Organizational behaviour

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BX3171 Organisational Behaviour Topic 14 – Foundations of organisational structure Topic 15 – Organisational Culture

Lecturer: Jaime Wong

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Topic 14

Foundations of organisational structure

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Foundations of Organisational Structure

An organisation’s internal structure contributes to explaining and predicting behaviour. That is, in addition to individual and group factors, the structural relationships in which people work have a bearing on employees’ attitudes and behaviour.

What’s the basis for this argument? An organisation’s structure reduces ambiguity for employees, clarifies concerns such as, ‘What am I supposed to do?’, ‘How am I supposed to do it?’, ‘To whom do I report?’ and ‘To whom do I go if I have a problem?’, it shapes their attitudes and facilitates and motivates employees to higher levels of performance.

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Organizational structure defines how job tasks are formally divided, grouped, and coordinated. Work specialization, departmentalization, chain of command, span of control, centralization and decentralization, and formalization are components which determine organizational structure.

Work specialization or division of labour is the degree to which activities in the organization are subdivided into separate jobs. Work specialization creates efficiency and productivity, but can also result in boredom, fatigue, stress, low productivity, poor quality, increased absenteeism, and high turnover. The trend towards specialization has been altered by the realization that productivity may be increased by enlarging the scope of job activities.

Departmentalization is the basis by which jobs are grouped together. Organizations may be departmentalized by function, product, geography, process, or customer. Functional departmentalization groups activities by the functions performed, such as engineering, accounting, or personnel. Organizations using product departmentalization have separate departments or divisions devoted to a product or product line. Many sales and retail operations are departmentalized by geography or territory. In process departmentalization, each department specializes in a specific phase of the production process. Finally, customer departmentalization organizes along customer markets. Many large organizations use all of the forms of departmentalization.

The chain of command is an unbroken line of authority that extends from the top of the organization to the lowest level and clarifies who reports to whom. The concept of chain of command is related to the concepts of authority and unity-of-command. Authority refers to the right of a manager to give orders and expect them to be obeyed. The unity-of-command principle states that a person should have only one supervisor to whom he or she is directly responsible.

Span of control refers to the number of employees that can be directed by one manager. Narrow spans of control allow for close control, while wider spans of control reduce costs, speed up decision making, increase flexibility, and empower employees. The ideal span of control will depend upon the situation.

Centralization is the degree to which decision making is concentrated at a single point in the organization. In a centralized organization, top management makes the key decisions with little or no input from lower-level personnel. In contrast, decentralized organizations allow lower-level personnel or provide input or actually make decisions. The recent trend has been towards decentralization.

Finally, formalization refers to the degree to which jobs within the organization are standardized. If a job is highly formalized, individual employees have a minimum amount of discretion over what is to be done, when it is to be done, or how it is to be done. The degree of formalization can vary widely between organizations and within organizations.

Common organizational designs include simple structure, the bureaucracy, and the matrix structure. Simple structures, characterized by a low degree of departmentalization, wide spans of control, authority centralized in a single person, and little formalization are typically used in small businesses. The simple structure is fast, flexible, and inexpensive to maintain and accountability is clear. However, as the organization grows, the simple structure becomes inefficient. Its low formalization and high centralization result in slow decision-making.

Over time, businesses have the tendency to evolve into bureaucracy, whose characteristics include highly routine operating tasks, very formalized rules, tasks that are grouped into functional departments, centralized authority, and narrow spans of control. The primary advantage of the bureaucracy is its ability to perform standardized activities in a highly efficient manner. In spite of these strengths, functional unit goals may eventually override the overall goals of the organization and programmed decisions may eventually become ineffective.

The matrix structure, used in advertising agencies, aerospace firms, universities, and laboratories combines two forms of departmentalization: functional and product. The direct and frequent contact between different specialties can make for better communication and flexibility which are often lost in the multiple layers of bureaucracy. However, the matrix structure violates the unity-of-command concept by creating a dual chain of command. Matrix structures facilitate coordination when the organization has many complex and interdependent activities. In addition, matrix structures facilitate the efficient allocation of specialists. The major disadvantages of the matrix structure are confusion, propensity for power struggles, and stress on individuals.

New design options that attempt to dissolve many of the layers of management associated with both the matrix and bureaucracy include the virtual organization and the boundaryless organization. In a virtual organization, the majority of functions are outsourced. Virtual organizations are highly centralized, with little or no departmentalization. In this arrangement projects can be regrouped and functions can be reconstituted with ease. The major advantage to the virtual organization is its flexibility. At the same time, however, it reduces management’s control over key parts of its business.

The boundaryless organization attempts to flatten organizational hierarchy by using cross-hierarchical teams, participative decision-making, combined with both extranets and intranets. Vertical and horizontal boundaries are collapsed to create increased flexibility; external boundaries are eliminated to create more options for organizational alliances. The boundaryless organization seeks to eliminate the chain of command, have limitless spans of control, and replace departments with empowered teams.

Organizational structures may be classified as mechanistic or organic. The mechanistic model has extensive departmentalization, high formalization, a limited information network, and little participation by low-level members in decision making. At the other end of the scale, an organic organization uses flat, cross-hierarchal and cross-functional teams, has low formalization, posses a comprehensive information network, and involves high participation in decision making.

The structure an organization chooses depends on its strategy. Common strategies include innovation, cost minimization, and imitation. Innovators are most likely to prefer the flexibility of an organic model, while those that choose a cost minimization strategy are more suited to the mechanistic structure. Imitators combine the two structures.

Organization size also influences structure. As organizations increase in size, they tend to become more mechanistic, although size affects structure at a decreasing rate. Once an organization has around 2,000 employees, it’s already fairly mechanistic and additional employees have minimal impact.

Technology refers to how a firm converts its inputs to outputs. Technologies may be differentiated by their degree of routines. Routine tasks are associated with taller and more departmentalized structures, while the relationship is not overwhelmingly strong. The degree of routineness is positively correlated with high formalization or centralization when formalization is low.

Structure is also affected by environment, which is comprised of capacity, volatility, and complexity. Capacity refers to the degree to which an environment can support growth; volatility refers to environmental instability, and complexity refers to the degree of heterogeneity and concentration among environmental elements. Taken together, these three components contribute to environmental uncertainty. In scarce, dynamic, and complex environments, a more organic structure is preferable. The more abundant, stable, and simple the environment, the more a mechanistic structure will be preferred.

Finally, there are individual differences in employee preferences for structure. Generally, work specialization contributes to higher employee productivity, but at the price of reduced job satisfaction. Negative behavioural outcomes from high specialization are most likely to surface in professional jobs occupied by individuals with high needs for personal growth and diversity. There is no evidence to support a relationship between span of control and employee performance, in spite of the intellectual or emotional appeal. There is a fairly strong relationship between decentralization and job satisfaction, particularly for employees with low self-esteem.

Learning Objectives

Assess the different elements of an organisation’s structure and the reasons organization’s structure differs.

Analyse the characteristics of the simple structure, the bureaucracy and the matrix structure.

Analyse the behavioural implications of different organisational designs.

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https://smallbusiness.chron.com/organizational-structure-important-3793.html

Organizational structure provides guidance to all employees by laying out the official reporting relationships that govern the workflow of the company. A formal outline of a company's structure makes it easier to add new positions in the company, as well, providing a flexible and ready means for growth.

Significance of Formal Structure

Without a formal organizational structure, employees may find it difficult to know who they officially report to in different situations, and it may become unclear exactly who has the final responsibility for what. Organizational structure improves operational efficiency by providing clarity to employees at all levels of a company. By paying mind to the organizational structure, departments can work more like well-oiled machines, focusing time and energy on productive tasks. A thoroughly outlined structure can also provide a roadmap for internal promotions, allowing companies to create solid employee advancement tracks for entry-level workers.

Flat Organizational Structure

There are relatively few layers of management in what is termed a flat organizational structure. In a flat structure, front-line employees are empowered to make a range of decisions on their own. Information flows from the top down and from the bottom up in a flat structure, meaning communication flows from top-level management to front-line employees and from front-line employees back to top management.

Tall Organizational Structure

There are numerous layers of management in a tall organizational structure, and often inefficient bureaucracies. In a tall structure, managers make most operational decisions, and authority must be gained from several layers up before taking action. Information flows are generally one-way in a tall structure – from the top down.

Introduction

Structural decisions are arguably the most fundamental ones that a leader must make towards sustaining organisational growth.

Choosing an organisational structure requires far more than simply deciding who’s the boss and how many employees are needed.

In this topic, we’ll explore how structure affects employee behaviour and the organisation as a whole.

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According to Drucker it is the correct design of structure which is of most significance in determining organisational performance.

Good organization structure does not by itself produce good performance. But a poor organization structure makes good performance impossible, no matter how good the individual managers may be. To improve organization structure ... will therefore always improve performance.

The importance of good structure is also emphasised by Child.

The allocation of responsibilities, the grouping of functions, decision-making, co-ordination, control and reward – all these are fundamental requirements for the continued operation of an organization. The quality of an organization’s structure will affect how well these requirements are met.6

The structure of an organisation affects not only productivity and economic efficiency but also the morale and job satisfaction of the workforce. Getting the structure right is the first step in organisational change. Structure should be designed, therefore, so as to encourage the willing participation of members of the organisation and effective organisational performance. For example, a major report on the quality of working life refers to organisations in the 1990s as in a state of constant change. Sixty-one per cent of managers say their organisations have carried out restructuring in the past year. Managers in these organisations say this has led to job insecurity (65 per cent), lower morale (65 per cent) and the erosion of motivation and loyalty (49 per cent).

Structure is also an essential feature of the learning organisation and empowerment, and must be responsive to the changing environment.

The functions of the formal structure, and the activities and defined relationships within it, exist independently of the members of the organisation who carry out the work. However, personalities are an important part of the working of the organisation. In practice, the actual operation of the organisation and success in meeting its objectives will depend upon the behaviour of people who work within the structure and who give shape and personality to the framework.

What is organisational structure?

An organisational structure defines how job tasks are formally divided, grouped and coordinated.

Work specialisation or division of labour

Activities are subdivided into separate jobs.

Creates efficiency and productivity.

Can result in boredom, fatigue, stress, low productivity, poor quality, increased absenteeism, high turnover.

Productivity can be increased by enlarging job scope.

Departmentalisation

The basis by which jobs are grouped.

By function, product, geography, process or customer.

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https://smallbusiness.chron.com/meaning-organizational-structure-3803.html

Organizational structure is a system used to define a hierarchy within an organization. It identifies each job, its function and where it reports to within the organization. This structure is developed to establish how an organization operates and assists an organization in obtaining its goals to allow for future growth. The structure is illustrated using an organizational chart.

Types of Organizational Structures

Several types of organizational structures are each defined to meet the needs of organizations that operate differently. The types of organizational structure include divisional, functional, geographical and matrix. A divisional structure is suitable for organizations with distinct business units, while a geographical structure provides a hierarchy for organizations that operate at several locations nationally or internationally.

A functional organizational structure is based on each job's duties. A matrix structure, which has two or several supervisors for each job to report to, is the most complicated but may be necessary for large organizations with many locations and functional areas.

Reporting to a Centralized Location

Although there are many types of organizational structures developed to meet each organization's needs, all of them provide a hierarchy that reports to a centralized location and group of executives. The highest ranking member of an organizational chart is one or several top executives referred to as the president, chief executive officer or chief operating officer.

Job Descriptions to Allow for Growth

When an organizational structure is designed, job descriptions can be developed to not only meet an organizations goals, but allow for organizational and employee growth. Internal equity and employee retention are a key to successful operations. Recruitment is also one of the highest investments for organizations, so ensuring employees have promotional opportunities and job security can assist in reducing recruitment costs.

Salary Structure in an Organization

Organizational structure is also a fundamental core to create salary structures for an organization. Once the structure is established, salary ranges can be created for each job in the organization. In most cases, each job is aligned to a salary grade, and each grade has a specified salary range. This allows an organization to meet its financial goals and ensures salaries are distributed fairly within financial budgets.

Allow for Organizational Expansion

If an organization expands, the organizational structure allows room for growth. This can include adding additional layers of management, new divisions, expanding one or several functional areas or appointing additional top executives. When the structure is reorganized for expansion, it provides the foundation to edit salaries and job descriptions quickly and efficiently with minimal disruption to an organization's operations.

Exhibit 14.2

Economies and diseconomies of work specialisation

Boredom

Fatigue

Stress

Low productivity

Poor quality

Increased absenteeism

High turnover

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For the first half of the 20th century, managers viewed work specialisation as a ‘sure thing’ for improving productivity. So, by the late 1940s most manufacturing jobs in industrialised countries featured work specialisation. However, by the 1960s people started to question whether specialisation is always a good thing. Human diseconomies began to emerge as boredom, fatigue, stress, low productivity, poor quality, increased absenteeism and high turnover, which often offset its economic advantages (see Exhibit 14.2). Increasingly, productivity gains were driven by enlarging, rather than narrowing, the scope of job activities. Giving employees a variety of activities, allowing them to do a whole and complete job and putting them into interdependent teams (see Chapter 9) often achieves significantly higher output, with increased employee satisfaction.

Exhibit 14.1

Key design questions and answers for designing the proper organisational structure

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An organisational structure defines how job tasks are formally divided, grouped and coordinated. Managers need to address various key elements when they design their organisation’s formal structure: work specialisation, departmentalisation, chain of command, span of control, centralisation and decentralisation, formalisation and boundary spanning. Exhibit 14.1 presents each of these elements as answers to an important structural question, and the following sections describe them.

Work specialisation

Early in the 20th century, Henry Ford became rich by building cars on an assembly line. Every Ford worker was assigned a specific, repetitive task, such as putting on the right front wheel or installing the right front door. By breaking jobs into small, standardised tasks that could be performed over and over, Ford was able to produce a car in two-and-a-half hours, using employees who had relatively limited skills, but were able to specialise. Ford demonstrated that work can be performed more efficiently if it is specialised and the practice still has applications in many industries. For example, could you build a car by yourself? Not many of us could. Equally important, it’s often easier and less costly to find and train workers to do simple tasks.

The idea of work specialisation, or division of labour, is not new, dating back more than 200 years to Adam Smith’s influential work.4 Work specialisation requires a task to be broken down to a number of steps, each completed by one individual. In essence, everyone specialises in one part of a task, rather than the whole. It seeks to efficiently use employee skills and improve those skills through repetition. Less time is spent putting away tools and equipment from one step and getting ready for another.

Most managers today recognise the value of some specialisation and the problems when it is carried too far. Specialisation enables McDonald’s to make and sell hamburgers and chips efficiently and hospitals to provide effective healthcare. Wherever job roles can be divided into specific tasks or projects, specialisation is possible. So, it still offers advantages outside manufacturing, particularly where job sharing and part-time work are prevalent. Amazon’s Mechanical Turk program, Topcoder and others like them introduced a new trend in micro-specialisation, in which extremely small pieces of programming, data processing or evaluation tasks are delegated to a global network of individuals by program managers who then assemble the results. This opens the way for employers to use online platforms to assign multiple workers to tasks in broader functional roles such as marketing and accounting. Automation and the use of computers and information systems within organisations are creating a new form of work specialisation in which computers take on specialised work.

So, whereas specialisation previously focused on dividing manufacturing tasks into specific duties within one workplace, now specialisation breaks complex tasks into specific elements by technology, expertise and region. The core principle, however, is the same.

Departmentalisation - Once you have divided jobs through work specialisation, you need to group them so that common tasks can be coordinated. The basis by which jobs are grouped is called departmentalisation.

Departmentalisation - The basis by which jobs in an organisation are grouped together.

One of the most popular ways to group activities is by function performed. A manufacturing manager might organise a plant by separating engineering, accounting, manufacturing, human resources and supply specialists into departments. A hospital might have departments for research, patient care, accounting and so on. The Australian cricket team might have departments for specific activities such as staffing (including players), coaching, ticket sales, marketing and travel. The main advantage of this approach is the efficiencies obtained from putting similar specialists together.

Tasks can also be departmentalised by the type of product or service the organisation produces. For example, large accounting firms’ departments often focus on their main product/service areas (such as taxation, auditing and consulting services) and each department can then be headed by a partner who specialises in that particular product/service line. You may think of Woolworths as one of Australia’s biggest grocery chains. But Woolworths is also a significant player in the liquor industry. Woolworths’ organisational structure offers liquor sales through four separate brands: Woolworths Liquor and Safeway Liquor are departments within Woolworths supermarkets, while BWS and Dan Murphy’s are free-standing stores. In relation to the total diverse Woolworths operation, these departments and stores represent substructures based on product differentiation.

What is organisational structure?

Chain of command: link of authority from top to the lowest echelon of the organisation.

Authority: right to give orders, associated with a managerial position – legitimate power.

Unity of command; each employee should report to, be responsible to one boss.

Span of control: the number of subordinates a manager can efficiently and effectively direct.

