Critical Comparative Analysis
This report comprises of a comparative analysis of two companies – Biogenta plc and Outback Inc. Biogenta plc manufactures product that protect plants from insects and pathogens. It operates in about eighty countries in the world, while Outback Inc is a tour company that provides various services and products to the tourists. The report has compared the way the two organizations operate and their management. Biogenta plc uses transformational leadership style while Outback Inc uses an autocratic leadership style. The results of these two leadership styles have been reflected in their performance. Biogenta plc has excelled in its business due to high employee motivation while Outback Inc has stalled due to its rigid structure and leadership. Different aspects of these organizations have been compared such as their organizational structure, teams and teamwork, leadership and management styles used, and organizational cultures. After evaluating each of these aspects the report has compared two organizations within their contexts. While evaluating organizational structure different theories such as traditional organizational theory, open system theory, and contingency theory have been discussed. Then the report has evaluated different types of structures so that an identification of specific structures in the two organizations could be done easily. These structures included functional, divisional, matrix, and team structures. After the evaluation and discussion of all aspects pertaining to the two organizations, a conclusion and recommendation have been written. The recommendations are mostly directed to Outback Inc, which has a performance and leadership problem. Good examples of performance and leadership inherent in Biogenta plc company have been recommended to Outback to improve its efficiency so that it could satisfy its customers. Some of these recommendations include changing the organizational structure, leadership styles and find means of incorporating employees in decision making. This is meant to increase their morale and efficiency at work.
Different organizations have been managed using different methods and systems. The existence of diverse organizations offering different products and services requires different mechanisms of managing them (Westlund et al 2007). Differences in the way organizations are led and managed are differentiated through the analysis of different aspects. Aspects that may differ when considering different organizations include structure and design, teamwork, leadership and management styles, and organizational culture. This report aims to compare two organizations – Biogenta plc and Outback Inc.
2. Organizational Design and Structure.
Organizational structure refers to the relationship between tasks allocation and their supervision with the aim of achieving the set goals (Baligh 2006). On the other hand, organizational design refers to the alignment of processes, talents, rewards, and structure with business strategy. The effectiveness with which an organization manages and links its design and strategy determines how well its objectives and goals will be met. Some organizations have very rigid structures while others allow flexibility in their design and structure. The choice of the structure to use in an organization depends on many factors such as the type of the organization and the nature of its business. For instance, a military organization is best suited for a rigid autocratic structure which makes its employees to follow orders without questioning. However, such structure may be vey detrimental to a service delivery organization such as a hotel, whose operations’ success depends on mutual exchanges between the organization and its clients. The decision on what organizational structure and design to use is based on different organizational structure theories. Such theories include traditional organizational theory, open system theory, and contingency theory.
2.1.Traditional organizational theory
This theory has an autocratic leader at the top of the structure (Northouse 2003). This leader is in charge of the whole organization and different lower level managers in the structure. This theory does not give recognition to the human aspects in the organization. As such, employees are oriented to follow orders and are expected to execute them as they are communicated. This theory is very restrictive because employees are not motivated nor are they trained to improve their productivity. One of the disadvantages with this type of organization structure is that innovation is discouraged.
2.2. Open system theory
This theory is very different from the traditional theory because it acknowledges the importance of the social aspect at work (Miles et al 2003). This theory identifies people’s emotions and motivation as drivers of success. Organizations using this theory have many divisions and departments headed by independent managers. These managers have been given autonomy to make decisions concerning their divisions and are empowered to identify motivating factors of individual employees. This theory puts emphasis on the uniqueness of organizations, which should guide them in choosing a design and structure that is compatible with the type of business it is involved in.
2.3. Contingency theory
According to this theory, it is very unproductive for an organization to maintain a fixed organization structure while many of its aspects are changing (Weber 2008). According to this theory the growth of an organization must be reflected by all its aspects including the structure. Assessment of business variables is critical in this theory and redesigning the business model should be effected if deemed appropriate. In this way the organization will gain the flexibility required to deal with the changing environment. Moreover, innovation will be possible which can be a competitive advantage for an organization.
Types of Structures.
Following the different theories explaining organizational structure, a variety of structures emerge. It is from these structures that an organization chooses the one that suits it best, depending on the nature of its business.
