SUNDAY, MARCH 2, 2014
by Abdel Abuisneineh *
PhD student, Concordia University Chicago
The structure of any organization is influenced by certain important factors including the following:
1. Size of the organization
2. Age of the organization
3. Complexity of products/ services provided
4. Corporate strategy and environmental forces
Poorly structured organizations suffer. Corkindale (2011) believes that “poor organizational design and structure results in a bewildering morass of contradictions: confusion within roles, a lack of co-ordination among functions, failure to share ideas, and slow decision-making bring managers unnecessary complexity, stress, and conflict.”
My organization which became functional in March 2006, as a sole person operation is currently employing over 30 people spreading over 15 physical locations in the Chicago land area, about half of which are manned with one person, acting like satellite offices. The company offers a variety of property and casualty insurance services, mostly personal line auto insurance (simple & routine) which composes about 85% of the company’s sales. Personnel include professionally licensed insurance producers, clerical help, accountants, and managers. Clerks and agents are hired and put in a 3 month training programs to handle mostly routine tasks of issuing insurance policies, filing documents, collecting and processing payments, and a number of other daily customer services.
The structure of the organization is a step above the “simple structure.” It resembles the Mintzbeg’s Model. On the top of the pyramid is the strategic apex, basically the owner (myself). Underneath that is the Administrative component, composed of three-members Sales Team Leaders, Bookkeeping & Statements Reconciliation, Finance, Marketing, and Human Resources. The technostructure element of the structure exists but not as a separate post, but rather as a group of tasks performed by the owner. Finally underneath that is the last level in the hierarchy, the clerics and agent workforce distributed across the 15 locations of the business.
The structure of our organization helps in the determination of authority, duties and responsibilities of individuals performing organizational functions. It also facilitates communication issues across the organization. Employees know exactly where to look for answers for their daily issues.
The structure has gone through a number of revisions as the organization grew larger. Since our strategy includes continuous vertical and horizontal expansion, more clerics/ agents stations and more supervisory stations are expected to emerge in the future because of the anticipated horizontal and vertical growth of the business. Without the present structure or similar structure the organization will be jumbled. Root III (n.d.) states that lack of organizational structure may lead to “complete breakdown in company productivity”, increasing conflicts, low productivity, and reduced employee skills.
The organization is primarily structured taking in considerations both nature of tasks and geography. Operating core level is grouped based on geographical considerations. Middle level is grouped based on nature of tasks performed. Operating core is coordinated with supervisory staff (Sales Team Leaders), who are subject to rules from Sales Manager.
The company has established its own training manuals, policies & procedures, and training video clips to facilitate work procedures and improve communications. All management software and most office equipment are standardized. Newer VOIP phone technology is allowing organizations members to instantly seek help from and communicate with supervisors on all product knowledge, customer services, and administrative issues. An electronic bulletin board where staff members can check their schedule, trade work shifts, post their opinions and receive email responses to their questions is helping in keeping every one connected in an organized manner. The company holds one face-to-face meeting and number of teleconferences every month to discuss important or new issues or to announce new contests and to award winners of previous sales contests.
The company has started using “ad hoc committees” in the past few months to deal with emerging issues related to improving operations, introducing additional services to sales team, obtaining feedback from employees, etc. Each committee is composed of 3 operating core employees, supervised by either a Team Leader or the Sales Manager. The committees are responsible for gathering information from organization members and clients about certain important topics, formulate solutions & discuss them with other employees, related managers & owner, then select the one that sounds most optimal. Once selected the new decision becomes a standard procedure or a policy for the organization.
Organization goals can be divided into two different categories, one related to the strategic horizontal growth (geographical expansion by adding more locations or acquiring existing businesses), and the second one related to vertical growth, or increasing sales (production) of the business. The first goal remains restricted to the owner while the goals of various operating core units are production & sales related. This is a sales organization where total number of new clients, percentages of return clients, and total dollar sales are key factors in setting goals. Goals for individuals and Team Leaders are set based on their experience of the member and age of the location.
The dilemmas that face the business come from the fact that the business is new, and many of its new entry-level employees need training. “Experienced employees” are not easy to find at the right time to work at the right place at the right cost. Because of those reasons, entry level employees are trained and are kept to grow with the business at reasonable and competitive rates. Maintaining these entry-level, average waged, employees plugged in the organization and focused on production goals are the greatest challenges.
To deal with these challenges the Team Leaders make sure to call staff under their supervisions (Operating core) on daily basis, offering help & support, providing incentives and guidance, and making sure that employees are always connected. Nuisances related to personal internet use (not allowed) are dealt with by blocking all non-productive websites and applications. Phones are monitored to assure quality customer services. All offices can be viewed live through a network of cameras by Team Leaders. Personal cell phones are strictly prohibited to use where new employees may suffer immediate termination for using personal cell phones in work areas during work hours. And probably the best measure is giving agents/ clerks huge bonuses and incentives to produce, much better than compensation offered by competitors. Unlike competition, the organization focuses on professional education and training. Seminars of different levels are offered by organization to its employees. Annual raises is connected to seminars and workshop attended, alongside other factors.
Bolman, L. & Deal, T. (2008). Reframing organizations: Artistry, choice, and leadership. San Francisco, CA: Jossey-Bass.
Corkindale, G. (2011). The importance of organizational design and structure. Harvard Business Review, Retrieved on 2/09/2014 from blogs.hbr.org/2011/02/the-importance-of-organization/
Root III, G. N. (n.d.). What Does a Lack of Organization Lead to in a Company? Houston Chronicle. Retrieved on 2/13/2014 from smallbusiness.chron.com/lack-organization-lead-company-22804.html
* Former college instructor of car insurance and business insurance. Consulting on personal and business insurance issues in Chicago, Illinois. Contact crf_abuisna[@]cuchicago.edu