In What Ways Can an Organization's Culture Effect or Influence Structure and Employee Behavior - Essay Example

INTRODUCTION: “Galactic Office Furniture Ltd.”, founded in the year 1959, has gradually become one of the biggest players in the office furniture business during the late 1990s. It was the leading player in UK during that time with nearly 30% of the total Office furniture market share. However, despite the astounding progress in such short run, the company is increasingly facing great uphill. This is due to the closed organisational structure and negative work culture followed by the organisation. The aim of the report is to analyse the influence of organizational culture over the entire organizational structure and employee behaviour. Galactic Office Furniture is a private sector undertaking and follows a hierarchical organization structure. The basic motive of the project is to determine the effect of the present organizational culture and analyse the aspects of Human Resource Management system within the firm. The in-depth analysis of HRM policies is important as it would help in pointing out the defects in the systems and will necessarily bring out the scopes for improvement. “GOF” Strategy and its effects The organisational goals and strategies are influenced by the structure and the culture followed by an organisation. Although the goals and strategies documented by the GOF upper brass is quite challenging and forward looking, still the organisational structure and the work culture followed by it greatly limits its value. According to the new mission, the company started focusing on improving the structure of the organization to improve the efficiency of operation. The operations and the production process need to be improved in order to reduce cost and increase flexibility of the process. This actually demands a change in the organization structure. Whenever there is a change in the system, the top management should be careful enough to bring about the change in the organization culture. (Morrison, Brown, Smit, 2006). Bringing a change is the organizational culture is of course a gradual process and it is time consuming. For that specific reason, it is always considered as a long-term strategic goal in Human Resource Management system. However, in most of the cases, culture might be considered as an abstraction but its forces are derived from the social interaction within the organization. (Schein, 2004, p.5). For that reason when the management seeks to adapt certain change in policy, it is always advisable to start from the core of the organization to bring about a change in the cultural base of the organization. Effective leadership can bring about these changes. The management should have certain level of influence on the overall workforce so that the changes hit the right areas of the organization. Now before implementing the changes within the organization a background perspective about the current employee culture is very crucial. Otherwise, the approach of projecting the change may go in vain. (Sergiovanni, Corbally, 1986, p.2). In addition, as the change has to be implemented with a specific goal in mind (specific process change or system change) the management must have structure layout of the overall process, which should be communicated well to all the employees. That means the process of bringing about a cultural change should not affect the employees in a negative way. They should not feel forced or compelled by the changing system. Internal and External factors influencing GOF Although the Mission statement issued by the MD is quite ambitious, still the internal factors of GOF namely the Organisational structure and the Work culture followed is hindering its growth. It is due to these internal factors that the organisation is not able to adapt and compete with the external market dynamics. Although the external factors were steady in terms of demand and labour market, still the loss of company’s productivity and profitability dipped due to the negating internal factors. The organisational structure of “GOF” and its effects on the employees According to “Robert E. Hoskisson”, “Organisational Structure specifies the firm’s formal reporting relationships, procedures, controls, and authority and decision making processes.” In other words, Organisational structure can be defined as the organisational rules, regulations, policies and strategies, which become the basic guidelines within which the organisation works. The organisational structure provides the basic framework to assign roles, delegate responsibilities, allocate resources and provide a basis for cooperation, coordination and communication among the organisational hierarchy. (Hoskisson, 2008) In the “Galactic Office Furniture Ltd.”, Chairman and Managing Director are in the topmost helm in the organisation followed by the CEO. Alistair Wexford, Finance Director and William Short, the Personnel Manager comes next in the hierarchical ladder, and is accountable to the CEO. Functional managers like T&D Manager - Arnold Winner, General Works Manager - Jim Barratt , Marketing Manager -Maggie and QA Manager - Rob Freeman comes next. The Supervisors and team leaders follow them in the organisational hierarchy. Under the direction of these supervisors and team leaders, various root level workers/ employees works. The Matrix structure followed by the “Galactic Office Furniture Ltd.” is mainly a combination of both vertical and horizontal structures. Such organisational structure aims at achieving an identical balance of power in the organization. In an