Analysis of Business Structures and Leadership at Open Apptions

This report examines the business structure of Open Apptions, comparing entrepreneurial, hierarchical, and matrix models. It delves into the effects of increased spending on training, highlighting its impact on efficient management, economy in operations, and increased production. The report also evaluates Pieter's leadership style using the Blake Mouton Grid, identifying areas for improvement. The analysis draws on various sources to provide a comprehensive understanding of business structures, leadership, and the benefits of training within the context of Open Apptions' challenges and successes. The report provides insights into organizational structure, leadership effectiveness, and the strategic importance of employee development. The report uses the Blake Mouton Grid to assess leadership effectiveness and provides a framework for understanding the impact of different leadership styles on organizational outcomes. The report also assesses the effectiveness of the leadership and management practices and their alignment with the organizational goals.

Running head: BUSINESS RESEARCH
BUSINESS RESEARCH
Name of the Student
Name of the University
Author Note

1BUSINESS RESEARCH
Introduction
Business structure or organizational structure can be best described
as the accomplishment of the organizational goals achieved through
proper coordination among the different departments and employees of
the organization, efficiency in task allocation and by maintaining effective
supervision. The organization as a whole is affected by organizational or
business structure which serves as a basic foundation for daily routine
work and standard process of operation. The business structure also
states the extent of power of different employees of the top-level
management who are vested with the decision making responsibility.
There are numerous ways through which an organization can be
structured which relies mainly on its objectives. The organization
structure are primarily of three types namely, “Entrepreneurial Structure”,
“Hierarchical Structure” and the “Matrix Structure.”
Types of business structures
The three main types of business structures as mentioned for Open
Apptions are as follows:
Entrepreneurial Structure: Entrepreneurial Structure is that business
structure where there is one big operational structure consisting few or
one person in the top-level management (Baliamoune-Lutz and Garello,
2014). In this particular business structure, the owner or the person
responsible for decision making controls the entire business operations.
In Entrepreneurial Structure, the owner of the business provides the all-
important leadership and also inducts the organization to all outsiders
(George et, al., 2016). Here, the owner of the business plays all the key
roles necessary for the smooth conduct of the business like supervising,
development of strategic business strategies, allocation of resources,
negotiation, maintaining and also monitoring a smooth flow of
uninterrupted information within the organization, bringing about a
change if necessary and many more (Stuetzer et, al., 2016). The primary
benefit of using Entrepreneurial Structure in business is faster decision

2BUSINESS RESEARCH
making as it is taken by a single or few individuals. In case of Open
Apptions, its owner Pieter initially managed the entire business operations
before going into Hierarchical Business Structure (Burns, 2016).
Entrepreneurial Structure can be mainly seen in Small business entities
like Pharmacy2U which is considered as the biggest online pharmacy in
the United Kingdom. It can be best explained with the help of the
following diagram:
Entrepreneurial Structure
Source: (BBC Bitesize 2020)
Hierarchical Structure
Hierarchical Structure is one such business structure where there is
a single decision making power at the top level of the management
structure and such decision making power is distributed at the lower
levels of the organization (Tseng, 2014). Here, the communication flows
in the hierarchical structure that is from the top level management
towards the bottom level and vice versa. This structure defines the formal
relationship of the management with its subordinates. So, there exists a
formal chain of command connecting managers at all levels taking part in
the decision making process (Ragulina, Stroiteleva and Miller, 2015). The
Hierarchical Structure defines the role of each superior and subordinate in
the formal chain of command thereby enabling smooth function of the
organization as a whole. The primary advantage of this business structure
is uninterrupted flow of information and clarity of communication owing to

3BUSINESS RESEARCH
well defined roles of each department and personnel in the hierarchical
structure (Furian, 2015). In case of Open Apptions, as the business
started making considerable amount of profits and the business
expanded, Pieter preferred Hierarchical Structure over Entrepreneurial
Structure. The Hierarchical Structure is mostly prevalent in bigger
organizations like Hargreaves Lansdown which one of the biggest
Financial Services Company in the UK. It can be best explained with the
help of the following diagram:
Hierarchical Structure
Source: (BBC Bitesize 2020)
Matrix Structure
Matrix business is one such business structure where a matrix or a
grid is used to portray reporting relationships within an organization that
is, each employee is accountable to report to both product manager as
well as functional manager (Schnetler, Steyn and van Staden, 2015). In
other words, Matrix Structure is that business structure where the
employees are accountable to more than one line manager. The principal
benefit to an organization of employing Matrix Structure is that a
particular project could be equipped with more than one expert viewpoint
which could efficiently fulfill the goals of the organization (Greschke et, al.,

