Business:
Introduction
The structure of an organisation is a very important aspect that dictates the functioning of activities in the organisation. The structure is what determines the organisation’s success and cohesion of activities and results to the effective operation. Structure leads to job and responsibility assignment and these factors are important for the division of labour and specialization which helps organisation tackle tasks in a sustainable and effective manner. Division of labour results to order and increases the effectiveness in meeting the goals and objectives of an organisation. The structure also establishes effective communication within the organisation that people could use to interact effectively between different levels within the organisation. This aspect also facilitates for easy problem solution and greatly helps in raising productivity of the organisation’s employees (Heynold and Rosander, 2006).
According to the article “A new organisational model for airlines”, there have been great changes in the way organisations have been structured. These changes have been attributed to the fact that most organisation and in this case airlines, have grown to become very large businesses. As a result, they have incorporated various other businesses in them other than those relating to airlines. Most of which have stopped outsourcing services from other outside firms and established most services within them. This aspect has led to great diversifications in activities carried out within the airlines. Some of the other activities carried out include restaurants, bus services, accommodation and many other businesses. These changes have led to changes in the structure of these organisations that quite differs to the tradition organisational structure that mainly involved a hierarchical form of structure that catered for the whole organisation. This was a more centralised form of organisation. The more recent and modern forms of organisational structure involve the decentralisation of activities within the organisation with different section each having its individual structure. This form of structure is attributed to the diversification of activities other than those relating to the airline business (Kubasek, and Brennan, 2006).
The levels are important as they help dictate the responsibilities of the employees. One main fact to note about organisational structures is that the traditional hierarchical model forms the basis of other organisational structures regardless of their nature and size, and this makes it a very important model. However, this model has been associated with all organisations with minimal activities. This model is important because it increases the effectiveness of the organisational activities and helps raise productivity. The development of levels develops the aspect of the division of labour and specialization and at the same time gives employees opportunities to rise in the ranks and advance to higher levels in the organisation that presents better opportunities. On the other hand, the modern decentralized model is a model that is associated with large organisations. According to the article, this model is associated with airlines that have grown over the years and led to the diversification of their business activities. The expansion process results to a reduction in service outsourcing from the outside organisation and these airlines become independent (Heynold and Rosander, 2006).
The increase in complexity in the structure of these organisations results to the development of a more flexible structure that would cater for all the new services that these organisations offer. This structure involves the division of the organisation’s activities into various different sections that work independently from each other. This creates a more decentralized structure. The organisation is then divided into units that are all responsible for themselves. One fact to note is that this model is associated with large organisations; however the basis of the structure that is also incorporated in the individual units is the traditional hierarchical model. The aspect of decentralization helps increase the model’s flexibility and reduce complexity but still maintain the traditional aspects of levels. Each unit has a structure that includes ranks and levels. The difference comes in as a result of the functions of the units and greatly depends on the services they offer. Another aspect to note is that small organisations start off with a more centralized structure, and this soon changes as the organization grows to have a more decentralized structure.
Effect of Model Choice on Managerial Authority and control
Choice of either of the model greatly depends on various factors. One of the factors is the size of the business. Small business requires the traditional model. This is because of their simple structure and fewer activities the traditional model is more effective in such organisational setting. The use of levels and ranks facilitates of better productivity within the organisation as a result of specialization and also allows employees to work their way up the ranks in more advanced positions. On the other hand, large organisations require more flexible structures that would cater for their complex structures. The traditional models wouldn’t be enough to cater for them and it is because of this reason that these organisations need more advanced models and the modern decentralized model is the most effective for the large organisations (Kubasek, and Brennan, 2006).
Another factor that dictates the choice of model o adopts be the nature of activities associated with the organisation. This aspect mostly relates to the number of services organisations offer. Due to the growth of organisations over time, their organisations also grow and, as a result; they develop other services within them and stop out souring services from outside organisations. Development of these services result to diversification of the organisation's activities, and this creates the need for a more complex organisation model. The modern decentralized model is most effective in such settings because of the fact that it increases flexibility of the organisation and helps manage the complexity of the organisation of the large firms.
As a result, activities are divided into units each responsible for themselves in every aspect but all of which answer to some central authority that coordinates them effectively. As for the small organisation, there is no need for decentralization because most of their activities either single or multiple can be handled as a single unit in the traditional model structure. Another characteristic that differentiates the two models would be the number of managers required in both of them. The traditional model is simple in nature and, as a result, only requires fewer managers. This is also because of the limited activities that are associated with a smaller organisation (Kubasek, and Brennan, 2006).
On the other hand, organisations requiring the modern decentralized model usually have more managers. This is because of the nature of their activities that is usually characterized by multiple services offered independently within the same organization. As a result, the structure of the organization is in the form of units each requiring specific managers. Control by the managers is limited to the units and so they have no power and authority over the other units. This reduces the chain of command because the model reduces the organizations into smaller subsets that the work independently. The units are differentiated horizontally by the nature of services they offer and vertically by the level of rank and authority. However, the top ranks usually have a mandate over the units and those in this level can exercise authority over any unit. The independence that each unit has protects them from authority coming from the other units and this makes the units more effective in their activities and at the same time increase performance competition among themselves (Heynold and Rosander, 2006).
Which Model is Better
The two models are very important in the development of organisational structures. However, according to the information above choice of model depends on factors such as size and complexity of the organisation as well as the number of activities in terms of services an organisation deals with. In this case we have looked at airlines. From the analysis, it has been seen that airlines have grown over the years to become large organisation offering multiple services. They have developed from the use of the traditional model and advance modern model of organization.
However, form the analysis it is clear that the modern model is more effective in aspects involving coordination of activities as well as specialization. This is attributed to the fact the model is involved with complex organisational structures characterized by multiple activities that are different and operate independently from each other. It facilitates for the linking of various different units with the organisation developed as a result of multiple services associated with the expanding organisation. Another fact to note is that the modern model is just an advancement of the traditional model.
The traditional model is still incorporated within the modern model but at a reduced scale mostly within the smaller units. This makes the modern model a hybrid structure that incorporates various different elements and which makes the organisation as flexible as possible. One way to improve the hybrid model so as to increase its success would be to strengthen the traditional model aspects in the units so that they can be stable and much more independent and at the same time reduce authoritative influence from the rest of the units. This would make competition the only factor influencing performance of the units and would help increase productivity of the independent units.
References
Heynold, Y., & Rosander, J. (2006). “A new organisational model for airlines”. Changes in the Air. Retrieved November 4, 2014, from http://www.economist.com/node/7025840
Kubasek, N., & Brennan, B. (2006). The legal environment of business: A critical thinking approach (4th ed.). Upper Saddle River, N.J.: Prentice Hall.
