Business book answers

Contents:
1. Functions and evolution of HRM
2. Organisational structure
3. Leadership and management
4. Motivations
5. Organisational and corporate culture (HL)
6. Industrial and employee relations (HL)

2. HUMAN RESOURCES MANAGEMENT:

❖ HRM → The practice of recruiting, hiring, deploying and managing the employees of a firm.

2.1 Functions and evolution of HRM:

HMR functions: Steps in HRM planning:
- Workforce planning 1. Analysing organisational objectives
- Recruitment, selections and inductions of 2. Inventory of present human resources
staff 3. Forecasting demand and supply of
- Staff development and training human resource (PEST)
- Staff appraisals and performance 4. Estimating manpower gaps
management 5. Formulating the final human resource
- Pay and remuneration packages action plan
- Discipline and grievance procedures 6. Monitoring, control and feedback
- Staff welfare

The labour market:

❖ Brainger → An investment in a worker (eg. training) and then they leave.

 ❖ Occupational mobility of labour → the extent to which workers are willing and able to move to
different jobs requiring different skills.
❖ Geographical mobility of labour → the extent to which workers are willing to move to a new region to
take up new jobs.
❖ Labour turnover → the ratio of the number of employees who leave a company (attrition, dismissal or
resignation) to the number of employees on the payroll in that period.

Effect of demographic change on labour supply:

Demographic change is the change in the size, structure and distribution of populations over time and
place. This could affect the potential supply of labour.
Natural population growth:
+ may be easier to recruit good staff as the working population increases.
- Constraints: increased birth rates may take years before they impact on the working population.
Net migration:
+ May be easier to recruit good staff at lower rates of pay
+ Highly qualified staff might be recruited from other countries
- ‘Brain drain’ of qualified and experienced staff to other countries will reduce competitiveness
- Immigrants may need more training; eg. in language and cultural issues.
Ageing population:
+ Often claimed that older staff are more loyal and reliable than younger workers
- Older staff may be less flexible and adaptable; eg. introduction of new workplace technologies.

Business Objectives:
- Most businesses objectives will be linked to Productivity.
- Which compares the output of a firm to the inputs used → efficiency.
- Which usually means a firm will want as much as possible from their workers.

Factors affecting labour mobility:

Low mobility of labour:
- High levels of home ownership
- High level of skills
High mobility of labour:
- Low home ownership
- Low level of skills

Labour turnover:
The overall change in the number of people employed in a business entity during a particular period of
time.
- Low labour turnover rates indicate motivated and satisfied staff.
- High labour turnover can turn expensive

Number of employeesleaving during a period

×100
Average number employed during a period
Employment patterns and practices:
Traditional: Changes in employment:
- Full-time employment contracts - Part-time and temporary employment
- Permanent employment contracts
- Contracts for most workers - Teleworking from home
- Regular working hours each week - Flexible contract hours
- Working at the employer’s place of work - Portfolio working

❖ Redeployment → The action taken by an organization to redirect or reallocate its current human
resources, such as employees.
❖ Reshoring →the practice of bringing outsourced personnel and services back to the location from which
they were originally offshored.
❖ Retrenchment → terminating an employee due to the surplus of labour or incapacity of employees to
match performance standards of the company.
❖ Layoff → workers and staff have been dismissed because they’re no longer needed.
❖ Offshoring → relocating business operations to a different country. Usually because of the low labour
prices, cheap resources or governmental regulations. Aimed to reduce manufacturing costs and other
auxiliary services.
❖ Outsourcing → refers to a process in which the employer transfers responsibilities and risks for HR
functions to a third-party to perform these tasks for the company.
❖ Appraisal → the regular review of an employee’s job performance and overall contribution to a company.

Workforce planning:
- Look into the business objectives
- Analyse the present workforce
- Planning for the future requirements of the workforce
- Developing a strategy to meet these future requirements
Problems: Changes:
- Do you need to replace people who - More people are self-employed
leave? - Increase use of temporary and casual
- Why are people leaving? workers
- Should we promote internally or appoint - More time-part workers
externally? - Increase use of home workers.
- What skills are needed due to changes in Plan:
technology? - Recruitment
- How do we obtain these skills? - Induction
- Do we need to retrain workers due to - Training
changes in technology? - Labour turnover
- Redundancy and retraining need careful - Dismissal
planning since they may cause major - Redundancy
problems. - Legal issues
Recruitment:
The process of identifying the need for a new employee, defining the job to be filled and the type of
person needed to fill it, attracting suitable candidates for the job and selecting the best one.
Process: - Internet
1. Job analysis - Internally (via notice boards and journals)
2. Job description - Local newspapers
3. Person specification - National newspapers
4. Job advertisement - Local shop window
5. Receive applications - Trade journals
6. Short-list applicants Assessing applicants:
7. Interview - Letters of application
8. Appoint - Application forms
Where should we advertise: - Interviews
- Job centres - Tests (aptitude, IQ tests,psychometric).

