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Requirement
What you are to do:
You are members of an external management consultancy team engaged by Frank to make recommendations to him on the following four aspects of PC Solutions:1. Review the present organization and recommend any changes that may overcome the problems in the organization at the moment.
2. The strengths and weaknesses of the organization’s culture and what aspects of the culture need changing.
3. Sources of resistance to change and develop a plan to how to implement your recommended changes within the organization.
4. What leadership role should Frank adopt to facilitate these changes?
Prepare a “Long Report” to be presented to Frank addressing these issues and making your recommendations.
Solution
ABSTRACT
This report illustrates the various aspects of organizational behavior and the numerous challenges faced by a growing organization with the help of explaining a case study on PC Solutions. It critically analyses the several components of organizational culture which binds an organization together to achieve the strategic corporate goals of higher profitability and market share. The work also touches upon the existing organizational behavior theories to explain the challenges faced by the organization PC Solutions. It tries to identify the prevailing issues in the organization and come up with a sustainable solution. These solutions are derived mostly considering the strengths and weaknesses of the organization with respect to its culture and human capital. The report also throws light on the aspects of organizational culture that require modification and how to achieve such change management. At last the report tries to talk about the leadership styles that might be helpful for PC Solutions in the present scenario and which should be followed by the CEO for a successful organizational transition. This report should be viewed as a detailed evaluation of the different facets of organizational culture and behavior which leads to the success of a business.
INTRODUCTION
As the world has developed technologically in the 21st century it has become increasingly complex for the organizational leaders to operate in an intricate business environment which is changing constantly. As human capital has emerged as a vital resource for every institution all over the world there is an increasing need for proper management and orientation of organizational behavior so that they can contribute to the growth of the business. Organizations offer a wide gamut of opportunities to its employees since they build their careers in and around the organizational philosophy or culture of the company they join. During the tenure of their employment, they commit themselves to a completely different set of perspectives, rewards, capabilities, social interactions, learning, etc. which help them to build a career in the organization where they work. This report reflects upon all these aspects of organizational behavior through the lens of a case study based on PC solutions. It also illustrates the need for change in an organization and the methods in which it can be achieved (Barney and Angeles, 2006).
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PRESENT ORGANIZATION AND CHALLENGES:
PC Solutions is a relatively new organization established in 2007 which has shown excellent growth in the desktop computer business and has also diversified into other functions apart from selling operations. The organizational structure of PC Solutions is a typical example of a function-based organization wherein the departments are demarcated based on the function of their job. As such it is divided into four department namely sales, administration, customer services and software development. Prima facie the organizational structure and hierarchy seem suitable for the company given its scale of operations and core competencies. Frank Wallace who was the founder of the organization had made single-handed contributions in developing and steering the organization through challenges and opportunities to achieve the market position it has today. Through the eight years of operation, Frank had recruited able leaders for all four departments of his organization. Although they have been highly successful in the past recently as the organization has started to grow both in terms of the scale of operations and employees there have been increasing instances of customer resentment and employee satisfaction has been decreasing (Chatman and Northwestern, 2009).
If we undertake a critical analysis of the organization structure then a few points come out clearly as the need of the hour. PC Solutions has grown drastically with 75 employees over the last eight years but there is no department for the management of human capital in the company. Although the top management have focused on the quality and standard of service to increase its business and grow its profitability, as an organization grows its human capital becomes one of the crucial resource for the business. Moreover, since PC Solutions is operating in a knowledge-based industry there is an increased requirement of recruiting and retaining talented pool of workers or employees. So from the analysis, it seems to be of utmost importance to set up a separate human resources department that is going to look after the needs and issues faced by the employees in the organization starting from left to compensation or appraisal. Apart from that, there has been a recent merger with a software development company named Software Solutions which was required to expand the core competency of PC Solutions together with generating synergetic benefits. Although it may have proved successful for the business of PC Solution but any merger requires sound and methodical application of change management principles. An organization however small it needs time to adjust with the culture of the parent organization and there needs to be a formal department that looks after the entire process till it is done completely. This function can also be performed by the Human Resources department which can look after the smooth transformation of the employees in the target organization. All these factors together lead us to believe that there is a strong requirement for the establishment of a Human Resources department in the organization.
