Research into Organizational structure and cultural management

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A project 'Importance of Organizational structure and cultural management 'is done by a group of students to fulfil the requirements of the course MSc in International Management and Information systems under the observation of tutor Mr. Rob van Stratum. The report explains about the organizational structure, types of organizational structure, importance, impacts and factors that influence organizational structure. Analyses of organizational culture like key dimensions, types of culture, multiple culture, and importance of culture, impacts and factors that influence organizational culture are included. In the project task, we analysed the case study of US Air and America West merger case.

The research method that we used in this report is qualitative method focusing on different books such as project management, management, research method, cultural management books written by authors like (Larson and F.Gray 5th edition 2010, Saunders and Lewis 5th edition 2009, David Boddy 4th edition 2008, Schermerhorn 2005, E.Pearlson and S.Saunders 2006, Hoecklin 1994). We used secondary data like articles, scientific journals and web pages to analyse structural and cultural differences.

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The process of designing organizational structure, characteristics of structure and types of organizational structure are explained in detail. By making comparison between the four types of organizational structure, we have shown the adaptability of different structure in different organizations. In organisational culture analysis, we included the key dimension of organisational culture. To indicate the external adaptation, internal integration, flexibility and stability, cultural characteristics of an enterprise which influence the prospective of an organization are explained. The impact of structure and culture in organizational performance, in company merger case and factors that influence organizational structure and culture are analysed in detail.

Finally our Findings and conclusions are the effective alignment of organizational dimensions and key cultural dimensions for enhanced employee performance. Then the organizational structure should have properly balanced between situational contingences and organizational design for better performance. Then firms should consider adopting a common organizational structure and culture to have a successful merger process. Then having a clear role and reporting relationship to enhance the communication and coordination among the units throughout the new organization after the merge.

Introduction

A project 'Importance of Organizational structure and cultural management' is taken by a group of students to fulfil the requirements of the course MSc in International Management and Information systems under the observation of tutor Mr. Rob van Stratum. In the project task, we analysed the case study of US Air and America West merger case. The reason for choosing this particular case study is that the two companies are from the same country with different structure and culture and are still struggling to overcome their problems.

Culture is a collective phenomenon that is about shared values and meanings. In order to work with uncertainty in business environment, it is important for an organization to understand the relationship between organizational structure and culture. Organizational structure works within organizational structure. Effective alignment is needed between the two in order to achieve organizational strategy and mission. It is difficult to distinguish one from the other. Both are needed in an organization to provide a clear framework for performing tasks in a consistent manner. For a successful company a strong connection between organizational structure and culture is very important.

Organizing is the process of arranging people and other resources to work together to accomplish a goal. Organizational structure is a system of tasks, reporting relationships, and communication linkages. Culture is a collective phenomenon that is about shared values and meanings.

Strategic mergers are becoming critical components for today's global business strategy. Merger is a process of combining two or more companies which are almost the same size. The benefit of merging companies is to create a new firm with combined shareholder value exceeding the sum of the values of the two companies through synergy. Failure of merger process can be due to many reasons .The common causes for the failure in mergers are structural and cultural integration of two different, competitive companies. Before firms consider merger extensive preparation, a relationship of trust between negotiators and long period of post-merger consolidation is needed.

1.1. Research questions

What are the organizational designs and key dimensions of culture?

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What are the factors that influence organizational structure and culture?

What are the impacts of organizational structure and culture on merger Process?

1.2. Research objectives

To describe the organizational designs and key dimensions of culture.

To identify the factors that influence organizational structure and culture.

To describe the impacts of organizational structure and culture on merger Process.

Research methodology

Our team has chosen qualitative analysis for the research because we had three months of time which was very less time to do quantitative analysis to submit our project report. So we focused on different books and journals based on different structures and cultures of organizations. We also focused on different company mergers and their success and failure factors. We chose US Airways and America west merger case because the two companies were from same geographical locations but still had problem with cultural difference after merger. We limited our selection to books and articles that describe organizational structures, cultures and their impact on merger cases. We analyzed books on project management, management studies, research methods and managing cultural differences. We used online web pages to analyze the case study of US airways and American west merge. We used secondary data which are books, scientific journals and web pages.

