Organizational Structures and their Impact

This assignment delves into the analysis of various organizational structures, including functional and matrix models. It examines the strengths and weaknesses of each structure, illustrating them with examples like Clarion Call Advertising Services Ltd. and Aspen Brewing Company. The goal is to understand how different structures impact efficiency, decision-making, and ultimately, customer satisfaction.

1
Business
Course code
Lecturer
Institution
Submission date

MANAGEMENT AND OPERATIONS 2
In this assignment I work for Hong Kong and Shanghai Banking Corporation (HSBC)
was developed with the intention of meeting the financial needs of the consumers. HSBC has
more than 4,400 offices globally and this is considered as the leading organization that is
respected due to its quality services. I will analyze the financial services that are offered by the
company include commercial banking, investment banking and market personal financial
services. So I have many clients with different structures and type of companies. In this report,
the highlight is on different types of organizations that work with the company and demonstrate
the various functions within an organization and its link to the organization structure.
Depending on the nature of organization that is operating in the sector, HSBC can gain
clients from either primary, secondary, and tertiary sectors. For primary sector, it involves
acquisition of raw materials, and this is normally evident in the sole proprietorship and
partnership form of organizations. Secondary sectors involve the organizations that are involved
in manufacturing processes. This largely entails sole proprietors, partnerships, corporations and
limited companies, and HSBC can target such clients in increasing their customer base. The
tertiary sectors involve commercial services that are developed in supporting the business
operation. It includes organizations such as the corporations and limited companies (Warner and
Witzel, 2004).
Types of Organizations
According to March (2013), there are four distinct types of organizations: sole
proprietorship, partnership, corporation, and limited company. The analysis for the four types of
organization is given as:

MANAGEMENT AND OPERATIONS 3
For sole proprietorship, it is one of the easiest forms of organizations to be established by
HSBC clients. The advantages of this type of organization are numerous. The owner of the
business has full control over the operations, and can easily manage the time for conducting
operations. The decision making process is fast, and the owner can divest the revenue outlay
without being involved in lengthy altercations regarding the use of the revenues.
However, there are also disadvantages and one of which is the unlimited liability.
Liability is the obligations that the business or entity owes suppliers and creditors. For sole

MANAGEMENT AND OPERATIONS 4
proprietorship, the unlimited liability can impose a challenge to the sole trader as upon failure to
meet the obligations of the creditors, then personal assets can be used in the paying the defaulted
amount.
Partnership form of organization is characterized by ownership being more than two
individuals and they are involved in pulling the resources together in the form of investment.
Through partnerships, organizations can increase their capital outlay and ensure that it capitalizes
on the available resources. The advantages with this form of organization include; shared
responsibility including the management of the business, decision making process is improved,
and flexibility in running the business. However, there are challenges of disagreements, the
liability is unlimited, and the taxation laws can impact the operations of the organizations (Blau
and Scott, 2003). Examples of partnerships include Warner Bros (founders being Sam, Jack,
Albert, and Harry Warner), Microsoft (Bill Gates and Paul Allen), and Google (Larry Page and
Sergey Brin).
A corporation is a business initiative that is characterized by legal obligation which is
different from that of its owners. The owners of the corporation always have shares in the entity
and they are involved in the daily management and running of the business. The advantages
associated with corporation are that the liability is limited and ownership transfer is made
possible through transfer of shares from one individual to the other. The capital that is raised is
essential in improving the expansion strategies and initiatives of the corporation. However,
corporations are always characterized by double taxation as the net income of the corporation is
taxed while the dividends received by the shareholders are also taxed. The tax filings for
corporations can have implications on the income level and the growth in the operations of the
entity.

MANAGEMENT AND OPERATIONS 5
Limited companies are form of organizations where upon start-up, the shareholders’
assets or finances are quite separate from that of the business initiative. As such, it implies that
the liabilities incurred by the company cannot be transferable to the owners or stakeholders
(March, 2013). The advantage of a limited company is the limited liability where the company’s
debts are not transferable to the shareholders. The legal separate entity implies that the company
can continue with its operations despite the death of the owner. Limited company can enjoy tax
advantages with the tax deductions being made on the allowances of the shareholders. However,
there is the disadvantage of high cost of operations and complexity in the legal regulations. The
powers are diluted and this can outweigh the implications of the operations and influence the
takeover process of the entity.
Depending on the nature of organization that is operating in the sector, HSBC can gain
clients from either primary, secondary, and tertiary sectors. For primary sector, it involves
acquisition of raw materials, and this is normally evident in the sole proprietorship and
partnership form of organizations. Secondary sectors involve the organizations that are involved
in manufacturing processes. This largely entails sole proprietors, partnerships, corporations and
limited companies, and HSBC can target such clients in increasing their customer base. The
tertiary sectors involve commercial services that are developed in supporting the business
operation. It includes organizations such as the corporations and limited companies (Warner and
Witzel, 2004).
Different types of Department
HSBC relies on the departmental operations as they are effective in improving the service
delivery and achieving the success level of the organization. The main departments include:

