Organizational structures and culture

management? There are not any adequate answers for this question. However, in management the talent of overview, foreseen and observes are necessary to evaluate flexible most. II. Detail: 1. Evaluate and compare different organizational structures and culture: Getting the structure right is important for any organization, whatever its size, its technology or its environment. In this point of Child’s view, it is claimed: “The allocation of responsibilities, the grouping of functions, decision - making, co – ordination, control and reward – all these are fundamental requirement for the continued operation of an organization. The quality of an organization’s structure will affect how well these requirements are met.” Child J. (1988). Organization: A guide to Problems and Practice. Paul Chapman. Depend on environment, technology and tasks or strategy of management, each organization will be structured to meet its objective or motivate workers. Organization structure can be broken down into two main types: function and division. “A function is a set of people who perform the same types of tasks or hold similar positions in an organization.” “A division is a group of functions created to allow an organization to produce and dispose of its goods and services to customers.” Veeramuthu (2008) Organizations and Behavior, Hanoi: National Economic University. 2- page handout on the Organizational Structure and Culture. Besides, authority/power is also a factor influencing on “shape of organization”. The span of control is a tool to evaluate authority and hierarchy structure is “flat” or “tall”. It is mean that an organization with the narrow span of control and high level will lead to tall structure. In contrast, wider span of control and low level is result in flat structure. The figure below is about organizational pyramid what shows you span of control, overall. Figure 1.1. Organizational pyramid EDEXCEL HNC & HND BUSINESS, (2004) Mandatory Unit 3: Organizations and Behavior Supporting foundation degrees. 1st ed., London: BPP Professional Education, Aldine House, Aldine Place, pp. 64. Relate to hierarchy, authority can be recognized under an aspect of centralize or decentralize. In the centralized organizations, managers retain most of responsibilities and the power concentration in one person. In contrast, decentralized organizations disperse responsibilities and decisions for lower level managers. At all, each organization will decide what combination is most effective. Making up a right structure is not enough for an organization to run clearly and effectively. Organizational culture is also remarkable. As the same as other concepts, there are many way to define organizational culture. One of the definition is described as follow: “Culture (in the sense of organizational ‘climate’) is the collective self-image and style of the organization; its shared values and beliefs, norms and symbols” EDEXCEL HNC & HND BUSINESS, (2004) Mandatory Unit 3: Organizations and Behavior Supporting foundation degrees. 1st ed., London: BPP Professional Education, Aldine House, Aldine Place, pp. 103. Each organization has different expectations, values, norms and ways to adapt and identify its culture. Thus, culture in each organization is unique. For example: if relationship of customers is cared of the culture, this distinction will be adopted by individuals. However, following the ideas of Harrison, Handy classify four main types of organizational culture: power, role, task, and person culture. Handy C.B. (1993). Understanding Organizations. Penguin Within power culture, power is central by judgment of key individual. In role culture, individuals pay attention to their particular job. Furthermore, task culture based on job satisfaction and expert power. Finally, person culture takes individual as central focus and talent of individual is target for structure exists. As we mentioned about organizational structure and culture before, now we will look through the case scenario of Microsoft; the article “Ballmer’s Microsoft” that published in Business Week on 17th June, 2002; to understand more clearly: Under management of Gate: Building a Microsoft basic foundation, Gates paid attention to develop production “the Windows operating system and Office suite of applications” that he believed more customers’ attraction and competition moves. To be convenient for product development and management, he divided company following functional structure. “Gates gave his pal free rein to restructure the way Microsoft manages finance, sales, product development, marketing, even strategic planning”. Concentrate to production, Microsoft employees worked in smaller groups and all product activities were done at one site. It is reason why the amount of Microsoft’s products was always competitive comparing with other company in the industry. “We have always had a multi-product strategy where the product managers and the development teams are the champions, and that is a process that has allowed us to have many more products than any one else in the industry”. Lalonde J.E. (1990,Feb. 18). A Billion-Now Microsoft's Chairman Bill Gates Needs A New President For The '90S. Retrieved April 17, 2008, Web site: In general, with the Microsoft’s goal at this time, organization structure that Gate created is suitable. To manage employees pretty well he used flat structure with narrow span control for office. Hierarchy was centralized that Gate handed most of power. It is true as Jame Collins said: “To my mind, Microsoft has never been a company. It's a single remarkable individual, Gates, with thousands of the smartest, best-paid people anywhere helping that individual. It's basically like a big wheel, with Gates at the hub.” Gates, Bill Leadership the Bill Gate way. Retrieved April 17, 2008, Web site: The authority of Gates covered around company and the last decision in hand. One