Organizational Change Proposal
Organizational Change Proposal
After learning that our unit will not be receiving additional manpower during last month’s Branch Workforce meeting, our management team has been exploring other options to address our top three personnel issues. The result from our recent employee interviews identifies task distribution, cross-functional communication, and job satisfaction as significant concerns for the unit. As we examined individual action plans for each issue, our most considerable concern was the time commitment required for a complete solution. However, upon further investigation, we are excited to present another recommendation that alleviates our manpower deficit. We propose to change the organization of our unit from a functional structure to a divisional structure because it provides an opportunity to address our top three personnel issues while minimizing total time and cost obligations.
To assist your decision, this organizational change proposal focuses on our unit’s areas of concern, the proposed solution, plan of action, and an estimation of cost.
Areas of Concern
During the last six months, the unit has been under increased pressure because of corporate demands. Our production rate has increased 34% from last year, and we continue to lose talented employees from turnover. Since then, the management team found three consistent issues among our three functional teams: Alpha, Bravo, and Charlie. The issues have continued to create conflict between the teams and are likely the leading cause of delayed production found in last quarter’s performance evaluation. Here is an overview of our findings.
Results from the last four months of internal surveys show a pattern of unequal task loads between the three teams. Alpha topped the list with an average task count of 30 a week, while Bravo averaged 15 a week, and Charlie averaged ten a week. Also, considering the number of positions allocated to each team, Alpha’s task load roughly estimated to 25% more than Bravo’s and 50% more than Charlie’s.
Additionally, feedback on task load was different from each team. Alpha complained mostly about having an excessive task load compared to the other teams, Bravo complained about not having enough employees to complete their task load, and Charlie complained about not having enough tasks and feeling undervalued. While all three teams viewed their task loads differently, they all attributed the recent changes in leadership and product improvement efforts as the cause of their complaints.
Results from the last five months of internal surveys and daily observations from our management team show that communication is often withheld or misunderstood between the three functional teams. When asked during the surveys to rank the importance of each team’s contributions to our products, every employee perceived their team as the most important. When also asked to describe their daily relationships with the other teams, 85% of employees had neutral or negative responses based on their knowledge of the other teams’ roles and responsibilities.
Similar issues have been identified in other functionally structured organizations. By departmentalizing teams by function, employees become overly focused on their own goals and tend to neglect the challenges other teams are facing. This isolation weakens the common bond between the teams and is harmful to effective communication (Gleeson, 2019).
Due to the recent increase in production requests that require constant collaboration between all three teams, effective communication is essential to providing our customers clear and timely responses (Bovee & Thill, 2016). We must find a way to integrate their daily interactions and create mutual respect and relationships.
Results from the last six months of one-on-one interviews with employees show a growing trend in dissatisfaction with their job. Alpha and Bravo employees mostly claimed their work was too repetitive, while Charlie employees mostly claimed their job did not provide enough opportunities for personal or professional growth. Additionally, 75% of all the employees admitted to feeling their work was not serving a meaningful purpose.
It is clear we have some challenges to deal with, but we must act fast to protect the unit from any harmful consequences.
Proposed Solution: Divisional Structuring
Fortunately, we have an opportunity to solve all three issues all at once by reorganizing the functional positions of Alpha, Bravo, and Charlie into a divisional structure. Here is a brief comparison of the most common organizational structures and an explanation of how the divisional structure will lead our unit to success.
Organizational Structure Comparison
Organizations can be arranged in a variety of structures, which determines how the organization will operate and perform (Boundless, n.d.). The three most common approaches to departmentalizing an organization’s workforce are functional, divisional, and matrix structures.
Functional. The functional approach aims to group employees by shared skills and work tasks. While this structure allows for increased specialization, it can often prevent flexibility and innovation within an organization (Boundless, n.d.). Examples include finance, marketing, production, and sales.
Divisional. The goal of the divisional approach is to create departments by product, program, or geographical location. This structure comprises all necessary resources and functions that support a single product line or geographic location (Boundless, n.d.). For example, a division would have functions of finance, marketing, production, and sales representatives working together.
Matrix. The matrix approach is a complex combination of functional and divisional structures, uses a two-dimensional array of management, and is typically used by large businesses. While this structure promotes better cross-communication between both function and product departments, it often complicates the chain of command and creates conflicting employee loyalties (Boundless, n.d.).
Problems with the Functional and Matrix Structures
Functions currently departmentalize the unit. The company decided to utilize this organizational structure during its foundation decades ago because there was little production demand, and the executive managers valued specialization. Today, our products have evolved into collaborative projects which do not rely as heavily on individual functions.
Over the last year, we attempted to address the surge in production and adapted our structure from strictly functional to somewhat matrix. However, a matrix structure requires more head managers in the unit to oversee both functional teams and production lines (Boundless, n.d.). As production requirements continued to grow, and employees began to leave, management was forced to assign dual roles to all three functional managers. This adjustment kept our production rates level but to the detriment of the teams.
