BM007-3-1-ITM?????????2017 r ; GROUP ASSIGNMENTTECHNOLOGY PARK MALAYSIAINTRODUCTION TO MANAGEMENTBM007-3-1-ITMStudent NameTP NumberStudent part IntroductionAbstractCentralizationDecentralization IntroductionDepartmentalizationConclusion Chan of commandSpan of control INTAKE: UCIFI11MELECTRURE NAME: NORAINI BINTI AHMADSUBMISSION DATE: 00/00/2017 Table of ContentsAbstract?3Introduction?4BMW?4General Motors?5Elements of organizational structure?6Centralization and Decentralization?6BMW?8General Motors?9Departmentalization?10Chain of command?13SPAN OF CONTROL OF BMW AND GENERAL MOTORS?15Conclusion?18References?18 Abstract This introduction to management assignment discuss the differences and the similarities between the BMW organization and General Motor organization. So, the researchers will clarify and explain the four elements of the organizations structure that the researchers have chosen. Both organizations (BMW and General Motors) are leaders companies in the marketplace. However, BMW and General Motor have many similarities and differences that are related to each other.
Besides that, the researchers are going to clarify and explain the four elements structure of the organizations such as Centralization & decentralization, Span of control, Departmentalization, Chain of command. IntroductionBMWBayerische Motoren Werke AG, commonly known as BMW, was founded in Bavaria Germany in 1916. BMW is a German luxury brand known for manufacturing automobiles, motorcycles, and engines. Rapp Motorenwerke Company morphed into BMW in 1917, and soon after was established as a public limited company.
Although they redesigned their logo, BMW stayed true to their original symbol and kept the blue and white coloration, symbolizing the Bavarian flag (Sheppard, 2015).It produces MINI and Rolls-Royce Motor Cars, and is well-known for offering wide arrays of automobiles of premium standards and outstanding quality worldwide. With the three brands, BMW, MINI and Rolls-Royce Motor Cars, the BMW Group has its sights set firmly on the premium sector of the international automobile market. To achieve its aims, the company knows how to deploy its strengths with an efficiency that is unmatched in the automotive industry.
From research and development to sales and marketing, BMW Group is committed to the very highest in quality for all its products and services. The company's success to date is proof of this strategy's correctness. (BMW Group, 2017). General MotorsGeneral Motors Company, incorporated on August 11, 2009, designs, builds and sells cars, trucks, crossovers and automobile parts (Data, 2011).
General Motors Corporation (GM) is the world's largest full-line vehicle manufacturer and marketer. Its arsenal of brands includes Chevrolet, Pontiac, GMC, Buick, Cadillac, Saturn, Hummer, and Saab. Opel, Vauxhall, and Holden comprise GM's international nameplates. Through its system of global alliances, GM holds stakes in Isuzu Motors Ltd., Fuji Heavy Industries Ltd., Suzuki Motor Corporation, Fiat Auto, and GM Daewoo Auto & Technology.
Other principal businesses include General Motors Acceptance Corporation and its subsidiaries, providers of financing and insurance to GM customers and dealers. In the early 2000s, struggling under the weight of escalating healthcare and pension costs, GM sought to shed some of its less profitable activities. Toward that end, among other moves, the company sold its stake in Hughes Electronics, phased out production of the Oldsmobile, and discontinued the Chevrolet Camero and Pontiac Firebird. Facing a tough economic climate, GM has nevertheless retained its position as the world's leading automaker(Britannica, 2017). In early 2017, GM agreed to sell its Opel business to France-based PSA Group, one of the largest carmakers in Europe.
Elements of organizational structureCentralization and DecentralizationCentralization is said to be a process where the concentration of decision making is in a few hands. All the important decision and actions at the normallevel, all subjects and actions at the simple level are subject to the approval to be top management. According to Allen, "Centralization" is the systematic and consistent reservation of authority at central points in the organization. The implication of centralization can be:? Reservation of decision making power at highestlevels.? Reservation of operating authority with the intermediate level managers.
? Reservation of operation at very simple level at the directions of the highest level.Figure 1: centralization structureDecision making is the process of choosing a course of action among alternatives. Decision making can either be centralized or decentralized. Decision making is centralized if most of the important decisions are made at the top. If decision making is decentralized, decisions are delegated to operating personnel (FEMA, 2005).
There are multiple reasons why BMW is a centralized company.BMW is one of the largest car companies in the world. Its large size is one of the main reasons it is a centralized company. In 2014, BMW planned a capital investment of US$ 1 billion in the company's South Carolina plant: "We will expand the plant's annual production capacity by 50% up to 450,000 vehicles by the end of 2016. Today's capacity is around 300,000 vehicles. This investment is an astronomical amount.
Companies with high capital investment encourage centralization. BMW places a great deal of importance on its MNC, which are located all over Europe, China, and many countries in Asia.The centralized of BMW structure provide a good deal of efficiency in time and resources because a high degree of coordination is possible with decision-makers at the top coordinating all activities of the organization. In BMW company centralization is concentrated at top level of management. So the decisions are made at the top and communicated down through the layers.
