Organizational Design & Structural Process (EDL 410)- Semester 4
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1st Module Assessment
CASE STUDY
The Coca-Cola Company is truly global, and its main product is recognised and consumed worldwide. The Company organises and structures itself in a way that reflects that fact. At the same time, the Company looks to meet the particular needs of regional markets sensitively and its structure also needs to reflect that fact. This Case Study illustrates the way in which the Company has built an organisational structure that is robust and yet also flexible enough to meet these particular requirements.The Coca-Cola Company is the world’s largest beverage company and is the leading producer and marketer of soft drinks. The Company markets four of the world’s top five soft drinks brands: Coca-Cola, Diet Coke, Fanta and Sprite. The success of The Coca-Cola Company revolves around five main factors: A unique and recognised brand – Coca-Cola is among the most recognised trade marks around the globe :- Quality – consistently offering consumers products of the highest quality ; Marketing – delivering creative and innovative marketing programmes worldwide; Global availability – Coca-Cola products are bottled and distributed worldwide; Ongoing innovation – continually providing consumers with new product offerings e.g. Diet Coke (1982), Coca-Cola Vanilla (2002).
Although Coca-Cola is a global product with universal appeal, the Company actually operates in local environments around the world, with each country having its own unique needs and requirements. So while Coca-Cola is probably the only product in the world that is universally relevant in every corner of the globe, the Company feels that its responsibility is to ensure that with every single can or bottle of Coca-Cola sold and enjoyed, individual connections are made with their consumer. That can only be achieved at a local level.
The challenge facing The Coca-Cola Company today is therefore to continue to build an organisational structure that will deliver a global and local strategy. An organisation’s strategy is its plan for the whole business that sets out how the organisation will use its major resources. An organisation’s structure is the way the pieces of the organisation fit together internally. It also covers the links with external organisations such as partners.
For the organisation to deliver its plans, the strategy and the structure must be woven together seamlessly. The goal of The Coca-Cola Company is ‘to be the world’s leading provider of branded beverage solutions, to deliver consistent and profitable growth, and to have the highest quality products and processes.’ To achieve this goal, the Company has established six strategic priorities and has built these into every aspect of its business: Accelerate carbonated soft drinks growth, led by Coca-Cola ; Broaden the family of products, wherever appropriate e.g. bottled water, tea, coffee, juices, energy drinks ; Grow system profitability & capability together with the bottlers ;Creatively serve customers (e.g. retailers) to build their businesses ; Invest intelligently in market growth ; Drive efficiency & cost effectiveness by using technology and large scale production to control costs enabling our people to achieve extraordinary results everyday.
There are many ways to structure an organisation. For example, a structure may be built around:function: reflecting main specialisms e.g. marketing, finance, production, distribution. ; product: reflecting product categories e.g. bread, pies, cakes, biscuits ; process: reflecting different processes e.g. storage, manufacturing, packing, delivery.
Organisational structures need to be designed to meet aims. They involve combining flexibility of decision making, and the sharing of best ideas across the organisation, with appropriate levels of management and control from the centre. Modern organisations like The Coca-Cola Company, have built flexible structures which, wherever possible, encourage teamwork. For example, at Coca-Cola Great Britain any new product development (e.g. Coca-Cola Vanilla) brings together teams of employees with different specialisms.
At such team meetings, marketing specialists clarify the results of their market research and testing, food technologists describe what changes to a product are feasible, financial experts report on the cost implications of change. The Coca-Cola Company has a corporate (Head Office) segment that is responsible for giving the Company an overall direction and providing support to the regional structure.
Key strategic decisions at The Coca-Cola Company are made by an Executive Committee of 12 Company Officers. This Committee helped to shape the six strategic priorities set out earlier. The Chair of the Executive Committee acts as a figurehead for the Company and chairs the board meetings. He is also the Chief Executive Officer (CEO) and as such he is the senior decision maker. Other executives are responsible either for the major regions (e.g. Africa) or have an important business specialism e.g. the Chief Financial Officer.
As a company whose success rests on its ability to connect with local consumers, it makes sense for The Coca-Cola Company to be organised into a regional structure which combines centralisation and localisation. The Company operates six geographic operating segments – also called Strategic Business Units (SBUs) – as well as the corporate (Head Office) segment.
Each of these regional SBUs is sub-divided into divisions. Take the European union, SBU, for example. The UK fits into the Northwest Europe division. This geographical structure recognises that: markets are geographically separated ; tastes and lifestyles vary from area to area. As do incomes and consumption patterns ; markets are at different stages of development.
