Organizational Structure, Culture, and Development

Organizational Structure, Culture, and Development

Organizational Structure

• Definition: An organization is a collection of people with formal human relationships, involved in pursuing defined objectives.
• Examples of People Involved:
  • Administrative staffs
  • Academic staffs
  • Students
  • Safety staffs
  • Medical staffs
  • Food and services staffs
• Vision & Mission: Strive to excel in:
  • Learning and teaching
  • Research and publication
  • Social Services
  • Personal growth of its students
  • Greater innovation

Organizational Structure (Detailed Definition)

• Definition: The arrangement of positions in an organization and the authority and responsibility relationships among them.

UMS (University Malaysia Sabah) Structure

• Hierarchy:
  • Vice Chancellor
    • Board of Directors
    • Legal Advisor
    • Bursar
    • Head of Librarian
    • Deputy Vice Chancellor (Academic & International)
    • Deputy Vice Chancellor (Research & Innovation)
    • Deputy Vice Chancellor (Students Affair & Alumni)
    • Registrar
    • 10 Faculties
      • 10 Deans
        • 10 Deputy Deans (A & I)
        • 10 Deputy Deans (R & I)
        • 10 Deputy Deans (A&A)
        • 20 Assistant Registrars
        • Administrative staffs
        • Contract Lecturers
        • Full-time Lecturers
        • Head of Programs
        • Facilitators/Trainers
• Chain of Command: The number of authority levels in an organization.
• Span of Control: The number of workers who must report to a single supervisor.
• Appointment Basis: Appointments to positions in UMS are based on the Constitution under Universities and University Colleges Act 1971.

Dimensions of Organizational Structure

Traditional vs. Nontraditional Organizations

• Traditional Organizations:
  • Formally defined roles
  • Very rule-driven
  • Stable and resistant to change
  • “Mechanistic” or “bureaucratic” structure
• Nontraditional Organizations:
  • Less formalized work roles and procedures
  • Flexible and adaptable
  • “Organic” structure: fewer workers, small organization (unit)

Functional vs. Divisional Organizations

• Functional Organizations:
  • Divides into departments based on the functions or tasks performed.
• Divisional Organizations:
  • Divides the organization according to types of products or customers.

Centralized vs. Decentralized Organizations

• Centralized:
  • The degree to which decision-making power rests at the upper levels of the organizational hierarchy.
• Decentralized:
  • The process of taking the decision-making power out of the hands of the top level and distributing some of it to lower levels.

Functional vs. Divisional Design: Advantages and Disadvantages

Functional Design

• Advantage:
  • It creates job specialists.
• Disadvantage:
  • Workers may become overly focused on their own department and area of specialization.
  • Decreased productivity, especially when work must move from one large department to another to be completed.

Divisional Design

• Advantage:
  • The company can easily expand products or services merely by adding a new division.
  • Greater accountability as each division operates as a separate entity, with its own production goals and profit.
• Disadvantage:
  • Duplication of areas of expertise.

UMS Structure: Functional vs. Divisional

Functional Design in UMS

• Pihak Berkuasa Pengurusan Universiti (PBPU) is divided into departments based on the functions or tasks.
• Structure:
  • Vice Chancellor
  • Board of Directors
  • Legal Advisor
  • Bursar
  • Head of Librarian
  • Deputy Vice Chancellor (Students Affair & Alumni)
  • Deputy Vice Chancellor (Research & Innovation)
  • Registrar
  • Deputy Vice Chancellor (Academic & International)

Divisional Design in UMS

• UMS has 10 Faculties that serve a specific type of customer. All of these faculties have duplication of areas of expertise.
• Examples of Faculties: FPEP, FKI, FSMP, FPP, FPL, FKJ, FSSK, FPSK, FSSA, FKAL.
• Each Faculty has:
  • Dean
  • Assistant Registrars
  • Deputy Deans (A & I)
  • Deputy Deans (R & I)
  • Deputy Deans (A&A)
  • Contract Lecturers
  • Full-time Lecturers
  • Head of Programs
  • Facilitators/Trainers
  • Administrative staffs

Traditional vs. Nontraditional: The Bureaucracy

Traditional: The Bureaucracy

• A traditional structure characterized by a well-defined authority hierarchy and strict rules governing work behavior.
• Represented as a pyramid with few members with the highest status at the top and many bottom-level workers.
• Developed by German sociologist Max Weber, who formulated the theory based on formality and authority.

