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Explaining The Organizational Structure And Culture Commerce Essay

Paper Type: Free Essay Subject: Commerce
Wordcount: 3812 words Published: 1st Jan 2015

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An organizational structure represents the hierarchical arrangements of various positions in the enterprise. In others words, who reports to whom? There is not one universally accepted structure to fit every organization because it depends on the nature of each individual organization and how they operate.

There are 4 main types of organizational structures;

Functional Structure:

Functional structuring helps in grouping similar specialties together by allocating each department’s duties and responsibilities. Top managers appoint duties and convey tasks easily and directly because each department has defined specialities.

Business organisation by function

Divisional Structure:

In divisional structure, a team of two or more are created, each having its own functional departments but in this case they correspond to the specific end product or services that are provided by the organization.

Furthermore, divisional structure is based on three criteria’s;

Product Structure

In Product structure an organization is grouped in such a way that the specialists are given specific products to work on. The organization divides the products into A, B and C and this way they have their own individual hierarchies to report to, i.e, Manager A, Manager B and Manager C; respectively.

Business Organisation by Product

Market Structure

In Market structure an organization is formed in such a manner that teams are made according to the different markets it operates in, for example; Cooperate customers, Business customers, government agencies and so on and so forth.

Geographic structure

In a geographic structure the team is set to meet the requirements of customers from different countries and cities, together they make a region.

Business Organisation by Region or Area

Matrix Structure:

A Matrix structure organisation is formed by making teams of people from different sections of the business. Each individual team is formed for the purposes of a particular project and will be led by a project manager.

Business Organisation by Process

Organizational Culture

A culture in an organization plays a vital role in the well-being of a company and represents its personality. Culture is something an individual senses once he/she joins an organization and there is no common culture everyone can follow. It varies between organizations.

Types of cultures

Collaborate (Clan) Culture:

Open and welcoming environment.

Leaders are considered to be mentors.

Group loyalty is strong.

Create (Adhocracy) Culture

A self-motivated, entrepreneurial, and creative environment.

The employees and leaders believe in bringing revolutions and risk taking.

Opinions of individual are encouraged and welcomed.

Control (Hierarchy) Culture

An extremely organized and official place to work.

Individuals have to stick to the rules and procedures.

The group strongly believes on formal policies.

Management wants security and predictability.

Compete (Market) Culture

A target focussed organization motivated on job completion.

Employees are competitive and target-driven.

Leaders are challenging and creative.

Reputation and success are common concerns.

Relationship between Vodafone’s structure and culture and effects on business performance

Vodafone’s organizational culture and structure both go alongside each other and are not completely different. They both have their own importance and play a crucial role in the establishment of any organization.

Vodafone Group Plc organisation chart


Having such a precise divisional structure and employing over 80,000 staff worldwide Vodafone was on an edge of breaking down due to its poor culture.

A few years ago it was found out through surveys conducted on employees that formal recognition was not part of Vodafone’s culture. Vodafone took it very seriously and introduced a number of events to increase employee recognition. An example for it is “The Legends scheme” which recognises individuals who have put in extra efforts and achieved great improvements.

Since then, each year the staff at Vodafone are encouraged to nominate colleagues that give an outstanding performance. The nominations are yet another way of intermixing staff, functions and conferences throughout the year and all travelling and accommodation expenses are paid by Vodafone. Finally, when the nominations are over and the winners are announced, they are sent on luxurious vacations, paid bonuses and acknowledged throughout the year at work place as well.


The significance between organizational structure and culture is that they affect employee behaviour, motivate them, help in improving the performance, keep them dedicated to work, and help building a satisfactory relationship with all the stake holders..

Factors influencing individual behaviour at work

It’s a natural phenomenon that human beings are influenced by everything that happens around them. There are various factors that might influence individual’s behaviour at work such as,


It’s in the human nature to build perceptions in daily basis and there may be a no. of factors that influence perceptions of an individual. It is important for mangers to create a positive work environment so that employees identify them in a most approving way.

Ability and skills:

This is the most important factor that influences behaviour of individuals at work. If a person has all the necessary abilities and attributes for a particular job, he/she is believed to work much more efficiently.


It is a common phenomenon that employees can’t concentrate and achieve better results if their mind is not present. So it is vital that employees are helped in forming a positive attitude by taking into consideration their family, society and cultural affairs to achieve satisfactory outcome from them.


Not everyone is the same. Some people face difficulties in mixing with a group of people while others may enjoy working with a group of colleagues. Hence personality of every individual plays a very important role for the well-being of the organization.

Different approaches to management and leadership and theories of organizations

How organizational theory underpins principles and practices of organising and of management

There are numerous theories that explain organizations and their structure. They are;

Classical organization theory:

Scientific Management approach

In this theory the model of planning is to work professionally and consistently. There is a mutual trust between management and works, this ensures increased efficiency.

