Introduction
Joseph Dunn, the proprietor of Dunn’s ski emporium intends to acquire the deli across the street which is owned and run by George Atkins. Joseph intends the merger and acquisition to be part of an expansion to his ski emporium business. The challenge for Joseph Dunn is that he has no experience in running a deli. It would therefore be critical that Dunn involves George Atkins in running of the deli during the transitional period before he takes over the deli fully.
The report is therefore intended to interrogate and come up with a suitable organizational structure to be effected during the transitional period. The proposed organizational culture and structure should succeed in ensuring a fruitful change management process not only during the specified transitional period but also after George Atkins fully retires from the deli and Joseph Dunn subsequently takes over the full ownership of the business.
The recommended organizational structure and culture should foster positive relationships among the employees, including the seasonal members of staff as well as fostering a good relationship between the employees and the employer. Over and above interrogating the deli’s internal environment during the transitional period, the report also looks into the relationship between the deli and its external environment and how it can be improved and fitted into the proposed shift in organizational culture and structure.
An important element of the report would be to assess the role of effective leadership with respect to the organization’s culture and structure during the transitional period. It is especially the case given that a leadership change is eminent as a result of the anticipated retirement of George Atkins from the business. The report also seeks to evaluate the requisite components for an effective change management process.
Analysis
History of the Two Businesses
Both businesses; Dunn’s ski emporium and George Atkins’ deli business have been successful in their distinct areas of interest for years. For Dunn’s ski emporium, it has been operational for a quarter of a century. It provides high quality ski equipment as well as providing repair services for broken ski equipment. Part of the business’ success can be attributed to its effective pricing strategy, quick delivery of service, and a welcoming environment that Dunn has endeared to create for both the local and visiting customers. On the other hand, the deli business which is owned and operated by George Atkins has also been operational for a long time and has continually recorded good business especially during the in season period.
The two businesses are complementary in that a majority of the deli customers are the emporium clients waiting for the completion of repairs to their ski equipment. On the other hand, some of the customers that visit the deli become attracted to the ambience of the emporium and up being clients. The intended outcome of the merger and acquisition is that the two businesses will continue offering top notch quality services to their clients by catering to their niche while drawing synergies from each other. However, the downside to the intended merger is being a seasonal business, the deli employs some of its staff on a seasonal basis. As such, there would be a challenge in entrenching a long term organizational culture and structure especially with a change in the management.
Furthermore, the two businesses are highly dependent on the strong leadership of each of the founders, Joseph Dunn and George Atkins, as evidenced by their numerous years of service in their respective businesses. As a result, there may be anticipated challenges in the ensuing change in leadership due to the deeply entrenched culture of the deli that the employees have long associated with Atkins.
Organizational Structure and Culture
Organizational Structure
In order to understand the basis for the organizational structure and culture to be adopted by the deli business, it is important to have a background look at the various approaches to organization structure and the various types of organizational culture. A detailed understanding of the same would be to interrogate the merits and demerits of each and perhaps more importantly, how it might give George Atkins a greater say in managing the transition so as to make him own the process.
An organizational structure can either be bureaucratic, divisional, functional or a collection of the three. A bureaucratic organizational structure is anchored on bureaucracy. Such a structure is usually useful within an organization, given that it helps to define the role of each of the employees while lending credence to a hierarchical structure in which authority cascades from the top through to the bottom. Therefore, such a structure may be suitable to an organization with numerous levels of management (Luthans, 2015). It allows for the senior management; which in the case of the deli’s transitional period would be George Atkins, to have a firmer control of the business.
In its inherent nature, it requires a raft of rules and regulations with which the management and the employees need to contend with, which may not be highly effective given that the deli business relies on some seasonal employees. Expecting seasonal employees to quickly adopt such rules and regulations may be a difficult task. Another downside to such an organizational structure is that it results in standardization, which more than not hinders innovation and creativity, which are important for the continued existence of the deli businesses. It is better suited for a large organization, which may not fit the description of the deli business whose operating culture has been grounded on the close supervision of its leader, George Atkins. On the upside, decision making is faster as a result of the clearly defined roles bestowed upon each of the employees (Luthans. 2015).
On the other hand, a functional structure as the name suggests, is one in which the business is organized in line with the distinct functions. A primary aspect of a functional structure is communication. Communication is important if the various functional divisions are to be integrated efficiently. Both vertical and horizontal communication is necessary. Such a structure is especially important if the business in question is a producer of standardized goods and services as is the case with the deli business, which is required to prepare huge volumes of meals especially during the in season while maintaining a high quality for the same. If communication is well structured in such a system, the level of efficiency could be potentially high. The downside to such an organizational structure is that it may result in some form of competition among the various grouped functions which if left unchecked, could turn out to be unhealthy and in the long run, lower the productivity of the deli. The structure does not also give the leadership such a prominent role as it emphasizes more on coordination among the various functions, which might serve to discourage Atkins during the transitional period.
