BUS209 Study Guide
Unit 6: Organizational Structure, Culture, and Managing Change
6a. Explain how and why organizations divide their tasks
- How would you define organizational structure?
- How are tasks divided amongst employees?
- Can an organizational structure be defined by a product or service? If so, how?
- Why is it important that an organization have formalization?
Numerous terms define organizational structure and how businesses operate at all levels. Organizational structure considers how best to organize individuals, departments, and/or teams to work together efficiently and reach company goals. Structures vary depending on factors such as size, product/service, physical facility layout, number of departments, and the kind of culture that you want to develop for your business.
Organizations will usually be structured as either centralized or decentralized. Centralization occurs when management is mostly at the top of an organization, and decentralization occurs when management is distributed evenly. This describes the decision-making process and information flow for the business. Formalization occurs when a company establishes standards, policies, and procedures that employees can follow; this ensures that all employees and customers are treated fairly. Hierarchical levels are seen with levels of authority, and the lower levels of an organization will implement any decisions; this type of hierarchy is seen in governmental and state agencies.
The decisions on what structure should be designed for any business need to consider many factors. What kind of culture is preferred for the organization? For example, if a team-based organization is preferred, the layout of the offices should support large, open areas where teams can meet. We will also think about the decision-making process and the amount of control that will need to be exercised. Will the management team make most of the decisions and pass them down through the organization, or will they empower employees to make more decisions?
Many of us are familiar with the organizational chart, the classic representation of a business' operations.
The organizational chart shows us the firm's various departments and identifies the management structure. As you can imagine, the organization charts can expand as firms grow, sometimes involving dozens of levels.
As companies continue to evaluate ways to improve performance and increase the satisfaction levels of shareholders, employees, and customers, new forms of organizational structure continue to emerge. Many changes in structure have resulted from the continuing study of organizational behavior and the application of the findings to current business operations.
There are many ways to structure an organization. The key is to consider all those choices and decide based on what will be the most beneficial for your organization's members and other stakeholders.
To review, see:
- The Influence of Corporate Culture on Employees
- Igniting Creativity to Transform Corporate Culture
- Organizational Structure
6b. Analyze organizational change and appropriate skills for accomplishing successful organizational changes
- What is organizational change?
- Why might an employee be resistant to change?
- How can a leader help to ensure their team sees change as positive?
- As a group, what occurs when employees resist change?
If there is one certainty in business, it is that the future is uncertain, or in other words, change is inevitable. Organizational change occurs when a company needs to stay ahead of the competition and thrive in the business world. Changes happen in the skills and work ethics of employees and the expectations of customers. Change is driven by the workforce, technology, the economy, world trends, competitor actions, and social trends. That's why businesses today need to be able to adapt to change and move quickly to meet new requirements. However, change is not so easy to achieve.
Although change can sometimes occur unexpectedly, in most cases, it results from an organization purposely deciding that a change is required. Many employees have witnessed good and bad changes in their organizations, and this has created employee resistance to additional changes.
In many instances, change can harm the members of an organization. These negative effects can result in concern or active resistance – deliberate behaviors aimed at blocking or impeding organizational change. Individuals may fear what a change may mean to their continued employment, opportunities for advancement, or compensation. They want employees to actively support those decisions, but resistance impacts how and if those changes are made. This chart shows this level of employee resistance:
Understanding that the members of your organization will have real concerns regarding change, managers have been trained before employees find out when change will occur. By keeping employees informed of upcoming changes, they may be better prepared. This diagram shows one method of enacting change:
To review, see:
6c. Explain the importance of cultural diversity in the workplace
- Why is cultural diversity important?
- How does organizational culture relate to cultural diversity?
- What assumptions might occur in the workplace?
- What is a company vision statement?
Cultural diversity involves appreciating the differences in employees in the workforce. Studies have shown that the more diverse an organization is, the higher its productivity is. When numerous people from various backgrounds look at a problem, they will all see the situation differently, and this is important to take into consideration from a business perspective.
Organizational culture is a system of shared assumptions, values, and beliefs that show people what is appropriate and inappropriate behavior. Assumptions occur when employees believe something even though there may not be any definitive proof of its existence; this is important to understand as a business culture may be based on these beliefs. An organization's culture should reinforce the importance and commitment to the organization's values. Dynamic, growing, and successful organizations create and sustain a culture that enables all the members of that organization to achieve their individual and group goals.
This diagram depicts the various dimensions of organizational culture. Different cultures have varying levels of these dimensions.
An organization's culture typically begins with the vision of its founder. The starting point might be found in the organization's vision statement, which tells internal and external stakeholders what the organization believes in. From there, many factors will influence the culture, including goals and objectives, employees, leadership, and rewards and punishments. To be effective, the culture must be assessed to verify that it is still true to the organization's vision, and adjustments must be made if it is not.
To ensure that the culture is understood and supported by the organization's members, care should be taken to bring in new members who are a good fit for the group. It is also important to focus on diversity and bring in various viewpoints to make the organization more culturally diverse and productive.
For an organization's culture to contribute positively to its success, it must create a sense of belonging for all members. The business culture influences the desired behaviors and commitments required to achieve the organization's goals.
To review, see:
Unit 6 Vocabulary
This vocabulary list includes terms you will need to know to successfully complete the final exam.
- active resistance
- assumption
- centralization
- decentralization
- formalization
- hierarchical level
- organizational change
- organizational chart
- organizational culture
- organizational structure
- vision statement