Organizational Structure And Culture In Deloitte
The type of organization structure Deloitte employ is what is known as the geographic organizational structure. Organizations, like Deloitte that are spread over a wide area may find advantages in organizing along geographic lines so that all the activities performed in a region are managed together. In a large organization, simple physical separation makes centralized coordination more difficult. Also, important characteristics of a region may make it advantageous to promote a local focus. For example, marketing a product in Western Europe may have different requirements than marketing the same product in Southeast Asia. Companies that market products or services globally sometimes adopt a geographic structure. In addition, experience gained in a regional division is often excellent training for management at higher levels. Geographic organizational structure, employ in Deloitte finds it advantageous to organize according to the types of customers it serves. Personnel can then become proficient in meeting the needs of these different customers. In the same way, Deloitte that provides services such as accounting or consulting may group its personnel according to these types of customers.
For organizations that cover a span of geographic regions like Deloitte, it sometimes makes sense to organize by the region. This is done to better support logistical demands and differences in geographic customer needs. Typically a structure that is organized by geographical regions reports up to a central oversight structure.
Deliberate time and thought should always go into the design of an organization’s structure. This is important so employees have a visual of how the organization functions and understands the chain-of-command. Operating within a defined structure with good communication processes and work-flows help to ensure more efficient management of resources – people, time and money.
A geographical organizational structure, like Deloitte also implements decentralization. For example, unlike the product organizational structure, there may be a local marketing, finance, accounting and research development person based in each region. This can be important because clients in various areas have different tastes. Hence, a geographical structure will enable the company to better serve the local market.
A geographic organizational structure of Deloitte, defines a reporting and functional system across multiple locations. This type of structure allows Deloitte offices to operate individually while adhering to company policies and values. Office locations can be local, national or international.
Each geographic location of Deloitte operating is overseen and directed by one or several executives. These executives oversee and direct the functions of the location and have responsibility for the entire operation and its finances.
Depending on the size of the organization, each geographic location may report to an executive who oversees several locations or it may report directly to top executives who are located at the main office of the organization. The reporting structure is based on the size of the organization and its industry.
Geographic organizational structure is used mainly in industries like retail and hotel chains, transportation and other large national and international organizations.
Deloitte, geographic organizational structure allows for each business unit or office to operate as its own entity based on where it’s located. Many organizations may experience more or less business opportunity in different places. This can increase or decrease financial budgets, revenues, the number of employees at the location and their salaries. An area’s cost of living may also play a factor in the overall operations at each location.
Deloitte also practices and combining their type of geographical structure to another modern structure known as network. While business giants risk becoming too clumsy to proact (such as), act and react efficiently, the new network organizations contract out any business function, which can be done better or more cheaply. In essence, managers in network structures spend most of their time coordinating and controlling external relations, usually by electronic means.
Hence we can summarize, Deloitte employing geographic organizational structure have competitive advantages in their coordination, offering customized quality customer services, enhancing the facilitation in communication, customized management and problem solving, facilitates teamwork and decision making.
Culture refer to a set of beliefs, values and norms, together with symbols like dramatized events and personalities, that represents the unique character of the organization and provides the context for action in it and by it.
Organization culture however is a pattern of shared basic assumptions that the group has learned as it solved its problems that has worked well enough to be considered as valid and is passed on to the new members as the correct way to perceive, think and feel in relation to these problems.
Organizational structure is a mechanism through which effort and work is coordinated with supervision to produce the results that are hoped for from organizational culture.
The structure seems to be the conduits or lines of authority, the system set into place through which individuals can come together to fulfill the expectations of organizational structure.
Most important aspect of the relationship between organizational structure and culture in Deloitte is to make sure that each individual understands the full extent of responsibilities and work expected out of them
Organizational structure and organizational culture have a dependent relationship with one another. In the business world, management structure determines the behaviors, attitudes, dispositions and ethics that create the work culture. Deloitte, a company’s management structure is decentralized, with shared power and authority at all levels, the culture is likely to be more independent, personalized and accountable.
The way a company allocates power and authority determines how employees behave. These choices manifest in a company’s organizational structure and organizational culture.
Strength from cultural diversity is one of Deloitte’s shared values, and Deloitte recognize that their diversity represents an enormous opportunity. Long before their competitors and the larger business community took actions to support diversity and inclusion in the workplace, Deloitte member firms took the lead. Initiatives for cultural change based on local market priorities were launched, and, in many instances, targets and goals were set to measure progress, and leadership was held accountable for results. Around the world, Deloitte member firms went public with their intentions, and they gained recognition as thought leaders in business and societal change.
