Table of contents
Task 1: Analysis of the characteristics of different organisational structures
TASK 2: Evaluation of different leadership behaviour theories:
TASK 3: Evaluation of how Investec Bank motivates its employees:
Task 1: Analysis of the characteristics of different organisational structures
A multifunctional structure is made up of centralised control- hierarchical- and contains separate functional departments. Vertical integration is part of this structure and brings together the operations of the different functional departments – e.g. manufacture and assembly, purchasing resources, retailing as well as distributing. This structure is mainly used for small companies and creates specialisation along functional lines. It is a viable structure as long as the products share common manufacture procedures and technologies and personnel can become highly specialised in their work.1
However, multifunctional structure is not optimal if the company is developing and makes use of multiple technologies to produce larger product ranges, is moving into new markets and needs to respond to market needs or the firm decides to diversify. Thus multifunctional structure is only valid for small, simple organisations that specialise in their product. For example, General Motors, a car manufacturer, built itself on centralised control over a functionally divisionalised structure and specialised as one of the best car manufacturers.
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Multidivisional structures are defined by different divisions representing separate business areas, which lead to a stronger market focus. They focus on the organisations outputs instead of inputs as structure focuses on the core product/service. This eliminates dangers of weak communication and coordination which makes responding to market changes faster. Individual divisions have access and control over the vital assets it needs. It allows better comparison of performance within the different business area, gives a clearer view of the sources of complications as well as assists with development of common management capabilities. However, some of the challenges of this organisational structure are to ensure the benefits aren’t being worn by repetition and diseconomies of scale. Extensive communication’s needed across functional areas and if customer groups, certain regions or product-based can be disregarded. An example of multidivisional structure is a international vehicles producer could structure on divisions attending North America, South America, Europe, Asia and Africa. Thus this structure is mainly incorporated by transnational organisations who determine that the most optimal way to serve geographically varied markets is to produce and allocate merchandises locally, permitting executives to meet local product market preferences.
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Matrix structures typically offer two or additional reporting relations to staff. The first line of reporting is typically the functional area and manages the formal aspect of the employment contract. The other lines of authority are used to include personnel in continuing ventures and initiatives that form part of their work. This form of structure is progressively used to coordinate merchandise and brands across countries and there is a necessity for workers to distribute their time across a variety of various activities. The matrix concentrates on answering to market needs, produces potentially good coordination across functions/divisions, leverages use of employee’s competencies and expands roles for employees that develop competencies.
The challenges around the matrix structure are its ability to form confusion over priorities connected to dissimilar tasks, loss of responsibility and ineffective information management. There can be a power struggle caused amongst the different managers and well-developed management skills are needed to make the different reporting lines work well together. An example of matrix structure would be a university who divides its staff into different subject divisions and the functional areas of new course development, teaching quality etc. cut across all the subject divisions. There is one subject leader per division who reports to the Dean and there is a hierarchy within the divisions and the university as a whole. Matrix structures can be applied to part of an organisation and does not need to be implemented to the entire organisation.
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Network structures and virtual organisations allows for a minor essential organisation to coordinate design, manufacture etc. across legally and geographically separate organisations. This structure is versatile and varies in response to data processing requirements. These organisations can be small but have a worldwide influence, emit quick responses to local market changes while retaining large scale operations, have great flexibility as component businesses can be altered and are possibly the lowest-cost structure. Conflict or disagreements can be handled in a more positive, task orientated environment and a climate is created for evolving a solid sense of identity with project goals and striving towards a mutual objective. In order for this structure to work each team needs to know what it is there for and individuals can belong to more than one team to aid with collective understanding and communication between teams.
The challenges are escaping goal uncertainty, clarifying the lines of authority and getting the best fit between the network structure and its ability to process information. We also need to guard against structure creating itself; lack of organisational identity and it must focus on retaining and rewarding key people.
In conclusion, we can see that from the four main types of organisation structure above, the most developed and future orientated structure is that of networked and virtual organisations.
Explanation of how the culture of an organisation can impact on the effectiveness of the organisation
Organisational culture forms a key part of organisational day to day business. It not only affects how personnel perform, but also how they relate to each other, to clients and to their superiors. Organisation culture dictates how well or badly tasks are being performed and might be the explanation behind the way employees feel concerning their work and their organisation.2 It’s the collected beliefs held concerning how work ought to be done and situations dealt with, that guides worker behaviour.
Culture leads to basic assumptions, which is the deepest level of culture; in the work place that employees silently embrace without even realising they are doing it. Some of these include quality, stability, excellence, innovativeness etc. Once an employee grasps these basic assumptions they thus begin to act and produce work to achieve those basic assumptions which will heighten the effectiveness of the organisation.
