Organization of Focus
The organization that will be reviewed in this case is ECOBANK. For two years, I served as an employee in this firm where I worked in the organization’s risk management department which was mandated in guiding the firm through all manner of risks. Having served in this organization for two years, I am confident that I adequately understood its function and operations as well as employee culture and organization structure.
The organization is one of the largest African multinational banks. The bank’s key operations are in West Africa. However, the bank has made great strides in penetrating the larger eastern Africa market and central Africa. The firm has also established operations in some countries in the southern part of Africa such as Malawi. As at 2015, the bank was in operations in 22 African markets (ECOBANK n.pag). In addition, to serve this extensive market, the bank has more than 3000 employees and extensive branch network.
Organization Structure
There are various management structures that may be applied by an organization. Through examining the official organization structure available on the firm website, ECOBANK organization can be categorized as a hybrid organization structure. The term hybrid may have varied meaning. However, in this paper, the hybrid system will be understood as an organization structure that is characterized by fluidity and not linear process and rigid structures. Therefore, in order to promote the fluidity required, it means that ECOBANK management team considered the business environment and the benefits that are associated with the other traditional form of organization structures. As such, the bank managed to craft a hybrid system that is based on the strengths of these traditional structures thus making a hybrid system. One should note that there is no standard way of developing a hybrid system. Consequently, a business will need to understand and comprehend its operations thus managing to extract the most useful component of traditional organization structures that will optimize the firm operations (McKee 312).
My experience in ECOBANK showed that the firm adhered to the established structure as defined in the firm hybrid structure although there were various systematic management hindrances. From the theoretical structure provided, the firm has sixteen departments. Out of the sixteen departments, seven departments are a standalone department that supports the other eight departments which are headed by a departmental head who reports directly to the CEO. In relation to the other eight, four of these departments are under the commercial director with each having a departmental head while two other departments are under the chief operating officer and the remaining three departments are under the chief finance officer. The internal audit function is an independent operational function which is headed by the chief auditor who reports directly to the audit committee of the board. With regard to the day to day operations, the CEO is in charge reports to the board of director. However, he is also closely monitored by a management committee. Nonetheless, the CEO is a member of the management board together with Credit committee members, ALCO, chief operating officer, chief finance officer and chief accountant. In relation to country management, each country network of branches is under a country managing director who serves under the commercial director (ECOBANK n.pag). These structures are evident in the firm operations.
According to Fayol management principles, there should be a scalar chain in relation to authority. Therefore, there should be a clear definition of the flow of authority in a firm from the highest level of authority to the lowest level of authority (Bhatia, 140). Examining ECOBANK structure, there is a high chance of a power struggle that may erupt between the chief financial officers, chief operating officer, and commercial director on one hand and the head of departments of the support department on the other side. From the structure, the departmental head of support departments reports directly to the CEO just like the chief financial officers, chief operating officer, and commercial director. The situation should not be the case since these departmental heads should be obliged to report to the chief financial officers, chief operating officer, and commercial director since the services that they offer are meant to be in support of the operations that are spearheaded by the chief financial officers, chief operating officer, and commercial director. Therefore, this places these head of departments on the same level of authority as the chief financial officers, chief operating officer and commercial director based on the fact the structure does not place these departments under the authority of these three senior staff which is a recipe for power struggles as the support department heads may seek to pursue different interests as opposed to supporting the activities they are meant to support.
In addition, the current ECOBANK structure may undermine the authority of the chief financial officers, chief operating officer, and commercial director. Authority should be applied uniformly in the organization (Saiyadain 277). Therefore, since the three senior staff do not have legitimate power over the support department head of department, this may lead to the head of department that report to the chief financial officers, chief operating officer and commercial director to undermine their legitimate power as they attempt to achieve a similar status with their counterparts that report directly to the CEO. Therefore, this will lead to operational crises in the organization since some head of departments are presented as receiving preferential treatment thus may prompt the head of department under the chief financial officer, chief operating officer and commercial director to feel that they are second fiddle compared to their counterparts that are not under these three senior staff. As such, they may attempt to bypass their immediate bosses and report to the CEO.
