Developing Effective Teamwork in Organisations by Considering the Organisational Structure - British Petroleum - Case Study Example

Developing effective teamwork in organisations by considering the organisational structure, culture, employees’ motivational and leadership aspects Name Name of Institution Developing effective teamwork in organisations by considering the organisational structure, culture, employees’ motivational and leadership aspects Context British Petroleum (BP) is a multinational firm that is a foremost player in the oil and gas industry. BP produces a wide array of products that include fuel for transportation, energy for lighting and heat, lubricants, and many petrochemicals (BP 2014 p. 2). At present, BP operates in around 80 countries, and it employs over 83,000 people. BP’s history began with the 1908 discovery of oil in a remote part of Persia by George Reynolds (BP 2015a). The Anglo-Persian Oil Company, which would subsequently become BP, was on the brink of losing all financing before the eventual discovery of the oil. Further discoveries, the start of the automobile age, and reconstruction after the Second World War fuelled the growth of BP due to the increasing importance of oil. The firm has faced considerable challenges during its existence. For instance, the 1970’s saw the nationalization of many of the firm’s operations in the Middle East (BP 2015a). Additionally, the firm had to deal with a major environmental disaster when one of its underwater exploded in 2010, leading to the spilling of vast volumes of oil into the Gulf of Mexico. As stated, BP operates in over 80 countries in the world. The firm has developed two main divisions to meet its organizational goals and the energy needs of people around the world. The first division is the upstream division which handles the exploration of natural gas and oil, production, transportation, storage and processing. On the other hand, the downstream division handles final products and services like lubricants, fuels, and other petrochemicals (BP 2014, p. 25). The firm’s core brands include Castrol, Aral, BP, and Wild Bean Café, and ampm. It is worth mentioning that BP has developed an interest in the research and deployment of alternative sources of energy like wind power, biofuels, and solar energy (BP 2014, p. 37). This strategy is informed by a realization that fossil fuels will be depleted, and that the world will move towards more sustainable sources of energy. Understand the relationship between organisational structure and culture Task 1 According to Daft (2010, p. 244), organizing defines the deployment of the resources available to an organization in order to achieve strategic goals. An organizational structure defines the official reporting relationships that cover the chain of authority, number of hierarchical levels, decision responsibility, and span of manager’s control (Daft 2010, p. 244). Two notable organizational structures are the functional structure and the divisional structure. The functional structure consists of groups that perform the same tasks. For instance, an organization can have marketing, human resource, engineering, and finance units that are controlled by high-level management. It is notable that this organizational structure emphasises technical skills rather than final products. The benefit of a functional structure is that it maximises productivity since skills get consolidated into one part of the organization. Another advantage is that the structure fosters career development for people who want to be specialists. On the other hand, the functional structure has several disadvantages. These include poor accountability, limited organizational understanding, and slower response to changes in the external environment. When it comes to the divisional structure, the emphasis is on end products rather than technical skills (Daft 2010, p. 252). A firm that uses the structure will have a set of divisions with each focusing on the production of a single end-product or service. For instance, a large multinational can have electronics, consumer products, and biotechnology divisions. Each of these divisions will then have R&D, finance, manufacturing, marketing, and finance units (Daft 2010, p. 253). It is notable that the employees will have skills that correspond to their divisions. The advantages of the divisional structure are a high degree of coordination, wider skills development, clear accountability, and prompt responses to changes in external environments. The disadvantages are duplication of resources, loyalty to divisions instead of the organization, and low product integration. It is worth mentioning that companies have to realign their organizational structures on a consistent basis in order to meet evolving organizational goals (Daft 2010 544). An examination of BP shows that it performs a wide array of functions. These include exploration, building wells and extracting oil and gas, transporting, manufacturing different fuels and products, marketing, and investing in renewable energy. BP has adopted a divisional structure to satisfy the different needs of its diverse customers,. The main divisions are the upstream and downstream segments. The Upstream segment focuses on the exploration and production of gas and oil and the transportation and storage of these products. On the other hand, the Downstream segment focuses on final services and the manufacture of products like fuels, lubricants, and petrochemicals. Additionally, the downstream segment develops