What are the differences in the design models? Functional (Traditional) Structure Ideal for small businesses Direct authority (CEO) Functional, strict operations that are all directly operated by one source (CEO) As complexity of airline functions increase, performance slacks A proportionate saving in costs gained by an increased level of production Low need for coordination between business units Slow response time to changes Hybrid Structure, as painted in article Functional for both smaller and larger businesses Functional, yet flexible operations, which focus primarily with business unitIndividual Business units, with broad decision making authority by management Due to split authority, ability for flexibility as functions increase Uses strengths from Business and Functional structures Business Unit Structure Ideal for large businesses Flexible operations by unit, separated with overarching strategic corporate center, under a CEO Management Decisions made by business units Independent business units can change strategy for success in marketplace, levels of production and costs/gains are variable High need for coordination between business units Quick, rapid response time to changesCompare and contrast the standard airline organizational functional structure model with the hybrid structure based on independent business units. The comparison and contrast list is fairly extensive. The differences are outlined above. The main difference, I see, between the two models is the fact that the business model allows more than one person to analyze and make the best move for their business units and maximize potential. With this structure, however, it is still stated that the business units must remain very interconnected in order to make the overall operation smooth.The CEO imilarly has the position of oversight, where they only step in when scenarios need guidance to the overall mission. The functional (traditional) structure is the opposite. I would compare it to micromanaging, where every detail of each ongoing process is being monitored.
Of course, for a small business, this may work, as there are not a lot of variables that could skew the business growth. Larger businesses such as the airlines would need a different structure, as there are too many variables to take into account by one person. As one problem is fixed, another problem (or several) can emerge.Many bottlenecks have downstream effects, too, so it is pertinent to have oversight by many instead of just one. Does the hybrid structure provide too much differentiation? For the case of the airlines, would say no.
I think the flexibility to make decisions for each business unit is pertinent in making sure that they stay up to par with competition of other airlines. Additionally, it weakens the overall accountability of the CEO, which in turn gives management to other individuals to focus on the bottlenecks of their specific role in the hierarchy.It ind of combines the more agreeable traits of both practices, which will give more benefits to the airline. How would support structures be the same or different? The support structures are centralized in both scenarios. The traditional structure leads straight to the CEO on all accounts.
The Business unit structure leads to the CEO, as well, but there is management within each business unit which reports back to a strategic corporate center (Finance, HR. Strategy, Safety) (McKinsey, p. 3). To what extent are either models mechanistic vs. organic? Why?The Functional model is very mechanistic. Based on Jones’ (2013) Description, the functional model fits the definition of “designed to induce people to behave in predictable, accountable ways”.
It is centralized. Each of the separate business units are closely monitored. Information has a direct path. Best suited for organizations that have stable, unchanging environments (pp. 373-374). The functional model is mechanistic for the reason that there is not muc flexibility or freedom of independent units making decisions without authority given.
The Business unit model is more organic.Based on Jones’ (2013) description, the functional model fits the definition of “structures that promote flexibility, so people initiate change and can adapt quickly to changing conditions”. There is decision making throughout the hierarchy. Coordination is used amongst all and there is innovative behaviors working for changing environments. In all, the business units are organic because they are given the opportunity to exercise freedom to make changes to adapt.