organization it may happen that one axis may be held up by the people who are into ‘advertising’ and ‘packing’ while the other end may be held up by the people who are into ‘marketing’, ‘finance’ and ‘information technology’. The good thing about matrix organisational structures is that both the brand manager and the functional manager hold equal ‘authority’. In today’s world where the companies are seeking for globalized format matrix structure can be of great benefit as it brings ‘collective responsibility’ into the frame. (Hankinson, 1999, pp 1-2) Although, the “Galactic Office Furniture Ltd.” follows a matrix organisational structure, still it seems to put more emphasise over the vertical element of the hierarchy as is evident from the earlier discussion. In the straight vertical formation, the flow of control and authority follows a top to bottom structure. Such structure depends on the vertical linkages of the organization. It helps to coordinate the activities from the uppermost layers to the lowermost layers. Thus, it follows a simple vertical path wherein each employee is liable to report to his immediate superior. The conversation that was held in the weekly management meeting also shows the lack of cooperation and respect for other members of the organisation. The one-upmanship tendency of the senior managers along with their tendency to avoid others suggestion clearly shows that the organisation lacks a proper work culture. The discussion shows lack of purpose. The meeting seemed to call merely to perform a regular organisational ritual, as most/ all of the discussions undertaken were of no relevance to the organisation. The work culture of “GOF” and its effects on the employees From the case discussion, it is clear that there was a discontent among the employees of Galactic Office Furniture Ltd. The discontent among the various functional departments reveals the lack of coordination and proper governance. The behaviour observed among the employees mostly reflects the organizational culture. According to some social psychologists, the overall employee behaviour is a function of the personal traits and the environment where he or she is working in. (Newstorm, N.d, p.87). It is being indicated that the employee behaviour is sharply affected by the kind of working environment that individual is in. It is always not the case that the management is consciously creating the culture, but it may be regarded as the set of values and beliefs norms, which are adapted, by most of the members of the organization. (Newstorm, N.d, p.87). The culture is necessarily an amalgamation of all the critical values and attitudes of all the employee group working for the organization. The most important thing about organizational culture is that it developed over a long time (Mcllwraith, 2006, p.45). Joann Keyton, in his book, Communication & organizational culture: a key to understanding work experiences observes, “Organisational Culture is the set of artefacts, values and assumptions that emerge from the interactions of organisational members.” (Keyton, 2005, p.28) According to him, it is a belief system, which the organisational members themselves creates and maintains. (Keyton, 2005) In today’s world, the work environment is very dynamic and in this environment, the organizational culture plays an integral role. Organizational culture helps in maintaining the social order by coordinating the behaviour of the members. Organizational culture not only is confined internally to the organizational unit, but also becomes visible to the outside world. Moreover, it was found that the perception of the outside world regarding the organisational culture would also influence the market reputation and image of the organisation. MacIntosh and Doherty cited that organisations should try to imbibe positive internal culture in order to create a positive image in the eyes of the outside world. (MacIntosh and Doherty, 2007). This necessarily points out one fact that within the company a non-participative culture was prevailing. This kind of culture does create a lot of hindrance while bringing about changes in the organization. As the level of communication between the employees groups are negligible continuation of a smooth process is quite difficult. Before implementing any change the management must ensure that interaction between the groups of the company are smoothened and a proper flow of communication is maintained within the organization. Otherwise drastically implementing any change would not resolve the issue and the system may fall altogether. The “GOF” HRM and its lack of Competency The company does not have any officially published Manpower/ Human Resource plan, instead of having a fully-fledged Human Resource department. It clearly shows the lack of proper planning in regards to the human resource of the organisation. Such, lack of purpose and planning of organisational Human Resources would be detrimental for both the short and long-term interest of the organisation. Thus, the absence of any such planning for the Organisational Human Resources manifests itself through a negative work culture. William Short, the Personnel Manager is the only member from the personal department to attend various high/ strategic level board meetings. It is only through him that the HR, Training and Development and Employee Relations manager are able to represent their plans and proposals to the board. Such limited access of the other departments in the organisational decision making process not only creates a barrier for a proper and valid decision-making