MGT 566 Week 3 Organizational Structure and Design Example

Four Companies, One Structure? Designing the Organization for North Star Home Services

[Student Name]

University of Phoenix

MGT/566: Planning and Organizing for Success

Week 3 Assignment

[Instructor Name]

[Date]

North Star Home Services and all details are composites written for a model paper.

The composite Twin Cities firm North Star was assembled from four contractors: two heating and cooling firms, a plumbing firm and an electrical firm. Each still has its own president, call center, dispatch system, pricing and brand. The Week 2 analysis found sharp performance differences and misaligned systems. The strategy calls for one brand, one customer experience and growth in service agreements and heat pumps. Structure is how strategy becomes daily routine: who talks to whom, who decides what and how a customer's call becomes a technician at the door. This paper designs North Star's organization.

The Current Structure

Today, North Star is a holding company over four operating companies. Each president reports to the chief executive. Shared functions are minimal: a corporate controller consolidates financial reports. Customers who need both plumbing and electrical work call two companies, and technicians from different companies may visit the same home in one week.

Problems With the Current Structure

The structure duplicates call centers, dispatch, marketing and accounting, raising costs. It prevents cross-selling between trades. It keeps best practices inside one company. It confuses customers. It also leaves the four presidents competing for resources rather than cooperating, and it gives technicians no path to move between companies for training or promotion, which works against the retention goal.

Design Criteria

Galbraith (2014) argued that structure should follow from strategy and the capabilities the organization needs, considered together with processes, rewards and people. From North Star's strategy, five criteria follow: a consistent customer experience under one brand, local responsiveness for emergency calls, efficient shared support, the ability to cross-sell trades and technician retention.

Option One: Keep Four Companies

Keeping four companies preserves local identity and minimizes disruption. It fails the criteria of one experience, efficiency and cross-selling. It is the status quo, not a solution.

Option Two: Functional Structure by Trade

Organizing into heating and cooling, plumbing and electrical divisions under one brand would allow specialization and unify each trade's practices. It still leaves customers dealing with separate trades and does not create shared technician teams by area.

Option Three: A Hybrid Structure

A hybrid centralizes customer-facing support and back-office functions, the call center, dispatch, marketing, finance, HR and purchasing, while organizing field operations into four geographic teams covering the north, south, east and west metro. Each team includes technicians from all three trades under a field operations manager, with trade leads for technical standards.

Scoring the Options

Against the five criteria, the hybrid scores highest on consistency, efficiency and cross-selling and acceptably on responsiveness and retention. The trade structure scores well on technical standards but weaker on cross-selling. Keeping four companies scores lowest overall.

Centralization and Decentralization

Mintzberg (1979) described how organizations balance central control and local discretion depending on their environment and work. Pricing, brand, systems and hiring standards will be centralized for consistency. Daily scheduling adjustments, customer problem resolution and local community relationships will be decentralized to field teams.

Spans of Control

Field operations managers will each oversee about 75 technicians through six to eight field supervisors, each with about 10 technicians. Spans of about 10 allow supervisors to ride along with technicians and coach them, which supports retention. Wider spans would save supervisor salaries but, in a business where most learning happens in the field, would weaken the coaching that keeps new technicians from leaving in their first two years.

Coordination Mechanisms

The structure creates new boundaries between the central call center and field teams and between trades within teams. Coordination will come from shared dispatch software, daily huddles in each team, trade leads who set standards across teams and a monthly operations review.

Decision Rights

Decision rights will be documented. Field operations managers decide technician schedules and local promotions; the central operations director approves hiring and capital spending; trade leads approve technical standards; the call center director sets booking rules with input from field managers; and the chief executive decides pricing changes with the finance director.

Pacing Integration

Graebner et al. (2017) reviewed research on post-merger integration and emphasized that integration involves human and cultural processes as well as structural ones, and that the pace and depth of integration must be managed to avoid losing key people. North Star will integrate in phases: back-office functions first, the call center and dispatch next and field teams last, over 18 months.

Roles for Legacy Leaders

Of the four presidents, one will become the central operations director, two will lead geographic field teams and the electrical company's founder, nearing retirement, will serve as trade lead for electrical work and a mentor. Giving legacy leaders meaningful roles preserves knowledge and signals respect.

Weaknesses of the Hybrid

The hybrid has costs. A central call center may feel distant to customers used to calling a local company, and field teams may feel that headquarters controls their schedules. Mixing trades in one team requires supervisors who understand work outside their own specialty. To manage these weaknesses, call center staff will be assigned to geographic teams so customers hear familiar voices, field managers will have a voice in booking rules and supervisors will receive cross-trade training.

Expected Savings

Consolidating four call centers, four dispatch systems and four accounting functions is expected to save about $1.6 million a year once complete, mostly through reduced overlap rather than layoffs, since staff will be redeployed to growth areas such as service agreement sales. Cross-selling between trades is expected to add about $3 million in revenue by the third year.

The Brand Transition

Moving from four names to one is part of the structural change. Trucks, uniforms and websites will switch over a year, with messages explaining that the same technicians are now part of a larger team. Long-time Heritage customers will receive personal letters, since the founder's name carries trust built over five decades.

How Employees Will Hear

Every employee will learn about the new structure in a meeting led by their current leader and a member of the executive team, followed by individual conversations for anyone whose role changes. A question line and monthly town halls during the transition will keep information flowing and rumors in check.

The Organizational Chart

Under the chief executive are the chief financial officer, the HR director, the marketing director, the central operations director and the call center director. Reporting to the operations director are four field operations managers and three trade leads. Field supervisors report to field operations managers.

Transition Plan

The transition includes announcing the structure with its reasons, appointing leaders, moving back-office staff in the first six months, consolidating the call center by month 12 and reorganizing field teams by month 18, with feedback sessions at each step.

Conclusion

North Star's four-company structure cannot deliver its strategy. A hybrid with centralized support and geographic field teams that mix trades best meets the design criteria. Clear decision rights, coordination mechanisms, phased integration and respected roles for legacy leaders give the new structure the best chance to work.

References

Galbraith, J. R. (2014). Designing organizations: Strategy, structure, and process at the business unit and enterprise levels (3rd ed.). Jossey-Bass.

Graebner, M. E., Heimeriks, K. H., Huy, Q. N., & Vaara, E. (2017). The process of postmerger integration: A review and agenda for future research. Academy of Management Annals, 11(1), 1-32. https://doi.org/10.5465/annals.2014.0078

Mintzberg, H. (1979). The structuring of organizations: A synthesis of the research. Prentice-Hall.