ORGANIZATIONAL BEHAVIOUR THEORIES:
Carol and Harrison (2008) illustrate that any organizational culture creates a standard set of operating rules on the language of communication and ideology. Furthermore, it guides the behavior of a member, shared vision of a benchmark for quality work, structures of social manners and demeanor, certain norms and customs regarding the interaction of an individual with his colleagues, seniors, subordinates, etc. These cultural rituals are so deeply entrenched in the behavior of individuals that a new member-only try to emulate these to establish his existence in the organization and tackle a particular problem. This does not imply that organizational culture is transferred from generation to generation without any resistance or evolution from the new members. The new members at least join an organization with the thought process of questioning the age-old process and create a threat for a change. However, they may get molded by the prevalent culture and customs to fall in line with the organizational processes (Verquer, Beehr, and Wagner, 2003).
Organizational culture has been approached by different scholars in different manners which have given rise to a wide gamut of models for analysis. Martin (2001) has conducted some extensive research on this topic and finally came up with the classification of the theoretical perspectives in an organization as an integration perspective, differentiation perspective or fragmentation perspective.
Integration perspectives are of the view that all cultural values are interlinked with each other, and they are reinforced with the help of their manifestations. If there is any deviation from those cultural values, then it is perceived as a defect that needs to be looked into and cured. On the other hand, the differentiation perspective focuses on the manifestations which are not in line with the prevalent cultural values and try to bring about a change in the environment of the organization. Fragmentation perspective tells the story of numerous fractured cultural values existing in the organization, these give rise to the subcultures prevalent in the organization (Schneider, Gunnarson, and Niles-Jolly, 2004).
(Martin, 2001)
Harrison’s Culture Model - Another model that was created from the cultural value perspective was Harrison’s culture model. Harrison (1972) had classified the different ideologies prevalent in the organization regarding four sub forces namely, ‘power orientation', ‘task orientation', ‘role orientation', ‘person orientation'.
(Harrison, 1987)
Schneider's Culture Model – Schneider (1999) worked on the various models suggested by different scholar and made an attempt to come up with a universal model which can encompass all the different types of organizations. He classified the organization as Cultivation, Collaboration, Control and Competence.
STRENGTH AND WEAKNESS OF ORGANIZATIONAL CULTURE:
Any successful organization has different strengths and weaknesses with respect to its culture and philosophy which drives its growth and profitability. A close analysis of PC Solutions will also reveal that there are numerous strengths underlying in the organization which has led to its growth over the last eight years. It can be seen that Frank has pressed upon quality and standard for the improvement of its organization. There are competent managers at the helm of the organization who guide their subordinates towards the direction of growth and prosperity. However, if we look at PC Solutions in the light of organizational theories discussed above, it can be seen that it has permeated a role oriented culture in its organization which implies there is high centralization and high formalization in the organization. If we look at the customer service department Louise holds the authority to allocate resources and create the priority list although there are three department heads for training, network and software support, and hardware support. If we try to fit Schneider’s culture model in the organization then we see that it is a mix of control and competence culture prevailing in PC Solutions. Although there is a strong emphasis on culture, control of the functions from the top is widespread. The sales leads are also being decided by the head of the department and there is little sense of co-operation among the sales executives (Homburg and Pflesser, 2000).
