Management
Under the leadership of co-founder and former CEO Adam Neumann WeWork organizational structure was complex. Figure 1 below is a ‘simplified’ version of WeWork organizational structure the company submitted for IPO Prospectus on August 2019. The structure fails to clearly illustrate the organization of the business from the viewpoint of who reports to whom. It also fails to clearly indicate the flow of information, an essential component of a good organizational structure. Figure 1 We Work organizational structure under Adam Neumann If this is a ‘simplified’ version, it would be safe to assume that the original version would be much more difficult to comprehend. Ineffective organizational structure is one of the main reasons why global flexible workspace provider faced near bankruptcy in 2019. After the departure of Adam Neumann, the new CEO Sandeep Mathrani restructured the business simplifying the organizational structure to a great extend with a clear pattern for information flow. Figure 2 Current pattern of WeWork organizational structure Organizational structure of WeWork can be classified as hierarchical. Such a structure offers advantages to the co-working giant such as creating a landscape for Sandeep Mathrani to turn around the business to make it suitable for long-term. Hierarchical structure offers clear delegation of authority and encourages specialization among employees at all levels. On the negative side, hierarchy can cause rivalries between various departments. It can also slow down the implementation of proposed changes through loss or misinterpretation of information along the hierarchy. The current organizational structure of WeWork may change in the foreseeable future because the structural changes by Mathrani are far from complete. Mathrani has predicted flexi-working revolution at a global scale[1] and he is striving WeWork to lead such a revolution. WeWork Inc. Report contains the above analysis of WeWork organizational structure. The report illustrates the…
Organizational structure can be defined as a system for outlining management roles and responsibilities to achieve organizational goals. Organizational structure also determines the pattern of information flow within the organization. For instance, in highly hierarchical structures decisions are communicated from top to down, whereas in flat structures the power for decision making is distributed among various levels. Organizational structure aims to provide efficiency and focus to operations. Appropriate structure should illustrate how the roles and responsibilities of each employee fit within the overall system. Organizational structure has the following four main elements: Chain of command. Illustrating who reports to whom via an organizational chart. Defining departments. Clustering tasks, roles and responsibilities into groups and defining connections between various groups. Extend of control. Categorizing each and every task into departments to avoid a situation where two or more people do the same task. Centralization. Identifying the levels where decisions are made. There are four main types of organizational structures – functional, divisional, flat and matrix. Functional Structure Functional structure is based on specialization of employees and it is the most common organizational structure. It is also referred to as bureaucratic structure and divides company into various departments such as procurement, operations, marketing , finance etc. Divisional Structure Divisional structure is also popular and it divides to company into various divisions on the basis of products, projects or subsidiaries. Flat Structure Flat structure, also referred to as horizontal structure aims to minimize the chain of command providing employees with autonomy in decision making. This pattern is popular among startups. Matrix Organizational Structure Matrix structure is the most complex and accordingly, the least popular. Matrix structure assigns employees across various divisions and supervisors. Employees in such a structure may belong to more than one divisions and report to several superiors. In this portal…
Starbucks corporate structure sustains international scope of its business operations that encompasses more than 34000 stores in 84 markets. Starbucks organizational structure is hybrid and integrates geographic, brand-based and functional hierarchy structures. Organizational structure of Starbucks can be divided into the following divisions: 1. Geographic divisions. Starbucks operations are divided into the following geographic divisions or segments: a) North America division. This division consists of USA and Canada b) International division consisting of China, Japan, Asia Pacific, Europe, Middle East, Africa, Latin America and Caribbean 2. Brand-based divisions. Each brand within Starbucks Corporation portfolio represents a separate division led by the head of division. The world’s largest coffeehouse chain has brand-based divisions as illustrated in table below: Brand Founded Products Starbucks 1971 Coffee, non-alcoholic beverages, food Teavana® 1997 Variety of teas La Boulange® 1999 French pastries and breads Evolution