Structuring Organization to Reach Its Goals - Essay Example

? Management ORGANISATIONAL STRUCTURE SHAPES CORPORATE CULTURE AND INFLUENCES ORGANISATIONAL CHANGE of Class: Professor: Submission Date: ORGANISATIONAL STRUCTURE SHAPES CORPORATE CULTURE AND INFLUENCES ORGANISATIONAL CHANGE Introduction “Managers must structure their organisation to reach the organisation’s goals” (Sims 2002, p.274). Organisational structure and design include the use of an arrangement of duties for the work to be done and the ways in which jobs and departments are arranged. Organisational structure also reflects some of the ways underscoring people’s interaction with one another and communications across jobs or departments. For example, formal, even bureaucratic as opposed to liberal or lenient relations. Structure also includes the allocation of power in an organisation, whether concentrated in the hands of a few people or there is sharing of power and decision making at all levels. Organisational culture can be understood as a “the shared set of assumptions, beliefs, values and behavioural patterns of a group, that guide that group’s perceptions, judgments, and actions” (Levin 2000, p.83). Its significance is related to its ability to influence the activities of members and the functioning of the organization without particular control measures (Awal, Rongione, Klinger et al 2006). Poole and Van de Ven (2004, p.xi) define organizational change as a “difference in form, quality, or state over time in an organizational entity” which may differ from an individual’s job, a work group, an organisational subunit, or the overall organisation. Change may be planned, unplanned, incremental, radical, recurrent, or unprecedented. Thesis Statement: The purpose of this paper is to critically discuss the extent to which an organisation’s structure shapes its culture, and impacts its ability to transform itself. Different Management Styles: Effects on Organisational Performance Over recent years, the role of present-day managers has become increasingly empowered, with a more networking, consensus-seeking approach (Reigle 2001). Different management styles have their distinctive effects on organisational performance, and the effectiveness of organisations. Management style pertains to “how the leader approaches opportunities, what he or she chooses to emphasize, to defer and to delegate to others” (Krause 2007, p.19), based on managers’ traits. Research evidence indicates transformational style as the most beneficial for driving safety and for creating a high performance culture. According to Early and Davenport (2010, p.59), “transformational leadership and transactional leadership are very different styles of leadership, but they are not mutually exclusive and can be complementary if employed correctly”. Additionally, an individual can have and develop skills required to be both a transactional and transformational leader. Transformational managers invoke colleagues and followers to view their work from new perspectives; they generate awareness of the mission or vision of the team and organization; managers guide employees to achieve their highest levels of potential; motivate colleagues to work for the larger interest of the group and the organization. This leadership style attempts to engage the employees’ creativity and loyalty, thus achieving a higher level of commitment and effort from employees. Tranformational behaviors include idealized influence, intellectual stimulation, individualized consideration, and inspirational motivation. Idealized influence is the leaders’ sharing of vision and sense of mission with employees, and the proposal of radical, innovative solutions to critical problems (Early & Davenport 2010). Transactional leadership occurs when a leader “rewards or disciplines a follower depending on the adequacy of the follower’s performance” (Early & Davenport 2010, p.59). Transactional leadership is closely associated with traditional models and strategies employed in leadership theory. In this form, meeting the end goals is more important than the development, loyalty, and consideration of followers. Transactional and transformational leadership are not mutually exclusive constructs, and under specific circumstances a leader may be more transactional or more transformational; or the leader may combine both styles in order to achieve a desired outcome. Charismatic leadership is the ability to fuel group-focused motives and action among subordinates (Chemers 1997). A charismatic leader usually has high levels of self-confidence, control and dominance over others, a strong conviction in the ethical righteousness of his or her beliefs, and a great need to influence others. Thus, the theory of charismatic leadership is typified by a certainty in self, and a willingness to impose that certainty on others. Among the leadership behaviors of charimatic individuals are role modeling with a public commitment to key values and beliefs, image building on the basis of one’s beliefs and principles, and goal articulation in relation to the call to a higher duty. The difference between tranformative and transactional leadership is that the goal is spiritual rather than pragmatic. Servant leadership is when a person who feels compelled to serve, naturally assumes leadership roles through his attitude of service. Servant leaders encourage trust, foresight, listening, and the ethical use of power. The other attributes of servant leadership include empathy, healing, awareness, persuasion, conceptualization, stewardship, commitment to people, and building community (Early & Davenport 2010). Safety leadership promotes employees’ well-being in the work place. While management behaviors are directed on actions to be taken, on the other hand leadership behaviors focus on how the leader’s task fits the overall goals of the organization. Vision pertains to that of the effective leader, who perceives safety excellence accurately. He articulates the vision, and conveys it in a compelling manner throughout the organization. Credibility of the effective leader is reinforced through his actions that underscore believability and trust among all employees. Examples include a willingness to admit mistakes, proactive style of working for the interests of the group and giving full information about safety, even when it is not well received (Krause 2007). Impacts of Organisational Structure on Change Management Managers are required to address the various ways of arranging the organisation, and determining the ideal pattern for the particular industry. To structure the organisation for reaching its goals, several important issues have to be taken into consideration. Besides allocation of duties, tasks and responsibilities between employees and various departments, “reporting relationships and the levels in the organisational hierarchy are other structural elements that managers must agree on” (Sims 2002, p.274). Organisational structure serves several purposes. Using a selected structural design, decisions about the departments to establish, the coordination of international