PLAN FOR CHANGE MANAGEMENT:
So as the organization is expanding and the employee strength is increasing there is a need for changing the organizational culture from role orientation to person support orientation wherein there will be low centralization and low formalization. This will lead to better collaboration among the employees and there will be more open culture prevailing in the organization. This will help in generating more leads, better customer satisfaction, and increased employee motivation. At the inception of PC Solutions it was necessary that the founder Frank Wallace looks into every detail of the business since it was bussing at that time. But now as it expands its operation and diversify its portfolio there is a requirement to hire experts in particular domains and let them shape the organization as per their suitability. This should be the way forward for every organization while it is in the growth phase. There is a requirement of setting up a Human Resources department to look after the human capital of the organization which will support the front line business functions strategically and increase employee productivity. This requires the application of strong change management principles in the organization. There is a need to bring everybody on board while initiating these changes in the organization, instead of having a top-down approach the top management should embrace a bottom-up approach while implementing these changes which will also help in mitigating any resistance that s prevalent in the organization. If all these principles are properly applied in PC Solutions with a collaborative attitude then the present organizational challenges can be solved with much ease.
LEADERSHIP THEORIES AND STYLE:
Over the years researchers have put in a lot of effort in analyzing and identifying the characteristics of great leaders throughout the world. As per their analysis, they have proposed certain leadership theories which is of special concern while discussing the role of Frank Wallace in this case. Some of the popular leadership theories are as follows:
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Trait Theory – Trait Theory came into prominence during the 1930s and 1940s whose fundamental principles are based on the fact that people are born with certain characteristics or capabilities which help them evolve as a leader. These attributes include intelligence, smartness, responsible, creative and other soft attributes which are quite common among the great leaders of the world (Hayes, 2005).
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Behavioral Theories – A decade later in the 1950s came a contrary approach to leadership called the behavioral theory. In relation to trait theory, the behavioral theory was offering a contrary perspective that focuses on the behavioral aspects of a leader rather than his mental and physical attributes. As there was an evolution of the psychoanalytic branch researchers were able to undertake factor analysis in order to identify the cause and effect relationship within the actions of leaders. After that people could access such studies with a view to analyze the behaviors which were most effective and apply them in their practical life to get the best result. This paved the way for the concept that leaders are made and not born.
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Transactional Leadership Theory – As per this theory, the behavior and characteristics of a leader is shaped by the relationship that exists between the leader and his followers. It tries to represent a positive relationship between the two and talks about a mutually beneficial exchange. Rational behavior says that we should take up actions that maximize our utility and minimize the less useful activities (Bono, Joyce E.; Judge, Timothy A., 2004).
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Transformational Leadership Theory – This theory illustrates the fact that leadership is based on the relationship forged by the good deeds done for a person. These helpful acts enable a leader to establish loyal followers who eventually assist in carrying out the required task by overcoming all the internal and external obstacles (Livingstone, 2003).
As per the above theoretical discussion, it seems apt for Frank Wallace to undertake a combination of transactional and transformational leadership styles to instill the new organizational culture and other change management principles in the organization. The organization is at present going through a crisis that needs a leader at the top who will be able to properly spread his message to every level of the organization and bring them on board for the restructuring of PC Solutions. If he adopts this type of leadership style then it will be easier for the employees to trust their top management and follow his direction. Moreover, this collaborative leadership style also goes hand in hand with the change in cultural aspects of the organization which was proposed previously. So if PC Solutions is able to follow a collaborative and accommodative leadership style with a special focus on changing the organizational culture from role orientation to person support orientation then it can augur well for the organization as a whole (Linnenluecke and Griffiths, 2010).
CONCLUSION:
A thorough analysis of the various aspects of organizational behavior has been undertaken with respect to the culture and change management principles that need to be applied in an organization. PC Solutions was the organization of concern in the case study and a critical analysis of the challenges faced by the organization and how to overcome them have been established. The report illustrates numerous theoretical concepts regarding organizational behavior and leadership styles which can be used to interpret the present scenario of PC Solutions. Finally, the report comes up with few recommendations about how to implement the change in organizational culture and the restructuring required in the organizational hierarchy. At last it is justified to mention here that this work should be viewed as a critical analysis of an organization facing certain cultural crisis while in its growth phase and the ways to overcome them.
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