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Introduction
Organisation means a group of people who form a business together in order to achieve a
particular aim. An organisations includes social arrangements, shared or collective goals,
controlled performance and the purpose of management. Behavior means the way someone
behaves, especially towards other people. Organisational behaviour is the study of how people
working for large companies or organisations think and behave, and the effect that this has on
the company or organisation that they work for i . Organisations are made up of people, the
network of relationships, communication and ideas that links people so organisational behavior
is very important. There are a variety of factors that distinguish between small-business
operations and large-business operations, one of which is the implementation of a formal
organisational structure. Organisational structure is essential for any growing company to bring
guidance and clarity on specific human resources problems. The main objective of my study is
achieving the highest productivity and understanding how should a person behave in an
organisation. Besides, it also help us understand culture of an organisation, in the developed
world, most societies are becoming multicultural societies. To make you clear about this
problem, I will present a report about two companies : Electrolux and LG Electronics Inc. in
details.
Organisational
behaviour
provides a set of
tools that allow
Managers to
improve, enhance,
or change work
behaviors so that
individuals,
groups and the
People to
understand,
analyze, and
describe
behaviour in
organisations
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Main body
LO1 : Organisational structures and culture
1.1Compare and contrast LG Electronics Inc. and Electrolux differentorganisational structure and culture
A. Introduction
Electrolux is a leading producer of appliances for household and commercial use.Their
products are very variety such as washing machines, cookers, air-conditioning ... With brands
accross 150 countries, the group sells over 40 million products per year. In 2009, the revenues of
Electrolux is 109 billion USD with over 51,000 employees. Its headquartered in Stockholm,
Sweden. Electrolux operations are devided into six business sectors : Finance, Communications,
Branding, Legal Affairs, Human Resources, and Organisational Development. The diagram
below show information about this Group :
Electrolux
Business sectors
Finance
Branding
Communications
Legal Affairs
Human Resources
Organisational
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LG Electronics Inc is one of the global leaders in consumer electrics, home appliances and
mobile communications. Its products range includes communication devices, kitchen appliances,
home entertainment products... Established in 1947 with the name Lucky-Goldstar and
abbreviated is LG . Its headquartered in Seoul, Korea with revenues is $ 61 billion USD. This
group restructured its business under four segments : Home Entertainment, Mobile
Communications, Home Appliances, and Conditioning & Energy Solutions. I show you the
structure of LG Electronics by the diagram :
As you can see clearly from the diagrams that two companies are different in their organisational
structures. LG Lectronics Inc. restructured its business under four segments and Electrolux
operations are devided into six business sectors.
B. Define and illustrate
1.1.1 Organisational structureOrganisationalstructure : the way in which a large company or organisation is organized
ii
There are many kinds of organisationalstructure : Formal structures and Informal structures ; tall
structure and flat structure ; functional structure and divisional structure ; centralized and
discentralized ; matrix structure.
LG
Electronics
Business
segments
Mobile
Communications
Home appliances
Home Entertainment Air conditioning
& Energy Solutions
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a. Formal structure and informal structureA formal organisation is one which is deliberately constructed to fulfil specific goals. It is
characterised by planned division of responsibility and a well-defined structure of authority and
communication. Thorganisation structure provides for consistent functions and roles, irrespective
of changes in individual membership iii
The formal structure for a company can genrally be found on its organisational chart that usually
includes staff names and their official job titles within the organisation.Organisations create the
formal structure that enable the organisations meet its objectives.
An informal organisation is one which is loosely structured, flexible and spontaneous,
fluctuating with its individual membership. Examples of an informal organisation are colleagues
who tend to lunch together and cliques informal organisations always exist within formal
organisations.iv
Informal organisation is network of personal and social relationships that arise as peopleassociate with people in a work environment.
Formal structures will be set out on paper in the form of organisational charts. However, in the
course of time an informal structure develops in the most organisations that is depended on the
real life interactions between the staff. The table below illustrates advantages and disadvantages
of informal structure in formal structure.
Advantages Disadvantages
Formal structure -Understanding the importance of
companys aims and objectives- Mutual support and respect each
others
- Well structure, well mannered,well dressed and well spoken
-Badly set out
- More difficult to make decisionbecause of stakeholders.
Informal structure -Find easier and save time of
doing something
-Patterns of interaction are shaped- It is easier to work
-Friendship groups
-Less efficient at meeting its stated
objectives
- Do not have detail description ofduties
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b. Tall and flat organisation Tall organisation
A tall organisation is one which, in relation to its size, has a large number of levels of
management hierarchy. This implies a narrow span of control. v
A tall organisation has many levels of management and supervision. The diagram below
illustrate the concept of a tall structure.
The leader of this organisation is director or CEO. Tall organisation divided into two mainmanagement brands. From mains brands, it is separated to many lower brands. It has advantages
and disadvantages like the table below.
