Organizational Structure and Leadership Style Final PDF

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ORGANIZATIONAL STRUCTURE AND LEADERSHIP STYLES Course Title: Principles of Management Course ID: MGT201 Section: 03 Semester: Spring, 2019 Submitted to: Ms. Sumita Das, Senior Lecturer of Management, School of Business, IUB Date of submission: 30-03-2019

Group name: CONSTANT Student’s Name

Student’s ID

Ashadul Al Akib

1821641

Sadia Sikder Shwatee

1720797

Sadiya Afrose

1821361

Humyra Rashid Meem

1711189

Ishrak Rahman

1610941

Safina Tuz Zohora Mishka

1821128

Sajib Ahmed

1730460

LETTER OF TRANSMITTAL To: Ms. Sumita Das Senior Lecturer Independent University, Bashundhara R/A Dhaka, Bangladesh

Date: 30 March, 2019.

Subject: Submission of report on “Organizational structure and Leadership Styles”.

Dear Madam, With due respect, it is our pleasure and honor to be your students and have this opportunity to present a report on “Organizational structure and Leadership Styles. While preparing this report, we have given our best effort throughout the topics. We have provided all relevant information and we believe and hope that our report will provide a clear conception about the aforementioned topic. We all gave our best to accumulate required information and we will be more than happy to answer any questions and clarify it fully to your understanding. Thank you for all your help and support which enabled us to prepare this report. Regards, CONSTANT

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ACKNOWLEDGEMENT In completing our report, we had to take the help and guideline from our respected faculty who deserves our greatest gratitude. The completion of this assignment gives us much pleasure. We would like to show our gratitude to Ms. Sumita Das, Senior Lecturer, Independent University, Bangladesh, for giving us a solid guideline for this report through numerous consultations. We would also like to expand our deepest gratitude to all those who have guided us directly and indirectly in writing this report. Many people, especially our team members, have made valuable comments and suggestions on this assignment which gave us an inspiration to improve our task by a large margin. We thank all the people for their contribution to our report.

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TABLE OF CONTENTS LETTER OF TRANSMITTAL...............................................................................................1 ACKNOWLEDGEMENT.......................................................................................................2 1.1 EXECUTIVE SUMMARY................................................................................................5 1.2 INTRODUCTION..............................................................................................................6 1.3 PROPERTIES OF MECHANISTIC AND ORGANIC STRUCTURE........................7 1.4 ADVANTAGES AND DISADVANTAGES OF MECHANISTIC STRUCTURE........8 Advantages of Mechanistic Structure:...............................................................................8 Benefit of specialization.....................................................................................................8 Proper discipline.................................................................................................................8 Minimize supervision cost.................................................................................................8 Quick decision and implementation...................................................................................8 Network position................................................................................................................8 Fixation of responsibility...................................................................................................9 Effective management........................................................................................................9 Disadvantages of Mechanistic Organization:....................................................................9 Work overload on manager................................................................................................9 Autocratic leadership.........................................................................................................9 Static and rigid...................................................................................................................9 More formalization.............................................................................................................9 Impractical decision.........................................................................................................10 One-way communication.................................................................................................10 Difficulty in coordination.................................................................................................10 1.5 ADVANTAGES AND DISADVANTAGES OF ORGANIC STRUCTURE................11 Advantages of Organic Structure:....................................................................................11 Decentralization of authority............................................................................................11 Free flow of information..................................................................................................11 Feeling of team work........................................................................................................11 Wide span of control........................................................................................................11 Adaptable in dynamic environment.................................................................................12 Increase efficiency............................................................................................................12 Disadvantages of Organic Structure:...............................................................................12 Lack of coordination........................................................................................................12 Complex of decision........................................................................................................12 High administrative cost..................................................................................................13 Spoil human relation........................................................................................................13 3

Unpredictable working process........................................................................................13 Difficult to control............................................................................................................13 1.6 LEADERSHIP STYLES..................................................................................................14 Contemporary views of Leadership:................................................................................14 Transactional Leadership.................................................................................................14 Transformational Leadership...........................................................................................14 Charismatic Leadership....................................................................................................14 Visionary Leadership.......................................................................................................14 Team Leadership Characteristics.....................................................................................14 1.7 COMPARISON BETWEEN TWO ORGANIZATIONS.............................................15 Robi Axiata Limited:..........................................................................................................15 Leadership Style of Robi:..................................................................................................16 Adcomm Limited:..............................................................................................................17 Leadership Style of Adcomm Limited:............................................................................18 1.9 CONCLUSION.................................................................................................................19 2.0 REFERENCES.................................................................................................................20

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1.1 EXECUTIVE SUMMARY In this assignment, we were given the task to select two companies with different organizational structures and give explanations on how these two companies operate due to their respective organizational structure. The assignment also asked for the clarification of leadership style and provide validation of the suitability of the leadership style with the firm.

