Three Major Components of Organizational Architecture
Mary Kay Cosmetics has a great rewarding system which seems to encourage their employees to try to sale as many of their products as possible. The employees can be rewarded with a new car, vacations, etc.
The 3 components of organizational architecture are:
a. The assignment of decision rights within the company
b. The methods of rewarding individuals
c. The structure of systems to evaluate the performance of both individuals and business units.
Real World Examples
a. One example for decision rights within a company is with a restaurant in it. The restaurant manager had been managing the restaurant for five years during which time the company had gone through four store managers. During this time the restaurant manager had been making all decisions dealing with the running of the restaurant and had raised the sales of the restaurant up from $200 a week to over $1,000 a week.
The fourth manager hired was a person who had never managed a restaurant before but who could easily influence the supervisor who was over the store and the restaurant, and after just a few months of being the manager of the store she decided that she should also be the person to make the final decisions for the restaurant and convinced the supervisor of this. The restaurant manger was responsible for any mistakes made and could lose their food license for those mistakes.
This caused major disruption with all involved and the restaurant manager finally resigned. After a short period the restaurant lost business and the company ended up selling the store and restaurant to another company. This probably could have been avoided had the District supervisor or the owner of the store been involved in the decision regarding the store manager’s responsibilities. The supervisor made his decisions on the influence of the store manager.
b. Mary Kay Cosmetics has a great rewarding system which seems to encourage their employees to try to sale as many of their products as possible. The employees can be rewarded with a new car, vacations, etc.
c. One company was evaluating on performance by the quality of the product we created. We made pc boards for sonar buoys which were used to detect enemy submarines. Each board had to be tested for accuracy before it was shipped out. If employees made the limit of boards with no or minimal rejects we were rewarded with bonuses or extra time off with pay. They would evaluate all employees and sales to see where the best production came from (example: day shift or night shift).
a. The assignment of decision rights within the company
b. The methods of rewarding individuals
c. The structure of systems to evaluate the performance of both individuals and business units.
Real World Examples
a. One example for decision rights within a company is with a restaurant in it. The restaurant manager had been managing the restaurant for five years during which time the company had gone through four store managers. During this time the restaurant manager had been making all decisions dealing with the running of the restaurant and had raised the sales of the restaurant up from $200 a week to over $1,000 a week.
The fourth manager hired was a person who had never managed a restaurant before but who could easily influence the supervisor who was over the store and the restaurant, and after just a few months of being the manager of the store she decided that she should also be the person to make the final decisions for the restaurant and convinced the supervisor of this. The restaurant manger was responsible for any mistakes made and could lose their food license for those mistakes.
This caused major disruption with all involved and the restaurant manager finally resigned. After a short period the restaurant lost business and the company ended up selling the store and restaurant to another company. This probably could have been avoided had the District supervisor or the owner of the store been involved in the decision regarding the store manager’s responsibilities. The supervisor made his decisions on the influence of the store manager.
b. Mary Kay Cosmetics has a great rewarding system which seems to encourage their employees to try to sale as many of their products as possible. The employees can be rewarded with a new car, vacations, etc.
c. One company was evaluating on performance by the quality of the product we created. We made pc boards for sonar buoys which were used to detect enemy submarines. Each board had to be tested for accuracy before it was shipped out. If employees made the limit of boards with no or minimal rejects we were rewarded with bonuses or extra time off with pay. They would evaluate all employees and sales to see where the best production came from (example: day shift or night shift).
Find more outstanding Management tools
Manager's Online Toolbox
Manager's Online Toolbox
Use the feedback form below to submit your comments.
Use the form below to email this article to your friends.
- Ancient Greek Architecture
- Baroque Architecture
- Optimizing Space Energy through Vastu Vedic Architecture
- Architecture and Music
- n-Tier Architecture in ASP.NET
- An Introduction to Architecture
- Environmentally Friendly Architecture Design
- Service-Oriented Architecture: What Is It and How Can It Help Your Business?
- Our Cities Are Being Over-run By Jack-the-lad Architecture
- Paris: Museums: Stunning Exhibits and Gorgeous Architecture
- Guatemala: Antigua: You’ll Be Greeted By Cobblestone Streets, Colorfully Clad Pedestrians, and Classical Architecture
- Yemeni Shibam Urban Development Project Wins the Prestigious Aga Khan Award for Architecture
- Iran's Rich Architecture and Rare Treasures Threatened By Possible Us Strikes
- Columns and Craftsman Architecture
- 'Worst Pile of Crap Architecture I've Seen.'
- Berlin 'waschmaschine' Wins Architecture Prize
- Egypt - A Paradise for Property Investments
- Different Architectural Styles
- Architects and Virtual Reality
- Know your Dendrimer