Sainsbury's organizational structure.
Task 3 (E4, C2, A1)
Sainsbury's organizational structure
Businesses are structured into different into ways according to the way they operate and according to their culture. The structure of business can affect the way it works and performs. You need to understand the differences between the following types of structure:
* Tall
* Flat
* Matrix
* Hierarchical
Flat and tall structure:- The term 'scalar chain is a rather old fashioned one and stems from the days when large organizations were bureaucratic, with lots of layers between the top and bottom. Scalar chain refers to the number of levels within the structure or hierarchy of an organization. The scalar chain set out the authority, responsibility and the framework that determined superior and subordinate relationships. The idea of setting out everyone's role and position is to make it clear who is responsible for what, and that there is clear line of authority.
Matrix structure:- A matrix structure can be used to combine the grouping method we have identified. In such a matrix it is probable that each member of the organization will belong to two or more groups. A matrix is thus a combination of structures, which enables employees to contribute to a mix of activities. The matrix enables the organization to focus upon a number of aims at the same time, and gives it the flexibility to respond to new markets where there is an increase in demand for its goods and services.
Hierarchical: - Hierarchical is the traditional way of developing an organization that was so popular for much f the twentieth century. The hierarchy in the business is the order or levels of management, from the lowest to the highest rank. It shows the chain of command within the organization (i.e. the way authority is organized). Orders pass down the levels and information passes up. It is generally held that, the greater the number of levels in the hierarchy, the less effective the communication process is.
Organization Structure of Sainsbury's
The organizational structure of Sainsbury's is hierarchical because there is series of levels of people and the level above controls each level. Each level is the responsibility of the level above. For example senior managers are responsible for the line managers and line managers are responsible for sales assistants. The diagram below shows the downward flow of communication in Sainsbury's.
I think Sainsbury's structure is between hierarchical and tall structure. Tall structure has many layers but not as many layers as matrix structure and as less as flat structure and this means the information is not a s fast in flat structure and not as slow as in matrix structure. Due to fast flow of communication it is easier and clear between each layer. This when decisions are made they will be specific to order instructions.
Strengths of Sainsbury's structure
* It gives them a greater sense of unity and purpose as they can see themselves as members of a team.
* It is easier to get help, as they can ask experienced colleagues or take more difficult problems to boss.
* It makes easier to carry out joint projects as everyone involved is working together.
* There are economies of scale as specialist staff can do more work efficiently.
* Communications from top to bottom are better, as there are definite channels through which orders can flow.
Weakness of this structure
* Hierarchies usually have tall organizational structures with seven or eight levels of authority. This means that there is long chain of command.
* Each employee is concerned mainly with his or her own function, or specialized work, and often has only employees in other departments.
* There is natural tendency for managers to protect the interest of their own department. This may make them more concerned with office politics than with the interests of the whole firm.
* The hierarchical system emphasizes status. This creates divisions in the firm, which are reflected in separate car-parking spaces for managers, longer holidays for white-collar workers and separate canteen for blue-collar workers.
MANAGEMENT STYLE AND CULTURES
(Diagram taken from AVCE Bus. Pg 82)
Management is the process of influencing people so that they will perform a variety of tasks in effective manner. It is therefore crucial to have a strong leader who can inspire and motivate the employees. In big organizations such as Sainsbury there are many different style of management that could be used but there are three basic categories of management styles. These are:
* Autocratic Management
* Democratic Management
* Consultative Management
Autocratic management
This is often referred as an authoritarian management style. The autocratic management style is one where the manager is used to give instructions. Telling his employees what to do rather than asking their opinions. The manager is the only person contributing to the decision making process. The managers are used to hold on to the power, and do not understand how the process of 'empowerment' might work.
Democratic management
This style management involves empowerment. Individuals and teams are given the responsibility to make decision, usually within a given framework. The team is then responsible for the decision that it chooses to make. The manager with this style will feel comfortable allowing others to make decisions. However, they will be confident that empowered individuals and teams will use the responsibility given to them.
