Organizational Culture And Structure Analysis Of ABC Company

Organizational Culture of ABC Company

Question:

Critically analyse a company called ABC and the culture organizational structure of that company.

This essay will critically analyse a company called ABC and the present organizational culture organizational structure of that company. I was appointed as a new supervisor for this company to manage three new teams, which were contracted by the company X, who is the prime contractor for building internet network. This essay will analyse how the existing organizational culture and structure of this company, and evaluate the best organizational culture and structure that can be implemented without much commotion to improve performance and quality of this company.  

ABC is a company with 19 employees that are contracted to undertake the construction of NBN network to the premises in Central NSW region. It has three teams looked after by one supervisor and management of consisting of three people at the office and with the owner at the top. It also has an operation team, admin and accounting and a supervisor to manage the workers and 16 labours.

Organisational Culture can be defined in many ways. Hence, they are dependent on which segment is to be discussed. An example of the definition of Organisational Culture is “A system of shared meaning held by members that distinguish the organization from other organizations” (Robins et al. 2011: 466). Another is “Cognitive framework, which consists of attitudes, values, behavioural norms and expectation” (Greenberg,Baron,1997).

There are many organizational cultural models available. However, this essay is particularly concerned with the one that is related to ABC. Aggressive/defensive culture more prominent in the task than workers and it is more focused on individual’s achievement than group achievement (Alvesson and Sveningsson 2015). There are four elements to Aggressive/defensive culture

More focussed on having the security and it is critical of other works. It questions the co-workers, which can result in disputes.  However, it can also permit quality improvement. Such complications exists there in ABC, where workers questions the quality of other team members’ work and it creates dispute rather than improvements.

Power culture more concerned with prestige and power and it does not necessarily have anything to do with the senior management controlling the lower management. It can exist in small teams and many forms. For example, in small companies when new workers join they are not welcomed, and there is an issue of someone been working for the company for a long time and have the authority over new employees. This did exist with ABC, where new employees were doing the basic tasks and always found fault by senior employees. There was no room for the new employees to progress further. This often led to the disputes and most of the workers resigned.

Individuals are focused on competing against each other and to protect their status by outperforming others. ABC rewarded bonus at the end of the month for those employees who have performed well. This was introduced to motivate employees as well as increase the turnover of the company. Although rewarding employees are great, it made no good for ABC with the existing organizational culture (Ou et al. 2013). There was great competition between the three teams and individual team members among each team. Initially, this bonus payment increased turnover for the company but later it declined as the quality was compromised and complaints increased. There were complaints made by customers to National Broadband Network (NBN).  Then the workers were directed to follow the rectification work and this lead to loss of time and money.  This whole process affected the company dramatically. It shows how this aggressive/defensive culture affected ABC, as employees had no collaboration in the workplace as a team.  Moreover, they were more focused on their individual achievement.

Aggressive/Defensive Culture

The focus of this culture is to do everything to perfection and in a flawless manner. This is again due to the status and competition and to do well in everything than other people (Alvesson and Sveningsson 2015). This sometimes results in high quality work but provides no room for teamwork.

Overall, the members of Aggressive/defensive culture find themselves in an extreme level of stress.  They also find themselves in a conflict situation and are not satisfied with their work. This culture has a negative impact on ABC, especially on the quality of their work and the level of consistency.  Often aggressive and defensive members cannot interact with other co-workers and find themselves with impossible expectations. Members usually face conflict situations and not knowing whom to listen to and no assistance from other members. Members dislike their working environment and often leave the organization to find a job in another organization. Importantly this culture does not support teamwork, and such culture does result in job dissatisfaction for any individual as seen in the context of ABC.

A power culture describes a non-participative organization structured on the basis of the authority inherent in members’ positions. Members believe that they will be rewarded for taking charge, controlling subordinates and, at the same time, being responsive to the demands of superiors

It is important for any organization to decide a suitable organizational structure (Knights and Pedrero 2013). It is vital for any organization to decide a structure carefully so that it creates a positive organizational culture as well as achieves the organizational goal.  Organizational structure defines who holds power, what responsibilities everyone holds and who makes the decision. There are six main key elements in organizational structure (Robins et al. 2011). They are work specialization, departmentalization, chain of command, span of control, centralization and decentralization, and formalization. The focus of this essay will be on that are related to ABC and evaluate some of the main elements that affect this company.