3. Literature review and application

4. Organizational structure

The structure of an organization is the sum total of the ways in which it divides it's labour into distinct tasks and then achieves co-ordination among them' (Mintzberg, 1979). Managers design the organizational structure to influence employees to achieve wider goals.

4.1. The organizational designs:

Organizational design is the process of creating structure that will help to achieve the mission and objectives of an organization. The organizational design consists of 1.Organizational variables, 2.Control variables, and 3.Cultural variables.

Organizational variables:

The organizational variables are designed to achieve organizational effectiveness. They will help the organization to achieve its goals without any confusion in a precise way. The following are the important organizational variables.

Decision rights: This Indicating who is having the responsibility to approve an important decision regarding the business and implement necessary technology and control various types of decisions. It designs the proper allocation of decision rights.

Business processes: The set of ordered tasks needed to complete key objectives of the business and includes 1) A beginning and an end,2)Inputs and outputs,3)A set of sub processes that transform the inputs into out puts,4)A set of metrics for measuring effectiveness.

Formal reporting relationships: The formal reporting relationship reflects the flow of communication and coordination among the units throughout the organization. Effective communication, coordination and cooperation among units in an organization are basic necessities for growth of the organization.

Informal networks: Sharing and transferring knowledge within different project unites other than the formal reporting relationships are the key factors for effective function of the organization.(pearlson and saunders,1976)

Control variables:

These are the tools which will help the organization to monitor, motivate and evaluate the performance of the organization.

Data: Collecting information regarding the progress of all units, evaluating and providing feedback.

Planning: It is the processes through which the desired strategic objectives are achieved.

Performance measurement and evaluation: To improve the quality of work a set of measures are used to get feedback about execution of plans and the processes. This feedback is used to improve the performance of the organization.

Incentives: Incentives are motivating factors within an organization which will help to improve the organizational performance.(pearlson and saunders,1976)

Cultural variables:

Set of values and beliefs about what is desirable and undesirable in a community of people.

Values: The set of unspoken and clear beliefs that underlines decisions made and actions taken, reflects aspirations about the way things should be done. (Pearlson and saunders, 1976)

4.2. Identifying structural characteristics

Every firm should have a strategic plan which specifies the future direction of the business. The responsibilities of the managers should be organized to achieve the strategic plan, for this the firm should have their organizational structure that identifies responsibilities for each job position and relationships among those positions. The organizational structure also indicates how all the job responsibilities fit together. The organizational structure affects the effectiveness and efficiency with which the firm produces its product and therefore has an impact on the firm's value. When choosing a structure that fits its business goals, it is important to understand different types of organizational structures and compare them with each other. Reduce the disadvantages or negative impacts that the chosen structure might have on the business goal.

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According to our analysis different firms use different organizational structures which are influenced by specific characteristics of its business and can affect the firm's performance. Organizational structures vary among firms according to:

Size of organization

Strategic importance

Budget and time constraints

4.3. Types of organizational structure

Organizational structure defines the way work is divided, managed and synchronized. Organizational structure is formed according to the organizations size and strategy. Functional structures, Divisional structures and Matrix structures are the traditional structures. Team structures and Network structures are new directions in organizational structures. The following are the important types of organizational structures.(Schermerhorn 2005)

4.3.1. Functional organizational structure:

In a functional structure employees are grouped by managers according to their activities and profession or function for example like production, finance or marketing. Functional structure is not only used in business but also in banks and hospitals. Functional structure is effective in small organizations with less problems and limited demand for change and innovation.( Schermerhorn 2005)

4.3.2. Divisional organizational structure:

A divisional structure group people together working on the same product, in the same area, with similar customers. It is suits more in complex organizations with diverse operations with many products, territories, customers, and work processes. (Schermerhorn 2005)

