The impact of organizational structure and culture on management and business performance at Paramount Pictures Corporation and Burger King.
The impact of organizational structure and culture on management and business performance
As for identifying the influence of organizational structure and culture to the company's business management and performance, there are two organizations are selected for such propose. These two chosen organizations are in two different industries of business. One of them is a United States based film company, Paramount Pictures Corporation and another is Burger King, a global chain of hamburger food restaurants, also headquartered in the U.S. Because of the business industry for both of them are in differ, one is in film industry whilst another is running fast food business, their organizational culture and structure, as a result, are different. Therefore, the following assignment is to clarify the organizational structure and culture of these two corporations and, consequently, make an analysis on their impact to management and performance of these two organizations separately and specifically.
. Comparison of organizational structure and culture of the selected two organizations.
* Organizational structure:
The definition of organizational structure - it is a formal system of task and reporting relationships that cooperates employees to achieve the organization's goals by controlling, coordination and motivation. (images.marniekathleen.multiply.multiplycontent.com)
- Paramount Pictures Corporation is an American film production and distribution company which is currently one of the Hollywood's major film studios which in a dominant position within the film industry.
The organizational structure of Paramount Pictures Corporation can be roughly illustrated by the figure as follows.
Organizational chart of Paramount Pictures Corporation
As it has been shown in the figure, the organizational structure is formulated by different functions of each department. In other words, it is a functional organization.
There are four subordinates within the company's organizational structure, which are theatrical distribution, home entertainment, television distribution and the studio for filmmaking. From these subordinates, it can be figured out that the work for each department is specific. Theatrical distribution department is mainly focused on the supply of raw film strips to the cinemas for the playing of new films; home entertainment department is responsible for the release of DVD and Blu-ray discs of home entertainment, after theatrical release films, television distribution department is to deliver the recordings of shows or films to the TV station for broadcasting; and the studio, obviously, is to make films on the sets for film production cast and crew. As the responsibilities have been taken by each of the departments, the functions of them are clearly defined as well, for the purpose of command and control.
- Burger King is the second largest global chain restaurants of fast food at the moment.
The organizational structure of Burger King could be generally presented as the graph below.
Organizational chart of Burger King
As the graph illustrates, Burger King has made its business departmentation based on geographical locations. Therefore, it is a divisional structure in which the departments have been geographically separated.
In efforts to meet the demand of customers around the world as international fast food chain stores, these four subordinated departments have been made for the specific focus according to regions. Asia Pacific department would pay more attention on matching the behavior of Asian people's diet behavior. For example, there will be regionalized foodstuff made of rice or noodles. Similarly, EMEA (European, Middle East and Africa) department, Latin America department and North America department are respectively focused on their relevant regions of service in order to localize the fast food menu in return for positive feedback from that specific region where they runs their restaurant business.
As the figures illustrate, it is obvious that both companies have a formal organizational structure. However, there are differences between the two companies.
First, in contrast, the organizational structure of Burger King is taller than Paramount Pictures Corporation. In other words, Burger King has a narrow span of control. It results from the requirements needed for fulfilling the four geographical regions in which the company selling its products which has one more layer, of each region's supervisor, than Paramount Pictures Corporation.
Second, however, both of the companies are centralized as the decisions have been made by ...
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As the figures illustrate, it is obvious that both companies have a formal organizational structure. However, there are differences between the two companies.
First, in contrast, the organizational structure of Burger King is taller than Paramount Pictures Corporation. In other words, Burger King has a narrow span of control. It results from the requirements needed for fulfilling the four geographical regions in which the company selling its products which has one more layer, of each region's supervisor, than Paramount Pictures Corporation.
Second, however, both of the companies are centralized as the decisions have been made by CEO in comparison.
* Organizational culture:
The explanation of the organizational culture is that it is "an idea in the field of organizational studies and management which describes the psychology, attitudes, experiences, beliefs and values of an organization." (en.wikipedia.com)
- Paramount Pictures Corporation:
The emphasis of Paramount Pictures Corporation is on the work-life balance of the person; therefore, the person culture can be illustrated as its organizational culture. In other words, it can be translated as a "work hard/play hard" culture. According to feedbacks from the employees of the company, most of them think that it is a funny place to work. (www.glassdoor.com) According to this, the company seemed encourages its employees to be constructive and creative without many regulations or rules bounded them from their liberty of thoughts and give them sufficient time in leisure activities in exchange of more balanced and beneficial working performance without stress. Therefore, it makes the corporation's culture could be described as the culture mentioned before - the person culture. The person culture aims to "serve the interests of the individuals within it" (Organization and Behavior 2004: 108) that talents of the individuals are preserved.