Characteristics of a Bureaucratic Organization (Max Weber)

1. Specialization of labor: The complex goals of the organization are broken down into separate jobs, creating specialized experts.
2. A well-defined authority hierarchy: Characterized by a pyramid-type arrangement where a lower position is controlled and supervised by the next higher level.
3. Formal rules and procedures: Strict rules and regulations to ensure uniformity and regulate work behavior.
4. Impersonality: Behavior is based on logical rather than emotional thinking.
5. Employment decisions based on merit: Hiring and promotion decisions are based on who is best qualified for the job rather than on personal preferences.
6. Emphasis on written records: Bureaucracies keep meticulous records of past decisions and actions to ensure uniformity of action and fair treatment.

Traditional: Line-Staff Organizational Structure

• Made up of two groups of employees, each with different goals.
  • Line: Workers who are engaged directly in tasks that accomplish organizational goals.
  • Staff: Specialized worker positions designed to support the line.

Nontraditional: The Team Organization

• A nontraditional structure consisting of a team of members organized around a particular project or product.
• Key features:
  • Members have clear goals to accomplish and possess a variety of work-related skills.
  • Collaboration and sharing of skills and resources instead of independent work.
  • Less emphasis on organizational status.
  • The leader does not have ultimate authority.
  • Decision-making is based on consensus of the team members.

Organizational Culture

• Definition: The shared values, beliefs, assumptions, and patterns of behavior within an organization.
• Organizational culture can be described as an organization’s personality.
• Differences in organizational culture cause two companies, which may be similar in size, goods produced and regional location, to feel completely different to workers and visitors.

Sources of Organizational Culture

• Shared norms, values, and goals contribute greatly.
• The technology used, the markets served, and the organization’s competition can influence organizational culture.
• Societal culture and the makeup of its workers can also influence organizational culture.
• Organizational culture can be shaped by the personalities of the companies’ founders and their most dominant early leaders.

Benefits of Organizational Culture

Enhanced Positive Work Behavior

• A positive culture aligns with employees' values, making them feel appreciated, increasing job satisfaction, and reducing turnover.
• Motivated and loyal employees result from feeling cared for.

Boosted Morale and Motivation

• Employees are more motivated to contribute their best in a positive culture.
• Recognition and rewards aligned with company culture make employees feel acknowledged for their hard work, driving overall morale.

Clear Expectations and Structure

• A strong culture sets clear norms and expectations, providing a framework for behavior and decision-making.
• Clarity helps employees understand their roles, reduces uncertainty, and allows them to focus more on their tasks and goals.

Better Alignment with Company Goals

• When employees understand and believe in the organization’s mission and values, they’re more likely to feel a sense of purpose and align their personal goals with those of the organization.
• This alignment enhances overall performance and unity.

Opportunities for Growth

• Cultures that prioritize development offer employees training, mentorship, and advancement opportunities.
• Focus on continuous learning enhances employees' skills and makes them feel valued and invested in.

Schein’s 3 Levels of Organizational Culture

1. Artefacts: Overt, visible, and describable aspects of the organization (e.g., branding, logos, office design, dress code, policies, tools).
2. Espoused values: How people would describe the organization in current or aspirational terms (e.g., missions, goals, value statements, social contracts).
3. Underlying assumptions: Unconscious, unspoken, and hard-to-articulate elements of the organization.

Example: Banks in Malaysia

• What makes each bank stand out, compete with one another, and successfully become a leading organization in financial services?
  • Organizational Culture

Organizational Culture: Maybank Example

• Maybank is among the top 5 banks in Southeast Asia with total assets of USD203 billion.
• It has an international network of over 2,400 branches and offices in 20 countries and employs 45,000 employees.
• Key factors for success:
  • Shared values and goals.
  • Mission to humanize financial services by providing people with convenient access to financing and being at the heart of the community.
  • First bank in Malaysia to introduce internet banking system in 2000.
  • First bank introducing pay service using direct debit card in Malaysia.
  • Core T.I.G.E.R Values: Teamwork, Integrity, Growth, Excellent and Efficiency, Relationship Building.

Maybank's Organizational Culture - Historical Highlights

• 1976: First to introduce mobile bus banking services; the first mobile bank unit was set up in Johor and the only bank in 18 rural locations.
• 1978: Pioneer in computerization of banking operations in Malaysia, which enabled customers to do banking transactions in almost real-time.
• 1981-1986: First Malaysian bank to set up ATMs in Malaysia.
• 2010: First to launch disabled-friendly banking branches for wheelchair-bound users.

