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Organizational Strategy and Structure

Alannah R. Williams

American Public University System

MGMT201 B001 Summer 2023

Ashley Taylor

August 27, 2023

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Executive Summary: Organizational Structure

This report emphasizes the importance of organizational structure. The concepts

shown in the paper influence efficiency, productivity, and overall success in the workplace.

The use of concepts such as centralization, formalization, specialization, span of control, and

departmentalization ensures that a business functions easily.

Centralization and Decision-making

Centralization within an organization defines how decisions are directed. It determines

whether decisions are concentrated in one individual or spread across various levels (Indeed,

n.d.). This concept aids in making prompt decisions. For instance, a baking company with a

centralized decision-maker, such as an owner, ensures consistency in baked goods quality

(Kokemuller, n.d.). However, it may lead to delays in changes due to owner approval.

Balancing Decision-making and Formalization

The concept of centralization extends beyond authority, requiring a balance between

management levels for efficient decision-making. Additionally, formalization, similar to a

recipe guiding cooking, outlines a company's structure to ensure clear responsibilities

(Ceopedia.org, n.d.). Formalization in a bakery involves defining roles and standardizing

procedures, enhancing consistency.

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Specialization for Expertise

Specialization focuses on specific tasks within a field, enhancing individual skills and

efficiency (Grezegorzek, 2021). In a bakery, specialization assigns roles based on strengths,

leading to faster production and reduced errors (Econ Express, n.d.). It ensures quality and

customer satisfaction by allowing employees to focus on their strengths.

Standardization for Consistency

Standardization involves implementing consistent procedures in various aspects of

business operations (American Military University, n.d.). In baking, standardized recipes

ensure consistency in taste and texture, improving resource management. It extends to

training, fostering a capable workforce.

Span of Control and Departmentalization

Span of control determines the number of subordinates a manager can effectively

oversee (HRDQ Staff, 2022). A narrow span is ideal for high-quality products, while a wider

span suits high-volume production. Departmentalization groups employees based on skills,

like functional departmentalization in a bakery (Nahavandi, 2015).

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Imagine being at an orchestra concert and seeing a grand ensemble instruments. When

you look at the orchestra, you can see each musician using their expertise to play a specific

instrument. Those musicians practiced and honed their skills to contribute to the symphony. Just

as a symphony combines various instruments to make music, the workplace functions similarly

through a concept known as organizational structure. The musicians were able to collaborate to

create a melody and employees in a workplace come together to achieve goals.

In an organization there is a concept called centralization which indicates how decisions

are guided. Centralization in an organizational structure is the extent to which decision making is

centralized or controlled (Indeed, n.d.). It is a way to decide if decisions are made by one main

person or spread out among different levels. Centralization can assist when wanting to make

quick decisions.

For instance, if a baking company has an owner as the main decision-maker, it could

assist in maintaining consistency in the company's quality of baked goods (Kokemuller, n.d.).

The owner would have the ability to personally confirm that each product meets the desired

standard. However, this could also mean that changes or adjustments take longer because all

decisions need the owner's approval.

The concept of centralization involves more than just allowing an employee to have

authority. It is important to find the right balance between the levels of management enabling

employees to be efficient in the decision making process.

When finding the right balance in decision-making, another important factor to consider

is formalization. Just as a recipe guides cooking, formalization outlines how a company's

structure is laid out, it ensures that everyone understands their responsibilities. Formalization in a

bakery involves defining roles and standardizing procedures in the business (Ceopedia.org, n.d.).
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Each staff member would have well-defined roles. For example, there would be designated

employees for tasks such as baking, decorating, packaging, and inventory management.

Additionally, formalization in a bakery consists of applying standardized recipes and baking

procedures. This guarantees that each product is prepared and made with the desired taste and

quality. This is especially important for signature products that customers expect to be

consistent. Whether it's the texture of a cookie or the frosting on a cupcake, using the

standardized processes ensures that the product meets customer expectations.

Furthermore, using the formalization process will make training new employees easier.

Standard baking procedures can be used, allowing new workers to adapt quickly (Drew, 2022).

This helps establish an efficient workflow by simplifying processes. From receiving orders to

preparing products and delivering them, each step can be documented for the workers. This

minimizes the chances of errors, reduces food wastage, and ensures timely deliveries.

Cinnabon, the popular bakery company, relies on formalization to keep its operations

consistent. Cinnabon developed procedures that all their franchise locations follow. This

consistency is crucial for maintaining their brand and ensuring customers get the same

experience no matter which Cinnabon bakery they visit.

Formalization also extends to how Cinnabon approaches cleanliness and hygiene.

They've established consistent sanitizing processes that all their locations follow. This

organizational structure ensures Cinnabon's practices are followed. Formalization acts as a recipe

for success because it shows the company how to create a consistent experience for customers

and make it easier for members to work making it a more organized workplace.

