From One Generation Of Employees To The Next Business Essay
“The collection of relatively uniform and enduring values, beliefs, customs, traditions and practices that are shared by an organization's members learned by new recruit and transmitted from one generation of employees to the next”
There is no single ideal organisation form, as cultures are affected by the events of the past, the climate of the present, the technology, the type of work, their aims and the kind of people working in them.
In the light of the above statements which are trying to define relationship between organizational structure and organization culture, discuss the various types of organizations structure, how organizations could have more than a single unified culture, and that strong culture do not necessarily result in successful organization.
In recent decades, there has been a lot of emphasis on the way the structure of the organization has been formatted along with the culture that is prevailing in the organization and vice versa. It is highly accepted by the researches conducted that the organizational structure and the culture are inter-related and all the activities of the employees there should be in accordance with the structure and culture prevailing there. Structure and the culture are always changed gradually influenced by the external environment of the organization. This change is needed for a successful running of the organization and extracting the best of the most complicated resource that is human being. Here, I am going to discuss the meaning and types of organization structure and then move on to the culture and analyse how a strong culture doesn’t necessarily build a successful organization.
There has always existed a need to arrange the resources of an organization in such a way that will achieve the objectives set for it, in the most effective manner possible. Martin (2005).Organizational structure is not the invent of modern era, it existed centuries ago and has been taking different forms with advances in needs and technology. The framework of any organization in any age represents the way the designers interpret, in the light of prevailing models and fashion, the objectives to be achieved matched together with the human and technological resources. Martin (2005). Organization structure has an huge impact on the performance of the human and monetary resources of the organization and on the organization as a whole.
No matter how organizations vary from each other depending on the complexity and the size, there is always a necessity for division of whole management task into a variety of activities. Thus, allocating different activities to different parts of the organization and setting mean and methods to control, co-ordinate and integrate them. The structure of an organization can be regarded as frame work for getting things done. It consists of units, functions, divisions , departments and formally constituted work teams into which activities related to particular process, projects, products, markets, customers, geographical areas or professional decisions are grouped together. The structure indicates who is accountable for directing, co-ordinating and carrying out those activities and defines management hierarchies- the chain of command, thus spelling out who is responsible to whom for what at each level in the organization. Armstrong (2006).
The different types of structure are:
Tall and Flat structures:
Tall structures are types of structures where the involvement of specialist managers, helps the organization to co-ordinate a wide range of activities across different products and market sectors. Its main characteristics are numerous levels of management and narrow span of control. Short or flat structures involves few management layers, enabling a greater degree of top management control. This type of culture prevails in smaller organization.
‘The basis of the different forms of hierarchical structures is the strict observance of the principle of the unity of command. A line of command can consequently be traced through the ranks of the organization to or from the chief executive or chairman. Members are usually divided into divisions or departments which are charged with a certain area of responsibility” Campbell and Craig (2005).
The various types of hierarchical structures are distinguished from each other depending on how the parts of the organization are distributed. They are
1. Entrepreneurial Structure:
Entrepreneurial structure is one where the owner of the organization has direct control of management activity and delegates task to his employees. This type of culture can be found in small organizations, where the tasks are limited like cafe, small retail stores, etc..
2. Bureaucratic Structure:
Bureaucratic structure is a tall and rigid structure. Bureaucratic form of organizations always exhibit their characteristics of fixed division of labour,central control, employees appointed for various posts on basis of capability and not elected, systematic and strict filing of the documents. In this structure promotions are given only on the basis of seniority and achievements. Here, there are strict rules and regulations and there is need for disciplined approach.
3. Functional Structure:
“A functional structure closely follows the ‘classical’ school of thought in organizational structure in that it prevails the first steps in determining the formality of roles, responsibility, control and co-ordination of activities”. Campbell & Craig (2005). The organization is often divided into five key functional areas:
Finance and accountancy
Marketing and sales
Technical (example: R&D)
Operations (example: Manufacturing).
This structure will become a drawback and give rise to complexity if the company wants to expand its product lines. To counter this drawback the larger companies especially operating across various countries and various types of customers divide their customer base according to the region and the type of product. This division is generically termed as Geographical division and Product or Customer Based division and within them they have the functional structures. In this scenario the head quarters has all the power and authority and pass it on to the managers in these divisions to carry out the task effectively. Example: Citigroup has divided its customer base on the basis of their country and the type of account or product they have.
Non hierarchical Structures:
In this structure the organizations do not observe the unity of command in a strict way as in hierarchical structure. This structure has been formed to give more freedom to employees by eliminating the concept of reporting to one boss and facilitating to have a more creative and flexible approach to work.
