Relationship Between Organization Structure, Culture And HRM

My research question is “Relationship b/w Organization Structure, Culture and HRM. It is a broad term to describe the interrelated functions of an organization. Those function whose absent encounter the problems of decline to an organization. Firstly I would like to describe the basic terminology of my research question.

Organization Structure:

An organizational structure is a mainly hierarchical concept of subordination of entities that collaborate and contribute to serve one common aim. (Wikipedia)

Culture:

The specific collection of values and norms that are shared by people and groups in an organization and that control the way they interact with each other and with Stakeholders outside the organization.” (Wikipedia)

HRM

The polices and practices involved in carrying out the “people” or human resource aspects of a management position, including recruiting, screening. Training rewarding and appraising. (Gary Dessler, HRM ,2005).

As these three mention categories are showing these are very much interrelated with each other and I am assigned to show relationship between these in context of an organization. My motivation to select this research question is very obvious as I’m very profound of these management elements and I ll show you how I motivated on these for my thesis. As everyone knows the critical values of these functions in an organization these are the function which constitute the basic part for making an organization or a company .for example if we talk about organizational culture than we heard employees talk about aspects of an organization , what they like about working at a company: respect for individual employees. Opportunity for personal growth and responsibility. Teamwork. A feeling of family. Freedom to be creative. Minimal rules and regulations. Little or no hierarchy. These all are a rich array of benefits and services to facilitate work force balance and people attract to such organization and this is why I select this function. My second target is HRM , as it is considered that the success of an organization often depends largely on the effectiveness through which workers are recruited, hired, trained, evaluated and rewarded. This is the very crucial success factor for a small who are not relying on hr manager even. My great interest in this is because of using the appropriate human source for an organization with its affectivity. My third function to be under taken in my thesis is organization structure, organization in these modern era tend to grow to large size and bureaucracy is efficient with large size while small may come and go but today modern technological advancements tend our organization to be multi-locational with financial and technological resources to compete in global market. So a review of the evidence linkage organizational structure to employee performance and satisfaction.

So I’m definitely sure to do justice with these objective of my thesis as with the advancement in each era of life it is so obvious that these three are the essential part of an organization. I’m sure I’m going through this as me my self very much interested in this topic /research question.

“It `s not what we don’t know that gives us trouble it `s what we know that ain` t so.”

(W . Rogers)

DEVELOPMENT OF THIS AREA IN PAKISTAN

In Pakistan, HR is merely a department to serve payroll management and related issues. Mostly, it has the short-termed components of HR i.e. Recruitment system. Although many Organization stands out from the rest as it has Training & Development, Recruitment, Job Descriptions, HRIS, PMS, Employee Relations, Legal Affairs section of HR. 

Although, it can be said easily, that HR is gaining popularity in Pakistan very fast, and within a span of 4-5 years, Pakistan may also recognize the importance of HR anagement. The need is to recognize the Job Analysis function as the base of all HR activities. As we all have experienced that job market of HR professionals has radically increased since 2-3 years. We can comfortably take HR as career.

In Karachi, Lahore and Islamabad we have many well established Recruitment Agencies, mostly large organization avail their facilities especially Multinationals. The scope is wide, but if we are planning to start one, we need to have good contacts and PR with the market to start off our agency. Companies now a day saving time by outsourcing Recruitment Agencies. As far as structure is concerned it mostly depend on what the owner is?, how much the capital he has?, and culture simply reflect what the personality of the owner is. So these can be developed with where the organization stand at progress level.

SCOPE OF THIS IN PAKISTAN

The beginning of a new era in Pakistan unfolded with the development of industrialization. Many world wide used functions are also introduce in Pakistani organizations which include structure, culture and hr functions etc. HRM has a lot of scope in future market by different ways. New business strategies that require more teamwork to survive to surve and to succeed. The market needs to rely on team workers who are diverse work force as a result of drawing from the most talented an experience staff .Market need HR and an organized structure strategy for producing better quality, innovation, cost control. It required top level hr as to retain and attract top talent people such as in concurrent engineering a design process that relies on team of expert from market. Different management functions now have a wide scope in Pakistan too. Pakistan having a wide scope for these areas to developed as we are growing in our industry. We are having more human resource to utilize as wel as resources to avail.

