Organizational and corporate structures (HL)

## By the end of this chapter, you should be able to:

* Define the meaning of organizational structure
* Outline elements of organizational structure
* Outline the types or organizational structure
* Discuss the reasons for, and consequences of, cultural clashes within organizations when they grow, merge and when leadership styles change
* Explain how individuals influence organizational culture and how organizational culture influences individuals.

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The term organizational/corporate culture refers to the attitudes, experiences, beliefs and values of an organization. These are the elements of corporate culture. The way individuals in an organization dress and treat each other, and those outside their organization often reflects the culture of their organization.  If an individual joins an organization and doesn't share the same values and beliefs, there is a big chance the person won't stay in the organization long (**Culture clash**).

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Manager may try to influence the organization's culture. However, it is hard to do so, specially at stablished and old institutions with low staff turnover(With strong corporate culture). Setting the values and the way things get done is a manager's role.   New managers will spell out  their beliefs and values and expect their staff to behave according to the beliefs the manager has set. All departament have different cultural norms. The factors that will influence this are the head of departament, the members of the team, the senior managers, the culture of the country in which the corporation is and the culture of the nationality of the department members.

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## **Types of organizational structure**

### **Charles Handy**

> Introduced a very memorable way of viewing organizational culture when he described four distinct organizational cultures: *Power culture, role culture, task culture, person cuture*
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#### **Power culture**

* Exists when a few individuals retain the essential power.
* Control comes from these individuals and spreads out across the organization
* Has few rules and procedures
* People are usually judged by their results rather than how the results were achieved.
* Quick decision making can result, but the decisions may not be in the long-term long term interests of the organization.
* The collapses of Enron and Barings Bank are attributed to dominant **power cultures**.
* Family businesses and merchant banks often have power cultures.
* Handy presented power culture as a spider web. The power comes from the spider, a web without a spider has no strenght. The spider can reward or punish.
* Individuals who do not fit in are not likely to work there for long.

#### **Role culture**

* Employees have clearly defined roles and operate in a highly controlled organizational structure.
* Often tall hierarchical bureaucracies with long chain of command.
* Power stems from a person's position
* Position and a rule book play dominant roles in decision making (Often slow and detailed)
* In this type of culture people avoid taking risks
* Civil services, military organizations and nationalized industries often have role cultures
* Handy uses the symbol of a temple or building to describe this culture. They are old and exist in stable environments. The oldest buildings in town often house organizations with role cultures. (Government offices and main post offices are often the oldest buildings)

#### **Task culture**

* Describes a situation where short-term teams address specific problems.
* Problems within this culture shift from person to person.
* Different people with different skills can lead the team at different times
* Many eople like this culture becuase they like to work in rapidly changing environments
* Strong team spirit with a great deal of emotional energy can emerge
* Divisive decisions can damage the team
* The passion for a team can be highly constructuve, but the reverse can also be true
* Often features the crossing line of a matrix structure
* Handy used the figure of a net to describe task culture. The strength of a net is its different strands. Task culture is often found in a management consultanties, where a team enters an organization to work in projects. Once the project is completed, the team will break up and a new team will form for another project.

#### **Person culture**

* Exists where individuals believe themselves to be superior to the organization and to just want to do their own thing.
* This is the type of organization where employees simply go to work and see themselves separate from it
* This type of culture is difficult to manage
* Professional partnerships, such as architecture firms and some university departments, can be person cultures
* Handy presents it as a constellation of stars. Each star is unique and different(individuals operate on their own)
* Individuals who prefer this culture will find it hard to work in organizations because the contrains they impose on these individuals seems unacceptable

### **Edgar Schein**

> Described 3 levels of organizational structure: Organizational attributes, proffesed culture, organizational assumptions.
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#### **Organizational attributes**

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