According to Robbins et al. (pp445) the simple structure “it is a flat organization, it usually has only two or three vertical levels and a loose body of employees, and one individual in whom the decision making authority is centralized.” The “simple structure” is utilized by ABC with the authority centralized to the owner of the company (Centralisation and decentralization).             The simple structure mostly used by small organizations. It allows organizations to be fast, flexible, permits clear accountability while maintaining low operating cost (Fan et al. 2013). ABC’s simple structure is a great example of this with the owner at the top and operations team and accounting/admin team at the next level down, as depicted in Diagram 1 (departmentalisation). The supervisor can directly report to the owner and the operations team and the workers can only report to the supervisor but can be in contact with the operations team and the owner to discuss any matter (Chain of command). This allows the organization to make quick decisions unlike other structures like matrix or bureaucracy.  ABC has one site supervisor who is managing fifteen team members and reports the owner and the operations team (span of control) (Neubert et al. 2014).

Power Culture

Work specialization also is known as the division of labour. It allows the organization to allocate work among the individuals. Henry Ford utilized this method in the early time and had been very successful.  Ford was able to produce a car every ten seconds, using employees who had relatively limited skills (Robins et al. 2011). Work specialization allows organizations to hire people who had relatively low skills and still assist them to be efficient because there were no need for change tasks. Similarly, at ABC the workers are hired with relatively low skills. As long as the workers have white card and first aid certificate, they are hired to do the task. Workers are allocated with repetitive tasks. For example, some workers are only required to dig trenches all day, some just have to operate machines every day, and some just have the job of installing NBN boxes on the wall and some others only do cable hauling.  These repeated tasks lead to boredom, fatigue, and poor quality. This results in so many complaints by customers and declines the efficiency when workers are again allocated to the rectification work (Neubert et al. 2014). This results in loss of revenue and some workers have been sacked as a result of it.

The use of Aggressive/defensive culture within ABC diminishing the company currently and it will continue to diminish, as the culture gets even more aggressive. ABC will have to focus on building a team that can work together not against each other. It should be working together to achieve a common goal. The most suitable culture for ABC will be Constructive culture. In Constructive culture, individuals are urged to be in correspondence with their colleagues, and work as groups, instead of just as individuals. The Constructive styles incorporate the Achievement, Self-Actualizing, Humanistic-Encouraging, and Affiliative customs in the workplace (Alvesson and Sveningsson 2015).

It allows the task to be completed successfully with the team’s own effort as well as be competent and able to do challenging tasks and believes that the achievements are based on personal skills (Ou et al. 2013). It talks about Setting realistic goals, thinking ahead and achieving the results. This is important for ABC as they are working beyond their capacity sometimes, this will allow them to have a realistic and sensible goal.

It refers to the craving for self-fulfilment, that is, eagerness of a person to become actualized and understand the potentiality. It is about the realization or fulfilment of one’s talents and potentialities – considered as a drive or need present in everyone (think in unique and independent ways) (do even simple tasks well). Based on the needs for personal growth, self-fulfilment and the realization of one’s potential people carry out their performance in a different way. People with this style demonstrate a strong desire to learn and experience things. They are creative yet realistic in thinking and obtains a balanced concern for people and tasks.

It is about helping the co-workers to grow and develop and gives high regards to people and their development (Chatman et al. 2013). This will allow the workers at ABC to be people focused and help one another, to develop skills as well being encouraging and supportive. This will eliminate existing issues with ABC where people are racing against each other and not being supportive and focusing on their individual needs.

Organizational Structure of ABC Company

It helps the workers to be focused on people and relationship (Alvesson and Sveningsson 2015). It will allow sustaining working relationship, and this will surely be significant for ABC. It is important for workers to have this culture and by following it; they will be able to pursue a great relationship.