Fresh™ 1992 Nourishment juices and foods Seattle’s Best Coffee 1991 Coffee, non-alcoholic beverages, food Tazo Tea 1994 Teas, herbs, roots and spices Brand-based divisions within Starbucks organizational structure Starbucks corporate structure is functional hierarchy and accordingly, groups are formed according to business functions on Executive Vice President (EVP) and Senior Vice President (SVP) levels. Specifically, as illustrated in figure below organizational structure of Starbucks includes 11 Executive Vice Presidents each leading a separate function below: Chief Financial Officer Chief Marketing Officer Chief Strategy & Transformation Officer Global Coffee, Tea and Cocoa Global Supply Chain Chief Technology Officer Public Affairs Chief Partner Officer Global Channel Development Starbucks North America General Counsel Starbucks Organizational Structure Similarly, there are 24 functions headed by 26 executives at Senior Vice Presidents level: Store Development Ethics and Compliance officer Chief Procurement Officer, Global Sourcing Product Experience Global Chief Inclusion and Diversity Officer Starbucks Canada Americas Finance Latin America & Caribbean Partner…
IKEA has a unique organizational structure. Specifically, “around the globe, a large number of companies operate under the IKEA trademarks. All IKEA franchisees are independent of Inter IKEA Group. A large group of franchisees are owned and operated by INGKA Group. Inter IKEA Group and INGKA Group have the same founder, and a common history and heritage, but have operated under different owners and management since the 1980s”[1] Figure 1 below illustrates the essence of IKEA organizational structure: Figure 1 IKEA organizational structure Inter IKEA Group integrates of a group of companies. The group sets strategic direction for the whole business and connects all IKEA franchisee. The group is formed of three core businesses as illustrated in Figure 1 above: 1. Inter IKEA Systems B.V. is the furniture retailer’s franchisor worldwide. This unit also deals with franchise agreements with 11 franchisees that operate in more than 500 locations.[2] 2. IKEA Range & Supply develops and supplies products for the home improvement and furnishing chain. 3. IKEA Industry produces home furnishing products and it manufactures about 10-12% of the total range. The present organizational structure of IKEA illustrated in Figure 1 above is the outcome of a major restructuring initiative that was introduced in 2016. To improve the franchise system and clarify roles, IKEA range, supply and production activities were transferred to the new Inter IKEA Group headed by Inter IKEA Holding B.V. Currently, Jon Abrahamsson Ring is the CEO of Inter IKEA Holding B.V. The Figure 2 below illustrates the overview of the franchise system. Figure 2 Overview of the IKEA franchise system[3] Specifically, IKEA Group sold key subsidiaries for EUR 5.2 billion to increase the flexibility of the business to be able to adapt to changes in the external global marketplace. IKEA management considers this change to be much…
McDonald’s organizational structure can be classified as divisional. McDonald’s business operations are divided into the following four divisions according to their geographical location: United States Europe Asia/Pacific, Middle East and Africa (“APMEA”) Other countries Each division above possesses its own departments such as IT, finance, marketing and others. Massive changes in McDonald’s organizational structure introduced in 2015 increased the emphasis on the international markets clarifying the roles of executives responsible for growth in international markets. Specifically, as it is illustrated in Figure 1 below, the responsibility for overseeing international operations is distributed among three senior executives at President level. Figure 1 McDonald’s leadership structure in international markets[1] Presidents are provided autonomy in decision making to a great extent to increase sales in their respective markets. The autonomy refers to adjusting the content and delivery McDonald’s marketing message to their respective markets taking into account cross-cultural differences. Moreover, Presidents are free to introduce new items in menu reflecting tastes and preferences of local markets. Furthermore, from administrative point of view McDonald’s organizational structure involves nine senior level managers reporting to President and CEO Chris Kempczinski. These managers include Vice President and Executive Vice Presidents and each manager is responsible for a specific strategic aspect of the business. Figure 2 McDonald’s organizational structure Since becoming President and CEO in 2019 Mr. Chris Kempczinski did not introduce any massive changes in McDonald’s corporate structure. However, he may restructure the business to a certain extent to reflect changes in the external environment. Specifically, COVID 19 pandemic revealed the importance of delivery and McDonald’s may change its corporate structure to ensure greater focus on making deliveries to homes and offices. McDonald’s Corporation Report contains the above analysis of McDonald’s organizational structure. The report illustrates the application of the major analytical strategic frameworks…
