Tall And Flat Organisational Structure Business Essay

An organisational structure defines how tasks and responsibilities are divided, work roles and relationship among members in the organisation and channel of communication within an organisation. It provides the framework for the organisational activities. An organisation can be structures in many different ways depend on the organisation’s goals (intentionally created). Managers need to focus on 6 key elements when they design their organisation’s structure: work specialisation, departmentalisation, chain of command, span of control, centralisation and decentralisation, and formalisation.

Organisational culture is the patterns of behaviour, assumptions and beliefs which members of the organisation have in common. It is an identity of the company and a product of history and its people, especially the norms and values set by its founder. Organisational culture affects the behaviour of employees as it provides a certain standards and guideline which they must perform in their daily tasks to meet the require expectation. Employees learn culture through symbols, stories and rites and ceremonies.

2.1.1. Tall and Flat Organisational Structure

The organisational structure is usually projected by a tall pyramid or a flat structure. Tall and flat organisational structures are two of the most common types of organisational structures.

Figure 1 Tall Organisational Structure

Figure 2 Flat Organisational Structure

Figure 1, shows a tall organisation structure with a narrow span of control, complex and a long chain of command, while Figure 2, shows a flat organisational structure with a wider span of control that has fewer levels of hierarchy which is only three layers. Span of control refers to the number of employees that report to a manager. Number of manager an organisation has is determined by the number of employees a manager can efficiently and effectively direct.

In a tall structure, every manager has a small area of control as they only have a few subordinates to manage. As the organisation grows, the structure will become taller and the number of management levels increases. A manager must be able to control, supervise subordinates and coordinates the effort of subordinates easily. Enhance quality of performance while building greater bond between manager and subordinates through working closely together. However, there are some drawbacks of tall organisational structure and narrow span of control such as high management level wages to be pay out, slow decision making and discouraging employees to be independent decision maker in times of critical decision making especially when a problem arises as decision is made by upper level management.

In contrast, flat organisational structure has fewer level of management which means lesser manager in the organisation and lower managerial level wages to be pay put. Wider span of control results in flat organisation as managers through this structure is able to manage many subordinates. Decision making in flat organisational structure is faster than tall organisational structure because there are few layers of communication between managers and subordinates. Although subordinates have more power but they cannot find ways to advance and enhance further growth in their organisation. Subordinates are able to make critical decision at certain level when there is a problem that needs urgent remedy. Limitations of flat organisational structure or wider span of control are organisation may needs to invest heavily on the employees training in order to let the managers know the jobs and make better decisions. Many mistakes could occur, compare to tall organisational structure because there are many subordinates, looser control, lesser qualified personals to study a proposal and also less guidance for subordinates.

2.1.2. Compare and Contrast Different Organisational Structures and Culture

The organisational structure provides the framework for the organisational activities while the organisational culture reflects the identity of the organisation, norms and value set by the founder.

Core

The core of an organisational culture of any business reflects on the mentality, professionalism and the core values of the company’s owners and their respective staffs. However, some firms are regarded as having a dog-eat-dog world culture where staffs aggressively contend for higher designation and special increments in allowances unperturbed and insensitive to other colleague’s emotions.

Just like there is two sides two as coin, there are also companies who strongly believe in “one company, one family” culture or in a culture that creates an environment for fresh ideologies. The term “organisational structure” denotes to the original framework of a company. A business can be registered as a sole proprietorship, partnership or corporation are among legally preferred choice of business registration. However, the choice of structure will have a direct impact on the firm’s tax liability and the manner operations are managed.

Control

Most companies have a structure of command from the start of their business apart of choice of registered business and preferred choice of chain of command. Companies are able maintain narrow span of control with a centralised structure or provide departmental managers with limited authorities. The company’s corporate culture may change from initial idea of culture setup as culture develops after first interactions with employees and clients. The starting tone could be setup, nevertheless a relaxed culture or a sale-focused culture, employee’s attitude toward work also has an impact on the culture. A warm work environment, but the managers mistreat their employees, then, despite company’s efforts, the company will have a negative organizational culture.

Change

The corporate culture of a business can change at any time. Some effects create changes such by implementing new policies and procedures that are aimed at less stressful working environment. The culture could change when a group of employees leave and new employees do not share the same ideals that have part of a tradition practiced to the time of their appointment. However, to change a company structure in the midst of its operation can be quiet destructive at its initial period of implementation.

Tangible

Tangible structure allows an outsider to determine how the operation of an organisation by checking the business registrar. Managers and supervisors are also evidence of a company’s organisational projection. Whatever the structure of choice and criticism it may receive, it is an undeniable fact the structure exists. An organisation culture’s feedback and perception cannot be taken as a tangible fact. Clients and employees may spread malicious rumours on the company, where it paints the company in bad image among the society and consumers. Though rumours could be clarified, it still unable to portray the company’s culture as a tangible fact. .