4.3.3. Matrix organizational structure:

The matrix structure combines functional and divisional structures. It is more precise to use matrix structure in permanent cross-functional teams to support specific products and projects or programs. It is more useful in manufacturing, service industries, professional fields and nonprofit sectors. (Schermerhorn 2005)

4.3.4. Network organizational Structure

Network structure is a modern structure which includes the linking of numerous, separate organization structure to optimize their interaction in order to accomplish a common, overall goal, because it consists of multiple organizations that works together to produce products and services.( Schermerhorn 2005)

4.4. Comparison of organizational Structures

In each type of organizational structure there are variations. Each one is unique in its own way. The adaptability of a particular structure depends on the necessity of the organization. (Schermerhorn 2005)

Functional organization structure :

They work best in a stable environment like small organizations with less problems and change.

Advantages of functional structure:

Economies of scale.

Task assignments with proper training and guidance.

High-quality technical problem solving.

Good skill development within functions.

Clear career paths within functions. (Schermerhorn 2005)

Disadvantages of functional structure:

Difficulties in indicating tasks for things like cost control, product or service quality, timeliness, and innovation.

Lack of communication, coordination and problem solving across functions. (Schermerhorn 2005)

Divisional Organization structure:

They work best in a complex organization with many products, territories, customers, and work processes.

Advantages of divisional structure:

More flexibility in responding to situational changes.

Improved coordination across functional departments.

Good responsibility for product or service delivery.

Focused on specific customers, products and regions. (Schermerhorn 2005)

Disadvantages of divisional structure:

Reduces economies of scale.

Increases costs through the duplication of resources and efforts across divisions.

Creates unhealthy rivalries as divisions compete for resources and top management attention. (Schermerhorn 2005)

Matrix organizational structure:

The main influence of matrix structures to organizational performance lies with the cross- functional teams whose members work together to share knowledge and information in a timely manner to solve problems.

Advantages of matrix structure:

Good collaboration across functions.

Problem solving takes place at team level which will improve decision making.

Improved customer service because there is always respective manager informed and available to answer questions.

Better strategic management, since top managers are free from un-necessary problem solving to focus on strategic issues. (Schermerhorn 2005)

Disadvantages of matrix structure:

The two-boss system is subject to power struggle.

It creates task confusion and conflict in work priorities.

Strong team loyalties will cause a loss of focus on larger organizational goals. (Schermerhorn 2005)

Network organizational structure:

A network organizational structure is seen as a more complicated and complex structure than any other structure. A network structure uses IT to link with networks of outside suppliers and service contractors.

Advantages of network structure:

Quality and cost are the best advantages of network structure.

The creative use of information technology. (Schermerhorn 2005)

Disadvantages of network structure:

More demand for new management responsibilities.

Network of contracts and alliances are more complicated to maintain. (Schermerhorn 2005)

4.5. Importance of organizational structure

Effective organizational structure makes responsibility delegation easier and makes it easy to see the organizational change throughout the organizations. It is important to realize the advantage of organizational structure to benefit from a strong framework.

Organizational Chart: is a tool that represents employees work responsibilities and reporting relationships. With its reporting structure it shows the structure and hierarchy of employees of their division of work and level of responsibilities in the organization.

Distribution of Authority: Organizational structure shows the authority and responsibility distribution throughout an organization. Employees will get awareness of their superiors and subordinates.

Communication: Organizational structure makes communication easy between employees in their duties and this enhances information sharing and problem solving.

Chain of command: the structure helps employee to know who is engaged in the decision making process.

Proper Balancing: Structure helps specific task and activities to be assigned in functional departments which provide a good coordination between departments.

Lorachester, 2010

4.6. Impact of organizational structure on merge

In the case of merger, two organizations are required to integrate their organizational structure appropriately. Inappropriate organizational structure can cause failure in integration between firms and reduce benefit of merger. Unclear reporting structure has a great tendency to cause merger failure.

Reconstructing organizational structure may take some time after a merger and it may cause uncertainty and anxiety among employees. Therefore it is important to declare the new organizational structure with clear roles and reporting relationship of employees (SS Brahma).