Training:

On-the-job training:
is conducted while the employee is performing work activities, without leaving the workplace. There are 7
types of on-the-job training:
Induction training: - New employees lack the freedom to
intended for new employees to introduce the job express their opinions
role, personnel policies, facilities, nature of the - The supervisor is taken away from their
work, health and safety regulations and meet main duties.
other workers.
Advantages: Mentoring:
- Employees feel valued and respected the employee is paired with a more experienced
- It helps them become familiar with the worker.
working environment and the job Advantages:
- Employee becomes more efficient more - Training is personalised and advice is
quickly available to trainees
Disadvantages:
- Mentors can get distracted from
responsibilities.

Coaching: Job rotation:

a supervisor guides through the use of The employee works at different positions in the
equipment or a process. company for short periods. The Aim of this
Advantages: training is to give the employee a range of
- Supervisor offers feedback experiences in different departments of the
- Improves efficiency quickly organisation.
Disadvantages: Advantages:
- Reduces boredom
 - Increases skills and job satisfaction
- Opens up new professional opportunities In-house courses:
Disadvantages: the company may organise its own training
- Employee morale may reduce if they courses staffed by its own workers.
prefer their own routine to the new role Advantages:
- Can disrupt workflow - Own employees can be used and are
relatively inexpensive
Apprenticeship: - It improves employee motivation for
This type of training is common in the fields of people who are used as trainers
industry where it takes a long time to acquire the Disadvantages:
skills to perform the work. Trainees work under - Employees may be dissatisfied if they
the supervision of an expert for a long period of need to stay extra-time
time and may also attend university regularly.
Advantages: E-training:
- Has the opportunity to acquire expert the company may use multimedia resources to
skills help employees learn new skills.
Disadvantages: Advantages:
- Takes a longer time and it’s expensive - Cheaper and can learn at home
- No guarantee that the apprentice will Disadvantages:
continue working in that company - Lack of face-to-face interaction

Off-the-job training:
Is the training that takes place away from the employee’s normal workplace. The main advantage is that
it allows employees to focus on the training, but the main disadvantage is it may not provide employees
with skills related closely to the job.
Lectures and conferences:
Involve verbal presentations for a large audience.
Vestibule training:
Employees are trained in a prototype environment near the workplace.
Simulations:
Involved specialised equipment that stipulates the working environment as closely as possible.
Case studies:
Trainees are presented with a case study and related questions they have to think about.
Role-playing:
Some of the trainees in groups are given roles to play.

Type Advantages Disadvantages

On-the-job - It is conducted at the workplace. - It disrupts the workflow.

- It is more affordable. - It takes time away from work for
- It is directly related to the performance supervisors and mentors.
of the work. - It may be conducted after working
 - It is conducted under the supervision of hours, which can cause dissatisfaction.
more experienced employees.

Off-the-job - It is usually conducted by experts in the - It is not directly related to the job
field. context.
- It is professionally organised. - It is expensive.
- The training programme may add value - Trainees may lack the motivation to
for employees if well organised. learn.

Ending employment:
Termination by notice:
- You have a contract and you give notice before the contract comes to an end.
Dismissal:
- This is where an employee has their contract ended because of their actions
- Only if they’ve done something bad (missconduct, lack of ability, etc)
- Firms have to demonstrate that they have done as much as possible to help (2 verbal warnings
and one written warning).
- Unfair dismissal → breach of employment law → goes to industrial tribunals to see if it was fair (eg.
worker is pregnant, discrimination, member of a trade union, criminal record not related to the
job).
Redundancy:
- Not the fault of the worker (eg. house is finished you aren't needed anymore).
- You have to pay a redundancy payment (severance)
- Usually expensive

