Module 4 – Background
ORGANIZATIONAL STRUCTURE AND CULTURE
Have you ever observed how some organizations just seem to be shining stars in their fields, even if the product or service they produce is not that much different from their competitors? Have you noticed that it seems that they are the ones who are the most successful? Did you ever wonder why? Read the following material on organizational culture for some insights into what culture is, what it does, how it is formed, and how it is taught to newcomers in the organization. This reading is available in the Trident University Library.
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Flamholtz, E. & Randle, Y. (2011). Corporate Culture: The Invisible Asset. Corporate Culture: The Ultimate Strategic Asset. (pp. 3-25), Stanford, CA: Stanford Business Books.
This material on organizational culture type may be particularly helpful as you prepare your Module 4 SLP assignment.
McNamara, C. (2000) Organizational Culture. Adapted from the Fieldguide to Organizational Leadership and Supervision. Free Management Library. http://managementhelp.org/organizations/culture.htm
Organizational Structure and Design
The way an organization is designed and structured can have significant effects on its members and its ability to execute its strategy. In this module we will try to understand those effects and analyze the behavioral implications of different organizational designs.
An organizational structure defines how job tasks are formally divided, grouped, and coordinated. According to Robbins and Judge (2014), managers need to address six key elements when they design their organization’s structure:
Work specialization – the extent to which activities are subdivided into separate jobs.
Departmentalization – the basis on which jobs will be grouped together.
Chain of command – the people who individuals and groups report to.
Span of control – the number of individuals that a manager can direct efficiently and effectively.
Centralization and de-centralization – the locus of decision-making authority.
Formalization – the extent to which there will be rules and regulations to direct employees and managers.
One way to gain insight into the complexity of organizations and how organizations are structured or designed is through metaphors. For example, using metaphors, an organization can be talked about as if it were a machine or as if it were an organism. The organization that is like a machine is characterized by extensive departmentalization, high formalization, and limited by low formalization, flat hierarchy and the use of cross-hierarchical and cross-functional teams, free flow of information, and decentralization. Each design has advantages and disadvantages. For example, organizations that are like machines are often good at keeping the costs of standardized products or services down, but could inhibit innovation and creativity. Read the excerpt (pp. 98-108) for insight into organizational design and how metaphors can be used to understand how organizations work:
Cameron, E. & Green, M. (2009) How Organizations Really Work. Making Sense of Change Management: A Complete Guide to the Models, Tools, & Techniques of Organizational Change 2nd Ed. (pp. 98-108). London and Philadelphia: Kogan Page. http://www.bms.lk/download/GDM_Tutorials/e-books/Making_Sense_of_Change_Management.pdf
Organizational structures are also considered in how they fit or align with an organization’s strategy, mission, and objectives. Traditional structures were divisional structures, functional structures, team-based or process structures, and flexible structures. More recently, organizations have needed to take on more “open boundary” designs. Models of hollow, modular, and virtual organizations describe these “open boundary” organizations. Overall, the key learning here is that the structure selected should match the organization’s strategy – or it will be very difficult for the organization to be successful.
The following reading considers organization design in an era of newer strategic considerations such as globalization and changing market dynamics:
Narasimhan, A., Yu, H. H., & Lane, N. (2012). Organization design: Inviting the outside in. Retrieved from https://www.imd.org/research-knowledge/articles/organizational-design-inviting-the-outside-in/
Aligning culture and structure
Designing an organization’s structure involves more than just shifting boxes and lines on an organizational chart. Mootee (2012) offers several critical tests when considering the adequately designing an organization’s structure:
- The Future Test: Does the design reflect the needs for how a company plans to compete in the future?
- The People/Culture Test: Does the design adequately reflect the motivations, strengths, and weaknesses of employees?
- The Competitive Advantage Test: Does the design allocate sufficient management emphasis to the strategic priorities?
- The Power Test: Does the design provide the desired allocated power to groups/individuals that is linked to the strategic value of the unit or functions?
