Organisation Design and Organisation Development.

Organizations vary considerably. They range from the small shop in your local high street to
household names such as Apple or McDonalds. The one common component of all
organizations is people. Whatever organization you choose to name, it will have people in it.
Organizations survive or fail according to the activities of these people. Those who lead and
manage organizations need to ensure, therefore, that the way that they operate gives every
opportunity for the people working within the organization to be successful. Leaders take time
to ensure that there are effective recruitment processes, effective learning and development
activities, and also to ensure that people are rewarded in such a way that they will be
motivated to perform well.
In addition to these very people-orientated issues there is also a need to look at the
organization holistically. As well as looking at the organization as individuals that all need to
be nurtured, we need to think about the way that the organization as a whole is designed and
developed. How do we put together all of the contributions from individual employees and
combine these to form a successful and thriving organization?
In answering this question there are two important areas that we need to consider.
Firstly, we need to consider the way that the organization is designed. Are the structure, the
culture, the diversity and the various other features of an organization designed such that the
people in the organization can contribute in the most effective way?
Secondly, we need to consider the development of the organization. An organization needs
to develop to survive. So, we need to be thinking about the process of managing change and
of identifying the need for change to ensure that the organization remains successful and
competitive.
We could illustrate these two areas by looking at the Royal Bank of Scotland (RBS), one of
the organizations that suffered most miserably in the global financial problems that started in

  1. To survive, RBS needed a massive cash injection from the UK government, and as it
    still struggles to become profitable again a key part of the strategy has been to restructure.
    The management of RBS have had to question the way that they want the organization of the
    future to look. Do they want the investment part of the bank (a very lucrative part, but also a
    very risky part) to be part of the main structure, or do they want to separate it out from retail
    banking? What sorts of skills do they need in the organization? Should they reward their
    bankers with large bonuses? If not, how should they reward them?
    Questions like this are all part of ensuring that the design and the development of the
    organization is fit for purpose, and that the bank becomes successful again.
    These questions of organizational design and organizational development are what this
    module is all about. We are going to look at various features of organizations, and ways in
    which organizations need to develop and grow, and try to determine how to design and
    develop a successful organization. We are going to look at broad aspects of organization
    design such as strategy and culture. We are also going to look at more specific issues relating
    to the people in the organization, such as performance management and reward.
    By the time you finish studying this module you should have a much clearer understanding of
    how you can contribute to ensuring that any organization that you work for is prepared for a
    successful future.
    Learning Outcomes:
  2. Understand, analyze and critically evaluate the processes and systems that need to
    be in place to maintain such structures and relationships and evaluation of same.
  3. Understand, analyze and critically evaluate possible change management strategies
    and activities through the application of organization development strategies, which
    might support organization design and realignment outcomes.
  4. Understand, analyze and critically evaluate organization culture, norms and behaviors.
    Assessment brief/activity ( The Assignment )
    Formed in October 2013 as a result of a number of mergers, Travel Group (TG) is a public
    limited company. TG’s head office is in Germany and The Group employs 56,000 people
    worldwide. Providing services to more than 40 million customers from around the world, TG’s
    key operational areas are 1600 travel agencies, 7 airlines, 350 hotels and 14 cruise liners.
    Travel UK is the UK tour operator subsidiary and airline. Travel UK has the following
    operational divisions: Airline, Commercial, Customer Operations and the following business
    support departments: Finance, IT, Marketing, Public Relations/Business Change and Human
    Resources. Each operational division is clearly defined and has its own sphere of
    competence. Each division has a hierarchy that is clearly defined with operational rules and
    processes that guide managers in making objective decisions. Each operational division has
    its own business support departments. Following the most recent merger a decision was
    made to put in place new organizational structures in recognition of the duplication that
    existed in some functions, and where different brands were in place for travel agencies these
    have now been rebranded Travel UK. Differences also exist in terms and conditions of
    employment and working practices of TG’s employees depending on which pre-merger
    company the employees worked for. Some of these differences can clearly be identified in
    job descriptions whereas others exist in agreements that were the result of consultation and
    negotiation with trade unions. The trade unions are strong and have high levels of
    membership. For example, in the UK department heads have been reluctant to make
    changes to cabin crew hours and working practices because of the underlying threat of strike
    action. Joint Consultative Committees meet on a monthly basis and the scope of issues can
    include almost anything from terms and conditions of employment to costs and allocation of
    employees to flying schedules. This consultative machinery has a significant impact on
    decision making.
    Organizational performance is measured in a number of ways. In addition to the standard
    financial measures (such as turnover and profits that are important to all public limited
    companies) TG as the parent company has three key non-financial measures. These are
    customer satisfaction, employee engagement and sustainability. In this highly competitive
    market, customer satisfaction is crucial in ensuring that customers book future holidays with
    TG and recommend TG to friends and family. The second key non-financial measure is
    engagement. TG believes that happy and engaged employees will help to achieve sustained
    competitive advantage in a fairly turbulent market. The third measure, sustainability within the
    travel industry, is seen as crucial. The Global Sustainable Tourism Council (which establishes
    and manages global sustainable standards with the aim of increasing sustainable tourism
    knowledge and practices among public and private stakeholders) sets two criteria. Their
    website states these two criteria are, ‘…those that relate to destinations and those that relate
    to tour operators that provide the guiding principles and minimum requirements that any
    tourism business or destination should aspire to reach in order to protect and sustain the
    world’s natural and cultural resources, while ensuring tourism meets its potential as a tool for
    conservation and poverty alleviation’. Practical examples of how TG meets these criteria
    include using e-ticketing, reducing waste, saving water and reducing carbon
    emissions. Sustainability is a key organizational goal and TG aspires to be included on the
    Dow Jones Sustainability Index (DJSI) and the FTSE4 Good Sustainability Index. Having the
    right organizational culture is viewed as being central to achieving this goal.
    The travel industry has been affected by a number of different external factors in recent years
    including: terrorism affecting flights, airports and resorts; industrial action taken by baggage
    handlers and air traffic controllers at various airports in Europe; volcano ash and extreme
    weather grounding or rerouting flights; Norovirus on cruise ships, etc.
    Write a 3000 word report in which you:
  5. Critically analyze TG’s current organizational structure Evaluate its appropriateness for
    the future.
  6. Provide a detailed analysis of external factors currently affecting TG and the impact that
    these may have on change and organizational development at TG.
  7. Produce organizational development and design recommendations of how TG can
    achieve its sustainability goal. In doing so you should consider the extent to which
    organizational culture can be changed and whether a culture change is important in
    achieving the sustainability goal. You should use research evidence and your
    knowledge of organizational practice to support your recommendations. Consideration
    should also be given to possible implementation issues and/or tensions.