Leadership Styles and Behaviors

By: Travis Sokana

Leadership Styles and Behaviors

Leadership styles and behaviors are a huge part to human resources and organizational structure and strategy. There are many different types of leadership styles and behaviors but to truly understand them we must first know what leadership is. “Leadership is defined as the use of power and influence to direct activities of followers toward goal achievement.” (450) The term leadership is derived from the word leader, which is when a person is able to display a high ability of control and influence over a group of people. Interestingly enough studies have proven that leadership isn’t a trait that one is born with. Rather studies have shown that certain traits are more predictive of leader emergence but not of how effective one will be as a leader. That being said everyone has the opportunity to step up as a leader by developing key skills and characteristics. There are several key characteristics that make up a good leader which include empathy, consistency, honesty, direction, communication, and flexibility. Obviously there are plenty more key characteristics but these are some of the most important ones.

           

Empathy – By being empathetic the teams knows you understand their concerns, and will be more likely to work with you then work against you.

Consistency – By being consistent leaders gain the respect and credibility from their peers.

Honesty – By being honest it helps in earning credibility. Honesty also helps personal growth and assessment when you’re honest with yourself.

Direction – By having direction it shows you are willing to step out of the comfort zone and aim or strive for something better. Setting goals and reaching them is important.

Communication – By using communication positively it can help keep everyone motivated and focused. Allowing you to give critical feed back all while keeping them from getting to down on themselves.

Flexibility – By being flexible it allows the opportunity for better results. Keeping an open mind and knowing when to extend deadlines and goals can be very beneficial.

Two well-known styles of leadership include task-oriented leaders and relationship oriented leaders. Both of these styles provide advantages and disadvantages. The success of leadership styles heavily depends on who and what the task at hand is. Both task-oriented and relationship oriented styles of leadership have sub styles of leadership within them.

Task-oriented leaders are exactly that. They are leaders that are mainly focused on reaching certain tasks and goals. These leaders focus on setting goals and deadlines in which they expect to reach them by. Task-oriented leaders tend to excel in environments in which job responsibilities and goals are easily defined. This style of management also makes it easy for measuring progress, insuring deadlines will be reached. Often when talking about task-oriented leadership styles the autocratic style comes up. Autocratic style is when the leader makes decisions without any input, opinions, or suggestions from the employees on the work unit, virtually making the alone. Such tactics are often non-beneficial. Not keeping employees in the loop or even merely asking for some input can really bring down employee moral. Unhappy employees are not ideal for being a leader.

Relationship leaders focus on keeping the group as whole happy and motivated. The logic being that the sum of the parts will drastically produce better results. This style of management is focused on “power” but rather employee satisfaction. Keeping work environment enjoyable, while still finding time to talk and give feedback. Theoretically relationship leadership styles make sense, keeping employees upbeat and positive about work will truly keep them motivated to preform their best at work. Similarly, consultative style presents the problem to individual employees or a group of employees, asking for their opinion and suggestions before ultimately making the decision. (455) Facilitative leadership would also fall in the sub category of relationship leader style. Facilitative style truly look to make everyone in the group happy, because it makes decisions based on what the group decides as a whole. Relationship leaders aren’t all good though. One negative of this style of leadership is it can be easily taken advantage of.

Combining task-oriented and relationship leadership styles truly are the most effective style of leading. The key to making this successful is finding the proper balance of each style. Each situation will be different, but great managers find a way to merge these two styles. This ability to combine the positives of each style truly separates the good leaders from the great leaders.

Reference

Colquitt, A. J., Lepine, A.,Wesson, J. M.. (2009). Organizational Structure, Organizational Behavior (p. 527).  Location: New York.

Department of Psychology, George Mason University, Fairfax, VA 22030, USA. szaccaro@gmu.edu

The American Psychologist [2007, 62(1):6-16; discussion 43-7]

Kouzes JM, Posner BZ. The credibility factor: Credibility is the foundation of leadership. Clin Lab Manage Rev. 1994;8:340, 342, 344–345 passim.

