Dell's Organizational Chart

http://www.theofficialboard.com/org-chart/dell

Dell’s company structure has three levels of hierarchy. The CEO is situated on the upper hierarchy level since he/she is appointed to control and manage all the aspects of the company. Being on the top of the hierarchical structure, the CEO has the most authority over the company’s operation over other employees, but the CEO also has equally as much responsibility in running the company too. Nonetheless, the CEO does not have full authority over the company as he/she is appointed as CEO to manage the company only. The chairperson would have the most authority over the company with directors also having some influence over the company’s decisions too. However, with so many employees needed to be overseen, the CEO may not have time to concentrate on important tasks that needs to be completed. In order to be able to ease the workload, a CEO will delegate his/her authority to managers and have them oversee the employees for the respective department and also give tasks to departments and have them held accountable in finishing the task. However, the CEO will still have to be responsible in making sure that the task given is done successful.

The departments and their respective managers stated can be seen on the second level of the Dell organization chart (Brian Gladden, Ronald Garriques, etc.). As seen from the organizational chart, the departments in the middle hierarchy level are then broken up into more specialized departments (CFO branching to CFO - small and medium, CFO - consumer and CFO - Public Group) with respective main departments being responsible for supervising them. As departments are situated lower in the hierarchy structure, they will have less authority over the operations of the company but also less responsibility compared to the high ranking workers. The workers in the lower hierarchy levels are usually not the decision makers and are just supposed to follow the orders issued from the workers from the higher hierarchy level as they have less authority.

Judging by how the subdivisions of the departments are created, Dell’s organizational structure is based on function rather than geography or product. This means that Dell’s departments and employees which does the same type of work (marketing, human resource, etc.) are grouped together. As seen from the organizational chart, each department in the middle hierarchy level branches to a few or many more subdivisions (Human Resource branching to 5 subdivisions, Marketing branching to 2 subdivisions). Each department branches differently as some departments may require more different types of work to be done, resulting in more specialized subdivisions being creating. Since each department has a very specialized function, there won’t be too many problems on confusion over which department certain tasks belonged too. This means that the company will be able to operate efficiently with a small amount of bureaucracy. Dell is a wide organization as it only has three hierarchy levels, meaning that the communication within the company will be quick as there is a short chain of command.

Despite having only three hierarchy levels and appearing to be like a wide organization, Dell has a narrow span of control which tall organizations usually have. This means each manager has less subordinates to manage as opposed to a company with a wide span of control. This is due to Dell’s extensive use of departmentation, which increases each department’s efficiency through specialization and makes departments more manageable. Moreover, since Dell does not have many levels of hierarchy, the chain of command is fairly short, making communication and relaying orders much quicker.

Dell’s authority is fairly diluted so the company’s structure can be identified as decentralized. A decentralized organizational structure means that a company’s authority is distributed throughout the company instead of having just few individuals who are decision makers. Decentralization is very common for large companies as the CEO will not have the time to make decisions for everything, by doing so, decisions on less important issues can be made by workers in the lower hierarchy levels. This not only improves efficiency but also increase the employee’s morale as they will feel that they are valued more.

With Dell’s current organizational structure, it could apply the use of matrix structure when performing different tasks. Since Dell is separated into departments based on function, project teams can be created easily from assigning workers from each of the departments for projects. The use of matrix structure can be useful in a company for the completion of task flexibly as workers from each department have a different field of expertise which could be used to help in the doing the task. However, conflicts may arise between workers from different departments due to unfamiliarity and conflicts may arise between the managers on various issues regarding to the project teams.

While this seems to be a good example of how an organization should be structured, this does not apply to all companies. The organizational structure Dell has is based on many factors such as the company’s size, field of work, etc.

Business Micro-commentary

1. Includes a link to the article.

http://news.bbc.co.uk/2/hi/business/8243226.stm

2. Includes a short summary of the article.

This article outlines T-Mobile and Orange’s plan to merge their company in UK. If successful, the new company created will become the dominant power in telecommunications market in UK. However, the merge will be very costly as there are many changes and restructuring that needs to be done.

3. Identifies the topic(s) from our syllabus that the article covers.

1.4 Stakeholders, 1.7 Growth and Evolution

4. Applies one business tool/theory/technique to the organization.

1.7 Growth and Evolution

The article talks about the plan of merging between T-Mobile and Orange. As opposed to a simple strategic alliance or joint venture, merging allow companies to gain an immense amount of market standing very quickly. This is beneficial to the company as becoming the dominant power in the telecommunications industry will allow it to become more influential on the stakeholders in various ways. For example, since T-Mobile and Orange’s newly formed company will become better well known, the company may be able to charge higher prices for their products/services while still having the customer’s support.

Since the company will be pooling together their resources after merging, they will be able to be more competitive compared to its competitors as they are able to set lower prices and offer discounts while smaller businesses may not be able to do so due to the lack of cash flow. Moreover, the merged company will also have a large customer base which comes from the customers from the original companies. Despite the benefits, pooling together resources might also present some problems such as redundancies. This is because both companies operate in the same industry, they might have an excess of capital and employees working on the same things causing lack inefficiency. Although this could be solved by restructuring the company, it would be very costly and troublesome.

By merging, T-Mobile and Orange will be able to benefit from various economies of scale too, namely technical, financial, marketing and monopsony. However, the newly formed company may also face many internal diseconomies of scale as a result of gaining too much market standing. One of which is a lack of coordination of the company due to the greatly increased number of workers that needs to be managed and supervised.

The merging of the companies may also meet interference from various stakeholders, mainly the government. This is because after merging, the new company will dominate the market and use the opportunity to set ridiculous prices after being able to eliminate or weaken other competitors. Since the government may fear the creation of a monopoly, the merge of T-Mobile and Orange may be stopped or be restrained through various methods.

Regardless of the numerous benefits from merging T-Mobile and Orange, there are also some serious drawbacks to this decision. Therefore, both companies should weigh the pros and cons of merging before initiating the plan.