Report- Change of Management Structure

Report 1. Proposed Change of Management Structure Introduction Asos. com is at current a leading online fashion store for men and women, which is based in the UK and attracts an impressive 3. 3 million shoppers every month. The site has a whopping 1. 8 billion registered users and the group profits are probable to exceed ? 7 million. The company has achieved significant growth since its inception in 2000 and is surely on the path towards conquering the online fashion retailing market and attaining greater profits in the coming years.

As a company progressively grows, it becomes essential for specific changes to take place within the organization. These changes are in relation to the management and organizational structure of a company and facilitate a straightforward and unproblematic expansion and development process. It is crucial that a functional and vastly efficient organizational arrangement is established in Asos. com as it allows the expressed allotment of tasks and responsibilities for the diverse roles and procedures for the dissimilar units and departments to be carried out effortlessly.

Furthermore, it minimizes confusion and coordinates activities professionally. The existing organizational structure of Asos. com consists of a board of two non-executive directors and three executive directors. Also, the business is a public limited company quoted in the ‘Alternative Investment Market’ (AIM) which is a part of the London Stock Exchange, from which the company receives additional funding for its growth and development. Research As the company Asos. om expanded and grew, it began to adopt a hierarchical organizational s structure. This structure consists of individual departments taking on different responsibilities such as warehousing, product design and new product development. In addition Asos. com has a team of 30 customer service advisers who deal directly with customers by responding to their queries about stock requests, delivery status etc (via email) promptly within an hour. The company has achieved significant growth by facilitating an internal organic growth process. Asos. om basically acquired larger profits which facilitated the growth process by increasing their customer base and by increasing the range and quantity of products available for the purchase of the consumers. “asos. com has achieved rapid growth internally. It has not grown by acquiring other businesses. Instead, it has grown by increasing its customer base, number of brands and products available to buy at any one time” Additionally, the company’s shareholders made the decision of listing a certain percentage of shares in the alternative stock market.

This wise decision proves to be more advantageous than issuing shares on the main stock market as Asos. com is not required to comply with the strict rules and regulations that must be followed by the company’s who are listed in the London stock exchange. This results in the online fashion company being able to obtain the necessary funds needed for expansion and growth without being burdened with the strict ruling and legal aspects of being a public quoted company. “ asos. com is a public limited company (plc).

This means that the business is owned by shareholders and that its shares can be purchased by the general public. asos. com shares are traded on the Alternative Investment Market (AIM)” As the online fashion retailing company is expected to drive growth further, it needs to put in place a well thought-out system of organizational and management structure in order to ensure the smooth and efficient operation of day to day tasks whilst bettering their current system and overall being able to provide better service to their customers. Body of answer

A proposed structure for organizational change should first of all contain a listing of organizational objectives as a planned structure for change would otherwise be seemingly futile. These objectives should address the internal and external affairs of the company due to the reason that the targets set forth can be accomplished by the suitable, relevant persons. Weekly meetings among division heads to discuss operational predicaments and setbacks are an example of an internal objective that may possibly be implemented for the benefit of the organization (Recruitment goals for seasonal staff are an example of an external objective of a ompany). By following this course of action, it becomes possible to determine the changes that need to take place within the organization by reviewing the business plans, goals, missions and objectives and it is the initial step towards building a fresh organization structure. In addition, it would be beneficial if the organization uses a wide span of control within the company. This basically means that every department head is expected to report to the general manager which in turns ensures a well-organized chain of command in the company’s structure.

As the organization grows the number of divisional managers’ increase, as does it result in a lengthier chain of command, but by implementing a system of wide span control within the company there would undoubtedly be efficient organization within the company. It is also very important that the various departments within the organization’s responsibilities are clearly defined. Since the organization Asos. com is an online fashion store, high quality customer service is primarily very essential.

In order to ensure customer satisfaction, it would be beneficial if every department of the company consists of a few well experienced individuals allocated with various non managerial duties (non management employees), in order to make certain that the division receives solid backing. These individuals should be allocated with an additional task of supervising and guiding the less experienced and newer employees, which would result in faster conversion of the newbies’ and cause them to understand their duties and gain experience a lot faster which would in turn result in increased productivity of the employees.