A divisional structure emphasizes on breaking up the business into numerous divisions. All the requisite resources are then availed to the distinct resources to enable them fulfill their mandate. Such a structure would be critical for Joseph Dunn, as it gives emphasis on delegation. As a result, after the merger, Dunn can then set up two divisions, one to handle the ski emporium business and the other to handle the deli business, with each having its own form of delegated authority. Such a structure would make it easier for the business to respond faster to changes in the operating environment, especially given that the two businesses are complementary. The downside to such a structure is that the need for delegated authority may result in Dunn losing touch with either of the businesses in the long run. Furthermore, the need to set up structures for the delegated authority may represent a significant cost burden to the merged business.
In light of the above, it would be prudent to implement a matrix organizational structure. Such a structure would enable the business enjoy the advantages of each of the aforementioned approaches to organizational structure. While a matrix structure raises the level of complexity in running the organization, it ultimately assists the business in terms of having a well-defined bureaucracy while at the same time minimizing the weakness of a vertical organizational structure. It also allows for specialization especially for the critical employees of the deli who may not be hired on a temporary basis. The structure is especially important if a strong project matrix is adopted. Such an approach allows for a single manager in this case Atkins, to take full responsibility of the business during the transitioning period. It will ultimately assist the business, as Atkins will have a high sense of ownership in the process, due to his elevated responsibilities.
Organizational Culture
There is a close link between organization’s structure and its culture. Organizational culture has an immense impact on the level of a business’ productivity. It can be defined as the sum total of the values and shared assumptions that serve to integrate distinct members within an organization. It is of special importance in not only creating a strong relationship with the external environment, but also in improving the relationship among the employees as well as between the employer and the employees (Bligh, 2006). It sets the acceptable standard of mannerisms that the employees are expected to adhere to. Defining the deli’s organizational culture at an early stage especially during a transitional period is of utmost importance because more often than not, it tends to have a long lasting impact on the business.
In order to understand organizational culture and how it impacts business performance, it would be important to have a look at the various forms of organizational culture in relation to the impending takeover of the deli business by Dunn. One such type of organizational culture is based on Hofstede’s cultural dimension theory. It focuses on the innate cultures of the individual employees and four aspects of such cultures. The first aspect is that of individualism versus collectivism. Hofstede opines that the collision between individual and collective goals often lead to a reduction in the productivity of a company. As such, there is need to ensure that there is a balance in the observance of the interests of individual employees and those of the deli if an efficient organizational culture is to be achieved. Part of this requires Atkins and Dunn to align the interests of the employees with those of the deli during the transitional period (Bligh, 2006). It is especially the case given that a number of employees at the deli are seasonal, and as such, the interests of such employees and the business could be a bit high and divergent.
The second aspect according to Hofstede in relation to organizational culture is the power distance (Luthans, 2015). The greater the power distance the greater the possibility of a dysfunctional system. In essence, power distance seeks to define the level of the relationship between the employer and the employees. Atkins needs to bridge the power distance divide during the transitional period, if he is to avoid the tag of being bossy, especially due to the nature of a deli business that requires close coordination and co-operation among the employees and between themselves and their employer. It also helps to improve the moral of the employees, as it creates a sense of ownership and as such, the employees do not view themselves as mere laborers.
The other aspect of organizational culture is the long-term versus short-term orientation. Organizations with a short-term orientation tend to engage in normative thinking which more often than not encourages them to champion for the maintenance of the status quo. On the other hand, organizations with a long-term orientation tend to embrace positivistic ideas that endear such an organization towards accepting and adopting to change (Luthans, 2015). It is therefore important that despite being a transitional period, both Atkins and Dunn embrace a long-term orientation which will enable the employees of the deli change their mindset towards not only embracing new leadership, but also focusing their attention towards achieving the objectives of the business. With such a culture set in place, even seasonal employees that report into the business will more likely continue with the same culture thus ensuring there is efficiency in the operations of the deli.
The other form of organizational culture is as defined by O’Reilly, Chatman and Caldwell. Such an organizational culture focuses on creating a self reporting measure that acts as the benchmark in grading the level of the business’ organizational culture. Some of the primary elements included in the measure include teamwork, innovation, respect, and output orientation. Such an organizational culture is of great importance to the business, given that it is engaged in the service industry. It is therefore important that all the employees are encouraged to perform their various tasks while emphasizing on teamwork. The employees should also be given the space to innovate and be creative, in order to inculcate a sense of ownership in running of the business. They should also be involved in setting up the goals of the business, such as the levels of inputs required and the expected outcomes. Respect in dealing with customers, fellow employees and the employer should be encouraged at all costs if the business is to maintain its good image and reputation, which is directly related to its level of performance. Ultimately, the O’Reilly, Chatman and Caldwell approach seeks to make it possible for the business to create a profile for its organizational culture, on a measure that can be regularly reviewed in an objective manner.