At a more local level the management of The Coca-Cola Company involves a number of functional specialisms. The management structure for Great Britain illustrates this. The structure of Coca-Cola Great Britain combines elements of centralisation and decentralisation. Divisions and regions operate as business unit teams, with each Director reporting to the General Manager, i.e. Division President. However, there is a matrix structure for each function e.g. the Finance Director in the GB Division reports to the GB President, but also to (dotted line) the Finance Director of North West Europe Division. In addition, functions within the Company operate across geographical boundaries to share best practice.
To take another example of local decision making at a regional (local) level the various SBUs are responsible for region-specific market research, and for developing local advertising, e.g. using the languages of the countries in which The Coca-Cola Company operates. A major region like Great Britain has its own marketing structure, organised as shown on the diagram.
The way The Coca-Cola Company works reflects the many countries and cultures in which it does business. It owns or licences nearly 400 brands in non-alcoholic beverages serving consumers in over 200 countries. An essential part of the organisation’s structure therefore focuses on ensuring that individual products are given the best possible support in regional markets.
Within the Company, different teams concentrate on particular products and use their specialist knowledge of the brands and consumer needs to support the sales and promotional effort. In some cases a product is developed solely for local consumption and an example of this is the product Lilt, which is only available in Great Britain and Ireland.
Examples of other products available in Great Britain include:
• Carbonated soft drinks- Coca-Cola, Fanta, Sprite
• Juice & juice drinks- Schweppes’ Tomato Juice Cocktail, Oasis, Five Alive
• Waters- Malvern
• Energy drinks- Burn
• Sports drinks- Powerade
• Squashes/cordials- Kia-Ora, Rose’s Lime Cordial.
Structuring an organisation is not only about organising internal relationships, it also involves external ones. The Coca-Cola Company has built well-structured relationships with a range of external groups including bottling partners.
People often assume that The Coca-Cola Company bottles and distributes its own beverages. For the most part, it does not. The Company’s primary business consists of manufacturing and selling beverage concentrates and syrups – as well as some finished beverages – to bottling and canning operations and other distributors.
The concentrates and syrups are generally sold to bottling partners, which are authorised to manufacture, distribute and sell branded products. The business system consisting of The Coca-Cola Company and bottling partners is referred to as ‘the Coca-Cola system’.
The relationship The Coca-Cola Company has with its bottlers worldwide is a key source of strength. The Company works together with them to ensure that concentrates and syrups are made into finished beverages that are produced and distributed to consumers around the globe with unmatched quality and service.
Every organisation has not only a structure but also a culture. ‘Culture’ describes the typical way an organisation does things, including patterns of behaviour and relationships.
Important aspects of culture at Coca-Cola Great Britain (which reflect the culture of The Coca-Cola Company as a whole) are an emphasis on teamwork, and empowerment. Coca-Cola Great Britain sees its employees as its most important asset.
Motivated employees provide the engine that drives the Company’s growth. Organising people into teams (e.g. marketing, sales or product teams) encourages people to feel valued. Within a team they are encouraged to contribute ideas and to be innovative. If they feel that something could be done better they are encouraged to voice that opinion.
By creating a friendly, innovative culture, Coca-Cola Great Britain is able to depend on a high quality workforce that helps it to maintain brand leadership in Great Britain and in every other market in which it operates. Trust is at the heart of every relationship, whether it be:
• customers’ and consumers’ trust that the Company will provide the highest level of service and attention to their needs
• bottling partners’ trust that the Company is operating in the best interests of the Coca-Cola system
• employees’ trust that their contribution is being valued in an open culture.
Open communication channels provide the means to support a culture based on relationships. Coca-Cola has a number of communication channels, including:
• monthly leadership team meeting (involving function heads)
• weekly department team meetings
• monthly employee team briefing sessions
• consultative employee groups for each region (with representatives meeting in a European Council)
• surveys to monitor employee views and feelings.
• The Coca-Cola Company has built internal and external structures to support the delivery of its business goals. The regional structure is the best way of supporting this growth, allowing attention to local requirements while at the same time building on a clear strategic direction from the centre.
•A culture of innovation, teamwork and partnership means that the Company has a firm foundation of relationships and open communication channels on which to build its growth.