and invests in alternative sources of energy (BP 2014, p. 38). Figure 1: BP’s divisional organisational structure. Task 2 As stated, BP has adopted a divisional organizational structure. One feature of the structure is the operational autonomy that each division gets. The executive management sets targets for each division and lets them find the best ways to reach these targets. When it comes to culture, BP’s emphasis is on safety, continuous innovation, collaboration, respect for diversity, and flexible work hours (BP 2015b). It is evident that the association between the organizational structure and culture will lead to high-performance levels. Workers are encouraged to specialise in the downstream or upstream divisions and to be innovative while managing risks. Despite the high performance, the relationship between the organizational structure and culture can be blamed for the 2010 spill. According to Economides (2010), workers at the firm often cut corners in order to meet the financial targets set by executive management. The spill led to significant losses through litigation and environmental clean-up, proving that the relationship between an organization’s culture and structure can impact business performance. Task 3 Individual behaviour can be affected by a wide range of factors. It is evident that different individuals within an organization can have different motives, abilities, perceptions, and ambitions. The three main factors that influence such behaviours in individuals are organizational culture, environmental factors, and personal factors (Tosi & Pilati 2011, p. 4). Organizational culture can impact behaviour through elements such as reward systems, leadership styles, organizational structure, and physical facilities. For instance, an organization with a poor reward system can suffer from low levels of performance since workers will be motivated to work hard. Environmental factors also affect individual behaviour. Elements such as technological development, wage rates, family relationships, politics, and laws can affect individual behaviours. Finally, personal factors also determine individual behaviour. Examples of personal factors are age, gender, intelligence, values, marital status, and religion. It is notable that some of these factors are beyond individual control, but they still have a tremendous impact on behaviour. Understand different approaches to management and leadership Task 1 The first major leadership style is the autocratic style. The style allows management to make decisions without seeking feedback from other relevant groups (Dessler & Philips 2007, p. 387). It is evident that managers get total authority, meaning that autocratic leadership can limit innovation and creativity. On the other hand, autocratic leadership can work in situations where the workforce has poor skills and thus require constant supervision. The second major leadership style is the participative/democratic style. Team members and senior managers participate in decision-making in organizations that use this style (Dessler & Philips 2007, p. 387). Its advantage is that employees feel closer to the organization leading to high levels of performance. Transformational leadership is the third major leadership style. The style features leaders having a focus on the future and communicating this vision to employees (Dessler & Philips 2007, p. 388). The leader becomes an inspiration to workers leading to improved efficiency and productivity. The fourth major style is the laissez faire leadership. The style features leaders who do not have direct control over workers. In addition, the leader does not provide either positive or negative feedback (Dessler & Philips 2007, p. 387). The style suits organizations that have highly-skilled workers. The fifth major leadership style is the transactional style. The style is achievement oriented as workers get rewards or punishment based on their performance. The management and teams collaborate in setting goals, with the managers retaining the right to evaluate results and organise further training in cases where a team cannot meet its objectives (Dessler & Philips 2007, p. 388). A transformational leadership style would be effective at BP as the firm has a clear vision. The firm seeks to satisfy the energy needs of the world in a safe and sustainable way. A strong leader can communicate this vision and motivate employees to work towards this goal. The democratic style of leadership would also be highly effective at BP. The divisional structure means that workers in the upstream and downstream divisions are highly skilled. Thus, executive management should seek the advice of these highly specialised employees when making decisions. Thirdly, the transactional leadership style would also be highly effective at the firm. Team members will contribute towards setting organizational goals. This will allow them to be highly motivated as they will receive rewards for reaching organizational goals. Task 2 According to Farazmand (2002, p. 30), the systems approach views organizations as systems that interact with the external environment on a constant basis. In order for such an organization to be successful, the organization has to learn and adapt to changes in the environment. The advantage of the system theory is that it forces managers to realise that the organization is part of a wider system. The approach also assists managers to develop better communication strategies that can be used within and outside the organization. Other