With social and economic development, the importance of the organizational context is increasingly recognized by people. The context of an organization is represented in or shaped by the structure of the organization (Glushko, 2008). Organizational structure is used to describe the order of various parts of organization, contact information and the interrelationships between the various elements (Robbins, 1990). Simply speaking, organizational context and structure show how the organization is organized. This essay will analyze a case which concerns the organizational context and structure of Innovative Electronics, and give recommendations to change their current situation.
Firstly, this essay will describe some background information on Innovative Electronics, and explain the organization of this company. Secondly, it will analyze the problems which should be solved by Innovative Electronics from its external and internal parts. At the same time, some causes which are significant in leading to these problems will be discussed. The following third section regards change and the relevant solutions. Finally, this essay will use a summary to provide some recommendations. 2. Background and Situation
Innovative Electronics is a high- technology company located in Europe which is a major subsidiary of an American well-known Fortune 500 company. The parent company involves a number of related areas in many countries and Innovative Electronics plays a key role in its parent company’s core business. Innovative Electronics’ competitive advantages are market-leading core products and high treatment of employees. However, because their core products lost their competitiveness in the market, the performance of this company showed a failing trend over the last five years. There are two reasons, on the one hand, the socio-economic environment is becoming more competitive, and on the other hand, Innovative Electronics and its parent company have a lot of their own problems in strategies and organizational structure. The following will describe the company's current strategy and organizational structure.
From the perspective of corporate culture, the strategy of the parent company is consistency. From the perspective of management, the parent company insisted Innovative Electronics use the centralized management and research methods. As a US parent company, it maintains the integrity and consistency of the company but ignores the regional differences. In this case, a traditional bureaucratic system was applied to the organizational structure of the parent company and subsidiaries. In other words, subsidiary companies in different regions have to replicate US parent company’s functional structure which is not suitable for specific geographical areas and local culture.
Because each department in a company has their respective tasks, thereby, organizational structure is used to distribute appropriate work to different departments (Castledine, 2010). The organizational structure of Innovative Electronics is a functional structure. According to Carnall (1995), this form of organization is designed to set different functions and activities into different departments. To some extent, effective internal coordination and cooperation could be achieved through functional structure. However, it is not conducive to product development. Form another point of view, Innovative Electronics is a rational organization. According to Paton and McCalman (2008), rational organization is defined as an organization in which goals are consistent, decision process is rational, power and control centralized, and information is communicated systematically. Most of the commercial companies belong to this type for it is efficient and effective. Siebert (2010) stated that power and control centralized is the most important feature of rational organization, and this is used to distinguish it from other forms of organization, in other...