3.1 Functional structure
This type of structure groups people, processes, and resources depending on their similarities or need to work together. People with similar sets of skills are best suited to work together and are, therefore, put in one functional unit. Processes that lead to production of similar services or products should be put in one functional unit to avoid duplication of work. In functional structures there are many departments designed on the basis of similar employees’ skills, processes, and expertise required to produce a particular product or service. Effective communication is required in this type of structure because it leads to efficient coordination of different functional units. Although this structure can prevent wastage of resources through duplication, it does not allow managers to have a wide scope of experience. Managers are restricted to their areas of expertise, thus not being able to learn from other processes in the organization. Moreover, this structure may hinder the organization from achieving its goals if the different functional units do not have goal congruence. They may have their own goals that are not aligned with those of the entire organization.
3.2 Divisional structure
This structure occurs mostly when an organization is big and operating from different geographical areas. When an organization has activities scattered in different locations it becomes difficult to track the activities, processes, and products. This gives rise to the need of having divisional structures. This structure is both efficient and flexible as it allows the organization to respond to change effectively and monitor all its operations. One disadvantage with this structure is that an unhealthy competition among divisions may arise if resources are limited. This may be counter-productive and can limit the ability of an organization to meet its objectives.
3.3 Matrix structure
This is a blended structure that integrates divisional and functional structures. In this structure professional expertise is combined with divisional focus in a way that employees belong to at least two different formal groups at a given time. This structure uses cross-functional teams. Employees in this structure are able to work in teams formed by people from different departments in project teams. This structure is highly motivational as employees are eager to learn news skills from the interactions among members of different departments (Westlund et al 2007).
3.4 Team structure
Employees from different functional groups are organized into a team with the aim of solving an ongoing problem. The advantage of having a team structure is that functional barriers are broken, giving problem solving a good chance. The teams may also be assembled to find more viable opportunities. Members of these teams get an opportunity to learn management skills and realize importance of teamwork in problem solving. The ability of team members to work together depends on group dynamics, abilities to mange the teams, and interpersonal relations’ quality.
Biogenta plc is an international company that manufactures products for protecting crops from pathogens. This company operates in more than 80 countries of the world. Out of the eighty countries within which it operates, there are 10 manufacturing facilities. Biogenta plc has a traditional organizational structure with four main departments. These departments include manufacturing, research and development, sales and marketing, and support. The support department includes smaller divisions such as human resource, financial services, and legal services. Despite having a traditional design and structure, the CEO of the company is very flexible. As such, she considers rigidity of the organizational structure and design to be prohibitive to many functions of the organization. The strategy of this organization is to penetrate the global market and become the best provider of pest protection products. For this strategy to be implemented, high levels of innovation are required and cannot be achieved with a rigid organizational structure. The CEO of Biogenta plc – Jane Morgan has flattened the structure of the organization to fuel the speed of decision making, which is usually slow in an organization structure with a hierarchy. The cross-functional teams encouraged in this organization create synergy because employees are all rounded. They are able to learn from each other new skills, thus, becoming more professional.
On the other hand, Outback Inc has a very rigid organizational structure. The design is very bureaucratic, with the CEO acting as the overseer of the whole organization. Decisions are made by managers at the corporate level of the hierarchy and communicated down the chain. Managers down the hierarchy are relatives of the CEO. This fact implies that they may not be holding these positions because of their professional qualifications, but rather because the company is a family entity. This structure requires an organization to have a very professional team for it to achieve its goals. A professional team will ensure that effective communication is in place to ensure that, in spite of passing through bureaucratic hurdles up and down the hierarchy, the message will reach in time and undistorted. Outback organizational structure is so rigid that even beneficial changes such as using a website for bookings and reservations for their clients is impossible. Performing reservation and booking procedures through a tour operator or agent is expensive, thus uneconomical. Outback Inc is in the service industry, which requires personalized management of customer relationships to ensure that they are satisfied. Reducing customer hustle in their reservation process would create a good image of the company. However, the rigid structure has made the organization to lose business which could be secured through little changes in their processes and structure.