This in turn leads to the concept of organisational socialization. This is when an employee’s values, patterns of behaviour, motives and attitudes are influenced to become those of the organisation. For example, this is when a company carefully selects new employees who have the appropriate ways of thinking and behaving already and are then moulded to the company culture by the influence of the behaviour of senior management. Thus this teaches new employees how to survive and prosper in an organisation which leads to high efficiency in a company.
Since culture allows employees ethical values and beliefs to align, it can prove effective in forming work groups because relationships and trust speedily ensue. This aids avoiding conflict and concentrate purely on completing their tasks. Staffs understand what’s expected of them, as well as how their performance is measured and what rewards are attainable. They will work towards them knowingly which increases their motivation levels which will increase the overall effectiveness of the organisation.3 Employees usually put more effort into their work to realize organisational goals if they feel like they are part of the company setting – which again is why it’s so important to align the recruitment process with the company culture as when values and managing systems are aligned, worker conduct results in the accomplishment of organisational goals.
According to Harrison’s quadrants of culture, he believes that organisational culture gives rise to four different categories of leaders: Apollo culture– extremely formal, centrally focused and bureaucratic; Zeus culture - this is where the informal colleagues share the identical thinking as their leader. It is verbal and intuitive; Athena culture – consists of inter-disciplinary project groups organised around a task. Work is decentralised but still formalised; Dionysus culture– informal and decentralised culture which is characterised by bonds of respect and affection. It’s made up of free spirits united by common interests.
Harrison’s model produces a consciousness of the culture gap between the current and desired cultures in a company. All four dimensions are measured within two modes of operation- centralisation and formalisation. A strong culture can be a substitute for formalisation which proposes that an organisations official guidelines and procedures can be adopted by company staff when they accept the culture. Thus low formalisation can reflect weak organisational culture.
Scheins model discusses three stages of organisational culture. The first level is ‘artefacts and creations’. This consists of obvious, visible expressions of culture. These are audible and tangible demonstrations of conduct reinforced by company customs, assumptions and values. The second level is ‘values and norms’. Values signify the ethics and standards esteemed by the organisations workers. Values are the foundation as to what is suitable and what is not suitable. They form the moral code of the company. Norms show what the expectations are between the organisations staff. They provide the company with unwritten guidelines that specify expectations in terms of actions in specific circumstances. The third level is ‘assumptions and beliefs’. These are the foundation of a company’s culture. These are often taken for granted and are unconscious. They direct actions and communicate to people how to reason, feel and perceive work, performance goals, relationships and performance of co-workers.
Schein believes that variations in the culture flow from the higher to lower levels, with the elementary underlying assumptions as the top level. Higher levels drive the lower levels and introducing change at a high level can bring transformative change throughout all lower levels.
Mintzberg suggests that companies can differ according to three different ways: the important parts of an organisation; its main coordinating instrument and the type of decentralisation it employs. It’s suggested that the strategy adopted and the degree to which the organisation applies it will result in five structural arrangements: simply structure, machine bureaucracy, professional bureaucracy, divisional form and adhocracy.
Innovation is often seen in companies who have a strong corporate culture as this empowers employees to perform their jobs in accurate and thoughtful ways which leads to problem solving being done in out of the box ways. As employees feel empowered and valued, retention of employees is often better as well which means the company will not have to undergo material costs to recruit and train new employees constantly. For example, Google is known to retain employees as their culture is so healthy, whereas with Amazon in 2013 it was rated the second worst turnover rate because of troubling conditions in their warehouses. Therefore culture is a long term investment in a company and a huge contributor to creating brand loyalty- it can be the difference between a customer returning for a second purchase or not.4
Assessment of the impact of learning on the effectiveness of employees
Today’s business world is dominated by rapid, unpredictable change and work which needs knowledge to complete, because of this continued learning or both the organisation and individual is crucial. Learning is based in psychology and it is suggested that behaviours structure how one learns. This is seen in Pavlov’s (1927) stimulus-response model that suggests a behavioural reaction to an incentive and Skinner who suggests that the bulk of learning solely happens once the action is done- therefore learning is decided by behavioural consequences. Tolman (1932) suggests that learning is a cognitive process supported by expectations and on the affiliation within the mind between two or additional stimuli: it’s a thinking process instead of a strictly reaction-based response.5
The Learning Organisation, proposed by Pedlar et al, believes that there is a huge hidden, locked up, underdeveloped potential in companies and the people want to unlock, free and grow this potential. The need for a company to learn and grow in order to not become irrelevant is a very popular idea and unceasing development of your product/service is material in today’s marketplace. Companies need to learn quicker and smarter just to be able to stay in the same place.6
An advantage of the learning organisation is that is helps in the need to realize uniform and high levels of excellence, continuous and rapid variations in technology and the need for service orientation , global turmoil and rivalry and the admission into the company of knowledge employees in great numbers to cope with the growing ambiguity in a international market. Thus if a company has the ability to learn at a quicker pace than its competitors it might be able to sustain a competitive advantage. The learning organisation has entrenched structures to attain and share learning.