Middle and lower level managers do various components of the organization in an efficient manner.The competitive environments encourage centralization in BMW. For example, BMW provide the most required brand in the word, and BMW puts great pride into branding their products and producing them. However, BMW has product diversification and its entire brand has same quality and better than it is competitors, which encourage the centralization in the organization. Finally, BMW has a lot of experience doing international business, seeing that it's the most famous company in the world that produce various products.
These examples clarify why BMW is a centralized company. BMWBMW has a commitment to excellence, creativity and innovation. Their leadership structure and BMW organizational structure is highly complex reflecting the massive size of the business and the global scale of its operations. BMW create the organisational such that it is difficult to describe but the structure of the organization show us that it is a centralised company, where BMW's CEO and the directors have the ability to make decisions that influence their business (Dudovskiy, 2016).Figure2: organization chart of the companyBMW has different directors for different departments that make independent decisions.
The presiding board has four standing committees: The Audit and personal Committee, mediation Committee, and the Nominating Committee. Each committee is composed entirely of independent Directors.General MotorsThe General Motors Company have been designed in a beauracratic manner whereby responsibility and authority have been arranged hierarchically. This has enabled specialization and grouping of people who performs similar or related tasks in clusters.
The bureaucracy in the General Motors have enhanced centralised, rationally and most important, the efficiency (ukessays, 2015). The General Motors Company uses divisional structure. Each division has its own CEO. According to Ukessays.com, General Motor is classic centralized organization. The chart below show the structure of General Motor Company(GENERAL MOTORS, 2016).
Figure 3: organization of the company DepartmentalizationDepartmentalization is a part of organization design that incorporates the subdivision of a business into units in light of their capacity or other criteria. Most organizations, including BMW and General Motors organizations, are probably going to utilize at least two sorts of departmentalization all the while. Some of the standard methods of departmentalization include grouping jobs by functional activities, product types, customer groups, region geography, processes, and set of command.According to Professors Pearce and Robinson, "Departmentalization is the grouping of jobs, processes, and resources into logical units to perform some organizational task.
" The concept of departmentalization is depicted in the following diagram. An organization can structure itself into departments in the following ways.1) Functional DepartmentalizationIn functional departmentalization, an organization is organized into departments based upon the respective functions each performs for the organization. For example, a BMW and General motors company may create a production department, sales and marketing department, an accounting department, and a human resources department.
Functional departmentalization may be advantageous because it can increase efficiency and expertise since all related activities are performed in one place by one group of people that specialize in that activity. 2) Geographic DepartmentalizationIn geographic departmentalization, an organization is organized along geographic lines. This is often a good idea for large multinational firms with offices around the world. For example, all activities related to the BMW company activities in each region are handled by a department in that region. On the other hand, General Motor has same Geographic department in their organization to handle all the activities in its regions around the world.
One advantage of this method is that it ensures the development of expertise specific to the political, social, and cultural needs of the region. 3) Product Departmentalization.This type of departmentalization is defined as "grouping activities around products or product groups. Many large organizations incorporate product departmentalization in order to more easily coordinate activities associated with a product or product line, increase decision making effectiveness, and easily define accountability associated with the product or products.
For example, in BMW and General Motor organizations a separate department is created for a single product or product line and all functions like production, finance, marketing, personnel etc. Each department is independent and responsible to improve and expand its business performance. In the same time the manager of each department is responsible for its expenses, revenue, profits, failure and success. Here, inside a BMW and General Motor companies, all activities, which are directly or indirectly related to car manufacturing are grouped together and assigned to car department.4) Customer departmentalization.In customer departmentalization, departments are separated from each other based on the types or groups of customers to be handled or dealt with.
For example, in BMW and General Motor companies, customers can be classified under types such as, international or foreign customers, inland or domestic customers, bulk purchasing or wholesale customers, retail customers, etc. Each group of customers' needs different tactics and strategies to handle them better. Hence, an appropriate customer departmentalization serves this purpose. Chain of commandChain of command refers to levels of authority in the company from the top position, such as a CEO or business owner, down to workers on the front line. According to study.
com, Chain of command is a hierarchy of authority where those at the top of the organization direct and control the activities of the organizational members below them. The rationale of chain of command is that it permits coordination of different individuals and groups engaging in task specialization in order to accomplish organizational goals. Individuals or groups engaged in specialized tasks do not always understand the big picture; their efforts must be coordinated by management so that the overall goal is achieved (Johnson, 2017).In the traditional chain of command, the relationships pictorially presented on an organizational chart, the President or CEO is the top employee in the chain of command.
His or her directly reporting staff occupy the second line of the chart. (Heathfield, 2016).In the large organizations such as BMW and General Motor companies apply chain of command to increase the effective the decision making process and greater the efficiency. However, both of the organizations are the biggest in the car industry, so they have staff authority function to support and assist the line managers. According to the top management of BMW organization a good chain of command ensures that every task has one person to take responsibility for performance. Both the organizations have proven to have a well efficient chain of command, this is verified by their success.
Chain of command in BMW and General Motor companies clearly defines each employee's role within the organization and defines the nature of their relationship with other employees.According to the guidelines on BMW, Board Members and Advisors ideally has 30 members. The board of directors is responsible for annual self-evaluation and evaluation of the CEO .The standing committees include the audit committee, the directors and corporate governance committee, the executive compensation and management resources committee, and the executive committee.