The companies we have chosen for this particular project are called Robi Axiata Limited, which is the second largest mobile network operator of Bangladesh and Adcomm Limited, the oldest and currently one of the largest advertising agencies in Bangladesh.

After surveying and carefully studying these two firms, we found that Robi Axiata Limited have a mechanistic structure and follow a visionary leadership style. On the other hand, Adcomm have an organic structure in place and they are following a transactional leadership style.

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1.2 INTRODUCTION Organizational structure is the formal arrangement of jobs within an organization. This structure, which can be shown visually in an organization chart, also serves many purposes. When managers create or change the structure, they’re engaged in organizational design, a process

that

involves

decisions

about

six

key

elements:

work

specialization,

departmentalization, chain of command, span of control, centralization and decentralization, and formalization[CITATION Rob14 \p 358 \l 2057 ].

Having a proper organizational structure will help a company to implement legitimate operating procedures and decision-making processes and that will assist the organization to accomplish its goal. Therefore, an organization must choose among a structure that is convenient for its individuals and help adapt to uncertainties and changes in internal and external environment.

To tackle the uncertainties and changes in an organization, Tom Burns and George Stalker introduced two basic type of organizational structure: Organic and Mechanistic. Burns and Stalker claimed “a mechanistic management system is appropriate to stable conditions” whereas an “organismic form is appropriate to changing conditions, which give rise constantly to fresh problems and unforeseen requirements for action which cannot be broken down or distributed automatically arising from the functional roles defined with a hierarchic structure”[ CITATION Gor11 \l 2057 ].

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1.3 PROPERTIES OF MECHANISTIC AND ORGANIC STRUCTURE

The mechanistic organization (or bureaucracy) was the natural result of combining the six elements of structure. Adhering to the chain-of-command principle ensured the existence of a formal hierarchy of authority, with each person controlled and supervised by one superior. Keeping the span of control small at increasingly higher levels in the organization created tall, impersonal structures. As the distance between the top and the bottom of the organization expanded, top management would increasingly impose rules and regulations. Because top managers couldn’t control lower-level activities through direct observation and ensure the use of standard practices, they substituted rules and regulations[CITATION PRo14 \p 368 \l 2057 ].

The organic organization is a highly adaptive form that is as loose and flexible as the mechanistic organization is rigid and stable. Rather than having standardized jobs and regulations, the organic organization’s loose structure allows it to change rapidly as required. It has division of labor, but the jobs people do are not standardized. Employees tend to be professionals who are technically proficient and trained to handle diverse problems. They need few formal rules and little direct supervision because their training has instilled in them standards of professional conduct [CITATION PRo14 \p 368 \l 2057 ]

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1.4 ADVANTAGES AND DISADVANTAGES OF MECHANISTIC STRUCTURE

Advantages of Mechanistic Structure: Benefit of specialization In mechanistic organization, activities are divided into different groups on the basis of common nature. Works are divided among the subordinates on the basis of their skills and efficiency. The use of specialization helps for proper utilization of resources and maximization of productivity [ CITATION Bhi15 \l 2057 ]. Proper discipline In this organization structure top level management has centralized power. There is system of chain of command from top level to subordinate levels. Subordinates are responsible for their immediate superiors. Therefore, all the subordinates perform activities according to best of their ability[ CITATION Bhi15 \l 2057 ]. Minimize supervision cost In mechanistic organization, works are divided among the employees on the basis of their specialization. It means right job is assigned to the right person. It helps to minimize supervision cost as all the subordinates perform activities according to best their capabilities[ CITATION Bhi15 \l 2057 ]. Quick decision and implementation In this organization only top-level management involves in decision making process. It does not consult with subordinates in decision making process. Therefore, quick decision and its implementation become possible. And in this competitive market environment, quick decision and its implementation is essential for business success[ CITATION Bhi15 \l 2057 ]. Network position There is the provision of network of position in management hierarchy. Top level management provides instruction and guidance to middle level managers, middle level managers to lower level managers and again lower level managers to operating level employees. This network is taken into consideration while communicating information. It helps for timely flow of information[ CITATION Bhi15 \l 2057 ].