Deloitte, cultural diversity program is all about recognizing their cultural differences, celebrating them together, and tapping into the different things that make their people perform best.
Deloitte’s CEO, Giam Swiegers, is a key proponent of the firm’s cultural diversity initiative: “Deloitte is, and will always remain, a meritocracy…the cultural diversity program is about creating a fair environment for all Deloitte people, regardless of background or religion”.
Deloitte to understanding and managing culture is applicable in many different situations which organizations face. This appreciation is particularly significant in strategic, technological or structural change, strategy development and becoming a flexible, agile and responsive organization
Conclusion a strong culture is more likely to have a strong and efficient organizational structure and a weak culture is more likely to have a weak and less efficient organizational structure.
3.0 Management functions
The four management functions of planning, organizing, leading and controlling, and their interrelationship, see Appendix A. All managers, regardless of title, level, type and organizational setting, are responsible for the four functions. However, they are not accomplished in a linear, step-by-step fashion. The reality is that these functions are continually engaged as a manager moves from task to task and opportunity to opportunity in his or her work.
Planning – A process that includes defining goals, establishing strategy, and developing plans to coordinate activities.
Planning is a mental process requiring foresight and sound judgement. It involves the laying of objectives and determining the course of action to achieve the objectives. Objectives have to be clarified before taking any other decisions. They provide the basis for the future and for evaluating the performance with the pre-determined standards.
Planning is based on future situations and is a must at all levels of management. The success of a plan, therefore, lies in the manager’s ability to forecast future situations correctly and accurately. Thus planning implies, deciding in advance what to do, when to do, where to do and how the results are to be evaluated.
Planning is a continuous process. It is required to ensure effective utilization of human and non-human resources to accomplish the desired goals. The process of planning thus involves the following activities :
Laying down objectives
Developing planning premises
Searching alternative courses of action
Evaluation of various alternatives and formulation of a plan
Formulating policies and procedure
Preparing schedules, programmes and budgets
Organizing – Determining what tasks are to be done, who is to do them, how the tasks are to be grouped, who reports to whom, and where decisions are to be made.
Once planning is effected, the people in the organization have to be organized. It is an important activity by which management brings together the manpower and material resources for the accomplishment of pre-determined goals. Organizing is the process of establishing relationships among the members of the organization. This relationship is created in the form of authority and responsibility. Each member in the organization is assigned a specific duty to perform and is granted the corresponding authority to do it.
In others words, organization is the process of identifying and grouping the work to be performed and dividing it among the individuals and creating authority and responsibility relationships among them for the accomplishment of objectives. The process of organizing thus involves the following activities :
Identifying the activities involved in achieving the objectives
Grouping the activities into a logical pattern
Assigning the activities to employees
Delegating authority and fixing responsibility
Coordinating the authority-responsibility relationships of various activities.
Leading – A function that includes motivating employees, directing others, selecting the most effective communication channels, and resolving conflicts.
Leadership is the process of influencing the behavior of the people in one’s own way. It implies guiding, actuating and inducing subordinates to work with zeal and enthusiasm for the achievement of the objectives laid down. Leaders are the moving spirits, guiding starts and source of inspiration of their subordinates. A leader interprets the objectives of the business, suggest course of action and guides people to achieve the set objectives. Leadership basically is a process of motivation.
Controlling – Monitoring activities to ensure they are being accomplished as planned and correcting any significant deviations.
Controlling is the process of seeing whether the activities have been performed in conformity with the plans. It helps the management to get its policies implemented to take corrective actions if performance is not in accordance with the planned objectives.
In others words, controlling is the process of checking actual performance against the agreed standards with a view to ensuring satisfactory performance. The process of controlling thus involves the following :
Determination of standards for measuring work performance
Measurement of actual performance
Comparing actual performance with the standard
Finding variance between the actual and the standard and the reasons for the same
Taking corrective action to ensure attainment of objectives
Leadership is the process of influencing individuals and groups to achieve goals. Leaders use influence to motivate followers and arrange the work environment so that they do the job more effectively. Some of the important roles of leadership have been summarized below :
Shares organization’s vision with people.
Recruits, trains and retains.
Models positive behavior.
Challenges, provokes and stimulates intellectually.
Builds the culture of creativity and innovation.
3.6 Transactional and Transformational Leadership
The need for organizations to change and adapt rapidly while creating a high-performance workforce has become increasingly apparent in recent years. To stay competitive, business leaders must be inspire organizational members to go beyond their task requirements and exert extraordinary levels of effort and adaptability. As a result, new concepts of leadership have emerged.