Centralisation and decentralisation: decision making responsibility

Formalisation: the degree to which jobs within the organisation are standardised. More formalised = less employee discretion.

Boundary spanning: individuals forming relationships outside their formally assigned groups eg formal liaison roles, committee.

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Chain of command

While the chain of command was once a basic cornerstone of organisational structure, it often has less emphasis today. But contemporary managers should still consider its implications, particularly in industries that deal with potential life-or-death situations calling for quick and difficult decisions. The chain of command is an unbroken line of authority that extends from the top of the organisation to the lowest echelon, clarifying who reports to whom. It answers questions such as: ‘To whom do I go if I have a problem?’ and ‘To whom am I responsible?’

Chain of command - The unbroken line of authority that extends from the top of the organisation to the lowest echelon, clarifying who reports to whom.

The chain of command can’t be discussed without also discussing authority and unity of command. Authority refers to the perceived right to give orders and expect them to be obeyed, often associated with a managerial position—a type of legitimate power. To facilitate coordination, line managers occupy a position in the chain of command, and each position provides its incumbent with a degree of authority. The unity-of-command principle reinforces the need for an unbroken line of authority, arguing that each employee should report to, and be responsible to, only one boss. Without this unity of command, employees might face conflicting demands or priorities from several superiors.

Authority - The perceived right to give orders and expect them to be obeyed, often associated with a managerial position.

Unity of command - The idea that subordinates should have only one superior to whom they are directly responsible.

Times change and so do theories of organisational design. A low-level employee today can access information in seconds that was available only to top managers a generation ago. Employees are empowered to make decisions previously reserved for management. Add the popularity of self-managed and cross-functional teams and the creation of new structures that include multiple bosses and you can see why authority and unity of command seem less relevant. Many organisations still find the chain of command to be a valuable principle, but this is less common today. One survey of more than 1000 managers found that 59% agreed that ‘There is an imaginary line in my company’s organisational chart. Strategy is created by people above this line, while strategy is executed by people below the line’.However, the same survey also found that buy-in to the organisation’s strategy by lower-level employees was inhibited by too much reliance on hierarchy for decision making. It’s worth bearing in mind that managerial authority has rarely been absolute—organisational conflicts and industrial disputes represent challenges to the legitimacy of managerial authority.

Span of control - How many employees can a manager efficiently and effectively direct? This question of span of control is important because it largely determines the number of levels and managers an organisation has. All things being equal, which they rarely are, the wider or larger the span, the more efficient the organisation.

Span of control - The number of subordinates a manager can efficiently and effectively direct.

Centralisation and decentralisation

Centralisation refers to the degree to which decision making is concentrated at a single point in the organisation. In centralised organisations, top managers make all the decisions and lower-level managers merely carry out their directives. In organisations at the other extreme, decentralised decision making is pushed down to the managers closest to the action or even to work groups.

centralisation

The degree to which decision making is concentrated at a single point in the organisation.

Centralised organisations rely on the authority associated with position in the hierarchy. Decentralised organisations can act more quickly to solve problems; more people provide input into decisions; and employees are less likely to feel alienated from those who make decisions that affect their work lives. The effects of centralisation and decentralisation can be predicted to some extent; centralised organisations may be better at avoiding commission errors (bad choices), while decentralised organisations are better for avoiding omission errors (lost opportunities).

Management efforts to make organisations more flexible and responsive have produced a trend towards decentralised decision making by lower level managers, who are closer to the action and typically have more detailed knowledge about problems than do top managers. Myer, the large Australian department store chain, has given its store managers some discretion in choosing what merchandise to stock. This helps stores to compete with local merchants and respond to regional consumer demands. Research investigating Finnish organisations demonstrates that companies with decentralised research and development offices in multiple locations were more innovative than those that centralised research and development into a single office. However, decentralisation is not universally successful: one study of nearly 3000 US Air Force officers suggested that decentralisation in organisations with multi-team systems can have problems such as excessive risk seeking and coordination failures.

Decentralisation is often necessary for companies with offshore sites because localised decision making is needed to respond to regional opportunities, client base and regulation, while some centralised oversight is needed to hold regional managers accountable. Failure to balance these priorities can harm not only the company, but also its relationships with foreign governments, such as in the ground-breaking 2013 case brought by Argentina’s government against Britain’s Hong Kong and Shanghai Banking Corporation (HSBC) for wrongdoing, notably tax evasion, at its Argentina subsidiary. This case led to other cases in different countries, potentially costing HSBC more than US$1.5 billion. Perhaps this is a situation that tighter corporate oversight might have made less likely.

Formalisation

Formalisation refers to the degree to which jobs within the organisation are standardised. The more a job is formalised, the less discretion an employee has over what to do and how to do it. Employees are expected to handle formalised jobs in the same way at all times, resulting in consistent and uniform outputs. This requires explicit job descriptions, explicit organisational rules and clearly defined procedures and processes. Formalisation discourages employees from considering and engaging in alternative behaviours. Conversely, where formalisation is low, employees’ job behaviours are less rigidly directed by management.

Formalisation - The degree to which jobs within an organisation are standardised.

The degree of formalisation varies widely between and within organisations. Research in high-technology Chinese firms shows that formalisation reduces team flexibility in decentralised organisation structures, suggesting that formalisation doesn’t work as well where duties are inherently interactive or if there is a need for flexibility and innovation. Publishing representatives who call on university lecturers to inform them of their company’s new publications have a great deal of freedom in their jobs. They have a general sales pitch, which they tailor as needed, and rules and procedures governing their behaviour may be limited to a requirement to submit weekly sales reports and suggestions on what to emphasise in forthcoming titles. At the other extreme, administrative and editorial employees in the same publishing houses may need to be at their desks by 8 am and follow a set of precise procedures dictated by management.

Boundary spanning

We’ve described how organisations create well-defined task structures and chains of authority. These systems facilitate control and coordination for specific tasks, but if there’s too much division within an organisation, attempts to coordinate across groups can be disastrous. One way to overcome this sense of compartmentalisation and retain the benefits of structure is to encourage or create boundary spanning roles. Boundary spanning occurs when individuals form relationships with people outside their formally assigned groups. An HR executive who frequently engages with the IT group is engaged in boundary spanning, as is a member of an R&D team who implements ideas from a production team. These activities help prevent formal structures from becoming too rigid and, not surprisingly, enhance organisation and team creativity, decision making, knowledge sharing and performance.

Boundary spanning - Individuals forming relationships outside their formally assigned groups.

Boundary-spanning activities occur not only within but also between organisations. Positive results are especially strong in organisations that encourage extensive internal communication; in other words, external boundary spanning is most effective when it is followed up with internal boundary spanning. Similarly, research on 225 manufacturer–distributor dyads in China suggests that ties between salespersons and buyers across organisations often develop better working relationships than those between inter-organisational executives.

Organisations can use formal mechanisms to facilitate boundary-spanning activities. One method is to assign formal liaison roles or develop committees of individuals from different areas of the organisation. Employees with experience in multiple functions, such as accounting and marketing, are also more likely to engage in boundary spanning. Many organisations try to set the stage for these sorts of positive relationships by creating job rotation programs so new hires get a better sense of different areas of the organisation. Another way to encourage boundary spanning is to draw attention to overall organisational goals, such as efficiency and innovation, and shared identity concepts.

Exhibit 14.3

Contrasting spans of control

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Assume that two organisations each have about 4100 operative-level employees. One has a uniform span of four and the other a span of eight. As Exhibit 14.3 illustrates, the wider span will have two fewer levels and approximately 800 fewer managers. If the average manager makes $100 000 a year, the wider span will save $80 million per year in management salaries. So, wider spans seem more efficient in terms of cost. However, if this results in supervisors having insufficient time to provide the necessary leadership and support, it reduces effectiveness and employee performance suffers.

Narrow spans do have their advocates. By keeping the span of control to five or six employees, a manager can maintain close control. But narrow spans have three major drawbacks. First, they are expensive because they add levels of management. Second, they make vertical communication in the organisation more complex. The added levels of hierarchy slow down decision making and tend to isolate upper management. Third, narrow spans encourage overly tight supervision and discourage employee autonomy.

The trend in recent years has been towards wider spans of control. They’re consistent with organisations’ efforts to reduce costs, cut overheads, speed decision making, increase flexibility, get closer to customers and empower employees. However, to ensure that performance doesn’t suffer because of these wider spans, organisations need to invest heavily in employee training. Managers recognise that they can handle a wider span when employees know their jobs inside out or can turn to colleagues when they have questions.

https://www.orgchartpro.com/span-of-control-and-organizational-structure/

What is Span of Control And Organizational Structure?

It is very important to understand span of control and organizational structure when describing an organization. Simply, span of control refers to the number of subordinates under the manager’s direct control. As an example, a manager with five direct reports has a span of control of five. To many or to few direct reports is a good way to view how efficent an organization is as long as it looked at in the context of the companys organizational structure.

An Executive team structure with a ‘narrow’ Span of Control

How many direct reports can a manager have?

Is there an optimal number? What needs to be considered is the nature of the work that subordinates are performing and how much attention each requires. For example a Call Center, the span of control can be numbers over 100, while executive functions – with high degrees of collaboration and interaction – could productively tolerate no more than three or four. So the nature of the work being performed, and how much attention it requires should govern the assignment of personnel to a manager, and not some industry ideal goal.

Exhibit 14.3

Contrasting spans of control

Wider span (8)

Less in management salaries.

Supervisors have less time to provide leadership and support

Reduce effectiveness and employee performance suffers.

Narrow span (4)

Manager can maintain close control

Expensive

Make vertical communication mor e complex

Slow down decision making

Isolate upper management

Tighten supervision

Discourage employee autonomy

jcu.edu.au

https://www.orgchartpro.com/span-of-control-and-organizational-structure/

What is Span of Control And Organizational Structure?

An Executive team structure with a ‘narrow’ Span of Control

How many direct reports can a manager have?

Common organisational designs

Simple structure

Low degree of departmentalisation.

Wide spans of control

Authority and decision making are centralised in a single person or small group.

Little formalisation

Strengths

Business owner has tight control over company’s operation.

Make quicker decision

Weaknesses

Workload of the owner

Owner does not delegate

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https://smallbusiness.chron.com/simple-organizational-structure-63451.html

A simple organizational structure is the default operating system used by most small businesses, because it centralizes decision-making with the owner. Unlike other organizational structures, the simple, or flat, structure doesn’t have formal departments and layers of management. This method of running a company has advantages and disadvantages, and understanding them will help you operate under this system more effectively, so that you can prepare for a transition to a more formal structure.

Evolving Organizational Structures

Businesses must have some form of leadership to be successful, as they will eventually create hierarchies of executives, managers, coordinators and staff members. A simple organizational structure usually consists of an owner who delegates tasks to individual employees who report to her. As the company grows, staff members begin to specialize. The owner might give Bob all of the company’s marketing tasks; she might give Liu all of the office management responsibilities; and she might give Maria the job of keeping the business’s computers up and running.

As a company grows and has more frequent need for specific activities, it creates a functional organizational structure, with marketing, accounting, sales, administration, human resources and information technology departments. If a company has multiple product lines or brands, it might develop a divisional structure, with overhead functions that are centralized in a corporate office, but the production functions are handled at each division. A matrix structure enables each product line to have its own, independent departments.

Strengths of a Simple Organizational Structure

The strength of a simple organizational structure is that it enables a business owner to have tight control over her company’s operation. No decisions are made without her approval, and she is aware of every important decision made. There is no hesitation on the part of employees in a simple structure because their orders come directly from the top, not a department head or mid-level manager a subordinate might question. Companies make decisions quicker with a simple structure because there are no layers of management that ideas or requests need to climb before approval.

Weaknesses of a Simple Organizational Structure

Many of the problems of using a simple organizational structure revolve around the workload of the owner, or that of the person at the top. An owner might become swamped with work, if he has to approve every decision at a company. Companies that use simple organizational structures, even after they’ve added many employees with specialized jobs often do so because the owner can’t bring himself to delegate, making staff members wait for approval on actions they are qualified to take themselves. If an owner is sick, in a meeting or on a business trip, the entire company can become paralyzed, because no one can move forward to take advantage of an opportunity or to solve a problem until the owner is available again.

Exhibit 14.4

A simple structure

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Simple structure

What do a small retail store, an electronics company run by a hard-driving entrepreneur and an airline’s ‘war room’ in the midst of a pilots’ strike have in common? They probably all use the simple structure. We can think of the simple structure in terms of what it is not rather than what it is. The simple structure is not elaborate. It has a low degree of departmentalisation; wide spans of control, authority and decision making are centralised in a single person or small group; and little formalisation. It’s a ‘flat’ organisation, usually with only two or three vertical levels and a loose body of employees.

Simple structure - A structure characterised by a low degree of departmentalisation, wide spans of control, authority centralised in a single person or group, and little formalisation.

Most companies start as a simple structure and many innovative technology-based firms with short expected lifespans, such as mobile phone app development firms, remain compact by design. Exhibit 14.4 is an organisation chart for a retail men’s store owned and managed by Jack. Jack employs five full-time salespeople, a cashier and extra personnel for weekends and holidays, but he runs the show. Although this type of organisation is typical for small businesses, in times of crisis, larger companies often simplify their structures (although not to this degree) as a means of focusing their resources.

The strength of the simple structure lies in its simplicity. It’s fast, flexible, inexpensive to operate and accountability is clear. However, simple structures are often limited by size, becoming increasingly inadequate as an organisation grows. The low formalisation and high centralisation of simple structures tend to create information overload at the top. Decision making typically becomes slower as one person continues doing it all. This proves the undoing of many small businesses. If the structure isn’t developed to address this, the organisation can lose momentum and eventually fail. Depending on one person is also rather risky—one illness can literally destroy the organisation’s information and decision-making centre.

Common organisational designs

Bureaucracy

Functional structure or Divisional structure

Clear hierarchies

High degree of formality

Rigid division of labour

Advantages

Clear accountability, predictability and structure.

Based on impersonal relationship thus, discourages favoritism.

Employees have equal chance to succeed.

Disadvantages

Strict policies slow operations and make communication difficult.

Reduced productivity and innovation, less autonomy.

Lead to conflicts, poor employee relations, inefficiency.

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https://bizfluent.com/info-7760003-advantages-disadvantages-bureaucratic-organizational-structure.html

Bureaucracy in organizations has long been associated with clear hierarchies, a high degree of formality, a rigid division of labor and strict policies that provide consequences to those who disobey. These features tend to get a lot of criticism, but there are plenty of advantages to bureaucracy, especially when the structure is built with an emphasis on equality.

Advantages of a Bureaucratic Structure

Even though the bureaucratic structure has received a lot of criticism, it has some advantages. Accountability, predictability, structure and job security are just a few to mention. Furthermore, a bureaucratic culture is based on impersonal relationships, discouraging favoritism. In this kind of organization, everyone has the same chance to succeed.

Colleges and universities, police departments and government agencies are all bureaucracy examples. They rely on standardized policies and procedures to maintain control and uniformity. An insurance company, for example, may embrace this organizational structure to ensure its employees comply with customer data protection laws and follow industry's best practices.

Advantage: Accountability

Despite being viewed as a large system of rules and regulations, the bureaucratic culture requires responsibility and accountability. People who work within this structure often have a high level of education, more self-direction and are more open-minded. They also tend to focus more on the general good compared to those working for other types of organizations.

Advantage: Job Security

A bureaucratic structure also provides more job security than other organizational structures as long as its employees follow directions. Typically, if a worker does what he is told, abides by the rules and is accountable to his position, he can expect a steady salary and benefits.

Advantage: Equal Chances to Succeed

Favoritism is discouraged in a bureaucratic structure. In a successful bureaucracy, the impersonal nature of relationships creates some benefits. Equality is emphasized. This means that friendships don’t influence the outcomes that are created. Political pressure is secondary to the clout that comes with doing a good, consistent job. This creates a starting line where everyone has the same chance to succeed. It's generally less challenging for an individual to fit into a bureaucratic culture as compared to a flatter organizational structure. This is because rules and regulations provide clear instructions for job roles and expectations.

Disadvantages of a Bureaucratic Structure

Organizations with a bureaucratic culture have strict policies for everything, which can slow down their operations and make communication difficult. For example, if the marketing department decides to try out a new strategy, it must first obtain approval from several other departments based on their order of importance within the company. This may lead to conflicts, poor employee relations, inefficiency and unhappy customers.

Disadvantage: Reduced Productivity and Innovation

The bureaucratic organizational structure may inhibit productivity, diminish innovation and decrease morale. The structure is inherently laden with rules and more policies and procedures can be added at any time, making workloads and roles more complicated.

Disadvantage: Poor Financial Management

Another disadvantage to a bureaucratic structure is the way finances are managed, more specifically, the way the budget is allocated. For instance, in a bureaucratic business, typically, money is available for the current cycle only. If it's not used, then expenditures will not be accounted for in the next budget cycle. This creates a culture of waste since people and departments will spend money so they can have it in their following year's budget.