Matrix structure is an attempt to combine the advantages of pure functional structure and the product organizational structure. (www.visitask.com). This structure is suitable for project driven companies such as construction, production companies etc.. In this structure the employee can be a part of more than one team and has to report to more than one boss like department manager and project manager. It is often assembling and de-assembling of groups depending on the project they have.
It is a structure where the organization is first divided according to the product and further sub divided into geographical divisions and finally sub divided according to the functions they carry out.
It is a term used for an organization which has loose knit structure and can easily adopt to the customer and market place requirements. In this structure the employees should adopt multi skill roles and are trained to perform a variety of tasks. Hence, they are capable of performing different functions according to demand.
Independence form of structure:
This form of structure is almost a form of non-organization. In this structure the owner runs the show on his own. If there are more than one owner then often they don’t co-ordinate and if they then the percentage of co-ordination is very less. This structure is often visible where professionals are involved. There is no control over each other. Example: GP Surgery, Barristers, etc.
Core-periphery Organizational structure:
Today’s global competition and emphasis on saving resources has given rise to structure through which the payroll is downsized to the core of permanent employees only who carry out the fundamental activities of the organization. This allows the organization flexibility in managing fluctuations in its labour requirements by hiring casual, part-time or contract workers on an ad-hoc basis. (Campbell & Craig 2005).
Shamrock Organizational structure:
In this structure the organization is formed of three parts and denotes the leaf of shamrock. One part is formed of permanent core professionals , technicians or managers. Secondly, there is contractual fringe comprised of self employed professional or specialist organizations (example: cleaning) and thirdly the flexible workforce to carry out temporary and part-time work.
Basically, organizational culture is the personality of the organization. Culture is comprised of the assumptions, values, norms and tangible signs (artefacts) of organization members and their behaviour. (www.managementhelp.org) .Edgar Schein (1985) described Organizational Culture as “the deeper level of basic assumptions and beliefs that are shared by an organization, that operate unconsciously and define in a basic taken-for-granted fashion an organization’s view of itself and its environment”. Ralph Stacey (1996) defines organizational culture as “ the culture of any group of people is that set of beliefs, customs, practices and ways of thinking that they have come to share with each other through being and working together. It is a set of assumption people simply accept without question as they interact with each other. At the visible level the culture of a group of people takes the form of ritual: behaviour, symbols, myths, stories, sounds and artefacts”.
Determinants of Organizational Culture are:
The ‘philosophy of the organization’s founders’.
The ‘nature of the activities in business’.
The ‘nature of interpersonal relationships’ and the degree of camaraderie in the organization.
The ‘management style’ adopted and the types of control mechanism’.
Any ‘influences’ from the external environment which can affect the employees perceptions of their job security or personal, economic and social outlook. Campbell & Craig (2005).
The ‘Artefacts’ of culture are things that ‘give away’ certain feature of an organization Campbell & Craig (2005). Artefacts can be logos of the organization, layout of the plant, colour of the walls, etc.. Artefacts include ‘slogans and sayings’, ‘form of language’, ‘rituals and routines’, how the culture treats newcomers to the organization and ‘heroes and villains of an organization’.Campbell & Craig (2005). Example: Google gives away its quality of friendliness, innovativeness and an outgoing organization by colouring its walls in vibrant colours and planning various sporting and entertaining activities. Moreover, every employee is free to interact with all the employees no matter of the department they work in and there is no discrmination in recruitment and no strict observance of hierarchy.
Organizations don't necessarily have one unified culture due to uniqueness of every individual and these individuals tend to form subgroups based on similarities among the individuals of these groups. “As understood in sociology, a subculture is a set of people with distinct behaviours and beliefs that differentiate them from a larger culture of which they are a part”. (www.wikipedia.com). The subcultures would be different and distinct from other subcultures and larger culture due to age of its members, race, ethnicity, class and/or gender,sexual orientation, etc..An organization always has many subcultures as it grows and expands because new employees that would be recruited by the organization would have different attributes influenced by the environment they have come from and the events in their life and society. These individuals often associate with employees with similar attributes resulting in a group having their own culture. Example: In Citigroup, due to the diversity there are employees with various cultures like Indian culture. They form a group with other Indian employees and they often interact with each other a lot and this has resulted them in having a different culture. This subculture can be seen the way they eat, dress and communicate with others.
Members of subculture would always have a different style and represent themselves differently from the mass groups. Many subcultures evolve constantly due to their members attempt to stay steps ahead of the dominant culture. A subculture can be described as a counter culture if they oppose dominant culture systematically.
