In the past two years, GBE International has been failing to produce profits. A review of the business divisions was completed, considering the divisions structure and management style. Such analysis will permit the company to assess a growth plan to reposition the company in the market. This report aims to analyze the company structure, culture and management styles, identify the main problems affecting the company and suggest a suitable company restructure.
This report is divided in six main sections. The first will compare and contrast the organizational structures and culture; the second will describe how the performance of the company is being affected by its structure and culture. The third will examine individual behaviour at work and the fourth will provide an evaluation of the different leadership styles and management approaches in the organization. The fifth will justify how organizational theory supports management. Finally, the author will make recommendations and conclusion to restructure the business.
ORGANIZATIONAL STRUCTURES AND CULTURE
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Every organization must have a clear structure that establishes roles and relationships between its members. In the same way, it shapes the layers of management and defines the flow of information. (Madura, 2007)
Organization structures may vary according to spam of control, height or job positions. The first one is based on the number of workers controlled by a manager. It can be narrow or wide, and depends on the size and nature of the company. The second one depends on the layers of management in the company. It is presented as tall or flat, according to the distance from the upper to lower level. Finally, the third one can be line or line and staff organization. The line is determined by specific business objectives and is used in small manufacture firms. The line and staff include line positions and staff positions to support the line positions. (Madura, 2007)
Turning to organizational culture, "the study of organizational focuses on the values, beliefs and norms about what is important and how things should be done in a particular organizational setting." (Brewis, 2007, p.344) This implies that such values affect performance in companies.
Tharp (2009) lists four main organizational culture types: Control (hierarchy), compete (market), collaborate (clan) and create (adhocracy). Hierarchical organizations are commanded by norms, authority and bureaucracy. Compete organizations are similar to control organizations but focus on the competence in the market. It makes external relationships and communication crucial for this kind of companies. Collaborative organizations are hierarchical but with internal focus and participation of employees. Finally, adhocratic organizations are focus on external factors and differentiation.
Madura (2007) points out that the organizational structure of a company defines job responsibilities and the links between roles. Besides, it identifies the flow of information in a business, which affects the efficiency and profits of a company.
Furthermore, organizational structures help to manage workers efficiently. It defines the chain of command which enable individuals to have a clear idea of their job and who is their superior. It also shows the spam of control of manager and communications between departments. Such clarity at the work place is crucial to ensure that employees have a clear idea of their role and work efficiently, which ultimately would beneficiate the business performance. (Madura, 2007)
Organizational culture and structures influence and define each other. A strong culture permits a company to have bigger changes to succeed at the long run. (Organizational Culture, 2007)
INDIVIDUAL BEHAVIOUR AT WORK
There are different factors that affect individual behaviour at work: demographic, abilities and skills, perception, attitude and personality. Demographic factors are related to the background, sex and age of the worker. The second one refers to the ability to perform of the individual; it is derived from individual competences, knowledge and experiences. (Ivancevich and Mattson, 2010)
Perception is associated with the way to appreciate the work environment, it is important to create a good climate at work to have a good perception and improve performance. It can be a social or physical perception of the environment and other individuals. Attitude is the way to respond to situations or other individuals, positive attitudes improve performance. Individual attitudes are include beliefs, satisfaction, feelings and motivation. (Ivancevich and Mattson, 2010)
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Personality also plays an important role in the individual behaviour. It is based on the traits of each person, their relation, approach and adjustment to situations and other people. Mullins (2007) mentioned the 'Big Five' dimensions of personality: extroversion/introversion, agreeableness/hostility, conscientiousness/heedlessness, emotional stability/instability and openness or intellect/closed-mindedness. According to studies, those factors compress the differences in personalities.
LEADERSHIP STYLES AND MANAGEMENT APPROACHES
Knights and Willmott (2007) recognized the importance of leadership for a company. They suggest that "Leadership is therefore linked with a process of organizing in which greater emphasis is placed on inspiring, listening, facilitating and involving people rather than instructing them to act. Leadership is linked to communication and innovation." (Knights and Willmott, 2007, p.259)
Such definition shapes the qualities of the kind of leaders that the company needs. It gives direction and sense of commitment to employees. Broadly, there are two types of leadership, the autocratic and the consultative. The first one aims to develop a culture of imposition and authoritarism.
On the other hand, the second one seeks the participation of employees on decision making. It relies on employees' opinions and ideas to solve problems. At the same time, it helps to build a strong relationship between leader and followers.
To assess the effectiveness of leadership styles, it is worth to take into account the contingency theories. Vroom explained the consequences of different leadership styles for different conditions, in his contingency model. He suggested that autocratic and consultative styles are suited for different situations and accordingly to the context, both of them would show adversities. For instance, time constrain. (Knights and Willmott, 2007)
Autocratic leaders experience more difficulties to coach and engage staff with the work than consulting ones. One of the main disadvantage of autocrats is the cause of underperformance.
At the same time, it is important to recognize that a consultative style is more appropriate for a smaller business, as the contact with employees is easier than in bigger companies.
Organisation theory study social and individual behaviour at work, taking into account that the effects of the external and internal environment. However, the organizational theory studies and compresses wider theories. It also serves management practices to understand behaviours and utilise theories for decision making at the moment of direct, predict and influence behaviours at the workplace. "The theory, thus, is intended to provide the ground for management activity in a number of significant areas of organisational behaviour" (Free MBA Resources 2008).
It is important to recognize that organizational theories are a helpful tool to understand organizations. Therefore, managers are able to run the business efficiently, anticipate negative outcomes and hire employee according to their needs. As a result, they would save money and time.
RECOMMENDATIONS AND CONCLUSIONS
This study revealed that there are different issues that the company should address before implementing a growth plan. The main recommendations for the business are:
The larger division of the company operates with many layers of supervision and management. It is worth to analyse the roles of them and identify the possibility of simplify the structure without affecting negatively the company. Madura (2007) suggest that few levels of management reduce expenses.
Diverse leadership theories suggest that often the deteriorating and weakening of a company relates to ineffective leaders. (Knights and Willmott, 2007) In order to restructure the business, the company should be looking for consulting leaders. They are able to engage employees, create an appropriate organizational culture and direct the company to overcome the changes that the company will go through a growth plan.
A major concern of the author is the leadership style in the larger division. It was observed that the atmosphere in this division was lethargic, and there were a culture of fear and authoritarism, which must change to obtain enhanced performance and a consulting leader is in need to obtain positive results from this division.
The informal structure of the smaller division reduces the involvement of management levels and increases good relationship between personnel. At the same time friendship increase job satisfaction, this improves results at the workplace. It was observed that the management style matches perfectly with the size of the company. The problem seen in this division is the size of the market, the main recommendation for this division is to reinforce the Sales and Marketing department to obtain a wide share in the market. At the same time, it is worth to assess the possibility to diversify the division's production.
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The main problem to meet the above recommendations is the resistance to change that the employees and management would show. For human is normal to resist to changes, it makes instable the routine and brings insecurity and fear of the consequences. Therefore, the role of management is crucial in the process of change. Providing the right tools and guidance, the change would be understand and accepted in a better way. There are diverse change implementations strategies and theories of overcome resistance that can be taken into account by the leaders to go through the company changes.
Overall, the importance of leadership is appreciated and the main concern for the successful restructure and growth of the business.