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CIC is a large insurance company which has become keenly aware of the need for basic change. There are some problems in company relating to the existing culture which is very traditional, male dominated and status conscious. The prevailing management style of the company is autocratic and dictatorial.
So, in order to resolve these problems there is need to rebuild the CIC. As a responsibility of HR manager, change in organisation structure and culture is necessary. It will help to empower the employees so that they become truly devoted both to their work and to the company.
It consists of beliefs and practices observed by specific human groups that have been passed down from their ancestors through their grandparents, parents and society around them.
In CIC member of organisation are following their tradition, they are not working according to the concept of modernization, which is a big problem.
In this company there is no rule of equality. Men's are preferred more than women's. They have large number of male staff members and employees and females are short in number.
Members of the company are status conscious. They are conscious about their status very much. Managers due to their status do not co-operate well with the employees. Top authorities are just making money. They are not worried about the sustainability of company.
Due to the autocratic and dictatorial style of top management, lower management cannot work according to the expectations what is required for the company. This results in hierarchical problem from which CIC is suffering.
Autocratic management style:
The company management style is autocratic which means that managers takes all the important decisions and do not consider opinion from their employees.
Dictatorial management style:
CIC is also following this style where employee do not have right of questioning on the decisions taken by managers.
Reformation of CIC:
In order to rebuild a big insurance company, two main changes are essential;
Boddy, (2008:319) defines organisation structure as:
"Organisational Structure describes the way work is divided, supervised and coordinated. When people join a department or take a job within the structure this gives a fairly clear signal about what they should do."
Organisational structure determines the manner and extent to which rules, power, and responsibilities are delegated controlled and coordinates and how information flows between levels of management.
As the CIC is facing too many problems. In order to resolve flaws like autocratic, dictatorial and hierarchical there is mandatory need to make new structure for organisation.
According to the Boddy, (2008, 319):
Organisation structure consists of-
Structure and performance
Design of structure
Structure and performance:
When an organisation is not performing well managers often change the structure.
When business grows, those running it divide the work and coordinates parts - they create a structure within which people work.
It reflects the belief that structure affects performance.
Design of structure:
Designing of structure is the most important thing for any organisation.
Structure is how work is divided, supervised and coordinated.
It defines the responsibilities of divisions, departments, and people what they are expected to do.
As CIC is a large insurance company, following is an example of structure of a unit in a large business.
The structure within a BAE aircraft factory (Boddy, 2008:320)
Due to the large company vertical structure is appropriate for CIC.
In vertical structure there is a concept of centralisation (those at the centre make most decisions) and its opposite decentralisation.
Centralised and Decentralised Organisation:
According to the learn management2 it has been given that:
In a centralised organisation senior officers will retain the major responsibilities and powers.
Conversely decentralised organisation will spread responsibilities for specific decisions across various outlets and lower level managers, including branches or units located away from senior managers/head officers.
An example of decentralised structure is TESCO the supermarket chain. Each store of Tesco has a store manager who can make certain decisions concerning their store. The store manager is responsible to a regional manager.
Advantages of centralised and decentralised structure for organisation:
Advantages of centralised structure:
Senior managers enjoy greater control over the organisation.
The use of standardised procedures can results in cost savings.
Decisions can be made to benefit the organisations as a whole. Whereas a decision made by a department manager may benefit their department, but disadvantage other departments.
The organisation can benefit from the decision making of experienced senior managers.
In uncertain times the organisation will need strong leadership and pull in the same direction. It is believed that strong leadership is often best given from above.
Advantages of decentralised structure:
Senior managers have time to concentrate on the most important decisions (as the other decisions can be undertaken by other people down the organisation structure.
Decision making is a form of empowerment. Empowerment can increase motivation and therefore mean that staff output increases.
People lower down the chain have a greater understanding of the environment they work in and the people (customers and colleagues) that they interact with. Â This knowledge skills and experience may enable them to make more effective decisions than senior managers.
Empowerment will enable departments and their employees to respond faster to changes and new challenges. Whereas it may take senior managers longer to appreciate that business needs have changed.
Empowerment makes it easier for people to accept and make a success of more responsibility.
Combination of centralised and decentralised:
Combination of centralised and decentralised is more effective for organisation.
For example, functions such as accounting and purchasing may be centralised to save costs.
Whilst tasks such as recruitment may be decentralised as units away from head office may have staffing needs specific only to them.
Following diagram shows the example of centralised and decentralised structure.
Robbins and Judge Organisational behaviour
If we look at the above diagram it shows that CEO has powers and he is conveying message to the employee below it which is a part of centralised structure.
On the other hand in the middle Vice President has some authorities which is communicating with other workers as regions 1 2 3 which then further linked with districts. So its transparently exhibits decentralised structure.
Boddy, (2008:330) demonstrate that:
If divide work then need to coordinate by
Standard inputs and outputs
Rules and procedures
Direct personal contact
Decision making is very important process for any organisation or company. Before making decision some tasks are required as shown in following diagram.