Taylor’s principles of scientific management

Science, not rule-of-thumb

Scientific selection of the worker

Management and labour cooperation rather than conflict

Scientific training of workers

Weber’s Bureaucratic approach

This approach considers the organization as a part of wider society. The organization is based on the principles of:



Predictability and stability



Administrative theory

It was proposed by Henry Fayol and is based on several principles of management. In addition, management was considered as a set of planning, organizing, training, commanding and coordinating functions.


Neoclassical theory:

This gives importance to individual or group behaviour and human relations in achieving productivity. The main features of the neoclassical approach are individual, work group and participatory management.

Principles of neoclassical theory,


Work group

Participative management

Modern organization theory:

The systems approach considers the organization as a system composed of a set of “inter-related – and thus mutually dependent – sub-systems. Thus the organization consists of components, linking processes and goals.”

The socio-technical approach considers the organization as composed of a “social system, technical system and its environment. These interact among themselves and it is necessary to balance them appropriately for effective functioning of the organization.”

The contingency or situational approach recognizes that organizational systems are “inter-related with their environment and that different environments require different organizational relationships for effective working of the organization.”


Different approaches to management and theories used by two organizations

The world’s largest mobile telecommunication provider, “China Mobile” has been working on the “neoclassical theory” since 2009. The necessary employment and labour management systems at China mobile were combined so as to cut down employment risks. Keeping in mind the current growth stage and the aim for future expansion, the Group strengthened its performance management and brought the motivational and required effect of the recognition strategy into action. The Group intensely encouraged the formation of its new talent team and continuously enhanced the lively of talent management system and built up the competitive advantage in key talents. The organization system was fully adjusted to maintain the development of the proficiency of talent selection.

Vodafone, on the other hand has been working on “the contingency theory” and their aim is to work on to build a sustainable future by providing products and services that ensure positive economic, social and environmental outcomes for their people worldwide.

Vodafone’s sustainability programme is being compelled from the top of the company. Their approach is to continue to grow a firm origin of corporate responsibility by engaging with employees to understand the material issues they must address and responding appropriately. They need to sustain and expand their strong framework of policies and management systems which are essential to cut down risks, particularly in newer emerging markets where management of sustainability issues is less mature.

Examine the relationship between motivational theories

Different leadership styles and effectiveness of these leadership approaches

The key to good leadership development is a good knowledgebase. In general, there are 3 key leaderships organizations use. They are,

Autocratic Leadership:

Manager has a control over decisions and the supreme authority.

Discussion with other co-workers in negligible and decision making becomes a unsociable process.

Managers are more concerned in working on the task at hand rather than developing their own leadership skills.

Democratic Leadership:

 Manager seeks consultation on all major issues and decisions.

Manager distributes tasks to the assistants, allowing them complete control for the particular tasks. 

 Manager encourages feedbacks from the staff.

Bureaucratic Leadership:

Leaders presume employees to demonstrate an official and professional attitude in the organization and between each other. 

Leaders are empowered via the office they hold – position power

Employees are rewarded for their ability to adhere to the rules and follow procedure perfectly.

Leadership approaches by Vodafone:

Vodafone operates a Democratic leadership within its organization and therefore emphasizes on the importance of effictive leadership. For this reason they introduced the “Global leadership Programme” nine years ago with the aim of identifying and developing internal individuals who had the potential to become the future leaders. Throughout the last nine years, hundreds of individuals successfully passed the rigorous selection process to become a part of the GLP community.


Different Motivational theories

Employees are motivated by a number of ways, several motivational theories have been introduced but unfortunately none of them comes to the same conclusion.

Some of the most commonly used theories are,

Taylor’s theory:

According to Taylor if it was not for the pay employees wouldn’t perform well and therefore it is essential that they are under constant supervision during work. For this reason the leaders should break down the tasks into small bits and assign it to the employees. Workers are then paid according to the no. of items they produce in the set time.

Mayo’s Theory:

Mayo’s theory strongly disagrees with Taylor’s theory. He stated that employees are not only motivated by the pay but can perform better if their social needs are met. This theory encourages leaders to treat employees as human beings and respect their opinions and involvement.

Maslow’s Theory:

Abraham Maslow introduced a model in which basic, basic needs such as physiological needs and safety must be satisfied before luxury needs such as self-actualization are achieved.



Relationship between motivational theory and practice of management

There are several motivational theories but if they are not being practiced within the working environment they are of no use. Relationship between few motivational theories and their practice of management are discussed below,

Taylor’s theory in practice of management:

Taylor’s theory were widely adopted as business saw the benefits of increased productivity levels and lower unit costs but it was found out that employees soon started to get annoyed by this approach because it made them lazy because of lack of productivity and encouragement by their managers.

Mayo’s theory in practice of management:

After the failure of Taylor’s theory, Elton Mayo was vastly adopted by organizations because it emphasised on the important factors like employee recognition, security, team work and rewards. This theory in practice not only helps motivate employees but also encourages them to work efficiently because of the recognition they get. Better communication, involvement of the managers and team work are the key points of this theory.