Question 1: An Organisational structure may be built around____?
a. function
b. product
c. processes
d. All of above
Question 2. As discusses in this case study, By creating a friendly, innovative culture, Coca-Cola Great Britain is able to depend on a _______ that helps it to maintain brand leadership in Great Britain and in every other market in which it operates
a. competitor
b. high quality workforce
c. business environment
d. All of above
Question 3. As per this case study, the geographical structure recognises that____
a. markets are geographically separated
b. tastes and lifestyles vary from area to area, As do incomes and consumption patterns
c. markets are at different stages of development
d. All of above
Question 4. Every organisation has not only a structure but also a culture. ‘Culture’ describes : ( a) the way an organisation does things (b)patterns of behaviour and relationships
a. Only a
b. only b
c. both a & b
d. none of these
Question 5. In this case study, Key strategic decisions at The Coca-Cola Company are made by______
a. Executive Committee of 20 Company Officers
b. Company Committee of 15 Company Officers
c. Executive Body of 18 Company Officers
d. Executive Committee of 12 Company Officers
Question 6. Modern organisations like The Coca-Cola Company, have built ____ structures which, wherever possible, encourage _____
a. inflexible , collision
b. flexible, teamwork
c. strong, competency
d. None of above
Question 7. The challenge with the Coca-Cola Company was to continue to build an organisational structure that will______
a. itself create a global impact
b. deliver a global and local strategy
c. Both A & B
d. None of these
Question 8. The Coca-Cola Company has built _____ to support the delivery of its business goals. ( a) internal structure (b)external structures
a. Both a & b
b. only b
c. only a
d. none of these
Question 9. The structure of Coca-Cola Great Britain involve the element of : (a) centralisation ( b)decentralisation
a. Both a & b
b. only a
c. only b
d. None of these
Question 10. The success of The Coca-Cola Company revolves around which of the following factor?
a. Quality
b. Global availability
c. Both A & B
d. None of these
10 on 10 J
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2nd Module Assessment
Case Study
Every organisation has to work within a framework of certain environmental forces and there is a continuous interaction between the organisation and its environment. The impact of environment on organization is manifold. The interaction suggests a relationship between the two. This relationship can be analyzed in three ways.
First, the organisation can be thought of as an input-output system. It takes various inputs-human, capital, technical-from the environment. These inputs are transformed to produce outputs-goods, services, profits-which are given back to the environment. Thus, the organisation merely performs the function of input-output mediator. In this process, the environment in its interaction with the internal factors of the organisation will determine what kind of inputs should be taken or outputs given.
the organisation can be taken as the central focus for realizing the contributions of many groups, both within and outside the organisation. When these groups contribute to the well being of the organisation, they must have a legitimate share in organizational outputs. These groups may be employees, consumers, suppliers, shareholders, movement, and the society in general. Thus, the organizational functioning will be affected by the expectations of these groups and the organisation has to take these factors into account.
Third, the organisation can be treated as operating in environment presenting opportunities and threats to it. Thus, how an organisation can make the best use of the oppm.lunities provided or threats imposed is a matter of prime concern for it. Any single approach by itself is insufficient to explain the complex relationship between the organisation and its environ-ment-Moreover, these approaches are not inconsistent to each other; they are complementary. Thus, an organisation will be affected by the environment in which it works.
The environment-organisation interaction has a number of implications from strategic management point of view.
The environmental forces may affect different parts of the organisation in different ways because different parts interact with their relevant external environment. For example, the technological environment may affect the organization’s R & D department. Further, these forces of the environment may have direct effect on some parts but indirect effect on others. For example, any change in the fiscal policy of government may affect the finance department directly but it may affect production and marketing indirectly because their program may be recasted in the light of new situation, though not necessarily.
The environmental influence process is quite complex because most things influence all other things. For example, many of the environmental forces may be interacting among themselves and making the impact on the organisation quite complex. Moreover, the impact of these forces on the organisation may not be quite deterministic because of interaction of several forces. For example, the organisation structure will be determined on the basis of management philosophy and employee attitudes. But the organisation structure becomes the source for determining the employee attitudes. Thus, there cannot be direct and simple cause-effect relationship rather much complexity is expected.
The organizational response to the environmental forces may not be quite obvious and identical for different organizations but these are subject to different internal forces. Thus, there is not only the different perception of the environmental forces but also their impact on the organisation. Key factors determining responses to environmental impact may be managerial philosophy, life cycle of the organisation, profitability, etc.
The impact of environmental forces on the organizations is not unilateral but the organizations may also affect the environment. However, since the individual organizations may not be able to put pressure on the environment, they often put the pressure collectively. Various associations of the organizations are generally formed to protect the interest of their members. The protection of interest certainly signifies the way to overcome unilateral impact of the environment on the organizations. The nature of organisation-environment interaction is such that organizations, like human species or animals, must either adjust to the environment or perish.
