Organizational structures and cultures
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Published: Mon, 15 May 2017
Organizations are ‘social arrangements for the controlled performance of collective goals’. (Buchanan and Huczynski, 1991)
The writer Chester Barnard (1938) used the example of a man trying to lift a stone which is too heavy for him. By getting together with another person, and combining their efforts, the man is able to move the stone.
Every organization to be effective must have an organizational structure. Organizational structure is the form of structure that determines the hierarchy and the reporting structure in the organization. Organizational structure shows information, flows from level to level within the company. It is also called organizational chart.
Designing of Organizational Structure:-
Work specialization is the key element of organizational structure and it refers to the degree to which tasks in the organization are subdivided in to separate jobs. In the work specialization the entire job is subdivided into different steps and each step have to complete separately by individual. For example: – making of an automobile. Advantages of work specialization are that, employee’s skills can increases by doing one job again and again. It saves time and there is accuracy in production. It allows managers to supervise more employees. While the disadvantages are that, employees might get bored by doing same job again and again. Sometime if the person is on leave then no one can do his job, due to which absenteeism rises. Quality of work may suffer.
Through departmentalization common tasks can be coordinated. In Departmentalization, work or individuals are grouped into manageable units. The primary forms of departmentalization are:-
Chain of Command:-
Chain of command is the formal line of authority, communication, and responsibility within an organization. According to classical organization theory the organizational chart allows one to visualize the lines of authority and communication within an organizational structure and ensures clear assignment of duties and responsibilities. In many organizations, the chain of command principle is still very much alive. Military is an example of straight chain of command which starts from a top to low level ranks.
Span of Control:-
In a business of more than one person, unless the business has equal partners, then there are managers and subordinates. Subordinates are workers controlled by the manager. Span of control can be:-
Tall and Narrow:-
The manager controls six or few employees. There is close supervision of the employees, tight control and fast communication. However, the supervision can be too close; the narrow span means that there are many levels of management, resulting in a possibly excessive distance between the top and the bottom of an organization.
Flat and Wide:-
A wide span of control forces managers to develop clear objectives and policies, select and train employees carefully. Since employees get less supervision, they are more responsible and have higher morale with a wide span of control. Flat and wide span of control is successful if employees have the awareness about their responsibilities and job tasks because managers are not able to have a look on each employee every day.
Centralization and Decentralization:-
Centralization and decentralization refer to the extent to which decision making power is devolved in an organization, or the degree of delegation of duties, power and authority to lower levels of an organization. Organizations’ which have a high degree of delegation of power are thought to be decentralized. Organizations which have a lower degree of delegation of power tend to be centralized. A decentralized structure often means power over both operational issues and strategic direction is devolved to lower levels in the hierarchy.
An organization which has a Matrix structure contains teams of people created from various sections of the business. These teams will be created for the purposes of a specific project and will be led by a project manager. Often the team will only exist for the duration of the project and matrix structures are usually deployed to develop new products and services. The advantages of a matrix include that, individuals can be chosen according to the needs of the project. Project team which is dynamic and specialist are brought together in a new environment to view problems in different ways. Project managers are directly responsible for completing their project in a specific time and budget.
Whilst the disadvantages include: A conflict of loyalty between line managers and project managers over the allocation of resources If teams have a lot of independence can be difficult to monitor. Costs can be increased if more managers (i.e. project managers) are created through the use of project teams.
Culture basically refers to the norms, values and behavior adopted by the organizational members during the working. When the members of an organization join the organization they adopt particular culture of an organization. Every organization has different culture depending upon their situation of working and the nature of their business. From the culture of organization one can assume the operating environment and working behavior of employees.
Types of Culture:-
Within a power culture, control is the key element. Power cultures are usually found within a small or medium size organization. Centralized Decisions making are found in the power culture organization. That person likes control and the power behind it. As group work is not evident in a power culture, the organization can react quickly to dangers around it as no consultation is involved. However this culture has its problems, lack of consultation can lead to staff feeling undervalued and de-motivated, which can also lead to high staff turnover.