Disadvantage: Decreased Employee Morale

Bureaucratic organizational structures can also create boredom for their workers, resulting in decreased employee morale. While employees may work hard to earn raises and promotions, there is no guarantee advancement or rewards will be given immediately. There must be incentives built into the bureaucracy to reward a worker who can complete a task in two hours with the same quality it takes someone to complete the task in the expected eight hours. If no incentive exists, you have a worker twiddling their thumbs for six hours and nothing that management can do about it.

Disadvantage: Less Autonomy for Employees

Lastly, there is less freedom to act within a bureaucratic structure. Rules and laws abound, making people accountable and responsible to a governing body. Actions are dictated by those rules and laws. Consequently, there is less freedom and individuals who don't follow the rules may face consequences or penalties.

Common organisational designs

Matrix structure

Combines functional and product elements in a grid-like structure where employees report to function and product managers.

Dual line of authority.

Use to share employees and resources across functions, cost efficient.

Bureaucratic and finger-pointing.

Employees conflict with various managers’ priorities.

jcu.edu.au

The matrix structure combines functional and product elements in a grid-like structure where employees report to function and product managers. We could find it in advertising agencies, aerospace firms, research and development laboratories, construction companies, hospitals, government agencies, universities, management consulting companies and entertainment companies.

Matrix structure - A structure based on dual lines of authority, combining functional and product departmentalisation.

The most obvious characteristic of matrix structures is that they break the unity-of-command concept. Employees in the matrix have two bosses: functional and product managers. Exhibit 14.5 shows the matrix form in a business school. The academic departments, such as accounting, management and marketing are functionally oriented. These are overlaid with specific programs (which are a little like products). So, a professor of accounting teaching an undergraduate course may report to both the director of undergraduate programs and the head of the accounting department. This can be further complicated if the professor also contributes to a major research project that is led by another, more senior, colleague—giving our professor of accounting a third boss to report to. However, universities, like other organisations, often recognise the challenges of operating within dual lines of authority and they’re likely to still specify a single line manager for each employee to report to, at least officially. So, although dual, or even more, lines of authority will exist, there’s still some unity of reporting, helping to moderate possible conflicting demands of different bosses.

https://study.com/academy/lesson/matrix-organizational-structure-advantages-disadvantages-examples.html

A matrix organizational structure is one of the most complicated reporting structures a company can implement. Read on to learn why a company might implement a matrix structure and the advantages and disadvantages for both company and staff.

Definition

A matrix organizational structure is a company structure in which the reporting relationships are set up as a grid, or matrix, rather than in the traditional hierarchy. In other words, employees have dual reporting relationships - generally to both a functional manager and a product manager.

Example

In the 1970s, Philips, a Dutch multinational electronics company, set up matrix management with its managers reporting to both a geographical manager and a product division manager. Many other large corporations, including Caterpillar Tractor, Hughes Aircraft, and Texas Instruments, also set up reporting along both functional and project lines around that time.

https://www.thebalancecareers.com/matrix-management-2276122

Matrix management is commonly used in organizations to share employees and resources across functions. In a matrix management system, an individual has a primary report-to boss while also working for one or more managers, typically on projects.

There are different types of matrix management styles, and different methods to overcome the challenges that come with them. You should know whether is it appropriate to use matrix management and what style you should employ.

Where Matrix Management Makes Sense

Matrix management is ideal for sharing talent and skills across departments. It's an especially handy system when developing new products—it allows individuals from different functions within an organization to work under a project manager to create something new and unique. This gives the team the ability to draw upon diverse skill sets from multiple disciplines, strengthening the project team.

It's a great way to cut costs as well—a matrix approach to projects is typically less expensive than establishing dedicated project teams. The diversity of the team members makes the team superior to many purely functional teams.

Where Matrix Management Is Not Ideal

While there are many potential benefits to this flexible style of team structure, there are some circumstances where it is not ideal. These include:

A project predicted to be long term. A dedicated team with a permanent assignment may be optimal

Situations in which one employee's skills are mission-critical to a particular function. Sharing this individual may reduce the effectiveness of that function

Varieties of Matrix Management Styles

The types of matrix management styles depend on the power given to the project manager leading the cross-functional initiative. There are three types of project team styles: weak matrix, balanced matrix and strong matrix teams.

The hard matrix format is similar to a dedicated team, where the team members have a clear line of reporting to the project manager. The project manager is the functional manager until the project ends. Generally, the function the team member belongs to loses that person for the duration of the project.

In the balanced matrix form, team members report to both the project manager and functional manager. In this form, members are generally expected to be working on the project and in their function, keeping both managers informed.

The weak form of matrix typically means that the project manager has to communicate with the functional managers of each respective team member. Each member reports to their functional manager for tasks on both functions and the project they are assigned to.

Challenges with Matrix Management

While there are many benefits of a matrix management approach, there are challenges as well. A number of these include:

The potential for participants to be conflicted between various managers and priorities

Communication confusion between and across projects and functions

Loss of clarity on who is responsible for performance evaluation

No determination on responsibility for coaching and professional development

Individual capability reduction as participants become stretched across too many initiatives

Reduced effectiveness amongst functional teams that have been working together for some time

Loss of organizational learning and team learning because individuals are involved for only a short duration

To reduce the confusion, conflicts, and loss of clarity, responsibilities should be defined in the project charter or agreed upon by the managers involved.

Members assigned to a project should be thoroughly vetted to ensure they are capable of handling the increase in the volume of work. Different forms of matrix styles should be explored to ensure that the proper one is chosen for the capabilities of the team members and the firm.

Documentation should be thorough and throughout the project to protect the lessons that are learned and provide evaluation information for the team members.

Employee Keys to Success

Working in a matrix environment can be both rewarding and frustrating. Your exposure to different initiatives and colleagues will support learning and relationship development. However, it is important for an employee working in a matrix to understand your firm's approach to your evaluation and development. Some actions you can take as a matrix team member are:

Resolve the identity of your primary reporting manager

Clarify how the input of your various matrix managers will be captured and reflected in your performance evaluation

Maintain a regular dialog with your report-to manager to keep them apprised of your progress and priorities

Identify conflicting priorities and broker discussions between the various managers to clarify any confusion

Take the initiative to propose or encourage your report-to manager to invest in your professional development through training, education, and coaching

Gain the support of your matrix managers for these efforts

Document everything. Type a memo to yourself every day regarding complications and successes. This way, you have documentation of your performance and work throughout the project

There are pros and cons to every management structure and approach. Matrix management is not ideal in every circumstance, and it can create stress for participants where the demands exceed the time and available resources.

Matrix management can offer access to specialized knowledge on a temporary basis while being more cost-effective than relying on dedicated teams. Succeeding with matrix management requires the active involvement and communication of all parties.

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Alternate design options

Virtual structure

A small, core organisation that outsources major business functions. (see exhibit 14.6)

Team structure

An organisation structure that replaces departments with empowered teams, and that eliminates horizontal boundaries and external barriers between customers and suppliers.

Circular structure

An organisational structure in which executives are at the centre, spreading their vision outwards in rings grouped by function (managers, then specialists, then workers).

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Circular structure

Picture the concentric rings of an archery target. In the centre are the executives and radiating outwards in rings grouped by function are the managers, then the specialists, then the workers. This is a circular structure. Does it seem like organisational anarchy? There’s still a hierarchy, but top management is at the very heart of the organisation, with its vision spreading outwards.

Circular structure - An organisational structure in which executives are at the centre, spreading their vision outwards in rings grouped by function (managers, then specialists, then workers).

The circular structure appeals to creative entrepreneurs, and some small, innovative firms have adopted it. As in many hybrid approaches, however, employees can be uncertain about who they report to and who’s running the show. The concept may also have an intuitive appeal for spreading a vision of corporate social responsibility (CSR), so we may see more organisations drawn to this structure in the future.

https://www.managementstudyguide.com/virtual-teams-advantages-and-disadvantages.htm

Virtual team is an emerging new-age trend with followers across business sectors. Just like any other new trend, virtual team also has to undergo strict scrutiny of researchers to weigh its advantages and disadvantages before being accepted by the professionals. The advantages and disadvantages of virtual teams can be looked upon from three levels - individual, organizational and societal as a whole. This article summarizes different perspectives on the advantages and disadvantages of the virtual team and serves as ready reference guide to our readers.

Advantages of Virtual Teams

Cost savings - The biggest advantage of virtual team enjoyed by an organization is the associated cost savings. The organization can do away with huge expenses on real estate, office spaces, utilities bills such as gas, electricity, water etc. and executives’ travel. Many organizations outsource their operations to the low-cost regions. Thus production cost also decreases with the reduced raw material cost, operational costs and lower wages of the employees in these geographic locations.

Leverage Global Talent - Virtual Teams allows organizations to look for talent beyond their country of origin. This brings together the experts and specialists from across the globe to work together on the project. Increased knowledge sharing and greater innovation happens as organization’s human capital share their understanding of global and local markets as well as best business practices.

Increased Productivity & Higher Profits - Members of virtual teams tend to have higher focus on the task at hand. As a practice virtual team supports flatter organization structure. The members do not have to deal with unnecessary bureaucracy which slows down the decision making. This enhances the productivity which shows as higher profits.

Reduced Time to Market - Since the members span the time zones, there could be different team working on the same project 24*7, so when one member sleeps there will be another one somewhere else who would start work where the former had left. This shortens the product development time as well as faster response time to demands in both global and local markets.

Newer Opportunities - If we see at larger societal level, virtual teams have created newer opportunities for people who are less mobile and hesitant to relocate due to either family requirement or physical challenge. Now any task that does not require the physical presence of a person and which can be supported by communication technology throws an opportunity for many deserving candidates.

Disadvantages of Virtual Teams

Cost of Technology - The successful working of virtual team is supported by the efficient use of multiple communication technologies such as instant messaging, emails and video-conferencing, among others. No one tool can provide the complete support. The cost associated with these installation and maintenance tools is little on the higher side.

Conflicts, Lack of Trust & Collaboration - The cultural differences between the members of virtual teams gives rise to number of conflicts. For example, while an American would write a straightforward email describing a bad situation, this would be perceived as impolite by a South Asian (say Japanese) member of the team. This would lead to conflicts, mistrust and difficulties in fruitful collaboration which is so vital for the success of virtual team functioning. These challenges are also precipitated by the absence of non-verbal cues so intrinsic to face-to-face interactions.

Social Isolation - Many members of virtual teams are adversely affected by the lack of physical interactions. Most of the communications in virtual environment is task-oriented. In today’s society where job is an important social force for most of us because many of our workplace colleagues also constitute our close friends, this gives a not-so-good feeling of social isolation. This in turn counter-effects productivity as well as leads to stress.

https://smallbusiness.chron.com/advantages-teambased-structure-55624.html

Using a team-based approach to solving business problems enables you capitalize on your employees' strengths and minimize their weaknesses. A team-based organizational structure groups employees who perform specific duties into project teams that perform specific functions. This type of organizational structure allows you to ensure the best coverage for activities such as product development, customer support and process-improvement initiatives. With low-overhead and minimal management, this allows you to maximize successful opportunities and avoid threats.

Less Management

By eliminating layers of management, employees get to make decisions without getting multiple approvals. This streamlines processes and lowers administrative costs. Additionally, employees feel empowered and morale increases. Because people on the team work toward the same goal, they focus on the task at hand rather than petty interdepartmental conflicts requiring management intervention. Using a team-based structure, employees typically solve problems themselves without having to consult superiors, which shortens the amount of time required to complete activities.

Improved Relationships

When people work on teams, they share the responsibility for completing work on schedule. If one employee can’t complete the task, another team member can fulfill the obligation. This ensures the work gets done no matter what happens. By creating a comprehensive roles and responsibility matrix, accountability gets clearly defined so misunderstandings and conflict don’t arise. Regular meetings ensure that communication flows from one team member to the next. Additionally, connected team members can use social media technology, including wikis, blogs and forums, to keep other employees informed.

Increased Productivity

When people work in teams, creativity and innovation increase through brainstorming and process improvement discussions. Instead of focusing on individual achievement, teams strive for a common goal, such as product or service development and delivery. Working together, they collaborate to solve problems using their collective knowledge and experience. People working closest to problems typically have the best ideas for solving them. In a team-based structure, the leader empowers her subordinates to take action.

Balance

Adopting a team-based structure enables you to staff your projects with resources that complement each other. According to management expert Meredith Belbin, successful teams require action-oriented members, people-oriented members and thought-oriented members. Action-oriented team members challenge the team to improve processes, encourage other team members to get things done and ensure work get done on time. People-oriented roles guide the team, provide support and get resources for the project. Thought-oriented team members come up with ideas, evaluation options and provide specialized knowledge. This balance ensures that the team considers all angles to complex problems and solves them efficiently.

Exhibit 14.6

A virtual organisation

Philip Rosedale’s virtual company (LoveMachine)

Company does not have full-time software development staff.

Outsources assignments to freelancers who submit bids for projects.

Programmers from around the world.

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Virtual structure

Why own when you can rent? That question captures the essence of the virtual organisation (also sometimes called the network, or modular, organisation), typically a small, core organisation that outsources major business functions.41 Virtual organisations tend to be highly centralised, with little or no departmentalisation.

Virtual organization - A small, core organisation that outsources major business functions.

The prototype of the virtual structure is today’s movie-making organisation. In Hollywood’s golden era, movies were made by huge, vertically integrated corporations. Studios such as MGM, Warner Brothers and 20th Century Fox owned large movie lots and employed thousands of full-time specialists: set designers, camera people, film editors, directors and actors. Today, most movies are made by individuals and small companies who come together and make films project by project. This structural form allows each project to be staffed with the talent best suited to its demands, rather than just by people employed by a studio. It minimises bureaucratic overheads because there’s no lasting organisation to maintain and it reduces long-term risks and costs because there’s no long term; a team is assembled for a limited period and then disbanded.

Another example is Philip Rosedale’s virtual company, LoveMachine, which lets employees send brief electronic messages to one another to acknowledge a job well done and can then be used to facilitate company bonuses. The company has no full-time software development staff—instead, LoveMachine outsources assignments to freelancers who submit bids for projects such as debugging software or designing new features. Programmers come from around the world, including Russia, India, Australia and the United States.

Exhibit 14.6 shows a virtual organisation that outsources all its primary business functions. The organisation’s core is a small group of executives who directly oversee any activities done in-house and coordinate relationships with the other organisations that perform the manufacturing, distribution and other crucial functions for the virtual organisation. The dotted lines represent the relationships typically maintained under contracts. Managers in virtual structures spend most of their time coordinating and controlling external relations, typically by way of computer-network links.

The major advantage of the virtual organisation is its flexibility, allowing individuals with an innovative idea and little money to compete against more established organisations. Virtual organisations also save money by eliminating permanent offices and hierarchical roles.44 Their drawbacks, however, have become increasingly clear as their popularity has grown.45 They’re in a state of perpetual flux and reorganisation, so roles, goals and responsibilities can be unclear. This sets the stage for political behaviour. Those who work frequently with virtual organisations often note that cultural alignment and shared goals can be lost because of the low degree of interaction among members.

The leaner organisation: downsizing

Effective strategies for downsizing

Investment: company downsize to focus on core competencies.

Communication: discuss with employees early in the process, reduce employees’ anxiety.

Participation: voluntary early retirement programs, severance packages can help achieve leanness without lay-offs.

Assistance: provide severance, extended healthcare benefits, job search assistance.

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Despite the advantages of being a lean organisation, the impact of downsizing on organisational performance has been very controversial.55 Reducing the size of the workforce has an immediate positive outcome by reducing wage costs. Companies downsizing to improve strategic focus often see positive effects on share prices after an announcement. For example, Russia’s Gorky Automobile Factory (GAZ) realised a profit for the first time in many years after then President Bo Andersson fired 50 000 workers, half the workforce.On the other hand, companies that cut employees without restructuring usually experience declining profit and share prices. One problem is the effect of downsizing on employee attitudes. ‘Survivors’ often feel worried about future lay-offs, may be less committed to the organisation and may experience more stress. In companies that don’t invest much in their employees, downsizing can also lead to more voluntary turnover, so vital human capital is lost. The result is a company that’s more anaemic than lean. Paradoxically, some research suggests that the victims may actually fare better than the survivors, experiencing higher control perceptions and less stress.

Companies can reduce negative impacts by preparing for the post-downsizing environment in advance, which alleviates some employee stress and strengthens support for the new strategic direction. Here are some effective strategies for downsizing, and suggestions for implementing them.

Investment. Companies that downsize to focus on core competencies are more effective when they invest in high-involvement work practices afterwards.

Communication. When employers make efforts to discuss downsizing with employees early on in the process, employees are less worried about the outcomes and feel that the company is taking their perspective into account.

Participation. Employees worry less if they can participate in the process in some way. In some companies, voluntary early retirement programs or severance packages can help achieve leanness without lay-offs.

Assistance. Providing severance, extended healthcare benefits and job search assistance demonstrates that a company does care about its employees and honours their contribution.