Question 1. An analysis of the external environment enables a firm to identify____
a. Strengths and opportunities
b. Strength and weakness
c. Weakness and threats
d. Opportunities and threats
Question 2. An organization’s __________ embraces the behavior, rituals, and shared meaning held by employees that distinguishes that organization from all others.
a. external environment
b. Culture
c. Dominant Culture
d. Ethics
Question 3. Applying rationality to understand the sources and possible effects of environmental factors and to determine the organization’s opportunities and threats is called_____
a. work analysis
b. environmental analysis
c. statistical analysis
d. None of the above
Question 4. Customs, mores, values, and demographic characteristics of the society in which the organisation operates are what made up the _______ of the general environment.
a. Political dimension
b. technological dimension
c. socio-cultural dimension
d. Legal dimension
Question 5. The economic environment of a business includes_____
a. Economic System
b. Economic Policies
c. Economic Conditions
d. All of Above
Question 6. The term environmental scanning stands for____
a. collecting information about the shareholders
b. gathering data about the organization and its surroundings
c. gathering information relating to the employees
d. None of the above
Question 7. Which of the following is not an example of an internal environment?
a. employees
b. office and plant layout
c. Competition
d. reward system
Question 8. Which one is not an element of internal environment?
a. Marketing capabilities
b. Operational Capabilities
c. Money and capital market
d. Personal Capabilities
Question 9. Which one of the following is not a part of the external environment of an organization?
a. Social Factors
b. Legal Factors
c. Political Factors
d. Organisational Culture
Question 10. ____consists of economic conditions, economic policies , industrial policies and economic system.
a. Business Environment
b. Natural Environment
c. Economic Environment
d. Technological environment
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3rd Module Assessment
Case Study
Organizational structure is a system used to define a hierarchy within an organization. It identifies each job, its function and where it reports to within the organization. This structure is developed to establish how an organization operates and assists an organization in obtaining its goals to allow for future growth. The structure is illustrated using an organizational chart.
Several types of organizational structures are each defined to meet the needs of organizations that operate differently. Types of organizational structure include divisional, functional, geographical and matrix. A divisional structure is suitable for organizations with distinct business units, while a geographical structure provides a hierarchy for organizations that operate at several locations nationally or internationally. A functional organizational structure is based on each job’s duties. A matrix structure, which has two or several supervisors for each job to report to, is the most complicated but may be necessary for large organizations with many locations and functional areas.
Centralization
Although there are many types of organizational structures developed to meet each organization’s needs, all of them provide a hierarchy that reports to a centralized location and group of executives. The highest ranking member of an organizational chart is one or several top executives referred to as the president, chief executive officer or chief operating officer.
When an organizational structure is designed, job descriptions can be developed to not only meet an organizations goals, but allow for organizational and employee growth. Internal equity and employee retention are a key to successful operations. Recruitment is also one of the highest investments for organizations, so ensuring employees have promotional opportunities and job security can assist in reducing recruitment costs.
Organizational structure is also a fundamental core to create salary structures for an organization. Once the structure is established, salary ranges can be created for each job in the organization. In most cases, each job is aligned to a salary grade, and each grade has a specified salary range. This allows an organization to meet its financial goals and ensures salaries are distributed fairly within financial budgets.
If an organization expands, the organizational structure allows room for growth. This can include adding additional layers of management, new divisions, expanding one or several functional areas or appointing additional top executives. When the structure is reorganized for expansion, it provides the foundation to edit salaries and job descriptions quickly and efficiently with minimal disruption to an organization’s operations.
Question 1. Departmentation is a process where
a. Tasks are grouped into jobs
b. Jobs are grouped into effective work groups
c. Work groups are grouped into identifiable segments
d. All of the above
Question 2. Functional structures help to create……
a. multi-skilled employees
b. teamwork
c. specialization
d. project-work groups
Question 3. Organizational structure is a system used to define a _____ within an organization.
a. goals
b. hierarchy
c. objectives
d. none of these
Question 4. Specialisation is a feature of which organisational structure?
a. matrix
b. divisional
c. multi- divisional
d. functional
Question 5. The process of dividing the work and then grouping them into units and subunits for the purpose of administration is known as
a. Departmentation
b. Organisation structure
c. Committee
d. all of above
Question 6. What is not a purpose of an organisational structure?
a. to coordinate people & resources
b. To limit workers’ rights
c. to formalise authority
d. to organise lines of communication
Question 7. What is not a purpose of an organisational structure?
a. To coordinate People & resources
b. To organise lines communication
c. To formalise authority
d. To limit Workers rights
Question 8. What is not an advantage of a hierarchical structure?
a. quick response to change
b. clear chain of command
c. descipline stability
d. small span of control
Question 9. Which of the following applies to the matrix structure?
a. It allows the owner to control all aspects of the business
b. It attempts to merge the benefits of decentralisation with co-ordination across all areas of the business
c. It is found in companies offering a diverse range of products in a home market
d. None of these
Question 10. Which of the following structure(s) is/are centralised?
a. The simple structure only
b. functional structure only
c. both a & b
d. none of these
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4th Module Assessment
Case Study
Organization design involves the creation of roles, processes and structures to ensure that the organization’s goals can be realized.Some people associate organization design with the mechanical arrangement of positions and reporting lines on the organization chart. It is certainly true that organizational designers also need to define the vertical structure, including reporting lines. However, organization design is much more than “boxology”.
