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Diploma in Business
Unit Number and Title
Unit 3 Structure & Culture Organisations and Behavior
The structure & culture organisations and behaviour unit mainly focuses on the organisational structure and culture and their impact on the performance of the organisation. The structure and culture of the organisation refers to the beliefs and values of the organisation. All the rules and principles on which the organisation conducts its processes are based on its culture and structure. Organisation needs to take decisions regarding the approaches and the theories that are to be followed in the organisation. These theories are related to the management practices of the organisation. This unit also describes about the management approaches like scientific, classical and human relation approach. These approaches explain about the concept of leadership. Leadership means guiding employees to work in a specific manner. Leaders not only guide employees but also motivate them. There are many motivational theories like; Maslow hierarchy needs theory, Herzberg two-factor theory, ERG theory etc.
The unit also focuses on the pattern of working of employees. Teamwork is the practice used by many organisations these days. It helps in improving the communication channel and in turn enhances the performance of employees as a team. We will also draw attention towards how technology has its impact on the teamwork in the following unit.
Not every organization works in the same manner. They differ in their working patterns, their culture, their policies etc. This helps in developing an organization structure. Organizational structure of a company is based on many characteristics.
If we talk about the formal organizational structure, it is categorized as:
There are some of the elements that are required to be followed by the organisation in the organisation structures. First, one is the unity of command or chain of command that suggests that an employee should have one superior who commands him rather than multiple superiors. Another element is the span of control. It refers to the extent of control a manager has with respect to the number of employees in his team. It can be narrow in some organisations and can be wide in others according to the structure of the organisation. (Luthra, 2015)
If we consider CAPCO, it has the flat organizational structure having very few layers of management. This is non-hierarchical structured organisation with wide span of control. CAPCO sometimes uses the matrix structure for the completion of some specific projects. This is in contrast with the organisational structure followed by the traditional bureaucratic organisation such as NHS having a very long hierarchical structure with narrow span of control. (De Cremer, 2006)
Organisation culture is the beliefs and values of the organisation. It shapes the organisation. Organisation culture can mainly be classified as:
CAPCO is the organisation that provides freedom to the employees to come up with their own creativity to perform tasks and focus on personal growth of themselves. They provide an open environment for their employees to work whereas the organizations like NHS have very different kind of culture. NHS has traditional organizational structure and culture that somehow does not allow the employees to come up with their own ideas of working but they have the culture of teamwork that is also followed by CAPCO.
The relationship between the structure and the culture affects the performance of the organisation. If an organisation is following the traditional hierarchical structure then they should adopt the culture with traditional values to perform towards the goals in better way. If we take example of CAPCO, they follow the flat organisational structure with fewer layers of management that somehow provides the organisation with an ease to communicate which in turn leads to efficient teamwork. CAPCO believes in creativity and allows their employees to come up with their own ideas of work. (Millar, 1979)
The values of creativity, integrity and involvement of employees are the main reason that CAPCO’s growth rate is 14.7%, which is far more than its competitor’s growth percentage. As CAPCO has the flat organisational structure, it is very easy for the employees to communicate with the top management that creates a sense of belongingness in the employees. This motivates employees to perform better. Their involvement in decision making process is also one of the motivational factors that leads to better performance of employees and in turn affects the success of the organisation as a whole. The company has also made efforts to enhance inter employees communication by introducing a social media application called Capln Touch. This positive approach towards communication also leads to personal growth of individuals as well as affects the organisational performance. (Ordway and Claudin, 1987)
In any organisation, the behaviour of an individual at work is influenced by organisational as well as personal factors. Organisational factors include the culture of the organisation, working environment etc and personal factors includes personality, designation, background of that individual etc. Let us understand it better by taking an example of CAPCO. (Capco.com, 2016).
Above all are some of the factors that somehow influence the behaviour of individuals. Even if the organisational culture is same for every individual in the company, they behave differently according to their different individual traits.
Leadership can be defined as the capability of a person to influence someone to work in a particular manner. It is the ability to guide and mentor others to perform towards a specific goal in a specified way. As we know that, the different individuals respond to the same stimulus in different way and it makes their personality. Leadership is also a part of an individual’s personality and have different styles.
If we classify the leadership, it can be categorized mainly in three styles:
Comparison of CAPCO leadership style with Sainsbury:
Leadership style: democratic
As we know that CAPCO has a very open work culture and they believe in creativity and innovation that shows that the leaders of CAPCO follows the democratic style of leadership. They consider the opinion of their employees before taking any decision. With the great communication channel, it is very easy for the employees to connect with the leadership teams. (Capco.com, 2016).
Leadership style: laissez faire
Unlike CAPCO, Sainsbury follows the laissez faire leadership style. They believe that with this style they can rely upon the employees to take decisions effectively. (J-sainsbury.co.uk. , 2016)
Democratic style by CAPCO
Laissez faire style by Sainsbury
CAPCO allows partial involvement of employees
Sainsbury leaders depends solely on employees
CAPCO employees are guided by leaders
Sainsbury hire highly skilled employees
Employees share opinions
Employees make decisions
CAPCO leaders give regular feedback to their employees
Sainsbury leaders do not provide regular feedback
Organizational theory refers to the design of organization. It includes the organizational structure, culture and their relation with the external environment. It forms the basis of the practices of the management. It guides the managers to plan over the things and suggest ways to respond to any stimulus. Organisational theory suggests the rules on which the organization runs and it gives the foundation to the management practices. (Brijesh Goswami, 2013).