Katzen et al (1993) define a team as a definite number of people, possessing complementary skills with the aim of accomplishing common goals. The goals to be accomplished require members to hold each other mutually accountable. The concept of teamwork is necessitated by the complex environment within which organizations operate. Businesses face dynamic challenges more than before. As such solving the problems facing these organizations requires a joint effort which creates synergy for their solutions. The biggest challenge for managers in team formation is to bring together people with the required skills, behaviours, attitudes, and experiences to accomplish some identified goals. Once managers accomplish this task, the next challenge is usually to build a team to ensure that it works coherently towards accomplishing the set goals. Building teams means breaking down barriers that may have existed due to prejudices and stereotypes since teams are comprised of people from different backgrounds (Diamond et al 2007). Dynamics in the group provide a chance for all members to learn from each other. These dynamics emanate from different backgrounds from which members come. These dynamics provide different ways of solving problems, which individual employees lack. As such, teams are better placed to solve problems and provide diverse perspectives on a situation. The cooperation of the teams empowers them to appreciate each others’ contribution. Challenging tasks assigned to different teams enable them to shun away individualism and focus more on the bigger picture of achieving the overall goals of the group. Once a challenging task has been accomplished, teams become stronger and form a good basis for team building in the future. Teamwork has been identified to be a building block upon which the success of many organizations is founded. Therefore, the importance of teamwork is indispensable.
In the context of Biogenta plc teamwork has been enhanced by the company’s CEO who identifies teamwork as a critical component of the organization’s strategy. The strategy of this organization, as defined by its mission statement, is to become the most trusted company providing crop protection in the world. As such, innovation and constant improvement of its product is mandatory. Improving products and adding new features to them constantly ensures competitive advantage, thereby providing the company with an opportunity to become a leader in this field and consequently being the best. The company utilizes cross-functional teams to ensure that all departments have goal congruence and are working towards achieving organizational goals. The teams formed in Biogenta are both long-term and short-term. Short-term teams are used to accomplish tactical tasks while long-term ones are effective in effecting strategic goals. Thee tactical goals may also be used as a base upon which the long-term goals will be achieved. Although teamwork seems to be a very simple concept, it can not be achieved with poor management. Employing people from different cultures with different value systems may pose a challenge on how to break barriers between such members and utilize their diversity to drive an organization to success (Diamond et al 2007). Effective team building can help overcome this problem.
Compared to Biogenta plc, Outback Inc is very different in terms of team working. Because of the bureaucratic structure of the organization, relationships among employees are limited to giving instructions and executing them with little discussion. The structure inhibits lateral and vertical communication in the organization, ensuring that communication is one way from top to bottom. This structure does not allow lower level employees to participate in decision making. Moreover, their opinions on products and processes required to improve organizational performance are never considered. Because of limited interactions among employees from different departments, cross-functional teams are unheard of in this organization. Each department works separately and is guided by different managers. Lack of cooperation among departments has resulted in poor service delivery to its customers. Consequently, the company has faced bad publicity in Asia where its image has been tainted by many Asian media because of customer dissatisfaction. Organizations that involve their employees in decision making achieve their goals with minimal effort. This is because employees tend to work harder to implement decisions they were involved in making than those directed to implement from their superiors. Employees perceive such decisions as their personal initiatives which should not fail because such failure would portray them as failures.
Leadership and Management.
A leader guides others to achieve certain goals by being an example to them and creating a favourable environment within which these people will be motivated to achieve the set goals (Crouse 2005). A manager is a person who oversees activities in an organization to ensure they are carried out as outlined by the organization. Leadership is the process through which a leader creates a vision, sets goals, and leads by example so that set goals can be achieved. Management means controlling people to achieve some pre-determined goals. Managers with leadership traits are able to achieve the set goals more effectively compared to those who just give directions and expecting their implementation. Many organizations have realized the importance of having mangers with leadership traits. There are many leadership theories that distinguish among different types of leaders. In the context of Biogenta plc and Outback Inc two theories are applicable. These theories include relationship theory and trait theory.