Organization design problems are often some of the hardest problems that leaders face. Finding the right design often requires inventing a new solution to resolve a dilemma. And decisions made with regard to formal structure, roles and processes directly impact the jobs and careers of employees – and the ability of the firm to realize its strategic objectives.
In an organization re-design process one may consider elements at different levels; The overall organizational “architecture” (e.g., the corporate level, the role of the headquarters versus business areas in a large firm, etc.); The design of business areas and business units within a larger firm; The design of departments and other sub-units within a business unit; The design of individual roles.
The field of organization design sits at the intersection of strategy, operations, law and HR. An important driver for organization design is the organization’s strategy – but the design of the organization may also to a great extent determine which strategies we may be able to form in the first place. We should, in general, attempt to align the organization with the work processes – so there is a close link between operations and organization design. The design of the organization is also influenced by laws, regulations, and governance principles adopted by the industry sector. Last but not least, organization design is fundamentally about people. People inhabit the roles that are defined in the organization design proces. People participate in design processes and also influence designs in many direct and indirect ways.
Organizational design serves as the foundation on which all company operations are built, including such vital factors as the grouping of employees within different departments and the formal managerial hierarchies within a company. Savvy early stage organizational design choices can create a foundation for success, allowing an organization to develop a strong company culture, grow in response to increasing demand and adapt to changes in the marketplace.
Company Leadership
Organizational design influences the leadership structure of a company, setting forth reporting relationships and lines of authority reaching from the executive level to the front line. It is important to have a clear map of managerial responsibility and accountability to keep the company running smoothly. Without clear lines of authority, employees in different areas of the company can become misguided or confused, while others find themselves with an unnecessarily high level of supervision. The ideal leadership structure depends on the industry a company is in and the personalities of business owners.
Company Culture
The leadership structure put in place by organizational-design choices can have a direct and lasting effect on company culture. The grouping of employees in various departments and the managerial hierarchy influences the way employees interact with each other on the job. Organizational design can influence the degree to which front-line employees are allowed to solve complex problems on their own rather than involving a manager, for example. An organization designed to make extensive use of telecommuters will result in a company in which workplace relationships are often formed and strengthened solely through online interactions, as another example.
Future Growth
Organizational design choices made in the early stages of a business can either help or hinder growth plans. Organizational designs built to easily accommodate new managers and employees at different levels of the organization can add new positions without making significant structural changes. A company using freelancing telecommuters, for example, can add large numbers of freelancers with a small increase in the number of managers. A company that locates all employees in a small office, on the other hand, must acquire new office space or expand their current office to take on new employees.
Adaptability
Organizational design choices can develop distinct competitive advantages. Savvy business owners continually monitor changes in their industries and markets, looking for opportunities to adapt and develop new competitive advantages. Companies with taller organizational structures and complicated bureaucracies can find it difficult to adapt to changing market conditions, such as a growing use of lean business models or outsourcing in the industry. Companies with less complex organizational structures can find it easier to shift employees around, rework managerial hierarchies and redesign job descriptions for existing employees, all of which can increase efficiency or productivity in response to outside pressures.
Question 1. A _______is one in which its design is not defined by,or limited to, the horizontal, vertical, or external boundaries imposed by a predefined structure
a. Project Structure
b. Autonomous Internal Units
c. Boundaryless Organisation (vese sahi ye hona chaiye but showing wrong)
d. Learning Organisation
Question 2. An important driver for organization design is the organization’s _____
a. Strategy
b. Choice
c. Differentiation
d. All of above
Question 3. Companies with taller organizational structures and complicated bureaucracies can find it difficult to________
a. face the competition
b. Work in a structured way
c. adapt to changing market conditions
d. None of these
Question 4. In an organization re-design process , one may consider which of the following?
a. design of individual roles
b. overall organizational architecture
c. design of business areas and business units within a larger firm
d. All of above
Question 5. Organization design involves the creation of _______ to ensure that the organization’s goals can be realized.
a. roles
b. processes
c. structures
d. All of above
Question 6. Which of the following is true for organisational design?
a. It is the way an organisation is to be structured and operated by its members
b. It is widely regarded as a competitive capability
c. It is a critical component of any organisation’s Organisation Development offering
d. All of above
Question 7. Without clear lines of authority, employees in different areas of the company can become______
a. misguided and confused
b. competitive
c. Both a & b
d. None of these
Question 8. _______describes the degree to which tasks in an organisation are divided into separate jobs.
a. Departmentalisation
b. Chain of command
c. Work Specialisation
d. Span of Control
Question 9. _______is a system of organisation where the elements of the organisation are unranked or where they possess the potential to be ranked a number of different ways
a. Organic Structure
b. Heterarchy
c. Hierarchy
d. Responsible Autonomy
Question 10. ________refers to the degree to which jobs within the organisation are standardized and the extent to which employee behaviour is guided by rules and procedures
a. Decentralisation
b. Formalisation
c. Centralisation
d. Simple structure
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5th Module Assessment
Case Study
Organizational effectiveness is defined as an extent to which an organization achieves its predetermined objectives with the given amount of resources and means without placing undue strain on its members.
