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MasterCard is one of the most common names used by people in USA and the second only in worldwide billings to Visa. In order to answer the question about the position of MasterCard in the world, Leigh Clapham (n.d) announced that: "As we examined the company, we felt our strategy and people were fine, so we really focused on culture almost by a process of elimination. We just felt our leadership and our execution could be much better, and culture was really at the heart of that."
MasterCard's organizational culture is defined as role culture because their employees have "passive-defensive behaviors, which often means avoiding personal responsibility and simply attempting to make everything rule-based." (Leigh Clapham, n.d) However, these bureaucracies are very slow to respond to change which means that the Leigh Clapham's desire to change behavior and culture in MasterCard is quite hard to achieve. However, role culture brings safety working environment to employees so that they are willing to keep their mind on their work.
In the past, Microsoft is known as the most successful and biggest technological company under Bill Gates' leadership. In 2000, Bill Gates left and Steve Ballmer became the CEO of Microsoft. Under Steve Ballmer's leadership, Microsoft went down in many aspects such as stock price, the capabilities of innovation, and especially the organizational culture.
The organizational culture in Microsoft is competitive culture (Diane Ravitch, 2012) and also called "cannibalistic culture" (Paul Thomas). It means that, working in Microsoft, employees always have to take part in an unexpected competition. This internal competition, somehow, has created dysfunction corporate culture that obviously will thwart innovation. It's one of many things that lead Microsoft to Lost Decade (Kurt Eichenwald, 2012).
According to Bill Gates (1997), Microsoft has a very flat organization. Microsoft is currently employing 94,000 people which means much larger than MasterCard. In 2011, MasterCard was employing approximately 7000 people. However, likes Microsoft, MasterCard is also defined as a flat organization (?)
Outcome 1.3: Discuss the factors which influence individual behavior at work
Admittedly, organization is made up by individual and, as a result, individual plays an important role influencing organizational behavior. There are five major factors that influence individual differences in behavior at work: personality; perception; attitude; abilities and skills; conflict, stress and change.
The individual's personality is one of the core factors of organizational behavior which obviously affect the whole organization. Personality is considered as the most complicated aspect that can influence an individual behavior in a big way. Family, culture and situation are several personality factors that have impact on an individual.
Attitude is a tendency to respond to certain situations. It's also defined as a mental and neural state of readiness, exerting a directive or dynamic influence upon the individual's response to all objects with which is related. That means the managers of an organization have responsibility in order to create a favorable working environment which will enable their employees form a positive attitude. For example, the working environment in Microsoft is known as "cannibalistic culture" (Paul Thomas) meaning that it's too competitive. It leads to result that their employees always have to compete with each other. They would rather beat their colleague than make innovation. Lacking innovation which comes from employees, Microsoft is performing a bad business in recent years.
Perception is the way an individual interpret the environmental stimuli. There are also many factors that decide the right perception of an individual. But the most important is that the manager has to create a favorable environment which will help employees perceive them in a positive way.
Abilities and skills are judged through the performance of an individual at work. It means that employees can perform well or not depends on his/her abilities and skills can match the job requirement or not. Microsoft is a typical example explains the relationship between skills, abilities and organization. Microsoft is using "stack ranking" system which was popularized by Jack Welch of GE (Diane Ravitch, 2012). This system enables manager rate their employees from the best to worst and then fail the worst. The worst one is also known as the person who can't match the abilities and skills with the job requirement. If the failed one is doing a terrific job and he knows he is going to get failed, he absolutely perform his work in a positive way.
The last factor in five core factors that influence an individual is conflict, stress and change. Working under "cannibalistic culture" means Microsoft's employees always have to work under pressure and stress. The result is that they can't do their best when they deal with problems or have to innovate. Then, they perform the bad work, greatly influence to the organization and Microsoft is now close to financial failure.
The knowledge about these responses is determining factors for the organization. Every organization requires a positive behavior from their employees and such behavior is recognized by observation, learning or training. Besides the job, the managers have responsibilities to create a good working environment which, somehow, will influence to employees' behavior.
Outcome 2.1: Compare the effectiveness of different leadership styles in different organizations
Leader plays a vital role for the development and the existence of the organization. Leader helps develop organization's objectives, visions, missions and value. Naturally, organizational culture is created based on its leadership and contrariwise the organizational culture also has impact on shaping and developing leadership. The leader styles could be distinguished into four types: autocratic, democratic, persuasive and, participative.
Microsoft under Bill Gates' leadership is different with Microsoft under Steve Ballmer's leadership because of different leadership between these two CEO. Bill Gates' leadership is called autocratic. "Gates made all the decisions, large or small. He allowed no middle managers between him and his employees. Gates was Microsoft's chief decision maker, chief technologist, chief salesperson, chief dealmaker and chief visionary, all rolled into one." (Robert S. Portfolio, 2004). His leadership styles made the communication between him and subordinates was shown in one-way. He made decision and everyone had to do exactly what he said without questions. It greatly effects on employees work performance. Making all decisions himself means he decides to change Microsoft's culture into overbearing culture (Edward Cotton). He also dropped the innovative culture which is built from the contribution or initiative from subordinates. However, his style ensures the fulfillment of the strategies. We can't avoid the excellent business performance of Microsoft under Bill which was a certain part created by his leadership style. "In 1993, Microsoft had $3.79 billion in revenues, $953 million in profit, and 14,430 employees. In 2000, revenues soared to $22.96 billion, profits to $9.4 billion, and the headcount to 39,170. Between 1999 and 2000 alone, the company had taken on nearly 8,000 new employees." (Robert S. Portfolio, 2004)
When Steve Ballmer became the CEO of Microsoft, he tried to change the organizational culture and encourage innovations by using his leadership style which definitely different from Bill Gates. Steve Ballmer (2012) said: "I'm really trying to give out the instructions, so that many decisions can be made by people." By saying this, he affirmed that his leadership style is democratic which allow him and followers make the decision together.
Robert W. Selander was the CEO of MasterCard for 14 years from 1999 to 2010. Robert W. Selander announced that: "I have to be careful about not conveying where I'm coming from too early on in the process, because I'm looking to get feedback from others." Obviously, his leadership styles can be defined as participative leadership. It helps MasterCard create the innovation culture. Participative leadership enables Robert W. Selander to gather and analyze subordinates' ideas and views. It makes all MasterCard decisions seem to be more objective than Microsoft. Under Robert W. Selander's leadership, MasterCard grew and turn into one of the most successful payment company. "In 2006, MasterCard sold for $39 in its initial public offering. It closed at $218 on June 25." (Roslyn Courtney, 2010)
The organization measures its performance and uses that information to improve products and services. In order to do that, it absolutely needs employees' contribution and everything is encouraged and shaped by the leadership. Leaders have responsibilities to ensure that their employees are motivated and guided by their leadership and organizational culture also. In other words, leadership has affected the whole organization including human resources, processes and profits.