The persons in charge of this task can additionally be granted a special designation or title to their name such as ‘Trainee Supervisor’ and it would prove to be immensely advantageous to the organization if they carry out their additional duties as expected. Another positive change that could be implemented is a method of organizational structure known as the ‘matrix structure’. It is basically defined as a type of management structure in which staff report to more than one person, effectively and efficiently having too or more supervisors at the same time.

This method permits employees with different areas of expertise, who belong to different divisions and departments to come together provisionally to work on special projects there by maximizing effectiveness and automatically creating the ideal setting for knowledge and information to be shared. For example, a well established internationally acclaimed company such as Boing, assigns employees to project teams when there arises a situation for it to create a new aircraft.

The relevant persons would report to many different project managers (for different projects) as well as to a functional supervisor who would in turn report to a general manager or vice president. However while implementing the matrix structure it is important to have strong, central oversight from the senior managers to make certain that there is no unnecessary work or conflicting interests. Another seemingly effective change that could be implemented in the management structure of Asos. com is the execution of another method of organizational structure known as the ‘team structure’.

It is similar to the matrix structure, the main difference being it allows teams to have the authority to make the final decision. In the system of ‘team structure’ the senior managers’ final approval is not required for decisions to be made, and lower level managers can take the initiative. Similar to the matrix structure, the team structure too brings together workers with different skills and abilities in order to meet a particular objective on the belief that the company will meet customer needs more efficiently than traditional structures.

Asos. com can implement this method of management structure within its organization in order to achieve significant results largely due to the reason that the fashion retailing business is an ever changing industry where the latest fashion trends are continually evolving. If the business implements a team structure within its organization, creatively able employees belonging to various departments should be assigned to a specific team in order to create new designs for the products Asos. om offers such as clothes, shoes, accessories etc. The teams should be somewhat informal and should contain the ideal setting in which an employee belonging to the accounts division is not prevented from being a part of a creative team. The main motive for implementing this method of management structure within the company is due to the reason that it is sometimes the case where persons with hidden talents are not discovered due to their introverted, timid nature or at times an employee might not realize what he/she has to ffer in terms of contributing ideas etc. Every now and then, it is possible for an employee who belongs to the finance division to have a brilliant idea regarding a new product range however the worker feels he is unable to communicate his idea to the management as he is operating in the financial division. Implementing this method of action additionally provides much needed motivation for employees and greater job satisfaction which would in turn result in better performances.

Moreover, a sense of unity is created within the organization where every employee is made to feel important and none are made to feel excluded from the exciting aspects of the business. It is vital that a limited amount of employees are assigned to a project team and it is incredibly important that a lower level manager as well as professionally qualified individuals (trained in the specific aspect of product development; engineers, product designers etc, are present at the meetings in order to provide guidance and a systematic flow of order and structure to the brain storming process.

If Asos. com executes this method of action it would put the company in an arrangement for it to be more creative in satisfying and fulfilling customer needs there by enabling the company to grow and reach new heights in its development. It is a known fact that the amount of levels or stages of a company increases gradually as a company grows, due to the increase in its technical complexity which comes with producing a good or service. When the said situation arises, it becomes necessary for the company to be organized into several departments, depending on the nature of the business.

In the case of Asos. com, it is a relatively large organization and possesses an impressive 32,500 square meters of warehouse space as well as a total of 250 permanent employees (as at 2008). Due to this reason, it would be more advantageous for the online fashion retailing company to implement the management system known as the ‘flat structure’. The flat structure system primarily involves a number of levels within the organization with small spans of management thus resulting in fewer layers of management (there are fewer levels of management between the executive level and frontline employee).

Executing this system of change in the management structure of Asos. com would result in a more effective and simpler communication process. Additionally, flat structures provide the ideal environment for increased productivity as well as flexibility within the organization when coping with changing circumstances there by minimizing bureaucracy and enabling quick and speedy decision making. Furthermore, power is centralized at the top levels and there is more control over the employees which in turn reduces the overall overhead cost of the organization as they can eliminate costly middle-management salaries.

The duties of the middle-managers can be effectively handed over to the lower level employees which would increase staff responsibilities and the remaining duties can be designated to the managers at a higher level there by creating a situation where the appointment of middle-managers would be largely unnecaccary. Moreover, quite often there arises a situation where a front line employee has to explain delays to customers and experience a lesser amount of productivity as he waits for answers as the decision making has to go through a process at each level.

