In this article we make available to the academic community a case of a Peruvian company to address the issue: organizational life cycles, on organizational systems. This case has been obtained from a diagnostic investigation of the company Sipán Distribuciones SAC, using organizational design and diagnosis. Finally, it is concluded that the environment in which a company develops has a great impact on the structure and organization of the company, which is why we have found a great difference in the cases of foreign books with which we develop.
Introduction:
In this article, we elaborate a case about organizational life cycles, applied in a commercialization services company: Sipán distribuciones SAC when I focus on organizational life cycles, the following questions arise: What stage prevails in this company and how to take it to the transition?
For this, it was necessary to collect data that would allow the aforementioned questions to be developed, constantly visiting the company, dialoguing with employees, administrator and manager. In addition, bibliographic information was also used to help compare and discuss the results.
Finally, the purpose of this article is to demonstrate the importance of identifying the stage of development, since in this way we will be able to recognize its size (due to the intimate relationship between size and life cycles, it is possible to establish these relationships) and consider or elaborate a design ideal, that is, one that adapts to its characteristics and does not prevent it from continuing to grow.
2. Objectives:
2.1. Overall objective:
Develop a case about organizational life cycles; in Sipán distribuciones SAC
2.2. Specific objectives:
- Define organizational life cycles. Diagnose the size of Sipán distributions SAC Analyze the advantages and disadvantages of the current size of Sipán distributions SAC Analyze alternatives to achieve the advancement of Sipán distributions SAC towards the next stage of development.
3. Methodology:
In order to carry out this investigation in Sipán distribuciones SAC, the authorization of the manager and owner of the company, Mr. Oscar Linares Rojas was required; who gave it pleasantly. Starting this way, with the manager and all the staff of the company, the talks and interviews that dealt with: the first years of life and its current design, this served as a starting point to develop the study.
This investigation lasted approximately 5 months, during the period from March to July 2007.
This investigation is exploratory and organizational diagnostic in its functional and competitive structure. The collection of information has been carried out using the bibliographic and documentary analysis techniques of the company and its formal and informal system.
The analysis of the information obtained will be carried out through the processes recommended by the specialized bibliography on organizational design.
4. Organizational life cycles:
4.1. Life cycles of an organization
Stages of life cycle development
Daft (2000) points out, about this stage, that: “When an organization is born, the emphasis is placed on the creation of a product and its survival in the market. The founders are entrepreneurial and dedicate all their energies to technical production and sales activities. ” (p.174). The main challenge that the organization presents at this stage is to survive, but although this is certainly correct, I believe that organizations are not born just to survive; but its appearance transcends that sense; the organization is challenged to grow.
This stage is characterized by its informal organization, constant supervision by the owners and a flexible structure; which is named by Henry Mintzberg as adhocracy; as pointed out by Hodge (2001) (p. 178)
As an organization begins to grow, the largest number of employees creates problems. Creative and technical-oriented owners face management issues, but may prefer to focus their energies on manufacturing and selling the product or inventing products and services. At this time of crisis, entrepreneurs must adjust the organization structure to accommodate continued growth, bringing strong managers who can do it, as Daft (2000) points out. (p.175).
If the leadership crisis is resolved, strong leadership is gained and the organization begins to develop clear goals and direction. Departments are established along with a hierarchy of authority job definition and an emerging job definition. Employees identify with the organization's mission and spend long hours helping it succeed. Members feel part of a collective body and communication and control are mainly informal, although some formal systems begin to emerge, this is stated by Daft (2000) (p.175).
Hodge (2001) indicates: "Although the organization begins to be formally structured, it still retains an air of informality and flexibility." (p. 179).
Likewise, Hodge (2001) concludes: “the management team must delegate responsibilities to employees at the most basic levels; otherwise these employees will be frustrated and leave the company. ” (p. 179).
About this stage, Daft (2000) points out: “It refers to the installation and use of rules, procedures and control systems. Communication is less frequent and more formal. " (p. 176).
Hodge (2001) notes: "Organizations in this phase must strike a balance between a greater need for structure and a continuing need to be flexible and responsive to changing environmental conditions." (p. 180).
Hodge (2001) mentions: "Businesses at this stage frequently use teamwork and self-suggestion based on shared values and norms in an attempt to replace bureaucratic rules and procedures." (p. 181).
After the organization reaches maturity, it may enter periods of temporary decline. A renewal may be necessary every 10 or 20 years. The organization is misaligned from the environment or perhaps it becomes slow and over-bureaucratic and must go through a stage of thinning and innovation, as defined by Daft (2001) for this stage. (p. 176).
4.2. Diagnosis of the size of Sipán distribuciones SAC
How to determine the size of Sipán SAC distributions?
The first step is to identify the main organizational characteristics of the company, such as: type of structure, degree of centralization, formalization, lines of authority, etc. This, in order to clarify the panorama and thus reach the second part, which consists of relating the characteristics of the company with the particularities of each stage, that is; the stage that best fits, resembles or contains the characteristics of the company.
First step:
Organizational characteristics of Sipán distribuciones SAC:
- Functional structure. It has high specialization. Heterogeneous departments. Relatively limited parameters, but actually broad. Centralized authority. Little formalization. Little complex.
After analyzing the following characteristics, it is clearly observed that Sipán distribuciones SAC has a mechanistic organizational design; focused on production efficiency and effectiveness.
