Chanakya National Law University: Fundamentals of Management
Chanakya National Law University: Fundamentals of Management
Chanakya National Law University: Fundamentals of Management
FUNDAMENTALS OF MANAGEMENT
STUDY OF THE ORGANIZATIONAL CHART OF STARBUCK’S
COFFEE AND GIVING REASONS WHY THE ORGANIZATIONAL
STRUCTURE HAS BEEN ADOPTED
Submitted To Submitted By:
Mr. Manoj Mishra Kundan Kumar
Roll no.1627
Bba llb
ACKNOWLEDGEMENT
I express my warm thanks to Manoj Mishra sir for his support and guidance at
Chanakya National law University.
I would also like to thank responsible authorities who provided me with the
facilities being required and conductive conditions for my project.
Last but not the least I would also like to thank the Almighty.
Thank you
CONTENTS
1. Introduction
2. Research methods
Aims and objectives
Limitations
Research methodology
Sources of data
3. Introduction Organizational structure
4. Types of organizational structure
5. Brief analysis of job specialization
6. Centralization and decentralization
7. Case study
8. Suggestion and conclusion
9. Bibliography
INTRODUCTION
The objective of this project is to bring to light, using research and reports,
to find out how the tasks are delegated into various departments and how the
assigned tasks are performed.
Limitations:
The presented research is confined to to a time limit of one month and this
research contains only doctrinal which are limited to library resources.
RSEARCH METHODLOGY:
The researcher will be using only doctrinal methods of research methods of
research. The researcher will be using library for doctrinal research.
SOURCES OF DATA:
1. Books
Principles of management (anil bhat and Arya kumar)
Principles of management (Meenakshi gupta)
The Modern Firm: Organizational Design for Performance and
Growth
Organization structure design (Mirza S. Saiyadain and Pornima
Gupta)
2. Websites
https://en.wikipedia.org/wiki/Organizational_structure
https://www.tutorialspoint.com/management_concepts/organizational
_structures.htm
http://study.com/academy/lesson/what-is-organizational-structure-of-
management-types-examples-quiz.html
http://www.fao.org/docrep/W7503E/w7503e04.htm
1 - Pre-bureaucratic structures
This type of organizations lacks the standards. Usually this type of structure
can be observed in small scale, 1start-up companies. Usually the structure is
centralized and there is only one key decision maker.
2 - Bureaucratic structures
3 - Post-bureaucratic Structures
Functional Structure
The organization is divided into segments based on the functions when
managing. This allows the organization to enhance the efficiencies of these
functional groups. As an example, take a software company.
1
http://smallbusiness.chron.com/different-types-organizational-structure-723.html
Functional structures appear 2to be successful in large organization that
produces high volumes of products at low costs. The low cost can be
achieved by such companies due to the efficiencies within functional groups.
Divisional Structure
These types of organizations divide the functional areas of the organization
to divisions. Each division is equipped with its own resources in order to
function independently. There can be many bases to define divisions.
2
http://smallbusiness.chron.com/different-types-organizational-structure-723.html
Matrix Structure
When it comes to matrix structure, the organization places the employees
based on the function and the product.
The matrix structure gives the best of the both worlds of functional and
divisional structures.
This way, there are many teams in this organization such as software
engineers of project A, software engineers of project B, QA engineers of
project A, etc.