A typical advantage of learning is that there is a general standard that the higher educated you are the better your chances of being employed and earning a higher salary. Also the more learned you are the more you contribute to an organisations effectiveness as you know what and how to do the job and how well you are expected to perform. Another advantage is that technologies have been introduced which allows for simulations to be used for training and managing development. Knowledge is additionally an enormous asset, because if you recognize the way to build products, innovate swiftly, bring new products and services quicker to the market place and meet dynamic client needs it results in competitive advantage.
A further advantage of learning is that through positive and negative reinforcement good behaviours will be repeated and negative behaviours will not be. Learning can depend on values and beliefs and if an individual feels as though learning a skill will uphold or achieve those values and beliefs a person will repeat those positive behaviours. Kolb (1976) suggests the concept of continuous learning through experiences, that is enticing to an organisation as if continuous learning takes place then it will improve the abilities and flexibility of the workers.7 Since there is a trend towards heightened dependence on knowledged staff and additional advanced business environments this might offer the organisation a competitive advantage. We see this today in company’s who give employees the opportunity to pursue courses within and outside of the organisation in order to develop their employees as individuals.
A disadvantage of learning is that self-reinforcement is a material feature to an individual’s decision to vary their behaviour and there is a risk that an individual may pretend to learn in order to achieve a certain reward and then revert back old ways. Another disadvantage that is associated with Kolbs cycle is that in order to attain learning the people should have clear goals or they may not seek out new experiences.
When it comes to the role of technology in learning there are many advantages and disadvantages. The advantages are that it is low budget as you do not need to spend extra on meeting rooms, lunch etc. and that it is flexible and global because nowadays you can connect to WiFi almost everywhere and thus employees can access the learning material anytime and anywhere and training reach is expanded. Other benefits are the convenience of resources as unlike offline coaching that offers restricted resources, online coaching offers staff access to any sort of resource from across boundaries – therefore they will do self-learning with or without an instructor as long as the necessary materials are provided. Self-paced learning is also an advantage as because modules are recorded and available at all times employees do not need to slow down their learning like they would if they were in traditional classrooms. They can learn at their own comfort and pace.8
The disadvantages of the role of technology in learning is that there is a lack of human connect as there is no social interaction with instructors or other learners, which means they cannot engage in debates to share their view points and there is no peer learning which can lead to a sense of isolation. Unstructured learning can also take place as it is easy to put off learning when there is no set schedule and so learners may fall behind. Technology meltdown is also an issue as if the learners computer technology is not compatible with the e-learning software they will not be able to access lessons and a reliable internet connectivity is a requirement which may not be easily accessible to learners.9
1 Brooks, I., (2008) Organisational Behaviour: Individuals, Groups and Organisation 4th Edition, Financial Times/ Prentice Hall
2 Buchanan, D and Huczynski, A., (2013) Organizational behaviour 8th Edition, Financial Times/ Prentice Hall
3 BUSINESSBALLS. 2019. Organisational Culture and Employee Performance You are here: Home Leadership Organisational Culture Organisational Culture and Employee Performance. [ONLINE] Available at: https://www.businessballs.com/organisational-culture/organisational-culture-and-employee-performance/. [Accessed 31 October 2019].
4 Forbes. 2017. 8 Ways Company Culture Drives Performance. [ONLINE] Available at: https://www.forbes.com/sites/williamcraig/2017/08/03/8-ways-company-culture-drives-performance/#e79fa256ce0a. [Accessed 31 October 2019].
5 Buchanan, D and Huczynski, A., (2013) Organizational behaviour 8th Edition, Financial Times/ Prentice Hall
6 De Villiers, W., 2009. THE LEARNING ORGANISATION: VALIDATING A MEASURING INSTRUMENT. Journal of Global Strategic Management, [Online]. 1, 115-123. Available at: http://www.isma.info/uploads/files/115-the-learning-organisation-validating-a-measuring-instrument.pdf [Accessed 28 May 2020].
7 Brooks, I., (2008) Organisational Behaviour: Individuals, Groups and Organisation 4th Edition, Financial Times/ Prentice Hall
8 HRinAsia. 2018. Advantages and Disadvantages of Online Training for Employee. [ONLINE] Available at: https://www.hrinasia.com/employee-relations/advantages-and-disadvantages-of-online-training-for-employee/. [Accessed 10 November 2019].
9 TheSHRMSouthAsiaBlog. 2017. The Pros and Cons of Technology Enabled Learning for the Working Professional. [ONLINE] Available at: https://blog.shrm.org/sasia/blog/the-pros-and-cons-of-technology-enabled-learning-for-the-working-profession. [Accessed 10 November 2019].