Analysis of Trends in Organizational Design - Report Example

HUMAN RESOURCE MANAGEMENT Table of Contents Table of Contents 2 Introduction: 3 Part Analysis of trends in organizational design: 3 1 Two trendsin HRM and their effects on organisation: 3 1.2 Strategies for building a shared understanding of these trends: 4 Part 2: Graphic of new metaphors and illustration: 6 2.1 Graphic of new metaphor with explanation: 6 2.2 Impact of trends and theories or organisational design: 8 Part 3: Approaches to organizational design: 9 3.1 Organisational designs and their impact on organisations: 9 3.2 Implications of the functional and matrix structure on various managerial levels: 12 Conclusion: 14 Part 4: Reflection of Module: 15 4.1 Application of organisational theory in your future: 15 4.2 Learning aspects in context of profession: 15 4.3 Review of PPDP: 16 Reference List 17 Introduction: The definition of Human resource management has evolved over the years along with its role in the internal functions of business houses. One of the most specific definitions was by provided by (Banfield and Kay, 2012). Banfield and Kay (2012) mentioned that human resource management focuses on recruiting employees and training them for increasing their value within the organisational functions. Armstrong (2012) on the other hand stated that the role of human resource management is to ensure recruitment, management and problem solving of the employees and enhance their performance. These two definitions mainly reflected basic roles of HR practices. However, in the contemporary scenario, HRs not only recruit and management the workforce but also contribute in the strategic decision making process of the firms (Brewster and Harris, 2009). This report will focus on the aspects of organisational designs and their influence on the operations of a firm. The report will also try to evaluate the contribution of HR practices in the development of organisational design in context of the ongoing trends in human resource management activities. Part 1: Analysis of trends in organizational design: 1.1 Two trends in HRM and their effects on organisation: The roles of the HRs are changing in the global business management scenario. Hope Hailey, Farndale and Truss (2005) stated that based on the increased competition in the business industry, business houses are trying to identify and recruit the best individuals for their firm. This trend has formulated a new trend in the business process called talent management. Lombardi and Laurano (2013) on the other hand focused on managing the talent within the organisational work culture and stated digital performance management is one of the added responsibilities of the HR managers of a firm. These two trends will be analysed in this report. Talent management process developed mainly because of the growing scarcity of talented and experienced employees in the business sector. Armstrong (2012) opined that the work process of the businesses are changing rapidly and they require a workforce that can adapt to these changes without hampering their performance level. Focusing on the influence of talent management on the organisational performance, Benko, Bohdal-Spiegelhoff and Geller (2014) emphasised that deriving the best output from the workforce helps in business enhancement. This brings in the concept of performance management. However, digital performance management is based on utilising the technological resources for driving the productivity of the firm according to the needs of the business. Hope Hailey Farndale and Truss (2005) stated that digital performance management helps in assessing the output required for a specific project and time period and the needed man hours for achieving the set target. It helps in effective time and human resource management. According to Lawler (2008), digital performance management ensures that an organisation is making optimal use of its resources and reduces the administrative and operational costs creating a cost competitive advantage in the market. 1.2 Strategies for building a shared understanding of these trends: Brewster and Harris (2009) stated that talent management and performance management are inter related as they focus on improving the overall productivity and performance of a firm. In the contemporary scenario, firms are trying to streamline their business processes which bring together the various strategies for business management. For instance, the example of world’s largest social media website Facebook has a vigorous recruitment process that selects the best candidates in according to their need from all over the world. The internal performance management process of Facebook is based on estimating the capability of the employees to fulfil their targets within the given time (Lombardi and Laurano, 2013). In order to develop a connection between the digital performance management and talent management process, firms can utilise the benefits of ICT and develop a common database that will store the data of the talent management process and the performance standards of the firm. Benko, Bohdal-Spiegelhoff and Geller (2014) opined that observing the dominating role of technology in the business management, firms should try to implement it in their business strategy development. In this report, aligning performance management and talent management will developed by amalgamating the database of both the process and developing a shared observation screen for both the departments. Figure 1: Strategy for shared understanding of Digital Performance Management and Talent Management (Source: Created by Author) The strategy will begin by setting multiple queries that will define the performance standards required by the company. This