Common in most organizations today is a role culture. In a role culture, organizations are split into various functions and each individual within the function is assigned a particular role. The role culture has the benefit of specialization. Employees focus on their particular role as assigned to them by their job description and this should increase productivity for the company. This culture is quite logical to organize in a large organization.
A task culture refers to a team based approach to complete a particular task. They are popular in today’s modern business society where the organization will establish particular ‘project teams’ to complete a task to date. A task culture clearly offers some benefits. Staff feels motivated because they are empowered to make decisions within their team, they will also feel valued because they may have been selected within that team and given the responsibility to bring the task.
Person cultures are commonly found in charities or nonprofit organizations. The focus of the organization is the individual or a particular aim
P2:- Analyze the relationship between an organization’s structure and culture
and the effects on business performance.
Task for P2:- Here you will discuss how organization culture and structure affect the organizational performance positively or negatively. This should be attempted as a continuation of P1.
Organizational Culture and Structure creates a number of various concepts, strategies, and situations which affect every level of planning when it comes to any type of hierarchical institution. The implications of organizational structure and culture apply to companies, corporations, charitable organizations, governments and even sports/organizations.
Organization Culture and structure affects the organizational performance both in positive and as well as negative direction. In positive sense the organization culture and structure creates the distinctions between one organization from the other and also it defines the boundary role to the same organization. It provides a sense of identity for the organizational members on the basis of which the employees work betterly for the achievement of organization goals. This organization culture and structure can generate commitment of employees towards the organization. As the culture represents the norms and values of the society so it can enhances the stability of the social system inside organization. The organization which has a strong culture will have good working environment in which the employees shared different norms and values. The culture and structure also provides appropriate standards of working environment. The organization culture and structure shapes the attitude and behavior of employees and it also serves a sense of making and control mechanism. Every organization has policies according to which the employees work by following certain rules and regulations. These rules and regulations of the organization can be bitterly formed by accessing to organization structure and culture. This organization structure also shows the responsibility for each employee which reflects that who will be reported to whom. Through strong organizational structure, the organization will have to make right decisions at the right time.
The organization structure and culture has also negative impact on business performance. The same culture becomes liability when the employees do not agree to share their values with others which raise conflicts. When the organization environment is dynamic then this can affect the business effectiveness. If the organizational structure is complex one then the decision making process in that organization will be very slow and also there will be centralized decision making in which the lower level employee’s will not be entertained.
P3:- Analyze the factors which influence individual behavior at work.
Task for P3:- In this area discuss the factors that influence behavior at work, your answer should focus on personality, traits and types, its relevance in understanding self and others
There are many factors that influence behavior at work for instance difference in opinions of individuals but the most important are personality and perceptions.
Personality is defined as the characteristics and distinctive traits of an individual and the relation between them and the individual response to the situation and adjusts to other people. This include big five factors of personality dimensions known as OCEAN that influences behavior at work which is given in the table below.
Personality dimensions and the poles of traits they form. Based on Costa &McCrae (1992: 14-16, 49).
Openness to experience
Neuroticism is a measure of affect and emotional control. In the given table high level neuroticism shows sensitivity and nervousness those experinces negative emotions. They more frequently become unstable, worried, temperamental and sad. Resistant persons on the other hand need strong stimuli to be provoked where as low level shows confidence, emotional stability and active at their workplace.
Extraversion dimension presence in high level in an individual shows outgoing and energetic. They are physically verbally active. The opposite of extraversion known as introverts or low level presence tend to be more independent, reserved, steady and like being alone. Extraverts are adventurous, assertive, frank, sociable and talkative. Introverts may be described as quiet, reserved, shy and unsociable.
Openness to experience is a measure of depth, breadth and variability in a person’s imagination and urge for experiences. Individuals with a high openness to experience have broad interests, are liberal and like novelty. The preservers with low openness to experience are conventional, conservative and prefer familiarity.