Company strategy and Company size

By: Xi Chen

Overview:

The main point of this article is to establish how company strategy and company size influence to the organization structure. I will briefly introduce the definition of them and separately explain how they influence the organization structure. For company strategy, I will focus on introducing the several key elements. For company size, I will list six organizational structures that companies can consider based upon the company size and the diversity in scope of operations.

Company strategy

Company strategy is the term that is used to describe the combination of policies, processes, and procedures that help a company operate according to its official statement of aims and achieve its short-term and long-term goals. A comprehensive company strategy has many levels, since it coordinates the operations of every department division within the structure of the company. The function of each part of the business is to complement all the other parts, this kind of strategy plan is necessary for an organized structure.

Although there are many different concepts about what counts as effective company strategy, most of them will focus on three key areas. All of the methodologies that combine these approaches together, to run the business, are based on these three key areas. The first of these three is the cost of operation. The idea of every company is to make a profit, so it's important to know how much it will cost to make products that are finally sold to customers. The company will be in a better position to decide the lowest rate or price for the products needed to earn other kind of profit by knowing all of the costs included in this process. Also, the management, which uses the cost most efficiently and keeps high quality products, will make a high profit for the company. Then, by applying the basic laws of supply and demand, retail prices can be decided, and the business will be allowed to offer products at a price that consumers are willing to pay.

A good company strategy also needs the creation and implementation of a possible statement of the aims of the company, in the same way as the cost of operations. The statement should have a wide range and give the company space to set and adjust goals when it's needed, but it also should be narrow enough to give the business the ability to create a character that consumers can recognize easily and come to trust. In order to make the statement a success, it must have some basic parts in reality. Operating from that foundation of reality, then it is possible to imagine a rewarding future for the business and begin to set goals, which will make it possible to fulfill the statement as those goals are achieved.

The last element of company strategy is called differentiation. This is a simple process, which can create an image in consumers’ minds that the company has something to offer that sets it apart from the competition. The purpose of this element is positive consumer perceptions in order to maintain customers and also gets the chance to increase the earning. “There is no one perfect company strategy that works for every type of business. The essentials must be adapted to the circumstances surrounding the company and the market or markets where it will attempt to connect with consumers” (Strategic management, 2013).

Company Size

Company size plays a very important role in determining the ideal structure. As the size of a company increases, it will correlate with the necessity for increasing complexity and divisions in order to achieve synergy. There are six organizational structures that companies can consider, based upon company size and the diversity in scope of operations. The first structure is called pre-bureaucratic and is appropriate for smaller companies. “This is an agile framework aimed at leveraging employees in any and all role to optimize competitiveness” (Liser, 2003). The second structure is called bureaucratic. The functions of this structure are appropriate for large corporations, which have complex operational initiatives. “This structure is rigid and mechanic, with strict subordination to ensure consistency across varying business units” (Liser, 2003). The third structure is called post-bureaucratic. This structure actually is the combination of the first two. This one is appropriate in non-profit companies and community organizations. In this structure, consensus is the driving force behind decision-making and authority. The fourth structure is called a functional structure. This structure works well in large organizations and it focuses on the development of highly efficient and specific divisions, which perform specialized tasks. “The down side is that each division is generally autonomous, limited communication across business units” (Liser, 2003). The fifth structure is called a divisional. This structure is appropriate in large companies, except economies of scale because large companies are in pursuit of economies of scope. Economies of scope simply mean a high variance in product or service. “As a result, different divisions will handle different products or geographic locations/markets” (Liser, 2003). The last one is called a matrix. This one works well in the largest companies, with the highest levels of complexity. This structure creates a product specific and division specific organization.

Knowing which specific structure will fit in each company is an important early step for a management team. Smaller companies best choices are pre-bureaucratic or post-bureaucratic. Larger companies have more choices, those are functional, bureaucratic, divisional, and matrix structures.





