Business / Examining Different Approaches To Management And Theories Of Organisation And Evaluating How Organisational Structure And Culture Contribute To Business Success

Examining Different Approaches To Management And Theories Of Organisation And Evaluating How Organisational Structure And Culture Contribute To Business Success

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Autor:  anton  02 March 2011
Tags:  Examining,  Different,  Approaches,  Management,  Theories,  Organisation
Words: 2320   |   Pages: 10
Views: 1049

Terms of reference

The task that I have been set is to examine an organisation of my choice and use my own research to satisfy the following outcomes:

• Examine different approaches to management and theories of organisation.

• Evaluate how organisational structure and culture contribute to business success.

To do this I need to answer the following questions in the form of a business report:

• Identify the organisation’s approach to management, supported with examples.

• Identify the type of structure and provide an overall organisational chart

• Identify the organisation’s management style and give examples

• Highlight any variances between theory and practice in Qs 1 to 3 above, using illustrative examples.

• Identify the culture of the organisation and use examples

• Show with examples how this culture has helped with the success of the business

Executive summary

In summary, I have stated that Egg’s approach to management closely follows that of Human Relations. I have also said that the Human Relations approach to management was devised by Elton Mayo and his Hawthorn experiments.

I have included an organisation chart of Egg this can be found at the Appendices at the back of the report. The organisational structure of Egg is that of a Functional one, this means that the business is structured by department where everyone does the same job or similar.

Also I stated that the management style of Egg is that of consulting. This means that Egg likes every member of the team to be involved but ultimately the decision is made by the team leader or manager.

I have outlined the differences between the theories of management and actually putting it into practice and making it work in order to achieve a set of targets.

I have said that the culture of Egg is one that is a mixture of both the Greek temple and of the Net. These four styles were devised by Charles Handy, and show the different cultures that could occur inside an organisation.

Finally I have stated that Egg because it has such a relaxed attitude towards its approach to work and staff, that they actually make it fun to turn to work and achieve the targets set.

Introduction

Egg plc was formed in 1998 as an e-commerce company. Although they have only been in existence a short time, Egg plc has built up nearly 3.2 million customers and has nearly 2000 employees working from three offices in London, Dudley and Derby in the UK.

In 2000, Egg plc floated on the stock exchange, with the UK based financial services company ‘The Prudential’ being the major shareholder with 79% of the shares.

Egg plc specializes in four main areas, banking, insurance, investments and online shopping. The company is intending to expand its services in the near future.

An early measure of success for the company was the award, in 2001, of the Yell.com recognition for “Best Finance Site”, achieved after only three years of trading.

1. Identify – with reference to academic theory – the organisation’s approach to management, supported with examples.

1.1 There are six different approaches to management that an organisation can use:

• Scientific

• Classical Administration

• Bureaucratic

• Human Relations

• Systems

• Contingency

Each approach has very different characteristics, and each is more suitable for a particular type of organisation.

1.2 Looking at Egg plc and the way that the organisation is run, I would suggest that the approach that the management uses is broadly the Human Relations approach.

1.3 The Human Relations approach to management focuses on the attitudes and relationships of the workers. It involves mainly the philosophy devised by Elton Mayo. He performed a number of experiments at the Hawthorn plant of Western Electric Company in the USA. The experiment was to see if there were any changes in the productivity of the girls working there if he changed the lighting. But he found that no matter what he did to the lighting, productivity went up anyway. He worked out this was because the girls were more motivated because someone was taking the time to focus on them.

1.4 I think that this is relevant to Egg plc because their website contains a lot of information about their staff, and how they like to have a pleasant, relaxed working environment, whilst achieving high targets at all times. For example, in every office there is a staff room for relaxation that contains both a pool table and a table football game. This allows staff to get to know each other better and to allow for a better atmosphere, because they can relax quickly, and overcome the effects of potentially stressful jobs.

1.5 Another example of the management taking a positive step towards ensuring staff feel relaxed and motivated is that there is no uniform at Egg plc. This encourages a freedom of image, and members of staff tend to enjoy coming to work more than other companies where rigorous rules are enforced.

2. Identify the type of structure and provide an overall organisational chart.

2.1 The organisational chart for Egg plc can be seen in the appendix at the end of this report.

2.2 Looking at the chart, it can be determined that Egg plc’s structure is a functional one. This means that the company is organised into different departments each responsible for a specific task.

2.3 A major advantage of using a structure like this is that the expertise of each person is being used collectively in one place. This means that a lot of people are doing jobs that they are good at, and therefore performance can be optimised.

2.4 Another advantage of using a functional structure is that it avoids two departments doing the same work, unaware that the other is carrying out the same task, as each has its specific responsibilities. This saves a lot of time and manpower resources.

2.5 A functional structure makes recruitment and training easier as well. This is because each department has a selection of specialist people who are able to pose appropriate questions to ensure that the right candidate is chosen, rather than someone conducting interviews who knows a little bit about each area of the business.

2.6 A disadvantage of having a functional structure for a business is that communication problems may arise from the different departments. This would occur because each department grows its own culture and language that the other departments might not fully understand.

2.7 Looking specifically at Egg plc; the management have set up a motivational structure. For example instead of labelling the first tier of management directly above the “lowest level workers” as “supervisors” (although they are in place for supervisory purposes), the company decided to name them Team Leaders. This means that each of the workers is part of that team leader’s team; they have a sense of belonging, they feel needed, and they will, therefore, want to work harder, in order not to let the team down.