Second step:
According to the aforementioned definitions, it can undoubtedly be verified that the stage in which Sipán distribuciones SAC is found is: the collective stage; this refers to a medium size. This is affirmed because growing and establishing itself required managerial and leadership knowledge; Which were obtained thanks to the hiring of an administrator, who not only helped the development of objectives and strategies, but also structured the company, taking charge of its management. Sipán distribuciones SAC is organized with a high degree of informality, since it does not have written documentation (manuals and other materials detailing the duties and rights of employees within the company).
Furthermore, an important aspect that indicates that it has not yet passed this stage is that: it does not grant freedom of decision to its employees; All incidents, problems and others are communicated to the management bodies so that they can make the decisions they deem appropriate, that is, no power of decision is granted to those who are closest to the clients, in reality it is not granted to anyone in the company; the only ones with this power are the manager and the administrator.
4.3. Advantages and disadvantages current size of Sipan SAC distributions
Advantage:
- Having a simple structure, it has flexibility, which helps to combat uncertain environments. Direct communication with its functional areas, since there are no middle managers. The company manages to identify workers with it, since they have gradually grown with the company, that is, a worker's commitment to the company is created.
Disadvantages:
- Only part of the company is formalized. The company is centralized in such a way that everything must go through the management bodies. The total absorption of responsibility by the management bodies can cause failures during the decision-making process.
4.4. How to take Sipán SAC distributions to the next level or stage?
The truth is that there is no need to formalize the organization and then create teams to reduce bureaucracy, it must, from now on, form small teams that have a certain degree of autonomy, thus obtaining control and self-discipline in the employees, achieving that they do not complex internal systems are necessary that delay communication, dehumanize work, consume a lot of money and make the organization inflexible in the face of sudden and unpredictable changes in the environment.
The first thing would be to form small groups for each functional area in Sipán, SAC distributions, granting a certain degree of autonomy, in order to achieve better communication and integration, so that we can improve through the workers themselves; without rules or procedures that make them feel tied and used, but rather feel an important part of the company and give their best disposition to carry out their function. This will also not allow identifying unnecessary activities or positions within the organization.
5. Conclusions:
• The classifications of the life cycle stages are only referential since they do not necessarily go through them linearly; It could be called a standardization of the evolution process. The stages of organizational development appear to be linear, but they do not necessarily go through them linearly.
• The stages of development are closely linked to size; the company Sipán distribuciones SAC has organizational characteristics that are peculiar to the collective stage, as it is at this stage, the size of the company is medium.
• The medium size helps Sipán distributions to be flexible, but it centralizes power too much, causing delay in communication and wasting the ideas and contributions that its employees can give it.
• The company Sipán distribuciones SAC needs to improve its control systems; the delegation and formation of teams can help it, granting it formalization, but prepared with the participation of the company and in this way not incur a formalization that can be repetitive and dehumanizing.
6. Bibliographic References:
Daft, R. (2000). Organizational theory and design (6th ed.). Mexico: Thomson International editors. 699 p.
Hodge, B. et al (2001). Organization Theory: A Strategic Approach (5th ed.). Spain: Pretince Hall editores. 467 p.
Annexed
Case for analysis:
Sipán distribuciones SAC
Mr. Oscar Linares Rojas, had a store located in the Moshoqueque market, where he sold groceries (the same activity he is engaged in now, but with less product line). His great opportunity came when Colgate Palmolive Peru was looking for strategic allies to introduce their products in our region; Mr. Oscar Linares Rojas felt that this was his moment to grow, and he was not going to let it go, he decided to introduce himself to this great company to establish business relations and it was so that he became one of its distributors.
On August 28, 1998, the activities of this new company called Sipán distribuciones began, they changed their activity center in the Moshoqueque market to Los quipus # 501 Urbanización Latina; this was a rented premises and much smaller than the current one. There were few people, but a lot of hope.
It had approximately 13 employees; now it has in its ranks an estimated number of 60 people. Its structure has been the same from the beginning, only two small details differentiate the current one from its predecessor: Administration and the accounting department, the latter was an advisory body, but later, as sales increased, stricter control was required (income, expenses, inventories, etc.) in order to obtain reliable information that will help the decision-making process. Its current organization chart is as follows:
At the beginning, their lines of authority were not very differentiated since, being so small and understaffed, Mr. Oscar Linares Rojas practically became one more operator, who participated along with all the other employees in the daily tasks.
The need to improve the organization of the company, the growth in sales, increase in income and especially more personnel forced him to change his center of activities again; This time to Yahuar Huaca # 261 La Victoria, a much broader environment with ideal characteristics to carry out the type of commercial activity it carries out. But it not only required a better environment, but also a person who provided direction and leadership; that's why an administrator was hired to handle these difficult functions.
At the beginning it was not easy since this represented a great risk (like leaving a child in the hands of a stranger), but at the same time a great opportunity since he could provide him with what the company needed: direction and leadership. The administrator carried out a correct work within the company, thus achieving to continue with the increasing rhythm of this.
Although the organization of the company was improved, creating some rules and establishing the responsibilities and limitations of each area; These were not recorded or documented in any registry. Senior management believe that with the information that is given orally and in a very generic way (when they enter the company, that is, new members) it will be enough to function properly within their job. Older employees communicate all that information to new ones based on their experience. There is no written documentation detailing the duties and rights of employees within the company.
This assumes that the lines of communication are, to a very high degree, informal since communication is dispersed horizontally, vertically and in any other way, generating not only distortion in messages, but often inventions, such as the development of gossip., etc. But it also represents a great advantage since, due to this, communication is very fast and frequent, minimizing inflexibility.
The company is growing, but what does Sipán distribuciones need in order not to stagnate in this process and develop? Continue its rhythm adding and developing mechanisms that allow it to achieve its objectives; achieving external adaptation and internal integration.