EMERGING OF ORGANIZATION STRUCTURE, CULTURE AND HRM

Organizational structures developed from the ancient times of hunters and collectors in tribal organizations through highly royal and clerical power structures to industrial structures and today’s post-industrial structures. Organization culture tend to develop from very first human on the earth who try to form groups, tribes societies and barter system. It is the very first thing which reflect the whole personality of the founder, its environment and nation. The need for an organized form of HRM emerged during the industrial revolution, as the manufacturing process evolved from a cottage system to factory production

REASONS FOR CHOOSING THESIS FOCUS ORGANIZATION

I am choosing PC Hotel Lahore, as the company is wel established and having departments fully developed as compare to other. This is the branded company. The company is enjoying good reputation in market.This is being listed on stock market of Pakistan.Its name is itself its recognition.

History of focus company

PC HOTEL LAHORE

History:

Pakistan services limited (PSL) was firstly incorporated in 1958 as a public limited company. It is being quoted on Karachi stock exchange since 1964. The major business of PSL is “hospitality”(services provider). In beginning, it started its operation under the management of Inter Continental Hotel, later on when Hashoo acquired PSL in 1958 .They also changed its name to PERAL CONTINENTAL HOTEL . They become the largest and oldest five star hotel chain in Pakistan in October 1958. All the inter pearl continental hotel in Karachi ,Lahore, Rawalpindi, Peshawar become Pearl continental hotels ,and an other pearl was added in chain at Bhurban in 1992. The first hotel pearl continental (PC) was built in 1964 in Karachi. In 1967-68 PC Lahore and Rawalpindi came in to existence respectively and in 1975 another PC hotel emerged in Peshawar. In 1985 Hashoo Group took over this company through privatization and changed the name from Inter Continental to Pearl Continental (PC). In 1990 PC Bhurban came into operation, in 1995 the expansion of Lahore was in operation.

“They are the very first hotel chain which got international standards in producing quality services and product.”

VISION

“We Will Open The Door And You Will See Whats In Stores”

MISSION STATEMENT

“Our Mission Is To Be Hotel Recognized As The Leader In Industry In Any Aspect. We Are Committed To Train And Develop All Our Staff Members Allowing Them To Grow In Their Career And Provide Services And Standards Which Exceed Guest Expectation”.

STRUCTURE

PC hotel structure is simple tall , having a top most authority resigned to Mr saddrudin Hashwani .

Several efforts were made to upgrade its image. These included a new décor and fresh landscaping of the hotel grounds as well as upgrading of food and service through training of relevant personnel

The hotel has 487 exclusively appointed bedrooms, which includes 193 Standard rooms,

238 Atrium Deluxe rooms and 49 Luxurious Suites providing various levels of guest

Comfort. There are only 2 Presidential Suites in the hotel.

DEPARTMENTS

PC has 8 departments:

Food & Beverage

House keeping

Front office, reception

Personnel/HR

Finance/sales

Marketing

Information Technology

Guest relations/Customer services

The PC hotel, Lahore is a Five Star Hotel located on Sharah-e-Quaid-e-Azam, on the same stretch of road as the Alhamra Art Council, Lahore Zoo, Avari Hotel and Parliament Building.

Services

PC Hotel Lahore being the only five star hotel in town offering matchless services and facilities stand tall among all the small hotels surrounding in its premises. In standards it always being the choice for budget meetings, seminars symposium, conventions wedding trainings courses, corporate meetings and conferences. It also gained the reputation of providing variety of foods in different restaurants and managing outside Caterings. The Pearl Continental Hotel offers complimentary airport shuttle service including travel desk facilities and provides hotel links to all major international cities having membership of Leading Hotels of the world consortium. Within Pakistan, Pearl Continental Hotels offers 5 star deluxe service in all the major cities of Pakistan through its nation-wide chain of Pearl Continental Hotels Pakistan.

The hotel features over 30 Channel Satellite TV, In-house movies, Fax machines in all suites and executive club’s rooms, International direct dialing, Exclusive electronic safes, Non-smoking floor, Centrally air-conditioned environment, Beauty Salon/Barber Shop and a Shopping arcade.

These following services and facilities are available to guests at

PEARL CONTINENTAL HOTEL.

