The management assignment
When an organization is formed, organizational structure holds the most important attention because the functioning of the organization is decided by this tree hierarchical structure. Organization Structure is a tangible form of management. It helps in identifying the role of each person in the organization, the authority he has got with him and the task which he has to perform. Authority and power are two different terms with respect to the organization. A person may have supreme authority by lying at the topmost position in the hierarchical organization structure but not powerful. Power is the ability that a person has to mould the decision taken by some supreme authority. PA to CEO is more powerful than the executives lying below CEO in the organization structure, though authority of those executives is more than that PA. The report will focus on the organization structure of Al Mazaya which is a real estate development company in Middle East and will also supply recommendations on what can be changed with the organization structure.
About the Company
Al Mazaya is an esteemed real estate development company with a capital of $170 million. It is a publically traded firm. Dubai and Kuwait stock markets, both have listed this company. The products and services offered by the firm in real estate sector are various housing projects like deluxe villas and lavish residential buildings; commercial projects of building offices and retail structures. It also deals in buying and distributing of large spaces in targeted areas, sometimes they themselves develop them. Prime activities of this company happen in Kuwait as the company stands on the financial support from big investors of Kuwait and the company maintains the level of trust that the investors showed while investing their money in this company. Al Mazaya takes care of the properties and management functions of third party and also of the investment, lease, fitness clubs, residential & commercial complexes, leisure parks, rent of hotels, trade fair grounds, restaurants, gardens and tourist & health resorts.
Al Mazaya wants to win over the real estate companies in Middle East by providing quality services to their clients. They truly believe in achieving the apex position because they have got efficient, productive, and well-grounded workforce and the firm follow high corporate governance discipline. (CORPORATE MISSION)
They aim at providing the best of their real estate products and services in fields like:
Residential Real Estate Agent: Apartments, Buildings and Complexes for housing purpose etc.
Commercial real Estate: Commercial Malls, Offices, Commercial buildings, business centers etc.
Investment Real Estate: Hospitals, Hotels, Offices and Residential Towers for the reason of leasing, BOT projects etc.
Vision of Al Mazaya
Al Mazaya Holding Company foresees itself as the leading real estate development company in the world and would like to provide its clients with the best of their products and services in residential sectors (Apartments, Buildings and Complexes for housing purpose etc), commercial sectors (Commercial Malls, Offices, Commercial buildings, business centers etc) and Investments sector (Hospitals, Hotels, Offices and Residential Towers, BOT projects etc.)
Objectives of the firm
The company wants to perform consistently in view of maximizing the shareholder's wealth through transparent and clear strategies. Company, in order to assess its performance, wants to record all the record of results. Company's objective is also to generate maximum Return on Investments; past records suggested that three fifth of their real estate development projects showed ROI between 30% and 50%. Al Mazaya wants its Balance Sheet to look consolidated and thus they stress upon asset management and cash flows. Company's wants to impress their clients by delivering projects ahead of promised time and with maximum cost reductions and lastly company wants to give their shareholders high valued return on their investments in Al Mazaya and thus maintaining their confidence level with the company
Organizational Structure, Processes and Systems
Organizational structure is one of the basic criteria that define functioning and objectives of the organization in an explicit format. It also helps organization to get better understanding of customers and their need. In this section, a detailed analysis of the organizational structure of Al Mazaya would be done along with depicting several other elements that plays a crucial role in refining this particular parameter. Al Mazaya is a huge real estate organization conducting its operations in two major cities of UAE, i.e. Dubai and Kuwait. Due to significant differences in functional standards of these two regions, its organizational structure is also divided accordingly.
This organizational structure has been formed so as to justify the designation held by the individual and also make appropriate categorization of the work that has to be done by entire organization. One important aspect that should be taken into account is that both Dubai and Kuwait branches of Al Mazaya are controlled by a single authority represented as Managing director and CEO of the company, which is held by Eng. Khaled Esbaitah. All the decisions that contain certain degree of pertinence are taken care by this particular entity. He is the highest authority in the organization that is also liable of taking care of Board of Directors as well as any discrepancy that may incur within organization. (MAZAYA KUWAIT TEAM)
There is a high degree of similarity between organizational structure of Kuwait and that of Dubai, which is based over the fact that there are only slight modifications that are being brought into consideration as far as regional feature is concerned. This could be clarified from the below shown organizational structure presently working in Dubai.
