Importance Of Organisational Structure And Culture For Optimisation Of Performance – Report

1.0 Comparison of organisational structure and culture with competitors

Question :

(1) LO 1 Understand the relationship between organisational structure and culture 

Write a report on the importance of organisational structure and culture for the optimisation of organisational performance. 

Please include sections on the following in your report:

a) Consider Atlantic Airway organisational structure and culture compare and contrast with its competitor structures and cultures (AC 1.1).

b) Explain the relationship between Atlantic Airway organisation’s structure and culture and demonstrate the impact of these elements on the performance of the Atlantic Airway (AC 1.2).

c) Discuss the factors internal or external which influence individual behaviour at Atlantic Airway working life, analyse through given examples (AC 1.3).

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(2) LO 2 Understand different approaches to management and leadership 

Different leadership theories affect behaviour and motivation and are therefore useful tools for managers; evaluate their impact:

a) Discuss the effectiveness of different type of leadership styles through compare the Atlantic Airway with competitors (AC 2.1).

b) Explain how organisational theory underpins the practice of management in the Atlantic Airway (AC 2.2).

c) Evaluate various management approaches through analyse the Atlantic Airway (AC 2.3).   

(3) LO 3 Understand ways of using motivational theories in organisations

Motivational theories are used in different ways in different organisations.  Discuss their use in a report, giving examples:

a) Discuss the impact the leadership styles impacts on motivation approach of Airway in periods of change (AC 3.1).

b) Discus the different motivational theories on the Airway business operation and culture relation with its environment and support your discussion with some examples within other company (AC 3.2)

c) Evaluate the applicability and usefulness of a motivation theory for manager of Atlantic Airway (AC 3.3). 

(4) LO4 Understand mechanisms for developing effective teamwork in organisations.

You have been asked to prepare a PowerPoint presentation as part of the recruitment process on understanding mechanisms for developing effective teamwork in organisations.

a) Explain the structure of team and group behaviour Atlantic Airway (AC 4.1).

b) Discuss factors (including internal or external) that may encourage or slow down the development of effective teamwork in Atlantic Airway (AC 4.2). 

c) Evaluate the impact of technology from various perspective on team working within the Atlantic Airway (AC 4.3).

Organisational behaviour is the study of behaviour of groups and individuals within an organisation (Hellriegel & John W. Slocum, 2011). It is concerned with the way overall performance and activities within an organisation are affected by human behaviour within a work environment. This assignment conducts an in-depth analysis of how organisational behaviour of Virgin Atlantic Airways affects its organisational structure, culture, leadership and overall performance. Virgin Atlantic Airways Limited founded in year 1984 is a British airline with its trading name as Virgin Atlantic and its head office in Crawley, West Sussex, England (Virgin Atlantic, 2015). It has more than 9,580 employees and in terms of passenger volume it is the seventh-largest airline of UK. Virgin Atlantic Airways has always faced British Airlines as one of its primary competitor in UK airlines industry.

2.0 Different approaches to management and leadership

Organisational Structure

The term organisational structure refers to the structural framework that determines hierarchical pattern within an organisation (Chambley, 2013). It defines the ways task allocation, coordination and other activities like supervision are carried out in order to achieve desired organisational goals. There are three main types of organisational structure namely; functional structure wherein organisations develop specific functional areas or departments on the basis of skills and specialisation and group their employees into specified functional areas (Baligh, 2006). This structure is comparatively easier to manage and control thus helps improving overall efficiency. However they fail if organisations lack effective communication within these functional areas.  Divisional Structure wherein organisations create divisions on the basis of geography, product and services or market (Kortmann, 2012). All divisions run independently and are treated as separate entity. Thus failure of one division has no impact on others however it results in duplication of functions. Matrix Structure which comprises of more than one reporting lines (Baligh, 2006). It allows managers to focus on specialisation however result in unnecessary conflicts.

Virgin Atlantic Airways and British Airways are the two leading Companies of UK airline industry (Topham, 2014). They both operate globally and have a massive structure. Virgin Atlantic Airways have a functional structure wherein it has grouped its employees into different functional areas according to their skills and specialisation. They are a small organisation as compared to British Airways thus have developed a structure that is easy to manage and control. They are cost conscious thus prefer a dynamic structure that can be adapted to changing business needs. British Airways on the contrary has a formalised structure and is run by précised rules and procedures. It has a somewhat divisional structure with reduced management layers between top executives and front liners. This structure helps British Airways in operating a massive organisation with wide global presence and ensuring that performance of each division is evaluated effectively.