Laundry/Dry Cleaning Jewelry & Gem Shops Car Rental

Parking Baby Sitting Travel Desk

Airline Offices In-House Doctor Florist

Bookstore Business Centre Pharmacy

24 Hour Room Service Authorized Money Changers

RESEARCH QUESTION AND PROJECT OBJECTIVE

The ultimate aim of this research investigation is to provide a comprehensive knowledge of

relationship between above mention functions , which is provider of a stronger competitive

organization using its intellectual and tangible resources. This thesis fulfill the aim through

the investigation of the following question:

Is any relationship between organization structure, culture and HRM?

In addressing the primary question following secondary questions can also be addressed :

What are the universally accepted theories about structure, culture and HRM?

What are the challenges and opportunities organization can encounter in implementing an effective structure, culture and HRM?

What is the impact of these on organization?

What will be happened if one of these elements absent from organization setup?

Summarizing an interrelationship between these elements?

RESEARCH SIGNIFICANCE/INSIGHT

The primary contribution of this thesis to provide the greater understanding of unique characteristics of hr polices and culture, structure of PC with reference to globally accepted phenomenon’s. The research is a multi method designs which provides insight into multidimensional relationship between structure, culture and hrm. I am also going to show the globally accepted theories about this relationship and elements.

FRAMEWORK OF MY THESIS

This thesis include 7 Chapters including above introductory chapter.

PART 1

1st chapter; “Introduction”

In this section It briefly described what is the topic and than It describe topic terminology .It also throw light on the scope of these HRM, Structure and Culture in Pakistan`s prospective . It mention the unit of analysis which is PC Hotel. It also mention the reasons to select this company. Than It mention primary objective and relevant secondary objective to carry out this thesis work proceeding. In the last It present a little framework of how It going to proceed for next chapters.

PART 2

2nd chapter:” Theoretical Background And Research Objectives Development”

In this section It present research question elements, a little about how they originated and include some views from articles. Than It take a literature reviews of organization Structure, Culture and HRM accordingly globally accepted theories.

3rd chapter: “Methodology”

This include the way It adopt to researching the chosen problem . Its called methodology which prevails research design steps ,that explain the type of data It gather from and techniques It has used for evaluation of data. Than it also mention limitatations that It come across with, and ethical issues during proceeding of research.

PART 3

4th chapter: Critical Analysis

This chapter will present an interpretation of the critical analysis of targeted company and a brief interrelationship of these three elements with respect to each other. This would also establish the basis for the further recommendation and conclusion.

5th Chapter: Description & Presentation Of Results Obtained

This chapter will present an interpretation of the data to be collected from research questionnaires , interviews and other sources in the form of graphical illustrations and tables. This would also establish the basis for the discussion and the resultant recommendations that will be identified as problem barrier in adopting or selecting any policy by the companies. This will also help me to put my own conclusion into it.

6th Chapter: Conclusion

The previous chapter finding’s conclusion and general comments.

7th Chapter: Recommendations

This include recommendation I would likely to made from above findings.

References will be attached at the last.

CONCLUSION

In this chapter the acquired and interpreted data transformation yields valuable information. It illustrates somehow little effectiveness of HRM ,structure & culture on companies.

Theoretical Background and Research Objective Development

LITERATURE REVIEW

HISTORY

Workface management has become increasingly complex. By the late 1800s, people problems were a very real concern in the workplace. Forward-thinking employers recognized that productivity was connected to worker satisfaction and involvement and realized they could not meet production schedules with bands of disgruntled employees. The first personnel management department began at the National Cash Register Co. (NCR) IN 1901.  Company President John H. Patterson decided to improve worker relations by organizing a personnel department to handle grievances, discharges, safety and other employee issues. The department also kept track of pending legislation and court decisions and these first personnel managers provided training for supervisors on new laws and practices.1(Michael Losey HR Magazine, March 15, 1998)

Reviews from different articles

“If you meet a group of people, you will find that they aren’t similar, but they hold the same things important,”. Furthermore, no one culture is right or wrong. “The right culture for one company is wrong for another,” You have to put it in context of what works for the business.

 Although culture itself is difficult to quantify, there are ways to measure its importance to employees. In Microsoft’s employee opinion surveys, a “culture index” is gauged by questions asking how long staff plan to stay with the company and if they would recommend the work environment to friends and family. How people view the company over the long term is indicative of how the culture is working and what improvements are yet to be made.