Companies that make themselves lean can be more agile, efficient and productive, but only if they make cuts carefully and help employees through the process.

https://www.strategyex.co.uk/blog/pmoperspectives/flat-lean-organisations-matters-strategy-execution-strategy-execution-series/

So what does it mean to be a flat and lean organisation?

To be a flatter organisation it is all about the hierarchy of the organisation – less middle management, more direct links between senior executives and the employees. As you can guess, the idea of a flatter structure has led to a middle management groundswell, it will be those managers that will find no place in a future organisation structure.

This article from Fast Company gives a good account of the four different types of flat organisations – they include holacracy; network-centric, lattice and self-management.

How realistic these four organisational types will be in the future is anyone’s guess but if we bring it back to organisation’s performing better at project management, the flat organisation will certainly bring the sponsors and the delivery teams closer together, which can only be a good thing.

To be a leaner organisation we can interpret this in two ways – fewer people needed because the organisation becomes more efficient – or lean management, the management philosophy derived from Toyota which is all about eliminating waste, increasing value and continuous improvement.

This insight from McKinsey directly relates lean to the management of an organisation (as opposed to the operations of manufacturing) and highlights four principles of lean when applied to management:

Delivering value efficiently to the customer

Enabling people to lead and contribute to their fullest potential

Discovering better ways of working

Connecting strategy, goals, and meaningful purpose.

https://smallbusiness.chron.com/make-lean-organization-25019.html

A lean organization is committed to its customers and works to minimize waste by focusing all of its resources on producing the best possible value for customers. Investments are carefully considered and only made when it is clear that a long-term financial advantage exists in doing so. Fluff is cut away until all that is left are departments and employees who directly affect the finished product. Any organization can be made lean as long as the organization's mission remains in clear focus.

1. Conduct an honest assessment of work practices. Change can be tough, particularly when you've been running your business in essentially the same way for years. A lean organization depends upon making the journey from raw goods to finished product as seamless as possible. Look at your current practices in order to determine which can be axed without any inconvenience to the customer. For example, if you purchase raw materials from a distant provider, look to see whether a local manufacturer might provide you with faster service and no shipping costs.

2. Eliminate the fat. Possibly the most difficult part of streamlining a business is cutting workers. Many companies have found that it is less expensive to outsource their payroll duties, rather than carry a payroll department. Human resource departments can often be run just as efficiently by fewer people as long as the jobs are matched to particular skills. Middle management can sometimes be cut without a corresponding loss in productivity. If you have hired your relatives to work in your business, consider whether they are an asset and how much they add to your bottom line. A lean organization has little room for sentimental hires.

3. Give employees credit for knowing what they're doing. The reality is that rank-and-file employees often have a better understanding of their jobs than their bosses do. Take advantage of that fact by allowing each employee to contribute in a meaningful way. That could mean encouraging employees to come up with fresh ideas for how to streamline their jobs and to actually implement those ideas. The days of an employer or a manager acting as a "parent" who has all the answers are gone. Businesses simply can't afford to lose the ingenuity that comes with employees who are encouraged to put their stamp on a job. The more weight you allow your employees to willingly carry, the less personnel you'll need to see projects through.

4. Continually revise your method of operation. Becoming a lean organization is a process. Sitting down and devising a plan is an effective way to get started, but you'll find that as you look more closely at your business, you'll find other areas that need to be trimmed in order to operate efficiently. Look at the process as ongoing as opposed to a one-time fix.

Why do structures differ?

Mechanistic model

Also known as bureaucratic structure.

Characterised by extensive departmentalisation, high formalisation, a limited information network and centralisation.

Organic model

A structure that is flat, uses cross-hierarchical and cross-functional teams, has low formalisation, possesses a comprehensive information network and relies on participative decision making.

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https://study.com/academy/lesson/bureaucratic-organizations-mechanic-organic-bureacracies.html

Organizational Structure

The organizational structure refers to the type of framework a company uses to distinguish power and authority, roles and responsibilities, and the manner in which information flows through the organization. An organization must choose a structure that is appropriate for its individual needs and allows for the company to react and adapt to uncertainties and changes in the internal and external environments. Having a suitable organizational structure will allow a company to implement proper operating procedures and decision-making processes that will aid the organization in accomplishing its goals. Tom Burns and G. M. Stalker identified two basic forms of organizational structure: mechanistic and organic structures. This lesson describes the differences between the two types of organizational structures.

Mechanistic Structure

A mechanistic structure, also known as a bureaucratic structure, describes an organizational structure that is based on a formal, centralized network. The mechanistic structure is best suited for companies that operate in a stable and certain environment. In general, a mechanistic structure is easy to maintain and rarely needs to be changed when an organization operates in a stable environment.

In mechanistic organizations, authority reflects a well-defined hierarchy where top-level managers make the majority of the decisions. Because the environment is relatively stable, complex decision-making processes that involve multiple parties are not required. Subordinates are expected to follow the directions of management and not question their rationale. Communication, much like decisions, also flows through hierarchical routes, or from the top down.

Individualized job specialization is used to place employees into designated tasks. In mechanistic organizations, it is typical for each person to be assigned one task that is relatively stable and easy to control. As a result of the stability of tasks, there tends to be low integration between functional areas or departments in organizations that use a mechanistic structure. Likewise, this creates a situation where, for the most part, functional areas are not dependent on each other.

Think of a mechanistic structure as a well-oiled machine that, once functioning properly, continues to work efficiently with little need for maintenance. Simply envision an organization where management makes most of the decisions, information is communicated based on chain of command, tasks are highly specialized, departments stand alone and operate as their own entity, and change is, for the most part, uncommon. Examples of mechanistic structures include healthcare, universities, and governmental organizations.

Organic Structure

Organic structures are used in organizations that face unstable and dynamic environments and need to quickly adapt to change. When an environment changes, an organization must be able to gather, process, and disseminate information very quickly. Failure to do so can directly affect an organisation’s ability to maintain its competitive advantage. Communication is lateral and rapid in these complex environments. TO achieve this organisations that use an organic structure will integrate functional areas and departments together so that information can flow seamlessly between them.

Exhibit 14.7

Mechanistic versus organic models

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So far, we’ve described various organisational designs. Exhibit 14.7 recaps the discussions by presenting two extreme models of organisational design. One, the mechanistic model is primarily bureaucratic in that it has standardised work processes, high formalisation and more managerial hierarchy. The other, the organic model, is flatter, has fewer formal procedures for making decisions, has multiple decision makers and favours flexible practices.

Why do structures differ?

Structure is a means of achieving objectives, and objectives are associated with the organisation’s overall strategy.

Organisational strategies

Innovation strategy: emphasises the introduction of major new products, services and organisational processes.

Cost-minimisation strategy: emphasises tight cost controls, avoid unnecessary innovation or marketing expenses and price cutting.

Imitation strategy: seeks to move into new products or new markets only after innovations have proven their viability. Eg. Mass-market fashion manufactures that copy designer styles.

Organisation size

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Organisational strategies

Structure is a means of achieving objectives, and objectives are associated with the organisation’s overall strategy, so it’s only logical that strategy and structure should be closely linked. Indeed, if management significantly changes the organisation’s strategy, the structure normally changes to accommodate it.60 Most current strategy frameworks focus on three strategy dimensions—innovation, cost-minimisation and imitation—and the structural design that works best with each.

To what degree does an organisation introduce major new products, services or organisational processes? An innovation strategy strives to achieve meaningful and unique innovations. However, not all organisations pursue innovation as enthusiastically as some. For example, the conservative retailer Myer demonstrates little inclination to innovate while other retailers, such as UK-based Marks and Spencer, have innovatively embraced online retail opportunities successfully in places such as Australia, New Zealand and China,after many years struggling with bricks-and-mortar retail globally. Innovative companies often use competitive pay and benefits to attract top candidates and to motivate employees to take risks. Some degree of mechanistic structure can actually benefit innovation. Well-developed communication channels, policies for enhancing long-term commitment and clear channels of authority all may make it easier to make rapid changes smoothly.

Innovation strategy - A strategy that emphasises the introduction of major new products, services and organisational processes.

An organisation pursuing a cost-minimisation strategy tightly controls costs, refrains from incurring unnecessary expenses and cuts prices in selling a basic product. This describes the strategy pursued by Aldi and the makers of generic or store-label grocery products. Cost-minimising organisations pursue fewer policies meant to develop commitment among their workforce.

Cost-minimisation strategy - A strategy that emphasises tight cost controls, avoidance of unnecessary innovation or marketing expenses, and price cutting.

Organisations following an imitation strategy try to both minimise risk and maximise the opportunity for profit, moving into new products or new markets only after innovators have proven their viability. Mass-market fashion manufacturers that copy designer styles follow this strategy, as do companies—such as computer giant HP and machinery manufacturer Caterpillar—that follow smaller and more innovative competitors with superior products, but only after competitors have demonstrated that the market is there. Italy’s Moleskine SpA, a small maker of fashionable notebooks, is another example of imitation strategy, but in the reverse; looking to open more retail shops around the world, it’s employing the expansion strategies of larger, successful fashion companies, Salvatore Ferragamo SpA and Brunello Cucinelli.

Imitation strategy - A strategy that seeks to move into new products or new markets only after their viability has already been proven.

Organisation size

An organisation’s size significantly affects its structure.64 Organisations that employ 2000 or more people tend to have more specialisation, more departmentalisation, more vertical levels and more rules and regulations than do small organisations. However, size becomes less important as an organisation expands because at around 2000 employees an organisation is already fairly mechanistic; 500 more employees won’t have much impact. But adding 500 employees to an organisation of only 300 is likely to significantly shift it towards a more mechanistic structure.

Exhibit 14.8

The strategy-structure relationship

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Exhibit 14.8 describes the structural option that best matches each strategy. Innovators need the flexibility of the organic structure, whereas cost-minimisers seek the efficiency and stability of the mechanistic structure. Imitators combine the two structures. They use a mechanistic structure to maintain tight controls and low costs in their current activities but create organic subunits in which to pursue new undertakings.

Why do structures differ?

Technology

Describes the way in which an organisation transforms inputs into outputs.

Degree of routineness: routine activities are characterised by automated and standardised operations, while non-routine activities are more customised.

Organisations that engage in non-routine activities tend to prefer organic structures, while those performing routine activities prefer mechanistic structures.

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Technology

Technology describes the way in which an organisation transforms inputs into outputs. Every organisation has at least one technology for converting financial, human and physical resources into products or services. For example, Mack Trucks uses an assembly-line process in its Queensland production facility. Universities may use a number of instruction technologies, such as traditional lectures, the case-analysis method, experiential exercises, programmed learning and even reading textbooks. Regardless, organisational structures adapt to the technology they adopt. Numerous studies have examined the technology–structure relationship.65 A common theme that differentiates technologies is their degree of routineness. Routine activities are characterised by automated and standardised operations, while non-routine activities are more customised. Organisations that engage in non-routine activities tend to prefer organic structures, while those performing routine activities prefer mechanistic structures.

Environment

An organisation’s environment includes outside institutions or forces that can affect its performance, such as suppliers, customers, competitors, government regulatory agencies and public pressure groups. Dynamic environments create significantly more uncertainty for managers than do static ones. To minimise uncertainty, managers may broaden their structure to sense and respond to threats. Many companies have added social media departments to their structure to respond to negative information posted on blogs. Companies may also form strategic alliances—perhaps the most visible examples being in the travel industry where airlines often seek synergy in some routes by sharing ‘codes’. So if you fly with Qantas from Chicago to Australia, you might find yourself seated on an American Airlines jet, despite having a Qantas code (beginning with QF or QFA) on your ticket.

Environment - Institutions or forces outside an organisation that potentially affect the organisation’s performance.

All organisations have three environmental dimensions: capacity, volatility and complexity.‘Capacity’ refers to the degree to which the environment can support growth. Rich and growing environments generate excess resources, which can buffer the organisation in times of relative scarcity. ‘Volatility’ describes the degree of instability in the environment. A dynamic environment with a high degree of unpredictable change makes it difficult for management to make accurate predictions. So, because information technology changes so rapidly, more organisations’ environments are becoming volatile. Finally, ‘complexity’ is the degree of heterogeneity and intricacy among environmental elements. Simple environments—such as in the tobacco industry—are homogeneous and concentrated. Environments characterised by heterogeneity and dispersion—such as the broadband industry—are complex and diverse, with numerous competitors.

Institutions

Organisational structure is also influenced by environmental institutions. These are socio-cultural factors that act as guidelines for appropriate behaviour.68 Institutional theory describes some of the forces that lead many organisations to have similar structures and, unlike the theories we’ve described so far, focuses on pressures that aren’t necessarily adaptive. In fact, many institutional theorists try to highlight the ways in which corporate behaviours sometimes seem to be performance oriented but are guided by unquestioned social norms and conformity.

Institutions

Cultural factors—especially those factors that might not lead to adaptive consequences—that lead many organisations to have similar structures.

The most obvious institutional factors come from regulatory pressures. For example, organisations servicing public-sector contracts must satisfy government requirements. Sometimes simple inertia determines an organisational form—companies can be structured in a particular way just because that’s how things have always been done. Organisations in countries with high power distance might have a structural form with strict authority relationships because it’s expected in that culture. Organisations may also be influenced by structural fads or trends. Managers may try to copy other successful companies just to look good to investors and not because they need that structure to perform better. Many companies have recently tried to copy the organic form of a company such as Google only to find that such structures are a very poor fit with their operating environment. Institutional pressures are often difficult to see specifically because we take them for granted, but that doesn’t mean they aren’t powerful.

Why do structures differ?

Environment

Suppliers, customers, competitors, government regulatory agencies, public pressure groups that affects a company’s performance.

Three environmental dimensions:

Capacity: degree to which the environment can support growth.

Volatility: degree of instability in the environment.

Complexity: degree of heterogeneity and intricacy eg tobacco industry is homogeneous and concentrated. Broadband industry is more complex, diverse with numerous competitors.

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Technology

Environment

Environment - Institutions or forces outside an organisation that potentially affect the organisation’s performance.

Institutions

Cultural factors—especially those factors that might not lead to adaptive consequences—that lead many organisations to have similar structures.

Exhibit 14.9

Three-dimensional model of the environment

The more scarce, dynamic and complex the environment, the more organic a structure should be.

The more abundant, stable and simple the environment, the more the mechanistic structure will be preferred.

Organic

structure

Mechanistic

structure

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Exhibit 14.9 summarises the definition of the environment along its three dimensions. The arrows indicate movement towards higher uncertainty. So, organisations that operate in environments characterised as scarce, dynamic and complex face the greatest degree of uncertainty. This is because they have little room for error, high unpredictability and a diverse set of elements in the environment to monitor constantly.

Given this three-dimensional definition of environment, we can offer some general conclusions about environmental uncertainty and structural arrangements. The more scarce, dynamic and complex the environment, the more organic a structure should be. The more abundant, stable and simple the environment, the more the mechanistic structure will be preferred.

Why do structures differ?

Institutions

Socio-cultural factors that guides behaviour: high power distance society tend to have a structure with strict authority.

Regulatory pressures eg organisations servicing public-sector contracts must satisfy government requirements.

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Technology

Environment

Environment - Institutions or forces outside an organisation that potentially affect the organisation’s performance.

Institutions

Cultural factors—especially those factors that might not lead to adaptive consequences—that lead many organisations to have similar structures.

Organisational designs and employee behaviour

Work specialisation contributes to higher employee productivity at the price of reduced job satisfaction and potential human diseconomies.

There is little evidence of a relationship between span of control and employee performance.

Evidence links centralisation and job satisfaction. Less centralised organisations offer greater autonomy and autonomy can contribute to job satisfaction.

National culture influences structural preferences.

Downsizing can negatively impact employees.

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Specialisation can make operations more efficient, but remember that excessive specialisation can create dissatisfaction and reduced motivation.

Avoid designing rigid hierarchies that overly limit employees’ empowerment and autonomy.

Balance the advantages of virtual and boundaryless organisations against the potential pitfalls before adding flexible workplace options.

Downsize your organisation to realise major cost savings, and focus the company around core competencies—but only if necessary, because downsizing can have a significant negative impact on employee affect.

Consider the scarcity, dynamism and complexity of the environment, and balance the organic and mechanistic elements when designing an organisational structure.

What are the six key elements that define an organisation’s structure? The structure is how job tasks are formally divided, grouped, and coordinated. The six key elements that define an organisation’s structure are:

Work specialisation

Departmentalisation

Chain of command

Span of control

Centralisation and decentralisation

Formalisation.