As part of fostering an organizational culture, the business’ espoused values should be clearly defined and open for every stakeholder more so the employees. Based on Schein’s approach to organizational culture, the best way to achieve this is by having a physical way through which the management can regulate and enforce such values (Luthans, 2015). One such way is by having clear and precise company vision and mission statements displayed for the employees and customers. Another way through which such a culture can be inculcated is by having a reward system for the employees based on performance and merit.
Closely linked to a business’ culture is the organizational behavior. It encompasses numerous elements that include job-related attitudes, leadership and occupational stress. In acquiring the deli, Dun has to ensure that the level of job satisfaction among the employees is high. Job satisfaction is positively co-related with the level of pay and supervision. Given that the deli is a service oriented business, it would be important to stress to the employees on the need to be emotional in executing their duties such as through smiling or showing empathy to the stranded customers. In a bid to reduce occupational stress, Dunn and Atkins should make sure that the employees strike the right balance by providing resources that would help manage the demands of the employees, which should be closely linked to them being treated properly. Incivility, incidents of sexual abuse and abusive supervision all amount to mistreatment of the employees, which apart from being morally wrong, leads to a drop in the productivity of the business.
Adherence to the various elements stated above would result in the business having a strong organizational culture. A strong culture can be defined as one in which the employees are responsive to changes that are aligned to the values and shared assumptions of the business. Such a culture would be manifested through a high level of appreciation for diversity, equal treatment of all the employees coupled with a sense of strong leadership. Ultimately, organizational culture is the mirror through which the external environment views the business.
Change Management and the Role of Effective Leadership
During a transition process, it is important to employ the best practices in regard to change management to ensure that the process runs smoothly. As a result, it requires strong leadership. It is especially the case given that more often than not, such attempts tend to attract a backlash especially from the employees. In order for the process to be successful, it is important for Dunn and George to prepare effectively for the impending change. Some of the critical elements will therefore include ample communication, ownership of the change process and the need to make use of training to ensure that there is continuity in the change rather than it being a one-off event that occurs only during the transitional process. The two should create an effective feedback mechanism through which employees can express their fears and concerns, which are to be anticipated during the transition period (Little, 2014).
More often than not, any transitional period tends to alter long established traditions at the place of work (Little, 2014). It is especially the case for the deli, which has been run by Atkins for many years. It would therefore be counterproductive to expect the new organizational culture and structure to be smoothly implemented and fully adopted over a short period. In light of the above, Dunn should undertake behavioral training to assist the employees in coping with the transition. Such a training would not only act as a medium through which the new management can communicate the proposed organizational culture and structure, but will also act as a basis for providing incentives to employees that show a willingness to adapt to the new reality of the merger between Dunn ski emporium and the deli business.
Conclusion
In light of the above, it is clear that the only possible way in which the transition of the deli’s ownership from Atkins to Dunn would be successful is if there is strong leadership. All the various aspects concerned with the business such as change management as well as organizational structure and culture require effective leadership, if the process is to be efficient. It would therefore be critical that Joseph Dunn takes on the role of transformational leadership. It would involve him leveraging on the experience of running Dunn ski emporium for over twenty five years while appreciating the dynamics of the new line of business. In order to achieve this, he would have to inculcate a close working relationship with the employees of the deli while giving Atkins a prominent role in the running of the business during the transitional period. Forging a close working relationship would enable him impact the supposed organizational structure and culture on the employees (Bligh, 2006). It is in recognition of the fact that he is the ultimate medium of change in the merged business.
Executive summary
It would be prudent to implement a matrix organizational structure. Such a structure would enable the business enjoy the advantages of each of the aforementioned approaches to organizational structure. While a matrix structure raises the level of complexity in running the organization, it ultimately assists the business in terms of having a well-defined bureaucracy while at the same time, minimizing the weakness of a vertical organizational structure. Adherence to the various elements of organizational culture stated would result in the business having a strong organizational culture. A strong culture can be defined as one in which the employees are responsive to changes that are aligned to the values and shared assumptions of the business. Such a culture would be manifested through a high level of appreciation for diversity, equal treatment of all the employees coupled with a sense of strong leadership.
One of the major challenges that Joseph Dunn may be expected to face may arise from the lack of a rationale for change. It is in recognition of the fact that change does not take place just for the sake of it; it should be clearly planned, for it to have a specific purpose. In the modern era, such a business merger requires seamless interaction if new ideas are to be created and implemented. There is therefore a need for people from different backgrounds to be part and parcel of the merged business. Such a level of integration is not always easy to accomplish. Ultimately, it is up to Joseph Dunn to be proactive in leading the change process in recognition of the fact that he is the chief social architect in the process.
References
Little, J(2014). Lean Change Management: Innovative Practices For Managing Organizational Change. Newyork: Happy Melly Express.
Bligh, M, C. (2006). Surviving Post-merger 'Culture Clash': Can Cultural Leadership Lessen the Casualties? Leadership 2: 395–426.
Luthans, F. & Doh J, P. (2015). International Management, Culture, Strategy and Behavior. Newyork, Mc Graw Hill
