BUS603: Managing People

7a. Relate the dimensions of organizational culture, such as employee's values and beliefs, common goals, leadership styles, and shared assumptions 

• How can organizational culture affect employees and the organization?
• What are the different models or frameworks of organizational culture?
• How are these models similar and dissimilar?

Organizational culture serves two purposes: culture helps an organization adapt to and integrate with its external environment and creates internal unity by bringing together employees so that they work more cohesively to achieve common goals. The organization is usually framed by the top manager or the founder of the organization. That individual's vision, values, and mission set the tone for the organization. Organizational culture, because it is based on values, influences employees' beliefs, behaviors, relationships, and the way they work.

One popular model of organizational culture is the Competing Values Framework (CVF), which diagnoses the effectiveness and fit of the culture with its environment. As a result of this diagnosis, an organization's culture can be defined as an Adhocracy Culture, Clan Culture, Hierarchy Culture, or Market Culture. Another popular model of organizational culture characteristics is the organizational culture profile (OCP). In this model, organizational culture can be framed as innovative culture, aggressive culture, outcome-oriented culture, stable culture, people-oriented culture, team-oriented culture, and detail-oriented culture. If you compare the CVF with the OCP, what similarities and differences would you find?

Other frameworks for organizational culture include Hofstede's Cultural Dimensions, in which Hofstede identified cultural dimensions globally: power distance, uncertainty avoidance, individualism versus collectivism, masculinity versus femininity, long-term orientation, and indulgence versus restraint. Edgar Schein's Cultural Model focuses on artifacts, values, and assumptions. Finally, Charles Handy's Four Types of Culture include power culture, role culture, task culture, and person culture.

While the cultural frameworks mentioned above are helpful, many frameworks exist to define organizational culture.

To review, see Corporate Cultures and Shaping Organizational Culture.

 

7b. Describe the relationship between the external business environment and the organizational culture 

• What factors make up the external business environment?
• How can we assess the best fit between the external environment and the organization?

The external environment consists of sociocultural forces, natural disasters, human-induced problems, government and political forces, economic forces, and technological forces. The company's industry fit can be determined by two dimensions: environmental complexity and environmental change. Environmental complexity refers to the number of elements in the environment (simple or complex), while environmental change is described as stable or unstable.

Looking at these two dimensions, we can determine if the company industry fit has a simple-stable environment, a complex-stable environment, a simple-unstable environment, or a complex-unstable environment. Working within a complex environment can be very challenging. Some ways to organize your company to meet these complexities include: using self-managing teams or autonomous business units with an entrepreneurial responsibility to the larger organization, developing simple rules to drive out creativity and innovation, or the company building upon its own capabilities.

To review, see External and Internal Organizational Environments.

 

7c. Explain how organizational design models (i.e. functional, centralized, decentralized, layers of hierarchy, departmentalization, etc.) help to achieve agility and improve performance 

• What factors go into the decision of organizational design?
• What are common organizational designs?
• How are these organizational designs similar and dissimilar?
• How does the necessity for agile organizations match these organizational designs?

Organizational structures tell employees how job tasks are divided, grouped, and coordinated. Factors to consider when choosing or changing an organizational design include work specialization, departmentalization, the chain of command, span of control, centralization/decentralization, and formalization. Another factor to consider is whether or not the organization is mechanistic or organic. Mechanistic organizations exist in stable, low-uncertainty environments. Mechanistic organizations tend to have a top-down hierarchy, narrow span of control, specialized tasks, formal rules, vertical communication, and structured decision-making. Organic organizations exist in unstable, high-uncertainty environments. Organic organizations tend to have a less rigid, horizontal organization; be flexible with few rules; two-way communication; participatory decision-making; generalized shared tasks; and a wide span of control.

Common organizational designs include functional structure, divisional structure, geographic structure, matrix structure, networked team structures, and virtual structures and organizations. The functional structure is organized by departments and expertise areas. A functional structure might be referred to as a "pyramid" structure as they are governed as a hierarchical, top-down control system. A divisional structure has many functional departments grouped under a division head. Each functional group in a division has its own marketing, sales, accounting, manufacturing, and production teams. A geographic structure is designed to serve customers faster and with relevant products and services. Matrix designs use teams to combine vertical with horizontal structures. Employees report to a functional boss while simultaneously reporting to a product or project team boss. Networked team structures move beyond the matrix structure with a structure that is more informal and flexible. Networks comprise clustering – the degree to which a network is made up of tightly knit groups – and path length – the average number of links separating any two nodes in the network. Virtual structures and organizations respond to the need for more flexibility, on-demand solution-based tasks, fewer geographical constraints, and accessibility to dispersed expertise.