The span of control is one of the other elements that affect the effectiveness of the organization structure. The span of control refers to the number of employees that are supervised by one individual (Kreitner 251). Examining the current structure, it is interpreted to mean that the CEO supervises the seven support department and the chief financial officers, chief operating officer and commercial director. As such, this stretches the span of control of the CEO which may lead to a burnout. The CEO involvement in such lower levels means he will be involved in extensive details as opposed to working with summaries hence limiting the supervisory effectiveness of the CEO with regard to these departments. Therefore, placing these support departments under the chief financial officers, chief operating officer, and commercial director will mean expanding the span of control of the chief financial officers, chief operating officer, and commercial director and lowering the span of control of the CEO hence improving the quality of supervision of these departments (Kreitner 251). In addition, this strengthens the legitimate power of the chief financial officers, chief operating officer, and commercial director over all the departmental head.
Also, examining the network of the ECOBANK in Africa, each country is managed by managing director while the country managing director reports to the commercial director who is not part of a critical decision-making organ, management committee. Therefore, it reduces the country offices as just mere decision takers as opposed to participants in the decision-making process since the person who ought to represent them is excluded from the decision-making process. As such, the commercial director ought to have been a member of this powerful committee the commercial director has a direct supervisory obligation on the business network in other countries which are a core component in the bank thus should take part in decision making that affects these subsidiaries in foreign countries.
Examining the centers of power in the organization, the ultimate power lies with the board of directors as agents of the shareholders. However, operationally, the management committee has the highest operation power since the committee closely oversees the functioning of the CEO. However, through this structure, this creates a state of confusion. Examining the membership of this management committee, the committee consists of the CEO, Chief operating officer, Chief Accountant and Chief Financial Officer. Conspicuously, the commercial director is excluded from this powerful organ of the organization and his place is filled by the chief accountant. Therefore, from this membership structure, it seems that the chief accountant, who is under the Chief Financial Opposition, takes a higher position than the commercial director in management process since the management committee is the key organ that guides the day to day running of the firm with the CEO as the proxy that executes their decision. The observation leads to the examination of the layers that are there in the organization senior management which leads to the observation that ECOBANK has two layers at the senior level. However, their functions overlap. For instance, as observed in the composition of the management committee, a senior official is replaced with his junior. Therefore, taking the senior management team the staff comprising of CEO, COO and CFO, the chief accountant is not part of this senior team yet he makes decisions that are binding to the commercial director who is his/her senior yet the role that chief accountant plays can be covered adequately by the CFO based on the fact the chief accountant reports to the CFO. There is no standard number of layers that can be recommended but the layers must never overlap to ensure the structure functions effectively (Glowinkowski 70).
In corporate governance, integrity is one of the factors that are emphasized in any organization. Through high levels of integrity, it becomes possible for the organization to operate with a high degree of ethics thus promoting good business practices. One of the indicators that show unethical behaviors, considering that ECOBANK is in the banking sector, is facilitating money laundering, insider trading, fraud and misleading business decisions. Throughout my tenure at the firm, the firm was never subject to any investigation relating to any unethical practices. As such, this is an indicator that the leaders of the entity adhere to high ethical standards thus they can be termed to be people of high integrity.
Departmental Level Analysis
Management style is one of the aspects that define a good manager. The head of my department (risk Department) can be termed to be applying both coaching management styles and participative management styles. As I joined, I was relatively new in risk management techniques although I had extensive training in this field. My experiences with the head of the department were developmental in that he maintained an open door policy with the juniors. Although there were other officers between my level and the head of the department, the department head was keen in establishing a close personal relationship with all the staff within his department. Through these interactions, the department head established a link between the employees thus giving him the room to mentor his juniors, especially the new one. The department head encourages respect for the scalar chain but encouraged the less experienced staff to seek skills and training from any member of the team so that they can increase their productivity (Passmore 87).
