Introduction to Organizational Structure and Systems Theory

The topic introduces the concepts of organizational structure linked with the systems theory with relevant examples posed in terms of the functioning at Walmart, United States. The topic will illustrate about the most suitable organizational structure to be followed along with the application of systems theory to encourage coordination and better functionality among the various departments (walmart.com, 2018). The three major structures including the functional, divisional and matrix structures will also be included in this report.

The organizational structure of Walmart represents the various business activities and ways by which the business issues are addressed. The flexibility of human resources possessed by the company is dependent upon the culture and structure of the organization, considering the fact that it can enable the company to generate higher revenue and gain competitive advantage in business as well. The hierarchical functional organizational structure is possessed by Walmart because of the presence of multiple departments and also due to the implementation of various mandatory initiatives and approaches implemented from the top level management of Walmart to the employees (Rice, 2013). The function based hierarchical structure allows for managing the various functions by employees within multiple departments including the information technology, human resource management and marketing department too. The corporate managers have followed this kind of structure because of its effectiveness in influencing the business operations and at the same time, ensure proper monitoring and control of the structure to support better organizational flexibility (Guadalupe, Li & Wulf, 2013). The communication process and approval of certain business aspects through are time consuming with the involvement of high and middle level managers.

The systems theory enables organizing the company and its functions to ensure that the decisions made by the managers flow to the employees and ensure coordination of several systems to work together. This can build a network between the various departments as well as enhance the efficiency of functions at various departments such as sales, marketing, manufacturing, production and financial management. The general systems theory will also allow the various departments work as independent departments to work towards a common goal or objective (Burke, 2017). Walmart consists of various departments and each of these can set up their own goal by operating as a motivator and afterwards share the efforts of goal achievement with the other departments to ensure successful business functioning.

The hierarchical structure of organization and the implementation of system theory has helped in organizing the various departments independently through prioritization of various information and resources inclined with the management of project. It is also useful for the managers to coordinate the requests obtained as inputs from the various departments within Walmart and ensure consistent transformation through changes managed. The permissions to manage changes are obtained for responding to the input obtained from the business environment and by gaining feedbacks from the internal departments as well (Jones & Jones, 2013). Thus the hierarchical structure of the organization and the application of systems theory at Walmart have enabled changes over time and gaining better ability to respond to the various departments within the organization to assess the needs of people within the marketplace. Therefore, it can be assumed that the organizational structure is interrelated with the systems theory and has managed to keep the business processes consistent and effective to fulfill the needs of people and kept them satisfied as a whole (Tran & Tian, 2013). The systems theory has also benefited Walmart by creating an e-commerce platform for creating awareness of the brand among the people and minimizes the costs incurred while managing the business operations and processes too. The systems theory has also helped in capturing a huge market share by meeting the demands and preferences of the customers in the different market segments, which creates better buying scopes and opportunities at various locations all over United States (Galbraith, 2014). It is effective for increasing the level of penetration into the customers’ lives and influenced their buying behaviors to generate higher revenue and enhance the profit level of the organization too.

Organizational Structure at Walmart

The functional structure of organization enables setting p various portions of the organization according to the organizational purpose. Example shows that when an organization consists of multiple departments such as the marketing, sales, production, finance, etc. it can be beneficial for the acquisition and management of knowledge and talents of the workers to foster better collaboration among workers, communication enhancement and going beyond the organizational boundaries (Ashkenas et al., 2015). One of the disadvantage is that the restriction caused by organizational boundaries could make the various departments within the organization work as a separate entity, which might slow down the production process and hinder the achievement of business goals with ease. It is good for smaller companies but not for companies like Walmart. 

                                                               

The large business organizations use the divisional structure because of its ability to work within a wider geographic area for covering different market segments consisting of clients. This kind of organizational structure can be beneficial, just like the hierarchical structure to work in various geographic areas and handle specific tasks with much ease and effectiveness. This kind of organizational structure allows the organization like Walmart to operate properly with each division functioning properly without depending much on the way the other departments function in the organization (Erhemjamts, Li & Venkateswaran, 2013). The employees face difficulties in communicating with each other and this kind of organizational structure is somewhat costly in terms of the size and scope. 

                                                               

The third major organizational structure is the matrix structure that combines the various components of functional and divisional organizational structures. It has been used by larger companies and manages dual functionality considering that the various departments work together as an unit while in some cases, each department is less dependent upon the functionality of other departments. Though, it is quite good for the large retail companies in United States to assess the market conditions, deliver products and services accordingly, still power struggles are caused due to the presence of a dual management system (Bustinza et al., 2015). At the same department level, both the functional and product or divisional manager working together may create conflicts and due to the difference in opinions, there can also be managerial disputes, which further will deteriorate the business performance (walmart.com, 2018).  

Application of Systems Theory at Walmart

                                                               

The matrix or hierarchical structure could thus be effective for establishing a good relationship between the organizational structure and system theory, furthermore ensure allocating the employees with the right tasks based upon the functions and products of the organization. The project manager though might not have much power or authority, still the motivation and encouragement of workers and smooth flow of information and messages between the various departments could ultimately contribute to successful business functioning and higher level of profit in business (Jani?ijevi?, 2013).

Conclusion:

The report was prepared to discuss about the structure that should be followed by the organization to maintain a positive work culture and ensure management of employees and assessment of market conditions to ensure customer satisfaction as a whole. Among the different organizational structures, the matrix or hierarchical organizational structure had been beneficial for the company to manage proper application of systems theory. This could not only assist in maintaining stability in the various functions of the multiple departments, but would also facilitate the coordination and communication processes. The departments should work towards a common goal and assess market conditions to keep customers satisfied and reduce the operational costs too. All these major aspects contributed to the development of effective buying scopes for individuals and influenced them t make purchases from the company, thereby resulted in higher production level and enhanced level of profit.

References:

Ashkenas, R., Ulrich, D., Jick, T., & Kerr, S. (2015). The boundaryless organization: Breaking the chains of organizational structure. John Wiley & Sons.

Burke, W. W. (2017). Organization change: Theory and practice. Sage Publications.

Bustinza, O. F., Bigdeli, A. Z., Baines, T., & Elliot, C. (2015). Servitization and competitive advantage: the importance of organizational structure and value chain position. Research-Technology Management, 58(5), 53-60.

Erhemjamts, O., Li, Q., & Venkateswaran, A. (2013). Corporate social responsibility and its impact on firms’ investment policy, organizational structure, and performance. Journal of business ethics, 118(2), 395-412.

Galbraith, J. R. (2014). Designing organizations: Strategy, structure, and process at the business unit and enterprise levels. John Wiley & Sons.

Guadalupe, M., Li, H., & Wulf, J. (2013). Who lives in the C-suite? Organizational structure and the division of labor in top management. Management Science, 60(4), 824-844.

Jani?ijevi?, N. (2013). The mutual impact of organizational culture and structure. Economic annals, 58(198), 35-60.

Jones, G. R., & Jones, G. R. (2013). Organizational theory, design, and change. Upper Saddle River, NJ: Pearson.

Rice, A. L. (2013). The enterprise and its environment: A system theory of management organization. Routledge.

Tran, Q., & Tian, Y. (2013). Organizational structure: Influencing factors and impact on a firm. American Journal of Industrial and Business Management, 3(2), 229.

walmart.com (2018). Retrieved from https://www.walmart.com/