This situation can be avoided by implementing a flat management structure within the company. Delays in decision making would result in unhappy customers which could have a negative effect on the company Asos. com as it strives to attract new consumers to its site by providing customers with high quality customer service. The mentioned management structure would be advantageous to Asos. com if the company incorporates this system in their management structure while maintaining corporate controls and by making certain that final decisions are made at the executive level.

The preferred solution that should be implemented by the organization is the matrix structure. Additionally, Asos. com should work at implementing the team structure in certain situations as it would be advantageous to the company. Additionally, a flat structure should be incorporated into their system which would provide maximum efficiency and add to the strong organization of the company. By integrating the mentioned methods of management structure, Asos. com could increase overall efficiency and increase employee productivity.

Conclusion The successful implementation of the above mentioned proposed structural changes would not cause much of a negative impact on the organization or its customers and it would ultimately result in the company being able to provide its customers with better online services. Due to reason that Asos. com is a relatively large company, it is a known fact that the implementation of the flat structure is more suited to relatively small and midsized companies, however it is possible to implement this strategy at Asos. om so long as the company’s operational centre’s (offices) are not stretched out or scattered across different borders or continents as communication between employees and managers would become very difficult. Therefore, I would like to state that a large organization like Asos. com can implement a flat structure in their system as long as they set up each division with this system and maintain corporate controls and ensure that decision making is taking place at the executive level. 2. Potential pitfalls and issues that can arise by implementing the new structure Introduction

Implementing a fresh management structure within any company can cause certain unneeded issues to arise which would have a negative impact on the organization. There pitfalls can arise due to wrong implementation of the new system or initial mishaps in carrying out the fresh strategy. Body of answer The proposed change of management structure consists of many drastic alterations and modifications of its current structure and it wouldn’t be easy to implement the system all at one. Firstly, the staff will need to undergo sufficient training in order to successfully and effectively execute the new structural system.

A month before the commencement of the implementation of the new system, the entire staff belonging to Asos. com needs to be informed in order to mentally prepare them for change. There after, the various divisions and departmental heads will need to undergo the required training in order to effectively communicate the idea of the new structure to their relevant divisions. Afterwards, the idea will then be communicated to the employees belonging to the relevant divisions and a full day will be allocated in order to clear any confusions etc. It wouldn’t take too long for the employees to grasp the new concept as there is not many rastic changes made to their daily routine responsibilities and the alterations mainly lie in the hierarchical structure in which information is communicated and the arrangement in who the employees are required to report to (their supervisors, managers etc) . If there are currently middle-managers being employed at Asos. com, the newer management structure would force the organization to appoint them with different designations and if they are unwilling to accept, the company will be forced to let them go and their duties will be assigned to the relevant persons, as described in the proposed change of management structure.

However, if there are any valuable, giftedly talented individuals, the company will not want to lose their services and will have to promote them to a managerial position. By following this course of action, the negative effects or situations that could arise by the change of management structure within the organization could be reduced to a great extent. The proposed plan of change will not cause much of a negative impact on the customers due to the reason that it was primarily formed to provide the online customers with better service.

However, in the initials stages of implementation, there might be a little confusion and it will take a little time for the workers to adjust to the new system of structure and a few mistakes could be made. Delayed response to customer queries and making quick decisions in regard to customer requests are probable to become slower than previous occasions, however it is important that the staff are provided with guidance and strong leadership which would result in them grasping the concept and there by moving forward to providing the customers with better service.

Another potential pitfall likely to emerge is the undisciplined nature of the employees who struggle to successfully carry out their duties in the newly proposed organizational structure. This would create a chaotic situation and would even result in a temporary halt in the ventures day to day operations. This factor can be prevented from occurring by maintaining a system of clear communication in between the management, executives and staff and by clearly defining and prioritizing every workers duty. Conclusion

It is possible for large, mature, professional organizations to make significant changes in their management and organizational structure, provided they so do in a suitable and well-timed fashion. It is vital that the leadership, board and management of the organization are fully committed to the fresh structure of governance. Furthermore it is imperative that the governance and management go well together in their goals and supportive of each other and make decisions in the best interests of the company

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