4BUSINESS RESEARCH
2014). Apart from the primary benefit, the other important benefit is for
the employees which entitles them to learn newer things and gain
experience from more than one experts or managers which will enhance
their productivity. In case of Open Apptions, as the business could not
maintain the same level of profit owing to intense competition in the
market, Brian thought of employing Matrix Structure to revive the profit
margin by employing more than one expert in a particular project to gain
a competitive edge in the market (Ghali, Neville and Brown, 2017). The
Matrix Structure is mostly applied in bigger organizations that goes
through the burning issue of reduction in profit margin or market share
like Royal Dutch Shell, which is the one of the largest oil company
incorporated in the UK. It can be better explained with the help of the
following diagram:
Matrix Structure

5BUSINESS RESEARCH
Source: (BBC Bitesize 2020)
Effects of increase in spending on training
Training can be described as a process that develops and enhances
the efficacy of an employee to match the needs of the changing business
scenario (Sung and Choi, 2014). In order to gain a better market
standing, each and every entity requires the service of highly skilled labor
or workers to enhance its productivity especially at times of changing
business scenarios. If the existing workers do not possess the required
skills for efficient performance of the job then training is the only way for
upliftment of the required skills and knowledge for keeping them updated
with the advancement in technology and changing business scenarios.
This training enables the firm to continue at the same level of operation in
spite of a change in business scenario and even improve its present
market standing. The rapid increase in technology in today’s era makes
the existing skills of the employee’s obsolete. This rapid advancement in
technology demands a higher level of skills and knowledge to perform the
jobs and if the employees lag behind the required skills and knowledge
then the productivity of organization will be at stake, the organization
may lose its clients and at the same time kit is debarred from using the
full potential of the employees. Thus training provides a breakthrough in
such a lag by enhancement of required skills and knowledge of the
employees thereby keeping them updated with the present business
scenario which in turn will enhance the level of production of the entity
and will also be beneficial in acquiring of newer clients (Kroll and
Moynihan, 2015). Training maintains the same level of operation and
also enhances the present market standing by upliftment of the present
skills and updating the knowledge of the employees. There are numerous
positive effects of increase in spending on training on the organization;
however, the primary three effects are discussed as follows:
Efficient management: Training is a process through which the existing
knowledge and skills of the employees are enhanced. It improves their
capability and efficiency in performing the designated job. Proper training

6BUSINESS RESEARCH
induces and cultivates the specific attitude and behavior within an
employee required in efficient performance of the job. Employees with
proper training performs his/her roles efficiently. Thus training reduces
the responsibility of supervision and results in efficient management.
Hence, the goals of the firm could be fulfilled with ease.
Economy in operations: Training and development ensures that the
employees uses the available resources optimally and judiciously. This
optimal use of the resources like then assets and materials, ensures
reduction of wastage to a great extent. On the other side, proper training
generates and improves the machine and material handling skills among
the employees that reduces accidents considerably thereby saving
considerable amounts for the organization. Proper training induces and
motivates the employees as well as raises the morale of the employees.
This increase in morale reduces labor turnover among the employees
thereby saving the training cost of newer employees and the organization
could concentrate on the upliftment of skills and knowledge of existing
employees which will ensure optimum use of the resources (Jazaieri et, al.,
2014). Training at the same time enables the employees to perform their
responsibilities with ease thereby reducing the supervision cost to a great
extent. Thus with increase in spending on training facilities, economy in
operations could be achieved owing to reduced cost of production and
operation.
Increase in production: Training ensures the availability of
standardized procedures and methods to all the employees. This
standardization ensures better performance levels among the employees.
On the other hand, proper training enhances the morale of the employees
to a considerable extent and highly motivated employees with enhanced
morale will enhance their personal productivity thereby enhancing the
level of production of the organization as a whole. Motivation not only
enhances the productivity, but also, reduces absenteeism among
employees, increases the level of job satisfaction, reduces the scope of
complaints and most importantly results in low or negligible labor turnover