will clarify the type of talent required by the business and help in the talent management process. In order to assess the performance of the new recruits, new queries can be set based on the recruitment and selection evaluation of the employees and comparing them with their actual performance (Banfield and Kay, 2012). This will also help in developing task teams for specific projects and reduce the time consumption of the overall process. Part 2: Graphic of new metaphors and illustration: 2.1 Graphic of new metaphor with explanation: Gareth Morgan opined that the strategies and activities of organisations are always interpreted by connecting them with some theory (Hope Hailey, Farndale and Truss, 2005). However, organisations are complex and often people tend to handle the complexity by ignoring them. The nine metaphors developed by Morgan define the various factors that define the strategies and operational style of a firm. Organisations that can identify all these metaphors have more options available for dealing with their problems (Lawler, 2008). Figure 2: Organisational Metaphors of Morgan (Source: Cameron and Quinn, 2011, p - 81) Considering the aspect of organisational design, culture will be considered in this study. The essence of every organisation is based in the culture and various sub-cultures embedded in it (Banfield and Kay, 2012). This metaphor considers the organisation as society developed with various aspects that shape the reality. The culture of an organisation shapes the structure of the firm and also develops the growth strategies of a firm. Baligh (2007) emphasised that culture has an in-depth relationship with the organisational aspects. For instance, aspects such as shaping the employee management process, conflict management, work structure, etc is designed in accordance with the organisational culture. Lombardi and Laurano (2013) observed that organisational culture reflects the core values of a firm and shows the business mission to its stakeholders. Defining culture in accordance with the metaphors of Morgan, culture has been highlighted as a technique for developing shared work process, shared beliefs, shared values and shared decision making (Benko, Bohdal-Spiegelhoff and Geller, 2014). 2.2 Impact of trends and theories or organisational design: The growth of the business processes are now defined by the ability to adapt to the changing circumstances. In the prevailing business situations, talent management is more related to the accumulation of essential human resource according to the needs of the business. Benko, Bohdal-Spiegelhoff and Geller (2014) noted that business motives and needs are driven by their culture which in turn also shapes the workforce and work culture of a firm. For example, Apple Inc. believes that employees who can share their vision and values can contribute towards the growth of the organisation. This shapes their recruitment and selection process and also develops the module for their work process. Conflicts of business needs and requirements with their core values are creating situations where talent management influences the business culture and core values (Lawler, 2008). A classic example of this condition was the HealthSouth Scandal, where in order to meet the expectations of the stakeholders the firm engaged in financial scam and promoted employees based on their participation and loyalty towards the racket. On the other hand, digital performance management trend is the result of rapidly growing technology. Competition and technology are considered as the driving factors of business in the current scenario. Numerous examples of changes in organisational cultures can be observed because of the growth of technical resources. Considering the case of Apple Inc. again it can be observed that back in 1992, their core value was to “think different” whereas now it is focused on “innovating for future” (Eppinger and Browning, 2012).Digital performance management brings in strictness and an unbiased performance evaluation process that is not influenced by psychological aspects such as culture or emotions. Part 3: Approaches to organizational design: 3.1 Organisational designs and their impact on organisations: The most common organisational design that can be observed in the corporate sector is functional structure. Baligh (2007) stated that business processes are getting complicated which has urged the managerial authorities for streamlining their business activities and departments. Functional design helps in assessing the business processes of a firm and develops suitable structures based on these processes. For illustration, organisations have separate department for accounting, HR, marketing, supply chain, etc that respond to their respective heads who in turn forwards the information to the top authority (Cameron and Quinn, 2011). Functional design helps in creating a independent work structure for each functional department and also keeps them aligned by bringing them under a common supervisory board (Baligh, 2007). Functional designs help the management of the firm to assess the performance of each department and develop the organisational objectives accordingly. Figure 3: Functional Organisational Design (Source: Baligh, 2007, p - 115) Cameron and Quinn (2011) stated that functional design helps in ensuring proper flow of information within the work place however functional designs also features gaps in the internal communication and collaboration. Lawler (2008) reflected that functional designs creates an independent work process for each of the segment to reduce clashes however this can also influence the internal work behaviour of the employees and generate unnecessary competition. Eppinger and Browning (2012) noted that functional designs are more suitable for self contained business houses such as Apple Inc. and Google Plc. According to Baligh (2007), functional structures can be developed as overall solutions to business problems if cross communicative process can be established among the different departments of a firm. Considering the aspects of risk management, functional aspects have an operational process for each department that helps in fast decision making and processing (Banfield and Kay, 2012).Benko, Bohdal-Spiegelhoff and Geller (2014) criticised that segmenting the functional departments can reduce the sustainability of the organisation enhances individual mentality among the workforces and reduces the sustainability of the work culture of the firm. Another form of organisational designed commonly followed in the business sector is matrix structure. Matrix structure is similar to functional structure however, in matrix structure all the departments are inter-connected promoting a multitasking as an essential feature of the business culture. Figure 4: Matrix Organisational Design (Source: Eppinger and Browning, 2012, p - 64) Matrix structure is mostly used in organisations with project based work culture. In matrix structure all the functional segments of a firm are interconnected in order to process effective communication process. Eppinger and Browning (2012) emphasised that businesses having matrix structure mostly develop their work culture on the basis of projects. The internal collaboration helps the business process to run multiple projects at the same time as the employees are trained for developing multitasking abilities. Benko, Bohdal-Spiegelhoff and Geller (2014) argued that matrix structure can be congested and create internal clashes among the work process because of inter-relation of jobs. However, the primary advantage of matrix structure according to the contemporary needs of the business process is that it helps in aligning the functional departments of an organisation. Eppinger and Browning (2012) mentioned that organisations with matrix structures can effectively assess the risks and uncertainty, if they are able to develop a holistic approach in the business process. Baligh (2007) stated that matrix structures in the long-run can increase the sustainability of the business process as constant communication among the workforce will increase teamwork and develop a collective culture within an organisation. 3.2 Implications of the functional and matrix structure on various managerial levels: The organisational structures are developed mostly on the basis of the organisational cultures or the organisational objectives. Eppinger and Browning (2012) opined that the organisational structures influence the work process of a business as it defines the system and methodology for work segmentation based on the capability of the workforce. Lombardi and Laurano (2013) argued that efficiency of the work process can also be influenced by the managerial decisions based on the market changes irrespective of the organisational structure. A similar change was noticed when Apple Inc. recalled Late Steve Jobs as their company CEO, who introduced flat structure in the organisational process (Jelinek, 2010).Considering the influence of functional structure on the different levels of the organisation, the independent work process developed by segmenting the functional departments of a firm is one of the major changes developed. Cabrera, Cabrera and Barajas (2009) stated that freedom of work enhances employee motivation and loyalty towards the organisational objectives. Eppinger and Browning (2012) criticised that freedom of work on the other hand can create chaos within the work culture because of limited discipline. A step by step analysis of the functional structure will help in evaluating its influence in the business process. The higher authority of the business takes the responsibility of the plans and policies and distributes the work on the basis of the employee capability. In a team structured organisation the work is segmented to different teams based for enhancing the acceleration of the work process (Chen and Huang, 2007). The line managers of the firm are assigned with the task of work segmentation among teams. The employees in turn have to complete the work within the given time line with the desired quality. Jelinek (2010) stated that as functional structure increases transparency within the departments, the employees feel the pressure of reporting to the higher authority in case of failures. On the other hand, in case of matrix structure interdependency among the departments is more which enhances the support for each operational segment but also increases chances of job clashes among the workforce. The matrix structure has a through connection with each of the workforce levels (Lombardi and Laurano, 2013). As employees are working under two departments at the same time, the collaboration of the work process is more. On the other hand, Cabrera, Cabrera and Barajas (2009) mentioned that matrix structure also facilitates implementation of different types of structures within a single organisation based on the nature of the work. Cameron and Quinn (2011) opined that matrix structures enhance the reach of the top level managers to the employees and vice-versa provides access to the lower level employees of communicating with their managers. Role or existence of line managers in matrix structure is limited as the operational functions are conducted on a project basis directly under the project managers. Conclusion: This report focused on assessing the new trends in the HRM practices, the influence of Morgan’s metaphors and organisational design on a business