McDonald’s leadership team is headed by the President and CEO, who is aided by nine senior managers, each overseeing a specific aspect of the business. [1] The previous President and CEO Mr. Steve Easterbrook took the helm in 2015 and he was widely considered as an effective leader until he was fired for having consent sexual relationships with subordinate employees. During his leadership tenure Mr. Easterbrook was credited with turning around the company and reviving its falling stock price. Most prominent changes introduced by Easterbrook include reducing costs, introducing touch-screen ordering and establishing all-day breakfast. The new President and CEO Chris Kempczinski has also proved to be effective business leader. Under the new leadership McDonald’s has emerged as a clear winner during the pandemic. Mr. Kempczinski has channelled his energy and focus on digital, drive thru and delivery to adjust the business model to the pandemic environment. McDonald’s leadership is currently faced with a serious challenge. In recent years the fast food chain has faced many lawsuits and claims involving sexual harassment and racial discrimination. The former President and CEO Mr. Easterbrook being found violating company code of conduct is the evidence of severity of the issue. One of the important tasks for the new leader Mr. Kempczinski is to create a corporate culture where sexual harassment and racial discrimination is not tolerated in practice. McDonald’s Corporation Report contains the above analysis of McDonald’s leadership. The report illustrates the application of the major analytical strategic frameworks in business studies such as SWOT, PESTEL, Porter’s Five Forces, Value Chain analysis, Ansoff Matrix and McKinsey 7S Model on McDonald’s. Moreover, the report contains analyses of McDonald’s business strategy, organizational structure and organizational culture. The report also comprises discussions of McDonald’s marketing strategy, ecosystem and addresses issues of corporate social responsibility. [1] Annual Report…
Amazon organizational structure can be classified as hierarchical. Senior management team include three CEOs and three senior vice presidents responsible for various vital aspects of the business reporting directly to CEO Andy Jassy. Amazon organizational structure has the following four key features: 1. Hierarchical corporate structure. Hierarchical structure at Amazon has developed due to the immense size of the business. The largest internet retailer in the world by revenue employs more than 1,3 million people worldwide.[1] 2. Hybrid project groups. Amazon corporate structure integrates hybrid project groups when developing new products and services. Specialists from various departments are attracted according to their skills and competencies required for the project. These employees can be attracted part-time reporting to both, the head of their departments and project leaders, or they can engage in the project full-time reporting to project manager only for the duration of the project. 3. Flexibility of the business. It is important to note that despite its large size, unlike many other companies with hierarchical organizational structure, Amazon remains highly flexible to adapt to frequent changes in the external marketplace. Moreover, the online retail giant leads changes in external business environment; it has caused disruptive innovation in e-commerce and currently it is about to cause a disruptive innovation in global logistics industry. Successful organization of hybrid project groups plays an instrumental role in maintaining flexibility of the business. Amazon organizational structure integrates many small teams that deal with various aspects of the business. Amazon founder and former CEO Jeff Bezos is credited with the introduction of ‘two pizza rule”. According to this rule, meetings should be held in teams small enough that could be all fed with only two pizzas. “Two pizza rule” continues to this day under the new CEO Andy Jassy. 4. Stability in the top management.…
Square Inc. organizational structure can be classified as relatively flat, taking into account ever-growing size of the business. Co-founder and CEO Jack Dorsey attempts to maintain a start-up environment and culture and reduce bureaucracy in order to keep the business flexible to be able to respond to changes in the external environment. Therefore, it can be argued that Square organizational structure is designed to increase the speed of decision-making. Leads of units operate as a CEOs and they report only to Jack Dorsey. Leads oversee project leaders and project teams at Square are small groups comprising maximum 12 people of diverse backgrounds. As illustrated in figure below, Square’s cryptocurrency business unit TDB is a division separate from both, seller and cash units. One of the reasons for this separation may relate to regulatory reasons. Specifically, maintaining crypto separate from other units decreases the chances of regulatory interferences. Square organizational structure The company is increasing the range of products