Appraisal:
The process of assessing the effectiveness of an employee judged against pre-set objectives.
Continuous process to enable a worker to achieve a sense of self-fulfillment.
Why have an effective appraisal system:
- Employee’s performance can be assessed and recorded against his or her targets and job
description.
- Useful tool for staff self-reflection on work-based performance.
- Facilitates management in being able to commend staff for work well done.
- Can assist in identifying barriers that may be impeding performance
- Can assist in identifying training and development to advance employee performance
- New goals and targets can be established
- Professional development needs identified can assist employee career planning
- Useful tool for gauging the suitability of staff for promotions, pay increases and bonuses.
Formative:
- Monitor learning, provide ongoing feedback
- Identify strengths and weaknesses and areas for improvement.
Summative:
- Evaluate learning at the end of a unit by comparison
 - Eg. project, final exam, paper, etc.
360-degree feedback:
- Employees receive confidential, anonymous feedback from the people they work with.

2.2 Organisational Structure:

Organisational structure determines how tasks are divided and coordinated, who employees report to,
who has the authority to define tasks to employees and what the role of each employee is in the
organisation.

Functional structure:

Product structure:

Area structure:
The type of structure separates a business by the areas it operates in. Eg. BBVA is managed by the
USA, Europe, Asia, etc.
Advantages: Disadvantages:
- Can adapt to local customers - Possible conflict between local and
- Encourages cpmètition between central managers
functions - Duplication of some services

Organizational chart:
A visual representation of the hierarchy in a business. Most to least power in a company.
Problems:
- Can be very complicated, static and inflexible
- Does not show the ‘informal’ communication
process works
Useful because:
- They show who is in charge of what
- They make it clear that different people have
different job descriptions
- Highlights too many levels of hierarchy (which
can be overcome by delayering) and too
greater span of control

❖ Delegation → The assignment of responsibility or authority to another person to carry out specific activities.
❖ Span of control → How many people does one person have as subordinates. Number of people each
manager is responsible for.

Types of structures:
What affects organisational structure:
 - The company’s objectives
- Corporate culture

Tall structure:
Simplest form of organisation. They usually have a long chain of command.
Advantages: Disadvantages:
- Employees can be closely supervised - Employees may feel restricted
- Good promotion prospects - High management costs
- Clear management structure - Decisions take longer

Flat structure:
Have fewer layers in them.
Advantages: Disadvantages:
- Better communication - Less chance of staff promotion
- Decision-making is easier - Can hinder business growth
- Reduces labour costs - Roles can be blurred.

Matrix structure/ project base:

Often used for specific projects. It involved creating teams which contain specialists from each area of
business. Suitable for getting experts together for short-term projects. It is run by a project manager and
these team members may come from lots of departments. Once the project is completed, the team
members disband and reassemble to begin another project.
Advantages: Disadvantages:
- Stadd can be allocated roles based on - Teams can be difficult to monitor
their strengths - It can cause possible conflicts between
- It offers flexible methods of working departments
- Allows the firm to be responsive to - Some team members may be isolated
change ini market demand. - May need extra materials.

Centralised structure:
Involves keeping all the major responsibilities at the centre of organisation
Advantages: Disadvantages:
- Senior management have more control - Branch managers have little
- Standard procedures mean cost savings responsibility
- Decisions are made for the good of the - Fewer promotion opportunities
business - Workers don’t feel involved in decisions.
- Helps economies of scale

De-centralised structure:
Involves giving decision-making powers to individual branches of an organisation. The head office will set
targets, but individual branches are free to decide how these targets are met.
Advantages: - Workers tend to be more motivated
- Workers are empowered to make - Branches can respond to change quickly
decisions
Disadvantages: - Large number of managers are needed -
- Senior management lack understanding which may be expensive
of day-to-day decisions - Discourages economies of scale.

Tea Tea
Fina
Mark
HR
ICT
Produ

Why have a formal structure:

Structures determine how well a business will function. Clear structures allow people to see what jobs
people do, how their teams fit together, who and what they are responsible for.
Successful structures: Inappropriate structure:
- Maximise efficiency - Poor communication
- Retain order and command - Decision-making can be slow
- Promote flexibility and creativity - Can hinder the success of the business.

Handy’s Shamrock organisation:

A flexible structure not based on the traditional hierarchical organisation of human resources. A core of
essential executives and workers supported by outside contractors and part-time help'. This structure
permits the buying-in of services as needed, with consequent reductions in overhead costs.
Types of workers:
Core workers:
Core managerial and technical staff must be offered full-time, permanent contracts with competitive
salaries and benefits.
Contractual fringe:
Independent providers who may once have been employed. These provide specific services.
Flexible:
Are temporary and part-time contracts, who are called based on demand. Most likely lose their job in an
economic downturn.