An important facet that has sometimes proven itself as a negative feature for the company is that whenever a project arrives at Al Mazaya that does not involve high level of technicality, it is generally observed that some of the individuals presently associated with other projects are allotted the authority to handle new project sideways. This sometimes distorts entire organizational structure and brings situation of ambiguity in the organizational functioning at different possible echelon of operation. (MAZAYA DUBAI TEAM)
Some of the key elements that can be held responsible for defining the organizational structure of Al Mazaya are formalization, standardization, complexity, specialization or differentiation, and centralization. There have to be extremely apposite choice regarding these features as they decide the determinants of the structure like goals that are to be attained, technology, power, environment, culture, and size. Based over all these parameters, structure of Al Mazaya can be referred to as divisional structure as most of its functions are performed by different divisions in accordance to which different deadlines are set and final objective is achieved. There is a proper segmentation of every project that arrives at Al Mazaya in accordance to which different teams are formed that initiates their work which is finally integrated to provide a complete product to the client. There has to be appropriate level of harmonization between different divisions otherwise while finalizing the project, achievement of adequate level of quality would not be possible. As for an example, Chief Executive Officers and General Managers are responsible for deciding which project should be undertaken according to the feasibility of the organization. Once a project is passed to the company, middle line managers like Assistant General Managers, Plant Managers, Regional Managers, and Line Managers come into picture and they perform various tasks assigned to them. Their main aim is to look after the project schedule and performance of the lower segment of the company that is mainly indulged in operational work. They perform an intermediary work and manage different resources that are provided to them from upper management, also termed as top line management. This segment is generally not involved in the strategic decisions that are being performed in the organization, but are holds complete responsibility to ensure time value of money. Next is the operational unit that performs entire operational work and are guided by middle line managers. Purchasing officers, Assemblers, Sales individuals, and Machine operators are specifically the individuals that take care of this aspect and are liable to perform most of the field work. They are also not in direct contact to the strategic department of the company and report only to the middle line managers. Most of the tasks that are to be done by individuals lying in this category are also decided by the middle line managers along with the time and resource limits under bounding which they carry out most of their activities in best possible manner. Also any reward and appraisal which has to be provided to them will be handled by their immediate seniors without any intervention of strategic department. (BOARD OF DIRECTORS)
Organizational structure also holds its importance for Al Mazaya looking at the scale at which it is operating and capital that has been invested in it. It is one of the supreme players making contribution in real estate business operating in whole Middle Eastern segment. Connotation of the company could be understood from the fact that it holds a capital of more than $170 million along with a number of ongoing projects with high relevance to the state and financial markets associated with it.
Highly refined organizational structure has also provided it with an internal strength to tackle various situations that could otherwise disrupt the smooth functioning of the company in both long and short run. If this analysis is extended further, it could be observed that presently Dubai is experiencing a condition of economic downturn in which this particular aspect helps to make sure that any it does not impact numerous operations of the company.
It is very well known that responsibility and accountability are two main aspects that have to be taken care of by the person holding authority in organization at some level in the hierarchy of positions. Unity of Command has to be followed by nay organizational structure. A person should be liable to report to only one person above him. Violation of the rule creates disturbances between the reported managers.
Al Mazaya, as mentioned, has a divisional organization structure. This organization structure is easy to implement and also can be clearly understood by any individual. It has got maximum elasticity with the usage of staff, expertise available is of to a great value, and technical problems are solved by the creative and synergetic solutions from the group specialists. But, with divisional organization structure propensity to sub optimize the task increases, no individual is given full responsibility of the task and also cross divisional communication is slow and difficult.
We know that Al Mazaya wants to win over the real estate companies in Middle East by providing quality services to their clients. They truly believe in achieving the apex position because they have got efficient, productive, and well-grounded workforce and they have got high corporate governance discipline. So a better form of organizational structure that Al Mazaya should follow is the amalgamation of the Divisional structure and Pure Project Organization structure which is called Matrix Organization Structure. In this type of organization structure, when a project arrives, the divisional head will assign efficient staff under his authority to the project manager till the project gets over and after the completion of the project that same pool of staff will return back to their previous positions under the divisional head. Thus, unity of command also is retained and a single individual is given the authority to control the project. For the project related issues like, time scheduling, budgeting and delivery are a responsibility of Project head. Efforts are also minimized in case of this organization structure. The project will be guided by the team of experienced personnel and the structure will also be flexible. The biggest advantage of the recommended organization structure is that the responses to the client's demands are rapid and the quality of the deliverables is profound. Also, better company wide balance of assets to attain targets which vary in time and cost is seen in Matrix Organization Structure.
- BOARD OF DIRECTORS. (n.d). Retrieved February 5, 2010, from http://www.mazayarealestate.com/Ehome.asp
- CORPORATE MISSION. (n.d). Retrieved February 5, 2010, from http://www.mazayarealestate.com/Ehome.asp
- MAZAYA KUWAIT TEAM. (n.d). Retrieved February 5, 2010, from http://www.mazayarealestate.com/Ehome.asp
- MAZAYA DUBAI TEAM. (n.d). Retrieved February 5, 2010, from http://www.mazayarealestate.com/Ehome.asp