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Diploma in Business
Unit Number and Title
Unit 3 Organisations and Behaviour - Understanding the Workplace
Organizations can be said to be a system or combination of systems which is dependent on the structure of the organization, the people working inside the organization and their behavior, the technology that is being used inside an organization structure, etc. Since, the behavior of the people working inside the organization is highly unpredictable, it makes it difficult to manage the day to day working of an organization. Thus, it makes it important to understand the various theories and approaches that are followed by various type of organization, to get a fair idea about the behavior of various organizations. This report is a case study of company ASDA. The report will look into how the organization is structured and what type of culture prevails in ASDA. Then it will focus on the various leadership style that are available and what type of leadership style is being followed in ASDA and why. This report, will further drill on the various organization and motivational theories and which theories are adopted inside ASDA. In the last section, the discussion will be related to the importance of group, the advantage and disadvantages of working in a team and the impact of technology on ASDA.
An organizational structure can be termed as arrangement of different groups of people according to their level of authority based on the roles and authorities of different people. An organizational structure decides how information should flow across the organizations and is dependent on the strategy and goal of an organization. Based on the span of control here are two types of organizational structure: Hierarchical and Flat organization structure. A hierarchical organization structure is the one which has many layers of management. In hierarchical type of organization structure the lower group of people does not play much role in management related activities, their tasks are assigned by their managers and they are expected to complete those tasks and report it to their managers. The main decision making tasks are handled by the people who are at the top of the hierarchy (Katz, 1978). ASDA follows hierarchical type also known as Tall organization structure as it has more layers of management and the employees provides the information to other employees who report finally report it to their boss and the chain continues till the information is shared with the top hierarchy. This kind of approach is followed in most of the companies where the population is more. On the contrary, a flat organization is one which has lesser number of management layer, hence employees in a flat organization are involved in decision making activities. There is nothing like top or bottom level and each employee is allowed to give suggestions and feedbacks which are taken into account before taking any decision. British airlines follow flat organizational structure. Another difference between ASDA and British airline organizational structure is that ASDA follows functional division where the division of group is based on the function that is performed by the employees. The people involved in account related activities are grouped in accounts group; similarly other groups are formed like human resource, marketing, etc. While, British airlines follow divisional organization behaviour and structure, where group is made based on the product. All employees involved in making a particular type of product are grouped as one. This type of structure helps British airlines in quick decision making and active supervision by the managers as their common objective is customer care.
Organizational culture is means how employees inside the organization behave. The culture of any organization shows the values, beliefs, goals, visions and habits that prevail inside the organization. The organization culture of any organization can be classified based on the double S cube. The double S stands for sociability and solidarity. There are four type of organization structure: Network culture, mercenary culture, fragmented culture and communal culture. A company like ASDA whose main objective is to serve their client to the best of their ability, respect each other within the organization, integrity and excellence, clearly shows that ASDA follows communal culture inside their organization, which is high in solidarity and sociability. On the other hand, British Airlines till recent times were focused more on delivering high customer satisfaction, but there has been drastic change in their organizational structure which resulted in communal culture in British Airlines.
The performance of any organization is dependent on the how the organization is structured. It has been observed by many researchers that it essential to form a well structure within an organization for smooth functioning of it. An unstructured organization will only lead to confusion and chaos across the organization. Moreover, behavior of employee also plays an important role. The satisfaction level of any employee plays an important role in improving the performance of the organization. Thus it can be seen that both organization structure and its’ culture are essential to improve company’s performance.
Any organization which is well organized and works on the same principle and values creates confidence and provides great level of security and satisfaction among its organization. Any organization which is confused and unorganized will increase uncertainty and will develop insecurity in the minds of its employees. All this plays a big role in improving the performance of the company. Moreover, customers are also driven by how well a company is organized. Customers like to look at the background of any company before assigning them their work. Thus, to improve customer satisfaction, both structure and culture of any organization plays a vital role. However, both culture and structure should not be very complex as it can adversely affect the performance by slowing down the processes that are followed inside the organization (Wilkins, 1983).