2.3 Leadership and management:

Skills of a manager:
- Excellent communication skills - Firm but fair
- Make decisions - Ability to listen
- Trustworthy - Reliable
- Work under pressure - Works to deadlines
- Motivation - Educated
- Leadership skills - Responsible
- Organised - Initiative

Role of a manager:
- Coordinates work & team members
- Organises
- Plans
- Delegate
- Communicates ideas and expectations

Henri Fayol (1841-1925):

“Scientific management of labour, organisation and production”. He came up with this during the
industrial revolution with el movimiento obrero.
The 5 functions of management:
Other:
Portfolio worker → someone who works on different jobs/
projects at the same time
Shamrock organisation.
Charles Handy (1932):
Big picture vs micromanagement.
3 key roles of management:
- Managers as general practitioners. Can oversee the whole organisation.
- Managers as confronters of dilemmas
- Managers as balancers of cultural mixes

Druker:
“Leaders do the right things, managers do things right”. Decentralisation (autonomy) in the workplace.
Managers not involved in daily activities should have five basic functions.
Decentralisation & simplification - 5 functions:
- Setting organisational objectives
- Organising tasks and people
- Communicating with and motivating people
- Measuring performance
- Developing people

❖ Blue collar workers → work with their hands

❖ White collar workers → work with their brains

Micromanagement by objective (MBO)

- Set corporate objectives
- Set and align employee objectives
- Monitor performance
- Evaluate performance
- Reward employee

Types of Leadership:
A person who inspires others to get things done. An effective leader will promote motivation, respect,
inspiration, etc.
- Autocratic
- Democratic
- Paternalistic
- Laissez-faire

Autocratic (Fayol):
- Leader makes decisions without reference to anyone else. Leader dominates team members and
makes decisions on their own without seeking or allowing input from group members.
- High degree of dependency on the leader
- May be valuable in some types of business where decisions need to be made quickly and decisively.
- Eg. military, schools, hospitals
Advantages: Disadvantages:
- Important in situations of - Can create de-motivation and
emergency alienation of staff

Democratic (Handy):
- Encourages decision making from different perspectives - leadership may be emphasised
throughout the organisation. Leader makes decisions by consulting a team, whilst still maintaining
control of the group.
- Consultative→ process of consultation before decisions are taken.
- Persuasive → leader takes decisions and seeks to persuade others that the decision is correct.
Advantages:
- Can be very motivational and help with involvement
- Workers feel ownership of the firm and its ideas
- Improves the sharing of ideas and experiences within the business
Disadvantages:
- Can delay decision making

Paternalistic:
- Leader acts as a ‘father figure’.
- Paternalistic leader makes decision but may consult
- Believes in the need to support staff.
Disadvantages:
- Employees may feel they are being patronized.

Laissez-faire (Drucker):
- ‘Let it be’, the leadership responsibilities are shared by all. Very little supervision and control. Leader
performs a minimum of leadership functions and lets the group sort out their own roles.
- Relies on good team work
- Relies on good interpersonal relations.
Advantages:
- Can be very useful in businesses where creative ideas are important
- Can be highly motivational, as people have control over their working life
Disadvantages:
- Can make coordination and decision making time-consuming and lacking in overall
direction
- Workers may not appreciate the lack of structure and direction
- Lack of feedback

Situational:
- Will depend on the nature and the task and the work group skills and willingness to accept
responsibility.
 - Varying the style of leadership may be difficult for some workers to accept and they may become
uncertain of how they will be led in different situations
- Allowing flexibility of leadership style depending on what’s needed.
- C.L.O.T.S (culture, leader, organizational structures, task, subordinates) factors that affect
situational leadership.
Disadvantages:
- Can lead to confusion, lack of respect and flow, and conflict in employees.
- Not very stable

❖ Jargon → specific to the people of the job (eg. kinda like an inside joke)

2.4 Motivation:
❖ Intrinsic → something that is natural or inherit
❖ Extrinsic → reward-driven behavior.

Motivation:
Motivation refers to the desire, effort and passion to achieve something. Often referred to the willingness
to complete a task or job with enthusiasm. How managers seek to motivate their employees maximise job
satisfaction, morale and labour productivity.
- Businesses are motivated to meet their objectives
- Workers may be motivated by money, enjoy being with other people, for a sense of status/
importance, to prevent boredom, to satisfy ambition.
Importance:
Workers who are not motivated:
- Workers not motivated may have high rates of absenteeism
- Arrive late
- Produce poor quality products/ services
- Be more careless
- Be slow to react to requests
Workers who are motivated:
- Be loyal (reduces labour turnover)
- Be enthusiastic and offer ideas
- Arrive early and take few days off
- They will assist in the achievement of company objectives.