Sometimes efficiency and effectiveness are used as synonyms. However, there exists a difference between the two concepts. Therefore, it is important to explain the difference between the concepts of effectiveness and efficiency to understand why organizations may be effective but not efficient, or efficient but not effective. Effectiveness is a broad concept and takes into account a collection of factors both inside and outside an organization. It is commonly referred to as the degree to which predetermined goals are achieved. On the other hand, efficiency is a limited concept that pertains to the internal working of an organization. It refers to an amount of resources used to produce a particular unit of output. It is generally measured as the ratio of inputs to outputs. Further, effectiveness concentrates more on human side of organizational values and activities whereas efficiency concentrates on the technological side of an organization.
Goal attainment is the most widely used criterion of organizational effectiveness. In goal approach, effectiveness refers to maximization of profits by providing an efficient service that leads to high productivity and good employee morale. Several variables such as quality, productivity, efficiency, profit, turnover, accidents, morale, motivation and satisfaction, which help in measuring organizational effectiveness. However, none of the single variable has proved to be entirely satisfactory.
The main limitation of this approaches the problem of identifying the real goals rather than the ideal goals.
Functional Approach
This approach solves the problem of identification of organizational goals. Parson states that since it has been assumed that an organization is identified in terms of its goal, focus towards attainment of these goals should also aim at serving the society. Thus, the vital question in determining effectiveness is how well an organization is doing for the super-ordinate system.
The limitation of this approach is that when organizations have autonomy to follow its independent courses of action, it is difficult to accept that ultimate goal of organization will be to serve society. As such, it cannot be applied for measuring organizational effectiveness in terms of its contributions to social system.
Both the goal and functional approach do not give adequate consideration to the conceptual problem of the relations between the organization and its environment.
System Resource Approach
System-resource approach of organizational effectiveness emphasizes on inter-dependency of processes that relate the organization to its environment. The interdependence takes the form of input-output transactions and includes scarce and valued resources such as physical, economic and human for which every organization competes.
The limitation of this model is that an acquisition of resources from environment is again related to the goal of an organization. Therefore, this model is not different from the goal model.
Thus, discussion of organizational effectiveness leads to the conclusion that there is no single indicator of effectiveness. Instead, the approach should focus on operative goals that would serve as a basis for assessment of effectiveness.
Managerial effectiveness is a causal variable in organizational effectiveness. It has been defined in terms of organizational goal-achieving behavior, i.e., the manager’s own behavior contributes to achievement of organizational goals.
Question 1. A supply chain is an inter-organisational work system devoted to procuring materials and other inputs required to produce a firm’s products.
a. Project
b. Service system
c. Supply Chain
d. Information System
Question 2. Highly effective organisations exhibit strengths across which areas ?
a. leadership
b. decision making and structure
c. work processes and systems
d. All of above
Question 3. In achieving______ criteria, an effective organisation must be adaptive to new opportunities and hurdles, as well as being capable of developing the abilities of its members and itself.
a. Short-term
b. Up to one year
c. Medium-term
d. Longer term
Question 4. System-resource approach of organizational effectiveness emphasizes on?
a. inter-dependency of processes
b. Processes relate the organization to its environment
c. Both a & b
d. None of these
Question 5. the goal and ______ do not give adequate consideration to the conceptual problem of the relations between the organization and its environment.
a. functional approach
b. System Approach
c. Competitive approch
d. None of these
Question 6. The ways in which real people learn, change, adopt and align, get “affected” by dynamics in the environment and leveraging this knowledge to create effective organisations that are pioneers of_______
a. Decision Making
b. Change & Learning
c. Group Effectiveness
d. Self-Organizing & Adaptive Systems
Question 7. Which of the following is correct in context of goal approach effectiveness?
a. refers to maximization of profits.
b. provides an efficient service that leads to high productivity and good employee morale
c. Both a & b
d. None of these
Question 8. Which of the following is true for Organisational effectiveness?
a. Defined as the efficiency with which an association is able to meet its objectives.
b. It is about each individual doing everything they know how to do and doing it well
c. It is the concept of how effective an organisation is in achieving its goals.
d. All of above
Question 9. _______is defined as the reaching of new or other important information to the employees in due time.
a. Care about clients
b. Transmission of information
c. Strategic Direction
d. Collaboration
Question 10. _______is the lifeblood for an organisation that builds bridges among the employees within the organisation.
a. System of control
b. Coordination and integration
c. Reward and incentive system
d. Communication
10 on 10 J
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Assignment 2
Case Study
The case discusses the corporate culture of the Canada-based airline, WestJet Airlines Ltd. (WestJet). When WestJet was incorporated in 1996, the founders were of the view that culture was the one element of an organization that could not be duplicated and that it was a way of differentiating WestJet from the competitors.
