In this essay I will discuss the pros and cons of different organizational structure for a US Plastic manufacturing company in Thailand based on the cultural dimensions affecting the organizational structure based on current theoretical framework and analysis and also on credible empirical evidence.
In addition I will discuss the challenges
the company will face in developing a cross-cultural organization based on current cultural issues affecting organization on a theoretical and empirical basis. In addition I will discuss how cultural issues in Thailand will affect the phase of change and how to overcome resistance to change using effective strategies in Thailand in a cross-cultural context and building an organizational culture, which is inclusive of diverse cultural perspectives and accepts diversity and minimize conflict and intolerance.
Pros and cons of different organizational structure and the most suitable organizational structure given the cultural dimensions of Thailand:
The organizational structure is the means to combine tasks, technology and human resources to achieve organizational objectives. There are two opposing forces in designing organizational structure. They are grouping similar tasks together to enable specialization so that people can focus on what they do best and the need to integrate functions so that they work as a system and not optimizing a sectional objectives, which is conflicting with the organizational objectives as different grouping may have different interests and values. That is in all organizations there is a need to balance these opposing forces so that it is suitable given the nature of technology, human resources, and products.
The traditional organizational structure can be a hierarchical functional to be done centrally and line of communication are top down and there is upper level management; middle level management and lower level management and the employees and they may have different functions like marketing, production, human resources, administration, finance, information technology purchasing and stores etc.
As well managers make decisions mostly individually or in a group regarding the operations of the organization and employees mostly do not participate in the decision-making process and they accept formal authority of the management and they like specific instructions in doing their tasks and the company produces less variety of different products.
The advantages of this organizational structure is enhanced co-ordination and control, efficient use of managerial and technical talent, improves organizational perspective within the organization, centralized decision making which enhances control of activities and reduce discretion of middle and lower level and employees to make decisions which is not compatible with organizational objectives as well it enables career paths in specialized areas.
The disadvantages are as there are specialized units they may have different values and interests and pursue short-term goals and also reduce communication and co-ordination. In addition it is difficult to establish uniform performance standards because sub unit objectives may differ and conflict with each other and there fore difficult to establish uniform performance standards.
Another organizational structure also can be a matrix organizational structure where a combination of functional and divisional structures is used where the individuals have to be responsible for project manager and functional manager. The advantages of matrix organizational structure is that it utilized specialized personnel and equipment effectively and also make mangers to have a broader range of experience and responsibility. The disadvantage is that it causes uncertainty and intense power struggle and work relationship becomes more complex as well decision make take longer time than in other organizational structure.
As one can see from traditional organizations they have vertical boundaries, horizontal boundaries external boundaries such as suppliers, customers and regulators and boundaries of location, culture and markets. So an international organization can also have a boundary less organizational structure if there is high trust and have a common shared interests.
These organizations can have flexible organizational boundaries, use of teams, and build mutually beneficial relationship and communication flows with internal and external parties. The advantages of this organizational structure are it uses the talents of all employees, enables co-operations between functions and divisions, faster response to changes in external market conditions, it enables to coordinate key suppliers, customers and other partners as it benefits all parties.
The disadvantages are it is difficult in practice to overcome political boundaries, lack of common vision and leadership, which may cause coordination problems, democratic processes may be time-consuming, trust is not at high level may affect organizational performance.
The cultural dimensions as per Geert Hofstede are power-distance, uncertainty avoidance,
Individualism Vs collectivism, masculinity, long-term orientation Vs short-term orientation. Power distance means the inequality in society accepted by the social structure. Thailand is more unequal compared to US.
According to Geert Hofstede rank of 64, which is very high and shows a high level of inequality in wealth and power, which is due to the acceptance of Thai society because of their cultural heritage rather, inequality forced upon the population. Thai society also is a society, which avoids uncertainty by rules, regulations, and religious practices and by laws. They like certainty and they tend to be risk averse. For example the Geert Hofstede ranking for Uncertainty avoidance is very high for Thailand like the power distance ranking.