Clayton says there are other ways to judge if the present culture is right for the organisation. Attrition rates give employers a good idea. As leaders, managers must carry forward the culture. “They monitor the symptoms – is the heartbeat irregular? If managers resolve the problem by searching for somebody else, they aren’t doing their job,” he says.

A tale of five monkeys reveal and highlights the power of an organisation’s past on its present culture. Stories and histories are passed down, creating rules of behaviour that employees sense without necessarily understanding the reasons behind them.2

HRM also will be required to train management to be more flexible in its practices. Because tomorrow’s workers will come in all different colors, nationalities, and so on, managers will be required to change their ways. This will necessitate managers being trained to recognize differences in workers and to appreciate-even celebrate-those differences. The various requirements of workers because of different cultural backgrounds, customs, work schedules, and the like must be all taken into account. In addition, extensive training to recognize these differences and “change the way managers think about people different from themselves” has positive outcomes. Many companies like have already begun to formalize this process.3

This study examined the relationship between three structural variables (size, vertical complexity, and administrative intensity) and the operating efficiency of all 234 metropolitan branches of a financial services company. As hypothesized, negative relationships were found between (a) size and productivity and (b) vertical complexity and productivity; however, the predicted negative relationship between (c) administrative intensity and productivity was not found – instead a curvilinear relationship emerged. On average, the smallest branches were approximately 31% more efficient than the largest ones; those with the least vertical complexity (one hierarchical level) were roughly 44% more productive than those with the greatest complexity (five levels).4

Reviews Of Books

I used two books for my data gathering first is Human Resource Management By Garry Dessler (10th edition)it contain a comprehensive review of essential personnel management concepts and techniques in a highly readable and understandable form. The 2nd book is organizational behavior by Stephen P. Robbins(10th edition) it contain brief description of organization structure and culture this also include the conversational writing style, the cutting edge content, the extension use of current examples which help me a lot.

ORGANIZATION STRUCTURE

DEFINATIONS:

An organizational structure is a mainly hierarchal concept of subordination of entities that collaborate and contribute to serve one common aim. (Wikipedia)

An organization structure defines how job tasks are formally divided, grouped and coordinated. (Stephen P. Robbins, organizational behavior, 9th addition)

 Organizational structure is the way in which and work, authority resources of an organization have been divided among members.(oppapers.com)

ELEMENTS OF ORGANIZATION DESIGN

There are six key elements that manager needs to address when they design their organization `s structure. These are;

Work specialization

Departmentalization

Chain of command

Span of control

Centralization and decentralization

Formalization

WORK SPECIALIZATION

“The degree to which tasks in the organization subdivided into separate jobs “

The essence of work specialization is that, rather than an entire jovb being done by one individual. It is broken into a number of steps, with each step being completed by a separate individual. In essence, individuals specialize in doing the part of an activity rather than the entire activity.

DEPARTMENTALIZATION

“The basis by which jobs are grouped together.”

The main advantage of this type of grouping is obtaining efficiencies from putting like specialist together. Functional departmentalization seeks to achieve economies of scale by placing people with common skills and orientation into common units.

CHAIN OF COMMAND

“The unbroken line of authority that extends from the top of the organization to the lowest echelon and clarifies who report whose.”

There are two complementary concepts

Authority; the rights inherent in a managerial position to give orders and to expect the orders to be obeyed.

Unity of command; a subordinate should have only one superior to whom he or she is directly responsible.

But now a days these trends are shift towards empowering employees.

SPAN OF CONTROL

“The numbers of subordinates a manager can efficiently and effectively directs”

It determines the number of levels and managers an organization has. All things being equal , the wider or larger the span, the more efficient the organization.

CENTRALIZATION AND DECENTRALIZATION

‘the degree to which decision making is concentrated at a single point in the organization”

and

“decision discretion is pushed down to lower level employees’.

An organization characterized by centralization is an inherently different structure animal from one that is decenterized. In a decentralized organization action can be taken more quickly to solve problem, more people provide input into decisions, and employees are less likely to feel alienated from those who make the decision that affect their work lives.

