-86%
Solution
Table of Contents
1.1 Organisation structures; reasons underpinning. 2
1.2 Connections between organisational strategy, products, services and customers. 4
1.3 Factors and trends which impact organisations. 5
1.4 Assessment of the scale of technology within organisations. 7
2.1 Theories/models of organisational behavior. 8
Geert Hofstede’s Cultural Dimensions Theory. 8
Abraham Maslow’s Hierarchy of Needs theory. 9
Victor Vroom’s Expectancy Theory. 9
2.2 People Practices Impact on Organisational Culture and Behaviour. 9
2.3 Approaches to Managing Change. 11
2.4 Models for How Change Is Experienced. 11
2.5 Importance of Wellbeing at Work. 12
3.1 Employee lifecycle and people practice roles. 14
3.2 People practice connection with other areas. 15
3.3 Consulting and engaging internal customers. 16
LO1
1.1 Organisation structures; reasons underpinning
There are three main types of organisational structures: functional, divisional and matrix. Each structure has its advantages and disadvantages depending on the organisation’s goals and environment.
Functional Structure
In this section, the organisation of focus is Al-Rajhi Banking & Investment Corporation operating in KSA banking industry. The functional structure groups employees by specialty, such as marketing, finance, and operations as evidenced by Vaughan (2022). Al-Rajhi Banking & Investment Corporation is one of the largest financial groups in Saudi Arabia. It started as a functional structure but has transitioned over time based on its changing needs. Initially, as a small local bank, Al-Rajhi adopted a functional structure with departments for retail banking, corporate banking, and treasury. This allowed specialisation and efficiency through standardised processes.
Advantages- It allows specialisation within functions and standard processes. Also, as evidenced in CIPD (2023), the application of the functional structure has a positive implication in increasing development of skills. This means the different teams possessing similar skills are enhanced hence enhanced skills for all engaged people.
Disadvantages- However, it can lead to suboptimisation where functions focus more on their area rather than overall company goals. It also lacks flexibility for diverse customer needs. This is with the process followed in decision making substantially hindered in a functional organisation structure. There are a high number of people who have to be consulted for making a decision in the functional structure.
Divisional Structure
The divisional structure organises the company by product, customer, geography, or other categorisations. Each division operates as a separate profit center ( Bragg, 2023). Al-Rajhi then restructured into a multi-divisional form by splitting into regional divisions based on geography. This improved responsiveness to the unique needs of each market and held divisions accountable for their performance. However, divisions started competing for resources and duplicating support functions.
Advantages- It encourages responsiveness to local needs and accountability. This is achieved by allowing organisations decision making and entire practices coordination actively. Also, the scope of specialisation is increased with the individuals operating in this structure pursuing specified functions.
Disadvantages- Nevertheless, interdivisional conflicts may arise as divisions compete for resources. In addition, duplication of support functions increases costs. There is also an evident duplication of the management. The lack of an active cooperation lead to divisions emerging which creates misunderstanding amongst the involved stakeholders in an organisation.
Matrix Structure
The matrix structure combines the functional and divisional forms. It has functional experts who serve particular divisions or projects (Indeed, 2020). More recently, Al-Rajhi transitioned to a matrix structure to leverage the benefits of both functional expertise and regional focus. It maintained centralised functions like finance, IT, and HR but overlaid these with geographical business units. Subject matter experts are now allocated to regions part-time. This hybrid structure gained flexibility while mitigating conflicts through multi-dimensional reporting.
Advantage- This hybrid structure aims to gain benefits of both while mitigating their weaknesses. Also, the structure engages individuals coming from different departments hence facilitating capitalization of resources already in place. This is as opposed to sourcing for expertise and recruitment of project teams members externally.
Disadvantages- Nevertheless, employees face dual lines of authority and need to please both functions and divisions, causing role ambiguity and conflicts. This means that it is a challenge for the employees understanding who is responsible for what when there is a need for making decisions in their organisations.