MANAGEMENT AND OPERATIONS 6
 Management: This is the executive department where the operations of other
departments are undertaken. It ensures that smooth running of operations within the
industry is achieved. With this in place, the other departments can meet their goals that
have been developed on the basis of meeting the overall success of the entity.
 Marketing: Marketing department plans and implements the marketing strategies for
HSBC. Depending on the cost implications of a particular strategy, the marketing
department can get go-ahead from the finance and accounting department. The
management department reviews the marketing strategies and cost implications of the
strategies employed.
 Finance: The finance department offers estimation and budgetary allocation that should
be used during a given period of transaction. In implementing its decisions and policies,
the management department considers the budget allocations that are provided by the
finance department. The same situation applies to the marketing department.
 Account: The accounting department conducts cost allocation measures and initiates
measures that will yield high success level. The competitiveness in the industry and the
changes that are experienced in the economy provides a framework for managing the
effectiveness of the operations in the long-run.
Organization Structures
Organizations that are operational in the economy can be in the form of associations,
societies, and businesses, and this provides an avenue towards increasing the credibility in the
success level. The management structure that is utilized in the economy can be essential towards
improving the operations of the entity. There are different organizational structures that the

MANAGEMENT AND OPERATIONS 7
management utilizes and this can be assessed by the HSBC Company in managing the client
base.
The main organizational structures include functional structure, divisional structure, and
matrix (Oberg and Walgenbach, 2008). In the case of the functional structure, the purpose and
aim of the different segments are clearly outlined with the units distinct. The departmental
functions and the business initiatives can improve the success of the operations and this can be
influential towards managing the services of the entity. As illustrated in the figure below, the
functional organization structure provides distinct roles that can be undertaken by different
departments towards meeting the needs and interests of the consumers. The clarion call
advertising services ltd has a functional organization structure that outlines the requirements of
each of the level towards increasing the efficiency of the operations and realizing global success.
The advertising service is a clear example of the functional organization structure. The link

MANAGEMENT AND OPERATIONS 8
between different management levels is evident and it shows that the chairman is the final
decision maker.
In the case of matrix organization structure, the reporting structure of the employees is
based on a matrix or a grid form and the employees have dual relationship with each other. The
information sharing is based on the functionality of different levels of management and it is
instrumental in increasing the desired in the sector (Galbraith, 2009). The projects and products
are effectively coordinated and there is an autonomous self-management amongst the employees
in achieving decision making and motivation of employees. Based on the matrix structure of
Aspen Brewing Company, the different functions of the employees are clearly outlined, and they
are required to offer an informed decision regarding the effectiveness of the operations. The
divisions have been created for the manufacturing process and it offers an opportunity for
understanding the functional departments and the employees’ management process. The
managers have unique roles that they need to undertake in maximizing the functions and

MANAGEMENT AND OPERATIONS 9
improving the needs of the employees and the consumers. For large corporations, the matrix
organization structure can be influential in mixing the needs of the employees and ensuring that
they execute their tasks with ease.
Conclusion
In this report, the focus has been on assessing the organization structure towards developing a
platform for understanding the trends and capabilities of the products offered towards achieving
customer satisfaction. The analysis of the different organization types and structures and their
advantages and disadvantages and this can be influential in determining the organizations that
the management can focus towards maximizing shareholder’s wealth.

MANAGEMENT AND OPERATIONS 10
References
Blau, P. M., & Scott, W. R. (2003). Formal organizations: A comparative approach. Stanford,
Calif: Stanford Business Books.
Galbraith, J. R. (2009). Designing matrix organizations that actually work: How IBM, Procter &
Gamble, and others design for success. San Francisco, CA: Jossey-Bass.
March, J. (2013). Handbook of Organizations. London: Routledge
Oberg, A., & Walgenbach, P. (January 01, 2008). Hierarchical structures of communication in a
network organization. Scandinavian Journal of Management, 24, 3, 183-198.
Warner, M., & Witzel, M. (2004). Managing in virtual organization. London [u.a.: Thomson
Learning.