By changing ABC’s organizational culture to constructive culture will enable this company to run in harmony. It will allow workers to be more people focused than to be task oriented. It will allow workers to be friendly and help each other and developing skills.

The “simple structure” is the most suitable structure for ABC, but there are rooms for some improvements, which will make the operation effective. One particular concern is to do with span of control, where one supervisor is managing three teams (Knights and Pedrero 2013). Although one supervisor is sufficient to look after three teams of sixteen members, the problem is arising because of the work environment. Not all three teams can work together as they are operating on different sites and supervisor can only be on one site at a time. The supervisor will have to travel each site throughout the day to monitor tasks and to assure that the safety standards are being followed.

It is recommended to hire another supervisor so the teams can be managed effectively and importantly a constructive culture has to be established and maintained. Another alternative option is to promote one worker from each team to be the team leader, and they can report to the supervisor. However, this is possible solution may create complexity by adding more chain of command. Since ABC is a relatively small company, it is important to have simpler chain of command and span of control.  Therefore, the most suitable decision is to hire another supervisor. In addition, the bonus policy of the company should be taken into consideration. Instead of paying bonus for the individuals for their performance, it can be evaluated on the overall team performance. This will encourage workers to work together, and it will allow them to work as a team and help them to change into a constructive culture. 

Conclusion

This essay has critically analyzed the organizational structure and the organizational culture followed by the organization named ABC. In conclusion, it can be said that the existing working, the organizational culture, and the organizational structure of the company named ABC is affecting the motivation and the employee turnover rate of the company. It is a prerequisite for a company to develop and maintain a good working culture. A strong and healthy organizational culture is talent-attractor. In addition to this, it also helps in changing the attitude of the employees to the job and the organization. The organizational culture of the company ABC is of the aggressive/defensive culture. The company needs to replace it with the constructive organizational structure to obtain the above-discussed advantages. On the other hand, the structural organizational pattern followed by the company ABC is being typically helpful for the growth and achievement of the strategic goals of the company. This company is developing a “simple structure” of the organizational structure. As they are operating in the small, scale this particular organizational structure, is providing them a simpler way of power control and a clear hierarchy. However, the undemocratic pattern of decision-making and the strict control over the power structure lead to the employee dissatisfaction and decreased level of employee engagement. Therefore, for the better operation, the ABC can go for this “simple structure” with a bit democratization and recruitment of some new staffs for the simplification of the working issues. Thus, these simple changes within the organizational setup can help ABC to perform better.

References:

Alvesson, M. and Sveningsson, S., 2015. Changing organizational culture: Cultural change work in progress. Routledge.

Chatman, J.A., Caldwell, D.F., O’REILLY, C.A. and Doerr, B.E.R.N.A.D.E.T.T.E., 2013. Organizational Culture and Performance in High-Technology Firms: The Effects of Culture Content and Strength. Working Paper). Berkeley, CA: Haas School of Business.

Csaszar, F.A., 2012. Organizational structure as a determinant of performance: Evidence from mutual funds. Strategic Management Journal,33(6), pp.611-632.

Fan, J.P., Wong, T.J. and Zhang, T., 2013. Institutions and organizational structure: The case of state-owned corporate pyramids. Journal of Law, Economics, and Organization, 29(6), pp.1217-1252.

Knights, P. and Pedrero, F.V., 2013. Speed, coordination and individualistic behaviors: a pilot NK modeling study to investigate the moderating effects of organizational structure on performance in individual firms.

Neubert, M.J., Hunter, E.M. and Tolentino, R., 2014, January. The Influence of Servant Leadership and Organizational Structure on Employee and Patient Outcomes. In Academy of Management Proceedings (Vol. 2014, No. 1, p. 17320). Academy of Management.

Ou, A.Y., Hartnell, C.A., Kinicki, A.J. and Karam, E.P., 2013, January. A Meta-Analytic Path Analysis of Leadership, Organizational Culture, and Unit Performance. In Academy of Management Proceedings (Vol. 2013, No. 1, p. 10037). Academy of Management.