FORMALIZATION

“the degree to which jobs within the organization are standardized”

Organizations use formalization to increase their rationality. In one sense formalization is an attempt to make behavior more predictable by standardizing it. Standard procedures for production workers or quality control checklists that must be used and submitted before a product can be shipped are examples of this kind of formalization.

(Published: 2007-04-15 , Author Martin Hahn)

COMMON ORGANIZATION DESIGNS

These are as follows;

The simple structure

The bureaucracy

The matrix structure

THE SIMPLE STRUCTURE

“A structure characterized by a low degree of departmentalization, wide span of control, authority centralized in a single person, and a little formalization.”

Simple Structure: These are structures with low degree of departmentalisation and a wide span of control. The authority is largely centralized in a single person with very little formalization. It is also called ‘flat structure’. 

It usually has only two or three vertical levels, a flexible set of employees, and generally one person in whom the power of decision-making is invested. This simple structure is most widely practiced in small business settings where manager and owner happens to be the same person. Its advantage lies in its simplicity. This makes it responsive, fast, accountable and easy to maintain. However, it becomes grossly inadequate as and when the organization grows in size. Such a simple structure is becoming popular because of its flexibility, responsiveness and high degree of adaptability to change. 

THE BUREAUCRACY

A structure with highly routine operating tasks achieved through specialization, very formalized rules and regulations , tasks that’s are group into functional departments,centerlized authority ,narrow spans of control , and decision making that follows the chain of command

Bureaucratic  structures have a certain degree of standardization. They are better suited for more complex or larger scale organizations. They usually adopt a tall structure. Then tension between bureaucratic structures and non-bureaucratic is echoed in Burns and Stalker[1] distinction between mechanistic and organic structures.

(Burns, T. and G. Stalker. (1961) The Management of Innovation. London: Tavistock.)

THE MATRIX STRUCTURE

“A structure that creates dual lines of authority combines functional and product departmentalization.”

The matrix structure groups employees by both function and product. This structure can combine the best of both separate structures. A matrix organization frequently uses teams of employees to accomplish work, in order to take advantage of the strengths, as well as make up for the weaknesses, of functional and decentralized forms

NEW DESIGN OPTIONS

The team structure

The virtual organization

Boundryless organization

THE TEAM STRUCTURE

The use of team as the central device to coordinate work activities

One of the newest organizational structures developed in the 20th century is TEAM. In small businesses, the team structure can define the entire organization  Teams can be both horizontal and vertical. While an organization is constituted as a set of people who synergies individual competencies to achieve newer dimensions, the quality of organizational structure revolves around the competencies of teams in totality. 5

THE VIRTUAL ORGANIZATION

“A small core organization that outsource major business functions.”

Another modern structure is virtual or 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, that 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

(Gummesson, E. (2002). Total Marketing Control. Butterworth-Heinemann, p. 266)

THE BOUNDRYLESS ORGANIZATION

An organization that seeks to eliminate the chain of command have limitless span of control and replace departments with empowered teams.

The most radical concept in today’s organizational design is the concept of boundryless, which seeks to overcome traditional boundaries between layers of management (vertical), functional areas (horizontal), as well as geographic boundaries. Some claim the boundaryless structure is a combination of team and network structures, with the addition of temporariness.6

WHY DO STRUCTURE DIFERS`

As we have discussed a variety of organizational designs ranging from the highly structured and standardized berucracy to the loose and amorphous boundary less organization. The other designs here are tend to exist somewhere between the two extremes.

MECHANISTIC MODEL

“A structure characterized by extensive departmentalization, high formalization, a limited information networks and centralization.”

Nearly one-half century ago, Burns and Stalker noted that mechanistic organizations are often appropriate in stable environments and for routine tasks and technologies. In some ways similar to bureaucratic structures, mechanistic organizations have clear, well-defined, centralized, vertical hierarchies of command, authority, and control. Efficiency and predictability are emphasized through specialization, standardization, and formalization. This results in rigidly defined jobs, technologies, and processes. The term mechanistic suggests that organizational structures, processes, and roles are like a machine in which each part of the organization does what it is designed to do, but little else.

ORGANIC MODEL

“a structure that is flat,uses cross hierarchical and crossfunctional teams. Has low formalization ,possesses a comprehensive information networks and relies on participative decision making “.