Agreeableness individual can be described as altruistic, gentle, kind, sympathetic and warm. Person with high level are friendly, compassionate and able to work in team. Whereas low level are more competent and outspoken.
Conscientiousness is scale of goal oriented and control over impulses. Individual with high level are more organized and efficient. They focus on limited goal and strive to achieve these goals. The focused person concentrates on a limited number of goals but strives hard to reach them, while the flexible person is more impulsive and easier to persuade from one task to another. The more conscientious a person is, the more competent, dutiful, orderly, responsible and thorough.
Personality can be regard as the most complex aspects of human being that influences behavior in big way. Personality traits offer an opportunity to the organization to understand the individual’s behaviors and directing their effort and motivating them for the accomplishment of the organizational goal
P4:- Analyze how organizational theory underpins principles and practices of organizing and of management.
Task for P4:- Discuss the major organizational theories and discuss their salient features (focus on functions of management, managerial roles, and managerial authority) – Please see the course contents for detail.
The attainment of an organizational goal in an effective and efficient manner through planning, organizing, leading and controlling organizational resources.
It is the on going process of developing the business’ mission and objectives and determining how they will be accomplished. Planning includes both the broadest view of the organization, e.g. its mission, and the narrowest, a tactic for accomplishing a specific goal.
Establishing the internal organizational structure of the organization. The focus is on division, coordination, and control of tasks and the flow of information within the organization. It is in this function that managers distribute authority to job holders.
Fayol’s called this maintain activity among the personnel, it involves instructing and motivating subordinates to carry out tasks.
This is the task of monitoring the activities of individuals and groups within the organization, reconciling differences in approach, timing and resource requirement in the interest of overall organizational objectives.
It is a four step process of establishing performance standards based on the firm’s objective, measuring and reporting actual performance, comparing the two and taking corrective or preventive action is necessary.
A role as defined as an organized set of behaviors belonging to an identifiable office or position. Thus actors, managers and others play roles that are predetermined, although individuals may interpret them in different ways.
The manager is a symbol, obliged to perform a number of duties. He represents the organization in various ceremonies etc.
Managers select and trained the team members. He/she used to motivate the team to achieve pre defined goal.
Manager duty is to communicate with people outside the work unit trying to coordinates two project groups.
The monitor involves seeking current information from many sources. The manager acquires information from others and shares it with concerns people to stay well informed.
The managers send external information into his organization and internal information from one subordinate to another.
The managers transmit information out to his organization’s environment to speak on behalf of the organization.
The manager acts as initiator and designer of much of the controlled change of the organization. By using the monitoring role, he seeks opportunities, sees problems, and initiates actions to improve situations.
The manger role involves resolving conflicts among subordinates or between the managers departments and other departments.
This role of manager involves deciding about how to allocate people, time, equipment, budget and other resources to attain desired outcomes.
Managers participate in negotiation activities. Managers represent department during negotiation of union contracts, sales, purchases, budgets, represent departmental interest.
The formal and legitimate right of a manager to make decisions, issues, orders and allocate resources to achieve organizational goals and objectives.
Managerial authority is the position that empowers a manger to exercise command and control over those placed under him for realization of the assigned role in an organization.
Originally, the overall authority is centrally vested in person of the manager. However, it is not possible for a single man to effectively execute and monitor each and every task. Therefore various functions with a suitable quantum of authority are devolved downwards to concerned subordinates for better and convenient output. The practice also provides a rationale for ‘organizational Tree’ specifying various powers and responsibilities in both vertical and lateral hierarchy.
P5:- Compare the different approaches to management and theories of organization used by two organizations.
Task for P5:- This will be the comparative analysis of the two organization, you will do the comparison with another organization (assigned to another group). This will be covered through the presentation. You must give soft and hard copy of your presentation to the teacher.
Functional Theory Followed by SNGPL:-
Organizations must make choices to organizational approach how to perform their work. There are five common methods used by management to perform work i.e functional, divisional, matrix, team, and networking. Each organization have follows different ways according to their needs and requirements.