Advantages Disadvantages
-Employees can be closely supervised
- It has a clear management structure
-The function of each staff will be clear anddistinct
-Clear progression and promotion ladder
-The freedom and responsibility of employees
is restricted
- Decision making could be slowed down asthe hierarchy management
- Difficult to communicate with all staff
Flat organisation
A flat organisation is one which, in relation to its size, has a small number of hierarchical levels.
This implies a wide span of control.vi
Despite their wide, flat organisations can benefit from most of the advantages enjoyed by small
companies, such as faster response time to changing conditions and customer perferences. The
flat organisations have their structure like this diagram below.
Director / CEO
Manager Manager
Staff
Staff Staff
Staff
StaffStaff
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A manager with a small number of direct reports has a narrow span of control. Flat organisations
are often small organisations because of the small number of management layers. This
organisations have advantages and disadvantages.
Advantages Disadvantages
-Greater to communicate between management
and workers-Team spirit is better
-Easier to make decision
-Fewer management layers may decrease costsas managers cost more than non managers
-More employees than managers at the same
level-Structure limited to small organisations
- Lack of layers reduce opportunities for high
level strategic management.-More difficult to control the organisation
effectively
There are a variety of organisational structures each with their advantages and disadvantages.
The most appropriate structure will depend on the size of the business and type of business. Flat
structure work well for small business or those with a small number of job roles.
c. Centralized and decentralized organisation Centralisation is the concentration of authority for making most decisions at the top of levels of
the organisation.
Decentralisation is the dispersion of authority to make decisions throughout all levels of the
organisation.vii
In a centralized organisation, decisions made by higher management are typically
communicated to lower organisational levels who are then expected to accept and move forward
in away consistent with those decisions. Meanwhile, an decentralized organisation includes the
decision making authority does not sit with a central figure or group. Some decentralized
organisations control all levels within the hierarchy with decision influence. Organisations may
decide that a combination of centralization and decentralization is more effective. For example,
functions such as accounting and purchasing may be centralised to save costs. Recruitment may
be decentralized as units away from head office may have staffing needs specific only to them.
Director / CEO
Manager Manager ManagerManager
Staff Staff Staff Staff Staff StaffStaff
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Advantages and disadvantages of centralization and decentralization.
Advantages Disadvantages
Centralised structure -Senior managers enjoy greatercontrol over the organisation
- The use of standardised
procedures can save costs-Decisions can be made to benefitthe organisations
-Employees may not know clearlyabout organisation
-Decision making by senior
managers with get ideas fromothers
Decentralised structure -Senior managers have time to
concentrate on the most important
decision
-Decision making is a form ofempowerment
-Staff can understand the
environment they work in and the
people they interact with
-Not easy to control management
-The costs for hiring senior
managers
-Decision making may benefittheir department, but disadvantage
other departments
d. Matrix structureMatrix is an arrangement of numbers and symbols.Matrix structure is an arrangement within a
company where employees are responsible to two or more managers, often in different
departments.
A matrix organisation facilitates the horizontal flow of skills and information.It is used mainly in
the management of large projects or product development processes.A matrix structure
organisation contains teams of people created from various sections of the business. These teams
will be created for the purposes of a specific project and will be led by a project manager. It
deployed to develop new products and services. The matrix structure include functional and
product/customer/project as the diagram below.
Production MarketingR & DFinanceSales
Product
manager A
Product
manager B
Product
manager C
Product
manager D
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Advantages and disadvantages of matrix structure
Advantages Disadvantages
-Individuals can be chosen based on the needs
of the project
-Project managers are responsible forcompleting the project in a specific deadlineand budget
-Conflict of loyaty between line managers and
project managers
-A lot of independence can be difficult tomonitor-Costs can be increased if more managers are
created through the use of project teams
e. Functional structure and divisional structure Functional structure : The classic organisational structure where the employees are grouped
hierarchically, managed through clear lines of authority, and report ultimately to one top person.
Divisional structure : A type of organisational configuration that groups together those
employees who are responsible for a particular product type or market service according toworkflow. viii
Functional organisation involves grouping together people who perform similar tasks or use
similar technology or materials. Meanwhile, the divisional structure of a business tends to
increase flexibility, and it can also be broken down further into product, market and geographic
structures.
Advantages and disadvantages of functional organisation
Advantages Disadvantages
Functional structure -More efficiently when expertise
is pooled-It is easier to recruit, train,
motivate staff
-Communication problems may
increase between specialisms withtheir culture and language
-Poor coordination
Divisional structure -Individual managers can be held
accountable for the profitability
of individual products
-Specialisation
-It is increases the overhead costs
- Different product divisions may fail
to share resources and customers.
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C. Apply to the two companies
Electrolux operates with matrix organizational structures :
Electrolux has a decentralized corporate structure. The business sectors boards performed the
overall management of operational activities. The Group operations are divided into five
business areas : Europe, North America, Asia Pacific and Latin America. It includes six sectors :Finance, Communications, Branding, Legal Affairs, and Human Resources and Organizational
Developmen. Their employees are responsible for a particular product type or market service.
They seperated out differents parts so that it is easier to control the company. Each sector has
their division to develop the company.