Consultative management
The managers in this style management are ones who seek to consult other people before making a decision. This type of managers wants to draw on more sources of opinion that just him or her. The consultative managers will have listening skills and also the ability to create the right sorts of channels to consult other people. In an organization with consultative management, there will be a series of mechanism (e.g. news, letters, suggestion boxes etc) that makes it possible to get the feel of the concerns of other people involved in the decision making process, as well as to draw on their expertise.
Sainsbury's management style
From my interview with John Davies manager at the Oadby branch (Leicester) I found that Sainsburys operate in a democratic management style as team managers are arranged so ideas and problems can be put forward and dealt with a s a team. These meetings are mostly informal. Although John believed that the company is operated in democratic style, so I talked to employees lower down in the company and asked them about their opinion. I got a different reaction from them; they thought that Sainsbury's is operated in more of an autocratic management style, whereby managers tell people what to do instead as asking their opinions. This is interesting to look at, the managers believed that employees are responsible to make their own decisions and employees believe that mangers order them to do things. I also think that in some situation Sainsburys use other styles. For example if an employee is underachieving and not contributing as much s he or she should, it is not other employees who have to make the decision on if the guilty employee is worth keeping in the business or not. That decision will be down to the manager. There are several managers spreading up the hierarchy. This means that every manager (expect the chairman) has some decisions made for him or her and other decisions they have to make. Also these decisions are made for them so are going to involve them or are going to be straightforward decisions that they have no say in it.
As I said before that with the views from employees at Sainsbury's I found that the decisions are made in head office where departments managers are not involved, they pass the message to the store where department manager discuss the matter with their assistant managers or supervisors where other employees are not involved so in a nutshell we can say that employees are not involved in any discussion between managers and supervisors as they are told to do things and managers are not involved in discussions made between CEO and directors. So in the end we can say ...
This is a preview of the whole essay
As I said before that with the views from employees at Sainsbury's I found that the decisions are made in head office where departments managers are not involved, they pass the message to the store where department manager discuss the matter with their assistant managers or supervisors where other employees are not involved so in a nutshell we can say that employees are not involved in any discussion between managers and supervisors as they are told to do things and managers are not involved in discussions made between CEO and directors. So in the end we can say that Sainsbury's is using a mixture of democratic and autocratic management style.
Types of organizational cultures
All organizations have a set of values, attitudes and beliefs. These make up what is called business or corporate culture. This describes the way the organization works. The corporate culture will determine they way in which the business operates and how it interacts with both its employees and other business with which it deals. Culture will affect business objectives and structure. Cultures are founded and built over the years by the dominant groups in an organization. There are four types of business cultures:
(Diagram taken from AVCE Bus. Pg 23)
Power culture
This is also known as web structure. This is usually associated with the small organizations. This is where the central character, usually the founder has all authority and is typically surrounded by people they get on with and usually seen with empowerment since there is lot of trust between the web. There is a central power source and the rays of influence spread out from that central figure. In this type of organization individuals rather than a group make all the decisions. The danger of this sort of culture is that, because it is autocratic, there can be a feeling of suppression and lack of challenge in the workforce. Since this is associated with small organizations there are not many theories associated with it and are only seen in smaller companies, which shows it, will only work on small scale.
Role culture
The role culture is typical of bureaucracies. In the role culture, the jobs that people do- their roles - are more important than the people themselves. Managers have power and influence due to their status within the organization and not because of personal influence or expertise. Business would be divided into various functions
(e.g. finance, marketing, production etc.). These would then have a hierarchical ordering of offices (e.g. Finance director, Production manager, Supervisors, operators etc.). Role cultures can only be successful where the environment in which the business is operating remains stable. Where a business faces rapid change, the role culture is likely to collapse. The large organizations, which can be difficult to control often have a role culture.
Task culture
Task cultures have become very important in business in the first decade of twenty first century. The task culture focuses on getting the job done. Groups or teams within this culture are not fixed but are made up of individuals brought together to achieve a specific task.
In the task culture there is a strong emphasis on building the team. Team members will need to share values and aspirations. They will also need to feel valued by the organization they work for.