Maslow’s theory in practice of management:

Maslow’s theory may not have a scientific approach but it is very effective. This theory definitely holds a zeitgeist in today’s world because every individual has his own needs and people may be motivated by entirely different factors. Therefore, to motivate an employee, the managers must be able to recognize the needs level at which the employee is operating and then decide what can be done for continues progress. http://www.netmba.com/mgmt/ob/motivation/maslow/

Working with others, teamwork and group dynamics

Nature of groups and group behaviour within organizations

Nature of groups within organizations:

In a contemporary organisation, what were once competitors are now collaborators, what were once outsiders are now stakeholders, what were once stark boundaries are now fuzzy fences. Organisations have now discovered the value of collaboration, both inside and outside. Group work has been enabled in achieving economic advantages, higher output and increased employee satisfaction (Steijn, 2001; Brooks, 2006; Buchanan and Hyczynski, 2007).

Group behaviour within organization:

Organizations needs ample talent to achieve its aims and therefore the leaders need to understand the individuals that are working for the organization. By learning how the performance and culture of employees affects the organization, organizations move closer to success.

There are three main attributes which can affect the way team members intermix with each other: diversity, communications, and goals. It is very essential that the leader has a good knowledge of the individuals to achieve great results. The dynamics of а team mostly affect its internal goals, but can influence how the team is perceived by others. (Isgar, Ranney, & Grinnel, l994). We can identify the dynamics of a group by looking at the strategy of recruitment, determining leadership qualities and seeing the impact that diversity has on the successfulness of a group.


Effective teamwork and influence that threaten success

Effective Team Work

Certain conditions are necessary for effective teamwork. Several models of team working have been developed; however “Tuckman’s Model of Group Development” is one of the most widely used.


(Buchanan and Hyczynski, 2007).


Forming is about orientation, socialisation and developing relationships. This is where they discuss what is acceptable behaviour and how to focus on objectives.


The second stage is Storming. It is about confrontation and conflict and the struggle for power and influence. During this stage there is conflict over individual’s desires to express their own opinions, which often results in the polarisation of opinions (Buchanan and Hyczynski, 2007).


The third stage is norming; in this stage groups develop a cohesive approach, whereby pleasant relations replace conflict and disagreement.


Performing is the final stage of group development, in which teams are finally able to work as a cohesive unit. This is about team collaboration and the focus is on getting the task at hand completed and reaching the shared goals of the team.


Team may disband on achieving their goals or because members leave.

Factors which threaten the Success of the teamwork

Teamwork of all kinds is fraught with tensions, conflicts and problems. If these are not managed effectively there will be a negative synergy. This can be caused by factors such as negative equity, example if one member of the team does not perform well the other one thinks ‘why should I?’. Collectively, this phenomenon has come to be known as social loafing.

In addition to social loafing, problems of groupthink can have a negative impact on the performance of teams. Group think occurs whereby members of the group fail to critically analyse, test and evaluate problems, issues and challenges which face the group (Murray et al., 2006). This leads to ineffective team working, which is not beneficial to the organisation.

Managers and team leaders play a pivotal role in ensuring that the problems of social loafing and groupthink do not occur. In addition managers should recognise team leaders who may deliberately or in-deliberately encourage the start of negative synergy, social loafing and groupthink and take steps to minimise the impact of their ineffective team leadership.

Impact of technology on team functioning

Impact of Technology on Team Functioning

Technology plays an increasingly important role on the way in which teams function. This is because “organisations are becoming increasingly distributed across geographical boundaries and across industries” (Brooks, 2006, p.115).

Impact of technology on team functioning within Vodafone:

Vodafone is a mobile service provider and therefore they themselves rely on the technologies to ensure an effective team functioning. Technologies that have enhanced team functions at Vodafone are,


mobile phones




Groupware is a software that Vodafone uses which allows teams to organize meetings, team up, delegate all within a virtual environment which can often be accessed remotely from anywhere in the world.

e-mails: have made the world smaller. Team members do not have to work in the same place and at the same time to complete a task, they are always connected through e-mails.

Mobile phones: There are more mobile phones in the UK then the people. Mobile phones has given a flexibility of staying in touch at all times.

Blackberry: Phone technologies such as blackberry and 3G data cards allow team members to work and communicate remotely and this out in the field or with clients, often for free.

Personal computers allow team members to carry out several jobs and interact more efficiently. Especially the use of laptop computers has enabled people to take their businesses with them wherever they go.



This assignment in a nut shell has helped me in investigating what Vodafone’s organizational structure and culture is like, how it differs from other well-known organizations and what impacts do the effective leadership, consistent motivational theory and nature of groups have on the organization.

Vodafone is a global organization and their main aim is to maintain an environment that is promising for the employees. It ensures this by having a appropriate organizational structure and a welcoming and competitive culture. For this reason, Vodafone always make use of effective use of their resources and take initiatives to overcome any sort of lack of motivations or poor leadership within their organization.

I personally believe that Vodafone has an excellent divisional structure and culture. This has enabled them to penetrate in the markets throughout the world and it is only because of their employee’s satisfaction and competitive approach that they are world’s leading telecommunication provider.


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