A key reason underpinning these structures is that they have different structures is the degree of product/market commonality versus diversity. Homogeneous operations benefit more from functional specialisation while heterogeneous activities require multidimensional structures (María Martínez‐León & Martínez‐García, 2011). Company size also influences the choice – larger organisations tend towards divisional or matrix structures to prevent hierarchy issues in functional structures. Additionally, different life cycle stages demand transitions between structures for changing needs in control, flexibility, and innovation. In general, the functional structure is suitable for stable environments with standardised production. Its centralised control and expertise development facilitate economies of scale. In contrast, divisional and matrix structures suit diversified and changing markets through decentralised autonomous units. Their self-contained divisions and multi-dimensional reporting improve responsiveness, flexibility, and innovation.
1.2 Connections between organisational strategy, products, services and customers
Products
The organisational strategy dictates the type of products that will be offered to satisfy customer demands as reported by Hansen & Juslin (2019). Product planning involves understanding customer needs and positioning products competitively. Features and functionality of products are aligned with strategic goals. The quality, performance and design of products reflect the brand image and customer value defined in the strategy. Pricing and specifications of products allow the organisation to target desired customer segments and segments as per the strategy. For example, Alrajhi offers various ariah-compliant savings, current, investment, and financing products tailored to individual and corporate customers. This aligns with its strategic focus on becoming the leading Islamic bank. Products cater to priority segments like salary customers through Muqassah savings accounts. This supports the strategic goals of market share growth and customer stickiness.
Services
The strategy governs the selection of services that complements product offerings. It provides guidance on the service culture and customer experience desired (Indeed Career Guide, 2022). Service delivery, assurance levels and processes are tailored according to customer expectations identified strategically. Service scope and models are shaped by the strategic focus on certain industries, segments or verticals. Investments in service capabilities are prioritised as per strategic service differentiators. Performance metrics ensure services strengthen customer relationships and support strategic goals. For example, Banking services embrace digital platforms as the strategy emphasises innovation. Services like Ahlan banking app follow strategic service differentiation.
Customers
The organisational strategy profiles the target customer base and guides customer acquisition, retention and engagement approaches as evidenced by Panel (2021). Customer insight helps uncover strategic imperatives. Customer segmentation aligns resource allocation according to strategy. Customer journeys are designed around the strategic value proposition. Partnerships extend strategic reach to customers. Customers are treated according to their strategic importance. For example, Strategic focus on the Saudi domestic market shapes wider range of branch locations, products and communication in local languages/culture. Partnerships provide services to strategic institutional customers like ministry payrolls and corporates.
1.3 Factors and trends which impact organisations
PESTEL is a framework used for environmental scanning which analyses macro-level external factors impacting organisations Political, Economic, Social, Technological, Environmental and Legal (CIPD. (2023). PESTEL framework to examine 3 external factors and their impact on organisational priorities:
Principal demographic trends
Political, Social factors– Population growth and ageing create demand for new healthcare products and services. This prioritises R&D spending in pharmaceutical companies towards therapeutic areas addressing senior needs (National Archives, 2019). Population growth and ageing leads to priority of expanding suite of Shariah compliant health/takaful insurance products in Alrajhi Bank through dedicated branches to serve senior customer base.
Due to the identified trend, the priority would be to ensure that they broaden their recruitment pool. This is by using modern technologies such as organisation website and job boards. The outcome of this would be increased retention of most qualified employees.
Social factor- Urbanisation and nuclear families increase demand for convenience foods. This influences food companies to invest in product launches and production facilities catering to on-the-go urban consumers.
The priority here would include ensuring that the employees are provided with capacity development opportunities. These opportunities would be meant to improve their capacity to execute their assigned roles.
Market and competitive contexts
Technological factor- Industry convergence across sectors intensifies competition. This emphasises the need for restructuring and strategic collaborations for companies to remain relevant. For example, the entry of fintech companies in Saudi Arabia intensifies competition, prioritising strategic partnerships with fintech firms to offer collaborative financial products and services.
The priority here would be to invest in modern technology. This is while ensuring that the budgeting is appropriately placed to investing in technology.
Economic factors- Customer expectations shifting online motivate retailers to prioritise omnichannel expansion, digital transformation, and loyalty and personalisation programs.
The priority is ensuring their budget is re-evaluated to be aligned with the current economic challenges. This would lead to the organisation achieving competitiveness despite of the existing economic challenges.