References
Strategic management. (2013). In Wikipedia.
Retrieved from:
http://en.wikipedia.org/w/index.php?title=Strategic_management&oldid=549735234
Liser, J. (2003). Chron, issues that influence an organizational structure by company.
Retrieved from:
http://smallbusiness.chron.com/issues-influence-organizational-structure-company-15909.html

Multi-Divisional Structure and Matrix Structure

By: Xiaoyu Liu

Multi-Divisional Structure and Matrix Structure

Over the past 20 years, and as the economic world continues to develop, organizations have been changing over time for increasing profit. From simply one strategy, one structure, they have adapted to the more complex structures in order to better serve customers and survive in the competition among organizations (Barlett & Ghoshal, 1990). There are many organizations that have tried not to trip over into the one-dimensional structure trap, and are always trying to develop newer and more efficient forms of economic organization. The most significant successes for organizational structure innovation was recognized as multidivisional structure and matrix structure, and both of them could be abbreviated to M-form structure and MX-form structure (Barlett & Ghoshal, 1990).

In our previous posts on this blog, we have already introduced the basic knowledge and discussed organizational structures and strategy. This paper will talk about the rest of the main organizational structures that have not been discussed yet. The larger business organizations usually have more diversity than smaller business organizations. Therefore, for a better understanding of the multi-divisional structure and matrix structure in different organizational forms, business people should be familiar with what functional structure, product structure, geographic structure and client structure first are.

• Functional Structure

As you can tell from the phrase, a functional structure is when a group of people with specific area expertise get together and form the structure of function. For example, employees that have knowledge in HR worked together as a whole, which created an absolutely efficient, advantageous environment with “work specialization that’s centrally coordinated” (Colquitt et al., 2009, p. 538).

• Product Structure

Please review the previous post about on Product Structure.

• Geographic Structure

A geographic structure is responsible for a set of products on a global basis (Chi & Nystrom, 1998). For instance, an organization’s branch is located in China, and reports its performance to a command center that is responsible for all branches that are in the Asian region.

• Client Structure

A client structure is an organizational form that employees organize to serve their customers. For example, an organization may have the department of Government Contract, Direct Consumer Sales, or Internet Sales (Colquitt et al., 2009, p. 539).

Multi-Divisional Structure

Hoskisson (1987) proposed that multi-divisional structure “is a unique structural frame-work that overcomes problems of both internal and strategic control that confront large multiproduct firms,” (p. 626). The research also shows that the organizations which have the multi-divisional structure tend to have a better economic performance (Chang & Choi, 1988). Applying multi-divisional structure in organizations could help organizations decrease margin costs by reducing the transaction failure.

One can determine whether a business organization applied multi-divisional structure, by looking at the following criteria (Chang & Choi, 1988):

• ·         A general corporate planning office on the group level which can help with controlling affiliated firms
• ·         Offices are divided into groups or teams that specialize in corporate planning, human resources management, auditing, and financing

Matrix Structure

In a matrix structure, two or more layers of multidivisional structures are combined and implemented together, such as, the geographic structure plus the client structure. In the last two decades, in many of the world's leading organizations, large-scale surveys found a matrix structure being used by 28% of major US or European multinational companies, by 43% of R&D projects, and by 27% of hospitals (Chi & Nystrom, 1998). 

In a two or more dimensional matrices, as illustrated in the chart above, all the different departments interact with each other, but each performs its own functions at the same time. For example, a HR manager at the country level reports Product A to a headquarter president who manages for a continental geographic area. Moreover, Product B teams may be independent of Product C team but interrelated with Product A teams, and Product A teams might correspond with Product C teams. So the advantages of the matrix structure promote the interests of the group as a whole, and intra organization communications. In addition, since employees know each other across even different departments, this leads to positive competition among employees and each product team. In other words, matrix structures increase the productivity of an organization.

