Comparison of Two Organisation - Essay Example

?Running Head: Case Study Analysis Case Study Analysis [Institute’s Case Study Analysis Introduction Biogenta, with its presence in 80 countries and employing over 15000 employees, is the market leader in the crop protection industry. With aspirations of becoming the most trusted company in its industry, under the leadership of its inspirational CEO, Jane Morgan, the organisation appears to be right on that track. Outback Inc., with a history of over the past couple of decades, is an adventure based tour company based on Sydney, Australia. Over the past few years, the tourism industry has been lagging behind in terms of its contribution in Australian economy but Outback Inc. Has got its own set of problems and issues, which are causing high employee turnover, decreasing profitability and bad press in its primary market of Japan This paper will attempt to understand, briefly, the organisational behaviour of both of these organisations by exploring the important entities under the umbrella of organisational behaviour such as organisational culture, organisational structure and design, dynamics of teamwork and approach towards leadership and management. Other than comparing and contrasting these organisations on the above mentioned variables, the paper will also provide some recommendations based on the analysis and discussion. Discussion and Analysis Organisational Design and Structure An important aspect of organisational behaviour is the organisational design and structure. Various studies have shown over and over again that successful organizations carefully create the right structures and designs which in turn enhance worker motivation, communication and productivity. Simply put, organisational structure is the arrangement of jobs within an organisation. Organisational design is a more complex activity which takes place when managers engage in the process of restructuring of organisation or changing the organisational structure. It concerns with six important elements which are work specialisation, departmentalisation, chain of command, span of control, formalisation and centralisation or decentralisation (Northouse, 2009, pp. 230-235). There are many possible options in front of managers while going for different organisational structures but then again, the fact is that there is no “best” organisational structure. The best fit organisational structure depends on many factors such as organisational goals, industry structure, and number of employees, employee maturity, type of product and service, customer expectations, geographical scope and so on. However, in order to understand the organisational structures and designs of Biogenta plc and Outback Inc., two generic forms of organisational structures and designs would be sufficient. There are mechanistic and organic organisational structures. Biogenta represents the latter whereas Outback is just the right example of the former (Cameron and Quinn, 2011, pp. 52-53). Mechanistic organisations have a rigid and tightly controlled structure. Mechanistic structures are characterised with a high degree of specialisation, inflexible departmentalisation, and narrow span of control, a significantly high degree of formalisation, centralisation and strong and unchallengeable chain of command. Mechanistic organisations such as Outback Inc. tend to rely on prudent rules and regulations to control the behaviour of all the members (Cameron and Quinn, 2011, pp. 52-53). As mentioned earlier that mechanistic structures are not “appalling” or “unfit” within themselves. In fact, organisations which are operating within stable, calculated and predictable environment should go for mechanistic organisational structures since it helps them to maximise their control. Many governmental organisations and large corporations, especially until a few decades back, show characteristics of mechanistic structures. When the political, social, legal, environmental, economic, cultural and technological forces along with the industry’s competitive forces are somewhat predictable or known to the organisation, the company does not need to take quick decisions (Rollinson, 2008, pp. 63-67). It does not face any pressures for innovation or change thus any factors which would support the same would end up causing inefficiency. However, the problem here is that the industry and macroenvironment in which Outback Inc. is operating is far stable and controlled. The tourism industry of Australia has received many shocks in the past few years and it continues to decline overall. The exchange rate fluctuations, economic recessions, lack of skilled workers, crises with airlines and many other factors have tormented the performance of the industry (DuBrin, 2004, p. 85). On top of it, Outback has got its own problems, which are prominent from the decreasing profitability of the organisation. The organisation has never wanted change, innovation and quick decision making then it needs it today. However, too many hierarchies, job titles and power distance are alienating the employees from the strategic goals of the organisation, something which Outback cannot afford during these troubled times. Not only this organisation inhibits communication, quick decision making and innovation but it is decreasing employee productivity and increasing