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Running head: ADAPTING ORGANIZATIONS 1
Adapting Organizations to Today's Markets
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ADAPTING ORGANIZATIONS 2
Adapting Organizations to Today's Markets
1. Explain the concept of centralized versus decentralized authority
In a centralized authority setting, the power is directed from the top management towards
the bottom authority through hierarchical channels following a chain of command (Serrat, 2017).
Organizations that opt for this form of authority prefer their operations to be kept close to top
management. Additionally, this form of authority is preferred for those organizations that have a
uniform set of policies and procedures to be followed. Examples of such firms include law firms
and public institutions. Decentralized authority, on the other hand, is characterized by a less and
less structured order of authority with the capacity of low-level hierarchies in the organization
having the capacity and ability to make critical decisions (Serrat, 2017). Examples of firms that
adopt the decentralized form of organization are chain companies such as fast food companies
with each outlet responsible for their own operations. The best environment for an organization
to exercise decentralized authority is during startups and then adopt more centralized authority as
they startup.
2. Informal organization
An informal organization is characterized by an unplanned structure which arises from
informal interaction amongst the people (Serrat, 2017). In this regard, people tend to discuss
their interests thoughts and feelings as opposed to formal organizational goals. The outcome is
that by relating through various avenues, employees may form what is seen as informal
relationships with different social needs that address issues such as friendship support and love
that form the basis of strength. Managers are not expected to control the existence and
organization of informal organization as such associations may exist together with a formal
organization promoting the commitment of the members of such employees to the achievement
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ADAPTING ORGANIZATIONS 3
of various organizational goals. Similarly, it is evident that the informal interactions relieve the
managers the task of interaction and coordination of people in various groups. Although it is
possible, controlling the informal organizations would limit the communication and interaction
of people to solve various social problems (Serrat, 2017).
3. Pixar studios
A review of the nature of Pixar studios reveals that it exercises a decentralized form of
authority. There is no defined hierarchical authority that manages and controls the development
of animator creativity (Herhuth, 2017). In this organization, the animation developers have been
granted the freedom and flexibility to demonstrate their skills. Such freedom promotes creativity
and innovativeness resulting in an overall increase in productivity in the company. In essence,
the animators are allowed to make important decisions rather than relying solely on top
management. Such a setting is appropriate for the future demands of the industry as the
innovativeness is required for competitiveness. Additionally, such authority motivates the
workers enabling them to work closely and competitively towards the achievement of the
organizations' goals.
4. What about the company you work for
Recently, I have worked for a formal organization that had a centralized form of
organization. The informal organization in the firm is demonstrated through creation of small
social groups in which different people related to various issues. In essence, I found it easier to
relate with my colleagues with whom we were on the same level working together not only
towards the achievement of the organization's goals, but also to meet various social needs. The
setting promoted friendship and helped in solving of conflicts within the workplace.
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ADAPTING ORGANIZATIONS 4
References
Herhuth, E. (2017). Pixar and the aesthetic imagination: animation, storytelling, and digital
culture. Univ of California Press.
Serrat, O. (2017). Informal Authority in the Workplace. In Knowledge Solutions (pp. 725-730).
Springer, Singapore.

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