operations, and the number of levels required in an organisation’s hierarchy are either deliberately formulated or develop automatically from the implementation of business processes. Organisational structure improves the functioning of the organisation by reducing variations that can arise in a comparatively unstructured environment. Thus, one of the effects of structure is to ensure regularity in the pattern of people’s behaviour. Structure provides consistency in the way the organisation treats people, and eliminates wastage of time spent on territorial or interpersonal issues (Sims 2002). Organizational design helps organizational leadership to contribute to the firm’s competitive advantage. All large-scale organizations have to take into consideration the efficient utilization of their human resources. Top-level executives and managers have developed complex frames of reference, or mental models, by reflective processing of information requiring higher orders of abstraction. The mental models operate like small decision support systems, containing patterned representations of the real dynamic systems within which these top-level leaders function. With greater breadth and richer interconnections between the elements of the model, “the greater the likelihood is that the model can be used to detect patterns in the complex flux of events in the strategic world” (Zaccaro & Klimoski, 2001, p.75). Thus, organizational design plays an important part in determining leadership activities, and promotes organizational performance. Theory E and Theory O represent the two completely opposite approaches to organizational change being implemented in the world today. Theory E aims to create economic value often expressed as shareholder value, with a focus on formal structure and systems of an organization. Change is planned and programmed, and is driven from the top, assisted by consultants and financial incentives. Theory O seeks to develop the organization’s human capability to implement strategy and to learn from actions taken about the effectiveness of changes made. It focuses on developing a high commitment culture. Change is spontaneous, less planned or programmatic. This change theory includes high involvement, and low reliance on consultants and incentives (Beer & Nohria 2000). Effects of Cultural Variations in Change Management on Organisational Performance Organizational change is frequently brought about with the transformation of the company’s culture. Culture measures are useful for corporate management in change situations. These range from evaluating gaps between existing and required situations, to helping top management create strategic and structural changes for the organization. Awal et al (2006) state that organizations using culture as a construct for driving change, benefit from addressing two issues: the extent to which culture as an index of the norms, values and beliefs of organizational members has the power to guide change, foster adaptation, and yield competitive success, and the extent to which ethical issues involved in endeavors intended to change the organization’s culture. There are five types of corporate culture. In the organizational culture of Type 1, innovation oriented is a vitalized one. Such a culture occurs in an organisation when being innovative and analytical combine with a small social distance vertically in the hierarchy. In Type 2, innovation oriented and following the leader consists of a culture of doing what one is told to do combined with a vitalized dimension. This type includes organisations which pursue ways of being innovative and intuitive and have a large social distance between members, vertically in the hierarchy. The vitalized culture of Type 1 and the vitalized culture with a strong leader of Type 2 have a thick culture with shared values (Kono & Clegg 1998). The organizational culture of Type 3 is procedure-oriented and is a bureaucratic culture. This combination is found in an organization that is conservative and analytical. The bureaucratic culture has sub-optimized values, decision-making is not aggressive and prefers to play safe, but cohesiveness is high. It is not a thick culture, though the pattern is uniform and the standard deviation is small. Here, the role of the manager is to change the organisational culture to a more innovative one, by accelerating the effectiveness of management and leadership activities (Maister 2001). Types 4 and 5 which are the stagnant cultures are thin, have low values in three dimensions and large standard deviations. In such relatively thin subcultures as found in creative organizations, members may not share the common values of the organization, cohesiveness is not high, but decision making is aggressive (Kono & Clegg 1998). Sometimes transformation in organizational culture does not take root and produce the intended results (Schneider, Arthur & Guzzo 1996, p.1). Further attempts also may be unsuccessful. One key reason is that the changes introduced are unsuccessful in altering the basic psychology of the organization to its members. It is this intangible psychological “feel” of the organization that directs and motivates employee efforts. For sustained change to take place, the psychology of the members in the organization has to change. This is because organizations are directly represented by the people in them; “if the people do not change, there is no organizational change” (Schneider et al 1996, p.1). Structural changes carried out in the hierarchy, technology, communication networks, etc. effective only when they are associated with employees’ motivation to actively participate in the change process. Type 1 organisational culture promoting innovation and independent working has been found to be effective in this regard. Conclusion This paper has investigated whether organisational structure impacts corporate culture which in turn influences organisational transformation. The different management styles and their effect on employees’ performance and organisational effectiveness have been critically compared. The elements of organisational structure and the associated consequences when managing change have been examined. The cultural differences in management approaches to organisational change and their impact on organisational effectiveness have been discussed. The evidence indicates that sustainable organizational transformation cannot be effectively implemented by structural or systemic changes to the organization. On the other hand, it is brought about by powerful management practices which change the way employees are drawn into the process and are stimulated to work towards the new cultural goals of the organization. Thus, effective transformation occurs when completely new organisational climates and cultures are created and maintained by the company. Therefore it is concluded that the transformational management style when implemented to achieve type 1 organisational culture promoting employees’ innovation and analysis, optimises organisational performance and effectiveness. 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