Critical Role Management and Organizations in Global Environment

Question: Discuss about the Critical Role Management and Organizations in Global Environment. Answer: Introduction: A key element of an organisation which plays a critical role in its success is organisational culture. It may be defined as a system constituting of values, beliefs and assumptions that are essentially shared across the organisation and hence drives the behaviour of the various stakeholders particularly employees. The organisational culture tends to have a sizable impact on the way the various tasks are performed by the employees and their underlying actions. It is evident that organisational culture of various organisations tends to be different (Alvesson, 2013). In this light, it is imperative to highlight the various factors that play a pivotal role in determining the organisational culture. Some of the significant factors in this regard are outlined below. Individuals working in the organisation While the conduct of the employees is shaped by the organisational culture, but the employees also play a critical role in shaping organisation culture. The underlying beliefs of the employees, demographics, their prior experiences and underlying nationality may play a critical role in contributing to organisational culture depending on their underlying numbers (Haberberg Rieple, 2008). For instance, any organisation which consists of sizable army personnel would tend to have a strict culture particularly regarding following of orders and punctuality. On the other hand, a workplace driven by young employees in the age group of 18-25, the organisational culture would be highly informal and fun driven. Nature of Business The nature of business also tends to impact the organisational culture particularly the nature of product and services offered. For instances the businesses offering emergency services such as hospitals, ambulances, fire extinguishing tend to be very high on punctuality and following strict protocols as non-compliance with these could potentially be fatal for the client (Alvesson, 2013). On the other hand, organisations in service businesses tend to driven by customer satisfaction and hence the employees are supposed to be extra cordial and helpful towards the customers. Further, consider businesses thriving on creativity such as advertisement which tend to have a highly informal and open culture which enables a creative thinking. Clients and parties being served The organisational culture tends to driven by the clients that are being served because the viability and survival of any business essentially rests upon the satisfaction of the clients. As a result, the organisational culture shapes up in accordance with the clients. For instance, an outsourcing business which is serving clients based in US and UK would need to work according to the timings suitable to the clients and must also be sensitive to their respective culture and behave accordingly. Additionally, the organisational culture of service businesses in general is more driven by the conduct of the clients (Brennan, nd). The conduct of the management This is perhaps the most significant internal factor that shapes up the organisational culture as the employees tend to exhibit behaviour which is consistent with the expectations of the higher management so as to reap rewards in terms of promotion and other benefits. The extent of delegation of decision making exhibited by management is a significant shaping tool for organisational culture. Additionally, the nature of factors taken into consideration by management for promotion and the performance evaluation system in place also impacts the organisational culture. The level of formality expected in conduct reflected in dress up and office etiquettes is also driven by the management (Schein, 2010). For instance, for an organisation where the CEO is quite informal with the employees, then in general the organisational culture of the underlying place would be lower in formality. Hence, the management style pursued by the founder and top management is a cr itical factor driving organisational culture. An example of organisation chosen for this task is Woolworths. It is the largest supermarket operator in Australia and also has sizable presence in retail industry across various verticals such as home improvement, discount retailing, fuel retailing and merchandise. Additionally, the company also has interest in the hotel business. With regards to geographical presence, about 95% of the revenues are obtained from Australia and New Zealand. Hence, it is apparent that the current share of markets outside the Oceania region is very miniscule (Woolworths, 2016). Being a service industry present in a competitive industry, the organisational culture is driven by the clients. This has profound implications on the employees and their behaviour (Menon, 2014). The employees especially working at the store level who are in direct contact with the clients need to be extremely courteous and sensitive towards the customers so that they can build a competitive advantage over the rival Coles by offering a better service to the customers. The employees working at the store level are given specialised training in this regard so as to ensure an unfettered consumer commitment with high degree of standardisation. Besides, flexibility in certain cases is also permitted provided it is driven by the client. As a result, the conduct and behaviour of these employees is highly driven by organisational culture. Further, the other employees are also driven by this organisational culture and hence aim to carry out their functions keeping the consumer at the focus (Me non, 2014). In the retail industry, with the advent of online retailing and changing demographics and expectations of the consumers, there is a shift in the organisational culture. This is also to an extent driven by the diversity of the employees working at the company. As a result, it is imperative that the organisational culture needs to be sensitive to these changes and alter accordingly so that to be more reflective of the needs of the employees and clients. In this regards, it is imperative to collect regular feedbacks from employees and clients with regards to organisational practices and value system and thus bring about requisite shift as and when required. Besides, training of employees is also critical and it needs to be deployed as a screening tool. For instance, there may be employees that may not be naturally suited for coming in direct interface with consumers and the same should be deployed elsewhere so that the organisational values are not compromised (Alvesson, 2013). The organisational structure