Analyzing Your Organization Structure

Analyzing Your Organization Structure

1) Environmental complexity is the “magnitude of the problems and opportunities in the organization’s environment as evidenced by the degree of richness, interdependence, and uncertainty”. The environmental richness is high when the economy is growing. Currently the economy is slowly recovering from one of the largest recessions, and the brokerage firms are slowly recovering as well. The market has been doing well and the brokerage firms are doing better as well. While the economy was suffering, the brokerage firms also got hit with different law suites for their analysts’ decisions and for their inability to control the mutual fund breakpoints. It was a double hit, with the market steadily declining after the 9/11. However, since about the end of 2002, the industry has been recovering. The support staff is rehired, the training programs are opening up for new broker trainees, the office spaces are remodeled and more money is spent on advertising. Our company is too small to have a strong environmental interdependence. I do believe that we have a few outsiders that sit on our board of directors, however, due to the lack of communication in our organization, I would not be able to tell you who the people are and what benefit if any they provide to us. Uncertainty and volatility does not seem as much of a problem for my organization. Being a small company with only one management level and a total of 21 employees, it is quick to adjust to any volatility. In fact I believe that even through the recession of 2001-2002, while most brokerage firms were happy to stay even with the market, our company was outperforming all the indexes and was consistently making profits.

2) I believe our company’s structure is the uses vertical specialization, which by definition is “a hierarchical division of labor that distributes formal authority and establishes where and how critical decisions are to be made”. Also, I would say that our formal authority is centralized, which means that the decisions making is restricted to higher levels of management. Typically most of our decisions are made by the president. He is the sole authority on everything. Even though there are 3 other managing partners, not a single one will take it upon himself to make the final decision, our president will be making it. He makes decisions on everything from what investments we should be looking at as a company, to what color shades should the new office have in a branch that he is not even in and never visits. I believe the reason we have this type of structure is because it is a small company that was started by our president and he feels that he can not let go and lose control over anything. I believe he feels that no one can make a decision as good as him and therefore he does not let anyone try. I believe that this type of decision making power gives the company ability to move quickly with the changing environment, considering there are no levels of management that a decision has to pass through; it goes straight to the president. I do feel that many employees feel that the company doesn’t value their abilities and views them as incapable of making decisions. Many view the company as a dictatorship run by the president with no use for new ideas or improvements. It would be simple structure more so than a bureaucracy, due to the small size of our firm.

3) As I mentioned in the answer above my organization has a flat hierarchy of authority which is also centralized. The basic structure looks like this:

Coordination style of activities is done using the impersonal methods. When something is communicated to the lower levels, it is done through a memo as to document the issue. However, most of the activities are organized, planned and decided on by the president, the rest of the organization is informed of the activity coming up and is supposed to participate with no discussions. There is a high level of formalization that is done in our organization. There are typed up procedures for everything, which is something that is required by the regulators, however, it seems that rules only apply to us in the North branch, where downtown/main office can bend the rules as much as they desire. We have a time frame on everything in terms of when the paperwork should be turned in and in what order, main office can mess up on the order and on the paperwork with no consequences to them.

4) I would say that our organization is highly differentiated. Each person belongs to his/her own department and they do not overstep the boundaries of these departments and never venture to help another department out. Each department has their own task that they perform well and guard to make sure no one tries to do their job, trying to help would men to them that you