Each executive officers handle various aspects of the international business including sales and distribution, strategic partnerships, global technology services, human resources, marketing and communications, research and other specific aspects of organization and function. On the other hand, General Motors board member has 28 board director and corporate officers. Each member has separate responsible for annual self-evaluation and each executive officers handle various aspects of the business.By evaluating the nature of these two companies, it has clearly that the chain of command the both companies started with Line Authority and advanced to staff authority.
Finally, Chain of Command is Staff authority because it consist of many boards, including directors, managers and CEOs. SPAN OF CONTROL OF BMW AND GENERAL MOTORSThe term span of control refers to the number of subordinates controlled directly by a superior. Span of control is either narrow or wide resulting in a flatter or more hierarchical organizational structure. The effect of span of control is that it increases efficiency, promotes good communication and coordination, shows good professional relations, promotes better supervision and control and it develops discipline and mutual trust.
Narrow span of control refers when a manager has a selected number of subordinates probably a low number. The number ranges from 2 to 3 at one time. Due to this kind of span of control the number of managers is more increasing the overall costs of the company.Wide span of control is when the supervisor takes control over many subordinates, the number ranges from 7 to 10. It promotes effective coordination and better communication as the number of managers is low also lowering the overall cost of the company.The factors affecting span of control are the competence of a manager, similarity of function, complexity of functions, non-supervisory duties of manager, physical proximity and direction and control needed subordinates.
SPAN OF CONTROL OF BMWBMW is a company that has its own span of control like any other companies. Its span of control is either influenced by the nature of work at the company, type of the management in charge and also by the type of the workers. In December 2011, BMW employed a large workforce approximately 100000 employees, it is very likely that BMW employs a lot of managers and probably a manager should take over supervision of 1 to 10 subordinates at the same time. Due to the technology a manager has lesser work as it is easy for him or her to share and present their new ideas to the employees. BMW falls under the wide span of control as the manager supervises a large number of subordinates. In all of the years up until now wide span of control has led BMW to be one of the most leading car manufacturing companies and a top level , because it allowed the managers to include their subordinates in their decision making meetings and n this case they are given a chance to pick out their own ideas and as result this will make the company succeed and be more productive.
Another factor that is helping BMW to be productive by using the wide span of control the communication between the mangers and his subordinates. As they are fewer managers by using wide span of control, the communication barrier between the employees and the top personnel is cleared and leads to the direct communication between the two parties. The company in 2013 had a large profit of approximately 2.43 billion Euros and on this point wide span of control was also a factor.
As the number of managers, a fewer the overall costs used by the company is also low resulting to a large profit. SPAN OF CONTROL OF GENERAL MOTORSGeneral Motors employed approximately more than 202,000 employees worldwide that shows it is based with the wide span of control as a company. With a large group of boards of directors and a lot of managers General Motors controls its problems simple and straight forward. Basically, GM uses what is called the multidivisional structure to separates its profit centres as it is well known by not creating only cars but it also has brands in automotive and it also manufactures cars with different brands like Chevrolet and Cadillac.
Besides everything GM falls under wide span of control as it has fewer managers in its brands. Approximately a manager in GM has a range of 5 to 7 subordinates to supervise. As a result, GM has been one of the most successful company that makes vehicles worldwide and all is prompted by the effects of wide span of control such as better coordination and communication, low costs used due to fewer managers in the company and its also give a chance to the subordinates to give their ideas and this is very effective in short terms quick decision making. By using wide span of control GM cultivated higher motivation in the subordinates and this improved the nature of work that is at GM in the present day. SIMILARITIES AND DIFFERENCES OF BMW AND GM INTERMS OF SPAN OF CONTROLThe similarities of BMW and GM are that they all use wide span of control, they are all well recognized leading car companies worldwide and annually the make a large profit. The difference between them is that BMW is based on only one car label resulting that it has fewer managers than GM because GM has many car labels resulting in more managers than BMW, on this matter it shows that GM uses some higher overall costs than BMW because of more managers in the company.
ConclusionIn conclusion, the hierarchical structure portrays how an association functions. It decides the way how they convey, administrative order and how their occupation attempts to accomplish a coveted outcome. BMW and General Motors have connected centralization sort for basic leadership and in addition utilized decentralization. Both organizations are having distinctive items and every item has got its specialization to oversee everything identified with their item.
They are likewise extremely strict in enrolling new individuals into their organization. This is on the grounds that both organizations have applying those components, BMW and General Motors have turned into a pioneer in auto industry.Based on the research and discussion for this assignment, here are numerous things to be accomplished for both BMW and General Motors organizations with the end goal for them to enhance their business. The proposals here are for both organizations.
They have been resting for so long on their past triumphs and their items. As we probably am aware there are numerous autos ventures that exist with better items. It is essential for them to watch out for rivalry, and begin concentrating on the most proficient method to develop themselves. In any case, they have accomplished their coveted outcome because of adequacy on hierarchical structure that they have in both BMW and General Motors.
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