What are the characteristics of the simple structure, the bureaucracy and the matrix structure? A simple structure is characterised by a low degree of departmentalisation, wide spans of control, authority centralised in a single person and little formalisation. Bureaucracy is a complex structure that is comprised of highly operating routine tasks achieved through specialisation, very formalised rules and regulations, tasks that are grouped into functional departments, centralised authority, narrow spans of control and decision making that follows the chain of command. The matrix structure is used in advertising agencies, aerospace firms, research and development laboratories, construction companies, hospitals, government agencies, universities, management consulting firms and entertainment companies. It combines two forms of departmentalisation, functional and product. The matrix attempts to gain the strengths of both functional and product departmentalisation, while avoiding their weaknesses. The most obvious structural characteristic of the matrix is that it breaks the unity-of-command concept. Employees in the matrix have two bosses, their functional department managers and their product managers. Therefore, the matrix has a dual chain of command.

What are the characteristics of a virtual organisation and a boundaryless organisation? The essence of the virtual organisation is that it is typically a small, core organisation that outsources major business functions. It is highly centralised, with little or no departmentalisation. Virtual organisations create networks of relationships that allow them to contract out manufacturing, distribution, marketing or any other business function where management feels that others can do it better or more cheaply. The boundaryless organisation seeks to eliminate the chain of command, have limitless spans of control and replace departments with empowered teams.

Why do organisational structures differ, and what is the difference between a mechanistic structure and an organic structure? There are four reasons why structures differ:

Strategy

Innovation strategy, which emphasises the introduction of major new products and services. An organic structure may be best.

Cost-minimisation strategy, which emphasises tight cost controls, avoidance of unnecessary innovation or marketing expenses, and price cutting. Cost minimisers seek the efficiency and stability of the mechanistic structure.

Imitation strategy, which seeks to move into new products or new markets only after their viability has already been proven. Imitators combine the two structures, a mechanistic structure (in order to maintain tight controls and low costs) and organic subunits (to pursue new lines of business).

Organisational size—as organisations grow, they become more mechanistic and more specialised, with more rules and regulations.

Technology—how an organisation transfers its inputs into outputs.

Environment—institutions or forces outside the organisation that potentially affect the organisation’s performance. Three key dimensions include:

Capacity

Volatility

Complexity.

What are the behavioural implications of different organisational designs? A review of the evidence leads to a clear conclusion: you can’t generalise! Not everyone prefers the freedom and flexibility of organic structures.

Different factors stand out in different structures as well. In highly formalised, heavily structured mechanistic organisations, the level of fairness in formal policies and procedures is a very important predictor of satisfaction. In more personal, individually adaptive organic organisations, employees value interpersonal justice more.

Some people are most productive and satisfied when work tasks are standardised and ambiguity is minimised—that is, in mechanistic structures.

This means that any discussion of the effect of organisational design on employee behaviour has to address individual differences. To do so, let’s consider employee preferences for work specialisation, span of control and centralisation.

The evidence generally indicates that work specialisation contributes to higher employee productivity, but at the price of reduced job satisfaction. However, work specialisation is not an unending source of higher productivity. Problems start to surface, and productivity begins to suffer, when the human diseconomies of doing repetitive and narrow tasks overtake the economies of specialisation. As the workforce has become more highly educated and desirous of jobs that are intrinsically rewarding, the point at which productivity begins to decline seems to be reached more quickly than in the past.

There is still a segment of the workforce that prefers the routine and repetitiveness of highly specialised jobs. Some individuals want work that makes minimal intellectual demands and provides the security of routine; for them, high work specialisation is a source of job satisfaction.

It is probably safe to say that no evidence supports a relationship between span of control and employee performance. Although it is intuitively attractive to argue that large spans might lead to higher employee performance because they provide more distant supervision and more opportunity for personal initiative, the research fails to support this notion.

There is fairly strong evidence linking centralisation and job satisfaction. In general, organisations that are less centralised have a greater amount of autonomy. And autonomy appears positively related to job satisfaction. But, again, individual differences surface. While one employee may value freedom, another may find autonomous environments frustratingly ambiguous.

The conclusion that can be drawn from this is that, to maximise employee performance and satisfaction, managers must take individual differences, such as experience, personality and the work task, into account. Culture should factor in as well. One obvious insight is that people don’t select employers randomly. They are attracted to, are selected by and stay with organisations that suit their personal characteristics.

Exhibit 14.10

Organisational structure: its determinants and outcomes

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An organisation’s internal structure contributes to employee behaviour. That is, in addition to individual and group factors, the structural relationships in which people work have a bearing on employee attitudes and behaviour. What is the basis for this argument? To the degree that an organisation’s structure reduces ambiguity for employees and clarifies concerns such as, ‘What am I supposed to do?’, ‘How am I supposed to do it?’, ‘To whom do I report?’ and ‘To whom do I go if I have a problem?’, it shapes their attitudes and facilitates and motivates them to higher levels of performance. Exhibit 14.10 Organisational structure: its determinants and outcomes

Summary

The structural relationships in which people work have a bearing on employee attitudes and behaviours.

Specialisation can make operations more efficient, but excessive specialisation can create dissatisfaction and reduced motivation.

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Implications for managers

Specialisation can make operations more efficient, but remember that excessive specialisation can create dissatisfaction and reduced motivation.

Avoid designing rigid hierarchies that overly limit employees’ empowerment and autonomy.

Balance the advantages of virtual and boundaryless organisations against the potential pitfalls before adding flexible workplace options.

Downsizing your organisation can realise major cost savings and focus the company around core competencies—but take care because downsizing can have a significant negative impact on employees, too.

Consider the scarcity, dynamism and complexity of the environment, and balance the organic and mechanistic elements when designing an organisational structure.

Topic 15

Organisational culture

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Organisational Culture

An organisational culture is an intervening variable. Employees form an overall subjective perception of the organisation based on factors such as degree of risk tolerance, team emphasis, and support of people. This overall perception becomes, in effect, the organisation’s culture or personality, and affects employee performance and satisfaction, with stronger cultures having greater impact.

Realise that an organisation’s culture is relatively fixed in the short term. To effect change, involve top management and strategise a long-term plan.

Hire individuals whose values align with those of the organisation; these employees will tend to remain committed and satisfied. Not surprisingly, ‘misfits’ have considerably higher turnover rates.

Understand that employees’ performance and socialisation depend to a considerable degree on their knowing what to do and not to do. Train your employees well and keep them informed of changes to their job roles.

As a manager, you can shape the culture of your work environment, sometimes as much as it shapes you. All managers can especially do their part to create an ethical culture and to consider spirituality and its role in creating a positive organisational culture.

Be aware that your company’s organisational culture may not be ‘transportable’ to other countries. Understand the cultural relevance of your organisation’s norms before introducing new plans or initiatives overseas.

What are the functional and dysfunctional effects of organisational culture? Culture defines the boundary between one organisation and others. It:

Conveys a sense of identity for its members

Facilitates the generation of commitment to something greater than self-interest

Enhances the stability of the social system

Serves as a sense-making and control mechanism for fitting employees in the organisation.

The liability or dysfunctional effects of organisational culture are that they can be:

Institutionalisation: a condition that occurs when an organisation takes on a life of its own, apart from any of its members, and acquires immortality.

Barriers to change, when a culture’s values are not aligned with the values necessary for rapid change

Barriers to diversity, when strong cultures put considerable pressure on employees to conform, which may lead to institutionalised bias

Barriers to acquisitions and mergers, when incompatible cultures can destroy an otherwise successful merger.

What factors create and sustain an organisation’s culture? Cultures begin with the thoughts and values of the founders. The founders hire and keep only the employees who think and feel the same way they do. The founders indoctrinate and socialise these employees to their way of thinking and feeling. Finally, the founders’ own behaviour acts as a role model that encourages employees to identify with them and thereby internalise their beliefs, values and assumptions.

Factors that sustain an organisational culture or keep it alive are:

Selection—this is concerned with how well the candidates will fit into the organisation and provides information to candidates about the organisation.

Top management—where senior executives help establish behavioural norms that are adopted by the organisation

Socialisation—this is the process that helps new employees adapt to the organisation’s culture.

How is culture transmitted to employees? Employees learn the culture through the socialisation process. The culture is transmitted in a number of forms:

Stories, which anchor the present into the past and provide explanations and legitimacy for current practices

Rituals, or repetitive sequences of activities that express and reinforce the key values of the organisation

Symbols, such as acceptable attire, office size, opulence of the office furnishings and executive perks that convey to employees who is important in the organisation

Language, the use of jargon and special ways of expressing oneself to indicate membership in the organisation.

How can an ethical culture be created? An organisational culture that is most likely to shape high ethical standards is one that is high in risk tolerance, low to moderate in aggressiveness, and focuses on means as well as outcomes. If the culture is strong and supports high ethical standards, it should have a very powerful and positive influence on employee behaviour. An organisation’s leader or leaders can create an ethical culture by doing the following:

Being visible role models. Employees will look to top-management behaviour as a benchmark for defining appropriate behaviour.

Communicating ethical expectations. Ethical ambiguities can be minimised by creating and disseminating an organisational code of ethics.

Providing ethical training. Use seminars, workshops and similar ethical training programs to reinforce the organisation’s standards of conduct, to clarify what practices are and are not permissible and to address possible ethical dilemmas.

Visibly rewarding ethical acts and punishing unethical ones. Performance appraisals of managers should include a point-by-point evaluation of how his or her decisions measured against the organisation’s code of ethics.

Providing protective mechanisms. The organisation needs to provide formal mechanisms so that employees can discuss ethical dilemmas and report unethical behaviour without fear of reprimand. This might include creation of positions for ethical counsellors, ombudsmen or ethical officers.

What is a positive organisational culture? A positive organisational culture is one that:

Builds on employee strengths by emphasising and showing workers how they can capitalise on their strengths

Rewards more than it punishes by articulating praise and ‘catching employees doing something right’

Emphasises individual vitality and growth by helping employees learn and grow in their jobs and careers.

What are the characteristics of a spiritual culture? A spiritual culture is one which recognises that people have an inner life, which nourishes and is nourished by meaningful work and which takes place in the context of the community. The four characteristics of a spiritual culture are:

Strong sense of purpose—culture is built upon a meaningful purpose

Trust and respect—esteem, value and dignity

Benevolence—showing kindness towards others

Open-mindedness—flexible thinking and creativity

How does national culture affect how organisational culture is transported to another country? National cultures all differ, and organisational cultures will often reflect national cultures. Organisational cultures, while strong, can’t ignore local culture. Managers can help by being more culturally sensitive, for example, by speaking slowly and in a low tone, by listening more and by avoiding discussions about religion or politics. All global firms need to be more culturally sensitive.

Learning Objectives

Compare the functional and dysfunctional effects of organisational culture on people and the organization.

Debate how culture is transmitted to employees.

Contrast the similarities and differences of creating an ethical culture and a positive culture.

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https://study.com/academy/lesson/cultural-transmission-definition-theory.html

What Is Cultural Transmission?

Have you ever wondered why you believe the things that you believe or know the things that you know? For example, at some point it probably occurred to you that, unless you want to work for the rest of your life, you need to save money for retirement. And there's a good chance you know that you're supposed to tip your server when you go to a restaurant. Of course, someone probably did mention these things to you during your lifetime, but they are also concepts that you learned by simply participating in your culture.

This type of learning is what is known as cultural transmission (sometimes referred to as 'cultural learning'), which is the process of learning new information through socialization and engagement with those around you. The cultural transmission of knowledge is a broad concept, and it refers to knowledge that is gained through non-biological means.

For example, if you're walking down the street and would like to cross the road, you know that you can't simply step into the road without looking because there is a chance that you'll get hit by a car. You don't instinctively know this; rather, it was passed on to you from a parent or other adult early in your life and reinforced through cultural transmission.

As a means of communication, cultural transmission is a one-way system in which culture is passed onto a person through certain channels. The process of receiving information about your culture or society is what is known as enculturation.

Cultural Transmission Theories

While cultural transmission is a broad concept, it is not a catch-all for all knowledge acquired through a person's lifetime. In fact, some of the knowledge that we possess is gained through experience - like a kind of trial-and-error process. For example, no one needs to tell you not to stand outside and spend hours staring directly into the sun because you would probably learn fairly quickly that this is not a good idea. This trial-and-error process is what is known as experiential learning.

Unlike experiential learning, the theoretical basis of cultural transmission is that throughout our development, we acquire a considerable amount of knowledge simply by being present in our culture.

For example, if you live in the United States, you know that spooky decorations during October are one of the ways that people celebrate Halloween. Likewise, you probably also know that there are certain conservative religions that discourage these decorations or celebrating the holiday in general.

Introduction

Developing and sustaining a positive organisational culture is an ongoing challenge for all leaders.

Every organisation has a culture that, depending on its strength, can have a significant influence on the attitudes and behaviours of the organisation.

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https://www.forbes.com/sites/alankohll/2018/08/14/how-to-build-a-positive-company-culture/#1d6e988049b5

Company culture is an integral part of business. It affects nearly every aspect of a company. From recruiting top talent to improving employee satisfaction, it’s the backbone of a happy workforce. Without a positive corporate culture, many employees will struggle to find the real value in their work, and this leads to a variety of negative consequences for your bottom line.

According to research by Deloitte, 94% of executives and 88% of employees believe a distinct corporate culture is important to a business’ success. Deloitte’s survey also found that there is a strong correlation between employees who claim to feel happy and valued at work and those who say their company has a strong culture.

There’s a reason why companies who are named as a Best Place to Work see so much success. These organizations tend to have strong, positive corporate cultures that help employees feel and perform their best at work. Research gathered by CultureIQ found that employee’s overall ratings of their company’s qualities – including collaboration, environment and values – are rated 20% higher at companies that exhibit strong culture.

What is organisational culture?

Defining organisational culture

A system of shared meaning help by members that distinguishes an organisation from other organisations.

Levels to an organisational culture.

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Organisational culture refers to a system of shared meaning held by members that distinguishes an organisation from other organisations.1

What is organisational culture and what are its common characteristics? Organisational culture is a common perception held by the organisation’s members; a system of shared meaning. Seven primary characteristics are:

Innovation and risk taking

Attention to detail

Outcome orientation

People orientation

Team orientation

Aggressiveness

Stability.

https://www.shrm.org/resourcesandtools/tools-and-samples/toolkits/pages/understandinganddevelopingorganizationalculture.aspx

The key to a successful organization is to have a culture based on a strongly held and widely shared set of beliefs that are supported by strategy and structure. When an organization has a strong culture, three things happen: Employees know how top management wants them to respond to any situation, employees believe that the expected response is the proper one, and employees know that they will be rewarded for demonstrating the organization's values.

HR has a vital role in perpetuating a strong culture, starting with recruiting and selecting applicants who will share the organization's beliefs and thrive in that culture. HR also develops orientation, training and performance management programs that outline and reinforce the organization's core values and ensures that appropriate rewards and recognition go to employees who truly embody the values.

An organization's culture defines the proper way to behave within the organization. This culture consists of shared beliefs and values established by leaders and then communicated and reinforced through various methods, ultimately shaping employee perceptions, behaviours and understanding. Organizational culture sets the context for everything an enterprise does. Because industries and situations vary significantly, there is not a one-size-fits-all culture template that meets the needs of all organizations.

A strong culture is a common denominator among the most successful companies. All have consensus at the top regarding cultural priorities, and those values focus not on individuals but on the organization and its goals. Leaders in successful companies live their cultures every day and go out of their way to communicate their cultural identities to employees as well as prospective new hires. They are clear about their values and how those values define their organizations and determine how the organizations run. See What does it mean to be a values-based organization?

Conversely, an ineffective culture can bring down the organization and its leadership. Disengaged employees, high turnover, poor customer relations and lower profits are examples of how the wrong culture can negatively impact the bottom line.

Mergers and acquisitions are fraught with culture issues. Even organizational cultures that have worked well may develop into a dysfunctional culture after a merger. Research has shown that two out of three mergers fail because of cultural problems. Blending and redefining the cultures, and reconciling the differences between them, build a common platform for the future. In recent years, the fast pace of mergers and acquisitions has changed the way businesses now meld. The focus in mergers has shifted away from blending cultures and has moved toward meeting specific business objectives. Some experts believe that if the right business plan and agenda are in place during a merger, a strong corporate culture will develop naturally. S

Exhibit 15.1

Definitions of organisational culture

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Exhibit 15.2

Schein’s pyramid – three levels of organisational culture

Source: Based on E. H. Schein, Organizational Culture and Leadership (3rd edn), San Francisco, CA: Jossey-Bass, 2004, p. 42.

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Most research has agreed that there are levels to an organisational culture, with some levels deeper than others. Edgar Schein,2 one of the foremost researchers and academics in the field of organisational behaviour, identified three levels: artefacts, espoused values and basic assumptions. Exhibit 15.2 illustrates this.

On the top are the artefacts of the organisation—what is observable, such as the unique ceremonies, rites and rituals, stories, symbols, language and behaviours in the organisation. We’ll return to some of these later in the chapter. The middle layer represents the desired shared values in the organisation, showing what ‘ought to be’: an organisation that values innovation, aspires to total quality, believes in sustainable practice, champions gender equality, and so on. This layer identifies the espoused values of the organisation but they may not necessarily represent the enacted values of the organisation. The lowest level represents the basic assumptions of the organisation, the deeply held beliefs or ‘taken-for-granted truths’ that guide thinking and behaviour of its members and which are the result of the shared experience of organisational members. We’ll see later that when trying to change a culture, while it may be relatively easy to change its artefacts, changing these basic assumptions is considerably harder.