turnover (O'Rourke and Yarbrough, 2008, pp. 462-468). Outback Inc. has some very young, energetic and enthusiastic employees who believe that they can play a crucial role in the turnaround of the organisation. An organisational structure that is more close to an organic structure, with decentralisation, low formalisation, and free flow of information and wide spans of control would encourage the employees to come out and put in their best to put the organisation back to growth and profitability (Martin and Fellenz, 2010, pp. 514-516). Biogenta plc is closer to an organic organisational structure. This is true because of the fact that despite having clear departments which take the organisation towards a more functional structure, Biogenta actively uses its cross functional and cross hierarchical teams to foster communication amongst the employees and dilute the impact of job titles. These teams work on different projects to solve problems, come up with new projects ideas, and reduce conflict and others. Job responsibilities change quickly in organic structure according to the needs and environment. In fact, employees are trained in such a way that they could adapt to these diverse job tasks and ever changing responsibilities. Since these employees have the skills and the confidence, there is no need to control and monitor them closely. Many employees report a single manager whose job is to provide support and direction rather than control and micromanage (DuBrin, 2004, p. 85). The fact is Biogenta’s organic structure allows the company to actively face the threats and challenges posed from the macroenvironment. The organisation operates in an industry where new product development and innovation is essential for survival and the same only takes place when employees are empowered enough. Organic organisational structure provides just the right tool and framework for employees to share their ideas with other organisational members. Since employees can react quickly, the organisation becomes more responsive to changes and instability in the marketplace. Leadership and Management Much of the success of any leader depends upon his or her leadership style and whether or not that leadership style is the best fit in the given situation. Situational Leadership Theory, originally developed as “Life Cycle Theory of Leadership” developed by Paul Hersey and Ken Blanchard in the early 1980s, captures a similar notion. The theory starts from the idea that there are two major leadership styles. First is the task style, where the leader defines the role of each member of the group and then lays down the basic principles and dictates in terms of how to perform those tasks (Yanow, 2011, pp. 291-292). Second is the relationship style, where the leader develops close interpersonal relationships with all the members and provides greater psychological and emotional support by more open and two way communication. Furthermore, Hersey and Blanchard also outline three factors which determine the maturity of individuals. These are degree of achievement motivation, the degree of their willingness to take up responsibility and educational exposure of experience in those tasks (Witte, and Muijen, 2002, pp. 167-168). The theory believes that the degree to which sub ordinates or followers are mature should go on to define the mix of the leadership style, thus depending on the situation. The theory outlines four leadership styles in this regard. These are telling style, selling style, participating style and delegating style. First, the telling style is the most suitable dealing with subordinates who are at the lowest level of maturity, where they are neither willing nor able to perform the required tasks, and thus a high task orientated and low relationship based relationship style suits the best. Second, the selling style is suitable when the subordinates are at a moderately low level of maturity which means that they are unable to effectively and efficiently perform the tasks but they are willing to do the same. Therefore, a high task and high relationship based leadership style suits the most (Sheard, et al, 2009, pp. 300-301). Third, the participating style of leadership is the best fit when the subordinates are at a moderately high level of maturity which means that they have the skills and experience to perform the tasks but they are not motivated enough for the same. In this case, a high relationship based and low task based leadership style is most likely to do the trick. Fourth, a delegating style, an ideal style for any leader who wants to sit back and relax is applicable when the subordinates are at a high level of maturity, where they are both capable and willing to perform the tasks. A low task and low relationship would suit the most in these situations (Daft, 2009, pp. 41-42). Now, the current leadership style of Jane Morgan is very much in line with the delegating style where the leader maintains a low task and low relationship style, which its followers and allows them to take the charge for the completion of tasks. Jane Morgan has empowered the managers and employees to use their abilities for coming up with the best possible ideas, decisions and solutions (Cameron and Quinn, 2011, pp. 52-53). In this way, employees feel more motivated to perform the tasks since they have the freedom and