process, but would creates a distrust among the lower/ medium level employees. It is also imperative to mention that the plans and proposals developed by a particular department is only be presented properly by it. However, the organisational policy seems to overlook such issues and rather seems to acquire the feedback from the Personnel Manager. The Personnel manger even holds meetings and discussions with the senior managers about various staffing, promotion and other such issues. The company policy also prohibits from sharing the outcomes of such discussions to the middle and junior level managers. The above instances once again show the closed nature of the Galactic Office Furniture Ltd’s organisation structure, wherein it hardly encourages employee participation in organisational planning and decision-making process. This in return hampers the participation level and when a new change is being implemented into the system, the employees are always not ready to accept. They may sometimes feel cheated or deprived or may feel threatened when a sudden change is brought about in the management style and operational activities. The studies and experiments involving many companies reveals that free flow of communication contributes to the employee performance and coordination. (Blau, Scott, 2003, p.242). In classical organizational framework, the flow of communication is always in the downward direction. Which often do hampers the employee relation. (Miller, 2008, p.50). When this is the case changes are being implemented in a forced manner. It does not maintain spontaneity with the overall system. In the monthly ritual of personnel department meetings, discussions pertaining to various proceedings undertaken by the Boards on business processes and organisational structure are hold. After each of the meeting, William washes his hand of any responsibility and puts the whole onus on the Board members, quoting “don’t worry, they have got that all worked out” (G.O.F. Case study). The limitation of his knowledge was evident when after a recent board meeting he asked if anyone from his department knows how to create a HR plan. Incidentally, the Board has asked him to draw a long-term HR plan. The silence of the department members over the HR Plan may be either due to the lack of knowledge or due to the apathetic attitude of the members to share and help the Personnel Manager. In both the cases, a negative work culture is evident, wherein knowledge sharing and development does not find its due importance. Although, Galactic Office Furniture Ltd., has a “Training and Development” unit, still it does not put any emphasise to use it efficiently. The “Training and Development” is often overlooked and whatever training interventions are implemented is not evaluated. The directors had even started questioning the legitimacy of putting so much of money for “Training and Development”. Training and Development is another critical factor of the Human Resource department. It is not only technical knowledge that is transferred through a modulated training and development program but the organizational culture is also transmitted through the process. (Cook, Staniforth, Stewart, 1997, p.143) A lack of proper culture will mean that training system will fail. That is what hampering the human resource policy of GOF. The HR department has provided specific job descriptions to the entire set of employees and provided them with strictly defined areas of responsibility. An annual performance appraisal scheme is also in place. The management must provide clearly focused appraisal criteria based on which the system should be designed. Appointment of a separate implementation team within the firm is also advisable for any operational organization. (Grote, 2002, p.170) Many mid level managers have also questioned the validity of the present performance appraisal system. They have even suggested the directors for undertaking a performance based pay scheme. The Directors however are unsure about it, as the personnel manager whom they rely on for such matters does not have sufficient knowledge regarding such issues. Such unsure and less knowledgeable persons being at the helm of the company is detrimental to the company as increasing number of middle level managers are voicing their concern over the dipping organisational morale. The above scenario once again raises question over the closed organisational structure followed by the company. Although, few of the midlevel managers have knowledge on the performance based pay scheme, still the directors and the Personnel manager do not find it just to consult and discuss the issue. The matrix structure is believed to be adaptable to change much rapidly. (Kerzner, 2009, p.109) Yet, in absence of proper planning the total system fails. Moreover, even the Directors do not seem to bother over the need of providing opportunity to the HR Department and even the Personnel manager to upgrade their existing knowledge. It once again shows the passive work culture that exists in the organisation. Such passive work culture where the need for continuous learning is overlooked and only immediate goals emphasised, it would eventually make the organisation lose its competitive edge. The discussion between William and Arnold regarding “competency framework” is another revelation of the organisational work culture. Arnold was annoyed after he observed that certain members of the department are designing very specific job tasks and area of responsibility for the employees. Such kind of restriction is considered by him as a means to control the