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Sustainable Consulting Firm By: Jenna Green

01/12/2021

For the consulting business, I would choose a matrix structure. I selected a matrix structure because it often blends functional and divisional structures. A functional structure organizes people with similar skills to reach a goal, the goal in our case being sustainable changes made to local businesses. I also think that divisional would be a beneficial structure to use in terms of long-term growth. That way, following the success of the current city of operation, there would be an opportunity to expand and benefit other communities. An expansion could even lead to becoming the most sustainable country, not just the most sustainable city! By planning for growth, it would mitigate the need for reorganization if, or when, that growth occurs! Therefore, by implementing a matrix structure, we can integrate a mix of these two into our business for optimal results. Second, there is a need to determine what functions are. These are described as “[...] the various roles or positions people fill, from management to employees. The employees are grouped by their functional skills into departments, which are then led by functional, departmental, or project managers” (Davoren, n.d.). To determine the proper positions that are needed. It is imperative to consider how our organization is structured, centralized, or decentralized. In our case, I find that that centralization would keep the goal of the company consistent. Meaning, our goals are not up to the interpretation of individual teams or managers to decide. Decisions would be consistent from the top-down, and goals and objectives would be set throughout the company. I think having goals that are realistic and achievable would lead to higher productivity. This way, the morale that we lose in this type of structure can be recuperated. Additionally, being open to feedback from the bottom up would be essential.

Feedback would allow people to feel their opinions matter, which would directly affect employees’ spirits. Open feedback would mitigate the common complaint that employees feel their voice drowned out amongst the centralized bureaucracy. When defining the top down in a centralized business we use the C-suite, “The chain of command is a factor within an organizational structure that establishes procedures regarding control and decision-making. The chain of command typically refers to the reporting hierarchy within the organization. It ensures all employees know where they are on the organizational chart and how they can contact those above them about concerns or ideas” (Heathfield, 2018). The following being all the various positions we would consider necessary functions of a centralized business structure: -

Chief Executive Officer (CEO)

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Chief Compliance Officer (CCO)

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Chief Data Officer (CDO)

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Chief Financial Officer (CFO)

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Chief Information Officer (CIO)

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Chief Knowledge Officer (CKO)

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Chief Marketing Officer (CMO)

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Chief Operating Officer (COO)

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Chief Technology Officer (CTO) (Doyle, 2019)

Not only do we consider the chief officer positions to be functions, but there are the roles of managers and team members as well. In a divisional structure, employees do just that; they are divided. These divisions are called departments. Departments represent the unique needs,

products, services, and geographical locations of the firm's clients. When creating a divisional structure, each department is assigned roles. These roles replicate across different regions, and employees are to act as generalists as opposed to specialists. Instead of specific specialized tasks, employees need to perform an array when delivering a product. Either way, there are many layers of teams and managers when business is centralized. The CEO and other chiefs are at the forefront of decision making and setting objectives; it is their responsibility to influence subsequent team members and division managers to follow. Finally, for formality, as it states in the textbook, a mixture of formal and informal are most efficient, and I believe a formal approach would be fitting for a consulting firm. By utilizing processes, we ensure everything is in proper compliance legally, consistent across customers, and tracked smoothly and managed internally. However, I think that customer interaction should be individual. I find that the need for scripts is antiquated and does not engage the other party. Additionally, each business’ needs will differ depending on if they currently have sustainability efforts or not. So even though I think a formal approach would be the best if we pick one or the other, a mixture of both would be preferable in this consulting scenario. That way, each interaction is individual and engaging while adhering to necessary rules and regulations. With the structure of the business established, it is crucial to consider organizational theory. Organizational theory is the study of organizational structures, with the intent to identify how they solve problems and how they maximize efficiency and productivity. So, choosing the best theory for you is essential for a functional and growing company. I would say that the structure I had previously outlined for the consulting business is pretty old-school, and to some,

it is very antiquated. It is very rigid, bureaucratic, and could even feel impersonal to work within. These feelings can derive from feeling like you do not have a voice and being low on the totem pole within the company, your role and work is useless, or even from the disparity in pay as individuals rise to the ranks. For these reasons, I determined the Neoclassical Theory would be the most effective. The Neoclassical Theory, also known as the human relations theory, is most applicable to the matrix structure, which is what I had chosen. This theory has an emphasis on... -

Differences and subsequent opportunities it creates

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Different and effective individual motivators

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Resolution of creative conflict creating new ideas and strengthening relationships

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The focus on social interactions, management participation, and mutual decision making (Wright, n.d.).

This theory focuses on improving management efficiency because matrix structures have increased complexity. For example, the chain of command contains both functional and project managers. Additionally, having a more people-focused theory applied can lessen inherent tensions that occur within centralized business models. Finally, we will analyze our company’s selected structure’s impact on its efficacy with the goal-approach model of organizational effectiveness. Our first factor is centralization, although a centralized approach is efficient in a stable environment. When the environment becomes unstable quick pivots and decision-making are hard to implement when starting from the top down. Because low-level employees receive more authority over subordinates, they feel a sense of empowerment and often make faster decisions. Decentralized companies are also able to make decisions that are fairer to employees. In centralized organizations, higher-level managers make decisions for those who are far removed.

After we have considered centralization, or the lack thereof, we analyze a business’ formality. Formality has the benefit of mitigating ambiguity and giving direction to employees, but this can lead to a decrease in innovation due to the structured monotony. Typically, strategic decisions are only made in crisis when a company becomes like this; that is not a superlative way to run a business. Businesses should look to be agile and ever-changing as external factors shift around them. Otherwise, they will quickly find themselves obsolete and being surpassed by those who could keep up. For this reason, I found that a mixed approach to be the most preferable for our consulting business. There would be formality and processes where necessary, but leniency when not. By doing so, we can create a consistent, organized work environment that can facilitate innovation and creativity to the fullest extent. Then comes the structure of employees, which tends to be more of a matrix, and we can see this in our case. We can centralize some operations, but we also create geographic departments when servicing different cities or countries. By being divisional, we can offer a myriad of products and services as solutions, and we will also be versatile and able to change as progression occurs within sustainable technologies. Although we may be partially central to ensure the company is consistent, there are advantages to have more agile divisions. Such as, we are subsequently able to handle unstable environments, and we gain some agility. When considering the stability of centralization, consistency of formality, the opportunity for innovation, agility, and versatility of a matrix structure, we can combat weaknesses in one area to strengths within another ultimately, in my opinion, balancing out to be quite an effective company in theory. Even so, if there was anything that might need addressing, I believe it may be the level of formality. When operating a consulting firm, there is no "one-size fits all" solution. There is a need to empower employees to have some freedom in the options and solutions they

can provide, and this may even inspire more creative and effective solutions. If our headquarters is in the United States, any outlines established may be ineffectual to individuals with foreign clients. So, despite losing the predictability and consistency of employee behavior when becoming less formal. I hope that it would incentivize employees to come up with creative solutions to achieve our mission.

Sources: Davoren, J. (n.d.). Organizational structure and service lines. Retrieved from http://smallbusiness.chron.com/organizational-structure-service-lines-52460.html Doyle, A. (2019). What are c-level corporate jobs? Retrieved from https://www.thebalancecareers.com/what-are-c-level-jobs-2061934 Heathfield, S. (2018). Understanding the chain of command in your workplace. Retrieved from https://www.thebalancecareers.com/chain-of-command-1918082 Wright, T.C. (n.d.). Principles of organizational theory. Retrieved from http://smallbusiness.chron.com/principles-organizational-theory-75374.html...