3
https://www.allbusiness.com/4-common-types-organizational-structures-103745-1.html
Brief analysis of job specialization
Job specialization is the degree to which the overall task of the organization is
broken down into smaller component parts. Departmentalization, on the other
hand, is the grouping of jobs according to some logical arrangement. The effect of
these two variables on job satisfaction among the staff of a library was the focus of
this study. A descriptive research design was adopted while a survey method was
employed to elicit information from the respondents for this study. Fifty (50)
copies of questionnaires with 30 structured questions were distributed among the
staff of Nimbe Adedipe Library, Federal University of Agriculture, Abeokuta and
45 (90%) were returned. The questionnaire sought information on respondents’
demography, job specialization, departmentalization and effects of job
specialization and departmentalization on job satisfaction of the respondents. Data
analysis was based on 42 questionnaires as 43 were unusable. Among the findings
of this study was that majority of the staff of the sampled library were fully
satisfied with their present area of specialization. Although, Cataloguing Section
was perceived as the most boring section to work in any library, this may not be
true after all, since the introduction of online copy cataloguing and classification
that gives room for interaction with computer system and sometimes further
navigations to ascertain the authenticity of the information being used on the
Internet. This study finally concludes that job satisfaction is individualistic and it
affects one’s feelings or state of mind. When the library personnel feel satisfied,
they will be less likely to leave the job. Keywords: Job Specialization,
departmentalization, Job satisfaction, Librarians, University Library, Nigeria
Introduction The method of job specialization involves breaking down a task to its
lowest level and designing jobs around each part. This creates specialization,
expertise, and improved quality. Job specialization design in the workplace is
frequently seen where a worker focuses on one specific task and ability during the
entire work shift. The task 5frequently repeats all day long. Because job
specialization allows significant expertise build-up in a specific task, the learning
and speed of production happen faster. The job does not involve complex
4
http://www.businessdictionary.com/definition/job-specialization.html
5
http://www.ehow.com/info_8083551_job-specialization.html
processes, so it can be taught faster to new workers. In theory, this approach
reduces quality control costs and improves production efficiency (Thibodaux,
2012). The downside of job specialization tends to be that people can only do one
task. They aren’t trained to multitask or handle multiple areas of a workplace. As a
result, when a critical expertise is lost, the process can suffer. Additionally,
workers under job specialization don’t have a wide array of applicable skills, so it
becomes hard for them to adapt to a new function or need in the organization. As a
result, unemployment is a significant problem when a company has to shut down a
factory or assembly line. Many of the laid-off workers usually have a hard time
adjusting to new occupations. Specialization refers to individuals and organizations
focusing on the limited range of production tasks they perform best. This
specialization requires workers to give up performing other tasks at which they are
not as skilled, leaving those jobs to others who are better suited for them. An
assembly line, where individual workers perform specific tasks in the production
process, is the best example of specialization. Specialization is related to another
management concept, division of labour, discussed at great length by Adam Smith,
the 18th-century Scottish economist and author of "The Wealth of Nations." Smith
famously illustrated the benefits of specialization and a division of labour when
describing a pin factory, in which each worker performs a single specialized task.
One worker measures wire, another cuts it, one points it, others make the head and
so on. Through this process, workers produced thousands more pins than if each
worker made whole pins independently. Specialization, as illustrated by Adam
Smith's example of the pin factory, allows workers to develop more skill in their
specific tasks. Specialization increases output because workers do not lose time
shifting among different tasks. Smith also believed that workers with specialties
were more likely to innovate, to create tools or machinery to make their tasks even
more efficient. The benefits of specialization extend beyond individual workers as
well. Firms that specialize in their 6particular products can produce larger
quantities to sell. Those firms and their employees use the proceeds from the sale
of those goods to buy needed goods produced by other workers and companies.
While Adam Smith saw the advantages of specialization and division of labour, he
also saw a downside to them as well. He feared that monotonous assembly lines in
which workers performed single tasks throughout the day could sap their creativity
and spirit. He saw education as a remedy and believed that education fostered
6
http://www.dreamcareer.com.my/index.php/job-specialization
creativity and innovation in workers. Karl Marx seized on Smith's concerns. He
saw monotonous production tasks, coupled with subsistence wages that do not
represent the full value of labour, as factors that increase worker alienation,
eventually resulting in a worker-led uprising against the capitalist class. The
division of labour according to Niederhoffer (2011) is the separation of a job up
into parts usually performed by different individuals. The division of labour is so
common in our society, and so much good comes from it, that we often take its
benefits for granted and forget about the harms from not following it. It seems
good to gain perspective by starting with some scholarly work from the field, so
that basic principles can be considered. He observed that the first division of labor
in society came from the separation of work between men and women, where men
did work that required larger frames and more strength. If the woman were to do
the child bearing, and men to do the heavy hunting, then it also became less
frictional for women to handle household chores like cooking, while men made the
tools for hunting. These concepts have now been subsumed in economics as
increasing returns to scale, and the great improvement in output or profits that
come from continuing until variable costs are more than the marginal costs without
regard to the high fixed costs in many processes. The concept has been generalized
by growth economists into a beneficent circle. Increasing the division of labor
leads to enhanced output from improvements in the productivity of labour. This
increases incomes and demand, and leads to larger markets. With larger markets,
more division of labour can occur starting the circle over again. A major reason
that specialization works in economics and biology is that everybody is different.