As discussed above, ASDA follows hierarchical and functional type of organizational structure. Thus, it becomes important for it to have a communal culture because functional type of structure is characterized by lack of communication between different groups, each group works separately. Similarly, in case of hierarchical structure, the lower group of people feels dissatisfied because they do not play any active role in taking decision. However, the common goal of the company and communal culture helps the company to minimize these disadvantages, so that company can aim for better results. Thus, the culture and structure of ASDA compliments each other and effectively improves company’s performance.
In this section, the focus will be on various factors that affect an individual behavior while working inside an organization. Some of the factors are discusses below:
Thus, it can be seen that ASDA understand the importance of individual behavior at work in order to attain better performance, at tries hard to provide better environment to all its employees so that they feel part of the organization and should not feel left alone. These increase the interest towards work and results in better efficiency from each individual.
In this section, the discussion will be on different types of leadership styles that are available and then the focus will be on the effectiveness of leadership style in ASDA compared to that of British Airlines.
Leadership can be considered as a quality through which the attitude and behavior of others can be influenced. Based on various types of theories, leadership style has been classified into various types. According to Michigan and Ohio theory, leadership was classified into task oriented, relationship oriented and participative leadership style.
A task oriented leadership style is one where leaders are more focused on doing and getting the task done rather than having an effective relationship with his or her team. The leader provides its team with the necessary resources required to complete the task. British Airways use to follow task Oriented leadership style under the leadership of Willie Walsh.
Relationship-oriented leadership style is one where leaders also focus on maintaining good relationship with its employees, along with getting the work done(Graen, 1995). As discussed above, ASDA follows relationship-oriented leadership style, where it effective measures were taken by the leaders to maintain healthy relations with their subordinate members.
Participative leadership style: The main feature of this type of leadership style is it involves the whole team while taking decision and the decision is taken after complete discussion, suggestions and feedback from the whole team.
According to another theory, leadership style can be classified into transactional and transformational leadership style. These are:
A transactional leadership style is one in which the leaders used to motivate their subordinated by giving them rewards and used to punish the employees who fails to deliver quality product on time. Willie Walsh believed that Salary of an employee is sufficient to get the work done, hence British airlines used to follow transactional leadership style.
Transformational leadership: In this leadership style, as seen in ASDA, the morale and motivation of an employee was not just defined by rewards and punishments. Transformational leadership doesn’t believe in give and take business but focused on bringing the change through leadership. A leader should set an example through his belief in the work, his ability and skill. The employees will follow him eventually (Podsakoff, 1990).
An organization theories are models that explains how an organization is working and how is it related to external environments. It is essential to understand the organizational theory of an organization for better management. Management related activities require theory, which can be used by managers to refer while performing these activities.
It was in 2000, when ASDA for merged with Wal-Mart, that leads to confusion in the minds of many employees working in ASDA. Since, the merger resulted in new rules and regulations, the employees of ASDA were not comfortable and felt insecure. At this point of time, the higher management took the initiative of explaining the new business strategies to its workers which help them build trust and made the employees felt more secure. Though, the two organization had similar kind of structure, still the organizational theory acted as the base for the management team to take crucial decisions in favour of the employees and the company as a whole.
The difference between the approach in the management of the two companies ASDA and British Airways comes from the difference in the organizational structure. As discussed above, ASDA follows functional organizational structure while British Airways follows divisional organizational structure. Thus, in case of ASDA, the management focuses on how to maintain effective relationship with their employees and make them understand their goals and objectives so that they can perform to the best of their ability to have competitive advantage over other companies in UK. The management also focused more on maintaining good relationship with their employees during the merger process with Wal-Mart.
On the other hand, British Airways, being a divisional type of organizational structure, focuses more on training its employees so that the employees are aware of the complete process rather than just knowing what is expected from them. In case of ASDA, management expect that each employee should be best in whatever work he is doing, while in case of British Airways, which focus more on customer service, management tries to incorporate different skills to all its employees so that each one is aware of the complete process and it’s functioning.
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