CRITICAL ANALYSIS: ABRAHAM’S GROCERY

BACKGROUND

Every organizations has its own management structure that outlines and governs the relationships
between top management, middle managers and various staffs. To achieve organizational goals and
objectives, individual work needs to be coordinated and managed. Organization structure is a valuable
tool in achieving coordination, as it specifies reporting relationships, delegation of tasks, defines formal
communication channels, and describes how distinct actions of individuals are linked together. There
are different structures that a company can take on, each possessing distinct advantages and
disadvantages. The best organizational structure for any company depends on many factors. Managers
must always remember that the structure of an organization evolves as the organization grows and
changes over time. This case study aims to identify the original and recommended structure of
Abraham’s Grocery Store, provide pros and cons of the two (2) structures and lastly, to offer an
alternative solution that will resolve the current management conflict inside the organization.

STATEMENT AND ANALYSIS OF THE PROBLEM

Questions:

1. Based on the information available in the case, sketch a picture of the original structure within an
Abraham’s store and the store managers’ relationship with district specialist managers. What type
of structure is this? Explain.

Exhibit 1. Current structure of Abraham’s Grocery Store

Above chart shows a functional structure. In a functional structure, employees are grouped into
departments based on similar skills, tasks and use of resources. Specialization is based on
functions. As stated on the case, stores specialized in excellent meats and produce. Thus, the
 reason why there was a separate meat department manager and produce department manager.
Functional structure is evident on the lower level of the chart, departments are grouped together
by their common output. Coordination and communication usually happens within the same
department only. Thus, one of the problems encountered by the management is the poor
communication across functional departments. The turnover of store managers are high since
they have no control over the meat and produce departments, who are very protective of their
responsibilities.

2. Based on the information available in the case, sketch a picture of the consultant’s recommended
structure within the store and the relationship of store department managers with district
specialist managers. What type of structure is this? Explain.

Exhibit 2. Consultant’s recommended structure of Abraham’s Grocery Store

Revised organizational structure shows a matrix approach. Matrix approach uses both functional
and divisional chains of command simultaneously, in the same part of organization. This structure
gives balance and flexibility to both traditional structures in order to strengthen strengths, and
compensate for weaknesses.

Matrix approach was recommended by the consultant since this approach can be implemented
within a short period of time in order to respond quickly to interdepartmental needs without
upsetting the functional organizational structures that are already in place. We can note from the
case that meat, grocery and produce departments will all report to the store manager.
Subsequently, the meat department manager would have a dashed line relationship with the
district meat specialist. While the produce department manager would have a dashed-line
relationship with the district produce manager specialist. From this structure, employees will
report to two managers simultaneously. The first boss will oversees both the product and
functional chains of command and the other is the functional manager. Here, the knowledge, skill,
and expertise is shared between the functional department and entire organization.
3. What are some of the advantages and disadvantages you see for the two types of structures?
Which structure do you think will work best for Abraham’s? Why?

Both the functional structure and matrix organization structure have their advantages and
disadvantages. Advantages and disadvantages are given below:

Functional structure advantages:

 Maximizes functional performance – departments are managed by boss who have in-
depth knowledge and experience. Hence, they can control the department efficiently and
effectively.
 Cultivate specialists – employees are classified on the basis of their area of specialization.
No work duplication.
 Centralize communication – all decision making will come from the top management. This
will provide unified direction to all concerned employees.

Functional structure disadvantages:

 Restrictive and slow response – department cannot respond to fast economic changes
driven by customer needs, product demands or technological advances.
 Poor communication and coordination - each unit has its own area of expertise, they tend
to ignore the need or problem of the other departments. They lack broad awareness or
understanding as how significant each department to the objectives of the company.
Cooperation is compromised.
 Low employee morale – employees may find it boring that tasks are repeated which will
lead to low performance and productivity.

Matrix structure advantages:

 Efficient use of human resources - allows sharing of highly skilled resources between
functional units and projects.
 Rapid flow of information - fosters better communications, limits boundaries and allows
more collaboration between departments.
 Train highly skilled workers - serve as a great boon for employees who are looking to
widen their experience and skill sets. Provides good environment for employees who
want to learn and grow professionally.

Matrix structure disadvantages:

 Dual chain of command – creates confusion if instructions are not clearly given or there
is a contradicting directive from 2 managers who have both equal authority and power.
 Creates conflict – conflict may occur between functional managers and cross-functional
team managers who are each forced to compete for the time of the individual team
members.
 Costly to maintained - Having more people in managerial positions is going to
have financial downside. Abraham will have to pay another manager since the store
manager will no longer serve as a grocery department manager.
 The best suited structure is the matrix approach for Abraham’s Grocery. It combines the best of
both worlds. At the same time, this structure will reduced the level of conflict without altering
the quality of product outputs. This will also ensure that the store operation will run as smoothly
as possible since there will be coordination among the 3 departments. Everyone involved is
interacting on a daily basis to achieve functional and project goals.

REFERENCES

Daft, Richard (2013), New Era Management 11th ed.

Alton, Larry (2017, July 9), 4 Common Types of Organizational Structures. Retrieved from
https://www.allbusiness.com/4-common-types-organizational-structures-103745-1.html

Roca, Joaquin (2012, August 22), What is a matrix structure and what types of organizations are best
suited to this structure? Retrieved from https://www.quora.com/What-is-a-matrix-structure-and-what-
types-of-organizations-are-best-suited-to-this-structure