Conclusion

The adoption of the multi-divisional structure has more benefits in terms of productivity to those organizations that do not adopt a complex structure (Riahi‐Belkaoui, 1997). Furthermore, the multi-divisional organization is an effort to avoid the problems of the functional organization and increase the efficiency and capacity of an organization (Hoskisson, 1987).

Based on experimental work that has been done, the results also show that the business organizations with strategy and structure that conform to the matrix structure show a better economic performance. What’s more, matrix structures promote productive efficiency and increased profitability of an organization.

All in all, a company using multi-divisional structures and matrix structures to coordinate its activities across divisions, functions, and geography, means eliminating withholdings, improving communications, and advancing performance and productivity.

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References

Barlett, C. A., & Ghoshal, S. (1990). Matrix management: not a structure, a frame of mind. Harvard Business Review, 68(4), 138.

Chang, S. J., & Choi, U. (1988). Strategy, structure and performance of Korean business groups: A transactions cost approach. The Journal of Industrial Economics, 141-158.

Chi, T., & Nystrom, P. (1998). An economic analysis of matrix structure, using multinational corporations as an illustration. Managerial and Decision Economics, 19(3), 141-156

Colquitt, A. J., Lepine, A.,Wesson, J. M.. (2009). Organizational Structure, Organizational Structure (p. 524-553).  Location: New York.

Hoskisson, R. E. (1987). Multidivisional Structure and Performance: The Contingency of Diversification Strategy. Academy of Management journal, 30(4), 625-644.

Riahi‐Belkaoui, A. (1997). Multidivisional structure and productivity: The contingency of diversification strategy. Journal of Business Finance & Accounting, 24(5), 615-628.

Organizational Structure and Information Technology

By: Brittany Ziegelbaur

There are several elements in the business world that work hand-in-hand with the organizational structure of a business.  One element, in particular, that may slide under the radar for most people is information technology.  Many people may not think of the correlation between information technology and organizational structure as being that important, because many people don’t even know what information technology is.  To clear things up a bit, information technology is "a tool designed to collect, store, process, disseminate and use information" (Lee, Cheng, & Chadha, 1995).  With this being said, there are several elements of information technology that correlate with business structures.

The first segment of organizational structures that we will be looking at is the number of departments within the business and the number of levels of hierarchies within these departments.  In a study conducted, a strong positive correlation was found between the number of departments and levels of hierarchies with the level of information technology for the business (Pfeffer & Leblebici, 1977).  In other words, the more elaborate the information technology was in a business, the more departments and levels of organization’s hierarchy there were (Pfeffer & Leblebici, 1977). 

The next segment of interest in the study was the measure of decentralization within the business.  For the purpose of this study, they are referring the measure of decentralization to the “amount of money department heads can spend without high authorization” (Pfeffer & Leblebici, 1977).  The results, again, showed a strong positive relationship between the two elements.  This means that the more information technology used within the business, the more decentralization there is within the different departments (Pfeffer & Leblebici, 1977). 

Moving further along in the study, they next examined the correlation between the formalization of decision procedures in advance and the amount of information technology within the business.  When talking about how formal in advance the decision procedures are they are referring to the extent of the information that will be provided ahead of time to guide the employees through the work procedures.  After the study was conducted, they found that the more intricate the information technology, the less formalized in advance the decision procedures are (Pfeffer & Leblebici, 1977).   

The last element of this particular study was determining if there is correlation between information technology and the formality of reviews for departmental performance, and if these reports are oral, written, or with detailed statistics (Pfeffer & Leblebici, 1977).  This, however, was the one component of the survey that did not show any correlation between the two elements.  This was different from their hypothesis that stated: utilizing information technology would lead to more formal reviews with the implication of detailed statistics for reviewing the performance of the employees (Pfeffer & Leblebici, 1977).