Role of Organizational Culture

• Organizational culture serves as a force that guides behavior within the organization.
• Understanding and assessing an organization’s culture makes it easier to predict organizational behavior under different circumstances.
• Examples:
  • Organizations with strong cultural values that involved flexibility, openness, and responsiveness were more likely to grow, expand, and innovate.
  • Organizations whose culture valued consistency and adherence to the company’s mission were more productive and profitable.

Measuring Organizational Culture

1. Qualitative Strategy:
   • Focusing on the “artifacts” of the organization’s culture:
     • Symbols that carry meaning for organizational members.
     • Shared stories about company’s founders or heroes.
     • Rituals such as monthly service days, community service projects.
2. Using Survey Instruments:
   • Organizational Culture Profile (OCP) developed by O’Reilly, Chatman, and Caldwell (1991).
   • Organizational Practices Scale developed by Hofstede, Neuijen, Ohayv, and Sanders (1990).

Organizational Development

• Definition: A process of assisting organizations to develop, adapt, innovate, and manage change.
• Organizations often cease operating because they are unable to change and keep up with the times.
• Companies that do not use the latest marketing or production techniques can lose out to competitors.
• Example of Organizational Development Failure:

The Rise and Fall of Nokia

• 1998: Nokia overtook Motorola to become the world’s largest mobile phone brand.
• 2007: Nokia had 51% of global market share in mobile phones.
• 2013: Nokia’s phone business culminated in a sale to Microsoft for 7.2 billion.
• Mistakes Made by Nokia:
  1. Only focusing on the hardware without good software.
     • By 2009, Nokia was using 57 different and incompatible versions of its operating system.
  2. Reluctant to change operating system.
     • Competitors shifted to Android in 2008, yet Nokia reluctant to switch until 2014, but it was too late.
  3. Missing the smartphone waves.
     • Nokia missed out on the first-mover advantage for smartphones.

The Rise and Fall of Kodak

• 1888: Kodak was founded.
• Kodak quickly became the dominant player in the photography industry due to the introduction of the first flexible roll film.
• 1962: Kodak sales surpassed 1 billion USD.
• Kodak's market share in the photography industry reached over 90%.
• Mistakes Made by Kodak:
  1. Hesitancy to fully embrace digital technology.
     • Kodak was an early investor in digital photography but focused on using it to enhance traditional-based products rather than extending into digital-based products.
  2. Organizational structure and culture contributed to failure.
     • A traditional hierarchical structure with a highly centralized decision-making process.
     • A culture of risk aversion and reluctance to invest in new technologies.
  3. Missing the digital photography waves.
     • Kodak failed to capitalize on opportunities to innovate and establish itself as a leader in the digital photography market.
     • Kodak had early success in the inkjet printing market but was slow to fully invest in the technology, allowing competitors to gain market share.

Organizational Development Process

• Organizational development often involves altering the organization’s work structure or influencing workers’ attitudes or behaviors to help the organization adapt to fluctuating external and internal conditions.
• Phases:
  1. A diagnosis of the organization to identify significant problems.
  2. Appropriate interventions are chosen to try to deal with the problems.
  3. Implementation of the interventions or techniques.
  4. The results of the interventions are evaluated.

Organizational Development Techniques

• Survey feedback: A process by which the consultant works with the organization to develop and administer a survey instrument to collect data, then fed back to organizational members and uses as the starting point for change.
• T-groups (Training group): A technique that uses unstructured group interaction to assist workers in achieving insight into their own motivations and behavior patterns in dealing with other organizational members.
• Teambuilding: A technique in which teams of workers discuss how to improve team performance by analyzing group interaction.
• Management by objectives (MBO): A goal-setting OD technique in which supervisors and subordinates jointly set performance goals, and their achievement is evaluated.

Management by Objectives (MBO) - Detailed

• Basic rationales behind MBO:
  • Work-related goals must be clearly specified and measurable.
  • Employees should participate in setting the goals to become committed to their fulfillment.
• Criteria for correct implementation of MBO:
  • Employees must participate in setting personal performance goals.
  • Feedback concerning goal attainment must be provided.
  • Guidelines for improvement must be provided.
  • Goals must be realistic.
  • The upper levels of the organization must support the program.
  • Individual, work group, and organizational goals must be equally emphasized.