3.6.1 Transactional leadership
Transactional leadership is a leadership style that is based on the exchange relationship between subordinates and the leader. Transactional leaders are characterized by displaying contingent reward behavior and active management-by-exception behavior.
Transactional leaders have the following characteristics :
They understand what their followers want to receive from their work, and they attempt to give the followers what they desire, if the followers’ performance merits reward.
They clarify the links between performance and rewards.
They exchange rewards and promises of rewards for specified performance levels.
They only respond to the interests of followers if the followers are performing satisfactorily
3.6.2 Transformation leadership
Transformation leadership involves motivating followers to do more than expected, to continuously develop and grow, to increase their level of self-confidence, and to place the interests of the team or organization before their own. Transformational leaders do the following :
They increase followers’ awareness of the necessity of achieving valued organizational outcomes, a vision, and the required strategy for realizing the vision and outcomes.
They encourage followers to place the interests of the team, organization, or larger collective before their own personal interests.
They raise the level of followers’ needs so that they continuously try to develop and improve themselves while striving for higher levels of accomplishment.
4.0 The relationship between motivation and performance for Deloitte
The key to any organization’s success is the performance of its employees and it is generally accepted that the quality of this performance will depend on the employees’ attitudes to their employer.
Motivation is defined as forces within an individual that influence the direction, intensity and persistence of the individual’s voluntary behavior. Motivation is concerned with why people choose a course of action in preference to others and why they continue with their chosen action often over long periods and in the face of difficulties. In order words, motivation affects a person’s decision-making process, which is internal in nature.
It is important for management to understand motivation and how it affects employees at work. People are complex and motivating them is important to ensure a productive and harmonious work environment. Furthermore, it can affect organizational climate such as methods for control, group development or team performance. It is also related to job performance and effectiveness, organizational design and organizational reward strategies. In short, it influences both leader and organizational performance, which results in the follower behavior.
Herzberg’s two factor theory
Herzberg’s motivation theory which states that job satisfaction and dissatisfaction are not opposites ends of the same continuum but are independent states and that different factors affect satisfaction and dissatisfaction.
The factors related to job satisfaction have been called satisfiers, or motivators. When these factors are increased, it will lead to greater performance and increase the productivity.
The factors include:
- Opportunity for advancement or promotion
- The work itself
- Potential for personal growth
The factors related to dissatisfaction have been called dissatisfies, or hygienes. When these factors are deficient, dissatisfaction will increase.
Hygiene factors include:
- Technical supervision
- Working conditions
- Company policies, administration and procedures
- Interpersonal relationships with peers, supervisors and subordinates
As a result of achieving employee satisfaction, the organization would have lesser problems in absenteeism, less turnover, employees would give their best performance and would show more loyalty. Therefore, it can increase the productivity and improve the performance of the organization. Otherwise, the lower the satisfaction, the more likely employees to be absent from work. Hence, absenteeism and turnover within the organization will gradually increase day by day. Thus, it can affect the performance of the company
The link between motivation and performance seem to be an obvious one. If individuals are highly motivated, they will perform better. In turn, better performance may well lead to a sense of achievement and result in greater motivation.
Tie rewards to performance
A basic characteristic of high-involvement management practice is tying rewards to performance. The importance of this link is supported by many theories concerning human motivation and learning. One of the basic principles operant conditioning is that rewards should be tied directly to performance to encourage the desired behavior. This basic proposition is reflected in the process theories of motivation as well. Expectancy theory proposes that motivation is a function of the perceived probability that various performance levels will lead to certain outcomes. To the extent that people have experience with performance leading to rewards, they will develop stronger instrumentalities.
Equity theory also suggests that performance (an input) should be clearly connected to rewards (outcomes). According to equity theory, associates should react more positively to reward decisions when the rewards can be linked to their own and others’ performance. In addition, procedural justice research indicates that linking performance and rewards should result in greater motivation because the reward decisions will be viewed as more ethical and unbiased when people are rewarded based on their achievement and contribution. Finally, goal-setting theory suggests that providing rewards for the achievement of goals helps associates accept and become committed to those goals, although external rewards are not necessarily required for goals to affect motivation.
Financial Rewards as Motivators
Deloitte can use various modes of financial rewards to motivate their employees. There are four types of rewards in organizations are:
Membership and seniority-based rewards: Benefits to employees depend on when they have joined an organization and their stay in a job. Usually advancement, pay raise and benefits depend on the seniority of the employees.
Job status-based rewards: Financial rewards are given according to the position in job hierarchy. This type of reward distribution ensures internal equity. Employees perceive their pay to be fair in comparison with others in the organization.
