Organisation Structure, Employee Motivation And Effectivness - Dissertation Example

?ORGANISATIONAL STRUCTURE, EMPLOYEE MOTIVATION AND EFFECTIVENESS A case study of Virgin Group Table of Contents Introduction 3 Problem statement 3 Aims and objectives 4 Literature Review 4 Historical overview 5 Organisational Structure 6 Overview of Theories 7 Herzberg’s Two Factor theories 7 Maslow’s hierarchy of needs 9 Alderfer’s ERG model 10 McClelland’s Achievement Motivation Theory 11 Reference 13 Introduction The structure of an organization, employee motivation and effectiveness on how matters are run are the most crucial aspects in the survival, profitability of an organisation. This paper seeks to analyse the interrelationship of the three aspects by looking at key motivational theories. It will first review literature based theories such as Maslow’s Hierarchy of Needs, Herzberg’s Two Factor theory, Alderfer’s Three Part Hierarchy of Needs and McClelland’s Achievement Motivation theory. As earlier stated the paper seeks to analyse organisational structures and their impact on employee motivation and organisational effectiveness. It will base its arguments on success and diversity of business sectors. Problem statement In the last few decades, many organisations have had problems that are related to employee incentive causing a rise in industrial mass actions and increased demands by workers on their employers. This has caused organisations great loss and drops in profitability due to ineffective workers and delayed processes. It is for this reason that the researcher seeks to get an in-depth analyses on what can be done to improve worker motivation hence effectiveness to improve production and profitability in the business sector. This is vital for continued survival of business organisations and the world economy in general because a surviving company will always guarantee employment among the world populace whereas a falling company will mean increased layoffs of employees. Aims and objectives The aim of this research is to analyse and examine the impact of organisational structure on employee motivation and organisation effectiveness. To achieve this aim, the researcher focuses on defining types of organizational structures which impact on employee motivation and organisational effectiveness. It will then discuss the applicability of various motivational theories towards the improvement of employee motivation and effectiveness in the day to day running of organisations. Literature Review This paper seeks to give an analysis of the interrelationship among organisational structure on employee motivation and organisational effectiveness. The question that the research paper seeks to answer is whether organisational structure has a significant impact on employee motivation and organisational effectiveness. In an attempt to answer this question, an integrative review of literature will be conducted. Aswathappa, (2005) asserts that many researchers have concentrated in research work on areas of improving productivity based on separate aspects such as organisational structure, motivation of workers and organisational effectiveness disregarding the fact that the interrelationship between the three plays an integral part in production. It is for this reason that the study in question studies the relationship between the three aspects. To begin with, the researcher will give general overviews of the four theories. The researcher will then describe the research methodology and give an overview of the reviewed literature. Historical overview Virgin Group is a collection of companies constituting one of the largest organizations in the globe. Since its establishment, Virgin Group has posed diversity in its business operations in the entire industry. The smart structure of the Virgin Group owes its origin to the core founder, Richard Branson, who created a decentralized organizational structure that allows its employees to act based on their own reasoning. This helps reduce bureaucracy where workers are subjected to adherence to bureaucratic procedures. In addition to this, Branson developed a tradition that helps secure employee value while upholding personal responsibility on duty. For this reason, the organisation continues to be a model of success in the world. It is paramount, to understand the historical and developmental overview of the company. The study of its historical milestones will inform the reader about its structure, culture, processes and functions of its systems. The study will also inform on the interrelationship between structure, worker motivation and effectiveness. In the analysis the paper uses the aforementioned theories and other academic concepts to help better understanding of this vital matter. Finally, the paper will conclude by emphasizing the contribution of the existing organisational structures on employee motivation and effectiveness. Virgin Group is today’s one of the largest and most successful business organizations. The organisational specializes in a number of industries which includes among others; mobile, trade, music, financial, and voyage industries. The company is well established in Great Britain where it was founded. It has dominated her market since 1970 when it started as a mail order retailer company. Today, the company has expanded to various regions of the world including Africa, North America, Australia and Asia. Presently, Virgin Group is made up of over 400 business companies with a total employee number of close to 60000 people operating in over 35 countries. It is one of the leading companies in global tax collection with a collection of over 20 billion US dollars. Organisational Structure Virgin group has not reached a level of multinational organisation. Its organisational structure one of the best as it decentralizes power to make decisions concerning the company. The 400 companies under the umbrella of Virgin Group run independently though its chief executive act as a share holder and chairman to the company. These companies own resources, employ workers who help in the day to day running of the business in addition to offering goods and services based on their area of operation. Virgin