Organizational Structure of Rio Grande Organizational Structure of Rio Grande

An organizational structure is as individual as the company itself. No one structure is appropriate for every organization. The company must look at their options concerning organizational structure to choose the one that best fits the needs of the company. In addition to the structure, the company must look at organizational functions and organizational design. Rio Grande is an example of how a company must tailor the organizational structure to fit with the culture of the company.

Organizational Structures

Rio Grande began by defining the vertical structure of the company. In this they are very different from most companies. Rio Grande is a family-owned business run by the Bell family. These individuals make up the board of directors. They did not want to run their company with the typical hierarchal structure so they developed a structure they refer to as participative management. Participative management consists of a board of directors, a team of business coaches, and functional teams. According to Rio Grande Careers (2011), associates know that part of their job is to complete and continuously improve the tasks for which they are responsible. Another part of their job is to participate in the management of the company (A Principle-Based Company). Rio Grande defines participative management as a decentralized organization. In a decentralized organization lower-level managers make the important decisions of the company, in this case the associates rather than the board of directors (Bateman, 2011).

The next part of the organizational structure is the horizontal structure. According to Bateman (2011), the three basic approaches to departmentalization are functional, divisional, and matrix (p. 287). In a functional organization, the company groups individuals into departments that specialize in specific tasks. A divisional organization takes the functional organization one step further and groups the organization by specific product, specific customer, or by geographical region (Bateman, 2011). A matrix organization combines both the functional and divisional organization in which employees report to a functional manager and a divisional manager. Rio Grandes horizontal structure is most similar to a functional organization. The company divides into functional teams; the difference is the teams do not report to a functional manager. Rio Grande also has one other key difference; each associate on the functional team is cross-trained to do other functions throughout the company. This makes it possible to resource shift to meet the business need and accomplish the companys strategic goals.

Organizational Functions

Because Rio Grande separates into functional teams, the functions influence the organizational structure. Rio Grande emphasizes the importance of their employees and seeks to find the best individuals for every functional area. There are four criteria the company must evaluate in their workforce. The first criterion is creating value. According to Bateman (2011), People can increase value through their efforts to decrease costs or provide something unique to customers or some combination of the two (p. 340). The second criterion is to find rare people. These are people with specialized skill sets not readily available to competitors. The third criterion is to find difficult to imitate people. This works in a very similar manner as the previous example of finding people with rare skill sets. The fourth criterion is finding organized people. According to Bateman (2011), Teamwork and cooperation are two pervasive methods for ensuring an organized workforce (p. 340). Rio Grande takes these four criteria very seriously when deciding who to hire.

The hiring process at Rio Grande typically takes one to six months to complete. The first step is to fill out the application. The human resources team reviews the applications and forwards the applications to the business coach for the team that individual is applying for. If the applicant fits the hiring needs of the company, he or she is asked to come in and take a series of tests. The first test is the 16PF. This test will show the compatibility of the applicant with the company and what function he or she is best suited to perform (Pearson Assessments, 2012). Once the human resources team evaluates the results and determines that the applicant is compatible with the company, the functional teams schedule an interview. The individuals on the team that the applicant is applying for conduct the interview along with, a representative from human resources, the business coach for the functional team, and representatives from key linked teams. For example, if an individual is applying for accounts payable, the members of accounts payable, one member of accounts receivable, one member of the controller team, one member of human resources, and the business coach for accounts payable interview the applicant. The process for hiring at Rio Grande is extensive but effective. By following this process, they eliminate individuals who would not adapt well to the culture and organization of the company.

Organizational Design

The final element that Rio Grande considered when they chose their organizational structure is the organizational design of the company. Rio Grande began in 1944 with a vision to serve the jewelry industry better (Rio Grande, 2012). To serve the jewelry industry in the best way possible, Rio Grande focuses their initiatives on customer service. According to Rio Grande (2012), Rio Grande remains the industry leader highly respected for serving customers with integrity and high standards in jewelry

manufacture and distribution (About Rio Grande). Because Rio Grande is a customer-based company, Rio Grande chose an organizational structure that caters to customer service.

The environment also influences the organizational structure of Rio Grande. Because Rio Grande is a jewelry manufacturer and distributor, they are very dependent on the precious metals market. This is known as a dynamic environment, or an environment that constantly changes. Acquiring up-to-date technology is important to ensure that associates can update the metal markets on a constant basis. Current metal markets ensure that Rio Grandes customers are receiving the most accurate information regarding their order. Operating in a dynamic environment means that Rio Grande has to be flexible and adaptable to changing with technology, markets, and customer desire.

Many factors go into the decision of what organizational structure a company chooses. No one structure is appropriate for every company. One of the most important factors in the organizational structure of Rio Grande is hiring the right people. Rio Grande constantly evaluates organizational functions and organizational design to ensure the organizational structure they chose in 1944 remains appropriate to the business they are today.

References

Bateman, T. S. (2011). Management: Leading and Collaborating in a Competitive World (9th ed.)

Retrieved from The University of Phoenix eBook Collection database.

Pearson assessments. (2012). Retrieved from http://www.pearsonassessments.com/HAIWEB/

Cultures/en-us/Productdetail.htm?Pid=PAg101&Mode=summary

Rio Grande. (2012). Retrieved from http://www.riogrande.com/landingpage.aspx?n=aboutus

Rio Grande careers. (2011). Retrieved from http://www.riograndecareers.com/rio_structure.asp Words: 1141 Pages: 5 Highlight Text Print Paper Save Paper Report this Essay Similar Documents Organizational Structure Of Rio Grande Organizational Structure Of Kudler's Fine Foods Organizal Structure Paper Outline Organizational Structure & Management Organizational Structure And Processes Organizational Structure Organizational Structure Management And Organizational Structure Issues Organizational Structure Organizational Structure Mgt 230 Organizational Structure Organizational Structure: The Concept, Structure, Design Principles

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