Organizational Design and Change Recommendation
Melvyn Lopez
University of Phoenix
GMGT/591: Seminar in Global Management
James B. Jordan
August 17, 2006

Organizational Design and Change Recommendation The formal structure of a company, a component of the company's internal environment, determines how its activities are conducted. The formal structure also determines how authority and communications flow from management to employees. An integral part of the expansion of Riordan Manufacturing to Germany involves the selection of an organizational structure that allows the firm to operate effectively in the new environment. Variations in structure are determined by the tasks a company performs, how management wishes to perform them, and external factors. External determinants include customer demands, competitors' strategies, and government regulations. Implementation of the structural change in Riordan Manufacturing can be assisted by change in the structure of the organization as reflected in its organizational chart. The company’s managers can greatly facilitate the implementation of new strategies by changing reporting relationships, creating new departments or business units, and providing the opportunity for autonomous decision making. Because no single organizational design suits all circumstances, managers at Riordan Manufacturing must carefully consider their company's situation, strategy, environment, age, size, and technology, in Germany before designing a structure for it. Following, are several different organizational structures and their advantages and disadvantages.
Functional Structure The functional structure groups positions into departments based on similar skills, expertise, and resources. Functional structure is an expanded version of functional departmentalization. In an organization with functional structure,