Organizational Structure: A Case Study of Indigo Books and Music
Several factors work in concert to bring about the success of any great organization. The most obvious and major factors include: the leadership style, a great vision and mission, personality and charisma, a good workforce and a unifying organizational culture, an excellent product or service, exceptional customer service, the right strategy and plans, technology and a unique organizational design (Daft, 2007). This term paper looks into the organizational design, which is the overall set of structural elements used to manage the total organization and the relationship of these elements, as a foundation to build upon as the organization strives to greatness. The paper will focus on the Books and Music that was formed in 2001 as a result of a merger of the two largest book stores in Canada- Chapters and indigo. The smaller of the two, Indigo, bought 50.1% of Chapters' shares in February 2001 amidst protestation of the latter's board of directors. During the course of 2001 Indigo slowly but sure acquired more Chapters' shares completing the takeover at the end of the same year. The merger of the two companies obviously presented major challenges to the management of the new outfit especially with regard to organizational design and structure. This paper will particularly evaluate the structural issues to be addressed in the merger of two companies, the role of organizational structure in the efficiency and effectiveness of an organization, the appropriateness of a mechanistic or organic structure for indigo and the effect of technology on indigo's organizational design. The paper will address the above mentioned issues from a broad perspective with the Indigo Books and Music providing specific examples for clarification and elaboration.
1.1 Structural issues to be addressed when two organizations merge
The structure of any organization is by and large determined by the strategy of that particular organization so that it is always vital to determine the strategy of the organization before designing its structure. The strategy of an organization simply articulates the organization intends to take within a specified period of time and the steps it will take to achieve its goals. The strategy of a company is developed by first analyzing the firm's market, resources, challenges in achieving its objectives and the opportunities. The strategy must then be integrated at all levels of the firm and effectively implemented with continues monitoring and evaluation. In the case of Indigo Books and Music the strategy of the merger was to establish a bookstore retail empire that was both efficient and profitable. This strategy was conceived by Heather Reisman, the CEO of Indigo, who had earlier hoped to graft the success of Borders (a giant book retailer enjoying market predominance in the United States of America) onto a Canadian company.
The organizational structure is the formal arrangement of tasks within the organization to ensure effective coordination of efforts to meet the overall objectives of the organization. Due to obvious structural differences between companies whenever two firms merge there is always need to address the structural issues for the unified outfit to function effectively. Two firms may actually have similar organizational structures, like in the case of Chapters and Indigo both of which had a function based structures, but there are still unique aspects of their structures that need to be integrated or scraped for purposes of effective coordination.
One of the structural issues that must be addressed in a merger is the way employees work and relate with each other. The firms now operating as a unified unit must decide whether to use a system of job specialization or other alternatives such as job rotation, job enlargement, job enrichment, job sharing, flexi time, part time or any other. This is particularly crucial if prior to the merger the companies operated different systems. The unified company may also choose to employ a combination of systems for purposes of stability and continuity. The issue of the hierarchy also needs to be addressed as well as the span of control so as to have a coordinated working and professional relationship. In the case study for example Indigo was a smaller firm with fewer employees, probably requiring minimal supervision, and the merger with Chapters meant more employees thus more levels of supervision. Failure to address the employee relationship aspects would result in massive confusion and inefficiencies. The issue of formalization must of necessity be addressed in a merger. The unified outfit must set rules, regulations and terms that the employees must abide to. This must also include such issues as rewards and penalties as well as remunerations.
1.1 Structural issues to be addressed when two organizations merge
The structure of any organization is by and large determined by the strategy of that particular organization so that it is always vital to determine the strategy of the organization before designing its structure. The strategy of an organization simply articulates the organization intends to take within a specified period of time and the steps it will take to achieve its goals. The strategy of a company is developed by first analyzing the firm's market, resources, challenges in achieving its objectives and the opportunities. The strategy must then be integrated at all levels of the firm and effectively implemented with continues monitoring and evaluation. In the case of Indigo Books and Music the strategy of the merger was to establish a bookstore retail empire that was both efficient and profitable. This strategy was conceived by Heather Reisman, the CEO of Indigo, who had earlier hoped to graft the success of Borders (a giant book retailer enjoying market predominance in the United States of America) onto a Canadian company.
The organizational structure is the formal arrangement of tasks within the organization to ensure effective coordination of efforts to meet the overall objectives of the organization. Due to obvious structural differences between companies whenever two firms merge there is always need to address the structural issues for the unified outfit to function effectively. Two firms may actually have similar organizational structures, like in the case of Chapters and Indigo both of which had a function based structures, but there are still unique aspects of their structures that need to be integrated or scraped for purposes of effective coordination.
One of the structural issues that must be addressed in a merger is the way employees work and relate with each other. The firms now operating as a unified unit must decide whether to use a system of job specialization or other alternatives such as job rotation, job enlargement, job enrichment, job sharing, flexi time, part time or any other. This is particularly crucial if prior to the merger the companies operated different systems. The unified company may also choose to employ a combination of systems for purposes of stability and continuity. The issue of the hierarchy also needs to be addressed as well as the span of control so as to have a coordinated working and professional relationship. In the case study for example Indigo was a smaller firm with fewer employees, probably requiring minimal supervision, and the merger with Chapters meant more employees thus more levels of supervision. Failure to address the employee relationship aspects would result in massive confusion and inefficiencies. The issue of formalization must of necessity be addressed in a merger. The unified outfit must set rules, regulations and terms that the employees must abide to. This must also include such issues as rewards and penalties as well as remunerations.
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