What is organisational culture?

Types of organisational culture

Handy’s model

Power culture

Role culture

Task culture

Support culture

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https://www.managementstudyguide.com/charles-handy-model.htm

What is an organization ?

An organization is a setup where individuals (employees) come together to work for a common goal. It is essential for the employees to work in close coordination, deliver their level bests and achieve the targets within the stipulated time frame for the smooth functioning of the organization.

Every organization has certain values and follows some policies and guidelines which differentiate it from others. The principles and beliefs of any organization form its culture. The organization culture decides the way employees interact amongst themselves as well as external parties. No two organizations can have the same culture and it is essential for the employees to adjust well in their organization’s culture to enjoy their work and stay stress-free.

Several models have been proposed till date explaining the organization culture, one of them being the Charles Handy model.

Who is Charles Handy ?

Charles Handy born in 1932 in Ireland is a well-known philosopher who has specialized in organization culture.

According to Charles Handy’s model, there are four types of culture which the organizations follow:

Let us understand them in detail:

Power

There are some organizations where the power remains in the hands of only few people and only they are authorized to take decisions. They are the ones who enjoy special privileges at the workplace. They are the most important people at the workplace and are the major decision makers. These individuals further delegate responsibilities to the other employees. In such a culture the subordinates have no option but to strictly follow their superior’s instructions. The employees do not have the liberty to express their views or share their ideas on an open forum and have to follow what their superior says. The managers in such a type of culture sometimes can be partial to someone or the other leading to major unrest among others.

Task Culture

Organizations where teams are formed to achieve the targets or solve critical problems follow the task culture. In such organizations individuals with common interests and specializations come together to form a team. There are generally four to five members in each team. In such a culture every team member has to contribute equally and accomplish tasks in the most innovative way.

Person Culture

There are certain organizations where the employees feel that they are more important than their organization. Such organizations follow a culture known as person culture. In a person culture, individuals are more concerned about their own self rather than the organization. The organization in such a culture takes a back seat and eventually suffers. Employees just come to the office for the sake of money and never get attached to it. They are seldom loyal towards the management and never decide in favour of the organization. One should always remember that organization comes first and everything else later.

Role culture

Role culture is a culture where every employee is delegated roles and responsibilities according to his specialization, educational qualification and interest to extract the best out of him. In such a culture employees decide what best they can do and willingly accept the challenge. Every individual is accountable for something or the other and has to take ownership of the work assigned to him. Power comes with responsibility in such a work culture.

Exhibit 15.3

Organisational culture types (Handy’s model)

Source: Adapted from C. Handy, Understanding Organizations (4th edn), London–UK: Penguin Books Ltd, 1993.

Examples:

Power – Rupert Murdoch’s approach to running NewsCorp

Role – public sector

Task (achievement) – McKinsey & Co., Macquarie Bank

Support – human-centered org eg the Virgin group

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Organisational culture as a focus of inquiry blossomed in the 1980s when there was research into what made organisations successful or not. Some of this research went further in seeking to categorise different kinds of organisational cultures and their effect on the organisation. One of the most noted categorisations is the organisational typology proposed by celebrated management scholar Charles Handy, illustrated in Exhibit 15.3.

Handy’s model identified two longstanding organisational cultural types. The first was the power culture, which is typified by a paternalistic approach (e.g. Rupert Murdoch’s approach to running NewsCorp). The second was the role culture typically encountered in public sector entities embracing bureaucratic work methods. Handy’s model further identified two more contemporary organisational cultures: the task (or achievement) culture present in dynamic, modern firms such as McKinsey & Co. and Macquarie Bank, and the support culture prevalent in human-centred organisations such as The Virgin Group and RedBalloon.

What is organisational culture?

Types of organisational culture

Quinn & Cameron’s competing values framework

The collaborative and cohesive clan

The innovative and adaptable adhocracy

The controlled and consistent hierarchy

The competitive and customer-focused market

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https://www.quinnassociation.com/en/culture_typology

Robert E. Quinn and Kim S. Cameron identify four types of culture. Clan culture A very friendly working environment where people have a lot in common and which strongly resembles a large family. The leaders, or the heads of the organisations, are viewed as mentors and maybe even as father figures. The organisation is held together by loyalty and tradition. There is a high level of engagement. Within the organisation the emphasis is on the long-term benefits of human resource development, and great value is attached to personal relationships and morale. Success is defined in the context of openness to the needs of the customer and care for the people. The organisation attaches great value to teamwork, participation and consensus. Hierarchy culture A highly formalised, structured working environment. Procedures determine what the people do. The leaders are proud of the fact that they are good, efficiency-oriented coordinators and organisers. Maintaining a smoothly running organisation is the most crucial thing. Formal rules and policy documents hold the organisation together. Concern for the long term focuses on stability and results, accompanied by an efficient and smooth execution of tasks. Success is defined in the context of reliable delivery, smooth planning and low costs. Personnel management must ensure certainty about the job and predictability. Market culture A result-oriented organisation in which the greatest care focuses on completing the work. The people are competitive and goal-focused. The leaders are drivers, producers and competitors at the same time. They are tough and demanding. The binding agent that keeps the organisation together is the emphasis on winning. Reputation and success are important areas of focus. For the long term people focus on competitive activities and achieving measurable targets and goals. Success is defined in the context of market share and market penetration. Competitive pricing and market leadership are important. The organisational style is one of unflinching competition. Adhocracy culture A dynamic, entrepreneurial and creative working environment. People stick their neck out and take risks. The leaders are viewed as innovators and risk takers. The binding agent that keeps the organisation together is a commitment to experimentation and innovations. The emphasis is on trendsetting. For the long term the organisation's emphasis is on growth and tapping new sources. Success means having new products or services available; being a pioneer in this is considered important. The organisation encourages individual initiative and freedom.

https://www.ocai-online.com/about-the-Organizational-Culture-Assessment-Instrument-OCAI/Competing-Values-Framework

The Competing Values Framework (CVF) emerged from research to identify the organizational effectiveness criteria (Quinn & Rohrbaugh, 1981). The criteria that were found to make a difference are the dimensions internal-external, and stability-flexibility.

Internal-External dimension

An organization might have an internal orientation; focusing inward on development, collaboration, integration of activities, coordination. Or it might have an external orientation; looking at the market, what’s possible with the latest technology, what competitors are doing, what customers want, and it could diversify activities as a result.

Both internal and external attention are needed to be successful in the long run - but depending on their environment an organization will have a dominant preference. An agile, volatile market will evoke an external orientation whereas a stable environment will allow for an internal focus.

Note the “competing” nature of the values: you have to choose whether you look inside or outside - you cannot do both at the same time.

Stability-Flexibility dimension

The second defining dimension is the focus on stability or flexibility — organizations that prefer to organize for stability value clear structures, planning, budgets, and reliability. They assume that reality can be known and controlled. Organizations that organize with flexibility assume the opposite: you can never predict and control everything. They prefer a flexible attitude and organization to adapt quickly to changing circumstances - focusing more on people and activities than on structure, procedures, and plans.

The “competing values” nature of stability and flexibility prevents you from doing both at the same time. Organizations can spend their money, attention, and time only once, so they tend to emphasize certain values. Quinn and Cameron found that flexible organizations are most effective, which sometimes leads to contradictory behavior. The “best” organizations use all four value sets when necessary.

A culture type works best in the activities domain that aligns with its values. In the health care sector, for instance, we often see clan culture. Beware: there is no ultimate “best” organizational culture prescribed by the Competing Values Framework. The model is descriptive. In a specific domain or market, one culture type might fit better than another, and this is for the organization to decide. "When would be at our best?”

Refer: https://www.thercfgroup.com/files/resources/an_introduction_to_the_competing_values_framework.pdf

Exhibit 15.4

Quinn & Cameron’s Competing Values Framework

Source: Adapted from K. S. Cameron and R. E. Quinn, Diagnosing and Changing Organizational Culture: Based on the Competing Values Framework (2nd edn), John Wiley & Sons, 2005.

> Positive job attitudes

> Strong innovation and financial performance

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Quinn and Cameron categorised organisational cultures by the degree of flexibility the organisation showed and whether their organisational focus was internal or external to the organisation. They created four different types of culture, as illustrated in Exhibit 15.4: the collaborative and cohesive clan; the innovative and adaptable adhocracy; the controlled and consistent hierarchy; and the competitive and customer-focused market.

A review of 94 studies found that job attitudes were especially positive in clan-based cultures and that both innovation and financial performance were very strong in market cultures. Although the competing values framework received some support in this review, the authors noted that further theoretical work is needed to ensure it’s consistent with the actual cultural values found in organisations.

Each of these approaches has involved the researchers first trying to identify what were the cultural elements, dimensions or characteristics that made an organisational culture and then developing their typology from these. For example, Schein, in his work, focused on an organisation’s underpinning philosophy, its raison d’être (purpose or reason for being), its core values, its behavioural norms, its rules and its climate.

What is organisational culture?

Types of organisational culture

Seven differentiating characteristics

Innovation and risk-taking

Attention to detail

Outcome orientation

People orientation

Team orientation

Aggressiveness

Stability

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Seven primary differentiating characteristics that we see as capturing the essence of any organisation’s culture. You will observe they incorporate many of the elements and dimensions discussed earlier:

Innovation and risk-taking—the degree to which employees are encouraged to be innovative and take risks

Attention to detail—the degree to which employees are expected to exhibit precision, analysis and attention to detail

Outcome orientation—the degree to which management focuses on results or outcomes rather than on the techniques and processes used to achieve them

People orientation—the degree to which management decisions take into consideration the effect of outcomes on people within the organisation

Team orientation—the degree to which work activities are organised around teams rather than individuals

Aggressiveness—the degree to which people are aggressive and competitive rather than easy-going

Stability—the degree to which organisational activities emphasise maintaining the status quo in contrast to growth.

What is organisational culture?

Culture is a descriptive term

Do organisations have uniform cultures?

Dominant culture: expresses the core values that are shared by a majority of the organisation’s members.

Subcultures: mini-cultures within an organisation, typically defined by department designations and geographical separation.

Core values: the primary or dominant values that are accepted throughout the organisation.

Strong versus weak cultures

Strong: core values are intensely held and widely shared.

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Strong versus weak cultures

It is possible to differentiate between strong and weak cultures. If most employees have the same opinions about the organisation’s mission and values, the culture is strong; if opinions vary widely, the culture is weak.

In a strong culture, the organisation’s core values are both intensely held and widely shared. The more members who accept the core values and the greater their commitment, the stronger the culture and the greater its influence on member behaviour because the high degree of sharedness and intensity creates an internal climate of high behavioural control.

Strong culture - A culture in which the core values are intensely held and widely shared.

A strong culture should reduce employee turnover because it demonstrates high agreement about what the organisation stands for. Such unanimity of purpose builds cohesiveness, loyalty and organisational commitment. These qualities, in turn, lessen employees’ propensity to leave. One study found that the more employees agreed on customer orientation in a service organisation, the higher the profitability of the business unit. Another study found that when team managers and team members disagreed about perceptions of organisational support, there were more negative moods among team members and the performance of teams was lower.These negative effects are especially strong when managers believe the organisation provides more support than employees think it does.

https://www.inc.com/ilya-pozin/build-your-company-culture-through-values-not-things.html

Surface-level perks like free Starbucks, company box seats, and ping-pong tables in the break room don't help you build a sustainable company culture. While they provide temporary morale boosts, truly great company culture requires more substance to attract and retain talent.

Company culture is a combination of values, the shared goals you work toward, and the effort you put toward those goals. Your culture is built on (and reinforced by) how you hire, fire, promote, train, and reward employees and how management corrects behaviors. All the extras are just that: extra.

Consider the fact that most employees are excited to work for companies they believe in that value them. Whether your team is made up of Millennials, older workers, or some combination of generations, workers are generally looking for the same things.

All employees want their work to be personally fulfilling, to be treated with respect, and to work for a company they're proud of -- and that all starts with culture. To improve your company culture and create an environment where your employees (and your company) thrive, you have to elevate engagement and feelings of success for employees while uniting them through shared values. Here are five ways to do that:

1. Develop clear and concise values.

Are your values easy to remember and embrace? Are they aligned with your mission? Does your incentive structure back them up?

An example of a company with concise guiding values that are easy to remember and follow is Meltwater. Meltwater, a SaaS company, is guided by three core principles summarized as MER. It discusses these values on its website, explaining:

"MER [is] an acronym for Moro, Enere and Respekt, which creates the Norwegian word 'More.' We celebrate our victories without losing our drive to improve -- whether in reaching personal goals or corporate milestones. Though simple on the surface, our values guide us in everything we do, from how we prioritize our objectives and make decisions to how we clarify expectations and measure our success."

These values drive company culture and allow Meltwater to foster better relationships with its employees.

2. Allow employees to pursue opportunities for growth and learning.

Nearly all employees want to work for a company that makes the most of their skills and talents. This means providing the training, resources, and autonomy to expand their personal capabilities.

Zappos states the importance of personal growth directly on its list of 10 core values: "We believe that everyone should be constantly trying to grow from a personal and a professional standpoint. By pushing our employees to unlock their full potential, we'll help them achieve a greater level of fulfillment."

Besides helping people become better at their jobs, growth and learning opportunities show employees you care about them as complete people, not just as employees.

3. Invest in your employees.

Great company culture demonstrates to employees that they are valued as people, not just for what they do at the office. Your employees are your best marketers. People support a company where they see and hear that employees are valued.

bluemedia, a people-first company, makes sure employees are cared for and enjoy where they work. Darren Wilson, president of the national signage company, recently explained how bluemedia's people serve as the foundation for the long-lasting partnerships the company is built on, propelling the company's long-term success.

Support employees at work and in their personal lives. Benefits like paid leave, educational reimbursement, and flexible work-from-home policies signal your willingness to help employees live better. This investment reaps long-term rewards and helps build loyalty and trust.

4. Create a flat and open organization.

Removing management layers spurs creativity and production. No company understands this idea better than Squarespace, a frequent flyer on "best places to work" lists. Its key attribute? Having as few levels of management between staff and executives as possible.

Sure, not every company may be able to restructure itself as a flat organization. But if you want to preserve culture and retain your best employees, ask yourself some important questions: How can you make executives more accessible? What barriers can you eliminate? How can you increase idea flow and communication?

5. Promote transparency.

Nearly one in three people reports lacking trust in his current employer, and that's a major problem for company culture. Part of forming and maintaining that trust is open communication and transparency, and Twitter is one company built on communication.

Twitter's company mission is to "give everyone the power to create and share ideas and information instantly, without barriers," and that extends to its employees, too.

Where can you involve more employees in decisions? How can you more effectively communicate? Talk to your employees to see what they are currently frustrated with or wish they had more information about, and start there.

Don't give up early. Your culture isn't magically going to shift overnight. How long will it take? Opinions vary, but Steve Jobs worked for a year and a half to change Apple's culture, and Best Buy's Hubert Joly worked twice as long to transform his company. Drop the surface-level perks, and focus on creating a company with clear values, fulfilled employees, and internal trust over the long run for success.

Exhibit 15.5

Contrasting organisational cultures

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What do cultures do?

Culture’s functions

Creates distinctions between one organisation and others.

Conveys a sense of identity for organisation members.

Facilitates the generation of commitment to something larger than self-interest.

Enhances the stability of the social systems.

A control mechanism that guides employees’ attitudes and behaviour.

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https://www.citeman.com/3998-what-do-cultures-do.html

It is already attributed to organizational cultures impact on behavior. A strong culture should be associated with reduced turnover. In this article, we will further review the functions that culture performs and assess whether culture can be liability for an organization.

Culture’s Functions:

Culture performs a number of functions within an organization. First, it has a boundary-defining role; that is, it creates distinctions between one organization and other. Second, it conveys a sense of identity for organization members. Third, culture facilitates the generation of commitment to something larger than one’s individual self interest. Fourth, it enhances the stability of the social system. Culture is the social glue that helps hold the organization together by providing appropriate standards for what employees should say and do. Finally, culture serves as a sense making and control mechanism that guides and shapes the attitudes and behaviour of employees. It is this last function that is of particular interest to us. As the following quote makes clear, culture defines thru less of the game

Culture by definition is elusive, intangible, implicit and taken for granted. But every organization develops a core set of assumptions, understanding and implicit rules that govern day-to-day behavior in the workplace. Until newcomers learn the rules, they are not accepted as full fledged members of the organization. Transgressions of the rules on the part of high level executives or front line employees result in universal disapproval and powerful penalties. Conformity to the rules becomes the primary basis for reward and upward mobility.

