Unit 3 Organizations Behavior London School of

Unit 3 Organizations & Behavior London School of Business and Finance HND 13 -1

On successful completion of LO 1 a learner MUST be able to: 1. Compare and contrast different organizational 2. 3. structures and culture (AC 1. 1) Explain how the relationship between an organization's structure and culture can impact on the performance of the business ( AC 1. 2) Factors which influences individual behaviour at work( AC. 1. 3) 13 -2

Introduction 13 -3

• Organisations can effective achieve their goals when the following are in place • Structure • Processes • Procedures • Structure follows strategies • Structure must be flexible • Yahoo failed to make changes to their organizational structure. • Jerry Young ousted in 2008. 13 -4

Integrated Portfolio at Fed. Ex • With all the acquisitions by Fed. Ex, there was a need to • • • change their structure. It adopted a multi-divisional structure. Significant authority has been delegated to the divisions. Each division manages its own specialized network of services. Do you know of other companies that operate in a similar fashion? Is this a good model for organizations to follow as they grow and develop? 13 -5

Fed. Ex Organization Fed. Ex Freight Fed. Ex Express Fed. Ex Kinko’s Services Fed. Ex Supply Chain Fed. Ex Custom Critical Fed. Ex Corp. Fed. Ex Trade Network Fed. Ex Ground 13 -6

Types of Organisational structures 13 -7

Organizational Structure The division of labour and patterns Of coordination, communication, Workflow, and formal power that Directs organizational activities 13 -8

Four key features of organizational structure: • 1. The division of tasks ( departmentalisation) • 2. The depth of the hierarchy (span of control); • 3. The extent of authority delegation (how much decentralization or centralisation? ) • Formalisation 13 -9

Characteristics of Organizational Structure Span of Control Departmentalization Organizational Structure Formalization Centralization/ decentralise 13 -10

Span of Control Number of people directly reporting to the next level • Assumes coordination through direct supervision Wider span of control possible when: • Other coordinating mechanisms present • Routine tasks • Low employee interdependence 13 -11

Tall vs Flat Structures As companies grow, they: • Build taller hierarchy • Widen span, or both Problems with tall hierarchies • Overhead costs • Worse upward information • Focus power around managers, so staff less empowered 13 -12

Centralization and Decentralization Centralization Formal decision making authority is held by a few people, usually at the top Decision making authority is dispersed throughout the organization Decentralization 13 -13

Formalization • The degree to which organizations standardize behavior through rules, procedures, formal training, and related mechanisms. • Formalization increases as firms get older, larger, and more regulated • Problems with formalization • • Reduces organizational flexibility Discourages organizational learning/creativity Reduces work efficiency Increases job dissatisfaction and work stress 13 -14

Departmentalization Specifies how employees and their activities are grouped together Three functions of departmentalization 1. Establishes chain of command 2. Creates common mental models, measures of performance, etc 3. Encourages coordination through informal communication 13 -15

Types of Organizational Structure Functional Divisional Matrix Geographic based Product-based Networking Structure 13 -16

Functional Organizational Structure • Organizes employees around specific knowledge or other resources (e. g. , marketing, production) Chief Executive Board of Directors Production Marketing Accounts Personnel IT 13 -17

Functional Organisational Structure benefits • Specialisation – each • • department focuses on its own work • Accountability – someone is responsible for the • section • Clarity – know your and others’ roles • Limitations Closed communication could lead to lack of focus Departments can become resistant to change Coordination may take too long Gap between top and bottom 13 -18

Divisional Organization Structure 13 -19

Divisional Based Organisational Structures • Benefits • Building block structure -- accommodates growth • Focuses on markets/products/clients • Limitations • Duplication, inefficient use of resources • Specializations are dispersed--silos of knowledge • Politics/conflict when two forms of equal value 13 -20

Product-Based Organisational Structure Hewlett Packard Imaging and Printing Group Personal Systems Group Enterprise Systems Group HP Services HP Financial Services 13 -21

