Critical Analysis of Organisational Structure and Culture in Relation to Business Performance

Introduction

From the analysis of the Phrase “Provided the underlying culture is strong, a bad patch will sooner or later end. Properly regarded, setbacks can be instructive. Enduring cultures regard them not as calamities but challenges, and absorb their lessons…..” We can hypothesise that �underlying culture �refers to organisational culture; �bad patch’ refers to a period where business performance is low or employees are moving away form the organisational culture resulting in low business performance; �Properly regarded, setbacks can be instructive’ means that the organisation can learn from their mistakes and overcoming obstacles, and �Enduring cultures’ are cultures that are long lasting in the organisation. Substituting translations into the above mentioned phrase, it would state that: once organisational culture is strong and lasting, periods of low business performance will soon end, the organisation will learn from its mistakes and overcome challenges.

This paper proposes to critically evaluate how structure and culture of organisations affect their business performance and individual behaviour in the workplace by: defining structure and identify four types of organisational structures, defining culture and identify the types and different dimensions of culture, Defining business performance and identifying and analyzing the factors influencing individual behaviour at work. Furthermore it will seek to compare and contrast the different organisational structures and organisational culture. Analyze the relationship between organisational structures and organisational culture and its effects on business performance. Additionally the learning cycle will be defined and it will be used to show how structure affects an individual’s behaviour at work and along with the other factors that will be identified and with the different types of culture show how this affects business performance. Upon completion of this, recommendations will be made for improving organisational structure and culture.

“Organisational structure is the pattern of relationships among positions in the organisation and among members of the organisation. Structure makes possible the application of the processes of management and creates a framework of order and command through which the activities of the organisation can be planned, organised, directed and controlled. The structure defines tasks and responsibilities, work roles and relationships and channels of communication.” Mullins (2005. p 596.) The objective of creating organisational structure is to link individuals in established network of relationships so that authourity, responsibility and communications can be controlled. It is also necessary to assign suitable levels of authourity and responsibility to groups or individuals to achieve the desired outcomes of the organisation. This creates a hierarchy or chain of command in which authourity flows downward and accountability because of responsibility flows back up. Structure also allows for tasks to be assigned to groups or individuals and that these groups or individuals can be coordinated so that overall objectives can be completed without wasted resources. Adapted from EDEXCEL HNC & HND Business Organisations and Behaviour Course book, (2004 p58:59)

Organisational culture as defined by Fons Trompenaars (1999) is the �shared assumptions, beliefs, values and norms as well as artifacts and language patterns. It is an acquired body of knowledge about how to behave and shared meanings and symbols which facilitate everyone’s interpretation and understanding of how to act within an organisation.’ Trompenaars as cited in and adapted from Mullins (2005 p45:46) goes on to describe culture in terms of layers the outer, middle and core. The outer layer represents artifacts i.e. style of dress, language and atmosphere of surroundings and climate it is the facets of an organisation’s culture which can be easily understood even after a short visit to an organisation. The middle layer houses intangible characteristics such as leadership style, perception, motivation, organisational structure control and power. The core layer of culture relates to the deepest assumptions i.e. belief in quality, loyalty, freedom to make decisions and mistakes and goals whether ideological, formal or sheared personal goals.

Business performance is the organisation’s ability to attain its finical goals by using its resources in an efficient and effective manner in order to meet its primary mandate which is to increase profits. Now that we understand these elements lets us look at their varying types and what factors influence an organisation to adopt different types of structures and cultures.

Theoretical framework

Structure