group has a keiretsu type of organisational structure where regardless of their independent functions companies come together with the purpose of furthering the entire company’s aims and objectives. Environmental changes can sometimes have adverse effect in large organisations as a result large organizations that have complex structures such as Virgin Group need to adapt swiftly to these changes. In this case such an organisation requires an organic structure that will allow flexibility in an ever dynamic environment. If each of these companies were to operate independently then, each providing a unique good or service, Virgin Group would been said to have product departmentalization where each division operates based on the product or service it offers. However, Virgin Group structure offers a unique scenario because a company affiliated to it does not have to necessarily specialize in one department. In fact, the type services offered by these companies vary depending on the country of operation. This is an indication of geographic departmentalization where an organisation supplies goods or services within a geographical location. Furthermore, the type of products and services supplied vary with customers. This presents a case of customer departmentalization where customers an organisation is divided based on the nature of customers. Since Virgin has various departmentalization structures, the whole system or structure can generally be termed as hybrid. In fact, Virgin’s adoption of structure helps the organisation easily adapt to cultural, technological market forces within the region. Labour division and hierarchy of command are vital aspects in employee motivation and effective running of an organisation. It is important to choose the right number of levels of commands. Companies within the Virgin Group operate as independent companies. These companies help one another although they run on their own. Therefore, common problems are tackled as a family entity under the umbrella of Virgin Group. All companies under Virgin Group have three things in common which are; wealth, information, interests, principles and goals. As mentioned earlier, Branson empowered the workers to make unsupervised decisions without necessarily following the chain of command. This has helped build confidence among them and the executive. Further, this has promoted effective communication hence effective management. In fact, the companies operate on a flat hierarchy of command allowing effective and quick decision making processes. The flat structure gives the company an opportunity to explore into new ventures. It gives an opportunity for a larger span of control and decentralization of powers. Virgin’s flat structure gives much power to subordinates on matters related to making decisions. This may be seen as an orthodox style of management but it has really worked for this group. Overview of Theories Herzberg’s Two Factor theories “The theory talks of job satisfaction among company employees” (Aswathappa, 2005). The theory was developed at the time when there was an urgent need to promote people’s attitude on their jobs. “The era was occasioned by frequent strikes, go slows among other grievances” (Aswathappa, 2005). In view of the rising concerns, Herzberg teamed up with other researchers and came up with a comprehensive literature review that was later published between 1901 and 1955. The review was however highly condemned due to varied designs and used methodologies. “In view of this, Herzberg assumed that there was sufficient correlation between job attitudes and productivity” (Aswathappa, 2005). He therefore saw that there was a need to inquire into the issue of people’s attitude due to the rising job dissatisfaction indicators such as strikes. Herzberg et al. developed hypothesis that job motivation or dissatisfaction measures cannot be obtained on the same scale. He conducted several empirical studies to test the hypothesis. Herzberg discovered that Maslow’s theory of individual development and self-actualization was useful in getting an in-depth understanding of the low and high job sequences. In its conclusion, Herzberg’s two factor theory categorises job motivation factors into two; Hygiene factors such as nature of supervision, physical working environment, company policies. Motivation factors such as achievement, responsibility and advancement. “Hygiene needs can be used to prevent job displeasure and meagre performance” (Aswathappa, 2005). Job satisfaction can be achieved through motivational factors that seek to enhance productivity by companies (Herzberg et al., 1959). Matching work capacity according to Herzberg’s findings is important in enhancing productivity. The purpose of this theory is to provide a solution to the management through provision of hygiene factors so as to give employees the spirit of motivation. The theory seeks to promote motivating factors through employee empowerment and offering challenging tasks. Like other theories, Herzberg theory has strengths and weaknesses. First, it helps managers to identify factors responsible for motivation and de-motivation of employees. “One major limitation of this theory is that the model generalizes the needs of all employees which may not apply to every individual or employee in a group of employees since individuals have unique character traits” (Aswathappa, 2005). The other disadvantage is that the theory was based on research whose respondents were engineers and accountants. Maslow’s hierarchy of needs The theory is presented as a pyramid of needs that persons desire to satisfy. The needs are categorised as deficiency and growth. “The basic needs must be satisfied first before the growth needs” (Aswathappa, 2005). In regards to the work place situation, Maslow’s hierarchy of needs assert that the executive have the responsibility of ensuring that efficiency needs of workers are achieved through provision of a safe working environment and better remuneration packages. it scores the need for proper climate that is able to support and develop worker’s potentiality to professional development failure to do so would lead to increased worker frustration hence poor performance