2.2 Relationship between an Organisation’s Structure and Culture and the Effects on Business Performance

The organisation structure and culture plays an important role in determining the success or failure of the company. Six key elements should be taken account in determining the culture strength of an organisation.

If the organisation structure is tall and complex, then the decision making of the organisation will be slow. Regardless being slow, the management gets a collective view points from all their upper level management and the additional time taken is spent wisely analysing any decision prior to implementing as to make minimal mistakes from any possibility arising from a poor decision which will lead to wastage of resources in term of monetary and labour.

2.3. Factors which Influence Individual Behaviour at Work

The major are personality and perception of each and every individual who is an employee are major factors which influence individual differences in behavioural patterns.

Personality can be defined as a relatively stable set of characteristics that influences an individual’s behaviour. The several factors that influence the personality of an individual are heredity and environmental. Hereditary factors were passed by our parents and ancestors to us. The environment is another factor in personality development. Different environmental factors may generate different responses. For example, an online shoe retailer Zappos.com understands how individual or organisational behaviour affects an organisation’s performance. Zappos maintains a positive, fun-loving work environment to employees. Employees are empowered to make decision that increase customer satisfaction and encouraged to create fun during work.

Perception is a process by which individuals organise and interpret their sensory impression in order to give meaning to their environment. (Stephen P. Robbins). There are many factors that influence the perception of an individual. The study of perception plays important role for the managers. To improve the productivity and smoother the organisational process, managers need to access how subordinates perceive their jobs.

APPLICATION TO CASE STUDY!!

3.0. Task 2

3.1. Organisational Theory

There are several theories explain the organisation and its structure.

Bureaucracy Theory

Max Waber has proposed an ideal way of organising government agencies and both public and private sectors organisation which is in bureaucracy form. He emphasised on five major principles which are formal hierarchy structure, individual is operated under a set of rules and regulations, employment based on technical qualifications, an “up-focused” or

“in-focused” mission and impersonal.

Scientific Management Theory

F.W Taylor proposed the scientific management which is mainly concerned with the ‘individual job’. He believed that inefficiency of production can be controlled with clearly defined principles. Four principles of scientific management are management has to take responsibilities to develop the best way to manage subordinates through developing a true science of work. Second, worker are selected carefully and trained to perform the tasks in accordance with management instruction. Third, analyse the tasks scientifically and effectively trained workers are put together to increase productivity. Last, the scientific approach to management helps worker-manager cooperation.

Administrative Theory

Henri Fayol was the first to identify functions of management, he believe that managers needed specific roles in order to manage work employees. According to Henri Fayol, there are 14 principles that create an administrative management mindset and five functions of managers which include planning, commanding, coordinating and controlling. By dividing the work into specific jobs, subordinates are able to work more efficiently and managers are able to direct the activities of subordinates within the organisation.

Contingency Theory

Contingency theory is a theory that most effective groups depends on for a proper match between a leader’s style of interacting with subordinates and the degree to which the situation fives control and influence to the leader. A good leader should react fast as different environment or situation requires a different organisational relationship for effective and efficiency working of the organisation. Flexibility and adaptability are the main concern of this approach.

Hawthorne Theory

Hawthorne theory is one way to motivate people to do their job well and investigate the effects of physical working conditions on the productivity and efficiency of employees. Human needs may be categorise into needs to feel worthy, need to have control and needs to have sense of belongingness.

Organisational Theory Underpins Principles and Practices of Organising and Management

The semiconductor company in Bayan Lepas FIZ practices contingency theory that underpins the principles to its management and leadership in order to stay competitive with other multinationals companies. The company comes out with a new strategic planning and objectives. They changed the work shift from eight hours three shift to 12 hours two shifts but the total working hours per month is still remained unchanged and it is within the labour law requirement. They believe that changing work shift or compresses work schedule helps to trim down the manufacturing cost. The leader of the company has now need to understand how the new change is going to change the lifestyle of the subordinates both in terms of their respective family and how it will affect their work performance. Understanding the situation of the subordinates will give the leader a better idea how to approach the situation with critical thinking after analysing the whole problem from a wider perspective.

4.0. Task 3

4.1. Motivational Theories

Motivate is the processes that account for an individual’s intensity, direction, and persistence of effort toward attaining a goal. There are four early theories of motivation which are hierarchy of needs theory, theory X, Y and Z, two factor theory and McClelland’s theory of needs. These 4 motivation theories are best known during 1950’s and still to this days. Most of the early theories are focus on needs. “Contemporary theories” represents the current state of thinking in explaining employee motivation.

Hierarchy of Needs Theory

Abraham Maslow’s hierarchy of needs is the best-known theory of motivation. There are five needs exist in the Maslow’s Hierarchy of Needs: physiological, safety, social, esteem and self-actualisation. The hierarchy of needs can be classified into higher and lower order. Physiological and safety needs were lower-order needs whereas social, esteem and self-actualisation were high-order needs. Low-order needs are needs that are satisfied individual physically or externally such as bodily needs, security and protection from physical or emotional harm, whereas high-order needs are satisfied internally.