Benefits of the Divisional Structure
While changing the organizational structure of our unit may seem overwhelming, we must not ignore this opportunity because it goes against what we have always done. The unique benefits of separating Alpha, Bravo, and Charlie into multi-functional divisions outweigh the demand for specialization while addressing all three of our personnel issues.
Task Distribution. A divisional structure equalizes the task-to-team ratio by distributing all tasks throughout each division. The nature of each task still dictates its assignment, but the entire division now becomes responsible for task completion. This approach allocates responsibility to all division members and inspires motivation for
Cross-Function Communication. A divisional structure eliminates the barriers between Alpha, Bravo, and Charlie and promotes a healthy culture for collaboration. According to KaiNexus (2019), creating a more collaborative environment can level the playing field, increases engagement, challenge traditional processes, and spur innovation. Every employee gets a fresh perspective of the other functions’ roles and contributions to the unit’s overall goals that will build relationships of trust and respect.
Job Satisfaction. A divisional structure also combats monotonous and repetitive work cycles. As employees progress through collaborative projects, they will inevitably be exposed to each other’s different ways of thinking and working. These different points of view counter personal limitations and offer tremendous opportunities for personal and professional growth. This structure emphasizes the importance of teamwork and how the entire team influences the unit’s mission.
Plan of Action
With an understanding of why the unit needs this change, here is an overview of what will change, the four-step process, and timing is necessary for setting expectations.
What Will Change
Organization. Alpha, Bravo, and Charlie will be split equally into two divisions: Delta and Echo. Each will require a division manager, and a single unit manager will manage both. The hierarchy of authority begins at the functional level, progresses to the divisional level, and ends at the unit executive level.
Task Responsibility. Delta and Echo will rotate responsibilities every two weeks. Standard production outputs like our Weekly Action Report and the Mission Summary Report will be the responsibility of one division, while the other division will attend external collaboration meetings and answer ad hoc requests. During the two-week rotations, synchronization is essential. The functional counterparts must confer daily, and the division managers should conduct changeover upon rotation of duties.
Step One. Decide how to group employees. With advisement from our Human Resources department, the management team’s recommendation is to balance the talent in both divisions. We have ranked the performance evaluations for all the employees and highlighted the individuals who have been employed the longest to offset experience ratios.
Step Two. Decide when to begin the reorganization. As we approach the holiday season, our projections indicate our production requirements will decrease by 10% each week for the next five weeks. These slower production rates present gaps throughout the week to reorganize our seating and begin step three.
Step Three. Implement training for every employee and monitor their progress using pre-established objectives. Since training is essential to the success of this change proposal, the objectives must be realistic and attainable within our training window. Those employees not meeting the requirements will require closer attention.
Step Four. Upon completion of training, begin operations, and measure performance each week to identify potential vulnerabilities. Management will work with Human Resources for drafting weekly assessment reports. These reports will be accessible to leadership to assist with operational adjustment decisions.
The estimated time for training completion is six weeks. If training began next week, management could accomplish approximately one hour a day of training for the first week while adding a half-hour every week. Week six of training will simulate realistic division task loads and will test team cooperation. By week seven, production rates will normalize, and training will be complete, barring any significant setbacks.
Since the unit is not losing any employees, equipment, or production resources, the cost of this change proposal is minimal. The six-week course will only cost our management team time dedicated to training, which must be our sole priority. We cannot afford excessive external tasking.
As the demand for production increases, the unit must evolve. Organizational adjustments are necessary to ensure efficiency throughout our branch. By reorganizing our functional teams into divisions, the unit will benefit from a product-centric structure that evenly distributes tasks amongst the employees, promotes a culture of collaboration and respect, and retains talent. If implemented soon, our six-week training plan minimizes risk by taking advantage of our low production rates during the holiday season and ensures standardized operational readiness.
We understand that this opportunity involves careful consideration. The management team respectfully requests approval for this change proposal this Friday during our Unit Management meeting. We look forward to your decision. Thank you for your time.
Boundless. (n.d.). Common Organizational Structures. Retrieved from https://courses.lumenlearning.com/boundless-business/chapter/common-organizational-structures/.
Bovee, C. L. & Thill, J. V. (2016). Business communication today (13th ed.). Retrieved from https://content.ashford.edu/
Gleeson, P. (2019, January 25). Benefits & Disadvantages of a Functional Organizational Structure. Retrieved from https://smallbusiness.chron.com/benefits-disadvantages-functional-organizational-structure-11944.html.
KaiNexus. (2019). Cross Functional Collaboration in a Culture of Continuous Improvement. Retrieved from https://www.kainexus.com/employee-engagement/cross-functional-collaboration.
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