and increased walk outs or if not burn outs in the organisation. “The theory has far reaching implications in management of organisations” (Aswathappa, 2005). For instance, managers need to give workers sufficient salaries to cater for their basic needs of life. Enough breaks during working hours should equally be offered to all employees. In addition to this, employers should always provide adequate job security for its worker as this promotes effective running of organisation. Further, the executive must at all times encourage team work through social events in order to promote good working relationship among its employees. “To promote self esteem, managers need to provide worker incentives to those workers who perform exceptionally well” (Aswathappa, 2005). This can be done through promotions to higher managerial positions. Maslow regards self actualization realization as a prerequisite in making employees motivated. To realise this, the management should give employees challenging tasks to accomplish. Through this, employee competencies and skills are developed to a full potential. Moreover, giving workers an opportunity to grow their professional skills can really work miracles in employee motivation. “According to this theory, managers are expected to identify the need level of every employee in the organisation” (Aswathappa, 2005). Having identified the specific need level of an organisation, the management can strive towards satisfaction of the needs. “Maslow’s hierarchy of needs theory has a number of limitations to its applicability” (Aswathappa, 2005). First, not all employees have similar desires at the same time. Therefore, some employee needs may remain unsatisfied yet the needs are fundamental towards motivation of workers. Secondly, Maslow’s theory has never received empirical acknowledgement. Lastly, the theory isn’t applicable in some instances where basic needs are not satisfied because if needs are satisfied or not, the workers would always strive towards satisfaction of the need. Virgin Group of companies takes into consideration individual employee needs bearing in mind that each employee needs are unique. Alderfer’s ERG model It borrows the ideas of Abraham Maslow’s hierarchy of needs. It condenses Maslow’s hierarchy of needs five levels into three levels; existence, relatedness and growth. In the work place Alderfer’s model shows that the executive should bear in mind employee multiple requirements. Therefore there is a need to focus on several needs of employees at a time but not exclusively on one need. “In fact, the frustration-regression factors impact on workers’ motivation” (Aswathappa, 2005). The impact can be seen when growth opportunities are not provided where workers often regress to relatedness needs socializing more with other workers. When this happens, managers need to satisfy the needs causing frustration early in time to a level where employees make a growth come back. Virgin Group upholds principles that are supported by this principle. However, ERG theory has some disadvantages. To start with, the executive must understand various needs by employees in order to work towards satisfying them. The theory does not support the idea of satisfying one need of an individual when the worker has several needs as this will not work effectively in motivating the subject. “It is paramount to note that all employees need to be given a chance to build on his or her career to avert situations where employees resort to other means of satisfaction such as socialization with co-workers which limits organisation effectiveness and employee motivation” (Aswathappa, 2005). Managers should always be aware of de-motivation signs and act quickly to avoid aggravating situations. McClelland’s Achievement Motivation Theory The theory asserts that individual’s need is subject to acquisition over time according to life experiences. The theory has three types of motivational needs; achievement motivation, affiliation motivation and power motivation. “The theory proposes the use of different motivation modes” (Aswathappa, 2005). It states that employees who are known to be high achievers should be given more challenging roles in the organization. However, the tasks assigned to them should have realistic goals. Such workers should be provided with frequent and adequate feedback to help them know their performance. Secondly, employees who are known for far reaching affiliations need placement in a cooperative environment which enables them work to their optimum capability. Thirdly, employees who are known for power seeking should be given an opportunity to practice their skills in leadership. In this regard, McClelland’s achievement theory is related to Herzberg’s hygiene theory. Such people are always interested with the motivators. In comparison with Maslow’s theory, Herzberg theory accepts that slight and variable factors have an impact on a person’s appraisal and discernment of their relationship with work as well as the employer. Employee motivation is a crucial aspect in management of any organisation. This is because it enhances productivity and effective task completion. McClelland’s theory has some advantages which include among others; providing managers with adequate knowledge on how to motivate different employee personalities. Secondly, managers will be able to categorise employees based on the various work type. The third advantage of this theory is that it enables the human resource managers understand the most suitable job for a new employee. One disadvantage of this theory is that managers may compromise on company’s rule in trying to respond to the needs of employees. In this regard, fairness as a bureaucracy principle may be subjected to violation. The executive is required to look at fairness in judgement of different situations since different situations require different interventions. In addition to this, the theory serves minor purposes in the public domain. Virgin Group understands the importance of job security and stability in ensuring motivation of it employees. Reference ASWATHAPPA, K. (2005). Human resource and personnel management: text and cases. New Delhi, Tata McGraw-Hill. Read More