In task culture, teams will often have considerable input in determining how a particular job will be done. Their views and opinions will be listed.
Person culture
In a person culture, individuals are central. Person culture is also known as cluster structure. This is very rare and is only associated to small organizations with very short structures and an extremely wide base. This is because they are usually conjoined with the organizations that are specialist in many different areas (universities, many lawyers and scientific researching) there is no real rules, only law associated with the types of experimenting and research.
Sainsbury is a varied company and I don't feel it can safely be placed into any of these categories, but I will say it's a mixture between Role culture and Task culture. Since Sainsbury is a big organization there can be many things at once, I feel Sainsbury has taken the best attributes of the two and made their own Sainsbury's culture. This includes: -
* Very tall and board structure but with many web links.
* Strict communication channels low down.
* Jobs, not people lowdown (but they do get their say when needed).
* Jobs suited to the task in the central range.
* Communication between departments by knowledgeable workers (not manual laborers).
* Formal communication going up the hierarchy.
All these are associated with the two cultures and so Sainsbury can't be defined to one group. Since Human culture is a mixture of hundreds of separate culture trying to produce the best of all words. In my opinion Sainsbury's would more suite the Role culture since the formal structure also emphasizes this by adding a rigid structure you add a formality quality or a freedom associated with the person, thus the job is more than the employee, which is the role culture. These two also dictate the management style because Role culture has important job. There is communication with the job not the person, this is autocratic because the person has no say. The structure means there is a formality also so Sainsbury is a formal business and this means all jobs are done in formal and this should increase production by having quick workers who don't have to think. All the difference influences each other because they all have an effect on certain aspects of the company. They all knock on to each other and manipulate the finer points of each.
Changes
Recent studies have shown a correlation exists between a strong organizational culture and organizational effectiveness. In fact, some studies question the relative benefit of leadership to organizational effectiveness versus a strong organizational culture. There fore a leader can improve or maintain organizational productivity when armed with an understanding of its culture. Structure, culture and management also affect the objectives of the business.
* Structure
* Culture
* Management style
Structure: - If a company is clustered then the objectives will be very similar but specifically different and minutely unique to each section. Whereas Sainsbury's having a formal structure, the objectives will be different for each department and segmentation because they are closed off and separated from the company as whole.
Culture: - If the culture will be power culture the objectives will be set by the manager and will probably be unique and self-satisfying to him/her. Sainsbury has a mixture of role culture so there will specific targeted objectives set by each manager for each type of job.
Management style: - If a company adopts the consultative style, then the person may well set the objectives and this would mean a lesser extant of pushing to achieve objectives.
In my opinion Sainsbury uses a mixture of two types of management style. First being autocratic means the objectives would be set up and to a good standard, they will want the most work out of their subordinates, to gain maximum value. For the key areas of operations.
Sainsbury is using autocratic management style, for setting its objectives, policies at top management level.
They also use democratic management style. These would be set to gain maximum revenue they would want this and strive to get this because this style is associated with the managerial levels and will mean they get bonuses.
For overall working of the organization at middle management levels and lower management levels, the style of Sainsbury is democratic, because the area of operations is widely decentralized and for the implementation of policies in thee different segments, policies should be consulted with the local personal, which are specially appointed for this purpose. As they know the inner constraints, strengths of that particular segment.
(C2) Relationship between structure, culture and management style
Organizational Structure: - This is the pattern of work roles and the ways of administration of the organization within the set of duties, responsibilities, following the rules and regulations, so businesses are structured in different ways according to the way they operate and according to their culture.
Culture: - Culture of an organization is set of behaviors and value system that characterizes an organization. So organization culture is very much related with the way people in the organization interact with each other.
Management Style: - The management style is the typical pattern of behavior of the manager, which he or she performs while performing management roles. So management style on the other hand effects the gripping of power approach towards subordinates and implementation of the work mechanism.
