Assignment 1 – Part B – Organisational Theory
Organisational design can be defined as achieving the organisation’s goals through changing and constructing the structure of that organisation (Robbins & Barnwell 2002). Organisational environment can be defined as the conditions that could potentially impact the organisation (Robbins & Barnwell 2002).The purpose of this essay is to explore and critically analyse British Petroleum (BP) from the modernist and symbolic interpretive perspectives. This essay will also consider not only the organisational design of BP but also the impact their external environment has on them, while also exploring how BP has impacted on the environment. On 26 May, 1908, what was then the Anglo-Persian Oil Company founded their first oil. In 1954 the company was renamed to British Petroleum. BP operates in over 80 countries around the world and has an estimated 85,900 employees worldwide (BP 2013). In the early 1990’s, John Browne transformed BP from a dying corporation into the world’s second largest oil giant (Bower 2010). Organisational designs comprise of different structures which are applicable to different organisations. Post industrial design is where organisations move away from vertical hierarchies and focus more on network communications (Hatch & Cunliffe 2006). BP had reduced its streams from 11 to 4 in the late 1980’s, this showing an initiative in changing their design from that of the past (Grant and Cibin 1996). Networks encourage information exchange among members of the organisation (Hatch & Cunliffe 2013). BP had previously developed a network strategy which allowed managers and employees to share information as it was acknowledged that to be successful against other companies, information needed to be shared and reflected on to obtain different viewpoints (Siddall, Willey & Tavares 1992). BP also used the network strategy with its environmental campaign by using separate climate teams (Kolk & Levy 2001). In implementing these actions BP was able to move into the post industrial design and possibly gain a competitive edge among competitors.
Organisational environment contains a range of important theories relating to the modernist and symbolic interpretive perspectives. One of the very influential theories developed by modernists is the environmental contingency theory. Burns and Stalker theorised that the organisations who work best are those that can generate efficiently using standard procedures to perform routine activities, these organisations are known to be mechanistic. However, organic organisations tend to be more efficient when the environment is constantly changing as they support adaption and innovation (Hatch & Cunliffe 2013). Amongst the environmental contingency theory there are other concepts that attempt to assist in explaining the environment. One such concept being isomorphism, this describes that the complexity of the environment reflects the complexity of the organisation (Hatch & Cunliffe 2006). BP attempted to generate efficiency by utilising outside experts to gain a wide range of opinions so they were at less risk of institutionalising one viewpoint (Kolk & Levy 2001), this created efficiency by preventing BP repeating pervious actions which possibly resulted in loss of competitiveness. Resource dependency theory developed by Pfeffer and Salancik is another modernist approach to the organisational environment. This theory explains that organisations are dependent on their environmental resources and as the environment is the source of survival and existence for the organisation, their environment holds a great deal of power over these organisations. The surrounding environment creates pressure on the organisations to perform competitively and efficiently in order to survive amongst other organisations and the environment itself, if the organisation isn’t willing to change, it will get left behind (Hatch & Cunliffe 2013). In relation to this...
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