Government policy and international bodies
Environmental factors- Stringent environmental regulations make waste management and green technology top priorities for automotive manufacturers and chemical industries in the EU region ( Brenan et al, 2023).
Legal factors– Trade restrictions and changing tax policies prompt local value creation through onshoring/near-shoring of manufacturing and jobs by multinationals operating across borders (Wang et al. 2023). In Al-Rajhi, Saudi Vision 2030 infrastructure spending results in priority of expanding project financing division and loan offerings to private sector. Regulations on lending rates prioritise optimising risk management practices and controls to stay compliant and competitive. Economic reforms incentivise private sector lending and SME financing through priority programmes like financial literacy and new specialised loans.
1.4 Assessment of the scale of technology within organisations
Most organisations today rely heavily on technology for work systems and equipment as evidenced by Cascio & Montealegre (2016). In Alharji Bank, Office workers use up-to-date computers, networking systems, software applications, and communication tools on a daily basis. While some machinery may be older, core systems are regularly updated to remain effective.
Larger organisations have successfully implemented technology across most departments but some frontline roles rely less on tech. Back-office functions are heavily digital while customer-facing roles still involve personal service. Data analysis and project management are highly technology-dependent.
IT is a major line item in budgets but not all spending is strategic. While necessary upgrades keep the business running, some experiments are short-lived. More planning could reduce wasting funds on fleeting technologies. Collaboration tools see high adoption while VR/AR trials have more mixed success (Noymed, 2023).
Internal IT teams provide user support but capacity is limited. Self-service options expand assistance but extensive training is still needed for new systems. Documentation and hotlines partially make up for lack of dedicated support in all departments. Overall support needs improving to maximise technology’s benefits.
Impacts of Technology
Technology has significantly increased worker efficiency by automating routine tasks. However, remote working enabled by technology has blurred work-life boundaries, negatively impacting wellbeing through an ‘always-on’ culture and isolation from colleagues.
Collaborative technologies like video conferencing and social media have enhanced communication and collaborative working across distances (Deschênes, 2024).). However, social media integration in remote working presents new challenges around maintaining separation between work and personal lives. Automation has reduced satisfaction for some jobs as repetitive tasks are given to machines. But technology also drives innovation by creating new roles and possibilities for creativity that did not previously exist.
The nature of work has fundamentally evolved alongside advancing technology. In Alharji Bank, roles have transformed considerably from manual to digital, requiring new skills that periodically become outdated as technologies develop. According to Manyika (2017), workers must constantly reskill and adapt to changing job requirements. Meanwhile, new technology-centered occupations have emerged. The outcome of this is the different organisations being appropriately poisoned to leverage on competitive advantage and dominate their markets. The best employees are attracted to the organisation.
LO2
2.1 Theories/models of organisational behavior
Edgar Schein’s Model
Edgar Schein’s Organisational Culture Model examines the way values and behaviors become embedded in an organisation’s culture through a process of social learning and socialization (Lteif, 2021). According to Schein, culture exists on three levels – observable artifacts and behaviors, espoused values, and underlying basic assumptions. His model suggests that for organisational change to be successful and enduring, managers need to understand the basic assumptions that drive behavior at the deepest level of culture.
Geert Hofstede’s Cultural Dimensions Theory
Geert Hofstede’s Cultural Dimensions Theory proposes that national culture influences values in the workplace. Hofstede identified 5 key dimensions along which national cultures can be compared – individualism versus collectivism, power distance, uncertainty avoidance, masculinity versus femininity, long term orientation versus short term normative orientation (Wale, 2023). By understanding where a culture sits on these dimensions, managers can better understand workforce behaviors and dynamics in multinational organisations and adapt their management styles appropriately to be most effective.
Theories/models of Human behavior
Abraham Maslow’s Hierarchy of Needs theory
This theory proposes that people are motivated to fulfill basic needs before moving on to other needs. The hierarchy comprises of physiological, safety, social, esteem and self-actualization needs. According to Cherry (2022) the theory suggests that lower level needs must be satisfied before higher-level needs can motivate individuals. This theory provides insights into what motivates human behaviour and performance at work. At Alharji Bank, ensuring basic needs like fair pay, health benefits and job security (physiological and safety needs) keep employees motivated and satisfied at lower levels. This allows the bank to focus on fulfilling higher social needs through teamwork and recognition, increasing employee commitment and engagement for optimal performance. Addressing each level of needs drives overall workforce motivation.
