Organizational Structure, Design & Culture

Human Resource Management

Organizational Structure

An organization is defined as a system composed of individuals, groups, tasks, and managerial controls.

The structure of an organization is an indicator of how an organization deals with the forces in its environment – the market or technology.

Organizational Design

OD is the process of structuring organizational activities so that the structure is compatible with other organizational components as well as with external environment.

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Functions of OD• It helps to focus on organizational objectives.• It helps to divide the organizational activities

into various groups.• It helps to provide a system of coordination.1.Organizational hierarchy2.Rules & procedures3.Coordinating agents4.Self-contained project groups

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Organizational Culture

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What is Culture?

• It usually refers to how people feel about the organization, the authority system and the degree of employee involvement and commitment. These are “softer” aspects that impact the “harder” aspects like the strategy and structure.

• All members come to adapt shared values, beliefs, norms, attitudes and ways of doing things. It guides how employees think-act-feel.

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What is Organizational Culture?

• It is reflected in how things are done and how problems are solved in an organization.

• It may be defined as the ethos of the company (USA) or the shared values and team spirit (UK).

• In biological terms, it is like the DNA, invisible to the naked eye, but critical to shaping its behavior.

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Elements of Culture

1. Innovation2. Stability3. Orientation towards people4. Result orientation5. Easygoingness6. Attention to detail7. Collaborative orientation

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Some other Elements

1. Basic assumptions of some companies:

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AT&T Market-oriented communication system

Citibank Customer orientation

Boeing & Hewlett Packard

Risk taking and innovation

Sony & Toyota Employee participation, risk taking & security

Asea Brown Boveri Self discipline and control

Some other Elements

2. Artifacts:• Visible manifestations like structure, symbols,

plaques, public documents, media reports it releases, rituals, norms, rules and procedures

• Observable behavior of its members – the way they talk, the jargon they use, the way they dress

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Some other Elements

3. Values:• These are the social principles, goals or

standards held by members of an organization, individually and collectively.

• These are generally not compromised for short-term benefits or financial gains.

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Functions of Org Culture

• Culture gives a sense of identity to its members.

• It helps to generate commitment among employees.

• Culture serves to clarify and reinforce standards of behavior.

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Types of Org Culture

1. Academy – provides opportunities to master many jobs, for self growth & to move forward

2. Club – organizations highly concerned with people to fit in and be loyal

3. Baseball team – fosters entrepreneurs and risk takers are rewarded handsomely

4. Fortress – an org facing hard times and is preoccupied with survival

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Managing Organizational Culture

• Taking advantage of the existing culture It may be easier and faster to alter employee

behaviors within the existing culture than it is to change its history, traditions and values.

Managers must be not only fully aware of the culture and behaviors supporting it but must also communicate the same to lower levels and set examples for them to follow.

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Managing Organizational Culture

• Transmitting the org culture1.Role of leaders – shaping, reinforcing,

transmitting the culture; role model; consistent; crisis handling; reward handling

2.Socialization – learnt through observation and communication by managers

3.Process of selection – to create a right fit between the individual and the job

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Changing Organizational Culture

• Managing symbols – replacing old mythical stories supporting old culture with new stories supporting new cultural values. Exp-meetings

• Stability of change – need to change – transition – firming up – stability. Slow and long process, art of managing resistance (reassurance & communication), tenacity to persist, mobilizing people, 2 layers (artifacts & core values) 16

Phases of Achieving Change

Linear model with 7 stages by Sathe (1974):• Shock the organization• Break the old mind-set• Make the tough decisions• Demand performance• Track progress• Weed out those unwilling or unable to change• Reinforce high performance and competence

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Phases of Achieving Change

Cycle model by Kaplan & Norton (1996):• Balanced Scorecard approach (incremental

changes):1.Clarifying and translating vision and strategy2.Communicating and linking objectives and

measures undertaken3.Planning and target settings4.Strategic feedback and learning – restart

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International Comparisons

Western & Asia Pacific countries like China, India, S Korea, Japan, Taiwan & Hong Kong have differing organizational cultures.

Opening up of economy, lowering of trade barriers, single market without borders and global presence of multinationals make it imperative to understand various cultures of organizations from different regions.

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Understanding Cross-cultural Dimensions

• Cultures can be high or low on these 4 dimensions (Hofstede, 1980):

1.Power distance (centralization vs flatter org)2.Uncertainty avoidance (security vs risk taking)3.Individualism-collectivism (self vs group)4.Masculinity-femininity (money-material-

ambition vs care-cooperation-quality of life)

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Thanks!

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