- The Agility Test: Is the design adaptable and swift to respond to future changes? (p. 1)
It makes intuitive sense that organizational culture and organizational structure should affect each other. Indeed, the way work is coordinated, the way hierarchies are designed, and the way communications are channeled should align with the norms and values of the people who work there. If they do not, there will be tension and conflict between the way people feel comfortable working and the structures that force work to be done in a different way. The following article is an excellent and compelling analysis of why management should consciously insure that culture and structure support each other so that the organization can function as smoothly and effectively as possible.
Janicijevic, N. (2013). The mutual Impact of organizational culture and structure. Economic Annals 58(198). Retrieved from http://www.doiserbia.nb.rs/img/doi/0013-3264/2013/0013-32641398035J.pdf
Denison, D., Hooijberg, R., & Lane, N. (2012). Building a high-performance Business Culture. Leading Culture Change in Global Organizations: Aligning Culture and Strategy. (pp. 1-23), Hoboken, NJ, USA: John Wiley & Sons. Retrieved from
A classic source for an overview of organizational culture is:
Schein, E. H. (2010) Organizational Culture & Leadership. 4th ed. San Francisco: Jossey-Bass. Available in the Trident University Library.
Organizational Structure and Design
“Guidelines for Organizational Design” assembled by Carter McNamara, PhD, provides library links to several readings on the topic.
McNamara, C. (n.d.) Guidelines for organization design. In Free Management Library. Retrieved from http://managementhelp.org/organizations/design.htm
Mechanistic vs. Organic Organizational Structure: Contingency Theory (2014) BusinessMate.Org http://www.businessmate.org/Article.php?ArtikelId=44
Mootee, I. (2012). What is the right organizational design for your corporation? And what test to use to know if you’ve got the right one? Innovation Playground. Retrieved from https://www.futurelab.net/blog/2012/06/what-right-organization-design-your-corporation-and-what-test-use-know-if-youve-got
Robbins, S.P. & Judge, T.A. (2014). Essentials of Organizational Behavior (12th Edition). Pearson.
Module 4 – SLP
ORGANIZATIONAL STRUCTURE AND CULTURE
For the SLP 4 assignment, you will explore some aspects of an organization’s culture, at least as you see it. (Select an organization you have worked with, if possible.) Since the concept of organizational culture is open to many interpretations and classifications, this assessment offers a slightly different approach from your background reading on organizational culture.
The People Group, Based on Gallup Research: What Makes a Great Workplace? Retrieved from https://thepeoplegroup.com/wp-content/uploads/2008/04/article-gallup-research-what-makes-a-great-workplace1.pdf
McNamara, C. (2000) Organizational Culture. Adapted from the Field guide to Organizational Leadership and Supervision. Free Management Library. Retrieved from http://managementhelp.org/organizations/culture.htm
Think about the results from the Gallup Survey for a minute, and how it compares to the Academy, Baseball Team, Fortress, and Club cultures described by McNamara in the Background reading.
Then prepare a 2- to 3-page paper addressing:
- In your opinion, do the Gallup results fit your general expectations or constitute a surprise in some ways? Interpret the results of the Gallup survey in terms of your own experience, either to confirm or to question the results. Compare the Gallup results and your opinions with the McNamara categories.
- The degree to which the Gallup results and the McNamara information tell you similar or dissimilar things about your organization.
- Does the Gallup survey and the McNamara categories help improve your managerial understanding and/or skills? What can you infer from the results about how your organization’s culture fits or doesn’t fit with you? What (if anything) can you do to make your interaction with the culture more effective?
- Provide your opinion on whether or not the above two sources in this SLP 4 help you understand the organization and how you cope with it. Do they accurately depict what is needed to analyze a company’s culture?
SLP Assignment Expectations
Your paper will be evaluated using the criteria on the SLP rubric (see the rubric for more detail): Assignment-Driven, Critical Thinking, Business Writing, Effective Use of Information, Citing Sources, and Timeliness.