employees. According to him it is best to make a person work for something which he does the best in the organisation and not force him to do something which the organisation deems fit. He was of the view that everyone has a certain set of talents that cannot be specifically defined within a competency framework. According to him, it is a challenge for the organisation to place employees according to their talent. Although, Williams seems to understand that talent cannot be restricted still his rigidity and lack of proper knowledge, made him ridicule Arnold’s proposals. Thus, once again it is revealed that despite the presence of forward looking mangers like Arnold, it is hard to change the stagnant work culture due to the rigid and closed organisational structure. The anomaly in the organisation’s compensation and reward system also throws light on the poor organisational work culture followed. Salary varies according to region and the salary level of employees tends be fall deeper than the regional norms. Where pay is now the most important aspect of a modern firm, designing a proper compensation package becomes most important. For an organization like GOF, which is widely distributed the reward system actually becomes a very important criteria. Using a total reward system is most advisable for any multi division organization. (Paik, Vance, 2006, p.280). The implementation of a secret bonus scheme for selected managers wherein they are eligible for a bonus if they achieve the target also indicates a biased work culture and a closed organisational structure. The organisation’s tendency to share the organisational profit unevenly with its employees, as is evident from a discussion between two managers also shows the greedy organisational culture propagated by the top brass. The above scenario clearly shows the internal organisational conflict that is present within the organisation. The noncooperation between the marketing and operations department in sharing information and mutual consultation acts as a barrier in the path of the organisational growth. It also once again reaffirms the negating work culture that has manifested within the organisation. It is in fact the lack of understanding of proper human resource values and system is what hindering the organization’s performance. The organization has to incorporate all the suggested systems in their human resource management to get change done. Without properly addressing the key issues of organizational culture and employee performance it is quite impossible to bring about the change. The structure of the organization is a closed one, which in many ways hinders proper flow of communication. The main element identified here is the lack of positive organizational culture. The distorted organizational culture and practices made the structure of the firm a closed one and influenced the employee behaviour in a negative way. (Drew, Kelley and Kendrick, 2005) That means it is a chain reaction process as when the core culture of the organization is not supportive enough, the other things fall apart. In absence of proper culture, the flow of communication and participation gets hampered thereby making the organizational structure a closed one. In a closed organization, the employees are mostly influenced and this effect is reflected in their individual or group behaviour within the organization. Recommendations Changes on Strategy and Implementation of a new Plan In view of the positive and forward-looking tendency of few of the young managers, there is a ray of hope for the GOF to change itself for better. As discussed earlier the mission statement issued by the Managing Director “Ted Englebertdown” was quite ambitious and may dramatically improve the organisational efficiency and productivity, if followed properly. The strategies and plans thus do not seem to need any changes. However, the organisational structure should be changed to a more open and flexible one wherein wider employee participation is encouraged. The work culture also needs to change wherein continuous learning and cooperation is encouraged and followed. Emphasis should be given more to the proper implementation of the present plans and strategies, rather than keeping them limited to papers. Necessary Changes The organisation structure should be more open and transparent. Active employee participation should be encouraged. Authority should be delegated properly according to the responsibility, evidently which is missing at present. Employee of all level should also be informed of any major decisions undertaken. A work culture of continuous learning should be encouraged. The T&D department should be given enough authority and freedom to perform its task. Cooperation and Coordination among employees and departments should also be encouraged. The company should also undertake proactive strategies rather than following a reactive strategy. Rather than, copying and following the competitors proven plans and innovations, it should undertake the challenge of innovation by itself. REFERENCES: 1. Drew, S.A., Kelley, P.C. and T. Kendrick, CLASS: Five elements of corporate governance to manage strategic risk, Business Horizions, Volume 49, Issue 2, March-April 2006, Pages 127-138 2. Hankinson, P. 1999. “An empirical study which compares the organizational structures of managing the world’s top 100 brands with those managing outsider brands”. 1-2. 8(5). 3. Hoskisson, R E. 2008. STRATEGIC MANAGEMENT - CONCEPTS AND CASES: COMPETITIVENESS AND GLOBALIZATION. USA: Cengage Learning 4. 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