Work culture is directly affected by the organization structure as it takes the rules and regulations, duties and responsibilities from the organization. Similarly management style is also affected by organization structure because the management style depends upon the degree of authority responsibilities vested in the hands of the manager. The duties and responsibilities authorize are strictly defined in the organization structure. For e.g. in Hierarchy structure or tall organization structure management style will be mixture of autocratic. In decentralized organization the structure the management style will be democratic and in the flat organization structure the management style will be consultative because the number of persons to be managed will be very few and easy to managed.
Culture
Organization structure
Management style
Role
Functional structure
Democratic
Power
Centralized structure
Autocratic
Task
Matrix structure
Democratic
Person
Centralized
Autocratic
Similarly the organization culture is also having the impact upon the management style and organization structures. If there is a power culture prevalent then there will be the centralization of power, management style will be autocratic and organization structure will centralize.
Under the role culture where all the members are divided according to their roles, here the organization structure will be functional organization structure and the style will be democratic.
Under the task culture, organizational structure will be matrix organization structure and the style will be democratic.
Under person culture, the organization structure will be centralized and the style will be autocratic.
As the Sainsbury is a multinational company dealing with different segments and diversified products network it is following role and task culture. Thereby its organizational structure is decentralized and the management style is democratic. To the greater extant except a few key decisions, which are strictly reserved for the top management in which, they are autocratic for e.g. financial policy and dividend policy.
In the nutshell we can say that the organization structure acts as the nerve system or the mind of an organizations from where the whole organization takes instructions, rules and regulations, duties and responsibilities. The organization cultures acts as respiratory system and digestive system, which extracts the best ingredient from the internal and external environment for the successful working of the whole organization system.
On the other hand management style acts as the blood circulation system, which provides the whole system with the best ingredients of leadership. So as these three systems are interrelated, similarly the organization structure, culture and style are interrelated.
(A1) An evaluation of the impact of the organizational structure, culture and management style upon the performance of J Sainsbury.
I think that the impact of the organizational structure has an excellent impact on Sainsbury due to the staff of Sainsbury working hard and being highly motivated in the work that they do, and the customer service that they provide for the customers that shop at Sainsbury. This is due to the human resources function of Sainsbury recruiting staff that they feel is suitable to work at Sainsbury, this could be due to the experience, qualifications, and availability of the member of staff working at Sainsbury.
The finance function helps Sainsbury by the accountants keeping accounts up to date, this is an advantage because this has an impact on Sainsbury by enabling it to see if the financial factors of Sainsbury are improving or declining, and if new targets should be set, and if new objectives should be made.
The marketing function has an impact on Sainsbury by the way that it helps the supermarket grow bigger by the advertisement campaigns it launches to make potential customers of Sainsbury notice what Sainsbury has to offer them.
This helps the performance of Sainsbury by increasing the sales and net profit that is made. The things that are mainly advertised about Sainsbury is that they offer a high quality range of "Be Good To Yourself" products (this is Sainsburys own range of food products) at a competitive price, and also to make this appeal to customers they use a celebrity chef to advertise the products. There are also many other advertisement campaigns for Sainsbury as well, such as the flyers that they give out, this is to create publicity for Sainsbury so that it can attract new customers and therefore sell more products.
One of the many jobs the administration function ensures is that the staff are kept up to date on how to use new equipment in the supermarket, and in order to do this they must receive training, so that the staff do their job efficiently and time is not wasted. This has an impact on the performance of Sainsbury by the way that the staff would be doing their normal jobs and be able to use the new equipment (tills for example) and not hold customers up, and cause a queue due to the staff not being able to know how to use the till. The training is essential to avoid this type of situation.
The main organizational function that helps Sainsbury to operate successfully and also relates to customers by the way that they are getting a good service.
The research and development function also interrelates with the production function in having an efficient impact on Sainsbury to improve its performance, the research and development function enables Sainsbury to be competitive and that the products at Sainsbury are safe for customers to eat/buy. Also food products are constantly looked at to be improved by the research and development function so that customers are highly satisfied from buying the food product.