7BUSINESS RESEARCH
which has a direct effect on the level of production. Therefore, a highly
trained employee portrays higher productivity in comparison with other
employees. Proper training induces a required skills within an employee
for efficient performance of a particular task. Thus enhancement of
knowledge and skills gained by an employee through proper training does
not only enhance the productivity but at the same time enhances the
quality of work as well.
Evaluation of Peter as a leader and manager
In the present context of Open Apptions, Brian was appointed by
Pieter to investigate the reasons of the reduction in the profit margin of
the entity. After a thorough survey of about two months, Brian concluded
that the organization was “over-managed” and “under-led” according to
Blake Mouton grid. Therefore, the evaluation of Peter as a leader and
manager can be best understood and explained with the help of the
following Blake Mouton Grid. The Blake Mouton Grid is popularly known
as the “Managerial Grid Model.” It was developed by Robert R. Blake and
Jane Mouton and this how it got its name the “Blake Mouton Grid (Cai, Fink
and Walker, 2019).” Therefore, the Blake Mouton Grid can be best
explained as a leadership style model that identified five distinct
leadership styles which are based on “concern for production” and
“concern for people.” Under this model, a grid is prepared where
“concern for production” is taken in the x-axis and “concern for people” in
the Y-axis and the grid marking ranges between 1 to 9 with 1 being the
lowest and 9 being ten highest. As per the scheme portrayed above, the
leadership styles that results from the Blake Mouton Grid are as follows:
Impoverished (1, 1): This particular leadership style is now known as
Indifferent. In this particular leadership style, the leader or manager has
minimal or low concern for both people as well as for production (Cho, Yi
and Choi, 2018). This leadership style helps managers to avoid getting
into trouble and also preserve their superiority thus there is less
innovation in decision making.

8BUSINESS RESEARCH
Country Club (1, 9): This particular leadership style is now known as
Accommodating. Here the manager or leader has a very low concern for
production and high concern for people. Here the managers think about
the comfort and security of the employees in the first instance.
Produce or perish (9, 1): This particular leadership style is now known
as Dictatorial. Here the managers have only concern for production and
they are not concerned for the employees at all. This leadership style id
derived from Theory X projected by Douglas McGregor and is normally
implemented in those organizations which are in the edge of fiasco. This
leadership style can be seen as a tool for crisis management.
Middle of the road (5, 5): This particular leadership style is now known
as Status Quo. Here the managers or leaders have equal concern for
production as well as for the employees. It is considered as the best
leadership style in this model. Here the leaders tries to implement a
balance between the need of the employees and the goals of the
organization.
Team Style (9, 9): This particular leadership style is now known as
Sound. Here, the managers or leaders have a highest concern for the
employees as well as for the production of the organization (Tools, 2016).
This leadership style instills teamwork as well as commitment within the
employees.
Here in the context for Open Apptions, Brian in his two month
thorough analysis of the organization concluded that Pieter, was a
produce and perish leader and the organization was controlled by him
single handedly where the main concern was for production and low
concern for the employees. Hence, it can be concluded that the Open
Apptions was “over-managed” and “under-led.”
Implementation of Douglas McGregor in improving the
performance of Open Apptions
Douglas McGregor in 1960 deduced the famous X-Y Theory. This
theory is still now considered as a base for development of positive

9BUSINESS RESEARCH
management techniques and styles. This X-Y Theory of Douglas McGregor
serves as a base in organizational development and also for developing its
culture (Aithal and Kumar, 2016). This X-Y Theory provides natural rules
for management of people and management of day-to-day business
transactions. This theory provides two primary approaches of
management of people, namely Theory X and Theory Y. Here, Theory X
deals with Authoritarian style of management. This states that the
average person dislikes work and will certainly avoid work if he/she could
do so. Therefore the management forces the employees to work for
attaining the goals of the organization. This theory also states that most
of the employees prefers to be controlled or directed by others as they do
not want to take responsibility in their hands and wants security in all
circumstances. Therefore it can be concluded that the theory X managers
or leaders are normally characterized as intolerant, distant, detached,
arrogant and many more. On the other hand, Theory Y deals with
Participative management style. Here in this style, efforts are provided by
the employees pro-actively that is, without being asked to do so. Here,
the employees by themselves directs their efforts in accomplishing the
pre-determined goals of the organization. Here there is no threat of
punishment for the employees (Aithal and Kumar, 2016). The employees
proactively give their efforts in accomplishing the objectives of the
organization because here their efforts and commitments are
compensated with considerable rewards for such efforts. Here the
employees by themselves applies and seeks for responsibilities because
they know that efficient fulfilment of such responsibility could earn them
better rewards. Here, the employees uses a high degree of imagination
and creativity in their work to yield a better result as they know that
better performance is associated with better rewards (Lupoae, Radu and
Pripoaie, 2019). So, it can be concluded that the intellectual potential of
the employees are used in Theory Y. Therefore it is recommended, that
Theory Y could be implemented in the present context of Open Apptions
for improving its performance.