Following are some of the organizational theories that affect the management practices of the organization:
Classical management theory: This theory deals with the organization that are formal in nature. It focuses on analysing the organizational structure. This includes two types of management approaches-
Scientific approach of management is about standardisation. It deals with increased productivity by using standard and scientific tools and making a proper structure of the processes to be done. An organization with this approach believes in scientific selection of employees, proper training and development as well as dividing the labour in such a way that leads to efficient working of the employees and the organization as a whole.
Bureaucratic approach also deals with formal organizations in which jobs are very much specific and the organization that follow this approach have authoritative kind of leadership in which employee involvement is negligible.( Lerner, Miodownik and Lerner, 2015)
Neo classical approach: Now the classical approach is renewed as the neo classical approach with some modifications. This approach focuses on individuals and human relations. The organization with this approach has participative or democratic leadership style. This theory or approach supports the concept of work groups.
Modern approach: With the change in the environment, the organizations felt the need to make changes in the management approaches they use. Modern approach of management came into picture now.
It involves two approaches;
System approach includes both the concepts of strategic working as well as the human behaviour. This approach considers an organization as the system having interrelated processes.
Contingency approach is the modified form of system approach. The organization following this approach believes that there should be no specific system for the organization to run. The response depends on the stimulus that means that the approach used in the organization totally depends on the situation at that particular time. Organization processes cannot be conducted in the same manner in all situations. (Brijesh Goswami, 2013)
Different organisations use different approaches for management. It depends on the culture and the values followed by the organisation. The organisation which focuses on individuals generally follow human relation approach and the organization having their focus on productivity will definitely go for the classical approaches like scientific and bureaucratic.
Management approach: contingency
The management approach followed by CAPCO is contingency approach. As CAPCO is the organization that believes in change management, contingency approach is the best to be followed by them. They have their change management consultants who guide them according to the dynamic environment inside as well as outside the organization. (Capco.com, 2016).
Management approach: neo classical approach
Sainsbury is an employee-focussed organisation. They provide opportunities to their employees to develop their skills and knowledge. Reward system is practiced in the organisation. Employees are rewarded according to their performances. This in turn motivates the employees to perform better. (J-sainsbury.co.uk., 2016).
Neo classical approach by Sainsbury
Contingency approach by CAPCO
Focussed on human relations
Focussed on change management
Guidelines suitable for employees
Guidelines suitable for all situations
Policies are made according to the workforce
Policies are made according to dynamic environment
Leadership is the ability of an individual to influence employees or group members to work in a particular manner. Leadership styles adopted by the organisation not only depend on the leaders but also depend upon the group members who are governed by them. The culture and organisational structure also influence the leadership style adopted by the organisation. Leaders not only influence employees but also motivate them towards a specific goal. Effective and efficient utilisation of human resource can only be done by motivating them. Leadership style has an impact on the motivation of the employees. (Luthra, 2015)
Motivation is the stimulating factor that causes an individual to work in an effective manner towards a particular goal and the result of the motivation factor reflects in the performance of the employee. Every individual has different motivational factors.
Two aspects of leadership have their influence in motivating employees.
Persuasive leadership is about influencing employees upon the decision that has already been made by the leader. Under this style of leadership, leaders try to motivate employees according to their will. Leaders try to make up the minds of the employees in the way the decision has been made.
Participative leadership is about considering employees knowledge and opinions before taking the decision regarding any issue. The involvement of employees in the decision-making process is the motivation factor for the employees. (De Cremer, 2006)
Motivation depends on the needs of the employees. As the time changes, the needs of the employees also change and hence change the factors, that motivates them for better performance. Different motivational theories have been proposed to understand the above concept.
Maslow hierarchy needs theory: This theory states that the needs of an individual changes with time and there is a pattern in which the needs are arranged. One need follows the other and so on. An individual cannot be motivated to achieve higher-level need until he has achieved the lower level needs. (Teater, 2010)
Maslow hierarchy needs theory involves five levels:
Application of Maslow hierarchy needs theory within workplace:
Maslow theory can be applied in the workplace with the help of the leaders as well as the employees. As this theory is about the hierarchy of the needs, the employees and the managers, both have to put efforts systematically. For achieving the basic physiological needs, managers need to guide the employees and employees need to do the delegated task on time without compromising with the quality of work. (Mcreynolds,2012).
Herzberg two-factor theory:
Frederick proposed this theory called Herzberg two-factor theory. The name suggests that it involves two factors, which are:
Motivators are factors that motivates and inspire an employee to perform better. For example, rewards, recognition, awards etc. These factors are present to satisfy employees.
Hygiene factors are those that are present to avoid the dissatisfaction of the employees. Like salary, work conditions etc. They cannot give a positive satisfaction but can be a cause of dissatisfaction if not present.