liberty to make their own choices and since they now “own” their work, they try harder to succeed and provide results. The managers in the organisation also appear to be using a mix of delegating and participating style based on the degree to which the employees are willing to perform their tasks. The fact is that in case of Biogenta plc, the leadership and management style are very much in line with the situational factors. Their leadership styles complement the maturity level of their sub ordinates thus ensuring high productivity and low turnover in the organisation (O'Rourke and Yarbrough, 2008, pp. 462-468). On the other hand, Outback Inc. presents a classic mismatch approach in terms of the leadership style. Many of the employees at Outback Inc. are young, motivated and willing to perform but they are not getting the platform, tools and opportunity to prove their worth and ability. Outback Inc. is a closely held and family controlled organisation with the members of a certain extended family controlling the happenings from all the major positions. It appears that they employ a strong “telling style” which is only suitable when the subordinates are at a low level of maturity, which clearly is not the case here (Daft, 2009, pp. 41-42). The managers and the CEO, in their attempt to micromanage everything, take a high task leadership approach, dictating their ideas, solutions and decisions and not allowing the subordinates to put forward their own thinking. Quite clearly, the most well suited leadership style for Outback Inc. should be either delegating style or participating style because the followers at mature enough to label themselves as competent for the tasks. The leadership style should vary based on the fact that whether or not they are willing to perform (Martin and Fellenz, 2010, pp. 514-516). Organisational Culture Edgar Schein defines Organisational culture as, “a pattern of basic assumptions, invented discovered or developed by a given group as it learns to cope with its problems that has worked well enough in the past and therefore, to be taught in the future to new members as the desirable way to act, perceive and think in relation to those problems” (O'Rourke and Yarbrough, 2008, pp. 462-468). Studies indicate that there is a high correlation that successful and growing organisation would have productive, desirable and strong organisational cultures. In other words, organisational culture is the overall sum of the experiences, philosophy, processes, approaches, beliefs, value, assumptions, predispositions, attitudes, customs and others, both express or implied and written or unwritten within an organisation (Reddy, 2004, pp. 41-42). In light of the literature available regarding organisational cultures, the culture of Outback can be classified into many different types. First, it represents the classic case of power culture where the power to take all the strategic decisions, tactical and operational decisions rests with the top management. Power culture creates a web where people from a common background hold everyone together with their power (Yanow, 2011, pp. 291-292). They create strong rules to exert their influence and create hierarchies and bureaucracies so that nothing out of the ordinary could happen. Although, these cultures do offer swift decisions, the problem with such an approach is that when employees feel alienated, their motivation and productivity goes down (Northouse, 2009, pp. 230-235). Biogenta’s culture represents a typical model of achievement culture where the focus is on results but those results are achieved with training, teamwork, support, dedication and loyalty. Furthermore, the company also has democratic culture based on mutual respect and understanding. The organisation is ready to listen to the opinions of all employees. Employee engagement and extensive teamwork in these organisations allow quick decision making, innovation and problem solving (Griffin and Moorhead, 2009, pp. 495-498). Teams and Teamworking The literature regarding groups and teams is immense. Many variables act simultaneously to determine the degree to which any group would succeed or not. They include the external conditions imposed on a group, group member resources, group structure, group processes, group decision making, conflict management and others. In order to understand the teams and related variables in the discussed organisations, group structure and its components such as roles, norms and conformity offer a great framework to understand the same (Daft, 2009, pp. 41-42). First, all members within a group have some roles assigned to them. The literature reveals that those roles have to be well defined in order to reach greater level of productivity. The problem with Outback Inc. is rooted in the fact that the organisation has not been able to define the roles for its employees. On the other hand, Biogenta allows its employees take up many roles within a group and in different groups but ensures that employees have the tools and ability to understand the same. This explains why role conflict is much less likely to appear at Biogenta. Second, norms play an important role in understanding groups and group work. In case of Outback, for most part, the organisational norms dictate most of the group norms thus making group less powerful. On the other hand, the