In a bakery, the importance of an organizational structure named specialization is shown

when employees are working on baking a variety of desserts. Imagine a scenario where every
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employee is responsible for every aspect of baking from mixing ingredients to baking and

decorating. The lack of specialization could lead to mistakes and a decline in the quality of

products.

Specialization is the practice of focusing on specific tasks or areas of expertise within a

broader field (Grezegorzek, 2021). This concept allows workers to understand their jobs on a

deeper level and become highly skilled in a particular area. This reduces the time and effort

required to complete tasks, leading to a sense of mastery and accomplishment. Additionally,

specialization promotes collaboration because team members with diverse expertise can come

together to solve problems that may occur. Specialization maximizes individual talents while

contributing to the success of the organization.

In the context of a bakery, specialization plays a crucial role in assigning roles to

employees based on their strengths and skills (Econ Express, n.d.). For instance, some employees

might specialize in creating pastries and cakes, while others could be better at inventory

management. This division of labor ensures that each task is executed with someone who has

expertise. Furthermore, specialization leads to faster production and reduced errors.

Without specialized roles, there could be more errors in preparing recipes, leading to

waste of ingredients and products. Inconsistent quality, longer wait times, and mistakes can

result in dissatisfied customers who may choose to go to other bakeries that offer higher quality

products and services. Employees might feel stressed when expected to perform tasks they are

not skilled at. Specialization can lead to a more satisfied workforce because they can focus on

what they do best (Park, 2015).

However, the implementation of specialized roles is not the only concept that ensures

well organized business operations. Standardization in business refers to the process of

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implementing standard procedures in an organization. It involves establishing a set of guidelines

that ensure consistency in various aspects of business operations (American Military University,

n.d.). Standardization can be applied in communication, products, and services within a

company.

Standardization plays a crucial role in the bakery industry because consistency and

quality are essential when ensuring efficient operations. One area where standardization is used

in bakeries is the preparation of recipes. Each bakery item requires a specific combination of

ingredients, measurements, and timed baking processes. Without standardized recipes, there is a

higher risk of errors occurring in the baking process. Inconsistencies can lead to desserts having

variations in taste, texture, and appearance.

Using a standardized recipe for chocolate chip cookies is a way to confirm that every

batch carries the same taste and texture that customers expect. Moreover, standardized recipes

are essential in managing ingredient inventory efficiently. Bakeries would also be able to

accurately forecast the quantities of ingredients needed. This not only saves costs but also

contributes to minimizing resource wastage.

Furthermore, the use of standardization is applied to the training and development of

staff. A standardized training program ensures that every staff member receives consistent

training, regardless of their role. This boosts efficiency and creates a workforce that is able to

adapt to changes and deliver consistent products (Indeed Editorial, 2022).

In addition to standardization's impact in a company, the concept of span of control

shapes the way authority and decision-making are managed within an organization. Span of

control in business refers to the number of subordinates that a manager or supervisor can

effectively manage (HRDQ Staff, 2022). It is a concept in organizational management that plays
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a significant role in determining the structure and effectiveness of an organization's hierarchy.

The span of control influences how communication is used within a company.

In a small bakery, a narrow span of control might be preferred because the products

require complex recipes and techniques. A manager with a narrow span of control can monitor

production, ensure consistent quality, and provide guidance to the baking team. This approach is

beneficial when owning a bakery that produces high-quality products.

A bakery with a wide span of control could be used in an environment that has high

volume production. If the bakery produces a large volume of items like bread or cookies, a

manager could effectively oversee a larger team. This setup is useful for large companies, where

managers can delegate tasks while focusing on broader aspects of strategic decisions. A wide

span of control can lead to efficient mass production.

Deciding whether to have fewer or more people under a bakery manager's supervision

depends on how the business is being run. If there is a narrow span of control the bakery might

struggle to keep up with the demand of customers. If there is a wide span of control the quality of

the bakery goods might decline because of the lack of attention. It is important to find a balance

when deciding the span of control in a company (Bhasin, 2021).

This balance is related to the concept of departmentalization, where employees are

grouped based on their skills and specific criteria. By using this organizational concept in the

workforce, the company is guaranteed for success. One common form of departmentalization in

a bakery is functional departmentalization, where employees are grouped according to their areas

of expertise. For instance, there might be different departments for baking, customer service, and

administrative tasks (Nahavandi, 2015). Each department consists of individuals with specialized
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skills. This structure allows employees to focus on tasks that align with their strengths, resulting

in an improved productive work environment.

In conclusion, the organizational structure of the workplace incorporates a number of

components, much like an orchestra uses a variety of instruments to produce a piece of music.

The use of concepts such as centralization, formalization, specialization, span of control, and

departmentalization ensures that a bakery or any business functions cohesively. Each of these

elements contributes to the overall success of a company, fostering consistency and customer

satisfaction. Just as a symphony relies on each musician's expertise to create a melody, a bakery's

success relies on individuals working together with the help of organization structures.
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References

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