This report provides a short summary on Singapore Electronics Ltd as a bureaucratic organization and emphasizes how Political, Economical, Social and Technological environment impacts its operation in the organization.
4. Introduction
The aim of this report is to analyze how a bureaucracy type of organization function succeeded in the global environment. The purpose of this report is to describe Singapore Technologies Electronics Limited organizational design as a bureaucracy type of organization and discuss how its organizational design is suitable for the environment in which the organization operates. It will conclude by highlighting ST Electronics as a bureaucratic organization and responding to the political, economical, social and technological environment.
ST Electronics is established in 1969 and employs 2,800 employees, comprising a majority of engineers and professional staff. It is a leading electronics and information communications technology systems house in the region. Its core capabilities lie in innovative design, implementation and integration of advanced electronics system solutions for commercial, industrial, defence and government applications worldwide (Singapore Technologies Electronics Ltd Corporate Brochure 2006, p. 3).
5. ST Electronics Ltd
5.1 Organizational Structure
The unit information guide stated organization structure provides directions for the system of reporting which drives an organization, segregating it into areas or departments which are responsible for certain aspects of the organization’s goal. Structure explains areas of responsibility and individuals which will work together, and permits effective communication, decision making and sharing of helpful information within departments.
In ST Electronics, its organizational structure is bureaucracy. (See Table 1) It consists of 14 directors and 1 alternate director. The Board of Directors provides leadership and guidance to the management team on matters pertaining to corporate strategy, business directions, acquisitions and divestments, risk policy and realization of corporate objectives through various sub-committees.
Organization having a bureaucracy setup is liken to mechanistic organizations which are highly formalized and centralized, and tendency to use lesser complex integration mechanisms in contrast to an organic system which repeatedly described as loosely coupled system. In a mechanistic organization, decision making exclusively rests with the board (Mintzberg 1979).
5.2 Organization Chart - Table 1.
(Source: Singapore Technologies Electronics Ltd 2006)
5.3 Key Principles for designing organizations
In the unit information guide, the six key principles stated in an organizational structure are specialization, departmentalization, chain of command, span of control, centralization and decentralization, and formalization.
In ST Electronics, the key principles in its organization structure concentrates on creation of roles, process and formal reporting through creation of several departments that specializes and applies span of control in area of its task (Singapore Technologies Electronics Ltd 2006). Organization structure affects human flow, context and nature of human interactions as well as impacting coordination method, allocation of power and responsibility, formality and complexity levels (Bower 1970). Important improvement in the form of cost reductions and service improvements are generally connected with integration (Lambert, Robeson & Stock 1978).
Different kinds of organizational designs
In the unit information guide, the characteristics of organizational design structures are bureaucracy and matrix. Organization structure in ST Electronics is bureaucracy which is represented by standardized procedure that guides the execution of most or all processes in the organization. The bureaucracy includes authority and decision making by strict hierarchy (Singapore Technologies Electronics Ltd 2006).
Political Environment
As stated in the unit information guide, changes in the political environment have a significant impact in the way organization operates. Increasingly, more organizations are privatizing state owned businesses to establish competition for better organization efficiencies and service provision.
In ST Electronics, Globalization is a key growth strategy. It delivers sustainable growth by penetrating into new markets around the world through partnership and acquisitions to reduce negative impact on operation (Singapore Technologies Electronics Ltd 2006). In Korea nationalized industries, government policy makers’ interference and consideration resulted in poor communication and insufficient defined objectives and goals (Song 1986). Tight controlled regulation by government directives resulted in overhampering efficient operation with commercial prudence (Lee 1997). Political environment have important impact in the way organization operates.
Economical Environment
As stated in the unit information guide, economical environment and restructuring changes in the labour market in response to pressure of global competition and swift technological changes has a significant influence on the survival or failure of the organization.
In ST Electronics, it places significance to economical strategies by adding value in all that they do, in the best possible way, and to the best of their ability by growing its people, and establishing new markets and businesses constantly (Singapore Technologies Electronics Ltd 2006). In the case of Korea nationalized industries, they operated overwhelmingly in monopolistic markets resulting in inefficiency as compared with 10 per cent of value added sold in competitive markets (The Ministry of Economy and Finance 1997).
Social Environment
As stated in the unit information guide, values and opinions which are brought into working place impacts the way we experience organizational life. There is greater participation of women in today organization. Having said that, significant barriers still exist for women choosing to enter workforce. Women still face lack of opportunities, support as well as discrimination.
ST Electronics is committed to achieve its shared vision, mission and strategic objectives by setting undivided attention on every employee to grow with the organization regardless of gender. This is obtained through responsibility to one another to succeed and thrive in order to give world-class services (Singapore Technologies Electronics Ltd 2006). In Korea nationalized industries, distrusts, delay in decision making, pressure from political groups and unions, poor communication at all level and personality clashes led to the erosion of the values system. This undermines the social fabrication of the organization (Kim & Rowley 2001, p. 137).
Technological Environment
As stated in the unit information guide, technological environment shapes individuals and their relationships. It also shapes the design of organizations and their relationships with other organizations. The process within the organization is affected by technological advances and the effect has to be alleviated through education and training.
ST Electronics continues to offer advance solutions for customers across industries by leveraging on its multi-sector capabilities. It invests heavily in new technology and training its workforce to prepare them competitively in the global market (Singapore Technologies Electronics Ltd 2006). Prudent government policy enables long-run prospect for effective use of new technology. The success of research and educational institutions also assist to create a favourable environment for successful application of new technology (Mckevitt 1994).
6) Conclusion
In conclusion, this report described ST Electronics organization design as a bureaucratic organization. This report also provides an insight into how ST Electronics reacts to political, economical, social and technological environment conditions which are fundamental to its success in venturing into the global markets and provide world-class services to customers. Though ST Electronics is a bureaucratic organization, some elements of its functions are independently operated to allow for quick response to market changes.
