Zio Entertainment Private Limited (ZEP) is a prominent entertainment service provider encompassing television, internet, cinema, and more. Within the company, the television division adheres to a tall organizational structure principle, designed to facilitate close supervision and rapid communication between various levels of management. This structure comprises seven hierarchical layers.
The CEO of ZEP firmly believes that meticulous oversight and limited delegation are pivotal factors for enhancing employee performance and ultimately driving the company's success. Nonetheless, ZEP has encountered significant challenges in the form of revenue constraints, escalating expenses, and conflicts among stakeholders, mainly due to intense competition, even from international counterparts.
In response to recommendations from business experts, ZEP is poised to transition toward a flatter organizational structure, characterized by a reduced number of hierarchical layers. This transformation will entail delayering and, to some extent, downsizing as well.
Questions:
Define the term 'delayering.' (2 marks)
Outline two
features of a tall organizational structure. (2 marks)
Identify and
explain two benefits to ZEP of the
proposed change in the organization structure. (4 marks)
Identify and explain two challenges that ZEP might
face while implementing the proposed change in the organization structure. (4
marks)
Suggested Answers
Define the
term 'delayering.' (2 marks)
Delayering is the process of
reducing the number of hierarchical levels within an organization's structure.
This usually involves removing layers of middle management to create a flatter
structure, allowing for faster decision-making, improved communication, and
cost reductions.
Outline two
features of a tall organizational structure. (2 marks)
· Many Hierarchical Levels: A tall
organizational structure has several layers of management, typically with clear
lines of authority and reporting.
· Narrow Span of Control: In a tall
structure, managers usually have a smaller number of employees reporting
directly to them, allowing for close supervision and control.
Identify
and explain two benefits to ZEP of the
proposed change in the organization structure. (4 marks)
Two benefits
of the proposed change to a flatter organizational structure for Zio
Entertainment Private Limited (ZEP) are:
Improved
Communication and Decision-Making:
With fewer
hierarchical layers, a flatter structure enables faster communication between
employees and management. This leads to quicker decision-making, as information
doesn't have to pass through multiple levels of approval. For ZEP, this can
enhance responsiveness to market changes, enabling the company to compete more
effectively in the rapidly evolving entertainment industry.
Cost
Reduction:
By
delayering and downsizing, ZEP can reduce overhead costs associated with middle
management, such as salaries and administrative expenses. This leaner structure
can help ZEP address its current revenue constraints and escalating expenses,
improving financial performance and allowing the company to invest in more
competitive offerings.
Identify and explain two challenges that ZEP might
face while implementing the proposed change in the organization structure. (4
marks)
Two challenges that ZEP might face while implementing the
proposed change to a flatter organizational structure are:
Employee Resistance:
Delayering and downsizing can create job insecurity,
especially among middle management, leading to resistance from employees.
Managers who lose their positions may feel undervalued, while remaining
employees may fear increased workloads and responsibilities. This resistance
could lower morale and productivity, making the transition difficult for ZEP.
Loss of Control and Oversight:
In a flatter structure, fewer hierarchical levels can result
in a wider span of control for managers, making it harder to closely monitor
employee performance. ZEP, which has historically relied on tight supervision,
may struggle to maintain the same level of oversight and quality control,
potentially leading to management inefficiencies or inconsistencies in
performance across departments.
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