B102 ORGANISATIONAL BEHAVIOUR

ORGANISE US
OB13 LECTURE – ORGANISATION STRUCTURE & CULTURE
 Learning Outcomes
• Identify what consists organisational culture and how it is manifested.

• Explain the key contingencies for a positive relationship between

culture and organisational performance.

• Configure an organisational culture suitable to support the

organisation’s strategy (and structure).

• Propose strategies to change or strengthen the culture of an

organisation.

• Examine the structural options for dividing labour / tasks, power and
control.

• Examine the structural options for coordinating divided labour.

• Propose suitable structural design for organisation based on its

internal and external critical success factors.
 Reason for this Problem
Working with People to Get Things Done

Managing Individuals - Job Performance, Satisfaction and Involvement

Managing Interpersonal Processes - Interaction With & Influence Over Others

Managing Team & Organisational Processes - Organisation and Development

Team Development Organisational Development

Structural Design

For the Workplace:

Enables you to :-
• Consider macro- and micro- contexts of the organisation in
decision-making, which is essential for the organisation’s
survival.
• Suggest or make changes in the way you organise people
within your work team to improve its effectiveness
• Develop a strong culture within your work team so that
the right values and behaviours are propagated
Immediate Benefit:
• Understand how organisations function in
relation to its environment
• Understand how to organise people for
events and activities in your Igs
• Understand how to create and manage a
suitable team culture within IG
Organisation Structure
 Organisational Design Elements
degree to which tasks are divided into
Work Specialisation separate jobs (each doing one part)

degree to which jobs are standardised

Formalisation through rules, procedures, training, etc.

Departmentalisation basis by which similar jobs are grouped

flexibility of line of authority (who reports

Chain of Command to whom) and communication

number of subordinates a manager

Span of Control directs

degree to which decision making is

Centralisation concentrated at a single point
 Contingency Factors
Technology
External Environment
(work nature)

• Dynamic (constantly changing • Routine (follow standard) OR

and unpredictable) OR Variable (has many exceptions
Stable (constant or predictable) to) procedures
environmental conditions
• Simple (easy to define) OR
• Diverse (varied types of) OR Complex (difficult to define)
Integrated (single type of) steps needed to complete task
clients, products, etc.

• Hostile (strong competition ) OR Strategy

Munificent (plentiful demand)

• Innovation (offer unique or

Size customised services) OR
(number of staff) Low Cost (keep cost low to
offer lower prices)
 Decision on Design Elements
Work Specialisation

Higher specialisation better: Lower specialisation better:

= large = small

= routine; simple = variable;

complex
= low-cost

• Each job focuses on a particular • Need for variety of skills + difficult

area of work (simple task  easy to spilt work (variable; complex)
to dissect and define areas) + lack of manpower (small size)
• Increases staff work skills through  narrow specialisation may not
repetition of narrow set of tasks be effective use of people
(possible given routine work with
sufficient manpower)  improve
productivity  achieve low-cost
 Decision on Design Elements
Formalisation

Higher formalisation better: Lower formalisation better:

= stable; = dynamic;
integrated diverse; hostile
= large = complex

= simple = innovation

= low-cost • Diverse and dynamic needs +

complex work  difficult to
• Stable, integrated, simple work  document + keep updated
easier to document and train
• Hostile  need to make changes
• Larger size  greater need for quicker (cannot just follow rules)
formalisation to coordinate work
• Innovation (customised solution)
and ensure consistency  lower
 can’t formalise all possibilities +
cost of operations
stifles creativity when done
 Decision on Design Elements
Chain of Command

Rigid chain of command better: Flexible chain of command better:

= large = dynamic;
hostile
= low-cost = innovation

• Larger size  greater need to • Dynamic and hostile  need for

coordinate flow of instructions management to have greater
• Follow orders given  fewer discussions with people on the
variations from management ground who are better attuned
decisions  lower cost to the environment
• Innovative  more freedom to
share ideas  better services
and products can developed
 Decision on Design Elements
Span of Control

Wider span better:

= Routine;
Simple
• Less need for direction
and guidance

Narrower span better:

= Variable;
Complex

* Other considerations such as

managerial skills, etc. apply
 Decision on Design Elements
Centralisation
Higher centralisation better:
= stable;
munificent
= routine
= low-cost
• Stable and munificent  more
time to react to environment
• Routine and simple task  less
discretion needed by staff
• Consistent decisions by experts 
lower cost of operations
Source: McShane
Lower centralisation better:
= dynamic;
diverse; hostile
= variable
= innovation
• Senior executive won’t be able
to process all decisions (diverse)
• Lower levels tend to be closer to
market and able to respond
more quickly (hostile market)
• Staff need more discretion for
variable and innovative work
 Decision on Design Elements
Departmentalisation

(1) Functional
More suitable when:

= integrated;
munificent

(2) Divisional

More suitable when:

= diverse;
hostile
Source: Robbins & Coulter; McShane
 Decision on Design Elements
Departmentalisation

(2) Divisional
Useful when needs
of regions or
customer groups
are different
OR
product marketing
and distributions
need to be done
differently (for by
products)

Source: Robbins & Coulter

 Decision on Design Elements
Departmentalisation

(3) Matrix Structure

More suitable when:

= diverse

= large

Source: K & K Chapter 15

 Types of Departmentalisation
Department-
Pros Cons
alisation
Functional • Functional efficiency and • Poor communication across
coordination functional areas
• In-depth specialisation • Limited view of overall goals
Product • Allows specialisation in • Duplication of functions
specific products / services • Limited view of overall goals
• Managers can become
experts in their industry
Customer • Customers’ needs/problems
can be met by specialists