Good organizational structure facilitates communication between individuals or groups within the two organizations. Incompatible structure becomes obstacle for successful communication and achieving the corporation goal will become impossible.

4.7. Factors that influence organizational structure

The organizational structure can be influenced by different factors, such as the size of an organization, the environment, technology, efficiency of organizational design, etc.

The structure of an organization should be developed in such a way that endorses the strategy and plan of management. It is very significant for managers to be aware of the factors which may have an influence on the structure of an organization.

Organizational Design aligns structure with situational Contingency

Environment

Strategy

People

Technology

Size

Figure: A framework for organizational design- aligning structure with situational contingences

Environment

Stable Environment- Composed of certain and predictable environment. Desires of customers are well known and may remain constant. Few changes take place in such kind of environment and organizations can perform well without frequent change. Bureaucratic organization and mechanistic design fits in such environment. (we need explanation )

Dynamic Environment- composed of uncertain environment with less predictable elements. The desires of customer are frequently changing. Organizations must be flexible. For such environment, adaptive organizations and organic design is adequate.

Strategy

Organizational structure should be designed in such a way to fit its strategies. Different strategies need different structure. Organizations may need to change their strategies or mission for better performance and this leads to a change in organizational structure.

Stability oriented strategy - only few changes occur in the external environment, Bureaucratic organizations and mechanistic design is adequate for such certain strategy.

Growth oriented Strategy - Strategies is likely to change frequently. Circumstances are complex and uncertain. The operation objectives focus on flexibility of frequent change and innovation. Plans changes regularly and there is a need for improvement.

Technology

Technology is the way through which a particular task is done using knowledge, skill, equipment, techniques and human know-how. Advance in technology cause frequent change in an organization. A suitable technology results in high productivity and lower cost for the firm.

Technology is a major influence on organizational structure. The right combination of structure and technology are critical to organizational success (Joan Woodward 1960s).

Organizational size

As the size of an organization become larger and older, the structure becomes more complicated. It is very difficult to manage large organizations without a formal organizational structure, whereas in very small organizations structure can be very simple. Employees can carry out their task based on their needs, skill and/or interest. Tasks can be performed without having a formal work assignment and delegation of authority.

In large organizations, the structure is more complex. Tasks are highly specialized and more level of management. Work procedure is dictated by rules and strategies. Communication flow is from superior to subordinate.

5. Organizational culture

"Organizational culture consists of the behavior, actions, and values that people in an enterprise are expected to follow."(Pettigrew, 1979)

"Organizational culture is a set of values, often taken for granted, that help people in an organization understand which actions are considered acceptable and which are considered unacceptable."(Moorhead & Griffin, 1992)

5.1. Key dimensions of an organizational Culture:

Measuring key dimensions of an organizational culture provides a composite picture of the organization's culture. This will become the base for the feelings of shared understanding of the members about the organization, how things are done, and the way the members are supposed to behave. The following are the 10 key dimensions of an organizational culture.

Member identity: The interpersonal relationship of the employees with the organization to feel a vital part of it. It depends on loyalty of employees to the organization.

Team emphasis: Organized group work rather than individual work.

Management focus: Identifying the effective outcomes of people within the organization and taking them into account to make important decisions.

Unit integration: cooperation and coordination among the units.

Control: The extent to which rules and policies used on employees to control their behavior.

Risk tolerance: The level up to which the employees are encouraged to be innovative and risk seeking.

Reward criteria: A precise system which rewards promotion and salary increase according to employee performance rather than seniority, favoritism or other nonperformance factors.

Conflict tolerance: The degree to which the employees are encouraged to talk about the conflicts openly.

Means versus end orientation: The extent to which the management focuses on outcomes rather than on techniques and processes used to achieve those results.

Open-system focus: Monitoring the changes in external environment. (Larson and F.Gray 5th edition 2010)

5.2. Identifying cultural characteristics

"Denison Organizational Culture Model", indicates the external adaptation, internal integration, flexibility, stability as cultural characteristics of the enterprise which influences the prospective of organization. These four ideal characteristics would be reflected by four features (1) involvement, (2) consistency, (3) adaptability and (4) mission.