Theory X, Y and Z

Douglas McGregor proposed two sets of assumptions about nature of human at work: Theory X and Theory Y. Theory X is a negative view of people that assumes employees dislike work, lazy, dislike responsibility and must be closely controlled to perform. Alternatively, Theory Y is a positive view that assumes employees are creative, enjoy work, seek responsibility and self-directed to achieve goals. Theory Z is introduced by William Ouchi. This theory believes that people are self-discipline, self-motivated, loyal towards company. Many assumptions are made in the work place based on observations of the employees and their relationship with management to make a more productive environment in the organisation.

Two-Factor Theory

Frederick Herzberg’s two-factor theory proposes factors that led to job satisfaction and dissatisfaction. Herzberg classified these job factors into two categories which are hygiene factors lead to dissatisfaction and motivational factors that increase job satisfaction and motivation. Two-factor theory plays an important role for managers to have a better understanding of employees’ attitudes and motivation. The limitation of two-factor theory is the theory is not free from bias and reliability is uncertain as employees will blame dissatisfaction on the external factors and employees may be analysing in different manner which will affect the results.

McClelland’s Theory of Needs

David McClelland and his associate had developed McClelland’s theory of needs. McClelland’s Theory of Needs states achievement, power and affiliation are important needs that help to explain motivation. McClelland focused on the Needs for Achievement (nAch). They dislike gambling with high odds or even low odds as no achievement satisfaction come with pure chances and high chances of success which means no challenges. Therefore, high achievers performance best and get high achievement satisfaction from success when there is 50-50 chance.

Goal-Setting Theory

Edwin Locke proposed the goal-setting theory of motivation, states that clear and challenging goals along with feedback lead to higher levels of employees’ productivity. Goal settings give direction to employees about what to do and help to complete the work effectively. Drawback of goal-setting theory is organisational goal conflict with managerial goals that effect on the performance.

Expectancy Theory

The expectancy theory was proposed by Victor Vroom. The expectancy theory focused on three relationships: effort-performance relationship, performance-reward relationship and rewards-personal goals relationship. The advantage of the expectancy theory is it emphasizes on rewards or pay-offs if the employees can achieved aimed performance level, however the application of this theory is limited as rewards are distribute by the managers is difficult to meet the employees’ needs.

Conclusion

The expectancy theory which focused on three relationships would apply well for the leader of the semi-conductor company in its efforts to build performance relationship, performance reward relationship and reward personal goals relationships.

The leader could suggest ways the better utilised their 3 off days to fulfil their respective family obligation which will in turn bring the happiness from their time spent on family bonding to the work place to further enhance their working performances.

APPLICATION TO CASE STUDY!!

5.0. Task 4

5.1. Group and Group Behaviour

A group composes of two or more individuals to achieve particular objectives. Group can be divided into formal and informal group. Formal group is a designated work group that are established by management as a part of an organisation’s structure. In contrast, informal group is a group that is neither formally structured nor organisationally determined. Informal group is less permanent than formal group. There are five stages to be consists in order to form a group: forming, storming, norming, performing and adjourning. Forming is the first stage in group development where tasks have to be understood, resources and information required but the group’s purpose is uncertain. Next stage is the storming stage, it represents the problem arises and conflict happens as individuals begin to question and decision who will control the group. After all the discussion within the group, the conflicts are settled and there will be a clear hierarchy of leadership within the group and relationship between members will slowly get closer. In the performing stage, group starts to perform tasks. Lastly, the adjourning stage where mission was accomplished and group will be dismissed.

5.2. Team and Teamwork

A team comprises of two or more people with complementary skills who are committed to common purposes and performance goals. Although teamwork takes more times and resources but the performance of team is usually better than individual’s performance. Teamwork is the joint actions of a team of people to complete a given task.

Factors that Lead to Effective Teamwork

We can organise the key components of effective teams into three general categories. First are contextual influences that make team effective. The second relate to team composition. Last, process variable are important process to team effectiveness.

Context

The four contextual factors that determine whether teams are successful are adequate resources, effectiveness leadership and structure, a climate of trust and a performance evaluation and reward systems.

Every work team relies on resources outside the teams such as timely information, proper equipment, adequate staffing, encouragement and administrative assistance. To perform jobs and achieve goals, organisation needs to provide adequate resources and avoid scarcity happens. Leadership may be seen in terms of creating and inspiring change. The leader does by inspiring members, influence others and share belief in the leader’s goal and values. Leaders should build trusting relationship between themselves and followers by reducing the need to monitor each other behaviour. Management should evaluate employees performance and reward them. The purpose of rewards is to recognise their efforts and create a better working environment.

Team Composition

The team composition category includes variable that relate how teams should be staffed- the ability and personality of team members, allocation of roles and diversity, size of the team and members’ reference for teamwork. The abilities set limits on what members can do and how effectively they will perform on a team. Personality significantly influences individual employee behaviour.