3: Organizational culture

1 Defining organizational culture
1.1 Definition
-organizations have distinctive cultures, and behavior acceptable in one organizational culture may be inappropriate in another
-can change instantly as a result of a single major event.
1.2 Components of culture
• Norms guide people’s behavior
• Symbols or symbolic action
• A set of shared values and beliefs
2 The factors that shape the culture of the organsiation
• Size
• Technology
• Diversity
• Age
• History
• Ownership
3 Writers on culture
3.1 Schien
-First leader of the company create the culture of an organization, thus the link between culture and leadership is very strong.
• Artefacts –these are the aspects of culture that can be easily seen, e.g. the way that people dress.
• Espoused values – these are the strategies and goals of an organization, including company slogans etc.
• Basic assumptions and values- these are difficult to identify as they are unseen, and exist mainly at the unconscious level.
3.2 Handy
- ‘the way we do things around here’, by this handy means the sum total of the belief, knowledge, attitudes, norms and customs that prevail in an organization.
• Power – rely on a central figure, most likely to be the owner of the organization, who strive to maintain absolute control over subordinates
• Role – everything and everyone are in their proper place doing own job, it’s a bureaucratic organization, where the structure determines the authority and responsibility of individual.
• Task – teams established to achieve specific tasks. People describe their position in terms of the results they are achieving. This is often associated with matrix structure.
• Person – is characterized by the fact it exists to satisfy the requirements of the particular individual involved in the organization.
3.3 Hofstede
-an attempt to find aspects of culture that might influence business behavior.
• Individualism vs. collectivism –some cultures are more cohesive than others. Anglo Saxon cultures are generally more individualistic than the collectivist cultures of South America.
• Uncertainty – some cultures, e.g. France and Japan use bureaucracy to reduce uncertainty because they dislike it.
• Power distance - the degree to which culture are willing to accept an inferior position. In south America societies, differences in power were tolerated more than in North European cultures.
• Masculinity vs. femininity – a masculine role is one where the distinction between the roles of the gender is large and the males focus on work, power and success.
• Confucianism vs. dynamism – this look at the attitude to change over the long term, emphasis love to a humanity.

2: Organisational Structure (Part 2)

2: Organizational structure (Part 1)

1.1 Different types of structure

Entrepreneurial - Owner of small companies, usually is built around the boss and his/her employees.

Advantages - One person taking decision lead to decisions is being made quickly so the entrepreneur should recognize the market alters fast act quickly. Also the owner can control over the work force easily.

Disadvantages - The structure is suited to small companies so there is no career path for the employees, when organization growth is hard to cope with the increase volume of decisions.



Functional structure - Organization that have outgrown the entrepreneurial structure and it is on a functional basis, usually exist in a relatively stable environment.

Advantages - Not much of duplicating so similar activities are grouped together. Hence, there are lower costs, standardization of output, specialization and there is a career path for the employees.

Disadvantages - Empire building (Manager will try to gain control over the key project and maximize their job security. As a result some other part of the project may not be achievable and ruin the ultimate goal of the entire project). Decision making in company will be slower due to longer chain of command and the structure is not suited for rapidly growing and diversifying organization too.



Product/Division/Department - Organization structured in accordance with product lines, usually general managers who enjoy responsibility for their own resources.

Advantages - It is easier to grow and diversify, also division managers can clearly see their area so top management can concentrate on strategic matters. As a result general managers are able to train up.

Disadvantages - There will be lack of control and duplication in companies. Also specialists may feel isolated and allocation of central costs problem may occurred.



Geographically structured - Grouping activities on the basis of location, commonly operate over a wide geographic area.

Advantages - It’s enable geographic growth. Also, clear responsibility for areas and top management free to concentrate on strategic matters. General managers are able to train up.

Disadvantages - It’s almost same as divisional structure.



Matrix structure - It aims to combine the benefits of decentralization.

Advantages - It got the advantages of both functional and divisional structures. It is flexible, customer orientation and able to encourage teamwork and the exchange of opinions and expertise.

Disadvantages - It may cause difficulty is in the lines of control and dilution of functional authority, meetings are quite time consuming, also the admin cost is higher.

1.2 Further aspects of organisational structure

Ownership and managers are normally seperated in large companies. This is because managers does not have enough money and they need to rely on bankers or the market ( the owners ).
In order the managers to manage the company in the best interest of the owners and this causes many safeguard/ controls are put in the place such as the formal organisation structures.

Scalar chain
the line of authority that can be traced up or down. This relates the nember of management levels within the organisation.

Span of control
The number of people that she or he is directly responsible.

