PHILIPPINE CHRISTIAN UNIVERSITY

1648 Taft Avenue cor. Pedro Gil Street, Malate, Manila, Metro
Manila

Discussions in

VI. Organizational Structure and Change

VII. Organizational Culture
VIII. Social Networks
IX. Leading People and Organizations
X. Decision Making

COMPILED by:
LOU MARVIN C. SANTOS

DEFINITION OF MANAGEMENT
 ORGANIZATIONAL STRUCTURE AND
CHANGE
Organizational structure refers to how individual and team work within an organization are
coordinated. To achieve organizational goals and objectives, individual work needs to be coordinated and
managed.

Factors in Considering Organizational Structure

Centralization is the degree to which decision-making authority is concentrated at higher levels in an

organization. Formalization is the extent to which an organization’s policies, procedures, job
descriptions, and rules are written and explicitly articulated. Formalized organizations eliminate
ambiguity in the roles of employees however, this may result to reduced innovativeness and job
satisfaction as they are programmed to act in a certain way.

Managers must also consider the number of levels in its hierarchy. Tall structures have several levels of
management between the rank and file employees and the top management. Flat structures involve few
layers. Tall structures allow manager to monitor and supervise their subordinates. On the other hand, flat
structures have a large number of employees reporting to the manager.

Organizational structures may also be divisional or functional in terms of departmentalization.

Functional structures group jobs based on similarity in functions. In divisional structures, departments
represent the unique products, services, customers, or geographic locations the company is serving.

Contemporary Forms of Organizational Structures

 Matrix organizations combine divisional and functional structures. Oftentimes, an employee

reports to multiple managers depending on their project.
 Borderless organizations eliminate traditional barriers between departments as well as barriers
between the organization and the external environment.
 Learning organizations continuously absorbs knowledge and change as a result.

Organizational Change

Organizational change is the movement of an organization from one state of affairs to another. This can
take in many forms such as change in organizational structure, strategy, etc. Organizational change occurs
as a response to its environment and may take years in advance before implementation. Several reasons
involve changes in workplace demographic, technology, globalization and company’s performance.

However, some employees resist organizational change whether in the form of passive or active
resistance. This is because of disrupted routines, uncertainty, fear of failure and personal feelings about
the change and loss of power.

ORGANIZATIONAL CULTURE
Organizational culture refers to a set of shared assumptions, beliefs and values that employees hold
appropriate or inappropriate in an organization. Many believe that a culture that has a positive impact on
organizations leads to company success.

This may be an organization’s biggest asset and liability. Researchers find a correlation between
organizational culture and overall organizational performance. It is important to have a culture that fits
the nature of the organization.

Creation of Cultures

Organizational culture is also an effective way to control employee behavior. Culture is in fact a more
powerful way of controlling and managing employee behaviors than organizational rules and regulations.
Organizational culture also dictates cooperation or resistance to major change such as mergers and
organizational structure changes.

Organizational cultures are created by a variety of factors, including founders’ values and preferences,
industry demands, and early values, goals, and assumptions. Signs of a company’s culture include the
organization’s mission statement, stories, physical layout, rules and policies, and rituals. Most
organizations have subcultures as employees tend to work in different departments, branches, or
geographic locations.

Levels of Organizational Culture

The deepest level of organizational culture reflects our assumptions which tell about the human nature
and reality. At the second level, values dictate shared principles, standards, and goals. The most shallow
part are our artifacts – things that show tangible nature of organizational culture.

Measurement of Organizational Culture

 Innovativeness – flexible, adaptable, and experiment with new ideas

 Aggressiveness – values competitiveness and outperforming competitors
 Outcome-oriented - achievement, results, and action as important values.
 Stable – predictable, rule-oriented and bureaucratic.
 People-oriented – prioritizes fairness, supportiveness and individual rights.
 Team-oriented – collaborative and emphasize cooperation among employees.
 Detail-oriented – emphasizing precision and paying attention to detail.

Cultural Change

Organizations tend to change their culture to respond to the changing environment, to remain competitive,
and to avoid complacency or stagnation. Creating and communicating a vision is part of planning;
leadership and role modeling are part of leading; designing effective reward systems is part of controlling;
all of which combine to influence culture.

SOCIAL NETWORK
Social Networks can be defined as a patterned set of relationships between two or more people. The
mapping and measuring of relationships and flows among people, groups, organizations, computers, Web
sites, and others is called social network analysis. Each connection in the social network analysis is
called a network tie, wherein each people in the connection is referred to as a node. Network size refers
to the number of people in the social network. On the other hand, network density reflects how many
people in the network are connected to each other.

Direct ties are those in which a single link spans two people; indirect ties refer to connection of people,
but only through other people. In the organization, everyone has direct and indirect ties.

There are five types of social networks, namely – communication (informal interactions), information
(work-related matters), problem-solving (troubleshooting issues), knowledge (flocks people together with
the same skill set) and access (access to whoever has the knowledge.)

