Professional Documents
Culture Documents
Introduction...................................................................................................................2
References.................................................................................................................17
Introduction
This report is mainly focused on Organization Design and Development. It covers 2
learning outcomes which are evaluate the importance of Organizational design to the
delivery of sustainable performance and evaluate the relationship between
Organizational design and Change Management.
Dilmah Ceylon Tea Company PLC is the chosen organization for the discussion of
the above learning outcomes.
Overview of the Organization - Dilmah Ceylon Tea Company PLC
“Dilmah Ceylon Tea Company PLC is a public listed tea company founded by Merrill
J. Fernando in the 1980’s. Today Dilmah has grown into an international brand that
is enjoyed in over 100 countries.” (www.dilmahtea.com, 2020) However Dilmah was
first launched as ‘Brew’ in 1867 as a contemporary reunion of Ceylon tea and Ceylon
coffee, to revitalize coffee farming in Sri Lanka.
Vision – “We strive to offer our customers the finest tea on earth, in the most
sustainable way.” (www.dilmahtea.com, 2020)
Mission – “To achieve our vision through our physical stores and digital channels,
we reach customers around the world. Our customer proximity is amplified by our
global distribution network.” (www.dilmahtea.com, 2020)
Overview of the existing structure - Dilmah Ceylon Tea Company
PLC
Chairman
Board of
Directors
CEO (Dilmah
Tea)
Above is the existing structure of the organization. More descriptive functions of each
department are as follows:
Production Department
Planning
Technical/Industrial design
Production
Quality assurance
Maintenance
Marketing Department
Digital Marketing
Promotions
Market Analysis
Research
Planning
Product engineering
Field operations
Talent Acquisition
Learning & Development
IT
Logistics
Procurement
Facilities management
The core concept of an agile organization can be explained as, “They include scrum,
which emphasizes creative and adaptive teamwork in solving complex problems.
The fundamentals of scrum are relatively simple. To tackle an opportunity, the
organization forms and empowers a small team, usually three to nine people, most
of whom are assigned full-time. The team is cross-functional and includes all the
skills necessary to complete its tasks.” (Rigby and Sutherland, 2019)
Dilmah has a unique strategy of shared purpose and vision for all teams and
departments of the organization. Their mindset is shifted to a more agile and flat
culture where everyone works for common goal which they call it “the value creating
processes”. Primary advantage of this shared purpose and vision is that everyone
works towards adding value to the brand name of Dilmah Ceylon Tea.
“We leverage the talent, commitment and expertise of our self-motivated team to
drive innovation, facilitate the customer experience and to achieve our strategic
aspirations.” (www.dilmahtea.com, 2020) as stated in one of their slogans they have
focused on shifting the mindset to work as teams resulting in an agile organization
design rather than just merely shifting the structure and expecting performance.
Dilmah follows a strategy of flexible resource allocation for each team within the
departments. For example, teams in the R&D department which are Research,
Planning and Product engineering teams flexibly share their recourses of the
meeting rooms and projectors to hold their team discussions on the current
challenges and tasks they are working for.
When we consider theories about organization design the Star Model of Jay
Galbraith is significant. “In the Star Model, design policies fall into five categories.
The first is strategy, which determines direction. The second is structure, which
determines the location of decision-making power. The third is processes, which
have to do with the flow of information; they are the means of responding to
information technologies. The fourth is rewards and reward systems, which influence
the motivation of people to perform and address organizational goals. The fifth
category of the model is made up of policies relating to people (human resource
policies), which influence and frequently define the employees’ mind-sets and skills.”
(Galbraith, 2018)
According to the above explanation there are 5 categories which are as follows:
1. Strategy
2. Structure
3. Processes
4. Rewards
5. Policies
1. Strategy
“The company’s strategy specifies the goals and objectives to be achieved as well as
the values and missions to be pursued; it sets out the basic direction of the
company.” (Galbraith, 2018). As for the above definition strategy refers to specific
corporate vision, mission and objectives of Dilmah.
Dilmah focuses on few corporate strategies which is stated in their annual report
such as; earnings growth, focus on quality and an inspired team. Earnings growth is
specifically focused on launching 65 new products to the market which brought
revenue growth of 16% and focusing on expanding the premium segment.
An inspired team strategy Dilmah has invested Rs. 36 million on training and skills
development, organizing over 450 training programmes in the last financial year.
Multiple engagement mechanisms and an open-door policy is also an initiation of the
above corporate strategy which has resulted in an improved new employee retention
rate of 82%.
2. Structure
“The structure of the organization determines the placement of power and authority
in the organization.” (Galbraith, 2018) When we focus on structure of the
organization few categories are vital when implementing the structure policies of
Dilmah. For example, span of control, distribution of power and departmentalization.
The lines of authority in an organization, is who reports to whom. The authority flow
from top to bottom. This reflects the distribution of power in Dilmah, as the
organization is converting to an Agile organization structure and culture their
distribution of power is 80% decentralized and they follow a very flat culture. Forming
teams in the Agile culture has initiated this flat culture within the organization where
strategic and tactical level managers interact together during team meet-ups.
