Organizational Development And Transformation

Running head: ORGANIZATIONAL CHANGE 1

Organizational Development and Transformation

Date

Institution

ORGANIZATIONAL CHANGE 2

Organizational Development and Transformation

A business cannot operate under the same model and strategy for a long bearing the

trends and upgrades that come with technology upgrades and the quest to stay relevant in the

market in regard to countering competitor’s strategies. Organizations often face internal and

external factors that call for changes either due to change in customer preferences or due to

changes in market strategies or mergers (Staffordshire university, 2012). My paper will focus on

the organizational structure change in Amazon inc.

Amazon inc.

Amazon is an online retail company that majors in electronics, cloud computing,

groceries and books. It’s a global company located in many countries but has its headquarters in

Seattle. Its mission is to be the most customer oriented company on earth. Amazon earlier

adopted a functional organizational structure when it was still growing as its operations had not

gone vast. Over time, the organization grew tremendously going global and due to that, an

organizational structure was called for. A Hierarchical structure that allows it to be effectively

managed regardless of the large operations handled by the company was adopted and is

discussed below.

Amazon History

Amazon Inc. started as small business in 1995 that operated as a website selling books

band the CEO named the company after the great Amazon river because he believed that his

company will one day grow as vast as the river. During the first month, the company sold books

to all USA states and 45 countries and that’s when Jeff Bezos realized that there called for

company expansion in terms of servers and its staff to suit the rising demand.

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Bezos later decided to enter into cloud computing and electronics to suit the demand that

was rising in the market. Amazon CEO believed that his company will one day be one of the

largest and worked towards achieving that and that is where the company stands today.

Amazon Size

Amazon is described to be bigger than brick and mortar retailers brought together as a

whole. The company size can only be approximated in terms of asset value which is worth USD

355.9B as of December 2016 and is the world’s most rich online retail company.

Amazon Purpose

Amazon Company purposes to be the most customer focused company in the entire

world. To achieve this, all their activities are carried with regard to customer considerations and

that is what sees the company grow.

Amazon Organizational Structure

A corporate or an organizational structure establishes both the system and design of

interactions among firm members. (Benn & Griffiths, 2014). Organizational arrangement of

Amazon works efficiently giving them full control on their e-commerce operations. The

manager’s control and impact on business dealings in various sectors is determined by the

corporate’s public arrangement or structural organization (Henry, 2012). Amazon maintains an

organizational structure that adequately supports its growing markets because it is the largest

retail company (Jones, 2010).

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Amazon has a hierarchial organization structure that focuses on business functions as

foundations of influence on determining component interactions in an organization. The Amazon

retail company structure has significant characteristics and these include:

Global Function Base Group

This is the key characteristic of the company’s corporate organization; a dedicated team

works alongside a high-ranked manager and is a constituent of each function of the business. The

company grows through the phenomenon of ensuring management operations are facilitated

throughout the organization considering the company’s global growth; the objective of this key

component of the company. Global function base group organizational structure comprises of;

International consumer business, legal secretariat, business development, Finance, Amazon web

service, accounting and Office of the CEO (Jones, 2010).

Global Hierarchy

An organizational arrangement with traditional characteristics is referred to as

Hierarchy. This feature has a strategic objective of facilitating the control of management in the

organization. The company has expressed this feature in terms of the influence brought by the

commands with vertical lines on the retail firm and the authority of a global system (Jones,

2010).

Geographical Divisions

Geographical divisions is a constituent of the retail company’s organizational structure.

The basis of the groups in this feature are their related goals in business and geographical

regions. It uses geographical divisions structures in managing the business based on economic

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conditions of certain regions. This helps the organization address issues in relevancy according

to regions (Jones, 2010).

Amazon Key Stakeholders

The theory of stakeholders explains that each company has internal and external

stakeholders, who maybe groups or individuals. Internal stakeholders are involved in the

processes of operation financially and directly while external stakeholders are influenced directly

by the institution’s operations. Those companies that creatively find ways to meet the

stakeholders’ long term and short term needs are the ones that last long. Amazon stakeholders

involve the internal and external stakeholders (Boutelle, 2014).

Internal Stakeholders

Owners. Significant shares in the Amazon retail company are owned by individuals

known as owners. These individuals play a significant role in strategy, are the decision makers

regarding both the external and internal stakeholders and are responsible for organizational

impacts (Boutelle, 2014).