The culture also has an impact on the way that Sainsbury performs as a supermarket by the way that the culture of Sainsbury is advertised through the advertising campaigns Sainsbury launches through the media. "Making Life Taste Better" is now a recognized slogan by all the customers of Sainsbury due to Sainsbury advertising their culture so that Sainsbury can express what they are aiming to do for the customers. Some of Sainsbury's "loyal" customers would probably agree with the slogan that Sainsbury uses, because customers may believe that Sainsbury is providing them wit h food products of a high quality, taste delicious and the price is competitive as well.
The staff at Sainsbury are always more than happy to inform customers about products at a special offer etc, this is helpful to the customer due to them knowing that there's special offers on, and if it interests then they would obviously buy the product. The members of staff also provide an excellent form of customer service by the way that they try to deal with customers as soon as possible, they have a lot of leaflets in the entrance of the store that informs them about the other Sainsbury services, such as the bank and now the property agent.
This encourages customers to use other Sainsbury services, which also has an impact on the performance of Sainsbury by attracting customers. To provide a high standard of customer services for the customers are also a couple of Customer service desks at the supermarket, which always have a staff members there to help customers if help is needed, so that customers don't have to find a member of staff themselves.
This is how Sainsbury provides a good customer service, which is also always improving with help to the research and development function. This helps the performance of Sainsbury by customers feeling valued that they are treated as individuals by the supermarket.
The management style of Sainsbury has an impact on the performance of the supermarket by the way that all the vital decisions are made by the managers, but this is also done with the help of the staff at Sainsbury. I think that its important that the employees of Sainsbury get a say in what happens within the business due to them working there to help it be successful as it possible can.
The staff can tell managers what they feel needs changing about the supermarket, and if the manager agrees then he/she will take action and change the factors that need changing.
This makes the workers of Sainsbury feel important because if they never had a say in then they may possibly not have respect for the supermarket and not enjoy working there, and they feel like they have vital decision making to do as well as the managers. The managers make decisions in order for Sainsbury to perform well and be profitable. The managers also motivate the staffs at Sainsbury to enjoy doing their work and to do their work.
This benefits customers by the way that the supermarket stays in a pleasant condition (tidy, clean etc) and the supermarket stays organized well so that products are easy to find for the customers.
Overall I think that Sainsbury has an outstanding organizational structure, culture, and a practical management system. However that's my opinion, I think that due to the management style, culture and organizational structure being successful for Sainsbury the impact it has on the supermarket as a whole is up to a high standard and this has a positive impact on the performance of Sainsbury.
Task 4 (E5, C3)
Methods of ICT in the business
Every business needs to communicate with range of individual's organizations including all the stakeholders of the business. The good communication is one of the major keys of success in the business. It is only the communication, which can help the business to operate effectively. So multinational companies like Sainsburys use many channels of communications such as: -
* Internal and External
* Formal and Informal
* Verbal and horizontal
* Open and Restricted
So ICT had a dramatic effect on the way communication takes place in the business.
Internal and External communication
Internal communication is a communication, which takes place within the organization while the external communication takes place between the organization and the rest of the world.
Both internal and external communication has been transformed by the latest developments in ICT. The modernized organizations like Sainsbury have the following types of channels for internal and external communication.
* Line area Network (LAN) a linked internal communication system.
* E-commerce. This is the links with the customers with the help of electronic media.
* E-business. This is the link with the other business through electronics.
Line area Network (LAN): - Networking involves linking together two or more computers to allow the information and facilities to be shared. So the help of networking can assess in best and a time saving manner and to provide solid and systematic base of information to make a decision quickly. A computer network specially developed for the organizations is as follows.
File server
(Diagram taken from Heinemann AVCE book pg 90 fig 5.3)
Wide area network (WAN) may also be used to connect the computers on different sides by making use of telecommunication. So wide area network (WAN) includes following type of sources: -
* E- mail
* Tele conference
* Remote database
* Electronic data interchange (EDI)
E-mail: - Here the computer is linked through LAN or WAN, mails can be send between terminals. The user of each terminal has his own mailbox for storing the messages.
Tele conference: - Here the meeting may take place with individuals, those are not present at the same place, but they are widely dispersed by using a number of terminals.