Geography • More effective and efficient • Duplication of functions

handling of region specific
issues
Matrix • Advantages of functional and
product departmentalisation.
• Facilitates coordination of
complex and interdependent
activities
• Can feel isolated from other
functional areas
• Complex and expensive
• Conflicts arising dual chain of
command
Organisation Culture
 Culture – What is it?
• Organizational culture — basic pattern of shared values & assumptions
governing way employees within an organisation think about and act
on problems and opportunities
o set of key characteristics that organisation values
o descriptive - how employees perceive its characteristics

• Dominant culture — core values shared by majority; organisation’s

culture is its dominant culture

• Strong culture — organisation’s core values are both intensely held

and widely shared
o Social glue
o Sense-making
o Control system
 Cultural Dimensions
Org Culture
Dimension Characteristics
Dimensions
Innovation and Risk- Degree to which employees are encouraged to experiment,
Taking seek new opportunities and take risk
Degree to which focus is on maintaining status quo,
Stability
predictability, security and rules
People Orientation Degree to which decisions take into account the effect on
(Respect for People) people in the organisation; focus is on fairness and tolerance
Degree to which focus is on the outcomes (as opposed to
Outcome Orientation process of achieving them); results-oriented, action-oriented
and high expectations
Degree to which employees are expected to pay attention
Attention to Detail
to details and be analytical / precise at work
Degree to which staff/work are organised around teams;
Team Orientation
focus is on collaboration and cooperative behaviours
Degree to which employees are competitive rather than
Aggressiveness
cooperative.
 Cultural Dimensions
Discussion: Choice of Culture Profile for RP
Dimensions Classroom Culture
Innovation and Risk-Taking

Stability

Respect for People / People Orientation

Outcome Orientation

Attention to Detail

Team Orientation

Aggressiveness
 Cultural Dimensions
Discussion: Choice of Culture Profile for RP
Dimensions Classroom Culture
Innovation and Risk-Taking High

Stability Low

Respect for People / People Orientation High

Outcome Orientation High

Attention to Detail High

Team Orientation High

Aggressiveness Low
 Cultural Dimensions
Application: Choice of Culture Profile for RP

Recommendation of ‘High’ for the following dimensions based on internal

and external issues faced by FET:

• Innovation and Risk-Taking

o Need to propose customised programmes, something new for staff and they
do not have good understanding of customer needs
o Hostile and rather dynamic environment + complex and variable products +
differentiation strategy

• Outcome Orientation
o Hostile and rather dynamic environment + complex and variable products

• Attention to Details
o Need to be analytical in order to understand customer needs and detailed-
oriented as work developing complex and variable products (courses)

* Choice depends on what culture you want for FET.

 Change and Strengthen Culture
Symbolise new culture Alter existing or create
through memorable new performance
events and model measures to
new culture reward culturally-
through consistent
decisions and behaviour
actions

Select recruits
whose values
are compatible Alter existing
to culture and artefacts or
indoctrinate staff create new ones
regarding what that reflect values
organisational
culture means
 Artefacts
Artefacts are the observable (visible) signs of an organisational culture. The 6 artefacts are:

PHYSICAL STORIES &

STRUCTURE LEGENDS

SYMBOL
RITUALS

ORGANISATIONAL
LANGUAGE CEREMONIES
 Artefacts
Physical structure: The size, shape, location and age of buildings might suggest a
company’s emphasis on team work or other set of values.

Symbol: Symbols are nonverbal language that vibrantly conveys the organisation’s
values. An example is a company’s uniform.

Organisational language: Words used to describe/address customers, staff,

products, etc. (e.g. referring to “clients” rather than “customers”). Includes acronyms
and jargons.

Stories & legends: Stories and legends serve as powerful social prescriptions of the
ways things should (or should not) be done. They provide human realism to corporate
expectations, individual performance standards and the criteria for getting fired.

Rituals: Rituals are programmed routines of daily organisational life that dramatises
the organisation’s culture. They include how visitors are greeted, how often senior
executives visit subordinates and how much time staff takes lunch.

Ceremonies: Ceremonies are planned activities conducted specifically for the

benefit of an audience. This could include publicly rewarding (or punishing)
employees, or celebrating the launch of a new product.
 Key Contingencies for Culture

Culture strength
advantages depend on:

• Environment fit
• Not cult-like
• Adaptive culture

Functions of Organisational
Strong Cultures Outcomes
• Control system • Org performance
• Social glue • Employee well-
• Sense-making being
Concept Diagram
 References
• McShane, S. L. & Von Glinow, M. A. (2009). Organizational behaviour
[essentials] (2nd ed.). New York: McGraw-Hill.

• McShane, S. L. & Von Glinow, M. A. (2010). Organizational behaviour:

Emerging knowledge and practice for the real world (5th ed.). New York:
McGraw-Hill.

• Kinicki, A. & Kreitner, R. (2006). Organisational behaviour: Key concepts,

skills and best practices, (2nd ed.). New York: McGraw-Hill.

• Kreitner, R. & Kinicki, A. (2007). Organizational Behaviour (7th ed.). Boston:

McGraw-Hill.

• Robbins, S. P. (2005). Organizational behaviour (12th ed.). Pearson Prentice

Hall.

• Robbins, S. P. & Coulter, M. (2007). Management (9th ed.). Pearson

Prentice Hall.
 After Class Activities

In-Class
• Go through the LEO quiz for week 13

Daily Activity (by 2359 hrs today)

• Complete the peer and self-evaluations.
• Complete your Reflection Journal .

End-of-Week Activity
• Review the lecture slides.

Best Wishes for Your ESE!