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System used to define a hierarchy within an organisation
The process of aligning an organisation's structure with its mission.
What is Organisational Structure & Design?
What kind of organisational structure does Westfield use?
How has Westfield’s strategy and environment influenced its structure?
Organisational Structure & Design
Case study: Westfield
What are some of today's organisational design challenges?
In the operations of the Westfield shopping centre complex, managers must understand the affect and influence of its active strategies and environments on its structure. Westfield’s organisational structure groups divisions into two departments:
The Development, Design and Construction Division
4 factors that help to build a learning organisation:
The growth of online shopping and social media in recent years presented a challenge for Westfield as it was mainly a physical presence
The Leasing and National Shop Openings Division
- Manage the franchises and sole trader businesses operating in Westfield or potential stores
- The opening of Zara in Sydney's city Westfield was highly publicised due to the Corporate Affairs divisions' communication and relationship with the media.
Online Shopping and Social Media
Mechanic vs Organic Organisations
– a bureaucratic organisation, a structure that's high in specialisation, formalisation and centralisation
– a structure that's low in specialisation, formalisation and centralisation
- This division is solely dedicated to the customers pleasant shopping experience
- This is done by making available information about stores through the concierge
Six elements in organisational design
A learning organisation is an organisation that has developed the capacity to continuously learn, adapt and change
The Business Development Division
The division of labour
In the past:
Jobs were fairly predictable, work was generally done at a physical location under a manager's supervision
Organisational structures had a strong focus on integrating and aligning people, resources and activities
Factors influencing structure
Large organisations - Mechanistic
Small organisations - Organic
Dynamic - Organic
Stable - Mechanistic
The more routine the technology, the more mechanistic the structure
Due to technology, work structure has changed
Virtual and network organisations are more common
Strong culture - Organic
Weak structure - Mechanistic
New innovation - Organic
Efficiency - Mechanistic
Implications of changes in technology and work structure:
Westfield’s strategy involves managing retail property, from designing and constructing shopping centres to leasing retail space. In which its major source of income is from rental income from retail businesses who lease space in its properties.
Which model do you think Westfield follows?
Bit of Both?
Challenge for managers nowadays is to:
Design flexible structures that can link people, resources and activities across organisational boundaries
Manage flexible work arrangements
Encourage/build a learning organisation
Authority & Responsibility
-Authority: One's position within an organisation
-Responsibility: Obligation to perform assigned duties
Span of Control
Number of employees a manager can supervise
People are able to work from home
Minimises costs (both time and money)
Attracts talented employees who want freedom in their schedules
May be difficult to manage employees without their physical presence
Security of data
Compressed work week
Employees work longer hours but fewers days
Employees are required to work a specific amount of hours but get to choose desired work hours
Two or more people split a full-time job
Centralisation vs Decentralisation
-Decision making takes place at upper levels
-Lower level managers providing input
How standardised an organisation's jobs are
- Westfield uses a divisional structure by classing each division into 2 fields: Asset Management and Business Support
This division is responsible for developing new products and services.
Recently, Target and Myer have joined with Westfield and now accept Westfield gift cards.
The Corporate Affairs Divison
This division controls and handles the contact between the media and all external groups such as stakeholders.
The individuals employed in this division are usually well equipped at dealing with change.
The 4 Traditional Organisational Designs
- Used by start up businesses
- Fast, Flexible and Inexpensive
- As the size of the business increases, simple structure is no longer useful
-Type of structure focuses on results
- Division managers have full responsibility for a product/service
- Duplication of of activites and resources such as accountants in each divison etc
- Increase in cost & decrease in efficiency
- Each division has limited autonomy
- Groups similar or related occupation specialties
- Can be thought of as departmentalisation applied to the entire organisation.
Case Study Question 2
The Retail Environment
Retail is a active industry in which customer preferences change regularly
Westfield's priority is an effective alignment with its:
The Marketing Division develop strategies that promote the Westfield brand and build customer association. Eg, Kids getting their photo taken with Santa at Christmas, then going shopping for gifts
Robbins, S DeCenzo, D Coulter, M Woods, M 2013, Management The Essentials 2nd Edn, Frenchs Forest NSW
Westfield Group 2014, accessed 23rd April 2014, <http://corporate.westfield.com/>
Pharmaceutical and Medical Professionals 2008, accessed 20th April 2014, <http://www.pmpconnect.com/defining_corporate_affairs.htm>
Miles, R. E., Snow, C. C., Meyer, A. D., & Coleman, H. J. (1978). Organizational strategy, structure, and process. Academy of management review, 3(3), 546-562.
Office of the Auditor General of Canada, 1992,
1992 Report of the Auditor General - Chapter 5 - The Learning Organization
, accessed 25th April 2014, <http://www.oag-bvg.gc.ca/internet/English/parl_oag_199212_05_e_8058.html>
What are some benefits and limitations of using a divisional structure within an organisation/company?
Which principles of organisational design has Westfield used to develop its organisational structure?
How has it used these principles to design the organisation?
Case Study Question 1
Westfield has utilised the following elements of design:
Authority & Responsibility: Chain of Command
The Business Development sector in the business support structure, which was responsible for identifying and developing innovative business areas for the services of shoppers and retailers.
Case study question 4:
How could Westfield use its organisational design to encourage a learning organisation?
Westfield addressed this by establishing Westfield Labs, which develops social, digital and mobile marketing opportunities for linking physical and digital environments.
Westfield could encourage a learning organisation by implementing the following organisational design elements:
A boundaryless environment
The Property and Facilities Management division which directs the ‘shopping experience’ of consumers through designing the physical layout of retail spaces and upgrades, as well as cleaning and repairs.
Can you think of any benefits that come from building a learning organisation?
- Responsible for the founding of new Westfield Centres
- Manager of this division must find suitable locations for potential centres.
The Centre Management and Customer Service Division
Use of contingent workers
Implementation of flexible working arrangements such as:
Compressed work weeks
Sense of community
Freedom of expression
Lead by example
Sharing of information
Case Study Question 3