Each business area and sector is defined differently. Within
Major Appliances, the business sectors are geographically
defined, while the sectors Professional Products and Floor Care
and Small Appliances are global. Besides, in each particular
market, Electrolux chooses an appropriate organizational
structure. For example, Electrolux Home Products Europe used a
functional organizational structure to compete in the European
market :
CEO
Area 1 Area 5Area 4Area 3Area 2
Finance
Communicati
Branding
Legal
Human
R & D
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( Source : From scenario )
Meanwhile, LG Electronics Inc. is structured by product lines :
( Source : From scenario )
LG Electronics restructured its business under four segments:
home entertainment, mobile communications, home appliances, and
air conditioning and energy solutions.Their kind of structure is tall. CEO to
manage all works in this organisation and the managers are responsibilities for manager four
segments. The Group is focused on continuing to build a lasting
relationship with , and achieving the highest satisfaction for
their customers.
Both the two companies Lectrolux and LG Electronics Inc. have their formal organisation
structures :
Organisat
Forma
Grou
Objecti
Rule
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This organisations are deliberately constructed to fulfil specific goals. The two companies
divided into groups and give rules to manage their staff. If their employees work effectively ,
they will get promotion or a higher-salary. In contrast, the employees do not work hard and have
mistakes, they will receive a punishment or be fired. Both two companies have their objective is
economy. They manage their organisations by their own strategies. Both the two companies are
tall structure organisations which have many levels of management and supervision. An
organisation with a narrow span of control will have more levels in its management hierarchy
than an organisation of the same size with a wide span of control.
1.1.2 Organisational culture An organisational culture : The values and behaviors that contribute to the unique social and
psychological environment of an organisation.ix
Organisational culture is ver important. Every organisation has its unique style of working which
often contributes to its culture. The culture of the workplace controls the wayemployees behave
amongst themselves as well as with people outside the organisation. The culture decides the way
employees interact at their workplace. It also goes a long way in promoting healthy competition
at the workplace. It is the culture of the organisation which extracts the best out of each team
member. In a culture where management is very particular about the reporting system, the
employees however busy they will send their reports by the end of the day. No one has to force
anyone to work. The culture develops a habits in the individuals which makes them successful at
the workplace.
There are four kinds of organisational culture :
CONTROL
( Hierarchy )
CREATE
(Adhocrac)
COMPETE
( Focus )
COLLABORATE
( Clan )
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CONTROL : There is a ranks of authority from lowest to highest. They give rules and positions
for their staff. Organisations always make sure that everything is according to objectives ( time,
behaviour and quality ). The boss care everything their staff do. In my opinion, control culture is
suitable for large enterprises.
COLLABORATE : Every employees cooperate to develop the organisation. The company
creates a warm atmosphere at the office. The company wants their staff go to work with satisfied
and happiness. This culture is fitted with entertainment firms...
COMPETE :Organisations focuses on relationship and partnership. They motivate their staff by
the effective of working. To get the best quality , employees have to compete with others. The
more they work hard , the more reward they can achieve. This kind of culture is adapted with all
organisations.
CREATE :Organisations always use the innovation and flexible by technology. With modern
information technology, their staff can working without going to the office, they can work at
home or anywhere. The boss does not care how much time the staff spend on work, they only
care the effective of working. This is an interesting culture which all organisations should try.
For example, in my business plan, I will establish a music company with the name Sun .Sunis the unlimited resource on Earth. My company will develop unlimited like Sun. My company
will spend the best conditions for people. The people who are not famous want to success. Our
customers will be the students, the artistics whom with a little money and relationships,they create
a lots of songs but nobody know. We will serve their demand by the way : Give their opportunitiesbecome well-known. We will register their songs with their copyright and sell them for the singers
with a better cash. We will bring our customers a stable job.
I want my staff feel motivated and satisfied when they work. Organisationalculture is
collaborate. I think I should create a comfortable atmosphere for staff. Organisational structure is
divisional. Every employees who are responsible for a particular product type or market service
according to workflow. Now, I will show you my company in a diagram below.
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Name Location Logo & color
Kind of business
Staff
Business Plan
Capital
Marketing campain
SUN
MusicCompany
SUN
HaNoi
City
* Director
* Marketing
* Accountant* Human
resouces Total : $
15.000
- Rental : $
3000
- Marketing :
Muic
Busine
ss
- Build a
website
- Advertise
on
News,TV,Inter
net..
- In an open
relationship
- Alwa s
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Apply to the two companies Electrolux and LG Electronics Inc.
Electrolux have a vision of culture is variety of innovation. The management of Electrolux is
constantly striving to maintain well-behave employee relationships. According to the homepageof Electrolux, we can see Electroluxs culture. The Electrolux People Vision is to have an
innovative culture with diverse, outstanding employees that drive changes and go beyond in
delivering on the Groups strategy and performance objectives. The Electrolux culture features
diversity and innovation. This Group also spend good conditions for employees to ensure their
work-life balance. Moreover, their mission is developing and understanding the customers
demands. There is a variety of their products to meet their customers demands such as : washing
machines, refrigerators, cookers, air-conditioning, ... This organisation wants their customers feel
satisfied with their products and services. Electrolux is also striving to make sure that all their
products, services, and production activities are friendly with environment.