How can Managers Utilize Social Networks?

Managers can take a look at these three fundamental principles for social networking:
 Reciprocity – degree to which people trade favors with others.
 Exchange – similar with reciprocity, but takes into consideration the opportunity for trading
favors when people are different from one another.
 Similarity – degree to which people have commonalities

Social networks can also be used as a vehicle for advancing careers by creating value in and across
organizations. In making social network analysis, managers should remember that social networks are
invisible and must consider several factors before doing one. Ethical concerns involve violation of
privacy, psychological harm and harm to individual standing. Hence, approaches like full disclosure of
the analysis, anonymity and feedbacks from the participants.

How can an Employee Utilize Social Networks?

Social Network Purpose How to Experience

Personal develop professional skills through participating in alumni groups,
coaching and mentoring clubs, professional associations,
and personal interest communities.
Operational get work done, and get it done identifying individuals who can
efficiently. block or support a project.

Strategic figure out future priorities and identifying lateral and vertical
challenges; get stakeholder support relationships with other functional
for them. and business unit managers

LEADING PEOPLE AND ORGANIZATIONS

Leadership is defined as the act of influencing others to work toward a certain goal. Those who hold a
position of authority and may use the power that comes from their position, as well as their personal
power, to influence others are called formal leaders. In contrast, informal leaders are without a formal
position of authority within the organization but demonstrate leadership by influencing others through
personal forms of power. Note that for people to have leadership, people must be willing to follow the
leader, otherwise it is a dictatorship.

What Makes a Leader?

Many studies searched for a limited set of personal attributes, or traits, which would make someone be
viewed as a leader and be successful as a leader. Some traits are consistently related to leadership, such as
intelligence (both mental ability and emotional intelligence), personality (extraversion, conscientiousness,
openness to experience, self-esteem), and integrity. It is more useful to specify the conditions under
which different traits are needed.

Leadership Behaviors

Task-oriented leaders give directives to employees to get things done and to ensure that organizational
goals are met. People-oriented leader behaviors include showing concern for employee feelings and
treating employees with respect.

When it comes to making decisions, a leader can have authoritarian decision making, where leaders make
the decision alone without necessarily involving employees, democratic decision making, employees
participate in the making of the decision and laissez-faire decision making where the leader provides
minimum guidance and involvement in the decision. The best one depends on the circumstances.

Leadership Styles

Directive leaders provide specific directions to their employees. Supportive leaders provide emotional
support to employees. Participative leaders make sure that employees are involved in making important
decisions. Achievement-Oriented leaders set goals for employees and encourage them to reach their
goals.

Contemporary Leadership Styles

Transformational leaders lead employees by aligning employee goals with the leader’s goals. Leader-
member exchange (LMX) theory proposes that the type of relationship leaders have with their followers
(members of the organization) is the key to understanding how leaders influence employees. Servant
leadership approach defines the leader’s role as serving the needs of others. Authentic leaderships derive
their strength from their own past experiences.

DECISION MAKING
Decision-making is making choices among alternative courses of action. While management is seen as a
chain of decision-making activities, there are many instances where managers fail to make decisions that
are aligned with organizational goals. Decisions can be programmed, where actions occur frequently
enough that people develop an automated response to them (decision rule). Non-programmed decision
on the other hand, is unique and important require conscious thinking, information gathering, and careful
consideration of alternatives.

Managers should think on the viewpoint they are making the decision (strategic, tactical or operational).
Nonetheless, they should make rational decisions in any given circumstances. Structured decision-making
processes include rational decision making, bounded rationality, intuitive, and creative decision making.
Each of these can be useful, depending on the circumstances and the problem that needs to be solved.

Who Makes Decisions?

Decision-making can be done by a single leader or by groups, both with advantages and disadvantages.
Individual decision-making is often done faster and the best individual in the group often surpasses the
whole group and people can easily pin accountability. However, locus of ideas are considered limited in
this manner. Group decision-making offers a diversity and greater commitment to ideas. This also
facilitates a team-building activity. Its main disadvantages are the time it takes to make decisions, the
tendency to create a group dynamic within the group and harder means to identify accountability.

What Could Go Wrong in Decision-Making?

Overconfidence bias occurs when individuals overestimate their ability to predict future events. On the
other hand, hindsight bias occurs when looking backward in time where mistakes made seem obvious
after they have already occurred. In other words, after a surprising event occurred, many individuals are
likely to think that they already knew this was going to happen.

Anchoring happens when individuals to rely too heavily on a single piece of information while framing
bias refers to the tendency of decision makers to be influenced by the way that a situation or problem is
presented.

Remedies to avoid Groupthink

There are a variety of tools and techniques available for helping to make more effective decisions in
groups, including the Nominal Group Technique, Delphi Technique, majority rule, consensus, GDSS, and
decision trees. Understanding the link between managing teams and making decisions is an important
aspect of a manager’s leading function.