Explanation (Functional Organizational Structure)
Discuss about the value proposition for Millhouse Construction based on the functional organizational structure by assessing the value added to internal and external stakeholders, through the complex theory.
Millhouse Construction is the leading property group company in Australia. Its vision is to combine construction, development and investment aspects to serve the customers right. The headquarter of the company is located in Sydney, where the organization is currently managing more than $15 billion of assets in office, retail as well as in industrial sectors (Kuhn, 2009). Since the company has been involved in most of the national projects where most are complex, it has developed the urge to ensure long-term value for its security holders. Value proposition refers to innovations or services implemented by a company in making its goods and services attractive to the buyers. In improving value proposition, the organizational structure has to be suitable based on the company’s operations (Starkey et al., 2004). For Millhouse Company, the functional organizational structure has been used with the aim to attract more customers and retain them. The paper describes the value proposition for Millhouse Construction based on the functional organizational structure by assessing the value added to internal and external stakeholders, through the complex theory. The manner in which the aspects of structure, people management, marketing and financial management interact to ensure value proposition is also discussed.
Functional organizational structure refers to where workers are grouped based on specialization (Bello, 2017). In this structure, there are leaders in each division whom the workers report to. The employees, therefore, implement their skills in each section, leading to the overall objectives attainment (Mao et al., 2017, pp, 45-53). This is to say that people are classified based on their functions or roles in the company. It is the role of every departmental head to supervise the workers executing their roles in the sector for quality performance. The structure is at times called ‘silos’ as it is vertical and disconnected and communication flows from one departmental head to the other, up to the top management (Batory, Neese, and Batory). Several benefits are realized in using this structure, which has led to Millhouse Construction preferring it. One is that workers make use of their knowledge and skills which contributes to the achievement of objectives. Also, the roles are fixed, with every worker having a clear knowledge of their roles which improves accountability in the organization. Duplication of work is also prevented as each department has its specific contribution to the success of the company (Ashkenas et al., 2015).
Complexity Theory
The complexity theory was developed by researchers, with the aim to rationalize the behavior of huge and complex systems since they are not explainable by the normal rules of nature (Lee et al., 2015, pp. 73-99). It is also called complexity strategy or complex adaptive stating that systems are unpredictable and also constrained by order generating factors. The basic aspect of the theory is that the complex systems have hidden behaviors and thus taking the form of an ecosystem other than a machine whose processes are predictable (Bai et al., 2017, pp. 621-629). However, the approach insists that certain traits are shared by the complex systems. This is because; the system is made up of many independent actors that behave like single units (Fairfield, 2016, pp. 242-251). Notably, the complex theory is closely related to the chaos approach, though complexity insists that the latter does not account for coherency and the self -organizing aspects of the systems.
Millhouse Construction Company boosts the value of goods and services to both internal and external stakeholders, in different ways. The internal stakeholders are mainly the workers and the management as well as the security holders while the external is the buyers to the company (Achour et al., 2015, pp. 557-562). Both parties have to be cared for, in making sure that the actions taken do not negatively affect them as this would lead to issues in the company. One of how value has been added to the internal stakeholders is by meeting health and safety measures across all sites. In this case, the organization has ensured that injury to the workers in the process of working has been minimized. This has been met through several activities. One is on training where employees have been directed on ways to avoid danger while working. Also, the company has put the necessary factors that ensure safety, for example, fire alarms. Where workers are made to work in a safe environment, their attractiveness to working in the organization is boosted (Santos et al., 2015, pp. 36-58).
The company promotes the value of goods and services to internal stakeholders by being diverse and including all people in its operations. Notably, while the company is employing people regardless of their race, age, gender and life experiences, most people are attracted to working in the company. This is because, people develop the attitude that the company does not discriminate, meaning that even the internal aspects of payments and others are fair. By that, many people are attracted to working in the company. Besides, the company ensures engagement between the management and the workers, through activities like training which develops more chances for the workers. With the idea that systems in the company are complex and thus a lot of work is needed, workers need to be motivated to working in the company. Once in a while, the company trains the workers where more skills are impacted. Also, they are given holidays and incentives that make them develop a positive attitude towards working in the company. This has added value to them as they feel that the company minds the welfare of the work and their personal lives as well.