of the evidence for his strong power is he had his own “think week” when he can think a new strategy in technology. This proof seems like simple but it expresses that he is such an important and seft-decision person “Gates had his ‘think week’ where he secluded himself at his family’s retreat in Hood Canal in northwest Washington to ruminate on the Next Big Thing in technology”. Turn your sight into culture. Power culture is the way Gate created in first years of Microsoft. At that time, the control key is Gates, he handed off decisions. It is may be that, others ideas were gathered and filled up each other but the last is Gates. Under management of Ballmer: Gates gave his place to Ballmer in January 2000. Taking a position as CEO of Software Company with clearly goal “great, long- lasting company”, Ballmer has reconstructed Microsoft’s corporate from top to bottom. With open-mind, he had a big innovation shaping Microsoft‘s division, tall, unwieldy and decentralized structure. He has broken Microsoft into seven operating divisions, each units has own leader and they have individual decision making and accountability “It’s a balance sheet that divides the company into seven distinct businesses and gives each unit’s leader the financial tools to measure its performance”. Looking ahead, the scale of Microsoft rose larger with a number of employees. It is reason why he has delegated a second tier of executives. Ballmer gave up old line of hierarchy that in the hands of Gates and Ballmer and made Microsoft to become decentralized structure “He has empowered a second tier of executives to run their businesses with less supervision, breaking from Microsoft’s heritage of placing every important decision in the hands of Gates and Ballmer” .Moreover, “management sync weeks” every quarter day-after-day proclaims a changing management from Ballmer, once again. Here, all ideas are expressed and the final is group-decision. On the other hand, Ballmer has reduced a level of management to manage more easily and efficiently. Microsoft structure is less flat therefore, the span of control is narrower and the gap between the sales and product-development are restored. Now, we are going definitely to Microsoft’s culture under management of Ballmer. Refer to division structure, Ballmer sent off a strong role culture. Firstly, we will focus on belief, one of the firm to appreciate organization culture. By the vision improving the relationship with customers and competitors, he has pointed out an anchor that influence on not only the method customers respond but also employees interact with customers “Microsoft’s mission is not just about technology. It’s also about improving the way the company handles relationships with customers and others in the technology industry”. Further, specific manifestations of culture are people behaviors, too. It is also regarded as belief that look at aspect of perception and feeling “People have to be very open, self-critical, almost relentlessly honest, and, at the same time, respectful”. Secondly, value is also important aspect. Giving core values “honesty, integrity, and respect”, Ballmer guides employees and promote their behavior in Microsoft environment. To be considerable positive mind, from these core values, Ballmer takes relationship with the rest of industry that did not happen with aggressive person as Gate. Finally, norm is a number of rule and order that are forced employees to obey. With an aim making all stick and employees are independent in their job, Ballmer has ordered array of meetings, reviews and examine “He says the company’s core value of honesty, integrity, and respect must shine through with customers, partners, and the tech industry”. In sum up, under Ballmer’s hand, Microsoft has made its own culture that has created specific image in industry. Competitor of Microsoft’s software company: Mozilla – Producer of Mozilla FireFox, the software Web browsers. It is time to look at one another competitor of Microsoft to evaluate and have a view more adequate. Consider as a big competitor, Mozilla with software web browsers Mozilla FireFox is actually competition comparing with the software IE (Internet Explore) of Microsoft. The reason choosing Mozilla but not another one is the different nature and nature goal. While the goal of Microsoft is a high fiscal, Mozilla is only a non-profit Corporation. Another reason is an image about open culture that Mozilla is a priority. Contrastively, Microsoft always tries to give persuasive data fights against this trend D.T., (2007,May 29). Who makes Miccrosoft unsleep well?. Retrieved April 17, 2008, from Estern Culure Web site: . Focus on making great products, Mozilla has applied a functional structure. This type of structure is effective for managing and easy to focus on product group “This unique structure enables Mozilla to financially support and cultivate competitive, viable community innovation. The result is great products build by passionate people” About Mozilla. Retrieved April 17, 2008, from Mozilla Web site: . Because of the main mission is an openness and opportunity on the Internet rather than business, like profits or price of stock therefore authority are decentralize and opener “Developers and programmers are central, but designers, testers, users and advocates are also key elements”.About Mozilla. Retrieved April 17, 2008, from Mozilla Web site: About culture, it can be said that an innovation. Indeed, over 20 percent market share in Europe, Mozilla FireFox send off free culture. In early, this organization has affirmed its own value, it is explain why the corporation have a success and bring its culture to around World Wide Web “providing a Web browser with enough marketshare to drive open standards on the Web. Carefully managed, this value — and the resulting ability to generate revenue — can be used to make the Mozilla project self-sustaining and help keep the