W4: Organisational Structures and Organisational Culture

organisational structure

framework in which the organisation defines how tasks are divided, the work of employees and departments coordinated, and authority distributed

organisational affects organisations’ ability to reach their goals

All organisations are perfectly designed to get the results they are now getting. If we want different results, we must change the way we do things

dimensions managers should consider when choosing organisational structures

division of labour, coordination, centralisation

formal organisational design

division of labour (differentiation), coordination mechanisms (integration), distribution of decision rights ((de) centralisation)

division of labour: past: Adam Smith’s Pin Factory

reliance on division of labour

division of labour: scientific thought disadvantages

increases loneliness, reduces autonomy of worker, dehumanisation of work

division of labour: today: “Silo effect” critique

too much specialisation can create silo effects (tunnel vision - losing focus of organisation’s goals + tribalism within departments AND misaligned efforts - misses cross-fertilisation opportunities)

forces for (de)centralisation

degree to which decision-making authority is concentrated at higher levels of organisation

centralisation

organisational crisis, management desire for control, increase consistency

decentralisation

complexity - size, diversity, desire for empowerment, increase flexibility, innovating from within

formalisation

standardisation of workflows (SOPs), specification of design criteria, written documentation of decisions + activities, often in places with high levels of hierarchy (e.g public sector)

formalisation: drawbacks

firms relying on innovation need to be careful of formalisation as it will stifle creativity

organisational structures: military hierarchy

clear chain of command, orders formulated at top and passed down, reports passed up (reporting line), no provisions for coordination or communication between units

military hierarchy: advantages

clear where accountability lies, clear chain of command

organisational structures: flat organisational structure

large span of management, large number of people reporting to CEO, works when job performed is flat and routine, whatever is produced is tangible, well organised and well understood

flat organisational structure: advantages + disadvantages

quick decision-making, clear view of organisational goals, wide spans of control and centralised authority, few organisational barriers (ensure flexibility), inexpensive

flat organisational structure: disadvantages

not feasible for large complex organisations, depends critically on top management team

organisational structures: functional structure

departmentalisations (people with similar skills and expertise)

functional structure: advantages

clear chain of command, efficiencies with people having common skillsets in each department, coordination within function, in-depth specialisation

functional structure: disadvantages

silos (risk limited collaboration + info sharing across departments), limited view of org goals

organisational structures: multi-divisional structure

groups based on organisational output rather than function (e.g apple - computers, iPads, watches etc.) - functions within each division

multi-divisional structure: advantage

focuses on specialisation within particular products not functions, greater collaboration across functions, facilitates cross-functional collaboration

multi-divisional structure: disadvantages

miscommunication (chain of command not well defined), support functions replicated in each division, create unwanted rivalries between divisions, limits knowledge sharing in functional areas

organisational structures: matrix (multi-dimensional) structure

organisational outputs, combining lines of authority for function with lines of authority for products

matrix (multi-dimensional) structure: advantages

fluid design that can respond to environmental changes, high information carrying capacity, high degree of coordination, potentially faster decision-making

matrix (multi-dimensional) structure: disadvantages

expensive and complex, dual authority can lead to task and personality conflicts to slow down decision making

organisational structures: contingency factors

strategy, size, technology, environmental uncertainty

low environmental uncertainty

mechanistic structure - rigid and tightly controlled: high specialisation, rigid departmentalisation, clear command chains, narrow control spans, high formalisation, limited info network, high centralisation

high environmental uncertainty

organic structure - highly flexible and adaptable: low specialisation, fluid team-based structure, wide control spans, low formalisation, open comms network, empowered employees

organisational culture

ways of thinking and doing things that is shared by a degree by all members of the organisation which new members must learn and accept in order to b accepted into service

strong culture

provide critical control, motivational and coordination benefits but can also lead to rigidity and be unhealthy

culture: intensity

degree of approval/disapproval attached to cultural values and norms

culture: cyrstallisation

degree of consensus and consistency with which cultural values and norms are shared

culture: visible levels

can be seen at surface level - artefacts (dress, office layout, symbols, slogans, ceremonies)

culture: invisible levels

deeper values and shared understandings held by organisation members - expressed values, underlying assumptions and deep beliefs

organisational culture: attention to detail

degree to which employees are expected to exhibit precision, analysis and attention to detail

organisational culture: outcome orientation

degree to which managers focus on results or outcomes rather than on how they are achieved

organisational culture: people orientation

degree to which management decisions take into account the effects on people in the organisation

organisational culture: team orientation

degree to which work is organised around teams rather than individuals

organisational culture: aggressiveness

degree to which employees are aggressive and competitive rather than cooperative

organisational culture: stability

degree to which organisational decisions and actions emphasise maintaining the status quo

organisational culture: innovation and risk taking

degree to which employees are encouraged to be innovative and to take risk

visible carriers of culture: language + metaphors

used to communicate assumptions, values, ideology

visible carriers of culture: props

used to reinforce values and ideology

visible carriers of culture: stories

used to draw attention to norm and heroes/role models

visible carriers of culture: ceremonies/rituals

build in-group cohesion and morale and reinforce values and norms

visible carriers of culture: dress/uniform

establish positive organisational identity

adaptability culture

values creativity and innovation, encourages individual initiative and autonomy in decision-making, adaptive response to environments that require fast responses

achievement culture

results-oriented, values competitiveness, personal initiative, achievement, cost-cutting, rewards for high performers, suitable for stable environments

involvement culture

high value on getting needs of employees, values cooperation, consideration and equality, characterised by family-like atmosphere

consistency culture

values and rewards standardisation, control and well-defined structure for authority and decision making uses internal focus and consistency orientation, not always suitable for today’s fast changing environment

reinforcing an adaptive organisational culture

consistent info/behaviour, employee selection/socialisation, comprehensive rewards for norm-consistent behaviour, participation

reshaping organisational culture for adaptive response

unsettle existing culture + resettle new culture

unsettle existing culture

create a crisis, highlight non-distinctiveness of culture, inject + support diversity, encourage participation of and give power to minority options

resettle existing culture

over-communication, introduce novel artefacts (new stories, symbols etc.), change reward system