Taylor’s scientific management:

- Taylor (1856-1917)
- He believed that workers were motivated solely by money
- “A fair day’s pay for a fair day’s work”.
- His ideas became less popular in the 60’s bcs not all workers were there for money; his best
method ideas would not suit everyone; the piece-rate system of payment was not always
appropriate.
“Scientific approach”:
- Select workers to perform a task
- Payment by piecerate
- Observe them, and then note the kew elements
- Record the time taken to do each part of the task
- Train all workers to do the task in the quickest way
- Supervise workers to ensure they use this method
- Pay workers on the basis of results

Maslow’s hierarchy of needs(1908-1970):

He believed that the reason people go to work changes. He believed people worked upwards the
pyramid.
Problems:
- He was not concentrating on business
- Some levels of hierarchy do not exist for
some people
- Some rewards fit into more than one
level
- It can be difficult to recognize which
level an individual us on
- Self-actualisation is never permanently
achieved.
What can business do:
- Physiological → Competitive salary
 - Safety → Safe working conditions, induction training, permanent contracts
- Social → Work social events, team working
- Esteem → Feedback via appraiser, praise/ recognition
- Self actualisation → Allocation more challenging work, delegating responsibility, training, opportunities for
promotion.

Herzberg (1923-2000):
He surveyed 200 people. Two-factor theory. He found it is possible to split the motivator factors into two
factors (not based around money):
- Motivators → eg. chance of promotions, recognition
- Hygiene → things that prevent dissatisfaction. Eg. pay and conditions.
Limitations:
- Improvements in pay will not in themselves motivate workers but to involve them in a production
unit, receive feedback on their performance and give a range of different tasks to complete.
- Providing job enrichment can be very expensive
- Herzberg’s findings were based on a very small sample
- Similar surveys have obtained very different results.

Motivation in practice:
The theorist identifies a range of tools that firms can use in order to motivate employees.
Monetary rewards Non-monetary rewards

Involves rewarding a worker in financial sense Involves giving rewards other than cash.
- Payment systems - Job rotation
- Bonus schemes - Job enlargement
- Staff discounts - Job enrichment
- Flat rate or time-based rate - Quality circles
- Piece-rate or output-based rate - Participation
- Commission - Quality circles
- Profit sharing (paid for the success of the - Flexi-time
company) - Perks and status symbols
- Share options - appraisals

Adams and Equity theory (1963):

States that people will be motivated
when they perceive that they
are being treated fairly; the idea that employees try to maintain equity between inputs and outputs
compared to others in similar positions.
- People become demotivated, seek change and improvement, and/or reduce input whenever they
feel their inputs are not being fairly rewarded.
- Fairness is based on perceived market norms.
- Workers will naturally compare their efforts or rewards to those of others in the workplace.
- Each worker should receive remuneration
- The degree of quality of equity is based on the ratio of inputs (eg. expertise, experience,
enthusiasm and effort) and outputs (remuneration, recognition, rank, praise, responsibilities).
- Workers were only motivated if this ratio was fair.
Equity norm:
- refers to the workers expect an equitable remuneration for their contribution
Social comparison:
- Workers determine what is fair based on comparison with others.
Cognitive distortion:
- Workers who feel demotivated because they put in more than what they get.

Pink’s drive MAP theory (2007):

Pink believes that a “carrot (rewards) & stick (punishments)” approach is the worst way to motivate
workers.
Mastery: urge to get better and better at something that matters.
Autonomy: the desire to direct our own lives
Purpose: yearning to do what we do in the service of something larger than ourselves.

