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Operating model of an organization defines how the organization operates its processes in order to attain its objectives. It describes the relationship between different business units and the ways of communication among the different units in the organization (Ross, Weill & Robertson, 2006). The business units may include people, business processes and technology. Operating model normally provides the foot and flexibility required to operate an organization effectively.
Unilever Company employs a coordination model. This model requires high level of integration with little standardization of business processes (Ankaraju, 2010). Unilever Company is a global company that shares, with its affiliation companies, its products, customers, suppliers, and partners worldwide. It has both local and global customers. In terms of business process integration, Unilever Company integrates its customer service by sharing its customers in different parts of the world and performs cross-selling of their products and supplies. This causes a positive impact on the company’s other business units. It also operates unique business units and has autonomous business management in each of the countries it operates. They also have a central management who organizes proper training to the unit managers to encourage company-wide thinking. This allows each unit to control its own processes in order to achieve its objectives (Potts, 2007). The company’s supply chain management is transparent. Each business unit makes its own IT application decisions. This enables the company to achieve the highest levels of goals that each of the units had set.
Business process standardization is, however, low in this model. The model has independent transactions which are accounted at the higher management level. They often define standardized data, but data is locally owned at the unit level with some aggregation. Though IT application decisions are owned at the unit level, they also have a centrally managed IT services, including one single website running on a sing server.
In terms of business process integration, when compared with the hospital business example, we find that Unilever Company is autonomously managed at the unit level while the hospital is centrally managed. The hospital integrates all of its records of different hospitals and clinics into a single Electronic Medical Record, while the company allows its IT applications decisions to be made at the unit level. Other departmental decision-making and operations in Unilever Company are also done at the unit level. The hospital example, on the other hand, manages their human resource, payroll, purchasing, and inventory activities of all the hospitals and clinics in the same Enterprise Resource Planning system. The hospital has higher standardization than Unilever Company. It has a standardized centrally mandated database management system that manages transactions in all the hospitals and clinics.
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Coordination business model allows autonomous management at unit level, which encourages the management to work hard to see their units shine. This makes the overall profit of the company high. It also encourages shared customers, supplier, products and services which generally increase sales and increase profits.
I chose the coordination business model because of its autonomy in management. This is one of the ways to encourage workers and increase the output.
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