Question

Organizational structure is important in determining decision making. In 500 words or more, address the following:

1. Compare and contrast the benefits and disadvantages of companies with a standard hierarchy and those without. Some example companies without hierarchies are Swedish software consultancy Crisp and DPR Construction.
2. How does hierarchy affect business processes?
3. How do ERP systems streamline business processes?
4. Can you foresee any problems that integrating systems such as ERPs can cause?

Answer 1

Compare and contrast the benefits and disadvantages of companies with a standard hierarchy and those without.

1. Compare and contrast the benefits and disadvantages of companies with a standard hierarchy and those without.

The hierarchical structure is the one of the important structure used by small businesses which follows a hierarchy level from the top as the basis of power and authority.

Advantages

Hierarchical structure	Non Hierarchical structure
Clear Line of Authority Clear Lines of Communication. Clear Results	It Is Cost Efficient It Promotes Faster Decision Making It Allows Clear Communication It Requires Less Dominance and Supervision

Disadvantage

Hierarchical structure	Non Hierarchical structure
Isolation and Siloed Thinking Centralization of Power Endless Red Tape	Management Can Easily Lose Control Work-Relationship Could Struggle It Can Create Power Struggle It Makes Employee Retention Difficult It May Hinder Growth There Is Less Motivation Can Result to Role Confusion

How does hierarchy affect business processes?

A business process is a collection of linked tasks which find their end in the delivery of a service or product to a client. A business process has also been defined as a set of activities and tasks that, once completed, will accomplish an organizational goal.

Consider only business processes, however, without considering organizational structures that can significantly affect business process performance.    In many BPR and PI projects, business analysts simulate redesigned processes to validate the processes and identify possible problems caused by the changes in processes. Since business processes are executed on organizational structures in practice, the structures can significantly affect the business process performance . In particular, even when the same business processes are executed, performance can differ depending on the organizational structures. Thus, only integrated simulation approach that includes both the business processes and the organizational structures can realistically facilitate analysis, design and redesign of organizations .Most existing approaches, however, did not consider the organizational structures when they simulated business processes. Moreover, they only con-centrated on how to optimize business processes while relatively little attention has been placed on how organizational structures should be changed according to the results of business process simulation.

3. How ERP Software Helps Streamline Processes

Streamline Processes with ERP Software

When a business first starts to evaluate software as a tool to help manage its processes, it makes sense to look at introductory solutions. For most businesses, the first software purchase made is in order to manage the company’s accounting and financials, and in general, introductory software provides functionality to manage one specific aspect of a company’s operations. Introductory software and manual processes work best when order volume is low.

ERP streamlines processes across departments from beginning to end and will include additional functionality to meet the specific needs of each individual business. With ERP software, a company has the ability to:

    Receive inventory into its warehouse with barcode scanners

    Convert a quote into a sales order without having to go into multiple systems

    Create a purchase order for inventory items not available from within the sales order screen

    Automatically email customers invoices

Can you foresee any problems that integrating systems such as ERPs can cause?

Implementation challenges

1. The Selection Problem

2. Technical Issues

3. Data Quality Issues

4. Business Philosophy Change

5. “Mindshift” Issues