Relationship between Organizational Structure and Culture:
In order for a culture to be strong it has to be appropriate to the organizational structure prevailing in the organization. Often, structure influences the culture. For instance, in a bureaucratic organization you would find a culture which would emphasize more on monetary values, seniority and discipline contrary to a matrix structure organization where there is flow of communication from both sides. A culture of an organization is its personality and all care should be taken that it suits the structure and fits well. This is very important , so that the organizations can present themselves in the best way to the stakeholders and most importantly acquire and retain human resources.
Culture in the organization is always passed on from the existing employees to the new recruits , but this is subject to alter with new recruits influencing the existing culture to change according to the evolution in the external environment. In recent decades we have seen that a lot of organizations have changed the way they operate hence changing the structure of the organization. These changes have occurred due to advancement in technology and globalisation and have also brought about changes in the organizational culture. Example: Cultural changes in Indian service industry influenced by western culture due to opening of many BPOs has replaced the conservative culture prevailing there. This influence has been brought in by new employees who have studied in proper Enlish medium schools and already have wetsern influence in them due to many wetern channels aired on the television.
Strong Culture :
Strong culture is said to exist where staff respond to stimulus because of their alignment to organizational values. (www.wikipedia.com). Strong culture has been defined below
The more one organization has a particular ritual or artefact compared to another organization, the stronger is assumed to be its culture.
The more diversity of artefacts-jargon, stories, myths, ceremonies, etc - an organization has , the stronger is culture.
It is not the quantity or diversity of artefacts which is important in assessing strength, but rather the consistency in meaning across them.
The extent of which control is exerted over organizational members, i.e. a strong culture is one which demands adherence to a particular organizational ‘self’, even where this is potentially inconsistent with other identities which individuals may wish to express. Yanow (1993:211-12)
A strong culture exists in an organization which emphases clearly and explicitly on the philosophy how business will be conducted. To develop a strong culture a lot of time has to be spent communicating values & beliefs and should be shared by all the employees . Moreover, new recruits should be carefully screened and employed so that they feel comfortable working in that particular culture. A strong culture always need to fit with the organizational structure. A culture can be made strong by telling legendary stories, honouring and rewarding employees who follow cultural norms and penalising who don’t and sincere commitment to operating company according to tradition. (www.csuchico.edu) A strong culture is very beneficial to an organization and it counts a lot because the organizational values are strong and widely shared across the workforce. Researches have showed that relative to an organization’s peers the one with stronger cultures are often successful and perform well.
Drawbacks of a strong culture:
In a stable environment a strong culture works very well but in today’s volatile environment organizations with strong culture don’t perform well because they don’t really adapt to changes in the environment and leading to under performance of the organization.‘A strong culture makes it easier for the employees to embrace existing perspectives and , at the same time less willing to explore totally new alternatives or way of doing things’.(www.bizjournals.com)
A strong culture can be a hindrance when the organizations try to redesign their structure so that they can compete very well with their competitors. A strong culture due to its strong relationship with the structure often limit’s the expansion of the organization to new markets and products. Example: a very disciplined organization trying to enter entertainment market or an organization with eastern culture trying to expand to western countries face problems and often under perform.
Where culture is strong, people always believe what they are doing is right and there is a risk of a phenomenon, Groupthink. Groupthink has been defined by Irving L. Janis as “ a quick and easy way to refer to a mode of thinking that people engage when they are deeply involved in a cohesive ingroup, when members’ strivings for unanimity override their motivation to realistically appraise alternatives of action”. This results in a scenario where even if people have different ideas they do not challenge organizational thinking and this results in reduced innovation. This often happens in a bureaucratic organization or in an organization which highly relies on a central charismatic person, or where there is significant belief in the organizational values and in groups where friendly climate is at the base of the identity (avoidance of conflict). (www.wikipedia.org)
Often organizations with strong cultures undermine the sub cultures prevailing in the organization and this leads to under performance by few employees and results in low productivity and less competency. Due to this ignorance of sub cultures a lot of employees feel left out and don’t really perform to the expected level..
Strong culture can be a problem when the organizations merge or an organization acquires another one and their might be conflicts between employees of the whole organization due to two different cultures existing in an organization.
We have seen the various types of organizations structure and the essence of strong culture we can now conclude that a strong organizational culture doesn't necessarily result in good performance by the organization. The top management of the organization must adopt to various structures and alter their cultures gradually to be in pace with the changes in both internal and external environment. The organizations should not undermine the sub cultures prevailing in the organization and also blend good attributes of the subcultures with the larger culture. Moreover, human resources of the organization have to be blended in a way that initiate them to perform well and result in good overall performance of the organization. Organizations with multinational operations or branches should mix the larger culture of the organization with the local culture to make all the employees feel comfortable to work there and the new employees find the workplace warm and welcoming. Culture plays an important role in the welfare of the organization and every care should be taken that it is fine tuned in accordance with the needs.
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