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
- 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: - 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. - 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. - 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: - Critically analyze TG’s current organizational structure Evaluate its appropriateness for
the future. - Provide a detailed analysis of external factors currently affecting TG and the impact that
these may have on change and organizational development at TG. - 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.
