The performance of any business in terms of its success or failure is very much ultimately dependent on the how well the adopted organisational structure, management style and the organisational culture interrelate and are complimentary and compatible with one another. Much though must be paid towards selecting the right interrelated and complimentary combination of management styles, organisational cultures and structures which are best suited to the ‘personality’ of the company and the company’s ultimate aims and objectives.
This is particularly as adopting the wrong structure, management style and culture can be disastrous in the long term. As regards to Asda, its aims and objectives are very much based on achieving the greatest market share in its field, and hence its motives are very profit centred. Given its profit centered-nature, Asda has adopted (as discussed in A1) a very specific organisational culture, structure and management style. The impact of the adoption of these interrelated cultures, management styles and organisational structure on the performance of Asda, are evaluated and explained below. Organisational Structure
Essentially, Asda is structured in a hierarchical form, as it is a leading supermarket chain, that employs tens of thousands of employees nationwide. Its hierarchical structure incorporates the division of this large PLC, into key functional areas of management and departments; where every team and employee have specific roles and responsibilities within their department. This hierarchical organisation incorporates a top-down structure (which is typical of a profit motivated company), and the profit-led objectives are determined by those key members of senior management who lead the organisation.
Such managerial decisions and responsibilities are communicated and delegated down the hierarchical structure through the various functional departments and teams, in order to ensure objectives and targets are being met and achieved effectively and efficiently. This type of organisational structure is quite typical of large companies such as Asda, due to the extensive number of inter-related departments and employees.
The impact of such an organisational on the performance of Asda’s business is such that this hierarchy has significantly contributed towards the effective and efficient day-to-day operation of the company. Such effective communication and delegation, from the very senior executives at the top of the hierarchy right down to those shop floor employees at the bottom of the hierarchy, has ensured that Asda has been able to remain at the very forefront of its field. The lines of communication between the various managers and departments remain, clear and unobstructed, due to the distinct hierarchical structure of Asda.
As a consequence of this hierarchical structure and the defined functions of the various departments, information is able to be effectively relayed down the organisational structure via team meetings, staff newspaper, internal memos, and teamwork concepts such as ‘The daily Huddle’. Had the organisational structure not been so defined and complimentarily interrelated with the right management styles and cultures, the impact on Asda’s performance and market share would be severely detrimental to the company’s success.
The term ‘culture’ describes the typical approach within an organisation. It refers to the ‘personality’ of an organisation, the shared beliefs and the written and unwritten policies and procedures that determine the way in which the organisation and its people behave and solve business problems’. (Needham ; Dransfield, pg. 22). Different organisations have different cultures that are expressed in their attitudes, values and beliefs and these are usually founded and built upon over the years by the dominant groups within the organisation.
In terms of the organisational culture that Asda has adopted and built upon, it is primarily the ‘role culture’ that is quite specific to this company and which interrelates most suitably with its hierarchical structure. Role culture is based very much on a bureaucratic style in which all members within an organisation have a very specifically, defined role or task to carry out. A bureaucracy is normally divided into various functional departments (e. g.
; sales director, sales managers, supervisors, sales advisors, check-out staff etc ;). This interrelation between the hierarchical structure, management style and culture can be best illustrated through the diagram below. Asda’s interrelated organisational structure and culture is based upon a hierarchy of power. As a result, the impact of this is that its strength lies in the pillar of functions i. e. within the functions of each department, is a smaller hierarchy of power, from the manager to the manual staff.
Each member of staff operates at different levels which are defined through the chain of communication and determined by a written job description which is specific to each employee. In this culture, ‘position’ or ‘status’ is the main source of power and ‘rules and procedures’ are the main source of influence. It is this role culture that contributes to the effective and efficient operational management of the business. The fact that everyone is assigned very specific roles and responsibilities within their own functional department is pivotal to the success of Asda’s performance.
The impact of an incompatible culture such as a ‘person’ culture, where the individual is central, which interrelated negatively with say, a hierarchical structure would have a severely detrimental impact on performance, as this would create considerable conflict amongst individuals and hence create inefficiency and unproductively. Successful interrelation is vital to a company’s organisation. However, this is not to say that individuals are not encouraged to show initiative and put ideas forward.
Asda recognises the impact of not foreseeing a changing retail environment and has therefore ensured it adopts to this in order to maintain its performance and meet its objectives. It recognises that it operates in a dynamic world in which change is frequent. As such, it has begun to move where relevant, towards a ‘task’ culture based on teamwork. This is particularly relevant and applicable to the ‘middle-layer’ departments such as ‘marketing’, ‘sales’, ‘accounts’ etc; where there is an even greater need to develop team skills, interpersonal skills, communication I.
T skills and decision making skills. It is particularly in these departments that managers have shown they are open to listening and teamwork, rather than simply giving orders. Management Style In line with the fact that Asda operates under a hierarchical structure and which incorporates a role/task culture (dependent on the type of department or nature of work), it is only fitting that Asda executives adopt an interrelated management style which comprises of a democratic/consultative – based process.
The impact of recognising that Asda needs to adopt to changing world in order to improve performance and staff productivity has meant that the company’s management style have shifted gradually from an autocratic style to either a consultative style for those at the bottom of the organisational hierarchy or a democratic management style for those who work with teams. The impact of almost eliminating an autocratic management style has resulted in higher staff morale and productivity.
Shifting from a dictatorial management style to the implementation of a combined consultative/democratic style has had a significant positive impact on the performance of Asda. The consequence of adopting these two managerial styles has resulted in greater ’empowerment’ for the individual. The primary management styles that Asda employ across their organisation, particularly in the bottom half of their hierarchical structure, is a consultative management style. Consultative managers at Asda seek to consult their employees before making and implementing a decision.
This is not to say that shop-floor employees make managerial decisions, but rather that they are consulted for opinions before most major decisions are implemented. However, there is an element of some mild autocracy that is applied in the management of such staff at the very base of the hierarchy, but they are still given a sense of worth as employees by being consulted and regularly informed of updates via newsletters, ‘daily huddle’ team briefings, in addition to being asked to contribute for suggestions as regards to potential improvements.
The consultative management style is also employed at the top half of the hierarchical structure as all departments and functional areas are consulted. Asda managers are encouraged to employ listening skills and be more approachable to their staff, rather than simply instruct and order. Consultative managers will draw upon the opinions of other employees before reaching decisions and will adopt a culture of consultation via means such as team briefing such as ‘Daily Huddle’, newsletters, suggestion boxes.
Democratic management at Asda encourage ’empowerment’. Individuals and teams such as accounts, marketing etc; are given the responsibility to make decisions within a given framework. Perhaps more relevant to those departments where there is a need for project-based work, creativity and administrative and managerial organisation, Asda also employs a democratic management style. A democratic management style involves ’empowering’ teams and individuals by being given the responsibility to make decisions, within the confines of given framework.
The team is then held responsible for the decisions it desires to make. Managers at Asda will feel comfortable with this management style as it encourages teamwork and creates a better workforce as well as giving the mangers a little more freedom. However it is vital that the manager has a clear overall understanding of the decisions taking place. The managers would be confident that individuals given the responsibility will use their time and efforts wisely.
These two styles have had a great impact on Asda in that they have significantly raised staff morale, initiative, sense of empowerment and most significantly, the consequence high staff morale has resulted in higher productivity efficiency, initiative and a reduction in absenteeism, conflict and friction. However, it must be recognised that the management styles have worked very well because they, in conjunction with organisational structure and culture formed part of a successful and complimentary combination of interrelated factors which served to significantly boost the performance of Asda and help to meet its objectives.