3. Processes
1. Vertical
2. Lateral
4. Rewards
“The purpose of the reward system is to align the goals of the employee with the
goals of the organization. It provides motivation and incentive for the completion of
the strategic direction.” (Galbraith, 2018) As for the above explanation rewards is
one of the main ways to motivate the employees which pushes them to achieve
goals. Dilmah has reward policies as regulating salaries, promotions, bonuses, etc.
Dilmah also follows modern HR trends of skill-based pay and team bonuses. “Skill‐
based pay (SBP) is a compensation system that rewards employees with additional
pay in exchange for formal certification of the employee’s mastery of skills,
knowledge, and/or competencies. In SBP systems, employees receive additional pay
only after they demonstrate the skills, knowledge, and/or competencies that the
system rewards (Shrm.org, 2020) This modern HR trend is implemented in every
department and employees are rewarded for their skills they possess when they
complete tasks and achieve higher performance.
Presenting team bonuses are also a modern HR trend Dilmah follows. This
motivates employees to achieve more as a team in the agile structure.
5. People
“This area governs the human resource policies of recruiting, selection, rotation,
training, and development. Human resource policies – in the appropriate
combinations – produce the talent required by the strategy and structure of the
organization, generating the skills and mind-sets necessary to implement the chosen
direction.” (Galbraith, 2018) According to this explanation it refers to the HR policies
in the organization. Dilmah has built a set of policies which have higher standards as
they consider human capital as one of the six pillars of their sustainability strategy.
Dilmah’s Human Resource governance framework is as follows, “Our Human
Resource governance framework consists of robust HR, Grievance and Ethics
policies centered on attracting, stimulating, developing and retaining our human
capital. Our governance policies focus on capitalizing and augmenting employee
interest based on stakeholder and organizational goals.” (www.dilmahtea.com, 2020)
Introduction to Change Management
“When organizations undertake initiative to improve performance, seize opportunities
or address key issues, they often require changes − changes to processes, job roles,
organizational structure, and types and use of technology.” (Tutorialspoint.com,
2020) According to the above introduction, change is the transition from state to
another. Changes can occur planned and unplanned and change management is the
initiative the organization takes to manage the change and improve performance.
Making even a small change in an organization can lead to anxiety, fear, and
frustration among the affected staff if not rolled out properly. A well-thought-out
change management process can help a company make needed adjustments
smoothly and successfully.” (Productplan.com, 2020)
Dilmah changed the way their employees are working to remote work and also
restructured the way their teams are functioning and collaborating. They mainly
switched to digital and virtual communication platforms like Zoom, Skype, etc. to hold
team meetings and to communicate to complete their tasks.
The transitional change in organizational culture when initiated the Agile culture, it
was a change that the whole organization had to adapt to positively. Flattening the
culture, efficient team meetings, restructuring as teams and many more changes in
the organization culture was made. Dilmah successfully implemented Agile
organization structure and currently 80% of the organization is following that concept
of Organizational design.
Evaluate how the Organization managed the transformational &
psychological change & How it affected the Organizational design –
M4
In order to evaluate how the organization managed the transformational &
psychological change Kurt Lewin’s change management model is important.
“According to Lewin, 3 steps are essential to make change successful. Recognition
of these distinct stages of change enable the leaders to effectively plan the execution
of desired change:
1. Unfreeze
In the Unfreeze stage organization needs to identify the need for change. For
example, due to the COVID-19 pandemic spreading rapidly Dilmah identifying the
change to switch to remote work and virtual communication as the country went to
lockdown.
“The senior management needs to role model the desired behaviors and mindsets,
plan and deliver quick wins to keep the stakeholders motivated, and empower
people to come up with solutions to tackle new issues and routine matters.”
(Medium, 2020) As explained above Dilmah management encouraged quickly
adapting teams and set them as role models to the other teams and departments in
the organization.
In the final stage of ‘Refreezing’ Lewins explains, “By freezing or refreezing, Kurt
Lewin means reinforcing and institutionalizing the desired changes, ensuring they
are widely accepted, utilized all the time, and incorporated into the business and the
organizational culture.” (Medium, 2020)
The above steps and practices taken and implemented by the management of
Dilmah excelled them in managing transformational and psychological change in the
organization. Through this excellent change management Dilmah has been able to
increase business outcomes of changed initiatives and also to increase the brand
value of the company. It also led to better-coordinated teams and secure employees
with increased job satisfaction. Dilmah truly have initiated change management to
their human capital in the organization which is one of the pillars of their
sustainability strategy.
“Companies that can't adapt and grab growth opportunities are most likely to be
outcompeted by agile competitors and even disappear. That's why preparing for
change should be one of your top priorities.” (Blog.smarp.com, 2020)
References
Dilmahtea.com. 2020. Pure Ceylon Tea | Best Ceylon Tea Brand | Dilmah Tea
Official Website. [online] Available at: <https://www.dilmahtea.com/> [Accessed 25
April 2020].
Rigby, D. and Sutherland, J., 2019. Embracing Agile. [online] Harvard Business
Review. Available at: <https://hbr.org/2016/05/embracing-agile> [Accessed 23 May
2020].
Medium. 2020. Lewin 3-Step Change Management Model: A Simple And Effective
Method To Institute Change That Sticks. [online] Available at:
<https://medium.com/@mark.bridges/lewin-3-step-change-management-model-a-
simple-and-effective-method-to-institute-change-that-sticks-c0274316748d>
[Accessed 15 May 2020].