Internet open and diverse”.About Mozilla. Retrieved April 17, 2008, from Mozilla Web site: Next, believing in personal traits make organization culture stronger. In this case, stand for nonprofit organization, it is not just belief, it is also independent attitude. Take examples are ability to work well, entrepreneurial style and spirit, good judgment and consensus building skills…etc. 2. The relationship between an organization’s structure and culture and the effects on business performance: As we noted, in one organization, structure and culture have mutual actions. Rely on what type of structure is shaped, culture will have an effect. For example: with type of functional, centralized structure, most of managers will show his organization to role culture. It is simple to understand, role culture has a main trend well personal relations so function structure seems like the most suitable. Because the characteristic of function is dividing to tasks, employees of individual task can exchange and work each others. And then, the more exchange the more relationship. Advantages: Microsoft also is not exception. Everything went well for Microsoft; the fiscal went sharply within 27 years. Aside from a management the way dividing employees to perform similar tasks and group smaller one to develop and complete independent projects are adequate business. It helped higher product capacity and work effectively “Gates believed that user-friendly computers and easily accessible software could attract many new customers. He tried to view the entire product portfolio of Microsoft in the light of future prospects and likely competitor moves. Accordingly, he made strategic decisions regarding product development”. Lalonde J.E. (1990,Feb. 18). A Billion-Now Microsoft's Chairman Bill Gates Needs A New President For The '90S. Retrieved April 17, 2008, Web site: Day to day, the scale of Microsoft expand more and more. The management is quite difficult, there is not another way is empower to second authority to manage. It not only solves a difficult in management employees but also gives a condition for sub-units to express potential and take full advantages in source of grey matter. Further, a volume of time to supervise is release in stead of a manager can spend time to make a strategy or schedule of work in the future. Disadvantages: Microsoft is not always right. Once again, Microsoft wants to bridge a belief in customers by getting product-development groups. However, the business was not successful because of these elements: First of all, a net work of Microsoft is too large. Develop more groups of product is having to add more people for project. It is a really trouble with such a large company as Microsoft Corp. The scale of management wide, supervisors will not adequate and easily lead to impact or higher is conflict. The second, a range of products are published but not have remarkable. Microsoft has not concentrated in any product for any people group. If Microsoft is still greedy and cover all products of industry, the company could lose it own goal and old own market. 3. The factors which influence individual behavior at work: In any side, any aspect, every people differ from one another. So on, behavior is a complex element in management. However, without understanding behavior will lead to result in conflict and frustration. As a starting point, a manager need to recognize how differences influence subordinates’ behavior and attempt to understand them if they are to be successful. Moorhead G., Organization: A guide to Problems and Practice. Individual behavior is affected by diverse different factors. Such an individual factors are personality, perception, attitude, learning, conflict, stress and change. The first factor is about personality. Personalities become more clearly defined and generally stable when people grow up into adulthood. “Personality is the relatively stable set of psychological attributes that distinguish one person from another”. Griffin R.W., Organizational Behavior: Managing People and Organizations. Houghton Mifflin Company. The big five is the classification system of traits to serve a model to appreciate and describe personality. In other words, these traits in big five influence on behaviors and individual actions. It includes five dimensions of trait that can be remembered as OCEAN or NEOAC: Openness to experience (Not open to experience) Conscientiousness (Un-directedness) Extraversion (Introversion) Agreeableness (Antagonism) Neuroticism (Emotional stability) Each Supertrait is measured by 6 facets (or subordinate traits). The figure will describe more detail: McCrae, R. R. and Costa, P. T. (2003). Personality in adulthood, a five-factor theory perspective (2nd ed.). New York: Guilford Press. O C E A N Fantasy Competence Warmth Trust Anxiety Aesthetics Order Gregariousness Straightforward-ness Angry hostility Feelings Dutifulness Assertiveness Altruism Depression Actions Achievement striving Activity Compliance Self-consciousness Ideas Self Discipline Excitement-seeking Modesty Impulsiveness Values Deliberation Positive emotion Tender-mindedness Vulnerability Basically, personality starts at birth, goes on adolescent and shapes in adult; but it can still be changed by circumstance, reflect of environment or situation. Observing and analyzing is a mission of managers to make his/her subordinates high feeling, spirit, and a little bit of changing basic personality. In deed, understanding basic personality is important, it is not only affect people’s behavior in organization but also their perception and attitude toward the organization. Pervin L. (1984). Current Controversies and Issue In Personality. New York: Wiley. The second hidden element is perception. Touch, sight, hearing, taste and smell are five senses help people awareness, encoding and decoding information about environment. The way and the process discover environment is not the same