Axel Wenner-Gren Founderof Electrolux said : The Electrolux spirit is a combination ofenthusiasm , loyalty, aggressiveness and belief which is inspired by confidence in our
organisation and product, and faith in our success and our future.( source : http://group.electrolux.com )
On the other hand, based on the homepage of LG Electronics Inc, this Group is striving to
create a cultural of corporation based on creativity and autonomy that enhances it to become a
true number one. While forming a work environment where employees work hard and improve
their quality of life, it is also making an effort to improve the standard of living for each
individual member. With the annual LG Way Survey , LG Electronics assesses its
effectiveness in creating a positive work environement in which employees feel their creativityand autonomy is promoted, and then improvements based on the results. Another main platform
for LGEs representative corporate culture is its voice of employees based culture. This is the
process of identifying empoyee perception about major company policies, and after
establishment , and then reflecting these views into those policies.
LGE operates various programs for employees to ensure their work-life balance.
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( Source : http://www.lg.com/global/sustainability/employee/corporate-culture-
work-life-balance)
Overall, the two companies deliberately constructed to fulfil specific goals. Their kind oforganisational culture are control , compete and create. There is a tendency for the management
hierarchy to develop too many levels.Moreover, this organisations might become so widelydiversified in the range of products or services it offers that it becomes difficult, if not
impossible, for management to integrate all of the organisation under a common objective andwithin a single management philosophy and culture. The kind of leader of two companies ischarismatic leader. They always want to inspire and motivate their staff.
1.2 The relationship between an organisations culture and structure
Organisational structure and performance share a relationship in which the former can dictate or
at least affect productivity. Different structures might be more appropriate for businesses
depended on the industry where a company operates.
Organizational structure and organizational structure depend on each other. Organizational
structure is the the way a company arranges its management and lines of authority. A company
with strictly rules and all determine authority focus at the top will leads to the lack of creativity
and passionate in its employees. In contrast, an appropriate and fair structure can encourage
creativity and the coherence among all employees, which can improve the performance of the
organization.
In case of Electrolux and LG, they are both working in high technology industry. Thus,
creativity and technological innovation must be placed at the top to generate their own
competitive advantages. Electrolux has built up the company with a matrix structure in which
each business area and sector is defined differently. This can bring up flexibility and the ease in
controlling. Besides, Electroluxs structure is decentralized corporate with shared power and
http://www.lg.com/global/sustainability/employee/corporate-culture-work-life-balancehttp://www.lg.com/global/sustainability/employee/corporate-culture-work-life-balancehttp://www.lg.com/global/sustainability/employee/corporate-culture-work-life-balancehttp://www.lg.com/global/sustainability/employee/corporate-culture-work-life-balance8/22/2019 Introduction Hanh
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authority at all levels (the overall management of operational activities is largely performed by
the Business sectors boards). Thus, the culture is likely to be more independent, personalized and
accountable.Their achievement is to createa spirit that is a combination of enthusiasm , loyalty,
aggressiveness and belief which is inspired by confidence in our organisation and product, and
faith in our success and our futuresaid by Axel Wenner-GrenFounder of Electrolux
Meanwhile, LG Electronics Inc operates with product line structure. This type of structures have
strength in accountability, specialization and coordination. However, different product divisions
may fail to share resources and customers.
1.3The factors which might influence individual behaviour1.3.1 Define and discuss
In order to manage people effectively, you need to understand people. If you know what
types of behavior make people effective as workers, you may be able to encourage or change
their behavior in such a way as to increase their contribution to organisational goals. All
individuals are different and so behave differently. Interpersonal behavour is different from
individual behaviour. Groups of people behave rather different than their individual members
would if they were on their own. There are five main kinds of individualbehavour at work :
Now, I will show you the illustrations of these types of individual behavour.
Individual behaviour
at work
Conflict, stress
and change
Attitude
Perception
Ability andaptitude
Personality
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Perception
Perception is the psychological process by which stimuli or in-coming sensory data are selected
and organised into patterns which are meaningful to the individual.( Source : Organisations and Behavior Coursebook, chapter 6, page 122 )
The process by which people translate sensory impressions into a cohenrent and unified view of
the world around them. Through necessarily based on incomplete and unreliable information,
perception is equated with reality for most practical purposes and guides human behavior in
general.
Attitude
Technically speaking, an attitude is a mental and neural state of readiness... exerting a
directive ordynamic influence upon the individuals response to all objects and situations with
which it is related.( Source : Organisations and Behavior Coursebook, chapter 6, page 125 )
Attitudes are our general standpoint on things : the positions we have adopted in regard to
particular issues, things and people, as we perceive them. Our attitude towards somethingincludes what we think and feel about it. This will be of particular interest to a manager, because
it suggests that if we can identify peoples attitudes to things, we may be able to anticipate how
they will behave. Behavior in a work content will be influenced by attitudes to work and
attitudes at work.
