A simple organizational structure is common in small companies.

The simple organizational structure is a structure in which the owner-manager makes all major decisions and monitors all activities while the staffs serves as an extension of the managers supervisory authority. Three drawbacks of the simple organizational structure used by Encik Ramlee are; poor decision making, unclear of job responsibilities, and take advantage of lack of regulation. i. Poor decision making One of the disadvantages of simple organizational structure is poor decision making. Simple organizational structure is utilised where an owner-manager makes most of the decisions. Even though the decisions often occur quickly because owners and managers have knowledge about the entire business, however, if the owner-manager is unavailable, the decision may not be able to be made and thus the opportunities maybe lost. As in the case, Encik Ramlee is the owner and also the manager and all the decisions are made by him. Without his absence, the decisions related to the business operations cannot be done. As a result, the business will suffer loses and if the longer time the owner-manager is unavailable, this can lead to the bankruptcy of the business.

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Unclear of job responsibilities In simple organizational structure, there is limited task specialization. Task specialization is condition in which the components of a work process are divided into various minute tasks and only a limited number of tasks are assigned to an individual job. So, if there is limited task specialization, so there is no segregation of duties. In the case, Encik Ramlee controls the business and makes all major decisions by himself. Due to that, there are problems in job responsibilities. This is because the staffs seem unclear on responsibilities that they need to hold since they do not have specific task that they need to do. As mention in the case also, the owner-manager, Encik Ramlee does not trust his staff and they are not allowed to give ideas and comments on his batik designs and also on matters pertaining to running the business. The staff seems cannot be part of the business, they do not have the career path, and if anything happen, the manager himself cannot pointing finger to the staff for any mistakes or error that they have made, because they are not being assigned to specific task.

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Take advantage of lack of regulation Encik Ramlee runs the business with few rules since he is using the simple organizational structure. With a few rules, so there are opportunities in taking advantage of lack of regulation by the staff. This is because Encik Ramlee is the one who control the business and make decisions, so there are chances where Encik Ramlee will overlook when his employees do the wrongdoings in his business.

The functional organizational structure consists of a chief executive officer and a limited corporate staff, with functional line managers in dominant organizational areas such as production, accounting, marketing, R&D, engineering, and human resources. This structure allows for functional specialization, thereby facilitating active sharing of knowledge within each functional area. Three advantages of the functional organizational structure to help Adam convince his father to change the simple organizational structure currently in use in the business are; specialization, efficiency and productivity, and employees cooperation. i. Specialization The functional organizational structure is an advantage where it offers a high level of specialization. Each unit is charged with carrying out its specific role. Employees typically start their careers in an entry-level position with the function and develop specialized knowledge as they move up within the hierarchy. They become experts within functional area, and the unit, thus the company will benefit from their expertise and experience over time. As in the case, Encik Ramlee run on limited task specialization, where there is no segregation of duties. The employees seem do not have specific task or job in the business. Specialization make easy to the employees to have their own specific task, this will teach the employees to be responsible in their career path and any action taken are their responsibility.

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Efficiency and productivity A worker who is an expert in his functional area can perform tasks with a high level of speed and efficiency, which will enhances productivity. Workers who know their jobs well can proceed with confidence and minimum amount of mistakes. As in current business structure, which is simple organizational structure, Encik Ramlee have an informal relationship with his employees where he does not trust his staff, so the workers themselves cannot contribute their skills, ability and expert in the business. If Encik Ramlee given trust to them, and show the clear career paths, the employees will be highly motivated to advance their careers; thus make them productive. Employees cooperation In functional organizational structure, the employees cooperation is improved and gives advantage to the business itself. This is because the employees

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work with others in their field, which allows for knowledge sharing and lateral job moves to learn new skills. This is in accordance to Adam perspective where by implementing the functional organizational structure, the staff will be able to interact frequently to exchange the ideas and thus find ways to further distinct products and to develop the new one. This will benefit the business besides improves the relationship among the staff.