Involvement: referred to the capacity of workers, ownership and responsibility. In the culture characteristic reflects the company's training for staff, the communication between workers, the participation of staff and the responsibility of workers.

Consistency : to measure whether the company has strong and cohesive internal culture. It helps to identify company's set of fundamental value.

Adaptability : mainly refer to capability of adapting the change from external environment or analyzing whether they have ability to recognize the situation of market and act quickly.

Mission : is used to determine the company is focusing on immediate interest or has long-term strategy and accurate tactics to approach even bigger goal.

5.3. The stages of cultural formation

As people become more civilized they develop and share some common beliefs and values according to their geographical location which will guide their behavior. The positive outcome of the beliefs and values makes them strong and will influence on how people should work and relate to each other. The following figure will explain about the stages of cultural formation.( David Boddy 4th edition 2008)

Shared values

Reinforcing Shared beliefs

Outcomes

Norms

Individual and

Group behavior

5.4. Types of culture:

Charles Handy (1993) generalized 4 culture types.

Power culture: is one in which people's activities are strongly influenced by dominant central figure.

Role culture: is one in which people's activities are strongly influenced by clear and detailed job descriptions and other formal signals as to what is expected of them.

Task culture: is one in which the focus of activity is toward completing a task or project using whatever means are appropriate.

Person culture: is one in which activity is strongly influenced by the wishes of the individuals who are part of the organization. (David Boddy 4th edition 2008)

5.5. Multiple cultures

A key concern in the culture of any organization is diversity. The term multiculturalism refers to pluralism and respect for diversity in the workplace. They value the talents, ideas, and creative potential of all members. Good characteristics of multicultural organizations are,

Pluralism: Members of both alternative cultures and majority cultures are important in setting key values and policies. The talents, ideas and creative thinking from different cultures are important for an organization to achieve its goals.

Structural integration: Members from multiple cultures are given equal opportunity in all levels and in all functional responsibilities. The integration of all levels of employees, management and all functional unites are important for a successful coordinated progress.

Absence of prejudice and discrimination: A proper guidance and task force actions deal with the need to eliminate culture-group conflicts. Prejudice and discrimination will cause difference among work force which will affect the work. So it is important to eliminate the prejudice and discrimination. (David Boddy 4th edition 2008)

5.6. Culture and performance

We can review the effect of organizational culture on employee behaviour and performance with some key ideas. The culture of an organization allows employee to understand both the history of the firm and present methods of operation. This knowledge provides guidance about expected future behaviours. The commitment of Organizational culture to corporate philosophy and values generates shared feelings of working towards common goals. The organizational culture, through its norms, serves as control mechanism to channel behaviours towards desired behaviours and away from undesired behaviours. Finally, certain types of organizational cultures may be related directly to greater effectiveness and productivity than others.

5.7. Importance of culture in merger process

The market world today is facing increasing competition, in such situation organisations will like merge to have popular strategic tools entering new markets and acquiring new technologies. On the other hand, 80% of mergers do not reach their financial goals and 50% of the mergers fail. (Nahavandi and Malekzadeh 1993) It's true that most mergers fail because of financial reasons or economic crisis, and management as well, but we must critically look at the importance of culture in the merger process.

When two companies merged with different cultures, it will have greater consequences on the organisation. An example for this is merger between US air and America West. The two airlines had extremely different organisation cultures. US Airways had an older workforce with highly structured bureaucracy, whereas America West had much younger workforce with entrepreneurial culture. For a successful merger they must adopt to a common culture that will suit the company.

Cultural differences: When employees do not agree with the cultural adaptation it will create problem for the organisation. This will affect their performance in the organisation. Culture play an important role in the way employees will react when they face new business environment, in some situation where merger take place. It's difficult for some to work with new members within a team. To overcome this problem the organizations need to prepare employees to adapt to the new culture.