Its lot look like the boundaryless organization. Its flat, uses cross hierarchical and cross functional teams , has low formalization ,possesses a comprehensive information network and relies on participating decision making.

MECHANISTIC VERSUS ORGANIC MODELS

WHAT MAJOR FORCES DETERMINE AN ORGANIZATION DESIGN

STRATEGY

An organization structure is a mean to help management achieve its objectives because objectives are derived from the organization overall strategy. Its only logical that strategy and structure should be closely linked. Most current strategy frameworks focus on three strategies;

INOVATION STRATEGY

A strategy that emphasis the introduction of major new products and services

COST MINIMIZATION STRATEGY

A strategy that emphasis tight cost control , avoidance of unnecessary innovation or markeing expenses and price cutting.

IMITATION STRATEGY

A strategy that seeks to move intonew products or new markets only after their viability has already been proven.

ORGANIZATION SIZE

There is considerable elements to support that an organization size significantly affects its structuring

TECHNOLOGY

How an organization transfer is inputs into outputs.

ENVIRONMENT

Institution or forces the organization that potentially affect the organization performance.

ORGANIZATION CULTURE

DEFINITIONS

A system of shared meaning held by members that distinguishes the organization from other organization

(Stephen P. Robbins, Organization Behavior 10th Edition)

A pattern of basic assumptions that the group has invented discover or developed in learning to cope with its problem of external adaptation and internal integrated. (human capital management)

DO ORGANIZATION HAVE UNIFORM CULTURE

DOMINATE CULTURE

Expresses the core values that are shared by a majority of the organization members (T A Timmaeman,”do organizationhave personalities ?”published in aug 1996.)

SUBCULTURE

Miniculture within an organization, typically defined by department designation and geographical separation.

CORE VALUES

The primary or dominate values that are accepted throughout the organization.

STRONG CULTURE

Culture in which core valuesare intensly held and widely shared.(Y. Wiener,academy of management review,oct 1988)

STRONG CULTURE VERSUS WEAK CULTURE

It has become increasingly popular to differentiate between strong and weak culture.the strong culture have have a greater impact on employee behavoiur and are more directly related to reduce turn over the more members who accept the core values and graeter their commintmentto those values is the stronger the culture is.and in result of a strong culture should be lower employee turn over.7

CULTURE VERSUS FORMALIZATION

A strong culture increases behavioral consistency and can act as a substitute for formalization.

ORGANIZATIONNAL CULTURE VERSUS NATIONAL CULTURE

National culture has a greater impact on employees than does their organization’s culture.

Nationals selected to work for foreign companies may be atypical of the local/native population.

WHAT DO CULTURE DO

CULTURE’S FUNCTIONS:

Defines the boundary between one organization and others.

Conveys a sense of identity for its members.

Facilitates the generation of commitment to something larger than self-interest.

Enhances the stability of the social system

CULTURE AS A LIBILITY:

Barrier to change

Culture is a liability when the shared values are not in agreement with those that will further the organization effectiveness.

Barrier to diversity

Hiring new employees who, because of race, gender, disability, or other differences are not like the majority of the organization members creates a paradox.8

Barrier to acquisitions and mergers

Historically, the key factors that management looked at in making acquisition or merger decisions were related to financial advantages or product synergy. In recent years, cultural compatibility has become the primiary concern. While a favourable financial statement or product line maybe the initial attraction of an acquisition candidate, whether the acquisition actually work seems to have more to do with how well the two organizations culture match up. 9

KEEPING CULTURE ALIVE

Selection

Concerned with how well the candidates will fit into the organization.

Provides information to candidates about the organization.

Top Management

Senior executives help establish behavioral norms that are adopted by the organization.

Socialization

The process that helps new employees adapt to the organization’s culture.

Stages in socialization process

Prearival stage;

The period of learning in socialization process that occurs before a new employee joins the organization.

Metamorphosis stage

The stages in the socialization process in which a new employee change and adjusts to the job, work group, and organization.

Encounter stage

The stage in the socialization process in which a new employee sees what the organization is really like and confronts the possibility that expectations and reality may diverge.

Entry Socialization Options

Formal versus Informal

Individual versus Collective

Fixed versus Variable

Serial versus Random

Investiture versus Divestiture