Product-Based Organisational Structure • • • Benefits Clear focus on market segment helps meet customers’ needs Positive competition between divisions Better control as each division can act as separate profit centre • • • Limitations Duplication of functions (e. g. different sales force for each division) Negative effects of competition Lack of central control over each separate division 13 -22

Matrix Structure (Project-based) Employees ( ) are temporarily assigned to a specific project team and have a permanent functional unit CEO Game 1 Project Leader Game 2 Project Leader Game 3 Project Leader Art Dept Leader Software Dept Leader Audio Dept Leader 13 -23

Matrix Organisational Structures • Benefits • Uses resources and expertise effectively • Improves communication, flexibility, innovation • Focuses specialists on clients and products • Supports knowledge sharing within specialty • Solution when two divisions have equal importance • Limitations • Increases goal conflict and ambiguity • Two bosses dilutes accountability • More conflict, organizational politics, and stress 13 -24

Network Organizational Structure Product development partner (U. S. A. ) Alliance of firms creating a product or service Callcenter partner (Philippines) Core Firm Package design partner (UK) Accounting partner (U. S. A. ) Assembly partner (Mexico) 13 -25

Network organisational Structures • Benefits • Highly flexible • Potentially better use of skills and technology • Not saddled with same resources for all products • Limitations • Exposed to market forces • Less control over subcontractors than in-house 13 -26

Geographic-Based Organisation structure Hewlett-Packard’s Headquarters Worldwide Hewlett Packard Americas Houston, Texas Europe, Middle East, Africa Geneva, Switzerland Asia Pacific Hong Kong 13 -27

Geographic-Based Organisation structure Advantages • Serve local needs better • Positive competition • More effective communication between firm and local customers Disadvantages • Conflict between local • and central management Duplication of resources and functions 13 -28

Group Activity 1 • In your small groups, brainstorm on what factors could cause an organisation to change it structure or to adopt a totally different structure? ( 20 min) 13 -29

Factors than cause a change in an organizational Structure Corporate Strategy Diversification Technology Growth Environmental Uncertainty 13 -30

Would the following cause a structural change within an organisation? • A change in the key individuals • A failure to meet goals • An inability to get things done • An increase in overseas customer complaints • Personality clash in same department 13 -31

How structure and culture impacts on business performance 13 -32

Developing Organizational Culture Shared Values Reinforcing Outcomes Organizational Culture Norms Individual and Group Behaviour Adapted from Exhibit 13 -7: Process of Developing Organizational Culture 13 -33

Where Do Organizational Cultures Come From? • Founder imprinting • Founders defined and shaped the culture • Apple (Steve Jobs) • Disney (Walt Disney) • Microsoft (Bill Gates) • Wal-mart’s “low cost” culture by Sam Walton • Recruit people that fit the culture • Zappos vs. Genentech 13 -34

Elements of Organizational Culture Physical Structures Artifacts of Organizational Culture Rituals/ Ceremonies Stories Language Organizational Culture Beliefs Values Assumptions 13 -35

Artifacts: Physical Structures/Space Courtesy of Oakley, Inc. 13 -36

Artifacts: Physical Structures/Space Courtesy of Oakley, Inc. 13 -37

Organizational Culture Defined The basic pattern of shared assumptions, values, and beliefs considered to be the correct way of thinking about and acting on problems and opportunities facing the organization. © Reuters/New media, Inc. / CORBIS 13 -38

Williams, Dobson and Walters • Williams et al (1989) redefined the four • • categories listed by Harrison and Handy as follows: Power orientation Role orientation Task orientation People orientation 13 -39

Power orientation • Power culture is when one person has control • • over everything that goes on within the organisation. There are central powerful figure, very few rules and systems in, fast decisions, and personal communications. An example of this would be Sir Alan Sugar’s organisation, where he is the central powerful figure, and he does not relinquish and control. He makes all of the decisions, like employees’ wages, how much time employees are allowed for their holidays, who gets employed, who is made redundant and what products are sold. 13 -40

