Introduction
As the chief executive of a newly established low-cost carrier in Hong Kong that plans to recruit around 500 employees, I have to design the organizational structure of the airline. I would recommend Bureaucratic Structure for the Board.
Reasons for recommending Bureaucratic Structure
As a reference, some of the low-cost carriers such as Hong Kong Express in Hong Kong and Scoot in Singapore, also follow a Bureaucratic structure. The division of labor assists employees in becoming experts in their jobs. The performance of employees improves considerably. Moreover, employees have specialized tasks or functions that only they can perform, mainly due to their respective training and expertise.
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Strengths of a Bureaucratic Structure
· Centralized decision making
Specific roles and duties are ordered by a bureaucratic leader, allowing employees to have defined rules and roles for productivity. Each team member has a responsibility for a specific task. That allows each person to focus on their strengths toward what they do the best. This includes the leader, who helps to ensure that all questions are answered by the correct people.
· A stronger level of job security
The bureaucratic structure creates more job security than other forms of oversight. If an employee obeys the rules and regulations that manage their position, then they are awarded specific benefits. Also, a steady salary that allows them to live the lifestyle they want. Health insurance, vacation time, or a pension would all be included as part of the security a bureaucratic structure can provide.
· Equal Chances to Succeed
Favoritism is removed in a bureaucratic structure. Bureaucratic leaders create relationships that are objective. The goal of each relationship is to ensure that unique possible results can be achieved. Friendships or family relationships don’t influence the process that is created. The dynamics of these relationships are set for the good of the team and the company. Therefore, a bureaucratic leader is often part of a family-run business.
Weaknesses of a Bureaucratic Structure
· Less of freedom to act within a bureaucracy
As rules and laws control the actions of an employee within a bureaucracy, there is less freedom to act or make independent decisions. Actions are dictated by what the rules or laws want. If an employee steps outside of those rules or laws without permission, even if it is the right thing to do, they may find themselves facing consequences, such as job termination or even prison. Moreover, with the certain steps needed to carry out tasks and the need to follow a chain of command to proceed, lots of time can be lost especially if decisions and results are needed immediately.
· Decreased employee morale
The bureaucratic structure can create weariness for their employee. As a result, decreased employee morale. The employee may work hard to earn raises and promotions. However, there is no guarantee advancement or rewards will be occurred immediately. There must be incentives built into the bureaucratic structure to reward an employee who can complete a task within two hours with the same quality it takes someone to complete the task in the expected eight hours. If no incentive exists, the employee may continue to work for the remaining six hours.
· Endless paperwork
The bureaucratic structure involves a lot of paperwork because every decision must be put into writing even for very simple work. All documents have to be maintained in their draft and original forms. This leads to great wastage of time, stationery, and space.
Measures to avoid the problems anticipated
- Less freedom to act within a bureaucracy
- Cut out processes
There are some steps, approvals, and work that employees have to do that can be removed altogether. Keep an eye out for these processes and remove them when possible. Every time someone is doing something routine, ask whether it’s really necessary, or if it can be reduced or eliminated. Several steps can be cut out to make things quicker.
- Decreased employee morale
- Reward action-oriented employees immediately
Reward employees for taking action quickly. Rewards could be as simple as praise or as big as a promotion or a bonus for those action-oriented employees. Moreover, the company needs to guarantee the employees’ advancement or rewards will have occurred immediately.
- Endless paperwork
- Eliminate paperwork whenever possible
The company has many forms. Much of that uses the same information. Maybe a simple computer program or online form is used instead. Therefore, the employee doesn’t have to fill out paperwork but can just fill in an online form where the basic information is stored and re-used so it doesn’t have to be re-entered. Often using a computer program will also automate things so paperwork isn’t needed. If it is possible just discard the paperwork altogether.
Recommendations and conclusions
Organization chart and Departmentalization by Function
The company is suitable for departmentalization by Function. Functional departments categorize jobs according to the activities performed. It is the most common form of departmentalization. It is based on specialized functions such as CFO, COO, Administration & Human Resources, Customer Service, Marketing, Operations, CIO, and CTO. Functional departmentalization is suitable for an airline company because it permits those with similar technical expertise to work in a coordinated subunit. The figure above shows an organization chart of departmentalization by the function of the airline company.
Chain of command
A proper chain of command ensures that every task, job position, and the department has one person assuming responsibility for performance. Each employee on the chain of command is responsible for a particular area of the job. For example, the COO must ensure that employees complete tasks such as fuel management and safety & security. When an employee doesn't follow the established chain of command, he/she undermines the authority of his/her direct supervisor.
Levels of management
- Top Management
- Includes: CEO
- Determines the broad objectives necessary to meet the goals established by the board of directors.
- Middle Management
- Includes: CFO, COO, Administration & Human Resources, Customer Service, Marketing, Operations, CIO and CTO
- Responsible for developing operational plans to implement the broader ones conceived by top management.
- Operating Management
- Includes: Fuel Management, Communication & Strategic Outreach, Flight Operations, Cabin Services, Maintenance & Engineering, etc.
- Mainly concerned with putting into action operational plans created by middle management.
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