advantages are a greater degree of control, facilitation of specialization, and better coordination. The contingency theory is related to the systems theory and it holds that the effectiveness of management depends on the interaction of specific environmental situations and the application of management behaviours (Farazmand 2002, p. 32). The theory’s advantage is that it enables organizations to assign tasks depending on an employee’s suitability to handle the prevailing situation. Additionally, organizations benefit from a high degree of flexibility due to the realization that there is no single pre-eminent way to manage. According to Hatch (2012 p. 31), the socio-technical approach to management recommends finding an equilibrium between technology, the environment, and social system in order to increase organizational effectiveness. The advantages of the approach are higher productivity due to greater employee satisfaction and reduced costs of control (De Marco et al. 2012, p. 482). Other advantages are operational autonomy and the ability to adapt to changes in the environment. Task 3 The basis of the systems theory is the constant interaction between the organization and the political, cultural, legal, demographic, economic, and technological environments (Farazmand 2002, p. 30). An organization that uses this approach will consider these environmental factors and adapt. Samsung is an example of an organization that uses this approach. The firm evolved from being recognised for cheap electronics devices to a producer of cutting age technology. This was done by studying the environment and producing innovative products that would satisfy consumers. The contingency theory holds that organizations should alter management styles to suit unforeseen events. As such, a firm that uses the approach is likely to operate in an environment that witnesses significant changes. An example would be Goldman Sachs, a leading investment firm that operates in the turbulent financial markets. Finally, the socio-technical approach considers a balance between the environment, technology, and social systems. A leading technology company like Google uses this approach through supporting alternative energy and valuing its employees and other stakeholders. Understand ways of using motivational theories in organisations Task 1 According to Daft (2010, p. 442), motivation defines the internal and external forces that lead to persistence or enthusiasm to pursue an activity. By definition, it is evident that external forces such as leadership styles can have significant impacts on motivation. Additionally, leadership styles can have pronounced impacts on motivation when an organization is undergoing change. Organizational change can define the introduction of new ideas or behaviour by a firm (Daft 2010, p. 278). In certain cases, employees might lack the motivation to adapt to changes. In such cases, leadership styles can determine whether an organization can change. An autocratic leadership is likely to lower motivation during periods of change since the opinions of workers will be ignored. Similarly, the laissez-faire approach will also result in reduced motivation during periods of change due to lack of control and feedback. On the other hand, democratic, transformational, and transactional leadership styles might have a positive impact on motivation. This is because these leadership styles welcome the inputs of all employees, have clear visions, and provide rewards for satisfactory performance. Task 2 Maslow’s Hierarchy of Needs contends that individuals are motivated by several needs that have different priorities (Daft 2010, p. 444). The most fundamental needs are physiological needs followed by safety, belongingness, and esteem needs. Self-actualization is the fifth and highest-rated category of needs. When it comes to BP, management has to ensure that it satisfies all the five categories of needs in order to have a motivated workforce. The firm should start by satisfying physiological needs such as food and drinking water before moving to safety needs. The next step would involve developing an organizational culture that ensures that workers from all backgrounds are accepted and feel loved. BP can schedule team activities to integrate its international workforce in order to satisfy the need for belonging. The next step in the hierarchy would be boosting the esteem of employees through promotion and recognition. Finally, the employee will gain self-fulfillment through professional growth and completing difficult tasks in remote areas. According to Daft (2010, p. 446), Herzberg’s Motivation-Hygiene theory contends that there are two unique factors that affect motivation. Hygiene factors define working conditions, organizational policies, compensation, and interpersonal relationships. Poor hygiene factors lead to satisfaction while good hygiene factors eliminate the dissatisfaction without increasing motivation (Daft 2010, p. 446). When it comes to motivators, they include growth opportunities, responsibility, achievement, and recognition. These factors have pronounced impacts on motivation (Daft 2010, p. 446). Remote oil-extraction plants provide an example of how the theory can apply to BP. The firm can improve working conditions and offer lucrative pay, but the workers will gain satisfaction and lack motivation. However, if the firm offers career growth opportunities and recognises good performance, the workers will be motivated to be more productive. McGregor’s Theory X and Y urges managers