The organisation –
structure and culture
What determines organisational form?
What is organisational culture?
Creating and sustaining culture
Organisational culture and national
The importance of culture
As organisations seek to compete in ever-changing environments, they need to adapt and develop to take advantage of new opportunities. To do this effectively means more than knowing which ‘levers’ to pull or which structural form to take. It also requires a deep understanding of what makes the organisation work – its culture. But what choices are available concerning structure and culture? What is culture? How is it created? How can it be changed? After reading and understanding the contents of the chapter, considering some of the Case Examples and Test Your Knowledge questions, you should be able to:
Understand the significance of organisational structure.
Describe a range of structural forms.
Define organisational culture.
Understand the nature and importance of organisational culture. Understand the relationship between organisational and international cultures.
1 What determines organisational form?
The culture and structure of an organisation (its form) develop over time and in response to a complex set of factors. Handy (1993) has identified a number of key influences that are likely to play an important role in the development of any corporate culture.These include:
primary function and technology;
goals and objectives;
management and staffing; and
Robbins (2007) identifies:
(b) size; and
(c) technology and the environment
as being determinants of structure. Taking these together the key influences are discussed below. Some of the terms used are defined further in the sections that follow.
The reason, and manner in which, the organisation was originally formed, its age, and the philosophy and values of its owners and first senior managers will affect culture.A key event in the organisation’s history, such as a merger or major reorganisation, or new chief executive or set of top managers, may bring about a change in its culture and structural form. Describing corporate history can be an effective induction tool and help integrate acquisitions and new employees by infusion with the organisation’s culture and identity.
1.2 Primary function and technology
The nature of the organisation’s ‘business’ and its primary function have an important influence on its culture. This includes the range and quality of products and services provided, the importance of reputation and the type of customers.The primary function of the organisation will also determine the nature of the technological processes and methods of working, which in turn also affect structure and culture.The effect of technology (how inputs become outputs) on structure depends very much on how routine are the technologies employed. A common theme in research is that routine tasks are associated with taller, more departmentalised structures; centralised if the degree of formalisation is low.
1.3 Strategy, goals and objectives
Structure is a means used by an organisation to achieve its objectives; if there is a significant change in the organisation’s strategy then its structure is likely to need modification. In this sense, structure follows strategy, as Figure 4.1 shows. Although a business organisation may pursue profitability, this is not always the sole goal. For example, to what extent is emphasis placed on long-term survival or growth and development? How much attention is given to avoiding risks and...
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