager relies more on the employees to make decisions, and these organizations are less rigid with fewer rules, regulations, and processes.
Figure 11: Classical and Neoclassical Theories of Organizational Structure15
Organizational Structure:
A Critical Factor for Organizational Effectiveness and Employee Satisfaction 17
Modern Trends in Delayering Organizational Structure
Figure 12: Delayering the Organizational Structure 16
Given the increasing acceptance of Neoclassical Organization Theory and the rise of new models such as the Horizontally-Linked Organizational Structure, it’s apparent that modern trends are moving the business world toward a Flattening or Delayering of organizational structure.
Delayering refers to stripping out middle management from a company’s organizational structure. The resulting structure is essentially flattened, with fewer managers, and those managers who remain are able to exercise a wider Span of Control. Those who work in these flattened structures have more decision-making ability, greater creative latitude, more autonomy, and more direct relationships with the higher level people inside the organization — all of which contribute to employee satisfaction.
With modern trends toward decentralized decision-making, fewer organizational layers, and more direct access to upper management, employees are motivated to contribute their voices to matters that affect the entire organization
The Implications for Employees
Perhaps most importantly, we should consider the implications of these evolving organizational structures for employees. In a more traditional and ponderous Tall Organizational Structure, with centralized decision making, the employee several levels down in the multi-multi-level hierarchy may never be heard nor directly access the elite levels of upper management. In the tall structure, with a very small Span of Control and tight supervision, the employee tends to enjoy few decision making opportunities, due to burdensome rules, regulations, and procedures. This can, quite understandably, be more than a bit disheartening for any employee.
Organizational arrangement depends on the result to be industrial as Wheelwright and Clark define scale executive structure among two boundaries; functional organizations are planned according to industrial regulation. Higher functional manager is responsible for apportioning assets. The accountability for entire creation is not owed to a solitary human being. Harmonizations occur all the way through system and events, thorough stipulation, shared customs between engineers and meeting. Thus, light-weighted matrix association remain functional and height of occupation is analogous to that establish in the practical mode. The position and influence puts value to the functional managers, since they have direct right of entry to functioning level community. The project members depart their functional subdivision and dedicate full time to the development, “share the same location. The professionals are less specialized and have brioader tasks, skills and responsibilities.
acquire the “best” project support staff from the finite pool of available people. And a great deal of valuable time is expended in meetings to coordinate staff for two or three or more concurrent projects.
But don’t dismiss the positive elements of the Matrix Structure. While this type of organizational structure is more demanding and perhaps more stressful than others, it is also very, very efficient.
Horizontally Linked Structure
The last type of organizational structure that we’ll examine, the Horizontally Linked Structure, is somewhat of a newcomer in the business world — making its first appearance only three or four years ago, to my knowledge — but it is gaining momentum and finding more and more acceptance today, especially among IT departments in the high-tech community. Plan Build Run (Often adopted by IT Departments)
Figure 10: The Horizontally-Linked Organizational Structure
Under the Horizontally Linked Structure, an organization groups its people along the value chain of activities and processes that produce, market, deliver, and service the firm’s offerings. 14
Horizontally Linked Structures
A Horizontally Linked Structure groups people along the value chain of processes that produce, market and service the firm’s offerings.
A very basic way of illustrating this type of organizational structure is seen in Figure 10, a simple Plan, Build and Run model. Let’s say a company will group its people and resources from R&D or Finance for the express purpose of planning projects or programs in the company’s interest; these plans are passed to the next group comprised of Manufacturing personnel for actual production; and then another group of IT personnel maintain and perpetuate the projects or programs. This is an interesting and growing trend in organizational structure, and it’s one that is well worth watching in the future. Organizational Structure:
A Critical Factor for Organizational Effectiveness and Employee Satisfaction 16
Classical vs. Neoclassical Theories
of Organizational Structure
There are two overriding theories of optimal Organizational Structure that hold forth in the business world, known as Classical Organizational Theory and Neoclassical Organizational Theory. As the names suggest, the former is a traditional approach while the latter is a more progressive approach.
The Classical Organization Theory assumes that there is a single best way to design organizations — that managers should have tight control over their subordinates, and that calls for designing organizations with tall hierarchies and a narrow Span of Control. Classical Theory entails a high degree of written documentation and rules and procedures intended to direct and control employees. As such, the Classical Theory advocates a decidedly functional type of organization.
The flip side is an attempt to improve on the classical theory. Today we know this as Neoclassical Organization Theory, which argues that employee satisfaction, as well as economic effectiveness, should be the ultimate goal of an organization. Neoclassical Theory assumes that managers do not tightly control their subordinates and calls for designing organizations with flat hierarchies and a wide Span of Control. Following Neoclassical Theory, the manager relies more on the employees to make decisions, and these organizations are less rigid with fewer rules, regulations, and processes.
Figure 11: Classical and Neoclassical Theories of Organizational Structure15
Organizational Structure:
A Critical Factor for Organizational Effectiveness and Employee Satisfaction 17
Modern Trends in Delayering Organizational Structure
Figure 12: Delayering the Organizational Structure 16
Given the increasing acceptance of Neoclassical Organization Theory and the rise of new models such as the Horizontally-Linked Organizational Structure, it’s apparent that modern trends are moving the business world toward a Flattening or Delayering of organizational structure.
Delayering refers to stripping out middle management from a company’s organizational structure. The resulting structure is essentially flattened, with fewer managers, and those managers who remain are able to exercise a wider Span of Control. Those who work in these flattened structures have more decision-making ability, greater creative latitude, more autonomy, and more direct relationships with the higher level people inside the organization — all of which contribute to employee satisfaction.
With modern trends toward decentralized decision-making, fewer organizational layers, and more direct access to upper management, employees are motivated to contribute their voices to matters that affect the entire organization
The Implications for Employees
Perhaps most importantly, we should consider the implications of these evolving organizational structures for employees. In a more traditional and ponderous Tall Organizational Structure, with centralized decision making, the employee several levels down in the multi-multi-level hierarchy may never be heard nor directly access the elite levels of upper management. In the tall structure, with a very small Span of Control and tight supervision, the employee tends to enjoy few decision making opportunities, due to burdensome rules, regulations, and procedures. This can, quite understandably, be more than a bit disheartening for any employee.
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