cross functional and cross hierarchical groups and teams at Biogenta have greater autonomy and power to set up their own regulations suiting to the needs of the project (Griffin and Moorhead, 2009, pp. 495-498). Third, the degree to which group members try to conform to the group and their decisions also impacts the entire framework. The need for conformity amongst the employees of both the organisation would be high but the approach is different. Employees at Outback are more likely to conform through silence and accepting the decisions of supervisors but employees at Biogenta are more likely to conform through questioning, critiquing, discussing and analysing (Witte, and Muijen, 2002, pp. 167-168). Furthermore, considering the relevant variables it appears that even if Outback Inc. were to engage its employees in teamwork, there would be a fairly high chance that those work groups would end up facing the problems of group think. Although, the problem of group think is more likely to emerge in group with high cohesion which is actually something more evident in Biogenta’s employees, the in-group pressures at Outback are of such nature that group think is almost imperative. Irving Janis, who first presented the concept defined group think as “a deterioration of mental efficiency, reality testing and moral judgement that arises from in group pressures” (Rollinson, 2008, pp. 63-67). Work teams and groups at Outback are most likely to be headed by the managers who belong from a particular family. Therefore, it is highly likely that they would not appreciate if someone questions their opinion or ideas. Furthermore, they would be more than happy to take the silence of the group members as their agreement to certain ideas. Group members, unfamiliar with each other, would avoid any possible confrontation because they know that the same is not appreciated in Outback. Furthermore, they would also refrain from participating in the decisions because would not see any point in putting in their energy for an organisation which does not truly respect their ideas (Cameron and Quinn, 2011, pp. 52-53). On the other hand, it is highly unlikely that Biogenta’s employees working in a group would ever suffer from groupthink. This is true because, over the years, Biogenta has created a democratic environment for its employees, which is characterized by mutual trust, respect, affection and idea sharing. Employees know that their company want them to question, critique, discuss, investigate, challenge, explore, analyse and come up with the best possible solutions (O'Rourke and Yarbrough, 2008, pp. 462-468). They would not reach any consensus by pressurising or using influence but by discussing and exploring. Therefore, the groups at Biogenta are more likely to succeed and add value thus explaining why the organisation prefers its employees to work in group. Conclusions and Recommendations It appears that Biogenta knows how to use the variables and dynamics of organisational behaviour in its own favour and maximise the productivity of the organisation. On the other hand, Outback has been very slow in responding to the signals and alarms and time has come that it should initiate some major changes. Following are a few recommendations in this regard. Outback Inc should move towards a more organic organisational structure by decentralising, widening the span of control, cutting down the hierarchical levels, reducing the impact of departments, creating more and more cross functional and hierarchical teams and decreasing formalisation. Outback should also create mechanisms to gradually and steadily change its organisational culture from a power culture to a more democratic and constructive culture where employees feel more empowered to share their ideas and thoughts. Outback could learn from the experience and strategies of Biogenta in terms of creating cross departmental and cross hierarchical teams since the same would bring employees together and foster communication. All work and no play have been making the employees of Outback dull and lethargic. The company should create mechanisms to produce adventure for its employees as well as it does for its customers. References Cameron, Kim S., and Quinn, Robert E. 2011. Diagnosing and Changing Organizational Culture: Based on the Competing Values Framework. John Wiley and Sons. Daft, Richard L. 2009. Organization Theory and Design. Cengage Learning. DuBrin, Andrew J. 2004. Fundamentals of Organizational Behavior. Thomson/South-Western. Griffin, Ricky W. and Moorhead, Gregory. 2009. Organizational Behavior: Managing People and Organizations. Cengage Learning. Martin, John and Fellenz, Martin. 2010. Organizational Behaviour and Management. Cengage Learning EMEA. Northouse, Peter Guy. 2009. Leadership: Theory and Practice. SAGE. O'Rourke, James S., and Yarbrough, Bonnie T. 2008. Leading Groups and Teams. Cengage Learning. Reddy, R. J. 2004. Organisational Behaviour. APH Publishing. Rollinson, Derek. 2008. Organisational Behaviour and Analysis: An Integrated Approach. FT Prentice Hall. Sheard, Geoff et al. 2009. Leadership Teams: Developing and Sustaining High Performance. Palgrave Macmillan. Witte, Karel De., and Muijen, Jaap J. van. 2002. Organizational Culture. Psychology Press. Yanow, Dvora et al. 2011. Organizational Culture. Edward Elgar Publishing. Read More