10BUSINESS RESEARCH

11BUSINESS RESEARCH
References
Aithal, P.S. and Kumar, P.M., 2016. Comparative analysis of theory X,
theory Y, theory Z, and Theory A for managing people and
performance. International Journal of Scientific Research and Modern
Education (IJSRME), ISSN (Online), pp.2455-5630.
Aithal, P.S. and Kumar, P.M., 2016. Organizational behaviour in 21st
century–'Theory A'for managing people for performance. IOSR Journal of
Business and Management (IOSR-JBM), 18(7), pp.126-134.
Baliamoune-Lutz, M. and Garello, P., 2014. Tax structure and
entrepreneurship. Small Business Economics, 42(1), pp.165-190.
BBC Bitesize. (2020). Matrix and entrepreneurial structures - Structures -
Higher Business management Revision - BBC Bitesize. [online] Available
at:
https://www.bbc.co.uk/bitesize/guides/z48y92p/revision/4#:~:text=Entrep
reneurial%20structure%20is%20used%20in,the%20owner%20or%20the
%20entrepreneur. [Accessed 6 Mar. 2020].
Burns, P., 2016. Entrepreneurship and small business. Palgrave Macmillan
Limited.
Cai, D.A., Fink, E.L. and Walker, C.B., 2019. Robert R. Blake, With
Recognition of Jane S. Mouton. Negotiation and Conflict Management
Research.
Cho, K.W., Yi, S.H. and Choi, S.O., 2018. Does Blake and Mouton’s
managerial grid work?: the relationship between leadership type and
organization performance in South Korea. International Review of Public
Administration, 23(2), pp.103-118.
Furian, N., O’Sullivan, M., Walker, C., Vössner, S. and Neubacher, D., 2015.
A conceptual modeling framework for discrete event simulation using
hierarchical control structures. Simulation modelling practice and
theory, 56, pp.82-96.

12BUSINESS RESEARCH
George, G., Kotha, R., Parikh, P., Alnuaimi, T. and Bahaj, A.S., 2016. Social
structure, reasonable gain, and entrepreneurship in Africa. Strategic
Management Journal, 37(6), pp.1118-1131.
Ghali, A., Neville, A.M. and Brown, T.G., 2017. Structural analysis: a
unified classical and matrix approach. Crc Press.
Greschke, P., Schönemann, M., Thiede, S. and Herrmann, C., 2014. Matrix
structures for high volumes and flexibility in production systems. Procedia
CIRP, 17(1), pp.160-165.
Jazaieri, H., McGonigal, K., Jinpa, T., Doty, J.R., Gross, J.J. and Goldin, P.R.,
2014. A randomized controlled trial of compassion cultivation training:
Effects on mindfulness, affect, and emotion regulation. Motivation and
Emotion, 38(1), pp.23-35.
Kroll, A. and Moynihan, D.P., 2015. Does training matter? Evidence from
performance management reforms. Public Administration Review, 75(3),
pp.411-420.
Lupoae, O.D., Radu, R.I. and Pripoaie, R., 2019. Aspects Regarding the
Possibility of Increasing the Performance of the Organization by Motivating
Human Resources (HR). Annals of the University Dunarea de Jos of Galati:
Fascicle: I, Economics & Applied Informatics, 25(3).
Ragulina, Y.V., Stroiteleva, E.V. and Miller, A.I., 2015. Modeling of
integration processes in the business structures. Modern Applied
Science, 9(3), p.145.
Schnetler, R., Steyn, H. and van Staden, P.J., 2015. Characteristics of
matrix structures, and their effects on project success. South African
Journal of Industrial Engineering, 26(1), pp.11-26.
Stuetzer, M., Obschonka, M., Audretsch, D.B., Wyrwich, M., Rentfrow, P.J.,
Coombes, M., Shaw-Taylor, L. and Satchell, M., 2016. Industry structure,
entrepreneurship, and culture: An empirical analysis using historical
coalfields. European Economic Review, 86, pp.52-72.

13BUSINESS RESEARCH
Sung, S.Y. and Choi, J.N., 2014. Do organizations spend wisely on
employees? Effects of training and development investments on learning
and innovation in organizations. Journal of organizational behavior, 35(3),
pp.393-412.
Tools, M., 2016. The Blake Mouton Managerial Grid. Leading people and
producing results.
Tseng, M.L., Lin, R.J., Lin, Y.H., Chen, R.H. and Tan, K., 2014. Close-loop or
open hierarchical structures in green supply chain management under
uncertainty. Expert Systems with Applications, 41(7), pp.3250-3260.