Personality
Personality is the total pattern of characteristic ways of thinking, feeling and behaving that
constitute the individuals distinctive method of relating to the environment.
( Source : Organisations and Behavior Coursebook, chapter 6, page 116 )
Personality can defined as a dynamic and organized set of personal traits and patterns ofbehavior. The use of personality profiling is one of the most effective ways of developing
awareness. Through it individuals and teams come to understand why they and their colleagues
behave in the way they do, gravitate to certain behavior modes, read situations differently and
make decisions in particular ways.
Ability
Ability is the capacity to do something. It is often equated with intelligence. It is now recognised
that there are many types of ability/intelligence, not all of which are based on about mental
dexterity or verbal fluency.
( Source : Organisations and Behavior Coursebook, chapter 6, page 136 )
Ability is thing that people can do, or are good at which is largely believed to be inherited.
Organisations such as schools, colleges and business attempt to assess the sphere of individuals
abilities, and the level of required abilities which different individuals possess. Ability is only
one factor of performance in a work context. It may be essential to successful performance in a
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particular job but it is unlikely to be sufficient, by itself. Willingness to perform the task, and
suitable task design and wrong conditions.
Stress
Stress is the product of mental and physical demands on the individual. It becomes strain if
excessive or uncontrolled.
( Source : Organisations and Behavior Coursebook, chapter 6, page 136 )
Stress is a term which is often loosely used to describe feelings of tension or exhaustion that
usually associated with too much , or overly demanding, work. Stress may affect the behavior of
individuals within an organisation. Stress in organisations is described as work stress in several
ways, all of which may have an impact on the overall organisational behavior. A key to
understanding the link between stress in organizational behavior and individuals is the
understanding that some degree of stress in the normal workplace cannot be avoided and is not
necessarily a negative factors. This is due to the fact that varying degrees of minor stress at work
may indeed help an individual to perform better. Stress will affect the effectiveness andproductivity of the employee, in turn affecting the bottom line of the company in a positive
manner.
Conflict
Conflict may be either destructive or constructive. Differences should be encouraged and
channelled into argument or competition, not destructive conflict.
( Source : Organisations and Behavior Coursebook, chapter 6, page 136 )
Many of the decisions the organisations make must not be tainted by the possibility of favoritism
or personal gain. It is not unusual for public officials to divest themselves of anything that could
even be construed as creating a conflict, including stocks, pensions, board memberships and
former customers.The major source of conflict arise from : the need to share scarce resources;
the diffenrences in goals between organisational units; and the differences in values, attitudes or
perceptions among members of different units. There are many ways to control conflict. If
competition is perceived to be open, the rules are seen to be fair, and the competitiors feel that
the factors leading to success are within their control, then competition can be extremely fruitful.
Change
Change poses a threat to individuals in many areas of their lives, and is often resisted. The
change must be carefully managed to overcome this resistance.( Source : Organisations and Behavior Coursebook, chapter 6, page 136 )
Change affects individuals in all sorts or ways. A change in shift-work patterns or work
conditions. Most importantly, change individuals spychologically. The manner in which a
change is put across is vital : if possible the individuals concerned should be positively
encouranged to adopt the change as their own.
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1.3.2 Apply to the two companiesBoth two companies have their individuals behavior at their organisations. May be the tall
structure of both two companies can cause conflicts between departments. Abilities of each
departments are different. Every staff have their skills they are good at. How individuals behave
based on their satisfied or not. Personality is an important factors of individuals behavior at
work. Attitudes depended on with whom the employees meet , such as attitude with boss, attitude
with colleagues, attitude with customers or partnerships which are different. Attitude is respect
with higher levels. Working under pressure can cause stress so that effect of working will
decrease. The members of these organisations should try new ways to behave at work. An
individual have well-behave at work can achieve more effective on working.
LO2 : Leadership and management
2.1Leadership style2.1.1 Define and discuss
Leadership style is how the leaders work, as a result of the relationship between individuals
and events.Leadership style is characteristic signs of system management activities of leaders,
defined by the characteristics of their personality. An individuals leadership style is the patternof behaviour that can affect the operation efforts of others. Every leaders have their owned style
of leadership. Neither style is perfect nor is completely wrong style. It is important that yo know
how to control depending on the specific situations and the time use them most effectively. The
leaders often want to learn how to build the style of leadership in the eyes of employees and
customers. There are five kinds of leadership style :
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Autocratic : Leader decide everything and set strict rules.
The leaders always want to control everybody and everything. They do not care about the ideas
of other people. They have goals and staff have to fulfil the goals under the control of the
leaders. In addition to that, they leaders set strict rules and force everyone to do that. They care
even little working. This kind of leadership style often make their staff under pressure and
disastisfied. For expamle, the leader gave the employee a punishment because he was late for
work even one minutes.
Advantages Disadvantages
-Quickly to make decisions without consulting
with a large group of people-Leaders who have autocratic style can control
the group, assign tasks to different members
and set up solid deadlines for projects to be
finished
-People who abuse an autocratic style are often
viewed as bossy, controlling , and dictatorial,which can lead to resentment among group
members.