Williams (1979) showed that not only does everyone have different degrees of
aptitudes, and appearance, morphology and 7physiology, but that everyone's
internal organs are different. These differences lead us to be able to perform
different tasks with different degrees of efficiency and productivity, and make the
benefits of specialization great even when improvements in machinery are not
available. Job specialization is the degree to which the overall task of the
organization is broken down into smaller component parts. It evolved from the
concept of division of labour. There are four benefits of specialization: workers
will become proficient at their task because it is small and simple, transfer time
between tasks may decrease, the more narrowly defined the job is, the easier it is to
develop specialized equipment to assist with the job and training costs should be
7
https://sites.google.com/site/ancientegyptopedia/social-structure/job-specialization
relatively low. Conversely, the main problem with specialization is that workers
can become bored and dissatisfied. This can lead to higher absenteeism and lower
quality of work. It is also possible to overspecialize. Because of the drawbacks of
specialization, many firms have sought alternative approaches to designing jobs
such as job rotation which involves systematically moving employees from one job
to another, global connection encourages rotation of workers to new jobs and
possible pay raises for each new job they master. Job enlargement gives employees
more tasks to perform while job enrichment attempts to increase both the number
of tasks a worker does and the control the worker has over the job. It is more
comprehensive than job rotation or job enlargement. Job enrichment is based on
the two-factor theory of motivation developed by Frederick Herzberg. Job
characteristics approach is an alternative to job specialization that suggests that
jobs should be diagnosed and improved along five core dimensions, taking into
account both the work system and employee preferences. The five dimensions are
skill variety which has to do with the number of things a person does in a job, task
identity which shows the extent to which the worker does an identifiable portion of
the total job and task significance is the perceived importance of the task. Others
are autonomy which shows the degree of control the worker has over how the work
is performed and feedback which means the extent to which the worker knows how
well the job is being performed.
CASE STUDY
Starbucks Coffee Company’s Organizational
Structure
Starbucks Coffee Company is the largest coffeehouse chain in the world. The
firm’s industry leadership is partly attributed to the appropriateness of its
organizational structure. A company’s organizational structure influences
management and leadership, communication, change, and other variables critical to
business success. Starbucks has evolved to have an organizational structure that
matches current business needs. This organizational structure is unique to
Starbucks, although it can be characterized based on a conventional typology of
organizational structures. Starbucks succeeds because its organizational structure
grows with the business, enabling the company to optimize processes and the
quality of its goods and services.
1. Functional structure
2. Geographic divisions
3. Product-based divisions
4. Teams
Bibliography
Books
Principles of management (anil bhat and Arya kumar)
Principles of management (Meenakshi gupta)
The Modern Firm: Organizational Design for Performance and
Growth
Organization structure design (Mirza S. Saiyadain and Pornima
Gupta)
principle of management (prof . Charles w.l. Hill and prof. Steven L.
Mc shane)
websites
https://en.wikipedia.org/wiki/Organizational_structure
https://www.tutorialspoint.com/management_concepts/organizational
_structures.htm
http://study.com/academy/lesson/what-is-organizational-structure-of-
management-types-examples-quiz.html
http://www.fao.org/docrep/W7503E/w7503e04.htm