Organisational Culture

The term organisational culture refers to the shared values, beliefs and norms of an organisation that help shaping the behavioural pattern of its employees (Schein, 2010). The main types of organisational culture are; power culture, task culture, role culture, people culture, entrepreneurial culture and bureaucratic culture (Pfister, 2009). There is a difference between the organisational culture of Virgin Atlantic Airways and British Airways owing to the difference in their size and global operations. British Airways has a massive size and a comparatively wider global reach thus is run by strict rules and procedures. In order to retain its market position British Airways prefer to have a culture which displays characteristics of both role and task culture. It gives its employee enough opportunities to expand their learning and grow in other areas of specialisation as well. Virgin Atlantic Airways on the other hand has a culture which displays characteristics of both people and entrepreneurial culture. People are the heart of the organisation who is greatly concerned about their growth and development. It encourages its employees to realise their full potential and develop innovative ideas.  

3.0 The use of motivational theories in organisations

Organizational structure and culture of an organisational is greatly inter-related and help determining it’s the overall performance (Mullins, 2011). Structure of an organisation determines its culture which in turn inspires people to follow its structure (Murray, et al., 2006). It is essential to ensure that structure and culture of an organisation is selected in a way that it helps attaining overall performance objective. Organizational culture and structure should be developed keeping in mind the goals and purpose of the organisation (Kitchin, 2010). An organisation that aims at longevity will always adopt a tall organisational structure with role culture where people are expected to follow directions and show no creativity. However an organisation that is concerned about innovation will always adapt a flat structure with entrepreneurial culture which strives for creativity and innovation.

Virgin Atlantic Airways has a functional organisational structure which is easy to manage and control. It is dynamic in nature thus can adapt to changing business needs. Its organisational culture is a mix of people and entrepreneurial culture thus making innovation and customer-orientation a key to its remarkable success. Its structure and culture encourage its employees to attain their full potential and delivery high level performance. There is natural warmth and friendliness that people experience within their work environment which they deliver to their customers (Virgin Atlantic, 2012). Thus, the perfect choice of organisational structure and culture at Virgin Atlantic Airways helps them in enhancing their overall performance effectiveness.

Individual behaviour at Virgin Atlantic Airways working life is affected by both internal and external factors.

Internal factors are also referred to as individual factors, some common internal factors include demographic factors, personality, traits, attitude, perception and skills and abilities of individuals working within the organisation (Fox, 2007). Some of the internal factors at Virgin Atlantic Airways are; diversified workforce, positive attitude of leaders and employees, openness that encourage employee to openly share their views, positive perception towards each other and the organisation, ample opportunities provided to employee who can realise their full potential and flexibility to attain a healthy work-life balance.

External factors are also referred to as organisational factors and include factors like leadership, culture, job requirements, values and norms etc (Ranganayakulu, 2005). Richard Branson is known for his high positive energy that he transfers to his employees, Virgin Atlantic Airways has a culture that motivates people to deliver high results. The company is recognised for its core values and high customer-orientation. All these factors make Virgin Atlantic Airways as one of the best airlines to work with

Leadership is defined as the process in which leaders create a vision and live by values that are in support of their vision, they possess the inherit charisma to inspire others and encourage them to live by value, they possess the ability to make tough decisions as and when demanded by the situation (Armstrong & Stephens, 2005). Leadership and management are two sides of the same coin and a balance between both is essential for the smooth functioning of the organisation. Leadership is about being people-oriented where employees are considered as an asset. Management on the other hand is task-oriented where employees are considered as mere machines.

4.0 Mechanisms for developing effective teamwork in organisations

There are four main leadership theories namely; trait theory which states leaders are born not created (Bass & Bass, 2009). Behavioural theory which focuses on leaders behaviour, based on which three types of leaders have been identified, autocratic leaders, democratic leaders and Laissez-faire leaders (Bass & Bass, 2009). Contingency theory which suggests that leader’s choice of leadership theory or style depends on situation and Power and influence theory which is concerned with how leaders use their powers and influence to get things done their way.

Initially British Airways witnessed use of autocratic leadership style where complete decisions were made by top management and employees were expected to follow them. Contingency and power and influence leadership theory was also practiced in order to make employee more task oriented. This helped British Airways in surviving through though times. Leadership at British Airways has changed to more democratic and Laissez-faire where people are encouraged to provide input and participate in decision making.

Virgin Atlantic Airways has witnessed use of democratic and transformational leadership style where people are expected to actively participate in decision making and realise their full potential. People are considered as primary asset of the company and deliver high quality performance.