WestJet encouraged a culture of participation and commitment and gave prime importance to empowered and happy employees, as it believed that these employees would provide customers with a good experience. At WestJet every employee was a shareholder in the company. The highly empowered employees were free to take any decision that would help them provide the best service to customers.
WestJet’s culture helped it remain profitable in an industry as highly volatile as the airline industry.
However, WestJet’s culture began to face a few threats. Venturing into the regional market through WestJet Encore and expanding internationally to various European destinations, made it difficult for WestJet to maintain the culture it was known for. At the same time, some of the employees were fueling unionization in the company, which could have a major impact on its culture in times to come.
In May 2014, Canada-based WestJet Airlines Ltd. (WestJet) won the prestigious Randstand Award and was chosen ‘Canada’s Most Attractive Employer’ for the third year in a row. WestJet was selected from among 150 companies by more than 8,000 people in search of employment opportunities. The airline was rated high for its work environment, strong management, interesting work, and training. According to Tom Turpin, President, Randstand Canada, “This award is truly the people’s choice award and to take home the title as Canada’s most attractive employer for three back-to-back years means they have created a very strong image and Canadians want to be part of that distinct culture.
WestJet, incorporated in 1996, was founded on a distinct corporate culture which considered people highly important to provide customers with a good experience. The founders wanted to develop a company with a culture of participation and commitment, where employees were friendly and caring in order to provide customers with a great flying experience. They were of the view that culture was one element of an organization that could not be duplicated and that it was a way of differentiating WestJet from the competitors. They insisted on developing a non-hierarchical structure with every employee being a shareholder in the company. The highly empowered employees were free to take any decision that would help provide customers with the best service.
WestJet’s origins date back to 1994, when a businessman based in Calgary, Canada Clive Beddoe (Beddoe), who traveled frequently, bought a small aircraft for the purpose. He also leased the plane through a local company Morgan Air Services, owned by Tim Morgan (Morgan). The high cost of air travel in Canada and the success of low-cost airlines in the US set the two of them thinking about starting their own discount airline. Beddoe and Morgan got together with two other businessmen, Don Bell (Bell) and Mark Hill (Hill), to start the airline. Their plan was to offer low fares, attract new customers, operate on new routes, and expand the market, instead of snatching away a share from existing airlines. They were of the view that the availability of low fares would encourage more people to fly.
Beddoe was the Chairman and CEO, Hill was the director of Strategic Planning, Morgan took charge of operations, while Bell took care of customer service. Other prominent investors in the venture included David Neeleman, whose company Morris Air was acquired by Southwest Airlines. The first commercial flight of the airline began operations in February 1996. All the pilots and flight crew were based in Calgary.
When the founders were contemplating starting a new airline, Mark Hill started reading about US-based SouthWest Airlines to understand how the culture of the company had evolved. He understood that it was the high performance culture that differentiated Southwest from its competitors. Hill felt that the culture in the company was reflected in the way the customers were treated. He believed that by aligning the interest of the people with business interest, it would be possible to foster a great culture.
The founders were of the view that the people working at WestJet, called WestJetters, must show a caring attitude toward the passengers, who were addressed as guests, and also toward their co-workers. The culture at WestJet was guided by a set of values
Incentives, a good culture and work environment, and open communication helped the founders to position WestJet as a fun airline. According to Rick Ericson, Aviation Consultant, “(Corporate Culture) It’s a key asset, and I give Beddoe full credit for creating that. Beddoe has done an excellent job of promoting WestJet externally as “a quirky little company that could. He has marketed the image of a company you can like and that you want to do business with.”
The atmosphere in WestJet was informal with the employees calling even the CEO by his first name. With all the employees having a share in the company, there was a feeling among them of working for themselves. There was a total absence of hierarchy, and anybody, irrespective of the position in the company, pitched in to help others, to get the work done on time, and to serve the customers.