- Burger King:
Traditionally, the Burger King has been regarded as an organization which was "formal, hierarchical and command-and-control oriented." (www.holmesreport.com) However, eventually, a new culture has been adapted, despite of the traditional one, in which there are more communications between employers and employees than it was ever did. In other words, Burger King has changed its culture from role culture, in which the company is bureaucratic as the employees are told what they need to do and have their clearly defined role in the company, to the culture that there is "open communication, limited bureaucracy and creative decision-making." (www.holmesreport.com)
2. Analysis of the relationship between cultural and organizational structure of the two organizations and the impact on their business performance.
At first, it must be understood that the organizational structure is a system that the work is coordinated with supervision to set up the goal, from the organizational culture, which the organization wishes to achieve. The structure could be regarded as the lines of authority that through the system individuals are gathered together for achieving the desired results of organizational structure.
Second, the organizational culture is described as "the collective self-image and style of the organization." (Organization and Behavior 2004: 103)
* Paramount Pictures Corporation:
As the organizational culture of Paramount Pictures is the person culture, there is a connection between it and its organizational structure, the functional structure. Firstly, the individuals in Paramount Pictures have a clear picture of their responsibilities and what are the optimal results of their work. For instance, in the Home Entertainment department of the organizational structure, the employees are responsible to make high quality DVD and Blu-ray disc product for home entertaining purposes of the customer. As the organizational culture of Paramount Pictures implies, individuals are encouraged to be creative on their work. As a result, the final products could be added some features full of new ideas within it. The culture applies within all other departments and, therefore, from the efficient organizational structure in Paramount Pictures, the organizational culture will be strong.
* Burger King:
There was a change of the organizational culture in Burger King. Originally, Burger King was under the role culture which is "formal, hierarchical and command-and-control oriented." (www.holmesreport.com) However, it turns out to be a lot of obstacles for the company. The employees are not empowered and a series failed relationships within the company caused confusion from customers that they do not even know what Burger King is stood for. Because of it, the company then has changed its culture to a new one. The new and improved corporate culture is about "open communication, limited bureaucracy and creative decision-making." (www.holmesreport.com) Even without enough formal research on the impact of the new culture to the loyalty, motivation and performance of the employees, it is still being considered as a beneficial change that, from the new culture, there are new ways of doing things everyday within the organizational structure.
In conclusion, it can be clarified that the organizational structure and the organizational culture are not separated. In reality, they are connected in the way that the organizational structure is consisted in an organizational culture. Allegorically, it can be illustrated as if the organizational culture is a military squad which had many successes on its missions, and then the organizational structure is the commander and soldiers in that squad.
3. Analysis of the factors which influence individual's performance and behavior within the two organizations.
As the goal of business is to grow and make money, it is important that employees' "performance and behavior contribute to the company's success." (smallbusiness.chron.com) The factors which influence the performance and behavior of individuals, for most of the organizations, can be found through interpersonal and individual aspects. Interpersonal aspects are conflict, stress and change between individuals. Individual aspects are their personality, perception, attitude as well as ability and aptitude that affect them from their working performance.
* Paramount Pictures Corporation:
In Paramount Pictures, individuals are highly motivated by the freedom and fun they have got on their work in the film industry. Therefore, the personality of the employees is an important individual factor which could affect them from their performance. For example, in the department of Paramount Studio, employees are encouraged to be imaginable to make up the spectacular scrip of a film. Not only it takes energy and time of an individual, more importantly, it takes talents of someone. In some occasions, they must even think of something ridiculous in order to pick out the right ideas for the creation of never-before-seen stories. Otherwise, there will be lack of better performance for the filmmaking as there would be no interesting stories made for filming as the result of unadoptable personality of individuals.
* Burger King:
At Burger King, the employees selected previously need to be basically capable enough to handle their work, understand their role and do their job as being commanded and controlled. However, it has changed as the company revised its culture which results a better performance on its employees in business. The reason of the changing of organizational culture is there is a phenomenon that employees were not communicated well as they were just being commanded of what needs to be done. As a result, they are not empowered in doing their jobs and a number of unsatisfied and unsuccessful relationships within the company caused customers' curiousness of the basic acknowledgement on what the company is stood for.
4. Comparison of leadership styles and the effectiveness of leadership approaches of the two organizations.
Leadership can be described in a variety ways such as "the focus of group processes, the formation of group structure, a condition of personality, and as particular behaviors." (edis.ifas.ufl.edu)
* Paramount Pictures Corporation:
The leadership style of Paramount Pictures Corporation can be described as transformational leadership. Transformational leadership, by definition, is "a leadership approach that causes change in individuals and social systems." (en.wikipedia.com)
* Burger King:
In the past, the Burger King applied for the leadership style of transactional leadership. Transactional leadership is based on the hypothesis that "followers are motivated through a system of rewards and punishment." (www.money-zine.com) In this style, transactional leaders' view of the leader and followers can be described as if the followers does good, they will be rewarded, otherwise they will be punished. Therefore, the transactional leadership in which relationship between the leader and the followers involves "motivating and directing followers primarily through appealing to their own self-interest." (www.managementstudyguide.com) However, the leadership style does not work well for a period of time in the history of the company and made some obstacles. Because its focus is on control mechanisms, the leaders have the supreme authority to the company and given the power to transform the focus of employees from self-interest to the glories goal of the organization. As previously mentioned, there are problems arises.