Study of organisational theory is concerned with the study of structure of organisations (Ghemawat, 2008). There are four main types of organisational theories namely; Classical theory which is a mix of scientific management, administrative theory and bureaucratic theory; Human relations theory, Contingency theory and Modern system theory. A number of organisational theories underpin management practices in Virgin Atlantic Airways; however administrative theory and contingency theory are the two theories that govern their management practices. According to administrative theory management include planning, training, organising, coordination and commanding activities (Baligh, 2006). Contingency theory states that organisational relationships must change with change in external business environment in order to deliver high performance. Based on this Virgin Atlantic Airways has adopted a flexible and dynamic structure that can be changed with changing business needs.

Management approaches helps determining the overall performance of an organisation. There are four main types of management approaches namely; Classical which is goal oriented, human relations which is people oriented, system which is a mix of classical and human relations and contingency which is adapting to different approaches based on situation (Armstrong & Stephens, 2005). Virgin Atlantic Airways displays a human relations management approaches where it values its people above all rules and has a informal structure which provide enough flexibility to its employee who tend to deliver high quality performance.

Effective leadership style is the key to effective change management and handling resistance to change (Holloway, 2014). Autocratic, democratic, bureaucratic, affiliative, transactional and transformational leadership style are the six most prominent leadership styles (Daft, 2014). Virgin Atlantic Airways owes its remarkable success to its leader Richard Branson who displays the use of democratic and transformational leadership style. Democratic leaders are also called as people-oriented leaders and are greatly concerned about their followers (Adair, 2009). Democratic leadership style encourages its followers to actively participate in decision making and choose their own ways of doing things. It is highly effective in motivating employees as they feel valuable and are engaged (Fairholm, 2009). Transformational leadership style encourages its followers to realise their full potential and display creativity at its best (Jr, 2005). It leads to high employee motivation as they are provided with ample opportunities and be a part of innovation. Thus, the application of effective leadership styles greatly enhances employee motivation at Virgin Atlantic Airways.

Motivated employees then to perform better which in turn result in increased organisational profitability (Herzberg, et al., 2011). Some of the most effective motivational theories applied by companies operating in airlines industry are;

Frederick Herzberg Motivator-Hygiene Model: According to this theory job satisfaction or dissatisfaction is affected by two factors called motivators and hygiene (Miner, 2005). Motivators comprises of factors like work itself, promotions, advancement, recognition, feedback, roles and responsibilities etc (Luis, 2010). Hygiene include factors like companies rules and regulations, employee relationship, salary and incentives, work culture, job security etc. It is important to ensure that these factors are in place and work effectively in order to increase employee motivation.

                                                                                                Fig.1.Source: Adair (2009)

David McClelland’s Three Social Motives: According to this theory need for affiliation, need for achievement and need for power are three main motivators within each individual which are greatly influence by work culture and life experiences (Odumeru & Ogbonna, 2013).

                                                                                 David McClelland’s Three Social Motives

                                                                                          Fig.2.Source: Adair (2009)

Maslow’s Hierarchy of Needs: According to this theory every individual has a complex set of needs that can be arranged in a hierarchical pattern (Herzberg, et al., 2011). These needs when meet lead to high motivation.

                                                                                         Maslow’s Hierarchy of Needs

                                                                                                Fig.3.Source: Adair (2009)

Application of various motivational theories by managers of Virgin Atlantic Airways help them in developing a motivated work force who are ready to take the ownership of tasks assigned to them and work in coordination with each other to achieve desired organisational goals. Application of Frederick Herzberg Motivator-Hygiene theory helps ensuring that all hygiene factors are in place and work effectively (Graetz, et al., 2012). Virgin Atlantic Airways is not a pay master still employee love to be a part of it as it empowers its employee to use their creativity and openly share their views. They provide high job satisfaction which lead to high employee motivation. Application of David McClelland’s Three Social Motives theory helps identifying the three motivators within individual employee and based on that they are allocated tasks and targets (Mukherjee, 2005). The company provide rewards and recognition to its employees and believing in promoting internal employees to leadership positions. Application of Needs hierarch theory helps in understanding the needs and future expectations of their employees better and providing them with roles that can help them achieve their goals (Mullins, 2011). All these theories help managers in keeping their employees motivated who deliver high quality performance. 

Conclusion

Organisational structure and culture of Virgin Atlantic Airways has enabled them in achieving their desired organisational goals and performance objectives. They have culture that leads to high employee motivation who in turn working in coordination with each other to deliver high customer satisfaction. Effective leadership style and management theories have helped them in achieving remarkable success in a very short span of time. Thus, the study of organisational behaviour is essential for smooth functioning of an organisation and its overall development. 

References

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