How the Company Promotes Value of Goods and Services to Internal and External Stakeholders
Concerning the external stakeholders or the customers, the company has ensured that their value is added by several aspects. To start with is the aspect of sustainability, where the organization has ensured that environmental, social and economic outcomes are considered. For example, the process of production does not pollute the surrounding and the prices put on goods are affordable, based on the nations’ economic status. The external stakeholders’ value has also been boosted by being customer focused. In this case, the company meets the demands of the buyers by not only offering the goods that they need but also involving them while making decisions in sectors that affect them. By that, the value proposition of the company has increased, because customers feel that their welfare is prioritized by the company. Millhouse Construction has put the desires of both internal and external stakeholders first, which has made the company gain a competitive benefit because the stakeholders are attracted to the company as their needs are prioritized.
The millhouse Company has several key aspects that interact in making sure that value proposition in the company. One of the factors is the functional organizational structure. As said before, this structure places workers based on the area they are skilled and thus gives them the chance to practice what they know best (Sandhu and Kulik 2018). This has added contributed to the value proposition as the produced goods and services offered are of high quality. Notably, the functional organizational structure has made it easy in meeting the needs and demands of the customers. This is because; the work is divided into sections, where each is led by a leader. The leader works together with the workers in the place in meeting the objectives of that section in the production process. With each department knowing what they are needed to do, set objectives become easy to meet. On the other hand, the structure allows for easy communication between one department to the other, making sure that information is given at the right time. With that, the customers served by the organization are satisfied with the goods and services, which make them, prefer Millhouse Construction over others and thus boosting value proposition for the company.
The other aspect is in people management, referring to the workers mostly. For an organization to attract more buyers employees serving them should have acquired the necessary training in serving people, and the company should meet their needs as well (Lee, 2015, p. 14187). For the Millhouse Construction, the workers have been closely engaged in different activities that have boosted their morale in working with the company, which has improved its value proposition. For example, the functional organizational structure offers the chance for workers to contribute in the process of making decisions as the departmental heads ask their views regarding different aspects. Where workers are involved in the process of making decisions, they feel that their presence in the company is of importance. Apart from that, the likelihood of wrong decisions being made is narrow, as the workers have the needed information while making the decisions because they understand the company closely (Battiston et al., 2016, pp. 818-819). Apart from that, most of the employees are retained in the company. Notably, workers are trained after joining the organization, which is expensive. Therefore, where workers remain in the company for too long, the training costs of new workers are reduced as the value proposition is usually high.
How the Company Promotes Stakeholder and Value Proposition
Marketing is the other aspect of Millhouse Construction that has contributed to value proposition. This has been ensured by the use of marketing strategies that communicate effectively to the potential buyers of the company. In the current market, marketing is one of the most important aspects if an organization is to stay longer in the market (Woodside, 2014). Considering Millhouse Company, where its operations are national, marketing has been a useful tool for the company. The approach aims to inform and remind the public about goods and services offered by the company. Since the marketing model used by the company is suitable, the value proposition has been improved, as more buyers have been attracted to the company. In fact, this aspect has made the company function across Australia because people have known about it.
The last aspect in the Millhouse Constructive is on financial management which has also contributed to value proposition to the company. Notably, the company manages its balance sheet capital based on property cycle and is focused on leveraging the third party capital so as to maintain a diversified capital structure in growing the company (Wu et al., 2014, pp. 1647-1670).
The manner in which finances are managed in an organization determines the level of success to be attained by the company. For Millhouse, it is evident that money is well accounted, which prevents cases like hiked prices that would lead to customers preferring other organizations and thus lower value proposition. The functional organizational structure has played vital roles in ensuring financial management in the company, which has led to value proposition (Woodside, 2016, pp. 57-81). This is because the company management can identify the amount of cash needed in each department of the production process, and the amount of income to be earned. With that, the company has known the amount to be used in input and that to be expected in the output.
Conclusion
In conclusion, basing the paper on Millhouse’s Construction value proposition is clear that the company has gained a competitive benefit in the industry as most of the clients have preferred the company. This is clear, by the functional organizational structure used in the company, where workers are divided according to the areas they specialize, which increases production. The complexity theory has also been used in explaining the value proposition for the company, which is useful where functions in an organization are complex though similarities are evident in the complex systems. Apart from that, the company has added value to both internal and external stakeholders which have ensured that the overall value proposition for the company is ensured. The key business aspects that are structure, people management, marketing and financial control have closely interacted in ensuring that value proposition for Millhouse is maintained. It could be said that Millhouse Construction has a high-value proposition because the involved aspects have been well coordinated.
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