target and situation so each people will have own distinctive view. “Perception is the relatively stable set of psychological attributes that distinguish one person from another”. Griffin R.W., Organizational Behavior. Boston, Toronto: Houghton Mifflin Company. Perception is cognitive process and appears whenever stimulate the senses. There are threes factors which influence perception: perceiver, target (or object) and situation. Through the process of observing, selecting and organizing, people perceive data information from outside. However, because of the imbalance level of knowledge, sometimes lead to misperceive. Indeed, many classic research studies clearly showed that in workplace, managers and subordinates often have different perception “The manager and the employee perceive the job design freedom in different ways; they have different perceptions of the employees’ amount of freedom” Gibson J.L., Organizations Behavior Structure Processes. Boston, Massachuserrs: Irwin Mc Graw-Hill. Another aspect of individual behavior in organizations is attitudes. We define attitude as: “An attitude is positive or negative feeling or mental state of readiness, learned and organized through experience that exerts specific influence on a person’s response to people, objects, and situations”. Gibson J.L., Organizations Behavior Structure Processes. Boston, Massachuserrs: Irwin Mc Graw-Hill. Individual attitude are formed in various ways and may still be changed. The modification of attitudes depends on changing either the feelings or the beliefs. There are three dispositional views of attitudes: intention, affect and cognition. Figure is single attitude about an object: Figure 1.2. Single attitude about an object Moorhead, Organization Behavior: Managing People and Organization. Houghton Mifflin Company. In work context, behavior will be influence by two types of attitude: attitude to work and attitude at work. “Attitude to work” mentions to opinion or view of individual on working. Meanwhile “attitude at work” has a trend to express a viewpoint by actions. Next, we jump to conflict aspect. Conflict arises because of a disagreement. In general, it is no surprise that most of people still think conflict as negative and avoid it. Although, some types of conflict are helpful and encouraged to improve decision. Three types of conflict are identified: bargaining, bureaucratic and systems conflict. A sequence of conflict was coded high or low on three dimensions: attention to own-view, attention to other view and relational disruptiveness. As we know conflict may occur between two individuals, as in the case of superior vs. subordinate…etc. When conflict is high and long-term, stress is consequence. Some expression in stress are exhaustion, loose temper…Keep stress out of your life is the best way to make best feeling. The last aspect of individual behavior is learning. Have to consider that the basic unit of learning is the individual. Organizational learning has emphasized cognitive and interpersonal factors. There are two main approaches to learning: stimulus-response and cognitive. Stimulus learning shows people behave and response the same way in the future. In other words, they do not make sense; just behave following “condition”. The approach of cognitive depend on experiences, information or nature, it is also mean people behave more flexible and various. Now turn to the scenario to analyze more clearly. As the entity of Microsoft Corp., Ballmer’s characters are also affecting to individual behavior in work. Ballmer has a gifted talent in predicting (a long term-view) the changing events and organizing, and directing the business follow what he expected. Take, for example, the Xbox 360, introduced to the world in 2001. . Who would have thought that Microsoft would enter the game-console industry? Although the Xbox still faces heady competition from Sony's Wii and Playstation, it is connected to several million US household televisions. Tang C. ,Lessons for Leaders, Retrieved May 25, 2008, from Web site: Further more, Ballmer more concerns to his employees and the work environment and brings energetic and enthusiastic when dealing with people “In 2007, the company was ranked one of Fortune's 100 best companies to work for”. That is all symbols of extraversion person. Another of Ballmer's philosophies is to be patient. This trait helps him clearer in the Microsoft’ target. Then again, Barry Zweibel points out that any company with $44 billion in sales has the luxury of patience. 4. Organization theory strengthens principles and practice of organizing and management Classical management theory Classical School: This school emphasize on the purpose, hierarchy of management, principles of organization and technical requirement. From these purpose of the approach, it is essential to understand how the best way for an organization works and how to improve productivity. Classic school includes two ‘sub-groupings’: scientific management and bureaucracy. First of all, we concentrate to scientific management. F.W. Taylor (1856-1917), a “father” of scientific management, recognized and defined scientific management in the early 1900s. Scientific management focuses on the process of working and the best work method is possible to perform. And then, motivation is needs concept that managers should do. It is useful to get workers working more efficient, so on increase the volume of productivity “He (Taylor) was our first professional guru and Taylorism-with its twin goals of productivity and efficiency” Stern S., (2001, October) “Guru Guide” Management today. Concerning with efficient method and procedure for co-ordination and control of work, Taylor summarized a set of principles: Mullins L.J., Management and Organizational Behavior 7th ed. Edexcel. The development of true science for each person’s work. The scientific selection, training and development of the workers. Co-operation with the workers to ensure work is carried out in the prescribed way. The division of work and responsibility between management and the workers. Next, we turn to another ‘sub-grouping’: Bureaucracy. A Germany sociologist Weber shows the concern for Bureaucracy. Weber developed the concept of Bureaucracy as a formal system of organization and administration designed to ensure efficiency and effectiveness Veeramuthu (2008) Organizations and Behavior, Hanoi: National Economic University. 