process. The analysis reflected that most of the firms are focusing on talent management and digital performance management for enhancing their organisational performance. The growth of the technology has allowed business houses to incorporate effective technological resources for combining their strategy to develop a competitive advantage. The metaphor of culture developed by Gareth Morgan was considered for assessing its influence on the business performance. Culture is one the inherit aspects of a firm; it helps in designing the work process, core-values and the organisational objectives of the business. Thus, relative proportion of the applied trends and theories in a business with the culture of a firm indicates the suitability of the trends for business growth and development. The analysis of functional and matrix structures helped in highlighting the impact of organisational structures on the work process and work efficiency of a business. Hence, it can be concluded that the efficacy of HR practices depends on proper adaptation of the new trends, available technological resources and their alignment with organisational culture and structures. Part 4: Reflection of Module: 4.1 Application of organisational theory in your future: From the above research, I gathered the importance of talent management and digital performance management for sustaining in the competitive business scenario. It is obvious that the business sector is adapting to the rapidly changing technological needs of the firms. Indulging technological resources and techniques for aligning business performance will help in enlarging the scope of the business in the future. I have also developed the strategy for amalgamating digital performance management and talent management with the help of database management system. The strategy highlights the benefits of using a common DBMS as it will clarify the needs of both the work segments and also help in developing a common information bank. Considering my future professional life, knowledge of these critical techniques that can develop the business efficiency will help in enhancing the scope of improvement in the workplace. 4.2 Learning aspects in context of profession: Business processes in the contemporary scenario is more based on practical application of solutions rather than theoretical accuracy of strategies. This project has helped me understand the various needs of business and how can they be managed with application and incorporation of suitable strategies. Understanding the importance of trends, metaphors and business structures has helped me understand their applicability and usefulness. Mostly, the influence of the organisational structures on different levels of workforce helped in assessing the employees’ perspectives and the potential risks of the structures. Focusing on my professional benefits, it is essential not only to know the theories but able to implement them based on their suitability to the firms’ needs. The ability to assess the practical implications will increase the scope of my professional career. 4.3 Review of PPDP: My professional and personal development plan focuses on developing an appropriate approach for facing the competitive job scenario and successfully using my knowledge for improving the extent of my career in the field of HR. Considering my field of study, the report was mainly based on the work aspects of human resource management and how it contributes in the strategic characteristics of a firm. This is essential knowledge for me as my professional objective is focused on the HR segment. The identification of the trends and their influence on developing the business process is an addition that I can make in my PPDP. Furthermore, the use of organisational structure to enhance the work process efficacy has also enriched my knowledge bank. The addition of these factors will definitely improve the scope of my PPDP. Reference List Armstrong, M., 2012. Armstrongs Handbook of Human Resource Management Practice, 12th ed. London: Kagan Page Baligh, H. H., 2007. Organization Structures: Theory and Design, Analysis and Prescription, 5th ed. Heidelberg, New York: Springer Verlag. Banfield, P. and Kay, R., 2012. Introduction to Human Resource Management, 2nd ed. Oxford: Oxford University Press Benko, C., Bohdal-Spiegelhoff, U. and Geller, J., 2014. Global Human Capital Trends 2014: Engaging the 21st Century Workforce. Texas: Deloitte University Press. Brewster, C. and Harris, H., 2009. International HRM: Contemporary issues in Europe. 3rd ed. London: Harvester Wheatsheaf. Cabrera, A., Cabrera, E. F. and Barajas, S., 2009. The key role of organizational culture in a multisystem view of technology-driven change. International Journal of Information Management, 21(3). 245-261. Cameron, K. S. and Quinn, R. E., 2011. Diagnosing and Changing Organizational Culture, 4th ed. London: Kogan Page Limited Chen, C. J. and Huang, J. W., 2007 How organizational climate and structure affect knowledge management – The social interaction perspective, International journal of information Management, 27, 104-118 Eppinger, S. D. and Browning, T. R., 2012. Design Structure Matrix Methods and Applications, 5th ed. London: Prentice Hall. Hope Hailey, V., Farndale, E., and Truss, C., 2005. The HR department’s role in organizational performance. Human Resource Management Journal, 15(3), 49-66 Jelinek, S., 2010. The Impact of Management Practices and Organizational Structure on Firm Performance. 2nd ed. Germany: Grin Verlag Lawler, J., 2008. Strategic human resource management. Handbook of Organization Development, p. 353. Lombardi, M. and Laurano, M., 2013. Human Capital Management Trends 2013: It’s a Brave New World. Aberdeen Group. 2-24. Read More