For instance Sui Northern Gas Pipe Line uses functional approach which is the simplest form of organizational structure. Below is an example of management of sui northern
In functional structure approach the features are well defined the channels of communication and responsibility. By following such structure by SNGPL it improves productivity, minimizes duplication of employees and also simplifies training of employees.
There are some drawbacks of functional structure approach as it is narrowed perspectives which causes reduce cooperation. Decisions are slow to take place because of many hierarchy layers in which authority is more centralized. This kind of structure only gives employees experience in only single field they don’t have the opportunity to oversee all the firms operations.
Divisional Theory Followed by Disney:-
On the other hand management of Disney follows divisional structure compare to sui northern to keep track of their operation. Below in an example of Disney management structure.
In large firms like Disney its difficult to keep track of all the activities for that purpose specialized departments are developed which is divided according to the organizational output this grouping of organizational structure are called divisional structure. It makes performance easier to monitor which allows managers to better focus on recourses and results. This kind of structure may cause duplication and create competition among the division due to limited resources.
M1:- Discuss the organizational structure and the prevailing culture in the
Organization under study. Also discuss how the structure and culture affect the performance of the business.
Task for M1:- This task should be taken as continuation of your answers to P1 and P2; Here you will discuss what is the prevailing structure and culture in the organization. This will be seen with the view that you can see the application of the concepts in real life.
Organization Structure and Culture in HBL and UBL
Culture and Structure of HBL:-
Organizations have their own structure and culture. If there is any informality in the organization culture and employees believe that they are a part of organization then behavior effect positively. Culture and structure is very important for an organization in a culture there are many people belong to different groups and the structure of organization is made from the people if there is unity of command, Span of control and intrinsic motivation so it effect the motivation level of the employees. In organization if they have a good culture and they have the good social norms, values and ethical behavior so culture automatically control behavior .Culture is develop by good social norms, good contents, good peer group and culture cannot be reinforced, it is link with the inner behavior and change is also continuous process. In organization good and positive behavior controls the culture aspects. Culture also pushes the member to behave in a way that is counter to the formal mission and goals of organization but it can be changed through inter personal skills and good behavior. In organization good, positive and progressive culture and structure is shared among the people. Organizational structure is the way in which the interrelated groups within and organizations are set up to allow them function smoothly from a large stand point. The two main purpose of successful organizational structure is to ensure effective communication between various parts of the company, as well as to increase coordination between different departments.
Culture & Structure of UBL
Culture and structure is important in organization but each organization has their own structure and culture. According to this organization, there is not a specific culture in organization but through employees and their related environment culture is develop. They develop their own culture according to their own requirement. Culture controls the behavior of employees according to their nature which accepts the efforts to that culture. They develop that culture which they need. Culture depends upon the nature of employees it develop the behavior of employees according to that culture. Culture does not remain the same but the unwanted culture will changed according to mew environment. In organization culture is made when employees share their own culture. In this organization the bureaucratic structure is used .Employees r not involved during taking of the decision they are totally depended upon the orders of their boss. Through structure it is easy for the organization for placement of employees, staffing and they also know how many employees are required for the jobs in organization. In the absence of structure some difficulties occurs for the organization that how many employees they need for the job and how they control the organization.
Factors Influencing in Both Organization
Culture and structure is important in each organization because through good culture there is friendly environment between the manager and employees. And through good structure the organization runs fast towards its objectives and can achieve the goals easily. In both organization culture developed by sharing their own culture which is very effective for both organization because by communication with each other and sharing their views least conflict occurs between the employees and manager. Through this friendly environment occurs which helps organization to run as high as they want. In organization the bureaucratic structure should be avoided and during decision making employees should involved because under this structure employees cannot work by their heart. They take their work as a burden. Under this structure organization cannot run towards there goals as fast as they need for their success because employees are not motivated by this structure they do not share their views, their ideas among them selves. This structure has negative effect on organization. It can be good thing in small doses especially in tackling issues that will become recurring themes in large businesses. Through good culture and structure employees are motivated and they share their new idea. They help each other and also solve the problems of organization. A fully healthy organizational culture and structure is exactly what should be expected when all is functioning normally
M2:- Discuss what approach of management adopted by the organization, with
Focus on management functions, roles and authority.