Taylor Maslow Herzberg

- Scientific management - Self actualisation - Hygiene

- One best way (money) - Sense of belonging - Job enrichment
- Payment by piece rate - Safety needs - 2 factor theory (motivation and hygiene)
- High division of labour - Hierarchy of needs - Reward becomes a right

Adams Equity theory Pink’s drive MAP theory Motivation in practice

- Equity norm - Mastery - Monetary rewards

- Social comparison - Autonomy - Non-monetary rewards
- Cognitive distortion - Purpose

2.5 Organisational Culture (HL):

Corporate Culture is largely based on the beliefs, values and attitudes of the management and
employees. Includes: punctuality, dress code, or whether smoking is acceptable. Represents the
character or personality of an organization. The strength of an organization's culture depends on the
degree of unity among the staff:
- Creating a sense of belonging and security for staff that improves motivation and teamwork
- Promoting cohesiveness so people do things as they feel that it is the right thing to do.
 - Reducing mistakes and misunderstandings as staff are familiar with the processes at work.
- Minimising problems associated with a culture gap so that conflict and misunderstandings
between different groups are curtailed.

Elements of Corporate Culture (NORMS):

Nature of the business:
- Purpose and direction of the organization, derived from its mission, aims and objectives.
Organizational structure:
- Tall or flat structure
- Centralized or decentralized, etc.
Rewards:
- If employees are appropriately remunerated for their efforts, the organization is more likely to develop a
strong and united culture → motivated workforce who strive to achieve the organization's objectives.
Management styles:
- Fayol, Henry, Druker.
Sanctions:
- An organization with few sanctions can encourage staff to be slack, but one that is too rigid may
cause staff to feel resentful of the management.

❖ Cultural intelligence or cultural quotient → the ability for an individual to blend into occupational,
corporate and national cultures.

Types of organizational culture:

- Edgar H. Schein
- Charles Handy
- Deal and Kennedy
- Goffee and Jones
- Geert Hofstede

Edgar H. Shein:
He is credited for coining the term corporate culture. There are three levels of corporate culture:
- Artefacts are superficial and behavioural aspects that can be easily seen but not necessarily
easy to understand (eg. history, buildings, facilities, dress code)
- Espoused values are the desired or expected corporate culture. Values that the organization
feels are important and staff are committed to (eg. mission statement, slogans)
- Shared basic assumptions represent the deepest level of culture. The one that is not seen or
easily identified as it is so well integrated. Reveals the actual values demonstrated through
behaviour, rather than espoused values and philosophies.

Charles Handy (1978):

The culture used to run an efficient chocolate plant is different from that used to run a primary school.
There are four types.
Power cultures:
- When there’s a dominant individual or group holding decision-making power.
 - It is likely to be flat with a relatively wide span of control
- Formal job titles or positions may not be highly regarded because decision-making power only
exists with very few.
- Decision-making is very swift, especially as there is little bureaucracy.
- Eg. signs of power can be parking spaces and private toilets.
Role cultures:
- Exist in highly structured organizations with formal rule and procedures
- Job roles are clearly stated in formal job descriptions and there is clear accountability.
- Power is developed depending on the formal position that the individual holds
- Eg. schools and colleges
Task cultures:
- Exist in organizations where the focus is on getting results from the work done.
- There is no single source of power → individuals and teams are empowered and have some discretion over
their responsibilities
- Formal job titles are seen as less important than the contribution that individuals make to
competing tasks.
- They promote problem solving through flexible and dynamic teams, often make up of
representatives from different departments based on their expertise.
Person cultures:
- Exist in organizations when staff in similar positions with similar expertise form groups to share
their knowledge and skills.
- Found in larger organizations with different branches (eg. commercial retailing, lawyers, etc.)
- Only exist for the benefit of the individuals involved, although the organization can indirectly
benefit from the creativity and the sharing of good practice amongst the members.

Deal and Kennedy (1982):

Described corporate culture as the way things get done. Two-dimensional framework:
Feedback and reward:
- Looks at the speed of feedback and the level of rewards within an organization
- Rapid feedback → unproductive conduct and inconsistent culture is quickly removed.
- Can be stressful working in such organizations because there is a high degree of risk and
uncertainty as results take so long to materialise.
Process culture:
- Exists in organizations where there is slow, little or no feedback with low risks.
- Bureaucracy exists and people become caught up with how things are done (paying attention to
detail) rather than focusing on what should be done.
- Eg. government departments and insurance companies.