After finding the correlation between different elements of organizational structures and information technology, businesses are able to implement their own strategies for operation.  One strategy that is becoming popular in several businesses is having high-centralized control over the company without having the risk of decentralized decision making between departments.  To explain this further, with the high advancements in information technology and technology, itself, management has the ability to obtain large amounts of information at their fingertips (Lee et al., 1995).  This allows upper level management to observe different business processes and how well they are performing, no matter how many departments there are in the business (Lee et al., 1995).  This makes it possible for a business to make all of their decisions through a few executives at the top of the organization, rather than by individual department managers.  There are both advantages and disadvantages to this process.  In one sense, it is very good for the business in terms of having a tightly monitored system of control over the information.  They are able to observe the information easily and efficiently.  On the other hand, it doesn’t give managers/employees of the business the freedom and confidence to make their own decisions.  Although there are positives and negatives to this business process, it is an efficient and effective way to operate a business.

Another strategy that many businesses are beginning to use to maintain an effective organizational structure is having decentralized decision making, without the expense of having centralized control (Lee et al., 1995).  Again, this process is made possible through the use of information technology.  With these high levels of information technology and technology in businesses today, it is very common that every employee will have a desktop computer or laptop at their desk.  This makes it possible for everyday employees to “generate, own, and access a great volume of information” (Lee et al., 1995).  This allows business decisions to be made more efficiently throughout the business.  These decisions can be made faster because there is more freedom among the employees.  Lower-level employees have the ability to evaluate the information they have accessed/found and infer a logical and appropriate decision, on their behalf, for the company (Lee et al., 1995).  Although this specific type of structure deals with less extensive centralized control over the business, there is still the ability for higher authority to track the information being processed throughout the business through the information technology programs implemented into the business process. 

These two examples of how organizations are altering their organizational structures with the implementation of information technology are perfect examples of how businesses are reacting to the greater amounts of information that run through the business.  One of the main reasons for implementing information technology into business structures is to work with the complexity of information that is entering the company (Sor, 2004).  Since today’s business world is so large and chaotic, the information coming into the business is more complex in quantity, quality, and type (Sor, 2004).  By implementing innovative business structures that involve the use of information technology, like the examples stated above, businesses have an easier way of dealing with large amounts of information.  Past theories of Thompson and Galbraith have carried over into today’s society and state that by implanting information technology into businesses structures, “uncertainty is reduced, the number of elements necessary for decision making are reduced, and task interdependence is reduced” (Sor, 2004). 

With all of this being said, information technology can greatly improve the organizational structure of a business.  Studies have shown that there is great correlation between different elements of organizational structures and information technology.  By having clarity that information does, in fact, improve organizational structures, businesses can now start implementing different techniques to improve the efficiency within the company. 

References:

Lee, A., Cheng, C., Chadha, G.  (1995).  Synergism Between Information Technology   and Organizational Structure: A Managerial Perspective.  Journal of Information Technology, 10(1).  (37-43).  http://search.proquest.com/docview/901450981/fulltextPDF?accountid=1 2924

Pfeffer, J. and Leblebici, H.  (1977).  Information Technology and Organizational       Structure.  The Pacific Sociological Review, 20(2).  (241-261).              http://www.jstor.org/stable/pdfplus/1388934.pdf

Sor, Roger.  (2004).  Information Technology and Organisational Structure:   Vindicating Theories From the Past.  Management Decision, 42(1/2).  (316-  329).  http://search.proquest.com/docview/212071031/fulltextPDF?accountid=1 2924

Organizational Culture

By Xiaoyu Liu



Organizational Culture

The head of an organization usually tends to think the more advantage they have, the more strength they could obtain. However, it is not always the case, at least in the organizational culture aspect. So learning how to create a first generation organization and maintain its culture strength becomes the essential source of competitive advantage compared to other organizations. 


Organizational Culture

For an organizational culture to exist, there must be a group of employees interacting with each other for accomplishing a defined goal or purpose in a work environment. After the group has had its own history of overcoming difficulties, and experiences the growth of its value, the organizational culture appears. By force of the founder’s personality, he or she could begin to shape the culture of that group. Consequently, the organization will find out their own solutions for how to cope with its external and internal problems. Therefore, Schein (1983) defined organizational culture as:

the pattern of basic assumptions which a given group has invented, discovered, or developed in learning to handle with its problems of external adaptation and internal integration, which have worked well enough to be considered valid, and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems (p. 1).

