Junqiang (Jason) LI ISE 517 Dear Ms Wanda Fields: Whether a company is newly forming or already established, it’s very important that the company have a strong leadership system and effective organizational structure. In an effort to continue your company’s growth and vitality, I strongly recommend that Hydrobuck change organizational structure as Hydrobuck is now planning to design and produce motor in the 50-150 horsepower range. After careful consideration, I found the functional organization would be the best organizational structure for your company to reach your planned objective.
Introduction to Functional Organization Functional Organizational Structure [pic] Figure 1: Example of Functional Organization From: Steve Benshoof Advantage of Functional Organization 1. “Highly flexible staff use” 2. “Ease of switching experts among projects in same functional division” 3. “Specialist pooling in functional division” 4. “Technological continuity” 5.
“Quicker career advancement of specialists” Disadvantage of Functional Organization 1. “Project not client focused” 2.
“Different goals between functional parent division and project” 3. Project manager competes with financial manager for role of central project responsibility” 4. “Slow response to client needs” 5. “Weaker project team motivation than in pure project organization” Functional organization would best suit the company’s current situation and objective.
1. Hydrobuck is a medium-sized company which doesn’t have a lot of human resources but needs to continue producing the small motors. Functional organization would be more advantageous than other organizational structures because it has highly flexible staff use and it’s easier for Hydrobuck to switch experts between small motors and large motors projects. . As pursuing the opportunity of the large motors is the main objective of Hydrobuck currently, functional organization would make it possible to pool specialist in functional division to focus on that project.
3. The internal workings of the large motors are quite similar to those of the smaller motors. Thus functional organization is more advantageous than other organizational form because it can provide the advantage of technological continuity. 4.
Hydrobuck is the leading producer of small motors, and I believe the clients would be confident of the large motors Hydrobuck produced. Thus, although functional organization is not client focused, there will be no problem in marketing as long as the new product is of fine quality. Successful examples are everywhere in the market: Sony, who achieved great success with walkman, also made a great profit from walkman’s related products, such as Mini-Disc and Mp3 because of consumers’ confidence in Sony’s audio products. Moreover, purposely assigning a marketing team to follow the client needs can help to pass the feedback from clients to the technological team and to reduce the negative effect of the disadvantages of slow response to client needs. .
Hydrobuck is financially secure, so project managers can have full project authority and avoid competition between the project managers and financial manager over the responsibility for the central project. 6.
The project team motivation would be stronger than in pure project organization because designing, producing and selling the large motors is the main goal of the project team. A qualified project manager could also play an important role in motivating workers. 7. This organizational form is more flexible compared with the other forms.
As we don’t know whether the large motors project will succeed or not, this flexibility can be conducive to continue on producing small motors. 8. Functional organization is more superior in terms of tolerating the risk of failure of that project. If Hydrobuck use functional organization, it would not rely on the success of the new project as much as using the other organizations, such as matrix project organization and pure project organization. Once the new project fail, Hydrobuck does not have to change the organizational structure.
. Functional organization would avoid the stockpiling of expertise and equipment to assure a critical state is never reached since the expert and the equipment would not be attached to the new project and would be flexible to switch between small motors producing and large motor project. And since Hydrobuck is a medium sized company, and doesn’t have a lot of experts and equipments, the negative effect of stockpiling expertise and equipment would be relatively large. 10.
Hydrobuck need to continue producing small size motors, and if functional organization is implemented, there will not be problems of inconsistency in carry out policies and procedures because the staff would work at a constant department and does not need to switch between project team frequently. 11. Although functional organization would be less effective in carrying out a project, two years will provide enough time for Hydrobuck to meet the objective of the large motors project. (see Figure 4) [pic] Figure4: Rated Effectiveness of Different Project Structures by Type of Project From Steve Benshoof Weighing the pros and cons of the functional organization, the functional organization is our best option since hydrobuck is medium-sized company and the leading producer of small outboard motors. Conclusion Functional organization have the advantages of 1)Highly flexible staff use; 2)Ease of switching experts among projects in same functional division; 3)Specialist pooling in functional division; 4)Technological continuity; 5)Quicker career advancement of specialists.
All of them are of great benefit for Hydrobuck, which is a medium-sized producer of gasoline-powered outboard motors and a financially-secured leading producer of small outboard motors. If my suggestion is accepted, not only the Hydrobuck’s vitality and growth will continue, but that Hydrobuck can catch the opportunity of large outboard motors.
I sincerely hope that you can seriously take my advice into consideration
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