The role of culture in influencing employee behaviour appears to be increasingly important in today’s workplace. As organizations have widened spans of control, flattened structures, introduced teams reduced formalization and empowered employees. The shared meaning provided by a strong culture ensures that everyone is pointed in the same direction.

Who receives a job offer to join the organization, who is appraised as a high performer, and who gets the promotion are strongly influenced by the individual organization “fit” that is, whether the applicant or employee’s attitudes and behaviour are compatible with the culture. It’s not a coincidence that employees at Disney theme parks appear to be almost universally attractive, clean, and wholesome looking with bright smiles. That’s the image Disney seeks. The company selects employees who will maintain that image. And on the job, a strong culture, supported by formal rules and regulation ensures that Disney theme park employees will act in a relatively uniform and predictable way.

Culture as a liability:

The culture is treated in a non-judgmental manner and we are not saying that it is good or bad but only that it exists. Many of its functions, as outlined are valuable for both the organization and the employee. Culture enhances organizational commitment and increase the consistency of employee behavior. These are clearly benefits to an organization. From an employee’s standpoint, culture is valuable because it reduces ambiguity. It tells employees how things are done and what’s important. But we shouldn’t ignore the potentially dysfunctional aspects of culture, especially a strong one, on an organization’s effectiveness.

What do cultures do?

Culture and climate

Organisational climate refers to the current shared perceptions of the behaviours, attitudes and feelings that make up organisational life.

Affect productivity, motivation and employee behaviour. A positive overall workplace climate has been linked to higher customer satisfaction and financial performance as well.

The ethical dimension of culture

The shared concept of right and wrong behaviour and shapes the ethical decision making of its members.

Ethical work climate (EWC)

Culture and organisational performance

Strong culture nurtures common understanding of performance goals.

Strong cultures don’t always facilitate performance. Eg Enron’s ‘winner- takes-all’ culture led to ethically compromised and criminal acts.

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Culture’s functions

First, culture has a boundary-defining role: it creates distinctions between one organisation and others. Second, it conveys a sense of identity for organisation members. Third, it facilitates the generation of commitment to something larger than individual self-interest. Fourth, it enhances the stability of the social system. Culture is the social glue that helps hold the organisation together by providing appropriate standards for what employees should say and do. Finally, it is a sense-making and control mechanism that guides and shapes employees’ attitudes and behaviour. This last function is of particular interest to us. Culture defines the rules of the game:

Culture by definition is elusive, intangible, implicit, and taken for granted. But every organisation develops a core set of assumptions, understandings, and implicit rules that govern day-to-day behaviour in the workplace ... Until newcomers learn the rules, they are not accepted as full-fledged members of the organisation. Transgressions of the rules on the part of high-level executives or front-line employees result in universal disapproval and powerful penalties. Conformity to the rules becomes the primary basis for reward and upward mobility.

Today’s trend towards decentralised organisations makes culture more important than ever, but, ironically, it also makes establishing a strong culture more difficult. When formal authority and control systems are reduced, culture’s shared meaning points everyone in the same direction. However, employees organised in teams may show greater allegiance to their team and its values than to the values of the organisation as a whole. In virtual organisations, the lack of frequent face-to-face contact makes establishing a common set of norms very difficult. Strong leadership that communicates frequently about common goals and priorities is especially important in innovative organisations.

Individual–organisation ‘fit’—that is, whether the applicant’s or employee’s attitudes and behaviour are compatible with the culture—strongly influences who gets a job offer, a favourable performance review or a promotion. It’s no coincidence that Disney theme-park employees appear almost universally attractive, clean and wholesome-looking with bright smiles. The company selects employees who will maintain that image. On the job, a strong culture, supported by formal rules and regulations, ensures employees will act in a relatively uniform and predictable way.

Culture and climate

If you’ve worked with someone whose positive attitude inspired you to do your best, or with a lacklustre team that drained your motivation, you’ve experienced the effects of climate. Organisational climate refers to the current shared perceptions of the behaviours, attitudes and feelings that make up organisational life. It’s more easily manipulated than organisational culture and is important to understand given its effect on productivity, motivation and employee behaviour

Organisational climate - The current shared perceptions of the behaviours, attitudes and feelings that make up organisational life.

This is like ‘team spirit’ at the organisational level. When everyone has the same general feelings about what’s important or how well things are working, the effect of these attitudes will be more than the sum of the individual parts. One meta-analysis found that, across dozens of different samples, psychological climate was strongly related to individual-level job satisfaction, involvement, commitment and motivation. A positive overall workplace climate has been linked to higher customer satisfaction and financial performance as well.

Dozens of dimensions of climate have been studied, including safety, justice, diversity and customer service, to name a few. A person who encounters a positive climate for performance will think about doing a good job more often and will believe that others support their success. Someone who encounters a positive climate for diversity will feel more comfortable collaborating with colleagues regardless of their demographic background. Climates can interact with one another to produce behaviour. For example, a positive climate for worker empowerment can lead to higher levels of performance in organisations that also have a climate for personal accountability. Climate also influences the habits that people adopt. If there’s a positive climate for safety, everyone wears safety gear and follows safety procedures even if individually they wouldn’t normally think about being safe very often. Many studies have shown that a positive safety climate decreases the number of documented injuries on the job.

Culture and organisational performance

A strong culture should nurture a common understanding of performance goals and shared cultural values should increase employee motivation to reach and surpass those goals. And yet, strong cultures don’t always facilitate performance.

There are many cases of business success stories due to excellent organisational cultures than there are of success stories despite bad cultures, and almost no success stories because of bad ones.

What do cultures do?

Culture as an organisational challenge

Institutionalisation occurs when an organisation takes on a life of its own, apart from any of its members, and acquires immortality. Behaviour and habits are not questioned and taken for granted.

Change management: becomes a challenge when entrenched culture is no longer appropriate.

Diversity: the paradox to hire employees that differ from the majority and new employees must accept the organisation’s core cultural values to fit in.

Mergers and acquisitions: A. T. Kearney revealed that 58% of mergers fail to reach the financial goals. The primary cause of failure is conflicting organisational cultures.

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Culture as an organisational challenge

Culture enhances organisational commitment and increases the consistency of employee behaviour. These are clearly benefits to an organisation. From an employee’s standpoint, culture is valuable because it spells out how things are done and what’s important. But we shouldn’t ignore the potentially challenging aspects of culture, especially a strong one, on an organisation’s effectiveness. Hewlett-Packard, once known as a premier computer manufacturer, rapidly lost market share and profits as the dysfunction of its top management team trickled down, leaving employees disengaged, uncreative, unappreciated and polarised.

Institutionalisation

When an organisation undergoes institutionalisation and becomes institutionalised—that is, valued for itself and not for the goods or services it produces—it takes on a life of its own, apart from its founders or members. It doesn’t go out of business even if its original goals are no longer relevant. Acceptable modes of behaviour become largely self-evident to members, and although this isn’t entirely negative, it does mean behaviours and habits that should be questioned and analysed become taken for granted, which can stifle innovation and make maintaining the organisation’s culture an end in itself.

Institutionalisation - A condition that occurs when an organisation takes on a life of its own, apart from any of its members, and acquires immortality.

Change management - Culture is a challenge when the shared values are not in agreement with those that further the organisation’s effectiveness. This situation is most likely to occur when an organisation’s environment is undergoing rapid change, and its entrenched culture may no longer be appropriate. Consistency of behaviour, an asset in a stable environment, may then burden the organisation and make it difficult for the organisation to be able to respond to changes.

Diversity

Hiring new employees who differ from the majority in terms of race, age, gender, disability or other characteristics creates a paradox. Management wants to demonstrate support for the differences these employees bring to the workplace, but newcomers must accept the organisation’s core cultural values to fit in. Because diverse behaviours and unique strengths are likely to diminish as people attempt to assimilate, strong organisational cultures can become liabilities when they effectively eliminate these advantages.

By limiting the range of acceptable values and styles, strong organisational cultures put considerable pressure on employees to conform. A strong culture that condones prejudice, supports bias or becomes insensitive to people who are different can even undermine formal corporate diversity policies.

Mergers and acquisitions

Historically, when management looked at acquisition or merger decisions, the key factors were financial advantage and product synergy. In recent years, cultural compatibility has become the primary concern.35 All things being equal, whether the acquisition actually works seems to have more to do with how well the two organisations’ cultures match up.

A survey by consulting firm A. T. Kearney revealed that 58% of mergers fail to reach the financial goals set by top managers. The primary cause of failure is conflicting organisational cultures. When health insurer BUPA Australia merged with MBF in 2010, the organisation tripled in size overnight. This was one of the more successful mergers in recent times. BUPA Australia managing director Richard Bowden was very sensitive to the issue of cultural fit between the two organisations and explains: ‘[W]e did lots and lots of communication, and we were conscious of being very transparent about our intentions and execution. We thought this was particularly important in view of the fact that, prior to the merger, there was vigorous competition between the two companies.’

Creating and sustaining culture

Establishing a culture

Founders hire and keep like-minded employees, founders indoctrinate and socialise employees thinking and feelings, founders model behaviour.

Keeping a culture alive

Selection and reward

Modelling behaviours

Socialisation

The pre-arrival stage: before employees join the organisation.

Encounter stage: employees experience the culture

Metamorphosis stage: employees change and adjust to the job, work group and organisation.\

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https://www.pioneernetwork.net/10-must-dos-creating-sustaining-strong-culture/

1. Focus on the Positive. The power of positivity can be especially helpful to those who need a little boost in employee morale. Negative talk (gossip, complaining and criticizing) can bring down even the best organization. It’s toxic to your culture, and your bottom line, so don’t let those Negative Nellies drag you down! Next time you catch yourself saying something negative, don’t be the Grinch, instead create Seuss’s Land of Fott-fa-Zee.

2. Ensure Shared Values. Skills and competencies are important, but behaviors are often rooted in one’s personal values. Have your team explore their values and share them with their colleagues. It is eye opening for staff to discover how their values impact them as a person, and what is important to their teammates. Be sure to hire employees who model behaviors that fit your values.

3. Give and Receive Feedback. When giving feedback, be specific, focus on the observed behavior, and describe the impact it had. It’s important to address conflict and how to have comfortable conversations. Most people love giving positive feedback but dread the tough stuff. If you’re used to structuring your feedback and developing a strong level of trust amongst your team, the tough stuff won’t feel so difficult anymore.

4. Follow-Through. Following-through builds trust and shows your commitment to getting the job done. Consider when your residents have a special request or a complaint, don’t you want your employees to resolve the issue and follow up afterwards? If you agree, then you need to model this behavior to your employees too.

5. Care About Your Team Members. If you want your people to care about your residents, not just checkoff tasks on a list, then you must care about your people! And show them that you do.

6. Play to Strengths and Look for the Bright Spots. At first glance this sounds like focusing on the positive, and it is, but it’s more than that. Let’s use recruitment as an example, when you are focused on strengths and what’s going well, you’ll want to look towards your superstar employees to find out: How did we find them? What about them makes them special? How do we keep them? How can we replicate what’s most important? If it was referral, consider ramping up your referral process. If they came from a local school, consider increasing your presence at this school. If it was someone who randomly applied online, how did they find you? What search terms were used? Ask them what it was that attracted them to you?

7. Set Expectations. All employees should know what is expected of them and in a field where we are struggling to retain employees past the honeymoon phase, setting expectations right from the start is critically important. Explain the importance of the organizational culture and the mindset that comes with being person-centered and focused on continuous performance improvement.

8. Evaluate Processes and Procedures. If you’re committing to continuously improving, and not falling behind the times, you’ll need to have systems in place to constantly evaluate and look for opportunities. You’ll also want to make sure that your current processes or procedures aren’t causing a bottleneck or hindering employees from doing the right thing.

9. Create Opportunities for Collaboration. We hear time and time again that teams are working in silos and that they aren’t working together to meet the resident’s needs. It’s important to create opportunities for team members to collaborate with each other.

10. Be Consistent. Starting and stopping new things all the time will never lead to movement and it can cause employees to distrust management. Flavor of the month clubs aren’t effective, and no one likes a boss who says one thing and does another. It is better to pick one thing and follow through on it then to try all ten, only to get overwhelmed and give up.

It was so hard to narrow this list down to just 10 and one thing we just couldn’t leave off the list is telling stories. Bonus: You now have our top 11 Must Do’s!

11. Telling stories and using examples. Stories paint a picture; they evoke emotion. Stories help people relate; they make an idea come to life. Next time you are working on updating your careers section of your website, your employee orientation, or even a simple newsletter, try including real life stories that provide insight into your culture. Stories are a powerful marketing tool!

Exhibit 15.6

A socialisation model

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The pre-arrival stage explicitly recognises that each individual arrives with a set of values, attitudes and expectations about both the work to be done and the organisation. One major purpose of a business school, for example, is to socialise business students to the attitudes and behaviours that business organisations want. Newcomers to high-profile organisations with a strong market position will make their own assumptions about what it is like to work there.45 Most new recruits will expect Nike to be dynamic and exciting and a prestigious law firm to be high in pressure and rewards. No matter how well managers think they can socialise newcomers, however, the most important predictor of future behaviour is past behaviour. What people know before they join the organisation and how proactive their personality is are critical predictors of how well they will adjust to a new culture.

Pre-arrival stage - the period of learning in the socialisation process that occurs before a new employee joins the organisation.

One way to capitalise on the importance of pre-hire characteristics in socialisation is to use the selection process to inform prospective employees about the organisation as a whole. We’ve seen how the selection process ensures the inclusion of the ‘right type’—that is, those who will fit in. Indeed, to be accepted into an organisation, applicants need to be able to present appropriately during the selection process to prove their capabilities and successful applicants are the ones who have ‘correctly anticipated the expectations and desires of those in the organisation in charge of selection’.

On entry into the organisation, new members reach the encounter stage and confront the possibility that expectations—about the job, colleagues, the boss and the organisation in general—may differ from reality. If expectations were fairly accurate, the encounter stage merely cements earlier perceptions. However, this is often not the case. At the extreme, a new member may become disillusioned enough with the reality to resign. Proper recruiting and selection should significantly reduce that outcome, along with encouraging friendship ties in the organisation; newcomers are more committed when friends and colleagues help them to ‘learn the ropes’.

Encounter stage - The stage in the socialisation process in which a new employee sees what the organisation is really like and confronts the possibility that expectations and reality may diverge.

Exhibit 15.7

Entry socialisation options

Alternatives designed to bring about the desired metamorphosis

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Finally, to work out any problems discovered during the encounter stage, the new member changes or goes through the metamorphosis stage. The options presented in Exhibit 15.7 are alternatives designed to bring about the desired metamorphosis. Most research suggests that there are two major ‘bundles’ of socialisation practices. The more management relies on formal, collective, sequential, fixed and serial socialisation programs and emphasises divestiture, the more likely newcomers’ differences will be stripped away and replaced by standardised predictable behaviours. These institutional practices are common in police departments, fire departments and other organisations that value rule-following and order. Programs that are informal, individual, random, variable and disjunctive and emphasise investiture are more likely to give newcomers an innovative sense of their role and methods of working. Creative fields such as research and development, advertising and filmmaking rely on these individual practices. Most research suggests that high levels of institutional practice encourage person–organisation fit and high levels of commitment, whereas individual practices produce more role innovation.

Metamorphosis stage - the stage in the socialisation process where a new employee changes and adjusts to the job, work group and organisation.

The three-part entry socialisation process is complete when new members have become comfortable with the organisation and the job. They have internalised and accepted the norms of the organisation and their work group, are confident in their competence and feel trusted and valued by their peers. They understand the system—not only their own tasks but the rules, procedures and informally accepted practices as well. Finally, they know what’s expected of them and what criteria will be used to measure and evaluate their work. Successful metamorphosis should have a positive impact on new employees’ productivity and their commitment to the organisation and reduce their propensity to leave the organisation.

Researchers have begun to examine how employee attitudes change during socialisation by measuring the degree of socialisation at several points over the first few months. One study has documented patterns of ‘honeymoons’ and ‘hangovers’ for new workers, showing that the period of initial adjustment is often marked by decreases in job satisfaction as their idealised hopes come into contact with the reality of organisational life. Other research suggests that role conflict and role overload for newcomers rise over time, and that workers with the largest increases in these role problems experience the largest decreases in commitment and satisfaction. It may be that the initial adjustment period for newcomers presents increasing demands and difficulties, at least in the short term.

How employees learn culture

Stories – narrative of events about the organisation founders, rags-to-riches success, reduction in work force, rule breaking, reactions to past mistakes, organisational coping.

Rituals – repetitive sequences of activities that express and reinforce the key values of the organisation. eg. Ceremonies, ‘founders’ day’.

Symbols – unspoken messages, artefacts, size of offices, pool table, game room, etc

Language – acronyms, jargons.

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https://www.wisdomjobs.com/e-university/principles-of-management-and-organisational-behaviour-tutorial-366/how-employees-learn-culture-12928.html

ow is culture transmitted to employees of an Organization ?

Culture is transmitted to employees in a number of ways. The most significant are stories, rituals, symbols, and language.