5.8. Impact of organization culture on merge

Organization culture is one of the most important factors of success or failure of a company in merger process. Culture will have an enormous impact on the way a company operates today. The culture does not become established until shared understanding achieves dominance in the collective thinking of the members of the organization. The following points below illustrate some important interrelationships that deeply affect the organization culture in merger process.

Purpose and Goals:

The purpose and goals of the organization initially trigger the kind of culture that founders want to follow their successors to see their vision. The extent to which they achieve this culture depends as much on the others factors as on their own leadership

Organization policies:

The different rules and policies followed by the organizations will create problem after merge.

Organization structure:

The difference in organizational structures also causes serious problem in the merger process.

Employee skills and attitudes:

The different skill sets and attitudes of employees from both the merging organizations also cause some disturbance in merger process.

Use of technology:

The development of technology and the way it's implemented will create an impact on the organization culture.

5.9. Factors that influence organizational culture

The following are the some of the important factors that influence organizational culture in a broad way.

Change in management

For an organization, change management means defining and implementing actions and technologies to deal with changes in the business environment and to profit from changing opportunities. Change management is one of the main factors that influence organization culture. Change might come in various forms within an organization, such as technological change, change in management staff as well as change in leadership.

Employee

Employees are part of an organization, they will be unhappy if things are not going well in the organization. In today competitive world, it's important for organization to do all they can to keep their employee happy and motivated. Organizational culture plays a vital role amongst employees. An organization that has a good culture ensures that its employees are satisfied with the facilities it provides them. This means that taking adequate care of employees ensures organizational effectiveness. This culture also enables employees to work in a comfortable environment that is reflected in the overall efficiency of their work performance.

Geographical location

Geographical locations influence organization culture, in sense that when companies are located in a particular region, they mostly adopt to the culture of that area to prosper. Geographical location might vary in turns of language; language is a factor that greatly affects cultural stability. When people from the same geographical location speak the same language, culture spreads easily. Since countries see language as an integrate part of their cultures. Religion is a strong shaper of value; different geographical location has different religions, this affects organization culture in that particular region.

6. Case study (US Air and America West Merger Case)

US airways and America West decided to merger in September 2005. The main objective for the merger was to create better synergies and to minimize cost through enhanced economic of scale. The merged company agreed to employ the US Airway name as it is the good old company with strong brand image. US Airway was an international airline whereas American west was operating locally.

During the merger, most of the management team came from the America west, including the CEO. American west was much young company with less experience in operating large airline. The management team failed to adjust its organizational structure and processes to accommodate the complexity involved in operating a large airline.

The two airlines had extremely different organizational structures and cultures.US Airways had an older workforce with highly structured bureaucracy, whereas America West had a much younger workforce with an entrepreneurial culture.

Most of the operational activities in the US Airway were outsourced; and activities in America West were handled in house. Even after the merger, the two companies decided to use the hybrid IT management approach. SABRE and SHARES were the two information system used for US Air and America West. After the merger, agreement was made between the two companies to switch the US Airway information system (SABRE) to American west (SHARES). Unfortunately, the integration of the two systems was a failure.

The merger was initially deemed a success and showed a path to other airlines to follow. But the problem started with in few months. After two and half years of merger, US Airways failed to operate as one airline.( E.Pearlson and S.Saunders 2006)

6.2. The influence of organizational structure and culture in merger Process

The two merging companies have two different organizational structures which caused a failure of integration between the two firms. The US Airways had a hierarchical organizational structure whereas America west had a flat structure. Unclear role and reporting relationship is a barrier for successful communication and caused integration failure.

Because of different organizational culture, the crew members and pilots failed to integrate.

Difference in Strategy

American west were low fair Full service and operating domestically whereas Us Air were operating internationally and because of this reason the strategy between the two companies were different.

Forming an effective common strategy to manage both the airlines is very important. The strategy should manage the different structures from both the companies step by step to merge into one common structure.