In addition, there were consultative weekly meetings that were chaired by the head. The meeting was characterized by brainstorming activities in relation to risk management that was suitable to handles issues that were being addressed. Being a financial company, there are numerous and dynamic risks that these organizations face. Therefore, through these consultation forums, the department has managed to steer the firm through harsh economic conditions by collectively developing creative approaches that are customized to the risks facing the firm as well as create a team spirit where every team member can contribute his ideas and have them critiqued by equally qualified people. Through this participative management approach, the head established a synchronized departmental team and created the necessary room for the junior employee to learn and grow (Liebler and McConnell 65).
The principle of a functional structure is evident. Functional structure refers to which the departmental was divided into smaller specialized functions. In risk department, the risks were subdivided into several categories such market risks, operational and integrated risk, investment risk and credit risk. Entrants are required take tasks from all the departments on a rotational basis until the head of the department permanently assigns each entrant and allocate that entrant to a given risk function cohort. Nonetheless, the team members are expected to be conversant with other risk function in order to promote employee collaboration within the department (Glowinkowski 27:239). In addition, the size of the responsibilities is defined by the employee level in the organization. At the entry level, the jobs are mainly clerical and guided by technical staff. As the entrant employee gain more experience, the scope of work is adjusted to promote the independence of work as opposed to just following instructions (Glowinkowski 68). Therefore, the roles of the employee increase as one move up the corporate ladder. However, the duties at lowers levels involve voluminous transaction that focuses on few roles but very many details.
Recommendation
There are various weaknesses that undermine the intended idea of developing the hybrid management structure. First, the management committee should be reconstituted to include the commercial director and drop the chief accountant. The action ensures the scalar chain of command is promoted thus the legitimate power will be clearly structured by eliminating overlaps (Bhatia, 140). In addition, to strengthen the CEO as the person in charge of operations of the firm, the CEO should be made the chairman of the management committee thus affirming the CEO to be the principle agent of the board of directors.
Second, the country managing directors should report to the group CEO as opposed to commercial directors. In addition, the title should be changed to be country CEO as opposed to managing directors and their duties and obligation altered to give them higher autonomy in devising creative operations and products that suit the markets that they operate.
Finally, the support department should also be placed under Chief Operating Officer, Chief Accountant and Chief Financial Officer. Since they are support department, the statement place these departments under Chief Operating Officer, commercial Director and Chief Financial Officer will mean that the three senior officials are given power over these departments thus they should report to them instead of the CEO. As such, this will enable the CEO to focus on strategic management as opposed to being concern with departmental details (Kreitner 210). This will occur since the Chief operating officer, Chief Accountant and Chief Financial Officer will filter out information and only pass information and responsibilities that are refined to the CEO hence improving the efficiency of the CEO.
Works Cited
Bhatia, R.C. Principles of Office Management. Lotus, 2005. Print.
ECOBANK. "Home." Inecobank. Web. 15 Apr. 2016. <http://www.inecobank.am/en/home>.
ECOBANK."Bank's Organizational Structure." Web. 15 Apr. 2016. <http://www.inecobank.am/en/home/about_us/bank-structure>.
Glowinkowski, Steve. It's Behaviour, Stupid!: What Really Drives the Performance of Your Organisation. Penryn: Ecademy, 2009. Print.
Kreitner, Robert. Management. Boston: Houghton Mifflin, 2009. Print.
Liebler, Joan Gratto., and Charles R. McConnell. Management Principles for Health Professionals. Sudbury, MA: Jones and Bartlett, 2004. Print.
McKee, Annie. Management: A Focus on Leaders. Upper Saddle River, NJ: Prentice Hall, 2011. Print.
Passmore, Jonathan. Excellence in Coaching: The Industry Guide. London: Kogan Page, 2010. Print.
Saiyadain, Mirza S. Organisational Behaviour. New Delhi: Tata McGraw-Hill, 2003. Print.
