Term Paper: Organizational Strategies Deliberate and Emergent

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[. . .] This is, of course, related to the point argued above: Because service providers cannot leave an area they are often subject to pressures caused by local physical or environmental conditions. For example, restaurants in Southern California cannot simply close up and open in Arizona when there are (as there were last month) devastating wildfires. Not only were a number of businesses physically burned to the ground, but even those that were physically unharmed were harmed in terms of their ability to do business by the fact that their customers have been evacuated or have lost all of their possessions and so cannot afford to eat out.

Restaurants in the area (which do offer a tangible good in the form of prepared food but are more a part of the service sector since the primary reason that people go to restaurants is not for food per se but for the service of having someone else prepare the food and then clean up afterwards) were further affected by the fact that roads and highways were closed for days.

If we look at a company like the manufacturers of the plates that those restaurants use, however, we see that they are relatively unaffected by such fires. They might lose a small amount of business from restaurants that suffer a loss in their own business but they also gain from those restaurants that need to replace what they have lost. And if their own factory is destroyed in a fire, the company can rebuild elsewhere, outside of a fire zone.

3. Service sector companies are expected to be able to shift to meet the needs of their customers more quickly than are companies that produce tangible goods. For example, car manufacturers are just now beginning to produce alternatives to the internal-combustion engine driven automobile. Despite the fact that people have been asking for such vehicles since the 1970s OPEC-induced oil crisis, auto companies have (apparently) felt little pressure to innovate and have been able to sustain profits even without such innovation.

However, now that such cars are beginning to appear in the marketplace, mechanics are expected by their public to be able to fix such cars right away. One mechanic at a local Firestone garage put it this way:

Toyota and Honda take, what? twenty years to produce these hybrids. And I'm not saying that I'm not impressed with the engineering, because they are very slick cars. But now all of a sudden we have people coming to us with a kind of car that we've never worked on and when we tell them that it may take us just a little longer to do the work we get an outraged response. We get, "What's wrong with you guys? I have this new kind of car and so you should already know everything about it."

Because consumers interact directly with service providers they make demands upon them that they do not - and cannot - make of manufacturers of tangible goods.

Departmentalization

If there is a single element of human thought that defines us as a species it is the ability to categorize - to put like with like and unlike with unlike. And yet, if there is any defining characteristic of social organizations it is the fact that what one person thinks is a logical category another person will disagree with - a useful reminder that there are always different ways to categorize or departmentalize both work and knowledge, as Griffin (2001) argues.

Anyone who has ever spent time playing with a young child will know this. A great deal of what we do when we interact with children is to teach them conventional ways of categorization. We give a child a collection of wooden blocks and then teach them how to sort them. "See," we say, "we can put all of the red blocks together here and all of the blue blocks together over there." And then we watch as the child ignores our neat divisions and puts all of the cubes together regardless of color.

This lesson - that you can put red blocks together or cubes together - is one of those kindergarten-level lessons that we have been reminded are in fact quite useful in the world of business, as this paper explores with an examination of how Departmentalization works in three different situations.

1. In my current job, I manage a small mortgage brokerage company. We organize our loans in terms of how we originate them: Through customer solicitation telephone calls, through customer solicitation telephone mailing, through referrals, through real-estate offices, etc. We then process the loan application, underwrite the files to the lender's specifications and then submit the file for approval with the lender, who then prepares the documents and then closes the loan, at which point the mortgage broker is paid a fee.

This process works well, but it is certainly not the only way in which we might work. Mortgages that we initiate directly with the consumer are more profitable to us, but we tend to squander our efforts in this area by classifying different direct mortgage offers in different categories. We might be better served by beginning the process by concentrating on non-Realtor derived mortgages and those that are based on direct solicitation. This would emphasize to each of the firm's workers that it is not the physical means by which we attract business (i.e. telephone or mail) that matters but rather whether or not we work through a mediator.

2. We might also come up with a new way to departmentalize the fast food restaurants that we go to. Currently I go to Del Taco more often than I go anywhere else, although I feel no great loyalty to it. It is simply convenient. However, my loyalty to this brand name would certainly be increased if the company packaged its goods more thoughtfully. This should not be hard to do given the amount of information that the company has on consumer buying habits (since all transactions are computerized).

For example (and this is of course supposition since I do not have access to the data, but the company could do this on a more scientific basis) it seems likely that customers tend to order the same combinations of goods on a regular basis. But the clerks are told to ask customers if they want the same side order regardless: If I order a burrito I am asked if I want French fries, if I order a quesadilla I am asked if I want French fries, if I order a salad am I asked if I want French fries. I think I might even have been asked if I want French fries when all I've ordered was French fries.

The company has made the choice to treat all food items and all customers as potential French fry matches on the grounds that many people who like French fries and on the ground that they believe it is quicker to offer such simple choices. In doing so, they have created a certain kind of ethos for the chain. This is a type of departmentalization that revolves around a certain way of conceptualizing the ways in which fast-food restaurants work.

However, the company could make different choices with little if any costs being incurred (asking me if I want fries with my shake but a quesadilla with my burrito) and so reconceptualize the process of service in a fast food restaurant. Customers are not looking for cordon bleu service at Del Taco, but a shift to treating them as somewhat more discerning customers would certainly not be amiss.

3. My least favorite class has always been political science. When I tell people this they are often surprised because I am myself actively engaged in politics. I believe that politics matters: I stay informed, always vote, have deeply felt opinions (but am always ready to become better educated) and believe that these are all duties of each citizen.

And yet, I disliked the political science courses I took. Looking back on them with the perspective of departmentalization in mind I can see that these courses could have been organized in a way that would have made them far more appealing to me - as well a having made them in many ways a more incisive avenue of understanding American politics (which is why I would have liked them better).

Political science classes tend to be taught as if the only thing that mattered in terms of politics was the fact that there are political leaders and political parties. Well, of course both of these elements of the American political system are important, but they are only one element of it. One thing that is strikingly absent form the political science classes that I have taken is the American public. There are, from time to time in political science analyses, "voters," but these are not… [END OF PREVIEW]

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