Question

1) Briefly describe the evolution of management thinking highlighting the bureaucratic approach to management.

2) What kind of organization structure is reflected in this company? Discuss.

3) What attributes of the bureaucratic structure can you find in this company?

4) What management approach is practiced by the top management of the above company? Is this approach suitable for a company in the communication industry? Critically analyze.

Reading

Large, bureaucratic organizations have many rules and regulations. This, as well as other characteristics of bureaucracy, is seen easily in the Radio Shack division of the Tandy Corporation, based in Fort Worth, Texas. Rules are evident throughout the organization, and rules relevant to the store manager level are explicit. They tell the manager how to file store reports and in what order, and which colour copies are to be sent to headquarters. Prior to opening the store, the manager receives a large binder notebook with instructions on the steps to be taken while opening the store and procedures to use in its day-to-day operations. These instructions cover topics from inventory methods to finances to how to fill out daily reports to how to keep the front window clean.

Individual store managers do not have the authority to make large purchases but can submit a capital expenditure request form for proper approval. If the request is approved, the form is forwarded to the accounting department and charged against that store’s profits. With just the district manager’s approval, a store manager can not incur an expense of more than $100. In this case, the original invoice would be sent to the central accounting office inFort Worth for payment. The accounting department only accepts and pays on an original invoice. This policy may be seen stringent, but it does safeguard against making duplicate payments since vendors have many copies of invoices but only one original.

The feeling of impersonality can be seen in the stores. All managers receive the same binder and, therefore, are required to run all stores the same way. Although this allows the manager no room for innovation, it does supply structure for possibly weak managers. If they have a question, they can look in the book. This also gives the customer confidence that the store in Atlanta is exactly like the store in Dallas. The customer feels comfortable knowing what to expect once inside.

Each manager has a signature card on file in the accounting department. This ensures that only properly approved expenses are paid. Only store managers can sign for invoices, refunds, petty cash payments, attendance records, and daily reports. A manager’s other responsibilities include making nightly deposits, hiring and firing sales personnel with district manager approval, doing inventory checks every three months, and assigning the responsibility for store operations to another individual while they are out of the store. The “temporary manager” must have a temporary signature card on file for the period he or she is in charge.

Each Radio Shack store is operated as a profit center. The Radio Shack division of Tandy is divided into eight broad, functional areas. Each function is headed by a Radio Shack vice president. These officers and all the managers down through the hierarchy are responsible for and rewarded on the basis of, the profits their respective functions earn. For example, the manager of a store showing a 10 percent increase in sales would receive a bonus based on this increase. If a 10 percent reduction occurs, the manager’s bonus is cut by twice the percent decline or 20 percent in this example.

District managers, regional managers, and division managers all receive bonuses based on profits in their geographic areas. For top executives, the formula is based on yearly trends in profits for the entire Radio Shack Division. Managers at the store level do not have a fixed salary. They have a fixed hourly wage that is set when they join the company. It is revised every six months, depending on the store’s sales volume.

This policy was established by President John V. Roach, who stated: “I want people who live for and will die for this work. If they don’t want to do that, then beat it.” Tandy’s wish is to have employees make a career with Radio Shack. Even though the turnover at the store manager level is high (52 percent per year), the 27 Radio Shack officers have an average length of service of 17 years, and 12 of them began by managing retail stores.

Each officer works in a clearly defined area, whether it is Tandy Electronics, which designates in-house manufacturing operations, or U.S. Retail Store Operations, which manages the 3600 company-owned stores. Managers in Retail Store Operations send directives down through the division to the regional level to the district level and finally to the store managers. Tandy management does not want to leave anything to chance, which is why they maintain such tight inventory and financial control on store managers. Store managers follow these directives because they are handed down by those having more authority. Similarly, they use their authority to direct the behaviour of their salespeople. The manager is subject to strict and systematic discipline when any policies are violated or when there is any misconduct in the operation of the store.

Answer 1

answer-

1- The evolution of management thinking in this company is old and traditional because The bureaucratic organizations approach is a subfield of the classical perspective that looked at the organization as a whole. Max Weber (1864-1920) introduced management on an impersonal, rational basis through defined authority and responsibility, formal record keeping, and separation of management and ownership.

2-This company shows bureaucratic organizational structure in which this company has has a pyramidal command structure. The bureaucratic organization is very organized with a high degree of formality in the way it operates. Organizational charts generally exist for every department, and decisions are made through an organized process.

like top management make rules and policies and lower level managers like store manager has to read them and follow them. Store managers follow these directives because they are handed down by those having more authority. Similarly, they use their authority to direct the behaviour of their salespeople. The manager is subject to strict and systematic discipline when any policies are violated or when there is any misconduct in the operation of the store.

3-we can find following attributes like clear hierarchy, specialization, a division of labor, and a set of formal rules, or standard operating procedures. in this company there is proper hierachy from top to bottom in which clear authority flows from top to bottom.

specialization means every person has to work according to their position. Each Radio Shack store is operated as a profit center. The Radio Shack division of Tandy is divided into eight broad, functional areas. Each function is headed by a Radio Shack vice president. These officers and all the managers down through the hierarchy are responsible for and rewarded on the basis of, the profits their respective functions earn

4-the management approach adopted by this company is rigid and bureacartic in which they do not want any change in the company which is not good for communication organization. The term bureaucracy has a negative meaning in today’s organizations and is associated with endless rules and red tape .