3. Identify the organisation’s management style and give examples

3.1 Ashridge Management College undertook a series of studies in different industries to try and develop a classification of management styles. The Ashridge Studies, as they came to be known, decided on four styles of management that occurred most often:

• Tells

• Sells

• Consults

• Joins

3.2 Egg plc uses the process of consulting to make decisions within departments. The team leader explains the problem or situation to the rest of the team. Then the team are allowed to add their own ideas and opinions on the matter. But ultimately the final decision is left to the team leader or department manager.

3.3 The advantage of using a process like this is that the situation gains the benefit of many peoples’ opinions and ideas and, therefore, the best solution can be obtained. Another advantage of using the consultation style is that the workers all feel involved with the business. This is far more motivational then if the management left them out of the “problem solving loop” altogether.

3.4 One disadvantage of using the consulting style is that it might take longer for a decision to be made, because the situation has to be brought to everyone’s attention, rather than have a ‘snap decision’ made by the team leader or manager.

3.5 A further disadvantage arises if the manager or team leader does not use the team’s input into decisions. The team may feel that the whole consultation process is a waste of time because their views appear to have been ignored. This would be highly demotivating, as the team would feel undervalued by the company, and an element of mistrust between the two parties could arise.

4. Highlight any variances between theory and practice in Qs 1 to 3 above, use examples.

4.1 There are many differences between having a theory written down by an academic and a manager attempting to put the theory into practice by trying to motivate a team of people to do some particular task.

4.2 Once a theory has been established, it is a relatively simple task for some people to commit the theory to writing, polish it a little, and then submit it for publication. These theorists are then termed “experts”, although they may have only formulated ideas, and not gained any practical experience. The real experts on the way to manage a group of people are not the theorists without practical experience, but the managers working inside companies who, daily, have to manage a group of workers in order to try to achieve the targets that have been set.

4.3 With regard to question 1, involving the approaches to management, a theorist can specify whether a business adopts one of the six approaches, but in the real working world every business is different and will not match any of the choices exactly. This is because like people, every business is individual, and each has its own characteristics, and usually adopts an amalgam of two or more of the approaches to management, depending upon the specific circumstances of each situation.

5. Identify the culture of the organisation and use examples

5.1 The term ‘organisational culture’ can be defined as “That’s the way we do things around here” (Deal and Kennedy 1982). It means simply that the ‘culture of the business’ includes the processes, practices, traditions and values that the organisation uses in its day-to-day running.

5.2 There are many ideas about organisational culture by many different people. One often-quoted idea is by Charles Handy (1932 – 1994). He said that there were four main types of organisational culture these are:

• The web – Power culture – One power in the middle to which everyone listens

• The Greek Temple – Role culture – Clear strong structure with roles being the key

• The net – Task culture – Brings together resources depending on the task

• Cluster of individuals – Person Culture – people share benefits but work separately.

5.3 Looking at Egg plc, I would say that the organisational culture is a mixture of both the ‘Greek Temple’ and the ‘net’ examples. This is because there is a clearly defined structure within Egg plc, involving the management and their different teams etc. Although there is a good structure, the company does bring together its resources when trying to reach a target, and therefore the departments inter-relate to get the job done efficiently.

5.4 Having the net as a part of the business’s culture means that usually the business is very results orientated. This is true of Egg plc because they state on the company website that they “like to achieve high targets and push back boundaries”.

6. Show with examples how this culture has helped with the success of the business

6.1 I think that the business culture that Egg plc has adopted does help with the success of the business. For example the employee of the year, normally the person who has helped the most to achieve the yearly targets, is given a brand new car! This is highly motivational to the staff because most people would appreciate a new car, so they will work that bit harder to try to achieve it.

6.2 I believe that because Egg plc has such a relaxed culture and attitude towards work practices, in the long term its employees work harder. On the company website, there are quotes from four members of staff stating how much they enjoy coming to work and how much fun it is to work at Egg plc. I think that if the company management can make coming to work and actually doing the job fun, then the staff and workers will enjoy their jobs more, they will want to work harder, and they will want to see the company grow and succeed.

Appendices

The organisation chart of Egg plc can be found on the next page.

Non Executive Chairman

Directors

Chief Executive Officer Vice Chairman

Chief Financial Officer Sales and Marketing Human Resources

Adviser Adviser

Taxation Payroll Accounts Company

Manager Manager Manager Secretary Sales Marketing Training Personnel

Manager Manager Manager Manager

Team Leaders Team Leaders Team Leaders

Team Leaders Marketing Market Research Team Leaders Team Leaders

Administration Department Department

Department

Taxation Payroll Accounts Customer Service Training Personnel

Assistants Assistants Assistants Assistants (call centre) Assistants Assistants

Bibliography

BPP Publishing: 2002 HNC/HND BTEC Core Unit 3 Organizations and Behavior: Business Course Book

1st edition, BPP Business Education Ltd

Goleman.D: 2002 Business: The Ultimate Resource

1st Edition, Bloomsbury Publishing, London

Luthans F: 2002 Organizational Behavior

10th edition, McGraw – Hill, New York

Pass.C: 1991 Dictionary of Business

Harper Collins Publishers, Glasgow

Egg homepage, (1998). Egg, Available from: http://www.egg.com, [accessed 13 December 2004]



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