Stories: Organizational “stories” typically contain a narrative of significant events or people including such things as the organization’s founders, rules breaking, reactions to past mistakes, and so forth. Lavinson and Rosenthal suggest that stories and myths about organization’s heroes are powerful tools to reinforce cultural values throughout the organization and specially in orienting new employees. These stories provide prime examples that people can learn from. Stories and myths are often filtered through a “cultural network” and remind employees as to “why we do things in a certain way”. To help employees learn the culture, organizational stories anchor the present in the past, provide explanations and legitimacy for current practices, and exemplify what is important to the organization.

Rituals and Ceremonies: Corporate rituals are repetitive sequences of activates that express and reinforce the values of the organization, what goals are most important, and which people are important and which ones are superfluous. Ceremonies and rituals reflect such activities that are enacted repeatedly on important occasions. Members of the organization who have achieved success are recognized and rewarded on such occasions. For example, awards given to employees on “founders’ day”, Gold medals given to students on graduation day are reflections of culture of that institution.

Material / Cultural Symbols: Symbols communicate organizational culture by unspoken messages. When you walk into different businesses, do you get a “feel” for the place –formal, casual, fun, serious, and so forth? These feelings you get demonstrate the power of material symbols in creating an organization’s personality. Material artefacts created by an organization also speak of its cultural orientation and make a statement about the company. These material symbols convey to employees who is important, the degree of equality desired by top management and the kind of behaviour that are expected and appropriate.

Examples: - assigned parking space for senior executives in the company premises, large offices given to senior managers, luxury automobiles given to senior or successful officers of the organization.

Organizational Heroes: Top Management and prominent leaders of the organization become the role models and a personification of an organization’s culture. Their behavior and example become a reflection of the organization’s philosophy and helps to mould the behaviour of organizational members.

Language: - Many organizations and units within organizations use language as a way to identify members of a culture. By learning this language, members attest to their acceptance of the culture and their willingness to help to preserve it.

Managerial Decisions affected by culture: For any organization to grow and prosper, it is important that its mission and its philosophy be respected and adhered to by all members of the organization. Here managers play a significant role in building the culture of the organization. The manager plays continuous attention to maintaining the established standards and send clear signals to all the employees as to what is expected of them.

Cultural consistency and strong adherence to cultural values become easy when the mangers themselves play strong role models. Good managers are able to support and reinforce an existing strong culture by being strong role models and by handling situations that may result into cultural deviations.

Changing organisational cultures

Developing an ethical culture

Be a visible role model

Communicate ethical expectations

Provide ethical training

Visibly reward ethical acts and punish unethical ones

Provide protective mechanisms

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https://www.shrm.org/hr-today/news/hr-magazine/1016/pages/how-to-change-your-organizational-culture.aspx

Former GE CEO Jack Welch once famously said, “The soft stuff is the hard stuff.” The business adage rings true for HR professionals trying to initiate culture change in their organizations.

Considerations:

Align culture with strategy and processes. Do your mission, vision and values line up with your HR processes, including hiring, performance management, compensation, benefits and the promotion of talent?

Connect culture and accountability. It is easy, particularly in difficult times, to forget the values you set in place to define your company, he says, citing Enron and WorldCom as examples. However, companies have a better chance at weathering disaster if they take responsibility for their actions, Sabapathy says.

Have visible proponents. For culture change to stick, it must be a priority of the CEO and board of directors. “Show the board a framework for understanding organizational culture and its impact on performance,” Sabapathy says. Work with the board to create a standing performance objective for the CEO that evaluates culture.

Define the non-negotiables. When contemplating a culture change, look at your current culture and call out which aspects you want to retain. Determining what’s not up for debate is particularly important during mergers and acquisitions, when leaders of two or more organizations must figure out how to blend identities.

Align your culture with your brand. Culture must resonate with both employees and the marketplace. To accomplish this, HR increasingly is partnering with marketing, he says. This is especially relevant in our current online world, where today’s bad customer experience can become tomorrow’s viral sensation.

Measure your efforts. Help demonstrate the effectiveness of your efforts by implementing employee surveys and analyzing gaps between desired and actual behavior.

Don’t rush it. Changing a culture can take anywhere from months to several years. Start by making sure there’s a clear rationale for why the company should change, he advises.

Invest now. Don’t wait for staff and resources that may never come. “It takes years of investment to get to that point where [your culture] just automatically becomes part of how you behave and act,” so begin whatever way you can.

Be bold and lead. You don’t have to be in a position of influence to have influence. “When we step up, it encourages others to step up as well,” he says.

Changing organisational cultures

Developing a positive culture emphasises

Building on employee strengths

Rewarding more than punishing

Encouraging vitality and growth

Limits of positive culture: when pursuit of positive culture start to seem coercive or Orwellian.

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The global context

Organisational cultures often reflect national culture.

All managers should be culturally sensitive.

Ethical behaviour is one area where national culture can rub up against corporate culture.

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Organisational cultures often reflect national culture. The culture at AirAsia, a Malaysian-based airline, emphasises informal dress so as not to create status differences. The carrier has a lot of parties, participative management and no private offices, reflecting Malaysia’s relatively collectivistic culture. In contrast, the culture of Qantas doesn’t reflect the same degree of informality. If Qantas were to merge with AirAsia, it would need to take these cultural differences into account. So, when an organisation opens up operations in another country, it ignores the local culture at its risk.

One of the primary things all managers can do is to be culturally sensitive. As one US executive put it, ‘We [American managers] are broadly seen throughout the world as arrogant people, totally self-absorbed and loud’. Companies such as American Airlines, ExxonMobil and Microsoft have implemented training programs to sensitise their managers to cultural differences. Some ways managers can be culturally sensitive include talking in a low tone of voice, speaking slowly, listening more and avoiding discussions of religion and politics.

The management of ethical behaviour is one area where national culture can rub up against corporate culture.69 Many strategies for improving ethical behaviour are based on the values and beliefs of the host country. Managers in some Western countries endorse the supremacy of anonymous market forces and implicitly or explicitly view profit maximisation as a moral obligation for business organisations. Associated with this perspective is the belief that bribery, nepotism and favouring personal contacts are highly unethical practices. Any action that deviates from profit maximisation may indicate inappropriate or corrupt behaviour.

Of course, there are exceptions to this. In the spirit of market-based capitalism during the global financial crisis of 2008–09, some senior executives viewed such unethical practices as part of the game. A growing number of authors have expressed their alarm at the extent and depth of unethical practices in business, particularly evident in the recent Royal Commission into banking practices throughout Australia.

In contrast, managers in developing economies are more likely to see ethical decisions as embedded in a social environment. This means doing special favours for family and friends is not only appropriate but may even be an ethical responsibility. Managers in many nations also view capitalism sceptically and believe the interests of workers should be put on a par with the interests of shareholders.

Exhibit 15.8

How organisational cultures impact employee performance and satisfaction

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Exhibit 15.8 depicts the impact of organisational culture. Employees form an overall subjective perception of the organisation based on factors such as the degree of risk tolerance, team emphasis and support of individuals. This overall perception represents, in effect, the organisation’s culture or personality and affects employee performance and satisfaction, with stronger cultures having greater impact.

Summary

Employees form an overall subjective perception of the organisation based on factors such as the degree of risk tolerance, team emphasis and support of individuals.

This overall perception represents the organisation’s culture or personality and affects employee performance and satisfaction, with stronger cultures having greater impact.

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Implications for managers

Realise that an organisation’s culture is relatively fixed in the short term. To effect change, involve top management and strategise a long-term plan.

Hire individuals whose values align with those of the organisation; these employees will tend to remain committed and satisfied. Not surprisingly, organisations with individuals misaligned with the culture have considerably higher turnover rates.

As a manager, you can shape the culture of your work environment, sometimes as much as it shapes you. All managers can do their part to create an ethical culture and to consider its role in creating a positive organisational culture.

Assessment 3

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Assessment 3: Case Study Analysis (essay) - individual assessment item

Due date: 23 Jan 2022, 23:59 hours, Singapore (late submission will be deemed as no submission and will not be graded)

Marks: 50%

Submission: Assessment must be submitted electronically in LearnJCU save as Word document (this is a hard rule) in a single file. Submit your essay to LearnJCU – subject home page – Assessments – Assessment 3-individual case study analysis (Essay).

Length: 1,500 words +/- 10%

The word count starts from Introduction to Conclusion. References are not included in the word count, but in-text citations and tables are included in the word count. Indicate your word-count on the first page of your essay.

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This assessment is aligned to the subject learning outcomes listed in the Subject Outline section 3.3. The aim of this assessment is to enable the analysis of a contemporary case study which draws upon all aspects of the subject materials in an essay style format. Safe-assigned is enabled for this assessment – read the following section on plagiarism.

The case for this assessment is written by Hemme, F., & Dixon, M. A. (2015). A Case Study on Power and Politics in Organizations. Case Studies in Sport Management, 4(1), 99–106. This case can be found in the following link: https://tinyurl.com/rkh4mts2

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The essay style submission will include the following elements. Make use of sub-headings to identify key sections of your essay.

Introduction – describe the key themes identified in the case study.

Body - Identify 3 organisational behaviour concepts, theories or models in relation to the case study and integrate your discussion with academic peer-referenced literature. Application of concepts, theories and models need to be contextualised to the case and not just a general theoretical discussion. Use the questions presented at the end of the case to identify the topics. As this assessment is based on a case study, you do not need to describe additional case studies in your essay.

Topic 1 – Clearly define the topic and discuss the relevant topic concepts, theories, models that can be applied to this case. Include literature review and where appropriate to this topic, discuss answers to the case study questions.

Topic 2 – same as above

Topic 3 – same as above

Conclusion – summarise the key themes and position taken from the research undertaken.

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Lit review - Research specifically to your 3 selected topics.

Use textbook/lecture materials – Does (1) complement/contrast?

Apply the above concepts, theories and models and contextualise to the case study.

This assessment is not a general theoretical discussion.

3 selected topics

How to integrate your discussion

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Literature Review

Case study

Your Essay

Textbook/ Lecture

References – You need to review at least 8 academic references. Academic references should be peer-reviewed or from credible newspapers and business magazines. References from other students’ papers, wiki…, blogs, online dictionary are inappropriate.

Marking criteria: refer to the marking rubric for this assessment in the Subject Outline and also attached on the next page.

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Assessment Task Three: Individual Case Study – Analysis (Essay)

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Note on Plagiarism: Plagiarism is a breach of academic integrity. Submission found to contain plagiarised content will receive a fail grade. The forms of plagiarism include:

Copying lecture notes in its entirety.

Cutting and pasting information directly from the assessment case study.

Cutting and pasting information directly from Internet sources and without clear acknowledgement.

Quoting word for word from another’s work.

Paraphrasing the work of others by altering a few words, changing their order or closely following their structure without acknowledgement.

Unauthorised collaborating and colluding with other students.

Using a professional agency or individuals (ghost writers) in the production of your work.

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Workshop – individual activity

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Workshop – individual activity

Your task:

Read the two contrasting organisational culture in Organisations A and B (slide 42)

Use the seven differentiating characteristics of organisational culture in slide 40 to describe either Organisation A or B.

Apply the Handy’s model (slide 37) or Quinn & Cameron’s framework (slide 39) to interpret and organisation’s culture.

Post your answer in LearnJCU, subject homepage, Workshop Discussions – Workshop 9: Organisation culture. Apply the learning in today’s lecture. Provide deep answers to demonstrate your knowledge and insights in this topic.

Then, respond to at least one other posts from your classmates. You need to post first before you can reply to others.

This discussion board will close on 18 Jan 2022, 5pm Singapore.

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Assessment Criteria High Distinction (85-100) Distinction (75-84) Credit (65-74) Pass (50-64) Fail (0-49) Grade 10%

Referencing Skills: Demonstrates an ability to choose suitable supporting evidence and referencing according to APA style conventions. Demonstrates good structure grammatical accuracy.

Uses at least eight academic references, with excellent variety and/or quality and follows the correct style/convention without error. Highly developed structure.

Uses at least eight academic references, some problems with variety and/or quality and/or style conventions. Good essay structure development.

Uses at least eight academic references, but some errors in referencing style and/or little variety and/or quality.

Some repetition in source citation, showing lack of variety and/or quality. Some obvious referencing errors. Essay structure met requirements..

Unable to correctly reference sources and/or little variety and/or quality of sources. Some limitations in essay development..

20% Introduction: Clearly describes the key themes identified in the case study.

SLO1, SLO2, CLO1

Describes the key themes accurately and in full, with clear evidence to support the discussion presented.

Good discussion of the key themes and support of the discussion presented.

Some discussion of the key themes presented.

Limited discussion of the key themes presented.

Discussion of the key themes unclear.

50% Body: Identify organisational behaviour concepts, theories or models in relation to the case study and integrate your discussion with academic peer referenced literature. Where appropriate, discuss the case study questions presented SLO1,SLO2,SLO3,CLO1,CLO4,

CLO5,CLO6,CLO10

Highly organised and researched response including evidence of the analysis of: 3-4 organisational behaviour concepts, theories or models related to the case study. Highly developed responses to the appropriate case study questions.

Organised and researched response including evidence of the analysis of: 3-4 organisational behaviour concepts, theories or models related to the case study. Developed responses to the appropriate case study questions.

Some analysis of 3-4 organisational behaviour concepts, theories or models related to the case study. Responses to the appropriate case study questions met requirement..

Limited analysis of 3-4 organisational behaviour concepts, theories or models related to the case study. Responses to the appropriate case study questions require further development.

Very limited analysis of 3-4 organisational behaviour concepts, theories or models related to the case study. Limited responses to the appropriate case study questions.

20% Conclusion: Articulate and identify the key themes and position taken from the research undertaken.

SLO2, SLO3, CLO1, CLO4, CLO6, CLO10

Clear articulation of the key themes identified in the case study. Clear identification of position taken from the research and analysis undertaken.

Key themes identified in the case study. Position taken from the research and analysis undertaken discussed.

Some discussion of the key themes identified in the case study and the position taken resulting from the research.

Limited discussion of the key themes identified in the case study and position taken.

Key themes not clearly identified and very limited discussion of the position taken.

Total

Assessment Criteria High Distinction (85-100) Distinction (75-84) Credit (65-74) Pass (50-64) Fail (0-49) Grade

10%

Referencing Skills:

Demonstrates an ability to

choose suitable supporting

evidence and referencing

according to APA style

conventions. Demonstrates

good structure grammatical

accuracy.

Uses at least eight academic

references, with excellent

variety and/or quality and

follows the correct

style/convention without error.

Highly developed structure.

Uses at least eight academic

references, some problems with

variety and/or quality and/or

style conventions. Good essay

structure development.

Uses at least eight academic

references, but some errors in

referencing style and/or little

variety and/or quality.

Some repetition in source

citation, showing lack of variety

and/or quality. Some obvious

referencing errors. Essay

structure met requirements..

Unable to correctly reference

sources and/or little variety

and/or quality of sources. Some

limitations in essay

development..

20%

Introduction: Clearly

describes the key themes

identified in the case study.

SLO1, SLO2, CLO1

Describes the key themes

accurately and in full, with clear

evidence to support the

discussion presented.

Good discussion of the key

themes and support of the

discussion presented.

Some discussion of the key

themes presented.

Limited discussion of the key

themes presented.

Discussion of the key themes

unclear.

50%

Body: Identify organisational

behaviour concepts, theories

or models in relation to the

case study and integrate

your discussion with

academic peer referenced

literature. Where

appropriate, discuss the case

study questions presented

SLO1,SLO2,SLO3,CLO1,CLO4,

CLO5,CLO6,CLO10

Highly organised and researched

response including evidence of

the analysis of: 3-4

organisational behaviour

concepts, theories or models

related to the case study. Highly

developed responses to the

appropriate case study

questions.

Organised and researched

response including evidence of

the analysis of: 3-4

organisational behaviour

concepts, theories or models

related to the case study.

Developed responses to the

appropriate case study

questions.

Some analysis of 3-4

organisational behaviour

concepts, theories or models

related to the case study.

Responses to the appropriate

case study questions met

requirement..

Limited analysis of 3-4

organisational behaviour

concepts, theories or models

related to the case study.

Responses to the appropriate

case study questions require

further development.

Very limited analysis of 3-4

organisational behaviour

concepts, theories or models

related to the case study.

Limited responses to the

appropriate case study

questions.

20%

Conclusion: Articulate and

identify the key themes and

position taken from the

research undertaken.

SLO2, SLO3, CLO1, CLO4,

CLO6, CLO10

Clear articulation of the key

themes identified in the case

study. Clear identification of

position taken from the research

and analysis undertaken.

Key themes identified in the

case study. Position taken from

the research and analysis

undertaken discussed.

Some discussion of the key

themes identified in the case

study and the position taken

resulting from the research.

Limited discussion of the key

themes identified in the case

study and position taken.

Key themes not clearly

identified and very limited

discussion of the position taken.

Total