1. Does it seem reasonable that Idea is attempting to better organize Sony in order to remain more competitive? Explain.
It is reasonable for Idei to attempt to better organize Sony. The company is facing different challenges and problems both internally and externally. Redesigning or restructuring the business in needed for Sony to be able to adapt to the different environmental business factors that it faces. The management needs to re-examine the business, its structure, divisions and departments, including how work is done in the organization.
Organizing is an important process in the organization and is primarily the role of the management, in Sony’s case organizing must be initiated by Nobuyuki Idei as Sony’s Chief Executive Officer. Organizing is the process of establishing orderly uses for all resources within the management system. A primary focus of organizing is determining both what individual employees will do in organization and how individual efforts should be best combined to advance the attainment of organizational objectives. Sony is a large multinational company with diversified products and services, it is understandable that its CEO attempts to better organize an organization as big and as complex as Sony. Organizing is very important to managers because it is the process by which plans are activated. It is the process where the resources of the organization are allocated and employed in order to achieve the organization’s goals and objectives. Organizing creates and maintains relationships between all organizational resources by indicating which resources are to be used for specific activities and when, where, and how they are to be used.
2. List five questions that Idei should ask himself in exploring how best to organize Sony.
In exploring ways on how Sony can be organized, Idea must ask the following questions:
1. Where is the company now and where does it want to go?
2. What is the best organizational structure for Sony that will facilitate the achievement of its goals and objectives?
3. What form should the organization take?
4. How will Hierarchy of authority be designed?
5. How will Labor be divided?
3. Explain why it would be important for Idei to ask each of the questions you listed.
Question 1:
In organizing, it is important that the decision-makers have a clear understanding of the company’s current state and where it wants to go (or what it wants to achieve). It is important to assess the company’s goals and strategies, and examine how successful they have been. It is also important to identify and assess the strengths and weaknesses of major functional areas within the organization. The analysis will provide decision-makers with an inventory of organization skills and resources and its overall functional performance levels. The external environment must also be examined. The external analysis begins with the analysis of the market and industry. Next stakeholders are analyzed – particularly competitors, but also buyers, suppliers, owners and shareholders, government and regulatory agencies, and unions and employee groups. The environmental analysis should also examine other forces in the environment such as macroeconomic conditions and technological factors. The external analysis provides planners with a number opportunities they could pursue and a number of threats they must counter
Question 2:
How the organization will be structured is perhaps one of the most important questions that Idei can ask in organizing Sony. It is important that the management choose the appropriate structure. Structure refers to the designated relationships among resources of the management systems. Identifying the structure of the company is important as all process, policies and decisions that will come next will be based on it. Organizations according to Daft (2007) are considered social entities that are goal-directed, designed as deliberately structured and coordinated activity systems and linked to the external environment. The key element of an organization is not a building or a set of policies and procedures; organizations are made up of people and their relationships with one another. An organization exists when people interact with one another to perform essential functions that help attain goals (Daft 2007). Organizational structure refers to how an organization is put together. Structure reflects some of the underlying ways that people interact with one another in and across jobs or departments (Sims 2002). Organizational structure refers to how job tasks are formally divided, groped, and coordinated.
Organizational Structure institutionalizes:
- How people will interact with each other
- How communications will flow
- How rewards are distributed
- How power relationships are defined
- What is important to the organization
Question 3:
Another important consideration is organizational form. There are two basic forms of organizations – mechanistic and organic. A mechanistic system is characterized by reliance on formal rules and regulations, centralization of decision making, narrowly defined job responsibilities, and a rigid hierarchy of authority. The emphasis is on following procedures and rules. In contrast, an organic system is characterized by low to moderate use of formal rules and regulations, decentralized and shared decision making, broadly defined job responsibilities, and a flexible authority structure with fewer levels in the hierarchy. Top management typically makes decisions that determine the extent to which an organization will operate as a mechanistic system or an organic system. A mechanistic system is essentially a bureaucracy. Bureaucracy is characterized by principles that include:
- Specialization
- Hierarchy
- Rules and Regulation
- Rational Decision-making
- Selection and promotion based on technical competence (Sims 2002).
Question 4:
Hierarchy of authority represents the extent to which decision-making processes are prescribed and where formal power resides. In a mechanistic system, higher level departments set or approve goals and detailed budgets for lower level departments and issue directives to them. A mechanistic system has as many levels in its hierarchy as necessary to achieve tight control. An organic system has few levels in its hierarchy, which makes coordination and communication easier and fosters innovation (Sims 2002). In the paper written by Hannan et al (2006), the authority or the span of control the superior has in the organization was studied. According to them increasing a superior’s span of control reduces the effectiveness of capital budgeting in eliciting truthful reports.
Question 5:
Division of labor refers to the various ways of dividing up tasks and labor to achieve goals. The more that tasks are divided into separate jobs, the more those jobs are specialized and the narrower the range of activities job incumbents are required to perform. The mechanistic system follows the view that the greater the division of labor in organizations, the greater will be the efficiency of organizations and the amount of wealth created. However, a continued increase in the division of labor may eventually become counterproductive. Employees who perform only very routine and simple jobs that require few skills may become bored and frustrated. The results may be low quality and low productivity, high turnover, and high absenteeism. The organic system takes advantage of the benefits from the division of labor, but it is sensitive to the negative results of carrying the division of labor too far (Sims 2002).
References
Daft, R 2007, ‘Organization Theory and Design’, South-Western, Cengage Learning.
Sims, R 2002, Managing Organizational Behavior, Quorum Books, Westport CT.
Credit:ivythesis.typepad.com
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