to move away from what he describes as Theory X and embrace Theory Y (Schermerhorn 2010, p. 38). Theory X assumes that employees hate work, resist change, are irresponsible, and lack ambition while Theory Y assumes that employees are willing to work, accept responsibilities, and can be creative and innovative. The adoption of either of these theories has a significant impact on leadership styles (Schermerhorn 2010, p. 38). The organizational structure at BP implies that workers operate with a lot of freedom. Managers should embrace Theory in order to motivate new workers at the firm. This can be done by asking new employees about the skills or training they will need to be productive instead of issuing strict commands based on the assumption that new employees are unskilled or irresponsible. Task 3 An organization defines an entity or social unit that is designed to meet collective goals. Organisations need to survive, be sustainable and grow. It is worth mentioning that this sustainability and growth can only be achieved when the workforce is happy. An understanding of the motivational theories assists managers to ensure that the workforce is happy. For instance, an understanding of Theory X and Y will assist a manager to avoid using an autocratic style of leadership. Similarly, an understanding of Maslow’s Hierarchy will lead to greater concern for the different needs of workers. Thus, an understanding of the motivational theories leads to a happier workforce, and a happy workforce is more likely to perform. This high level of performance in turn allows a firm to meet its objectives. Understand mechanisms for developing effective teamwork in organisations Task 1 Organizations create formal groups to meet specific objectives. Formal groups consist of task groups and command groups. Task groups collaborate in completing projects while command groups report to supervisors and are included in the organizational structure. Informal groups evolve naturally and help to fill social needs. They can be in the form of interest groups that allows a social group to achieve a mutual objective or simple friendship groups. Group behaviour within organizations is essential as it determines cohesiveness and the relevance of organizational culture. A successful firm requires employees that buy into and comply with shared policies. However, group behaviour should not lead to situations where employees follow the decisions of executive management without thought. There should be space for individual expression and innovation. It is evident that group behaviour can have both positive and negative impacts on motivation. Thus, leaders should strive to ensure that group behaviour leads to a motivated workforce. Task 2 The factors to consider when building an effective team are team size, team diversity, and team composition (Bauer & Erdogan 2010). Each of these factors can stimulate or inhibit the development of teamwork. When it comes to team size, research has shown that teams that have more than 20 members have limited cooperation. The recommended size for effective collaboration is teams of 10 members or less (Bauer & Erdogan 2010). Having fewer individuals means that most opinions will be heard and that it would be easier to solve differences. Research has also shown that high levels of team diversity lead to effective teamwork. For instance, a team composed of engineers will have the technical skills to create advanced products. However, engineers might lack information on customers, meaning that the advanced products will be unsuccessful. This shows that higher diversity leads to better teamwork through avoidance of groupthink. Finally, team composition can also foster or inhibit effective teamwork. A team should be filled with individuals who are suited to their expected roles. There should be a clear definition of team roles that will allow individuals with relevant knowledge, abilities and skills to be identified. Task 3 Improvements in technology have had tremendous impacts on the way teams function. Daft (509) notes that virtual teams and global teams have emerged as a result of technological improvements. Technology allows teams to perform functions like meeting, sharing documents, and decision-making with a lot of ease. Information technology also allows a firm to build relationships, monitor progress, and shape organizational culture (Daft 2010, p. 510). References About BP 2015a. BP. Viewed 15 January, 2015 Bauer, T &Erdogan, B 2010. Organizational behavior. Flat World Knowledge. BP 2014. Annual Report and Form 20-F 2013. Viewed 16 January, 2015 Daft, RL 2010. Management, Ninth Edition. South-Western Cengage Learning, Mason OH. De Marco, M Te'eni, D Albano, V & Za, S 2012. Information systems: crossroads for organization, management, accounting and engineering: itais: the italian association for information systems. Springer. Dessler, G & Phillips, J 2007. Managing now. Cengage Learning, Boston, MA. Economides, M 2010. BP culture made gulf spill inevitable. Forbes. Viewed 15 January, 2015 Farazmand, A (Ed.) 2002. Modern organizations: Theory and practice. Greenwood Publishing Group. Hatch, MJ 2012. Organization theory: Modern, symbolic and postmodern perspectives. Oxford University Press. Schermerhorn, J. R. (2010). Management, 11e. John Wiley & Sons, Hoboken, NJ. Tosi, HL & Pilati, M 2011. Managing Organizational Behavior: Individuals, Teams, Organization, and Management. Edward Elgar Publishing, Cheltenham, UK. Working at BP 2015b. BP. Viewed 15 January, 2015 Read More