Kotter and Heskett (1992):

There are two types of culture:
Adaptive cultures:
- Are receptive to change and exist in organizations that adapt themselves to change.
- Staff and management are encouraged to be entrepreneurial and to take risks without blame.
- Eg. Google.
Inert cultures:
- Are resistant to change and inward looking
- Exist in organizations that hold negative values of any change in their cultures.
- Promote inertia (disinterest and opposition) rather than being proactive to changes in the business
environment.

Goffee and Jones:

Two dimensions of culture. They argue that the ideal culture has both high sociability and high solidarity.
Sociability:
- Refers to the extent to which people have concerns for their colleagues.
- A culture with high sociability tends to focus on ‘people’ whereas a low sociability culture places a
greater focus on completing tasks.
Solidarity:
- Refers to the degree of unity in an organization, such as whether people share the same values
and have common interests.
- High solidarity aids harmony and efficiency in the workplace. Low solidarity implies self-interest
takes priority → high levels of internal conflict, uncooperative behaviour and/or inefficiencies.

Geert Hofstede:
There are five dimensions of culture:
Power distance:
- Measures the extent to which subordinates expect and accept unequal distribution of power within
the organization.
- Low power-distance rating (eg. scandinavian countries) reflects the society’s view that people
should have equal rights.
- High power-distance cultures tend to have centralized decision-making, whereas low power-
distance cultures tend to be decentralized, with delegation and empowerment.
Individualism versus collectivism:
- Measures the extent to which people feel they should care for themselves or be cared for by the
family network and society.
- Consider the extent to which people feel it is their responsibility.
Masculinity versus femininity:
- Measures the extent to which a culture conforms to traditional gender values.
- Eg. usually dominated by males (aggressiveness, competitiveness, ambition, selfishness and
materialism) or females (focus on relationships and overall quality of life).
Uncertainty avoidance:
- Measures the extent to which people in an organization or country prefer structured routines over
flexible structures.
- High uncertainty avoidance cultures have strong customs and habits. They tend to favour formal
structures, rules and regulations and tend to remain loyal to their employers.
Long-term versus short-term orientation:
- Measures the extent to which a particular culture values making sacrifices today for the benefits to
be reaped in the future.
 - Those with long-term orientation invest for the future, have perseverance and are patient with the
results.

Culture clashes within organizations:

Exist when there is conflict or incompatibility between two or more cultures within an organization. Can
exist when firms merge, when a business expands overseas, change in leadership.
Reasons for clashes:
- Growth of firms
- Mergers and acquisitions
- Change in leadership
Consequences:
- Misunderstandings and miscommunications
- Unhappy staff
- Compromises must be reaches
- Resistance to change
- High cost of training staff and implementing change
- National culture clashes/disputes

Individuals and organizational culture:

The challenge for leaders is to influence people within the organization to follow or to shape a shared
vision and corporate culture. Strategies to achieve this include being a MOVER:
Mentor:
- Leaders act as mentors by sharing knowledge and expertise, and supporting their people to
mould a healthy organizational culture.
- Helps build trust within the organization.
Outreach:
- Communicating the vision to all members of the organization, so everyone moves in the same
direction and stands for the same values
Vision:
- Without knowing where the business wants to be, it is impossible and pointless trying to guide and
motivate staff
Engaging:
- The desired corporate culture must engage and excite the workers, perhaps by nurturing a sense
of self-worth and commitment to the strategic goals of the organization.
- Empowering others also means a greater number of individuals can help to shape the
organizational culture.
Role modelling:
- Effective leaders lead by example.
- Being a role model to others in the organization, the leader can drive and develop the desired
culture.

2.6 Employer and employee relations:

Poor working relationships often lead to low morale and conflict. Extreme actions taken by the disgruntled
workforce include strike action or even rioting.
❖ Collective bargaining → the process by which pay and conditions of work are settled by negotiations
between employers and employees, or by their respective representatives.
❖ Negotiation → bargaining process whereby two or more parties attempt to achieve a mutually acceptable
result. These tend to focus on the terms and conditions of employment.

Trade union (labour union):

Organizations whose members unite to protect their rights and welfare. From an employer’s perspective,
it is also cheaper and quicker to bargain with just one representative than many individual workers.
Role:
- Protect the interests of their members
- There is a subscription fee that covers the costs of legal advice, disputes, etc.
Main issued they solve:
- Negotiating with employers for increased pay and benefits.
- Improving conditions of work
- Supporting members with necessary legal advice
- Providing financial support
- Upholding the rights of their members
- Pressuring employers to ensure that equipment and machinery is safe to use