may be defined as the manner in which various activities such as allocation of task, coordination and evaluation of the same are carried out with the intention of achievement of the underlying organisational goals. The organisational structure is a key element for organisational success and facilitates decision making and hence implementation of the underlying strategy. Since, the delegation of power is greatly linked to the organisational structure, hence proportional the decision making is also allocated based on this. Further, it also plays a key role in determining organisational communication which usually flows in the hierarchy of the authority outlined by the structure. The organisational structure also facilitates the evaluation of employees as it outlines a particular authority as being responsible for reviewing the performance of the subordinate (Jacobides, 2007). As the organisational structure provides a clear hierarchy to the organisation, th e supervisors can clearly identify their subordinates and hence carry out their performance evaluation by observing the conduct of subordinate with regards to work, organisational commitment and conduct with fellow employees. The organisational structure also enables a direct chain of command which not only provides requisite authority and clarity but also ensures that accountability is achieved which is a critical element for the achievement of the organisational goals (Galbraith, 2014). Besides, organisational structure enables convenient identification of the issues that may hamper organisational growth and allow for timely solution in this regards (Mintzberg, Ahlstrand Lampel, 2008). The various elements of organisational structure are as follows. Geographical presence The organisational structure is driven by the extent of geographical spread of the business activity. A large geographical spread of the business may imply that regional heads may be required with requisite functional support so as to provide customised strategic support (Galbraith, 2014). For Woolworths, the major geography is Australia which contributed more than 80% of the revenues with New Zealand being the only prominent foreign market of importance. Thus, low geographical presence implies that the headquarter controls the overall operations. Number of distinct businesses and products Typically, an organisation which has high number of products which tend to offer significantly to the revenues and profitability, then it makes a strong case for organisational structure driven by product line (Haberberg Rieple, 2008). This is true for Woolworths which has presence across various businesses which are run under different names and would have slightly different underlying strategy and therefore the organisation structure is driven by a dedicated team deployed at the level of different businesses who owe accountability to the Board of Directors of Woolworths. Authority distribution and Control This is a key element which drives the organisational structure. In this regard, the key element is the level of control that is desired (Root, nd). For instance, in case of Woolworths, the employees at the store level are under the direct authority of the store manager and a portfolio of stores in a region are under a regional manager and thus the hierarchy thus set up. Overall, the structure is not very hierarchical with the largest number of employees concentrated at the store level. Hence, the organizational structure is heavy towards the bottom and lean towards the top. The relevant divisional structure at Woolworths is highlighted below (Woolworths, 2016). It is apparent from the diagram that the organisational structure is driven by the various divisions of businesses namely supermarkets, petrol, liquor, general merchandise and home improvement. Further, for each of the division, then functional structure has also been displayed which is responsible for the given division. A detailed functional structure for the home improvement division is displayed in the following structure which caters to the various business needs so that the end objectives may be achieved (Galbraith, 2014). In the organisational structure that is being followed at Woolworths, there are the following two critical issues (Mintzberg, Ahlstrand Lampel, 2008). There is overlapping of functions for the staff under different divisions which results in incremental costs which could otherwise be avoided. This is particularly true for certain divisions such as purchase whose cross divisional synergies may be reaped. Further, considering that the concentration of employees at the store level tends to be very high, there are limited opportunities for growth from the bottom level and these need to be increased so that the employee loyalty and skill may be suitably rewarded. In order to resolve the above challenges, following solutions may be suggested (Galbraith, 2014). It is imperative for the organisation to explore cross functional synergies across divisions and integrate the same thus resulting in significant costs savings on employees and functional costs. Besides, it is imperative that more promotional positions need to be created for the staff working at the store level as they play a critical role in acting as brand ambassadors of the company and are at the crucial interface with the customers. References Alvesson, M. (2013), Understanding Organisational Culture, London: Sage Publications Brennan, J. (n.d.), Five key factors that determine organisational culture, Retrieved 22 December 2016 https://wellnessatwork.com.au/five-key-factors-that-determine-organisational-culture/ Galbraith, J.R. (2014), Designing Organisations, San Francisco: John Wiley Sons Haberberg, A. Rieple, A. (2008), Strategic Management: Theory and Application, New York: Oxford University Press Jacobides, M. G. (2007). The inherent limits of organizational structure and the unfulfilled role of hierarchy: Lessons from a near-war. Organization Science, 18(3), 455-477 Menon, S. (2014), Does organizational culture influence employee behavior at work?, Retrieved 22 December 2016 https://www.linkedin.com/pulse/20140809231713-40057959-does-organizational-culture-influence-employee-behavior-at-work Mintzberg, H., Ahlstrand, B. Lampel, B.J. (2008), Strategy Safari: The Complete Guide Through the Wilds of Strategic Management. New Jersey: Prentice Hall Root, G.N. (n.d.), Six Elements of Organisational Structure, Retrieved 22 December 2016 https://smallbusiness.chron.com/six-elements-organizational-structure-4.html Schein, E.H.(2010), Organisational Culture and Leadership, San Francisco: John Wiley Sons Woolworths (2016), Annual Report 2016, Retrieved 22 December 2016 https://wow2016ar.qreports.com.au/