To review, see Factors Impacting Organizational Design and Organizational Structures and Corporate Cultures.

 

7d. Examine the relationship between leadership and the development of subordinates to achieve organizational strategy 

• How are leadership and the development of subordinates linked?
• What leadership styles might be effective in the development of subordinates?
• What are specific actions leaders can take to develop subordinates?

Studies in learning at work indicate that social support – received from managers/leaders and peers – is important in transferring knowledge. Knowledge management looks at how the performance of management helps develop the intellectual/human capital of an organization. Knowledge management, then, is using knowledge as a strategic asset in an organization. A leadership style oriented toward learning and knowledge encourages innovation and knowledge sharing, encouraging open communication and team development.

Transformational leadership, aimed at the positive influence of subordinates, is directly associated with the process of the professional development of subordinates. Transformational leadership can be both supportive leadership and developmental leadership. Supportive leadership, as part of transformational leadership, considers followers' needs and preferences when making decisions. Developmental leadership, as a part of transformational leadership, engages in career counseling, careful observation of employees, recording followers' progress, and encouraging followers to attend technical courses. Development leadership displays a stronger relationship with job satisfaction, career certainty, workplace commitment, and self-efficacy than supportive leadership. Research also indicates that servant leadership and authentic leadership are also effective leadership styles when developing followers.

Transformational leaders can contribute to the professional development of followers across three areas: strategic management, formal learning activities, and informal learning activities. In strategic management, we want to create a work environment that supports learning and commitment. One of the most important areas is to have shared goals with the work teams and to use empowerment leading to workplace commitment. In formal learning activities, the leader's goal is to stimulate the team. In addition to providing formal learning opportunities, the leader can create communities of practice that offer constant challenges and growth possibilities for employees. In informal learning, the leader must inspire followers. Creating multidisciplinary teams can enrich the quality of exchanges within the team. Reflective observation can also be used to enhance learning.

To review, see Attracting the Right Workers.

 

7e. Apply leadership practices such as mentoring and talent development to foster the career progression of subordinates 

• Why would we want our followers to progress in the organization?
• How can mentoring and talent development help with career progression?
• How can an organization benefit from mentoring and talent development?

As a leader, you must give your followers a reason to remain with your organization. Understanding what each of your followers needs can be done by listening. What are their career goals? What do they like and dislike in their current position? What skills do they want to develop? What assignments have you found most engaging?

Employees also want to grow and develop. Mentoring and networking help to energize people, Through mentoring and networking, people can learn, create, and find new opportunities for growth. Providing followers with a sense of purpose is also very important with Millennials, as this sector of workers ranks meaningful work and challenging experiences at the top of their job search lists.

McKinsey & Company, through a study, found three talent management practices that correlate with financial performance: globally consistent talent evaluation processes, cultural diversity in a global setting, and developing and managing global leaders. Consistent talent evaluation allows a global organization to transfer employees, knowing they have the same skills and standards. Cultural diversity, as you have learned throughout this course, helps employees understand different cultures. Developing global leaders by rotating employees across different cultures gives them international experience and a global viewpoint.

To review, see Human Capital Management: Don’t Reinvent the Wheel.

 

Unit 7 Vocabulary 

This vocabulary list includes terms you will need to know to successfully complete the final exam.

• adhocracy culture
• aggressive culture
• Charles Handy's Four Types of Culture
• clan culture
• clustering
• Competing Values Framework (CVF)
• complex-stable environment
• complex-unstable environment
• detail-oriented culture
• developmental leadership
• divisional structure
• Edgar Schein's Cultural Model
• environmental complexity
• environment change
• functional structure
• geographic structure
• hierarchy culture
• Hofstede's Cultural Dimensions
• innovative culture
• market culture
• matrix structure
• mechanistic organization
• networked team structures
• organic organization
• Organizational Culture Profile (OCP)
• out-come oriented culture
• path-length
• people-oriented culture
• simple-stable environment
• simple-unstable environment
• stable culture
• supportive leadership
• team-oriented culture
• virtual structures and organizations