Competency-based rewards: Modern organizations are increasingly rewarding their employees on the requisite competencies. Competencies are the knowledge, skills and the abilities (KSAs) employees possess for delivering the performance on the job. Objective of such reward is to motivate the employees to acquire new skill sets.
Performance-based rewards: Modern high performance organizations reward the performance at individual, team and organizational levels for motivating employees to deliver enhanced performance. Some common example of individual rewards is commission and bonus. Organizations also offer profit sharing and stock options for motivation of its star performers.
Thus the relationship between motivation and performance can be a mutually reinforcing one. Yes, motivated individuals may do more work, but this will need to be carefully managed if they aren’t going to spend most of their energy on aspects of work they find stimulating, which may be of little or no benefit to the company.
Yes, motivated employees in Deloitte may be more productive, provided they have the requisite skills to do the job and the perception to realize whether they have or not. It is just as important to take steps to improve ability by means of good selection and training as it is to pay attention to motivation.
Lastly, motivation implies pressure – to move forward, to do more- but too much pressure, in other words too much stress, can be harmful in both the short and the long term. Of course, the answer is balance. In the short-term, we need sufficient pressure to concentrate well and do the job quickly and efficiently, but not so much that panic starts to intrude an concentration becomes difficult. In the medium to long term, we must avoid working to exhaustion.
The impact of technology on Deloitte’s team functioning
Technology can affect structure in number of ways. The impact will depend upon management discretion and the ways in which the technology is used within the organization. The impact influences three areas of structural design:
Technology can impact on the number of jobs provided by an organization. The large-scale introduction of computers in an office or robots in a factory can be used to cut the numbers employed. Organization structure is a means of compartmentalization based upon the need to manage human activity. If the operation is automated a significant rationale for the existing structure also changes.
The introduction of a new technology produces a need to accommodate new jobs or even functions within a structure. Also it is not unusual to find new jobs springing up within existing departments, for example, computer accountant, a job responsible for seeking ways of using computer technology in accounting.
The integration of technology into existing jobs also influences the structure. For example, the use of CAD/CAM allows the integration of designers with production, logistics and marketing specialists. Under such operating circumstances it becomes increasingly difficult to justify the traditional separation of activity into functional compartments. This can be used as the justification for reviewing the structure of an organization.
Where new technology has been integrated into an organization to the extent that it dominates operational activity, Mintzberg (1983) describes the emerging structure as an adhocracy. This form of structure is typified by :
- Few levels of management
- Little formal control
- Decentralized decision making
- Few rules, policies and procedures
- Specialization of work function
Advancements in technology have the potential to decrease the time needed to complete a task, or in some cases eliminate the need for a business process or job function. Typically, the desire for increased productivity drives upgrades to technology within an organization, which can significantly influence company operations.
Progressions in computers and communication technology improve the efficiency of a business. Deloitte adapts to these changes by restructuring departments, modifying position requirements or adding and removing jobs. Deloitte’s employees often require training on new software programs or equipment as a job requirement if it becomes industry standard.
For employees, technological enhancements often reduce the number of tedious office tasks or improve efficiency. Changes in day-to-day operation may come in the form of an upgrade to desktop computers, faster office equipment or the introduction of a new information system.
The decision to launch the video department, to use web video to communicate has really given a great impact on Deloitte.
The contribution of Web video allow people to communicate quickly, share ideas, and transfer information without regard to physical locations, or to a reasonable extent, even without regard to the temporal dimension. Therefore, a supervisor will be able to monitor the activities of a larger number of subordinates without requiring them to report directly to him/her. Through web video, cost of operation can be reduced, as the reduce in the travelling cost involved, and time efficiency can be achieved when the need to travel from one destination to another destination is eliminated, where the using of web video, can do all the communication, delivering and sharing of information, and decision making.
Both David Nadler and Jeremy Main refer to this “span of control” as a measure of how many individuals or teams that a supervisor can effectively manage. Thus, a key advantage of web video is to be able to simplify organizational structures. In fact Deloitte with well-developed management information systems and communication technology lend themselves to a move towards flat structures.
Communication technology, employed by Deloitte, web video, email and teleconferences, makes organizational communication easily accessible. Using these methods of electronic communication can help make distance a non-factor in organizational communication.
Communication technology enables Deloitte to better collect data around the workplace, allowing making more informed decisions. Technology also creates a more connected workplace.
The relationship between technology and communication in today’s organizations is significant. Technology can even change the way organizations are structured when a new system is introduced.
Deloitte also proven to have successfully achieved coordination and integration amongst their employees and through this all employees can be better connected to the Deloitte’s business strategy and senior leaders.