Currently, the leadership style of Burger King, which has changed from transactional leadership, is somehow like the most optimistic one - both transformational and transactional.
To sum up, there is no definite leadership style that can be said is the most optimal one for the organization. Both of them have advantages as well as disadvantages. As a consequence, according to the leadership style which is later being adopted by Burger King, combination of transformational and transactional styles, the only beneficial style is the one which matches the company's structure and culture.
5. Analysis of the way the organization theory supports the principles of their management and guides their practices within the two organizations.
The organizational theory refers to "the study of the phenomena of organizational functioning and performance and the behavior of groups and individuals working in them." (www.scribd.com) There are various organizational theories arises in time from classical administration, the human relations approach, the system approach to the management today which is market-driven.
At the moment, two specific organizational theories will be specifically focused in relation to the two chosen organizations - the classical administration and the human relations approach.
* The classical administration:
It consists of "the scientific management approach, Weber's bureaucratic approach, and administrative theory." (www.fao.org) First, the scientific management approach is "a theory of management that analyzed and synthesized workflows." (en.wikipedia.org) It focuses on the productivity of labors in exchange of economic growth. However, it is highly criticized for dehumanizing. Second, the administrative theory emphasized management functions and attempted to generate administrative principles that would serve as guidelines for organizational activities. (faculty.babson.edu) Last, the bureaucratic approach, which is developed by Max Weber, holds a similar view with hierarchy in the administrative theory that "each lower office is under the control and supervision of a higher one." (Organization and Behavior 2004: 35) Take Burger King as an example, in their organizational structure, the office of each regional department; say Asia Pacific department is under the monitor of the CEO. Moreover, its subordinates are under the administration of the regional officer.
* The human relations approach:
This approach is evolved from its pioneer - Elton Mayo which is emphasized on "the importance of human attitudes, values and relationships for the efficient and effective functioning of work organizations." (Organization and Behavior 2004: 37) As Paramount Pictures Corporation's organizational culture is focused on individuals, this approach has been adapted.
6. Comparison of the theories and approaches to management of the two organizations. Showoff of their effectiveness and ineffectiveness in efficiently achieving their goals.
Approaches of the two chosen organizations can be described as follows:
* Paramount Pictures Corporation:
The organizational theory of human relations approach has been adapted by the Paramount Pictures Corporation. The human relations approach is emphasized on "the importance of human attitudes, values and relationships for the efficient and effective functioning of work organizations." (Organization and Behavior 2004: 37)
* Burger King:
Originally, Burger King was still held the organizational theory of the classical administration in which Weber's bureaucracy approach has been applied. The bureaucracy approach "regarded an organization as an authority structure." (Organization and Behavior 2004: 35) Anyhow, subsequently the company has undergone a change to an approach which is a partially bureaucratic and partially focused on human relations.
In comparison, the bureaucracy approach which Burger King initially accepted is impersonal related to Paramount Pictures' human relations approach. However, Burger King has changed its approach to management from bureaucracy approach to human relations approach. Resulting from this, both of the companies, Paramount Pictures Corporation and Burger King, are currently focused on individuals that it is important to make the connection between the company and employees' attitudes, values and relationships.
References:
BPP Professional Education, Organization and Behavior, London, Aldine House, 2004
http://images.marniekathleen.multiply.multiplycontent.com/attachment/0/SS36qgoKCkUAACetRyM1/Organization%20Culture%20and%20Structure.ppt?nmid=139182093
http://en.wikipedia.org/wiki/Organizational_culture
http://www.glassdoor.com/Reviews/Paramount-Pictures-Reviews-E13273.htm
http://www.holmesreport.com/opinion-info/1584/Hurricane-Andrew-Blew-Away-Burger-Kings-Culture-1995.aspx
http://smallbusiness.chron.com/factors-external-environment-influence-employee-behavior-1251.html
http://edis.ifas.ufl.edu/fy1063
http://en.wikipedia.org/wiki/Transformational_leadership
http://www.money-zine.com/Career-Development/Leadership-Skill/Transactional-Leadership/
http://www.managementstudyguide.com/transactional-leadership.htm
http://www.scribd.com/doc/4880211/Organization-Theory
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http://en.wikipedia.org/wiki/Scientific_management
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