Essay on "Management and Organizational Structure"

Essay 4 pages (1190 words) Sources: 3

[EXCERPT] . . . .

Management Theory

Organizational structure: Sara Lee Corporation

Sara Lee Corporation

Sara Lee is a world-renowned corporation. It is famous for its trusted, tested products, including Ball Park hot dogs, Hillshire Farm meats, Jimmy Dean sausages Sanex, Senseo and of course Sara Lee desserts (About Sara Lee, 2010, Sara Lee). The Sara Lee Corporation is international in its scope, and its output encompasses many types of products, although it focuses upon home-related items such as foods and skin cleansers.

Traditional centralized structure: Three problems and proposed solution

In a traditional, hierarchical firm structure (which characterizes Sara Lee at present), individuals are in charge of certain, specific products and functions: for example, the Sara Lee brand's operations in a particular region of the United States are always under the centralized control of top management. The advantage of a traditional structure is quality control: with a trusted brand like Sara Lee, there are high customer expectations which must be met to ensure repeat purchases. Customers must believe that Sara Lee and its signature products maintain the quality and flavor profile their mothers enjoyed.

However, Sara Lee as an entity has changed over the years. Given that it is more international in focus, communication problems could result between different divisions regarding regional tastes. For example, an individual in charge of UK operations might realize that British consumers are not as enamored with peanut butter or vanilla-flavored items, but the centralized command of the company back in the U.S. might be more convinced, based upon strong sales of such items in the past in the U.S., by his or her data 'on hand,' rather than the impressions of someone lower on the organizational hierarchy.

Centralized structures can also be alienating. If workers do not feel that their input is valued by company leaders, they may begin to simply do the minimum to 'get by' in the company, rather than make an investment of time, energy, and loyalty. The company can lose critical input from lower levels of the company that could improve organizational efficiency.

Centralized structures can also lack flexibility. If there are sudden changes, such as a sharp drop or rise in demand, having to seek approval from a centralized authority can make the organization less responsive. For example, a certain amount of autonomy for regional managers may be required to adjust product orders because of sudden heat waves or snow storms, or to allocate more money in operating costs because of a rise in fuel costs.

Even a centralized structure requires a close, responsive and participatory relationship between the central command and regional and international lower-level managers. A centralized structure must also do careful market research to ensure its flexibility to shifts in market conditions, so its standard operating procedures do not become outdated.

Most centralized structures either break down their divisions into functional organizations segmented by key functions such as "production, marketing, and finance" while "companies that employ a product or divisional structure, by contrast, break the organization down into semiautonomous units and profit centers based on activities, or 'projects,' such as products, customers, or geography" (Malonis 2000). Sara Lee currently breaks down most of its divisions by region and by brands, first geographically and then functionally.

Matrix structure: Three problems and proposed solution

A matrix structure of a firm makes use of "dual-reporting relationships instead of a more traditional linear management structure…In its simplest form, a matrix configuration may be known as a cross-functional work team, which brings together individuals who report to different parts of the company in order to complete a particular project or… READ MORE

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