Application of Herzberg theory:
Every employee of the organisation can be satisfied or dissatisfied. This theory says that motivation and hygiene factors are equally important for an employee. Hygiene factor can prevent the dissatisfaction buy motivation factors can provide satisfaction to the employees. The theory can be applied by designing a job in such a way that can fulfil the basic needs of the employees and simultaneously provide him the chance to achieve other physiological and esteem needs. (Rudolph, 2016)
There are many motivational theories that are introduced for the organisations. The application of these theories has utmost importance in the organisations to motivate and inspire employees to perform in an effective way. It is very necessary for managers to understand the usefulness of motivational theories. The main function of managers is to make human resource work in an efficient way. Managers have to provide the path according to which the employees work. There exists a give and take relationship between the employee and the organisation. The employees work for the organisation and the organisation pay them accordingly. However, to compete with the competitors and to deal with the dynamic environment the organisation needs to increase its efficiency to perform. This increase in the performance of organisation can be achieved only when its employees work in an efficient way. The need to increase the efficiency leads to the introduction of motivational factors in the organisation to inspire employees to work. The growth of the organisation and the employees run hand in hand. If the organisation is growing then it will definitely affect the growth of employees in a positive way. (De Cremer, 2006)
It is the duty of the manager to motivate employees to perform. The introduction of reward system for the efficient workers creates a sense of competition between the employees and they work more efficiently. If we talk about the Maslow needs theory, it suggests that human needs change with time and they have hierarchical system. If the basic needs are fulfilled than humans start working towards the achievement of higher-level needs and so on. Managers have to recognise the level of needs of an employee and motivate them accordingly.
If we consider Herzberg theory of motivation, it suggests that satisfaction of the employees is important but avoiding the dissatisfaction is equally important. So the employees should be provided with some hygiene factors such as healthy work conditions etc. It helps in preventing dissatisfaction of working in the minds of the employees. (Ordway and Claudin, 1987)
When two or more people come together for any particular purpose, they form a group. In the case of organisations, the collection of employees who are working towards a common goal forms a group. (Frazer and Oswald, 2009)
Formal group: Groups that include the specially designated employees working for the achievement of the specific purpose are known as formal groups. The managers without the concern of the group members choose the members in these groups deliberately. These groups can be permanent or temporary according to purpose of formation of group. (Gregory, 2013)
Informal groups are formed according to the willingness of the member to join the group. They do not have a definite purpose. They are either friendship groups or interest groups.
Most of the organisation forms the work groups to solve a particular problem or to achieve a specific goal. Working in a group has many benefits for the employees as well as for the organisation. Some of the benefits are:
As far as CAPCO is concerned, forming work groups is the common practice in the organisation. They generally form the temporary formal groups who work for the common purpose. After completion of that particular task, they dissociate the group. CAPCO is employee driven organisation where employees have the freedom to share their opinions and views regarding any issue in the organisation. As the organisation has a open working environment, employees easily communicate with each other and can work as a team.
Working in a group dissociates the responsibilities and the burden and enhance the efficiency of performance.
Human being is a social animal. He needs a society to live. If we talk about the organisations, same concept is applied. Employees working individually may not perform well as compared to the performance they give when they work in a group. Many factors can affect the performance of the team. Some factors promote the teamwork and some may inhibit them. (Gregory, 2013)
Factors promoting team work:
Let us take an example of the organisation called CAPCO.
CAPCO believes in teamwork rather than individual work. The reason behind the CAPCO’s effective teamwork is the social behaviour of the employees. CAPCO has the great communication channel that leads to effective performance of the teams. The leadership approach followed in CAPCO is democratic, where employees are involved in the process of decision-making, this develops synergy between the employees as well as between the employees and the organisation. (Capco.com, 2016).
Factors inhibiting team work:
CAPCO is an organisation with an open working environment. They practice teamwork as the method to enhance performance of the organisation. As we know that CACPO has a democratic kind of leadership in which employees are involved in the decision making process. This can sometime act as a drawback for the teamwork as there is less involvement of managers. (Ghaferi, Dimick, 2015).
We are very much aware with the technology advancement across the globe. Technology has become a part of daily lives. Technology plays a very vital role in the industries like, IT, financial institutions, marketing etc. Technology has reduced the manual work. Technology has an immense importance in the organisation like CAPCO, which is a financial service firm.
CAPCO is using technology in the following form:
There are many other forms in which technology can be used to enhance the team work.
Some of them are:
The structure and culture has a great impact upon the functioning of the organisation. Different organisations have different work patterns according to their culture and structure. Organisation is classified according to the functions, geographic region and product lines. Different organisation use different management practices and approaches such as; classical that includes bureaucratic and scientific approach, neo classical that includes human relation approach and modern that includes contingency and system approach.
Different motivational and leadership theories are followed by different organisation. Motivational theories like Maslow hierarchy needs theory, Herzberg theory etc and leadership styles like democratic, autocratic etc are followed by the organisation according to their principles and policies.
Now days, organisations are adopting the culture of teamwork as it enhances the performance of the employees and the organisation as a whole.
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