Relationship theory is also known as transformational theory of leadership. James McGregor advanced this theory. According to this theory, a transformational leader inspires his followers and induces positive change in them. By doing this, followers are able to care for each other’s interest and act in manner that will fulfil the interests of the entire group. In an organizational setting, a transformational leader motivates employees to perform their duties willingly and provides a good environment where personal needs are met in the process of achieving organizational goals. This theory is very useful, especially when an organization is undergoing a change process. Many organizations fail to implement change because they focus their effort on the aspects to be changed, but forget to pay attention on the transition of employees, which comes with anxiety and uncertainty. The process of globalization has brought dynamism in all organizations. There are many changes that are taking place in organizations to cope with these dynamisms. As such, transformational leadership is a requirement for organizations in this era of globalization.
Trait theory, on the other hand, asserts that leaders are not made, but rather inherit their leadership characteristics (Griffin et al 2011). The theory assumes that people from families that have had prominent leaders will automatically become leaders due to the traits they may have acquired from their parents. This theory has elicited controversy as to which traits a leader should have. A close examination of different leaders has identified a diverse spectrum of traits with no common grounds for comparison.
The CEO of Biogenta plc has been described by many of her employees as motivational, respectable, and a role model. The CEO of this company has led the organization to design its own mission and value system that will guide their execution of duty. She realized that for the value system to be respected and adhered to, consultation was necessary to know the expectations of people. By consulting the stakeholders of the company, they felt valued and, therefore, formed ownership to the value system. This meant that they would identify with the values and ensure that they are followed during their interactions within the organization. Biogenta plc is led using a transformational type of leadership. The CEO trusts the employees and gives them autonomy to make decisions regarding their duties. Moreover, she provides many programs that ensure that the employees develop and grow with the organization. This is done through learning programs such as sponsorships to institutions of higher learning like Cambridge and internal trainings that impart new knowledge on employees to enhance their performance. Through the creation of cross-functional teams positive and honest relationships between the organization’s leadership and employees are established. Therefore, employees are able to trust the leadership of the organization. This reduces resistance for the decisions made and their implementation. Due to the autonomy given to employees they are able to create innovations and new products that keep the company ahead of its competitors.
Outback Inc uses an autocratic leadership style that matches its rigid structure. The CEO is a son to the founder and former CEO of the organization. Moreover, other managers in the organization come from the same family as the CEO. A good leadership style should provide an organization with a clear vision and strategy. However, these two aspects are missing in Outback Inc. Instead of involving employees in decision making, the decisions are made at the top and employees are required to follow them. This is very detrimental given that this organization is in the service industry that relies heavily on the interactions between front line employees and guests for its success. Actually, the results of this traditional autocratic leadership have been reflected in the poor performance of the organization in the recent past. In an attempt to improve the performance of the organization, employees have tried to give their insights to the management about what can be done to improve performance. Their efforts, however, have been futile because the management has not listened to them and did not think their opinions mattered. In return, employees have refrained from giving opinions for fear of being blamed for customer complaints. It is very evident from this scenario that the organization has restricted innovation by denying employees the freedom to participate in decision making. The management system used by this organization seems to be based on the trait theory of leadership. Because the CEO is the son of former leader and founder of the organization he becomes the next leader automatically. Moreover, other members of the family have also been included in the management team of this organization. This kind leadership denies an organization a chance to be led by professional, thus making the organization less competitive.
Organization culture refers to the behaviours, values, assumptions, philosophies, and experiences that shape the way an organization relates with its employees, customers, and the outside community (Keyton 2010). An organization culture is very important because it acts as a guiding principle to all stakeholders on how to behave and conduct their duties. A good organizational culture creates a good environment within which employees can achieve personal and organizational goals. Organizational culture has some connection with cultures of different communities in the world. Because of the diversity that exists in many organizations people from different communities and countries work together. They join organizations while carrying their cultural traits and values. Because these values and traits vary from one community to another, there may emerge a conflict at the work place. At such times, the organizational culture should come into play. A good organization culture embraces diversity. Diversity is a strength if well managed because it represents different methods of solving a problem and looking at situations.