-Lack of creative solutions to problems
Democratic : Involve everybody in making decisions.
The leaders bring out an idea and want staff comment.Although the comments are good or bad,
the leaders will think it over. They always want their staff give opinions about their business.
This kind of leadership always have conflicts and may be achieve lower-effective. For example,
the manager want to expand their market in another area, they show plan for everybody. After
that, there are many different comments on the plan ( the environment, the conditions... is not
suitable ), the manager change plan immediately.
Advantages Disadvantages
-Having more ideas and more creative
solutions creative solutions to problems
because of sharing thoughs of group members- Leading to higher productivity among group
members.
-In case that roles are unclear or time is of the
essence, leader can lead to communication
failures anf uncompleted projects
Leadership
style
AutocraticLaissez Faire
Bureaucratic
Charismatic
Democratic
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Charismatic : Leader always want to inspire and motivate.
Charismatic is emotional bonds between leaders and followers. The leaders always want their
staff feel movivated and satisfied. They have goals in their business and have stratrgies to fulfill
them. For example, Honda company want to sell 100 motobikes/ one month. They motivated
their employees by an attractiveness goal : 5% bonus from the profits. Their employees will feel
motivated and working harder.
Advantages Disadvantages
-More effective on working
- The bond between the authority figure and
followers is highly emotional in nature
- Does not readily share the timelight
Bureaucratic : Leader make decisions by levels and care about working by levels.
The leaders divide the organisation into sectors. Each sectors have their specific work. For
example, a worker want to have a day off because of illness. He go to the managers room to
submit the letter but the manager let him to the human resouces department. The manager care
about working by levels.
Advantages Disadvantages
-Idealing for business owners with a commandand control style
-Strategic decision-making time can be shorter
in a tall organisational structure
-This style can discourage creativity andinnovation throughout the organisation
-Every work become flexible because the
leader care everything by levels
Laissez Faire : Freedom.
This kind of leadership style is not popular because of non-effective working.
Leader is different from boss. Leader is a person that a dominant or superior position within its
field, and is able to exercise a high degree of control or influence over others. Boss means an
individual that is usually the immediate supervisor of some number of employees and has
certain capacities and responsibilies to make decisions. The term itself is not a formal title, and
is sometimes used to refer to any higher level employee in a company, including a supervisor,
manager, director or the CEO. The majority of managers are want to be a good leader. They
prefer care about the strategies to develop business than control the finance. If they only havemoney without management skills, they do not become successful on their business.
2.1.2 Apply to two companies
According to these types of styles, I will present with Electrolux and LG Electronics.
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Leadership development of Electrolux is a process, which focuses on taking Electrolux
forward and improving the overall business results through accelerated development of the
leadership capabilities of the managers. The Electrolux Leader program is designed for
managers. It is based on the idea that leadership is more about dialogue and coaching than about
assigning mission and demostrating authority. The program is designed to improve leadership
skills. The program provides opportunities to network and leverage global skills and resources,
deepen the knowledge of Remote Management and Cross-Cultural Differences and develop the
understanding of a clear and communicative leadership style. This program help to effectively
implement Group strategy through improved leadership. The Executive is designed as an
intergrated learning journey of senior managers and top leaders to prepare them to manage and
lead present and future changes in the Group. It also harmonizes the approach and strengthens
the global agenda of the Group. Their kind of leadership style is charismatic.The leader of this
Group always want to inspire and motivate their staff. They want their staff feel satisfied and
motivated. The more effective work the staff do, the more promotion they can achieve.
Leadership style of LG Electronics Inc is autocratic. As LG continues to develop as a global
leader, its strength will continue to be derived through this pursuit of a greater good, whileupholding the fundamentals of cooperation , mutual trust , and respect for the free market
economy. Creating value for customers and respect-based management have long been theprinciples behind LG Electronics management activities-aiming.LG Electronics has establishedbasic methods to achieve corporate sustainable management.
2.2Principles of management2.2.1 . Define and discussOrganisational theory is the study of how organisations work and why they are or are not
successful.
Principles of management are basic idea or rule that explains or controls how something
happens or works.
Management is the act of running and controlling a business or similar organisation. The
organisation and coordination of the activities of a business in order to achieve defined
objectives. Management is often included as a factor of production along with machines,
materials, and money.Management consists of the interlocking funtions of creating corporate
policy and organizing, planning, controlling , and directing an organisations resources in order
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to achieve the objectives of that policy. There are many theories of management such as content
theories and motivational theories :Maslow, Herzber, Alderfers ERG, and McClellands.