Management Problem

The merged company wanted to use advantage of the strong US Air brand image but

most of the management came from the American west which has no sufficient experience in managing international airline business and that had created management issues which are the key factor for the failure of the merger. Human resource alignment should be considered between the two firms before merger.

Cultural differences

The large cultural differences caused many operational issues, such as delayed baggage, unexpected overtime expenses, HR issues, wrong spending strategy and rescheduling shifts and routes. In addition, the cultural differences caused take of timing differences and the failure in crew integration.

Technology Differences

The two airlines had two different Information technology management approaches. The US airway wants to outsource most of the operational activities whereas the American west handled most of its activities in house. Even after merger the two firms agreed to use a hybrid IT approach and that caused a lot of complexity in the structure.

Both the organizations should analyze their common technology requirements and should start planning for that before merger. This can be done by adopting new technology and giving proper training to the employees. This will reduce the risk of technology confusion.

6.3. Recommendations for the successful merger organizational structure and culture in US Air and America west merger case.

When two companies merge into one company, the grading of people who work together will change dramatically in order to achieve new goals. This change includes recognizing and adopting the organizational culture of each separate organization. Values and traditions followed by one company may not be shared by the other. Preparing your workforce for organizational change due to a merger involves clearly establishing the purpose, creating a compelling vision statement, and overcoming resistance to change by explaining why it is necessary.

Organization strategy

Proper planning for redesigning effective organizational structure should be considered by establishing new organizational mission and objectives. Then combine both the structures with collaboration and converting them to one structure by preserving the best features of both. Then establish metrics to check the efficiency of the new structure.

Human resource

Empower employees to changes. Give some time for the transition to occur. Employees need to be able to get rid of old practices and to learn new practices which may take time to learn. Working with new people in new locations typically requires a period of adjustment. Managers should try to reduce conflict amongst employees from the two companies by searching an integrated solution.

Technology:

Adopting new technology and giving proper training to the employees. This will reduce the risk of technology confusion.

Before system integration, proper study of system integration complexity and resource requirement should be studied.

Adopting one IT management approach (either outsourcing or in sourcing) should be considered to reduce the complexity of organizational structure.

Business environment:

Check how the new organizational structure is working based on operational metrics. For example, after six months, evaluate customer satisfaction and make adjustments to business processes that impact customers accordingly.

Cultural integration:

Merging companies should adopt the same organizational culture. Train people to adjust to new culture. They have to adapt to new ways in a new organizational structure. They need to develop the skills and competence to do so. Train them to discover their own new paths. Establish orientation programs to ensure effective integration.

Effective Communication

Improve effective cross cultural communication like: Listening, message framing, and respond to Feedback.

7. Findings and Conclusions

To design an organizational structure the basic dimensions are organizational variables, control variables and cultural variables. The effective alignment of these three dimensions is very important in designing the organizational structure. Organizational culture also plays an important role in successful organizational structure. To get a composite picture of organizational culture the aspects like member identity, team emphasis, management focus, unit integration, risk tolerance and reward criteria are key dimensions of an organization. A proper alignment is necessary between these dimensions to enhance employee performance.

Environment, people, strategy, technology and size of the organization are the main factor which influences the organizational structure. Managers should make a proper balance with situational contingences when designing organizational structure.

Change management, the cultural difference among employees and geographical locations are the key factors which influences the organizational culture. The prejudice and discrimination among employees will create lot of problem in operational issues which in turn will affect the performance of the organization. Employees in organization should be made to understand the mission and goal of the organization. A culture that enables the employees to share the common goal of an organization should be implemented to boost performance and productivity.

Effective strategic planning is necessary for designing proper organizational structure in merger process to effectively achieve organizational objectives. Effective alignment of organizational structure and culture should be deployed to achieve organizational strategy and mission. The importance of organizational structure and culture should be balanced in order to have a clear structure to perform task consistently in merger cases. Having a clear role and reporting relationship enhance the communication and coordination among the units throughout the new organization after the merge. For a successful merger process, integration of organizational structure and culture is a crucial factor. Firms should consider adopting a common organizational structure and culture to have a successful merger process.

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