Tasks in making decisions (Boddy, 2008:210)
For a bright future of CIC it is very useful to consider some decision making model
Decision making model by Garbage Can (March, 1988):
Garbage Can says that, Decision requires (PPS):
To produce a decision, they need to come together in a "choice opportunity" e.g. a meeting
PPS are independent, and decisions get taken only when all three come together(even if randomly) in the "garbage can" (a meeting)
Learning organisation includes learning approach to strategy and participative policy making.
Looking in informative, formative accounting and control, internal exchange and reward flexibility
Looking out boundary workers as environmental scanners
Learning opportunities in climate and self development
All of the above learning organisations emphasis on one thing "Enabling Structure"
Atkinson, (2009:6-10) defines organization culture as:
He says that a popular and simple way of defining culture is 'how things are done around here'. For example, Atkinson explains organizational culture as reflecting the underlying assumptions about the way work is performed; what is 'acceptable and not acceptable'; and what behavior and actions are encouraged and discouraged.
Organisation culture will cover up the defects related to Status conscious, Male dominance and Traditional culture.
Organisation culture comprises of the following:
Culture and Performance
Culture and performance:
Culture plays a very dominant role in any organisation. It affects the organisation performance.
It is belief that culture affects performance
Schein (1985): Culture develops as people work together, and develops a set of beliefs about what works, which is transmitted to successive generations.
Beliefs relate to mission, goals, ways of achieving goals, and how to measure performance.
Following diagram explains that how culture is develops in an organisation.
The stages of cultural formation (Boddy, 2008:86)
As CIC needs a balanced culture following above steps of development will enable the CIC to sustain its culture for long period of time.
Boddy, (2008:87) shows that:
Components of culture are;
Espoused beliefs and values
Basic underlying assumptions
Artefacts include Surface level, visible features such as language, form of greeting, clothing and the physical layout (open plan or closed offices).
Espoused beliefs and values:
Beliefs members hold about their work and the situations with which they deal. Genuinely held ideas of members about right or wrong, fair or unfair.
Basic underlying assumptions:
Deeply held ideas about the way people work together, and the sources of their success.
As a responsibility of HR Manger these are the basic things that should be considered while implementing culture in an organisation or company.
In order to form a culture for a big insurance company there is need to develop some strategy. This will solve the problem of traditional culture which CIC is following. Strategy like implementation of new technology.
Technology in business:
Business help 2009 provides evidence to show that:
New technology can be put into different categories that will helps to understand the different effects they could have:
A New Product/Service:
For example, mini-discs, lap-top computers, interactive TV (for home shopping, games, banking, etc)
New Business Operations:
For example, automatic cash tills, computer aided design (CAD), e-mail, remote working, etc
A New Production Process:
For example, ordering, invoicing to robotic arm manufacturing.
For example, silicon chips (computers), polystyrene packaging, etc
So, implementation of technology will raise the standard of the Company.
Boddy, (2008:15) demonstrate Mintzberg's Interpersonal Role as follows:
There are three types of role;
ÂPerforming ceremonial and symbolic duties, receive visitors.
Sign letters of award to successful applicants.
Direct and motivate subordinates, train, advice and influence.
Design and coordinate process with team and other managers.
Maintain information links in and beyond the organisation.
Become link person for government bodies to contact for progress reports.
Following interpersonal role will sort out the status conscious problem in CIC and for any other organisation. As it shows the person to person relationship and also a way to motivate employees as well.
Boddy, (2008:369-370) states that:
Although the number of women in the workforce has increased, they do not have equal access to all occupations. Many tasks are still predominantly male or female occupations.
Women are much more likely than men to work as teachers, nurses or librarians than as doctors, judges or chartered accountants. They often do routine office work and shop work, but rarely do what is defined as skilled manual work. The reverse is true for men.
Gender in management:
Rosener (1977) found the difference between;
Male managerial style
Female managerial style
Male managerial style:
She found that male managers tended to adapt what she termed a transactional style. This uses the principle of exchange as the dominant way of managing giving rewards for things well, and punishing failure. Male respondents tended to rely on mainly on their positional authority, the status conferred on them by their formal role to influence others.
Women managerial style:
Women tended to use a relational style, motivating staff by persuasion, encouragement and using personal qualities rather than position. They generally try to make staff good about themselves.
Consequently Rosener believes that female model of leadership is more suited to modern, turbulent conditions than the command and control styles typical of the male managers in her research.
From the research of Rosener it shows that women's have got ability to do work at high occupational positions. Therefore, there should be no discrimination on the basis of gender.
This phenomenon is very important as CIC has a segregation problem like male dominance. For a long term sustainability there should be no gender segregation in any company or organisation as nobody is superior, everyone has equal rights and should follow the principle of equity.
From the above study we as HR Manager have analyzed that CIC is a big insurance company with a lot of structure and cultural problems. Following vertical organisation structure with mix of centralised and decentralised is best option for CIC to resolve these problems.
On the other hand, we as Manager fulfils our obligations by giving appropriate solutions to the problems related to both culture and structure. In the end we would say that not only for CIC but for any organisation or company following this structure and culture will certainly improve its standard.