Biogenta plc has a culture that motivates its employees to the highest levels of production. The CEO has flattened the organization structure to ensure that communication flows smoothly both vertically and horizontally. This aspect of the organization is designed in this manner to conform to the innovation and creativity that is highly valued by the organization. Innovation results from novel ideas of employees’ creativity. Since decisions about innovation are made by the management, the organization has maintained an open door policy and communication to ensure that no innovation idea is overlooked. Consequently, employees have taken this chance to interact with the management on issues regarding their work and product innovation and creation. Biogenta plc recruits highly motivated employees with high qualifications. Such a move creates a good image of the organization in the eyes of its consumers because high motivation and academic excellence are associated with high quality. Employees are highly respected and valued at Biogenta plc. The company invests heavily in their development. This is done through providing them with scholarships to continue their studies as well as training them internally. Many of the support team members have at least a degree in a science related field. Those who require special expertise e.g. IT specialists are sponsored to advance their education in that specialty. Having employees with a basic science education regardless of the section they work in ensures that team coordination is smooth since all employees have basic knowledge about the products and processes involved in the organization. The office environment at Biogenta is bright and pleasant. The company encourages artwork that enhances the appearance of the workplace. Social corporate responsibility has been given a lot of consideration in Biogenta. The company supports many exhibitions and museums. Moreover, the organization has promoted many projects in several schools around the world especially those portraying themes related to biological science.
Outback Inc has a very restrictive culture. First it has neither vision nor strategy to guide the organization in the future. Employees have no power in making decisions and have to wait for instructions from their leaders. These leaders use old fashion leadership and thinking with total disregard to the changes that have taken place in the business world. Instead of investing in developing its employees, organization struggles to retain them since there is a very high employee turnover rate. Innovation is limited by the strict leadership employed. Employees have low morale and are not motivated except for some who are self-motivated. Teamwork, which is a crucial element of a good organization culture, is never emphasized and departments work as individual units. This denies the company a chance to use the power of team work in improving its performance.
Performance and success of an organization depends on a combination of many factors. The mix of these factors varies greatly with the type of organization. However, there are certain aspects of an organization that must meet certain standards so that organization can perform excellently and be competitive. The structure of an organization must be very flexible to allow changes that occur in a dynamic business world. The structure must allow for contingency plans so that an organization can fit in its environment at any given time.
Teamwork is a strong factor that enables an organization to benefit from the dynamics of groups. People working in teams can yield more rewarding results than individuals working alone. Teams enhance individual capabilities of its members so that their output is more than it would be when working individually. Organizations longing to edge out their competitors must enhance teamwork so that teams can lead to innovation, which differentiates organizations from their competitors.
Among all the leadership styles available the autocratic one is retrogressive. It restricts organizations to embrace change and compete with other on new platforms. The leadership style to be used by an organization should meet the needs of that organization. The leadership style must allow an organization to have a clear vision of its future and the means to get there. There is no specific leadership style that can be prescribed to all organizations, but contingencies among organizations should determine the style to be used. Organization culture that incorporates values, beliefs, and aspirations of people working in an organization should be adopted.
A good culture should allow an organization to achieve its objectives while allowing employees to grow and achieve their personal goals. Making a corporate culture requires involvement of employees so that they can accept it as their own and, therefore, work within its provisions.
The recommendations of this report mainly targets Outback Inc because it has shown deficiency in all the aspects evaluated. Moreover, they can be used by other organizations similar to Outback. The CEO should understand that the organizational structure of his company does not allow it to optimize resources to give the best outputs. The managers in the lower levels of management may not help the organization to improve its performance due to their ties with the CEO and lack of professional expertise. Therefore, the organization should conduct a recruitment drive to welcome a new management team based of academic qualifications and experience. This will help the organization improve its performance.
Moreover, the rigid bureaucratic structure should be flattened to facilitate easy communication, which can yield innovation through listening to employees’ ideas. Teamwork should be encouraged so that the damaged image of the organization in the eyes of the clients is rectified. Employees’ ideas are crucial especially in the service industry because they are in direct contact with the customers during service delivery and get clients feedbacks and reactions.
The leadership style should be changed. The style to be adopted should allow employees to contribute to decision making. Moreover, it should enable the organization to have a clear vision and strategy to direct it into the future. Once these changes have been implemented, a strong positive culture should be developed through consultation with stakeholders. This will lay a good foundation upon which relationships in the organization will be built.