Managers. Managers are the points of connection between the board of directors,

stakeholders and the organization. They are the ones held accountable for the major decisions of

the company. Furthermore, they are the major role players in the organization’s strategy and their

voices impact operations (Boutelle, 2014).

Employees. Employees are the backbone structures of the Company as they play

important roles in strategy, operations and tactics carried out. Employee engagement in the

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company is vital as it takes into consideration their values, opinions and concerns in the planning

of the vision, mission and strategy of the retail firm (Boutelle, 2014).

External Stakeholders

Customers. Customers are immediate external stakeholders in any firm. Attracting,

retaining and maintaining consumers is one of is important for a company’s long-term success

financially (Boutelle, 2014).

Creditors. Businesses use creditors to i.e. banks to borrow for to help them finance key

company developments like the construction of a new building. Creditors will always expect to

be paid before the date line is reached (Boutelle, 2014).

Communities and governments. Companies have close ties between communities and

governments as close stakeholders. Companies are expected to do daily operations in a way that

favors the communities around, for example, using environment friendly methods, government

taxes and sanctions will also have an impact on their operations (Boutelle, 2014).

Suppliers and partners. More often companies build relationships with associates and

suppliers, and this enables sharing of business goals strategies and visions. Your trade partners

will expect you to operate ethically to keep the business reputation high (Boutelle, 2014).

Changes Observed

Changes observed in the transition in organizational structure include the fact that

the hierarchical structure was divided in terms of geographic to give specialized decisions based

on different regions and also brought about managers per locations to oversee on regional

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operations bringing managers and chief executive officers on board for effective management of

business operations.

Another change observed is that the company was able to expand tremendously even in

new locations for the reason that the organizational structure provided a good managerial platfor

hence mistakes were avoided and decisions made were best suited for the development of the

company.

Challenges Associated with the Change

Planning. Before an organization changes its corporate strategy, the strategy has to be

planned and this will involve extensive research which was costly to the company in terms of

time and resources (Benn & Griffiths, 2014).

Risk. When an organizational structure is being adopted. The probability is half as to

whether it will be effectively functional or not. In some cases, a new organizational structure

fails to be compatible with the mode of operations leading to losses hence making the change in

organizational structure a risk (Benn & Griffiths, 2014).

Employee Resistance. In some instances where communication was not embraced nor

team involvement in decision making, employees may denounce to embrace the new change

maybe due to lack of consultations at the planning stage which leads to chaos and reduced

productivity at work (Bareill, 2013).

Organizational changes affect both internal and external stakeholders hence they need to

be updated on the new mode of operations (Saylor n.d.). Amazon communicated to their

stakeholders through their websites and through annual reports produced by the company.

Communication is essential in keeping the stakeholders posted in regard to company operations.

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Change Reinforcement and Stabilization

Change reinforcement and stabilization was achieved promptly in Amazon due to the fact

that all stakeholders especially employers were notified from the first point hence they were

ready to adopt the change.

The new structure which was managed regionally made overseeing the embracement of

the new organizational change possible. Factors such as company motivation towards performing

well on the new change made employers work eagerly under the new change to be more

productive hence achieve wards such as promotions by the company.

Conclusion

After my research have learnt that a business organization is majorly affected by its

organizational structure hence an enterprise should adopt a structure that is flexible to future

trends i.e. technological production methods. A flexible business structure saves a company the

losses in cost and time of planning a new structure from scratch and also ensures that all

operations run smoothly hence providing good revenue and employee productivity. Before a

business model is adopted, necessary people should ensure that the organizational model fits the

nature of business and possible changes in the future.

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References

Saylor (n.d.). Focusing on Organizational Change. Saylor.org

Hornstein, Henry. (March/April 2012). The need to integrate project management and

organizational change. Ivey Business Journal

Staffordshire University. (2012). Changes Models.

Western, S. (2010). What do we mean by OD? What do we mean by Organizational

Development, Krakow: Krakow: Advisio Press.

Bareil, C. (2013, Fall). Two paradigms about resistance to change. Organization Development

Journal 31 (3), p. 59-71

Benn, S., Dunphy, D., & Griffiths, A. (2014). Organizational change for corporate

sustainability. Routledge.

Boutelle, J. (2014, May). Understanding organizational stakeholders for design success. In

Proceedings of the 2004 conference on Designing interactive systems: processes,

practices, methods, and techniques, ACM Press New York, NY, USA.

Jones, G. R. (2010). Organizational theory, design, and change.

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