Question

Cedric COMPANY

Products: Producing heating equipment for the construction industry in Turkey.

Manufacturing: Computerized production are used for manufacturing. Manufacturing process is dominated by robots and there is a small team of engineers and technicians monitor the process and intervene if necessary.

Customers: Customers are the construction firms in Turkey. They are looking for new and innovative products, which can be input for low-cost, efficient and user-friendly buildings and facilities.

Environment: Number of competitors is increasing, and big companies want to enter the market. Sales teams of the competitors develop strong relationships with the customers through offering them new products.

It is said that main supplier will make an agreement with a competitor, and will produce for only that competitor in the next year. As there is no alternative for the main supplier in terms of product quality and price, ABC faces a serious problem.

a. Analyze uncertainty sources for ABC’s environment.

b. Which type of structure (organic or mechanistic) is suitable for ABC company? Why?

Answer 1

Uncertainity in business is a bad sign for the business environment.The dynamic environment of an organisation creates unceratinity. The sources of unceratinity can be many . The uncertainity sources of ABC's environment is dynamism and complexity. Complexity is the degree to which the organisation deals with. it is the forces that a company has to face like suppliers , customers etc. and dynamism is the degree of change that a business environment has to deal with like insuffieciency of raw materials from suppliers, the problem that ABCis facing. So the main uncertainity sources for ABC are complexity and dynamism.Among them , the greatest source is dynamism because it is related to the main issue or uncertainity that the company is facing.

The organisational structure that is suitable for ABC company can be found out by seeing their goals, size and a structure that would aid in performance evaluation. I my opinion , ABC should have an organic structure. What is organic structure ? An organic structure is the one which does not have the traditional typical pyramid of leadership flowing from top to bottom. it is easy to adapt and flexible. ABC should have organic organisational structure because it is facing a great problem of no alternative to the main supplier and the companies that are not stable should go for organic structure. On the other hand , mechanistic structure is for those companies which are large and stable and does not faces severe uncertainity problems. The main benefit of having an organic structurein ABC is that it will increase efficiency in the future and would not burden the managers or employees while facing uncertanities. This would also enable ABC to have more flexibility and provide better decision making involving managers and employees's ideas in taking decisions.It would also be beneficial in making ABC capable in rapid changes.