Btec Hnd in Business Environment Silviu Daniel Varvara
BTEC HND in Business - Level 5
Unit 3: Organisations and Behaviour
Submitted by: Silviu Daniel Varvara
Statement of Authenticity:
I certify that the work submitted for this assignment is my own. Where the work of others has been used, has been used to support my work and credit has been acknowledged.
1.1 You are required to select any two companies from UK energy industry to compare and contrast the different organisational structures and culture with another company from the same industry.
1.2 Explain how the relationship between structure and culture can impact on business performance of the first organisation you have selected
1.3 Also discuss the factors which influence individual behaviour at your first organisation that you have chosen.
2.1 Compare the effectiveness of different leadership styles with another business organisation in the same industry.
2.2 Also explain how the management functions, managerial roles and management authorities will underpin their practice of this company management.
2.3 You need to evaluate the different approaches to management used by the both organisations concerned in this task.
3.1 You have to discuss the impacts on different leadership styles on organisational motivation throughout the change of periods in the first organisation you select in the task 1.
3.2 You need to compare application of two different theories within your work place in the same organisation.
3.3 Evaluate the usefulness of these motivation theories for the managers in your organisation concerned in this task.
4.1 Explain the nature of groups and group behaviour within the organisations you selected in the task one.
4.2 Discuss the factors which may promote the development of effective team work within these organisations.
4.3 Also evaluate the impact of technology on team functioning within your first organisation selected in task one.
This unit focuses on the behaviour of individuals and groups within organisations. It explores the links between the structure and culture of organisations and how these interact and influence the behaviour of the workforce.
The structure of a large multi-national company with thousands of employees worldwide will be very different from a small business with 20 employees. The way in which an organisation structures and organises its workforce will impact on the culture that develops within the organisation. This system of shared values and beliefs will determine and shape the accepted patterns of behaviour of an organisations workforce. The culture in organisations that differ in size, for example, or are from different sectors of the economy can be very different.
Supplying energy to homes across the UK involves three key elements:
-Making electricity through generation
-Transporting gas and electricity
-Selling it to the customer.
Energy companies can work in any of these different areas, and some operate in all three: electricity generation, networks and energy supply.
BP and Chevron Oil have been chosen to compare and contrast in the following.
BP and Chevron Oil are two large companies operating in the energy industry of the UK. Both companies have a complex organizational structure and, at the moment, they operate internationally.
As both companies operate internationally, they have many outlets located overseas. In this regard, the organizational structure of both organizations is similar since they operate internationally and have similar organizational needs and challenges to cope with which they have to develop the complex organizational structure. In this regard, it is worth mentioning the fact that BP tends to provide its outlets with larger autonomy compared to Chevron Oil, which tends to more centralised organisational structure, although the company also maintains a flexible organisational structure.
At the same time, both organisations confront similar problems since they have to operate in the multicultural environment.
Both BP and Chevron being large companies they operate a tall business structure supported by role culture.
A tall structure is most efficient when functioning under a role culture because of its many layers of command. Maintaining a clear communication between the layers of command within the company using the role culture, implies the employees must be focused on their responsibilities and their role in the company, and follow the chain of command so that the communication is made simple and direct for high efficiency and the achievement of the company’s established goals.
Examples of organisational structures
A) Tall Organisation Structure
B) Flat Organisation Structure
1.2 As BP expands its business internationally, it has to open its outlets abroad and employ local professionals. The employment of professionals from different countries contributes to the diversity of the organisational structure but raises the problem of cultural differences that may raise substantial problems, such as communication gaps or problems caused by offensive behaviour of some employees in relation to others because of the lack of understanding of cultural differences.
BP attempts to tackle the problem of their operations in the multicultural environment by adapting their organisational structures to the new cultural environment. To put it more precisely, the company provides their outlets located abroad with larger autonomy and hire local professionals to minimize the risk of cultural conflicts and misunderstanding. In addition, BP attempts to introduce common moral norms and standards to minimize the risk of cultural conflicts and offensive behaviour of employees of the company because of their failure to understand cultural differences between each other.
1.3 Organisational culture and structure are closely intertwined and cultural specificities of organisations may drive structural changes as is the case of British Petroleum.
At the same time, employees working in BP are vulnerable to the impact of multiple factors that affect their behaviour and workplace environment. First, BP has to take into consideration internal factors that affect the employees’ performance, such as the organisational culture, job satisfaction, workplace safety, compensation plans and other issues that affect employees’ satisfaction with their workplace environment and career in the company.
On the other hand, BP has to take into consideration external factors that may also affect employees’ behaviour, such as company-customer relationships, public image of the company, environmental effects of company’s operations and other issues which also influence employees’ behaviour and their attitude to their job.
2.1 The leadership style affects consistently the marketing performance and organisational behaviour as well as the internal organisational culture and relations between employees. In this regard, it is possible to distinguish transformational leadership style and transactional leadership style as one of the main leadership styles applied in contemporary organisations operating at the local level as well as international one. The transformational leadership style challenge and inspire their employees with a sense of purpose and excitement. In such a way, the transformational leader focuses on the motivation of employees through changing their needs and motivating them to achieve new goals, which are target goals of the organization. For instance, the transformational leader can focus on the development of effective approaches to employees based on the development of new goals and expectations of employees. In such a way, the transformational leader leads employees changing their priorities and goals.