Task for M2:- Here you will apply the concept of organizations theory and what is being discussed in P5 and apply your knowledge to the organization under study.
Objectives of HBL
Following are some main objective of HBL
To earn profit for the Bank itself and maximize its shareholders value.
To provide solutions for multiple requirements of clients of diverse
To manage with the changing trends of the modern day financial market
To be a diversified bank by offering all basic consumer services and
Honest and ethical conduct, including ethical handling of actual or
apparent conflicts of interest between personal and professional
To provide employment opportunities to people
To help in development and industrialization of the country
To make our customers prosper, our staff excel and to create value for shareholders.
Leading functions in HBL:-
Managers of HBL motivate the employees by providing free medical treatment, free education and incentives to them.
Managers of HBL always try to resolve conflicts among employees.
Giving importance to their opinions.
Giving new ideas for solving problems.
Sometimes giving group tasks to employees.
In HBL CEO Give orders and issues polices to the managers. Then further the managers forward these instructions and policies to their subordinates and so on. All of them accept and obeyed those instructions/polices/orders.
Spokesman of HBL attending the seminars outside the bank and negotiating with the people in banking issues.
D1:- Discuss what problems the organization can face in the performance
areas and what is your suggestion/solution to the problem.
Task for D1:- You must identify some problems observed regarding organizational structure and culture (there is no organization which is flawlessly perfect). You will give your recommendations and justify your recommendations in light of the management knowledge you have gained in the class.
The basic objective of organizational structure is to establish a network of relationship among the different level of employees. When the structure becomes so tall and complex one then the problem arises that how those employees will keep a permanent network of relationship. This problem will also have certain impacts upon the decision making process of an organization. The organization structure also keeps coordination between different departments/units. Sometimes the responsibility of one unit mixes with another unit which affects the units in achieving their goals as in case of selling and marketing department.
Through organizational Culture the employees shares the values, belief, norms and symbols during working. The problem arises when there is diversity of work force. Problem arises when culture is dynamic. Rituals, stories, symbols, ceremonies and also the rules of organization form the culture of organization. These all are subjective in nature and having different perceptions during different timing so sometimes the problem arises that it misguides an individuals.
The organization should focus on participative and pre active work of management through which the organization can easily analyze the problems. The participative approach will also be effective in keeping relationship among the employees and as well among the different unit of organization. When there will strong relationship then the decision making process will also be quick.
The organization should focus on training and development in order to guide the employees regarding the culture of organization. Through training and development the employees will come to know about the norms, values, beliefs and symbols which should be adopted during the working. In order to minimize the problem related to workforce diversity the organization should guide their employees by having a dynamic culture.
D2:- Discuss your recommendations which should use the synthesis of different approaches, this should also include the convergent and lateral thinking.
Task for D2:- In this task you will come up with recommendations for the organization theory for the organization. We will encourage amalgamation of two or more approaches considering the environment in which the organization exists. In addition we will also appreciate your approach towards the solution you are recommending as it should a) solve the organizational problem, b) should also consider the internal and external environment requirement.
Approaches followed by the Managers:-
There are different approaches which are followed by the managers in order to solve the problem arises inside an organization. There are many factors which will determine the structure and culture of an organization. If the organization size is so large then it will be difficult for the organization to keep the structure tall. The management encourages the flat structure and decentralized decision making for those large organizations for the smooth operation of an organization. On the other side if the size is small then it will be better to use the tall structure and centralized decision making.
Unit and Assessment Details
Course Title: HND Business
Unit Name: Organization and Behavior
Assessor: Ms. Neelam Marwat
Internal Verifier: Mr. Sajid Fahim
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