Remote database: - These include the type of services you can pick up on your television for e.g. teletext which provides users with a large amount of information that can be made up to the mark constantly.
Electronic data interchange (EDI): - This allows the users to exchange the business documents, vouchers, orders and invoices directly through the telephone network or electronic communication system.
Internal Communication
The sources of internal communication within the organization can be verbal, written and electronic.
* Verbal information
* Written information
* Electronic information
Verbal Information: - It is that information where two or more persons communicate face to face, through telephone or recorded messages, through answering machines and voice mails. Although the verbal information is quick but still it needs feedback in written form. For e.g. if you communicate any important message to your colleague verbally, he or she may asks you to send that in writing.
Written Information: - Written information always covers a wide range of paper documents that can be exchanged within the organization such as memos, letters, broachers, reports, instructions etc. The written information takes lot of time to process and also they need to be had in a record.
Electronic Information: - Electronic information is the latest source of information, which is rapidly replacing all the other forms of communications for e.g. the list of stock, can be electronically transformed from the business house to the head office. All the successful companies like Sainsburys are using electronic information for the success of the business.
External communication
All the methods used in networking can also be used for external communication such as e-mails, tele conference, remote database and EDI.
Examples of External communication
So under the external communication the organization needs to communicate with range of stakeholders including shareholders, customers, government officials, suppliers and local community. So these external communications performs the number of functions for success of the business.
* Public Relations functions
* Informative functions
* Day to day trading functions
* Transparency functions
Public Relations function: - This enhances the goodwill of the company information of company reports and advertising materials.
Informative functions: - This provides groups with external information about the company for e.g. tax records to inland revenue, hours of opening to the customers and details of supply arrangements to suppliers.
Day to day trading functions: - This is used to transit the business's daily commercial relationship such as making orders, buying goods, making enquiries about goods being offered.
Transparency functions: - It is often very important for an organization that the outsiders can see what is happening inside the organization so that the business can be carried out in a true and fair manner for e.g. environmental reports, audit, ethical reports and financial reports which are complying under company ordinances.
Formal and Informal communication
Formal communication refers to the official channels of communication which exist in a business, such as information being passed through' line and staff' relationships (e.g. between superiors and subordinates, or between people on the same level.) These information flows will be concerned with the content of the jobs and may be in one of several forms, spoken, written, or electronic etc.
Informal communication refers to the unofficial channels of communication that exists in a business (often spoken as opposed to written communication). This is often referred to as the 'grapevine'.
This can be concerned with the content of the jobs (e.g. two employees commenting on the poor performance of a task by their superior), or it can be discussing non work-related matters. (e.g. arranging a staff social function).
Verbal and horizontal communication
Communications can also be classified in terms of direction, vertical or horizontal.
Vertical communication can be top-down (e.g. directions and instructions given from superior to subordinate) or it can be bottom-up (e.g. feedback from subordinate to superior).
Horizontal communication refers to contacts and flows of information between people at the same level in the business. Where there is no facility for feedback, (often under an authoritarian management style then this is referred to one-way communication. There is a danger here, however that the message will be misunderstood or poorly performed, since the employee performing the task is unable to ask his superior for assistance or clarity.
It is widely held view among many businesses today that communication must be multi-directional (i.e. top-down, bottom-up and vertical-horizontal) in order to involve employees and make them feel valued by the business (e.g. implementing systems of quality circles or work councils). This will help to improve their job satisfaction and level of motivation, as well as encouraging lower rates of absenteeism and Labour turnover.
Open and restricted communication
It is important to identify the purpose of message with any form of communication. Open communication refers to the message, which is to be targeted at everyone within the business, or groups outside the business and does not contain confidential materials. (e.g. notice boards, memos to all staff or staff magazines, etc).
On the other hand if the message contains confidential materials, and it is only targeted at specific person or group either within a particular business or at a certain level of seniority, so that its use is restricted. That is known as restricted communication. (e.g. college staff meeting where students are needed, or a letter saying private and confidential etc).