a. Maslows theoryThe American psychologist Abraham Maslow ( 1954 ) suggested that people have certain innate
needs :
Maslow also suggested that freedom of inquiry and knowledge and understanding were twofurther needs and that these were the channels through which we could sastisfy all the other
needs. Freedom of speech and expression and to gain knowledge, explore and experiment are the
bases of sastisfaction. Abraham Maslow believed that these needs are similar to instincts and
play a major role in motivating behavior. Physiological, security, social, and esteem needs are
deficiency needs, meaning that these needs arise due to deprivation. Satisfying these lower-level
needs is improtant in order to avoid unpleasant feelings or consequences. Maslow termed the
highest-level of the pyramid as Growth needs. Growth needs do not stem from a lack of
something, but rather from a desire to grow as a person.
b. Alderfers ERG theoryExistence Needs Growth NeedRelatedness
Needs
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In an attempt to line up Maslows Theory of Needs with empirical studies, Alderfers ERG
Theory elicits three core requirements : Existence, Relatedness,andGrowth.This categorization
reduction is the result of earlier research on Maslow Hierarchy of Needs that indicates some
overlap within the middle levels. According to Alderfer, the needs arent in any order and any
desire to fulfil a need can be activated at any point in time.
Pros
- All three needs have valid and reliable measures for both the levels of desire and
satisfaction.
- Scholars and practitioners all agree that the fulfillment of human needs has an important
role in human motivation.
Cons
- Alderfers ERG Theory is problematic to use as it tends to approach a set of experimental
generalities.
-
The theory is difficult to test with our current tools and research methods.- Does not provide a motivational value for each motivator.
2.2.2. Apply to the two companiesAccording to these theories, I will apply to the two companies.
Human relation approach
The classical school did not give importance to the human aspects of the workers. Therefore,
they did not give achieve a high level of production efficiency and cooperation between themanagement and workers. The failure of the classical approach led to the human relations
movement. The human relations experts tried to combine spychology and sociology of
interpersonal and intergroup relationships. They gave importance to the management of people.
They felt that management can get the work done from the workers by satisfying their social and
spychological needs.
For Electrolux, labor relations start at the top. The broad of directors comprises non-
executive members. The workplace code of conduct regulated that all Electrolux employees are
free to exercise their legal rights to form, join or refrain from joining organisations representing
their interests as employees. In addition, Electrolux insists that all operations and those of its
suppliers respect employees right to collective bargaining.
Meanwhile, LG Electronics creates working environments that enable its employees to
demonstrate their capabilities, focus on their work, and create value for their customers. This
group evaluates performance results fairly and rewards them accordingly. LG Electronics
ensures equal opportunities regardless of gender, race, age, religion or nationality.
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Scientific management approach
Based on the information of LG Electronics on its homepagewww.lg.com, I will show the
information in summary. This Group has established four basic methods to achieve corporate
sustainable management. Fristly, LG Electronics continually assesses new ways to develop its
organisation and systems. It also find ways to strength its internal competencies so that the three
focal points of sustainable management : economic profitability, friendliness, and social
responsibilities, can be assured. Secondly, LG Electronics systematically managers risks by
identifying and closely monitoring both financial and non-financial concerns, such as the
environment and social issues of domestic and international businesses. Thirdly , LG Electronics
monitors communication channels with heightened analysis relating to the parties concerned,
reflecting their opinions and requests more effectively. Finally, LG Electronics intends to build
global leadership by using its brand strategies in connection with corporate sustainable
management activities.
Meanwhile, according to the website of Electrolux, I will present in summary about
scientific management approach of this organisation. Electrolux Group Management includes
the President and CEO, the six business sector heads , four Group staff heads and the Chief
Technology Officer. At each Annual General Meeting , the Electrolux shareholders adopt for
remuneration to Group management. Electrolux shall strive to offer total remuneration that is fair
and competitive in relation to the country of employment or region of each Group management
member. The remuneration terms shall emphasize pay for performance, and vary with the
performance of the individual and the Group. Remuneration for Group Management may
comprise : fixed compensation ( annual base salary ) ; variable compensation ( short-termincentives and long-term incentives ) ; other benefits such as pension and insurance. The long
term incentive program comprises financial goals that are based on the average annual increase
in earnings per share over a three-year period. Participants are required to individually invest in
Electrolux shares. The aim is to increase the participants holdings in the company long -term
development for Electrolux. The Board of Directors has proposed that the 2011 Annual General
Meeting shall approve a performance-based, long-term incentive program for 2011 with the
same main elements as the program for 2010. The long term incentive targets are based on
increase in earnings per share.
SocioTechnical approach
According to LG Electronics R&D strategy on its website, they have many campains to
create good image in their customers. It often spends money on charity. This Group provides
school meals in their school where they supported and gives children opportunities to study for
being out of poverty in the future. It also supported foods for poor people. On the other hand,
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LGE tries to update news technology to devolop its products. From mobile innovations to digital
media technology , LGE is leading the electronics industry and bringing technology into
customers home. Based on the design of LGE, I can show you some main points. This group has
focused on devdeloping four core design capabilities in its bid to become purveyors of great
design Concept , Style , Interface and Finish. This is a great opportunity for the
company to position itself as an innovative technology firm with a flair for design, and there by
further increasing its market position with a keen focus on becoming a top three global company
by 2010.