and services extensively. This strategy can increase complexity of the business with direct implications on Square organisational structure, despite CEOs attempts to maintain it simple. Accordingly, the senior management of the financial services platform has a challenging task of maintaining flexibility of the business amidst its exponential growth. Moreover, there are opinions among industry analysts that CEO Jack Dorsey’s ultimate plan is to make Square a holding company for autonomous fintech businesses[1]. A Tweet by Dorsey on July 2021 claiming that the payments company will create a new business line to help developers build financial services products focused on Bitcoin can be seen as a signal to support such as viewpoint. Square Inc. Report contains the above analysis of Square organizational structure. The report illustrates the application of the major analytical strategic frameworks in business studies such as SWOT, PESTEL, Porter’s Five…
Uber organizational structure has been traditionally highly hierarchical with co-founder and former CEO Travis Kalanick yielding tremendous power and micromanaging the ride-hailing giant. Lack of Kalanick’s leadership skills resulted in a series of scandals involving bullying, discrimination at workplace, sexual harassment etc. Kalanick had to resign as a result of these scandals. After Dara Khosrowshahi became new CEO in 2017, Uber organizational structure has been subjected to certain changes.[1] Figure below illustrates Uber organizational structure: Uber Organizational Structure It can be argued that the current pattern of Uber’s organizational structure illustrated in Figure 1 above can be subjected to more changes by new CEO Dara Khosrowshahi in the medium-term perspective. Demoralized workforce and poor organizational culture belong to the list of major issues for the global transportation technology company. Dara Khosrowshahi is credited for creating collaborative work culture at Expedia where employees are encouraged to propose their ideas to management. Mr. Khosrowshahi is attempting to fix Uber organizational culture as part of his grand plans to turnaround the business. Accordingly, improvement in organizational culture may necessitate changes in organizational structure. Specifically, de-layering of organizational structure may be introduced, removing certain levels of management in order to make the business more flexible to respond to the changes in external marketplace. Moreover, advantages of flat organizational structure include faster speed of communication between the top management and floor-level employees. Senior leadership reorganization initiated by CEO Dara Khosrowshahi due to failed IPO in 2019 the roles of chief operating officer (COO) and chief marketing officer (CMO) were eliminated. Specifically, COO role was replaced by two executives who manage biggest businesses – ride-haling and food delivery. These two executives directly report to Khosrowshahi. Uber marketing operations, on the other hand, were combined with communications and policy departments. The rationale behind this specific change was…
Tesla is a unique company in many ways and this uniqueness also extends to its organizational culture. Tesla organizational structure integrates the following: 1. Unique organizational structure. “Tesla, unlike most companies its size, doesn’t have any known management structure. There’s no organizational chart or public list of senior leaders.”[1] Nevertheless, Tesla organizational structure can be characterized as divisional. 2. Tesla CEO Elon Musk has issues with delegation. Workaholic and micromanagement nature of Elon Musk, as well as his sleep deprivation work habits have become well-known. Famous author and businesswoman Arianna Huffington even wrote an open letter to Musk urging him to get more sleep and learn to delegate. Musk’s issues with delegation has implications on Tesla corporate structure in a way that he has more people directly reporting to him than any other CEO in auto industry. 3. Divisional and flexible structure. Although it is difficult to list Tesla organizational structure under a specific rigid category due to its unique nature, the structure can be characterised as divisional and flexible. As it is illustrated in figure below, Tesla organizational structure comprises a number of divisions such as energy, engineering and production, HR and communications, legal and finance, sales and software. Each division is led by several vice presidents, except software division, which is led by one vice president and Director of Artificial Intelligence. Tesla Organizational Structure Tesla benefits from divisional organizational structure through less bureaucracy compared to many other companies of similar sizes. Divisional organizational structure also helps the electric automaker to increase the speed of communication among different layers of management with positive implications on decision making and flexibility of the business. Tesla Inc. Report contains the above analysis of Tesla organizational structure. The report illustrates the application of the major analytical strategic frameworks in business studies such as…