There were some formal groups in the company to address employee grievances and encourage employee participation. At WestJet, CARE, or Creating a Remarkable Experience, was one of them. CARE was a group whose aim was to propagate the WestJet culture throughout the company. Inculcating the culture was not a one-time effort but an ongoing process, according to company insiders. CARE was responsible for organizing more than 250 events every year for the employees and their families. These included meetings with the pilots, the crew, discussions about culture, and town hall meetings. Twice a year WestJet held profit sharing parties – one during the spring and the other during the fall. At these parties, employees were given profit-sharing checks. The CARE team also brought out videos and plays to entertain the employees. At these celebrations outstanding employees received awards…
Analysts attributed WestJet’s success to the sense of ownership that was cultivated among the employees. Encouraging the employees to assume responsibility and providing them a role in the growth, resulted in better productivity, highly motivated employees, and high morale, all resulting in better customer service. “All of us are owners here, and we’re all very passionate about what we do. When you have a stake in the company, you want to do whatever it takes to make it work,” said Lisa Puchala, director of in-flight training and standards.
Beddoe was of the view that as the employees were responsible for providing a friendly environment to the guests, it was important to recruit people who fit in with the culture of the organization. According to Darryl Howard, of CIBC World Markets, the lead underwriter on the IPO of WestJet, “Hiring the right people is the most critical one. For the first couple of years he probably interviewed every person (himself) before they were hired. (Secondly,) he kept things simple. The business itself is quite defined. They’re not trying to compete on long hauls or business travel. They went specifically to short haul passenger service. And the third principle is that he insists that his people have fun. You’ve seen that on the flights where they tell hokey jokes. That goes a long way.”
Analysts attributed WestJet’s ability to provide the best customer service in the airline business mainly to its employee focus. The airline attributed its success to hiring the right kind of people and empowering them.
Since its inception, WestJet had been ranked among the most profitable airlines in the world, showing consistent growth in revenues. As of 2014, the company had achieved 38 consecutive quarters of profits, an impressive statistic in the highly turbulent airline industry. WestJet was able to save on employee costs, as the supervisory level was almost absent in the organization. The productivity per employee in WestJet was the highest in the Canadian airline industry. The company’s attitude toward its employees helped it score high with potential employees too. It was ranked at the top in Canada’s more admired corporate cultures for several years…
As the organization grew, there were subtle changes seen in the corporate culture with every new employee who joined. The fast pace of change in WestJet brought with it some anxiety among the employees. Analysts pointed out that as the number of employees was expected to exceed 10,000 by 2015, it might be difficult to keep them connected to each other and to the culture of WestJet. Analysts said that with WestJet expanding to European destinations, its business model had changed, placing a stress on the culture of the company. As it moved into international markets, it might be a challenge for WestJet to retain high levels of employee engagement and provide a unique guest experience that differentiated it from so many other carriers, they opined
Question 1. As discussed in this case study, which of the options is true. The founders were of the view that___ ? (A) culture was one element of an organization. ( B) Ciulture could not be duplicated ( C) Culture was a way of differentiating WestJet from the competitors.
a. Only A
b. Only A & C
c. Only A & B
d. All A, B, C
Question 2. As per the Case study which of the options is true . WestJet encouraged___ ? : (a) a culture of participation and commitment (b) gave prime importance to empowered and happy employees( c) it believed that the employees would provide customers with a good experience
a. Only a & b
b. Only b & c
c. Only c & a
d. All a,b,c
Question 3. Canada-based WestJet Airlines Ltd. won the prestigious Randstand Award and was chosen ___
a. ‘Canada’s Most Competitive Employer’
b. ‘Canada’s Most Attractive Employer’
c. Both a& b
d. None of these
Question 4. Founders of WestJet, insisted on developing ____? : (A) non-hierarchical structure (B)every employee being a shareholder in the company.
a. Only a
b. Both a & b
c. Only B
d. none of these
Question 5. In this case Study , CARE is referred to as ?
a. Creating a Resourceful Experience
b. Creating a Remarkable Experience
c. Creating a Resourceful Expertise
d. None of these
Question 6. WestJet was founded on a distinct corporate culture. Which of the following option is true in this context?
a. It considered people/employees highly important
b. Its aim was to provide customers with a good experience.
c. Both a & b
d. None of these
Question 7. WestJet was able to save on employee costs, as____?
a. the supervisory level was almost absent in the organization
b. it hired less employees
c. training & development avctivities were not conducted
d. None of the above
Question 8. WestJet was incorporated in____
a. 1990
b. 1996
c. 1969
d. 1970
Question 9. which of the following was adopted by WestJet , in order to get better productivity from the employees.
a. Encouraging the employees to assume responsibility
b. providing employees a role in the growth
c. motivating employees
d. All of above
Question 10. _____helped the founders to position WestJet as a fun airline.
a. Incentives
b. a good culture and work environment
c. open communication
d. All of above
10 on 10 J
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