Role Orientation • Role culture is based on structure, with more • • • rules to abide by and bureaucracy. Work is decided via rules and regulations. Power is a based on level in a hierarchy, i. e. your job position. For example a manager would have more power than a supervisor. People work to a job description. This means that not just one person has control over the whole business, but a number of people who have important job positions will also have important decisions to make depending on their job role. 13 -41

Task orientation • Task culture is all about teamworking, when people • • come together to form a team in order to work on a project. This means that people in the teams will have different skills to use in the project. No one has greater position over anyone in this type of culture as people will have different skills to use together in order to get the project completed. The task is key, rather than the individual or rules • • London 2012 Olympics adapt task culture as a lot of people are working together in order to get the project completed. After the task is over, they will probably never work together again. 13 -42

Person orientation • Person culture is the individual person is the • • focus of the business, and has the authority to make all decisions regarding specific tasks and or activities. The person will be using their own expertise to complete he task. There is no hierarchy, and the organisation only exists to serve the interests of those within it. Examples include barristers, architects, doctors and surgeons. A doctor is his own boss and completes the work at his own pace, without being told what to do. 13 -43

Activity 1 - Fed. Ex Culture Attracts High-Quality Associates üDo you think Fed. Ex would have enjoyed its success had a different type of culture been introduced? üSuggest any organization that could benefit with a similar culture? üAs Fed. Ex continues to grow, will the culture survive or will it possibly be replaced by a more traditional culture? 13 -44

Activity 2 - The Bottom Line 13 -45

Relationship between Structure and Culture Read case study article Make individual comments (20 min class reading and sharing comments) 13 -46

Organizational Culture and impact on business • Cultural impact on employee behavior • Motivates employees by appealing to their ideas • Strengthen employee commitment, engagement, and effort • Culture is vital to an organization • Stronger founder imprinting leads to higher performance • Effective alignment allows development and refines organizational core competency 13 -47

Organisational structure and impact on performance of the business • Specialization - higher productivity & less satisfaction -But: Individual differences & differences in types of task! • -The higher educated, the less satisfaction from specialized job No supported relationship between span of control and performance -Some people like to work alone -Some people prefer security of boss available -Manager s satisfaction increases with number of subordinates 13 -48

Links of Structures With Employee Performance & Satisfaction • Centralization linked with job satisfaction • -Less centralized organizations - more participatory decision making - more satisfaction Again dependent on individual characteristics 13 -49

Factors which influences individual behaviour at work( AC. 1. 3) 13 -50

Some factors impacting on human behaviour…. . Personality traits Position Power Views & attitudes Selfesteem Experience Cultural background Trust Response to pressure Selfawareness Personal Values Passion Social background Ambition Confidence &Self-worth Skills & Knowledge 13 -51

Three main factors impacting on behaviour at work… • Drive • Challenge • Ownership • Control • Compliant • Position • Influence • Authority Power of Position Personality Traits • Influential • Interactive • Systematic • Organised OUTPUTS • Responsibility • Specialist skills Emotional Intelligence • Selfawareness • Self-control • Motivation • Empathy • Social skills 13 -52

Case study 1 • This case involved a personality clash between two senior employees who were working under a partnership arrangement. Both had joint responsibility for managing a team made up from practitioners from each organisation. The conflict between them was beginning to threaten the success of the partnership. • Question: what personality traits could be inhibiting their working together? 13 -53

Case study 2 • Both Jessica and Alan have been working • alongside one another for many years at the local newspaper. As their existing manager leaves the company, Alan is promoted, but still shares an office with the team, of which he used to be a member. Tensions arise when Alan decides to introduce a new policy, which makes little sense to the rest of the team and is likely to increase their already heavy workload. What could have ignited the disagreement? 13 -54

I’m Not Crazy…. I’m Just Not You!! 13 -55

Welcome to Myers-Briggs Personality Type Every students is expected to use either a computer in the library, personal internet on smart phones to conduct the Myers Briggs personality test and bring their results to class in 20 mins. Type Myers Briggs Test in Google. 13 -56

Extroversion/Introversion 13 -57

Activity 1 – What is YOUR Myers Briggs Type ? ? In small groups discuss how your personality types influences your work-life outcomes 13 -58