The transactional leadership involves the system of motivation of employees based on rewards and punishments. In such a situation, leaders attempt to motivate the target behavioural patterns of employees rewarding them and prevent undesirable behavioural patterns punishing employees. For instance, if an employee does a good job, he/she receives a bonus. On the contrary, if an employee underperforms or fails to perform the task he/she had to perform, then the leader can punish the employee through depriving the employee of a bonus, which he/she could have earned, if he/she performed the job well.
The transactional leadership focuses on the development of team work but may face considerable problems in the highly emotional environment, while the low emotional environment makes the transactional leadership effective for the development of team work because the system of reward and punishment works well. On the contrary, the transformational leadership style is more effective in the emotional environment because the leader uses emotional background as the basis for redirecting goals and motivation of employees, while the low emotional environment makes such changes quite difficult because leaders may have difficulties with adopting new goals and priorities.
2.2 Management functions include: planning, organizing, motivating and control. The four management functions are essential for the successful organisational performance. Managers should plan the organisational development first. On the ground of the elaborated plan, managers organise the work of their subordinates to achieve the set goals. In such a way, managers unit their employees and conduct the implementation of organisational goals. The motivation of employees is also very important since employees need motivation to enhance their performance and to achieve organisational goals and objectives. In such a way, managers focus on the motivation of employees to keep their employees motivated that maximizes the effectiveness of their performance. The control function is essential to keep employees of the organisation motivated and prevent the failure of employees to achieve organisational goals. For instance, if the manager identifies that employees fail to fulfil the business plan properly. The manager can introduce changes to help employees to achieve organisational goals. Therefore, the control function helps managers to respond immediately to possible challenges in the development of the organisation.
Management roles may vary depending on organisational goals. In such a way, managers can perform the role of the leader to head their organisations to the achievement of organisational goals. Alternatively the manager can perform the role of a steward helping employees to implement the development of organisations and guide employees throughout the change.
2.3 The development of management roles should match the organisational development and goals of the organisation. Management authorities are also important for the organizational performance and managers should have the authority to perform their functions effectively. In such a way, the management authorities should perform their functions properly.
At this point, it is worth mentioning the fact that often managers need to develop the organisation using their authority but sometimes, managers may face the problem of the emergence of informal leaders, who may affect the performance of the organisational and challenge the authority of managers. Managers should overcome the informal leadership problem to be able to exercise their authority effectively.
3.1 The leadership style used by British Petroleum leaders contributes to the motivation of employees and completing changes launched by the company. In this regard, it is worth mentioning the fact that BP tends to use the transactional leadership style to maintain the motivation of employees high. However, when the organisation undergoes changes, BP leadership shifts to the transformational leadership style which allows the organisation to keep employees motivated and shift goals and priorities to meet organisational goals. The organisational development requires the introduction of consistent changes from time to time. in such a situation BP uses the transformational leadership style because it allows changing goals of employees and inspiring them to achieve new goals. Leaders of the company help employees to change their needs and expectations and set new goals for them to achieve. In such a way, employees follow their leaders in the direction determined by leaders. Thus, the company keeps progressing while employees are still motivated to achieve new goals. When BP focuses on a stable development, leaders of the company tend to maintain the motivation of employees using the transactional leadership style. They use rewards and punishment to keep employees focused on the achievement of organisational goals and to develop target behavioural patterns which are beneficial for the organisational development.
3.2 Management theories that can be applied to BP is the bureaucratic theory which implies the existence of the complex organisational structure, where functioning of the organisation is determined by the strict organisational hierarchy. In fact, this organisational structure and management theory is applicable to BP, when the organisation’s development was stable and the energy industry kept growing steadily. In such a situation, the organisation could benefit from the strict organisational structure and complex organisational hierarchy which maintained the control over employees’ performance and keeping employees motivated to reach organisational goals. The classical management theory can also be applied to BP to justify the use of the reward and punishment system used by the transactional leadership style of the company.
3.3 Motivation theories can also be helpful for BP to maximize the organisational performance. In this regard, the two-factor theory which basically matches the transactional leadership style used by the organisation. In addition, the company can also rely on Maslow’s Hierarchy of needs theory which would match the transformational leadership style of the company, which is applied in the time of changes that take place in the organisation because this motivational theory implies the change of needs of employees that will keep them motivated to improve their performance.
4.1 The nature of groups and group behaviour in BP is determined by the current marketing strategy of the company oriented on the international market expansion. Groups are created on the ground of specific functions and goals, which they have to achieve for BP. For instance, there are groups focused on the research and exploration of oil fields, there are groups working on the development of new methods of oil refining, there are public relations groups, etc. In addition, there is the development of international operations contribute to the development of multicultural groups operating within BP. Functions of these groups and their behaviour is determined by goals, which they have to achieve and the position they hold in the organisation.
4.2 At the moment, BP is concerned with the development of the effective team work. The team work of BP depends on the motivation of employees and the effective communication between team members. In addition, the effective team work is possible due to the autonomy of employees granted by the top management of the company to groups within BP.
4.3 At the same time, the team performance is vulnerable to the impact of technology, which may facilitate the communication between team members. In addition, the technology helps teams to maximize the effectiveness of their performance because employees can increase their productivity.