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Fixation of responsibility In this organizational structure, each individual has given specific responsibility on the basis of ability. He can neither transfer job to others nor avoid it. Thus, the concerned employee needs to accomplish given job himself. It develops the feeling of self-responsibility among the employees[ CITATION Bhi15 \l 2057 ]. Effective management It is a bureaucratic form of organization structure. In this organization, there are specific rules, regulation, policies and working system. The top-level management has sole authority in decision making process. There is system of chain of command from top level to subordinate levels. Therefore, manager can manage the organization in effective way[ CITATION Bhi15 \l 2057 ].

Disadvantages of Mechanistic Organization: Work overload on manager In mechanistic organization there is the provision of centralized authority and decisionmaking authority is vested in top level manager. Besides, manager needs to involve in day to day supervision and guidance. Hence it maximizes work overload on manager due to which he cannot involve in creative and innovative works[ CITATION Bhi15 \l 2057 ]. Autocratic leadership Mechanistic organization emphasizes to autocratic leadership. The system of delegation of authority to subordinates on the basis of given responsibility is not prevail. Subordinates need to accomplish given job. They have no right to provide suggestion and information to manager. It does not support for expansion and diversification of business[ CITATION Bhi15 \l 2057 ]. Static and rigid It is a static, rigid and tightly controlled structure. It emphasizes on standardized activities. There is no provision of change in working system and procedures on the basis of changing environment of the society. In such cases it is more difficult to adapt the organizational activities in dynamic environment[ CITATION Bhi15 \l 2057 ]. More formalization There is provision of rules, regulation and policies for official activities. All subordinates need to work in accordance of specified rules and policies of the organization. They cannot use their skill and efficiency while doing work. The fulfillment of more formalization makes 9

difficulty for quick decision and smooth functioning of the organization[ CITATION Bhi15 \l 2057 ].

Impractical decision There is no provision of participation of subordinates in decision making process. They have no right to provide suggestion and information to managers at the time of taking decision. Only top-level managers are involved in decision making process. Since limited persons are involved in decision making, there is possibility of impractical decision[ CITATION Bhi15 \l 2057 ]. One-way communication It emphasizes in autocratic leadership. The information is communicated vertically only from top level to subordinate levels. Here only the manager provides information of instruction and guidance to subordinates. Such one-way system of communication does not support for smooth functioning of the organization[ CITATION Bhi15 \l 2057 ]. Difficulty in coordination In this structure, specific work is assigned to individuals on the basis of their skills. They perform the given task properly. However, there is no mechanism of maintaining coordination over their performance. Hence top-level management needs to spend more time[ CITATION Bhi15 \l 2057 ].

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1.5 ADVANTAGES AND DISADVANTAGES OF ORGANIC STRUCTURE Advantages of Organic Structure: Decentralization of authority Organic organization emphasizes on decentralization of authority. It initiates on participative decision making where top level management invites subordinate to provide suggestion, information, and ideas in decision making process. Subordinates can implement decision according to best of their ability[ CITATION Bhi151 \l 2057 ]. Free flow of information One of the advantages of organic structure is free flow of information within organization. There is the system of two-way communication. Top level management provides information of instruction and guidance to subordinates and similarly, subordinates provide information to the manager about achievement and problems in work. Such two-way communication helps to solve problems and to bring smoothness to performance[ CITATION Bhi151 \l 2057 ]. Feeling of team work Organic organizational structure emphasizes on team work. Works are divided into different groups on the basis of common nature and each group of work is assigned to team, members of which have diversified skills. They work together for achieving common goals through mutual support [ CITATION Bhi151 \l 2057 ]. Wide span of control Wide span of control is one of the advantages of organic organization. It emphasizes on specialized team performance. Team members are expert in their own area of performance. They are independent and responsible for completion of given jobs. They do not require close supervision, only just simple instruction and guidance can become sufficient to them. Thus, it helps to minimize supervision cost [ CITATION Bhi151 \l 2057 ].

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Adaptable in dynamic environment Flexibility is one of important advantages of organic structure. It emphasizes on specialized jobs, but those jobs are not rigid and can be changed on the basis of requirement. Work is frequently organized around team of employees as it is needed. Such redefinition of tasks helps to adapt in accordance of changing environment of the society [ CITATION Bhi151 \l 2057 ]. Increase efficiency In this structure employees are highly trained and empowered to handle various activities and problems independently. They need to consider minimum formal rules and regulations and smal...