5- page handout on the Evolution of Management Thought. . Especially, he emphasized on the administration based on rules of experts and rules of officials. Human Relation School: The next evolutionary step in during 1920s (Human relation School) paid attention to social factors at work and behavior of employees within an organization. This theory also studies the way of how managers should behave to motivate employees to meet organizational target. According to Follett, he showed some influence of this theory: Suggested workers help in analyzing their jobs. If workers have relevant knowledge of the task, then they should control the task. Another branch of organizational research relating to Human Relation School is theory X and theory Y of the writer Douglas McGregor. Assumptions of two theories are described as follow Theory X and Theory Y, Retrieved May 25, 2008, from Web site: : Theory X: managers assume workers dislike and avoid work if possible, so they must use coercision, threats, and various control schemes to get workers to make adequate efforts against objectives. They assume the average worker wants to be directed and prefers to avoid responsibility, has little ambition, and wants security above all Theory Y: assumes that individuals do not inherently dislike work, but see it as natural as play or rest. Furthermore, external control and threat isn't the only way to encourage productivity, and the most significant rewards are the "satisfaction of ego" and "self-actualization needs". Overall, contrast with Classical School that was concerned about ‘organizations without people’; Human Relation School related about ‘people without organizations’. System approach: Mullins claims that “system approach focus on the total work of the organization and the interrelationships of structure and behavior and the range of variables within the organization” Mullins L.J., Management and Organizational Behavior 7th ed. Edexcel . Indeed, attention concentrates to analyze organization as a ‘system’ with a number of sub-systems. Moreover, the approach gives a meaning that any activities of one part also affect to other parts. It is mean that managers should have open-eyed in a whole. Contingency approach: The last theory but more correct than others: Contingency approach. Concerning with structure as a influence on organizational performance; contingency approach implies that there is no one best way to organize. Depend on different situation and circumstance of each organization, it is lead to appropriate designed structure and management system are different. Actually, it is claimed by Tim Barnett “The contingency approach to management (also called the situational approach) assumes that there is no universal answer to such questions because organizations, people, and situations vary and change over time”.28 Barnett T., Contingency Approach to Management, Retrieved May 25, 2008, from Web site: However, this research also indicated that different forms of structure have equally successful chance. Above all, “an organizational structures and control systems a manager chooses are contingent on characteristics of the external environment. Organization needs to be flexible and adaptive”. Veeramuthu (2008) Organizations and Behavior, Hanoi: National Economic University. 12- page handout on the Evolution of Management Thought. 5. The different approaches to management and theories of organization used by Microsoft: After a century, classic theory is still remained. Now, this theory has been applied in Microsoft. Including scientific management and bureaucracy, classic school is actually useful in Microsoft’s management. Looking at the scientific point, a proof that Microsoft has been applied this affirmation is centralization. An authority is always on hand of managers and leaders, who make plan, organize and control a group. However, all of the guideline and an overall way contributing to managers and leaders are decided by Board of directors. And Ballmer is the most important person; he set standard for subordinate: “People have to be very open, self-critical, almost relentlessly honest, and, at the same time, respectful”; “Ballmer wants people finish projects on time” Greene, J. (2002) Ballmer’s Microsoft, Business Week. . Not just set a employees standard, Ballmer also make a right plan for Microsoft running “Ballmer looking for alternatives- a key reason why Microsoft last year jumped into game-console business with Xbox and into the accounting –software business with the acquisition of Great Plains Software Inc” Greene, J. (2002) Ballmer’s Microsoft, Business Week. . About Bureaucracy, Microsoft use as a method to create an environment for good working. The span of management widen from the Board of directors to managers. Board of director includes ten persons divided into five committees (the Audit Committee, the Compensation Committee, the Finance Committee, the Governance and Nominating Committee and the Antitrust Compliance Committee) that manage distinguish matters of Microsoft Corp.. Each distinguish have own employees relate to specific work. Based on rules, norms are applied in workplace; managers will evaluate a performance of employees. Study on the way of how managers should behave in order to motivate employees to meet organizational targets, human relation theory is positive affective in Microsoft. In deed, Microsoft concentrate to motivating the employees plays a._.