Instructor: David Schuff, Section 003

organizational structure

Organizational Structure at Microsoft

Microsoft Organizational Structure

Microsoft’s organizational structure is classified as divisional. It’s broken down into two divisions: engineering and business. One advantage the arises from this is the elimination of bureaucracy in the business processes which grants more flexibility. This organizational restructuring took place in 2016 and resulted in the elimination of 7,400 jobs resulting in cost savings for Microsoft.  Another advantage is that the specific divisions can specialize in the tasks they perform resulting in greater levels of efficiency. By breaking apart the products into different independent and self-sustaining sections allows Microsoft to create great products and innovate using their core competencies. Product innovation is highly encouraged as well as the implementation of features that can help the end consumer. While Microsoft has not been creating groundbreaking innovation, they support systems that great majority of the world use every day. A disadvantage that comes with this new structure is that there is a greater separation between the technical and business employees. Additionally, because each division functions independently, they need a competent manager that understands the product or service offering for the division well.  What other advantages or disadvantages do you see from this structure? Is there anything Microsoft can do to improve?

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Netflix and Chill…Organizational Structure


Netflix is well known for its flat, organizational circle structure. Employees are given more freedom and responsibility than those at other companies, which is evidenced by the unlimited vacation days and lenient expense account policy. Netflix avoids top-down decision making and seeking management approval for everything. These practices are characteristic of a traditional bureaucratic organizational structure. Instead, the company values high employee performance and excellent work. The company believes that in order for employees to perform well, they should be given the freedom to make their own decisions and dictate their schedules. Even though the company may be less rigid about certain policies, the work environment at Netflix is not as “chill” as one might expect. According to Netflix’s former Chief Talent Officer, Patty McCord, the culture is “intense” and there is a lot of “pressure” (View the Source Here). Employees are expected to perform at an exceptionally high level. Managers are required to periodically perform a keeper test. For this test, the manager imagines that one of their team members is thinking about leaving Netflix for another company. She then must assess whether she would fight hard to keep that person. If she answers no, that person is promptly removed and offered a severance package. Netflix doesn’t support keeping “B level” employees. So even though Netflix may have a flexible organizational structure, there is a trade-off between freedom and stability that employees face. Would you like to work in a Netflix type of environment or would a job that offers more security and stability appeal to you more? What would be the benefits/drawbacks of each?


Will Payless Survive?

bankruptcy photo

Recently emerged from bankruptcy, shoe retailer Payless ShoeSource announced the realignment of its organizational structure a week ago with goals of becoming a more customer-focused company. The company has made the decision to reduce hierarchical levels between its corporate headquarters and retail stores. As a result, Payless is increasing the number of North American associates working closely to the store level, with company goals to develop a team of strong leaders to guide the store teams. This intended result of this effort is to have a flatter organizational structure will enable the company to reach its customers more directly. However, it remains to be seen whether this reorganization will lead Payless in the right direction. While reducing layers in an organization can lead some companies to certain benefits, including an increase in communication between all levels of associates, other companies may struggle to adapt to the new structure. It will certainly be interesting to see the outcome of this restructure, specifically if it keeps the company from going bankrupt again. Do you think Payless customers will feel the effects of this reorganization? What are reasons that this reorganization could cause Payless to fail?



The Growing Popularity of Flat Organizations

team photoFor many years, most US corporations have focused on a hierarchal organization structure for their organization. The structure typically meant that an employee has a boss, that boss reports to their boss and so on until you reach the CEO at the top of the command. Today, many corporations are moving towards eliminating hierarchy amongst their organization and becoming a flat organization. In a flat origination, there are no bosses, everyone is equal and working together as a team. This creates an opportunity for employees to be able to work on projects more efficiently by removing barriers such as, time needed to get upper level approval. Ciplex, a marketing agency that adapted a flat structure, noticed that after the change, projects that would normally take six months, only took six weeks to finish. The company also noticed that employees are happier and have a greater focus on improving customer satisfaction. With more project being completed, more can be taken on, increasing both revenue and satisfaction. Yet, with the removal of upper management, it can often bring up some odd rules. At Valve Corp., a video game company, pay is voted on by peers and promotions are nonexistent. Ciplex, fired any employee who resisted the change, and now has a policy where employees vote off anyone they don’t like. My questions that have risen from this article are: What do you think about flat organizational structure? Do you think you would be able to sacrifice not having a boss for equality? Is a flat organization only realistic in certain companies or can it be universal?



Employing Pre-bureaucratic Structure With A Loose-Tight Governance Model in Local Government to Better Serve Communities

For many, the first word that comes to mind when we think of government is “bureaucracy,” and not just because of its literal place in government. Bureaucracy as we know it has a negative connotation, criticized for its inefficiency and inflexibility to individual situations. Within the context of organizational structure, a bureaucracy clearly defines roles and responsibilities within a hierarchy with respect for merit. In a typical bureaucratic structure, there are many levels of management. We can’t escape the endless hierarchy of government at-large. However, why does local government have to be inherently inefficient as a result of the bureaucratic structure it sits below? Anyone who has tried to work with the Philadelphia Mayor’s Office or City Council knows that it is as seemingly impossible to get anything done, as if we were attempting to pass a bill through congress. In society, we fantasize startup culture and its ability to “get stuff done.” Why can’t local government operate like a startup? To best serve its people within the constraints of democracy, local government should employ a pre-bureaucratic structure using loose-tight governance model. A pre-bureaucratic structure is completely centralized, where the leader (in this case the elected official) makes all key decisions through one-on-one conversations. In a loose-tight governance model, there is a balance between control and autonomy where the most importance processes are kept under central control (the elected official), but staff (subordinates, supporting government staff) are given huge amounts of freedom to think outside the box. This approach gives local government officials the freedom and agility to accomplish goals within the context of democracy and the larger structure of government, while empowering government employees to flex their creativity, all working towards serving their communities in a more flexible and efficient way. How else can we use course concepts, such as systems thinking, to improve local government? Can a similar structure and governance model support positive change elsewhere in society?

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