There are 2 types of span of control:
Tall- narrow span of control
Flat- wide span of control

There are many factors that will influence the span of control:
Nature of work - more repetitive of work wider is the span of control
Type of personnel - better managers have wider span of control
Location of personnel - widely spread personnel have narrower span of control

1.3 Centralisation and decentralisation

analysing structures by refrence of the level which decisions are made

Centralisation
upper levels retain the authority to make decision

Decentralisation
lower levels people are able to take decisions

Factors that will affect the amount of decentralisation:
- management style
- ability of management/employees
- location spread
- size of organisation
- scale of activities

advantages of decentralisation
- senior management can concentrate on strategy
- better decision due to local expertise
- better motivation due to increased training and career path
- quicker responses due to smaller cain of command

disadvantages of decentralisation
- loss of control
- dysfunctional decisions
- lack of goal congruence
- poor decision from inexperience managers
- training cost
- duplication of cost
- extra cost in obtaining information

The business organisation

3. Strategic, tactical and operational planning levels in the organization

Strategic planning

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Tactical planning

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Operational planning

Levels	Definition
Strategic planning	Long term looks at the whole organization defines resource requirements
Tactical planning	Medium term Looks at department/divisional level specifies how to use resources
Operational planning	very short term Very detailed Mainly concerned about control

Strategic plans translated ---> Medium term tactical plans converted --->Detailed performance targets and budgets

3.2 The nature of strategic plan

3.3 The strategic planning process

Process	Definition
Strategic analysis	external analysis of markets,competitors, business environment--> identify opportunities & threats internal analysis of the firm’s resources, competences--> identify strength & weaknesses stakeholder analysis- to understand stakeholder expectations/influenc--> clarify objectives
Strategic choice-	What’s the basis of our strategy?How are we going to compete-high quality/low cost? Where do we want to compete? Which markets,countries,products? How do we want to get there? Organic growth,. Acquisition or joint arrangement such as franchising?
Strategic implementation	Once determined, the long-term strategy needs to be translated into plans for marketing, human resources management, IT, production, organizational structure, etc May involve major changes that have to be managed

1: The business organisation (Part 1)

The nature of organisation
Organisations
-what are they
-why do we need them
-different types

1.1 What is an organisations?
-Organisations are social arrangements for the controlled performance of collective goals.
-group or instituition arranged for efficient work.
-process to acheivethe stated objectives

The key aspect :
a)Collective goals
- goals must be Specific, Measureable, Attainable, Realistic, Timely.
b)Social arrangements
-a structure to enable people to work together with different role towards the common goals
c)Controlled performance
-systems and procedures to ensure that goals are achieved
d)Boundaries
-seperate internal environment with the external environment

1.2 Why do we need organisations?
-Organisations can achieve results that cannot be produced by individuals on their own.
Organisation enable people to :
• Share skills and knowledge
• Specialise
• Pool resourse
Reason why organisations exist :
-they satisfy social needs
-more effiecient at fulfilling needs than individual. In particular ,
• Save time
• Pool knowledge (share knowledge and skills)
• Power centres(influence demand,win orders and create wealth)

1.3 Classifying organisations by profit orientation
a.) Profit-seeking organisations
-Organisations that maximising the wealth of their owners.
• To continue in existence
• To maintain growth and development
• To make a profit
b.) Not for profit organisations (NFPs)
-do not see profitability but to satisfy particular needs of their members
Eg. Charity,school
-Mutual organisation : organisation with no shareholder. Establish by group of people to provide a range of services that serve interest of their member.
• Some building societies ( to pull saving together to build their own home)
• Trade unions(to protect theright of employee)
• Some working-men’s clubs

1.4 Classifying organisations by ownership/control
a.) public sector organisations
-providing basic government services and is thus controlled by government organisations.
Eg. Police,military,public roads,public transit, primary education,healthcare for poor.
b.) Private sector organisations
-part of nation’s economy that is not controlled by the government.
Eg. Businesses(profit-seeking),charities(NFPs),clubs
c.) Co-operatives
-an autonomous association of person united voluntarily to meet their common economic,social and cultural needs and aspiration through a jointly owned and democratically controlled enterprise.
-they are not owned by investor ,not to accumulate capital for investor.

2. The roles and functions of the main departments in a business organisation

2.1 The main function within an organisation

Research and development
Role:
- Improving existing products
- Developing new products
Key concerns:
- Anticipating custimer needs
- Generating new ideas
- Testing
- Cost

Purchasing
Role:
- Acquiring the goods and services necessary for the business
Key concerns:
- Price and payment terms
- Quality
- Delivery schedules

Production
Role:
- converting raw materials into finished goods
Key concerns:
- Quality
- Costs
- Wastage
- Productiong schedules

Direct service provision
Role:
- Providing services to clients
Key concerns:
- Quality
_ Time sheets

Marketing
Roles:
- Identifying customer needs
- Market research
- Product design
- Pricing
- Promotion
- Distribution
Key concerns:
- Customer needs
- Quality
- Promotional strategy
- Distribution channel strategy
- Pricing strategy

Administration- Administration support
- Processing transaction
Key concerns:
- Efficiency
- Information processing

Finance
Role:
- Bookkeeping
- Financial reporting
- Financial controls
- Budgetting
- The raising of capital
Key concerns:
- Accurracy and completeness of record keeping
- Monthly management reporting
- Annual financial repoting

Human resources
Role:
- Job analysis and job design
- Recruitment and selection
- Performance appraisal
- Rewards
- Training and development
- Grievances and discipline
Key concerns:
- Staff competence
- Staff commitment
- Cost
- Staff welfare
- Compliance

2.2 Co-ordination

- the regulation of diversed elements into an intergrated and harmonious operation.

mechanisms of co-ordination:
- budget-setting process
- regular planning meetings between the managers
- effective and regular communication between departments
- clear, well-documented reporting lines
- supervision

ways to achieve
- standardised work processes
- standardised outputs
- standardised skills and knowledge
- direct supervision
- mutual adjustment