In contrast, Electrolux has its aims. This Group approachs to social responsibility helps us
understand the challenges and opportunities facing their world and their business. It enables to
help this organisation to find solutions and demonstrate the value Electrolux and their products
bring to society. Electrolux have their strategies to find a new market to expand their business.
To meet this strategies, Electrolux always finds solutions to meet customers demands. They
always have good sevices with high quality products for their customers. Electrolux also updatesnews technology to develop their products. This group spends the best conditions for its staff to
meet their satisfied.
Contingency Approach
An assumption that no one theory or method for business management can apply to all
businesses or to all circunstances. From a business perspective, using a contingency approach
to problem solving would indicate that issues need to be understood and then addressed in
ways that depend on the environment and context in which they occur. x
2.3Approaching to managementApproaching to management is an act of communicating with another person or group in order to
ask for something. Each organisation has its own strategies to approach management.
The Electrolux organisation approaches to management by many ways : organisational
responsibility, policies, external assurance, training and monitoring, environmental performance,workplace code of conduct, labor practices and human rights, people vision, healthy and safety,
and society. This Group has a variety of different managements. These managements meet
objectives of staff and customers. All strategies given by this Group are suitable with all
demands. Such as, when producing products, Electrolux aims at protecting environment. This
Group makes sure that all their staff work under a safety conditions. This organisation aims at
implementing strict norms and efficient processes to ensure that all operations create long-term
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value for stakeholders and shareholders. Besides, in each particular market, Electrolux chooses
an appropriate organizational structure. The management of this organisation should find more
ways to manage company to get more effective work. Focused on the loyalty customers to serve
their demands. Encouraging staff on working.
LG Electronics is striving to create a cultural of corporation based on creativity and autonomy
that enhances it to become a true number one. The culture of the workplace controls the way
employees behave amongst themselves as well as with people outside the organisation. If their
employees work effectively , they will get promotion or a higher-salary. LG Electronics Inc
operates with product line structure. This type of structures have strength in accountability,
specialization and coordination. However, different product divisions may fail to share resources
and customers. This organisation should try to learn management from another organisations to
have more skills on managing. Sometimes, managing should strict but in real life it seemd to be
more comfortable.
The two organisations have their own strategies to manage their companies. Each types of
strategies have their advantages and disadvantages. To get effective on working, the management
should innovate and flexible.
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ConclusionEach company has their own effective organisational structure. Electrolux has a decentralized
corporate structure in which the overall management of operational activities is largely
performed by the Business sectors boards. They seperated out differents parts so that it is easier
to control the company. Each sector has their division to develop the company. Each business
area and sector is defined differently. Besides, in each particular market, Electrolux chooses an
appropriate organizational structure. Meanwhile, LG Electronics Inc is structured by product
lines. The Group is focused on continuing to build a lasting relationship with , and achieving thehighest satisfaction for their customers. This organisations are deliberately constructed to fulfil
specific goals. The two companies divided into groups and give rules to manage their staff.
Their organisational culture always focus on developing creativity and innovation among
employees. The Electrolux People vision is to have an innovative culture with diverse,
outstanding employees that drive change and go beyond in delivering on the Groups strategy
and performance objectives. Human resource policies, leadership programs and an internal
recruitment tool help to realize the vision. Sustainability is included in induction programs for all
new senior managers. On the other hand, LG Electronics Inc is striving to create a cultural of
corporation based on creativity and autonomy that enhances it to become a true number one.While forming a work environment where employees work hard and improve their quality of
life, it is also making an effort to improve the standard of living for each individual member.
The differences in structure and culture of the two organizations lead to the differences in
leadership style. Electroluxs kind of leadership style is charismatic.The leader of this Group
always want to inspire and motivate their staff. They want their staff feel satisfied and
motivated. The more effective work the staff do, the more promotion they can achieve. However,
leadership style of LG Electronics Inc is autocratic. As LG continues to develop as a global
leader, its strength will continue to be derived through this pursuit of a greater good, while
upholding the fundamentals of cooperation , mutual trust , and respect for the free market
economy.
A effective structure, appreciation of developing org culture with a suitable leadership style
is the reason why the two companies can become the leading producer in their business fields.
Electrolux is a leading producer of appliances for household and commercial use, and LG
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Electronics is one of the global leaders in consumer electronics, home applicances, and mobile
communications. Each company has their strength on the business market.
i Source from : http://dictionary.cambridge.org/dictionary/business-english/ii Source from : http://dictionary.cambridge.org/dictionary/business-
english/organizational-structure?q=organizational+structureiii Source from : Organisation&BehaviourCoursebook, chapter 1 , page 5iv Source from : Organisation&BehaviourCoursebook, chapter 1 , page 5v Source from : Organisation&BahaviourCoursebook, chapter 3 , page 62vi Source from : Organisation&BahaviourCoursebook, chapter 3 , page 62
vii Organisation&BehaviourCoursebook, chapter 3, page 64
viii Source from : http://www.businessdictionary.comix http://www.businessdictionary.com/definition/organizational-culture.htmlx http://www.businessdictionary.com/definition/contingency-approach.html