First Generation Organization

According to the related research, founders often start an organization with the flowing essential steps:

1. Come up with an idea for a new enterprise. The ideas is workable and worth running, but with some risks.
2. Allocate the ideas to some people that may have the ability to run the business or are interested in doing so, and form a founding group.
3.  Begin to create the organization by raising funds, obtaining patents, incorporating and so on.
4. Develop its own history by bringing other businessman into the group according to what the founder or founding group considers necessary. 

Maintain Cultural Strength

According to the quantitative analyses, organizations with strong cultures have higher performance than the organizations that have weak cultures (Sørensen, 2002, p. 70). As one important aspect of organizational structure and strategy in human resources, culture strength, which is defined as "a set of norms and values that are widely shared and strongly held throughout the organization”, enhanced organization performance (Sørensen, 2002, p. 70). 

As stated earlier in the paper, organizations have to be aware of the truth that having strong culture does not always equal success. There are many examples that demonstrate sometimes the greatest strength could be the biggest weakness in an organization. For instance, strong culture creates steadiness within the organization, but it would appear that strong culture also creates difficulties to adapt in new environments. Moreover, an organization stands out among others but it would be difficult to merge with another organization (Colquitt et al., 2009, p. 567). 

Thus, finding a way of maintaining cultural strength that best fits in an organization is important. After the organization is created, the founders keep shaping the culture of the organization and molding employees. This learning and adapting process for employees is defined as socialization, and it helps the organization maintain its strength (Colquitt et al., 2009, p. 569).


Source of Competitive Advantage

Like the paper illustrated previously, organizational culture is defined as “the shared social knowledge within an organization regarding the rules, norms and values that shape the attitudes and behaviors of its employees” (Colquitt et al., 2009, p. 557). Organizations have to compete with one another, because only a few of organizations have absolute advantage over others, such as Apple and Microsoft. So after we know how to maintain the organizational strengths, it will not be hard to have a competitive advantage over other similar organizations. 
There are various specific culture types of organizations, such as customer service, safety, diversity and creativity.  Based on what kind of culture types the organization is, three conditions must be met for a source of sustained superior financial performance (Barney, 1986, p. 657).

• • Valuable
• • Rare
• • Inimitable

First of all, the culture must be valuable. These valuable cultures enable an organization to add financial value to itself. It leads the organization to achieve high sales, low costs, high margins, and low conflicts in order to have positive economic consequences.

Second, the culture must be rare. It should be unbeatable and have unique attributes and characteristics that others do not usually have.

Last but not the least, the culture must be imperfectly imitable. Organizations lose advantages, such as reputation or experience, if they try to imitate cultures. Organizations could not operate without these cultures and engage in activities that change the cultures to include the required characteristics. 



The organizational culture not only labels who its employees, customers, suppliers, or competitors are, but it also describes how an organization will interact with these primary factors. By implication, the concept of organizational culture blurs the borders between organizational culture and the structure and strategy because these characteristics of an organization directly demonstrates the cultural assumptions about what business an organization is in and how it conducts that business (Barney, 1986, p. 657).


Additional activity: by looking at the chart below, one can see which values they prioritize the most and decide whether your organization shares the values (Colquitt et al., 2009, p. 576).

References

Barney, J. B. (1986). Organizational culture: can it be a source of sustained competitive advantage?. Academy of management review, 656-665.

Colquitt, A. J., Lepine, A.,Wesson, J. M.. (2009). Organizational Structure, Organizational Culture.  Location: New York, 554-575.

Schein, E. H. (1983). The role of the founder in creating organizational culture.Organizational dynamics.

Sørensen, J. B. (2002). The strength of corporate culture and the reliability of firm performance. Administrative Science Quarterly, 47(1), 70-91.