Victor Vroom’s Expectancy Theory
This theory explains motivational forces based on individual perception. It proposes that motivation is a product of three factors – valence (value of a reward), instrumentality (belief that performance will lead to reward) and expectancy (belief that effort will lead to performance). The factors combine multiplicatively such that if any single factor is low, motivation will be low as well. The model provides an understanding into why people choose particular behaviors and how expectations and attitudes impact motivational forces. At Alharji Bank, employees are more motivated when they believe excellent performance will lead to lucrative bonuses (high expectancy). If performance reviews are perceived as unfair, motivation drops as workers feel less confident their efforts will be rewarded (low instrumentality). Regular feedback keeps expectancy and instrumentality high.
2.2 People Practices Impact on Organisational Culture and Behaviour
People practices have a significant influence on shaping an organisation’s culture and the behaviours demonstrated within it. As the ‘people champion’ responsible for initiatives that relate to employees, the human resources (HR) function plays a key role in establishing and reinforcing the beliefs, values and principles that determine how people interact and work together ( Bosley, 2022).
Through the policies it develops and implements, HR communicates the standards of conduct and treatment expected across all levels. For example, policies on diversity, inclusion and anti-discrimination help foster a culture of respect where all staff feel valued. Similarly, learning and development (L&D) policies signal the importance placed on continuous skill development, thereby motivating staff to constantly improve (Gabriel, 2023).
Beyond policies, the HR team also acts as a role model due to its interactions with employees on a daily basis. Demonstrating the values of fairness, empathy and collaboration through their own actions and decision-making sets an example that permeates behaviours organisation-wide. This helps build high levels of trust between the workforce and leadership.
Rewards and recognition programs linked to engagement and performance management systems administered by HR further reinforce culture by incentivising desired behaviours. For instance, policies that reward teamwork and innovation encourage cooperation and a willingness to embrace change. This bolsters motivation levels across the organisation.
Ensuring transparency in processes like talent acquisition, compensation planning and succession management strengthens the sense of inclusion and feeds open communication chains. It engenders psychological safety which is vital for healthy debate and progress. Staff feel empowered to perform to their best in such empowering cultures.
A supportive, people-centric approach from HR correlates with greater wellbeing too as evidenced by Khan (2023). Flexible policies, an emphasis on work-life balance and mental health initiatives demonstrate valuing people holistically beyond professional contributions. This renders the culture more humane and caring. Higher job satisfaction arises from feeling cared for as an individual. Collectively, strategic people practices administered by an effective HR function play the pivotal role of architect and guardian of a company’s culture. Through diverse pathways, they cultivate behaviours that achieve alignment with organisational goals and priorities. A consistent, values-driven people agenda is thus essential for optimising performance at both individual and institutional levels.
2.3 Approaches to Managing Change
Lewin’s three-step model involves unfreezing the current state, moving to a new state and refreezing the new state. The unfreezing involves preparing employees for change by creating motivation as evidenced by Mind Tools (2023). Moving involves implementing the actual changes through action planning and training. Refreezing stabilises the new state through feedback, recognition and institutionalisation.
Kotter’s eight-stage model begins with creating urgency around the need for change, forming a powerful coalition, developing a clear vision, communicating that vision widely, empowering broad-based action, generating short-term wins, consolidating gains and embedding changes into the corporate culture (Juneja, 2019). It emphasises establishing urgency before initiating change and reinforcing progress through celebration of successes.
Reactive approaches respond to changes as they happen instead of anticipating them. Changes are unplanned and tend to be chaotic since there is no structured process to manage the transition (Abbas, 2023). This can undermine productivity and morale as employees struggle to adapt quickly.
Proactive approaches anticipate needed changes and plan for them systematically before they occur. Goals are set, resources allocated and timelines established to transition in an organised manner. Employees are prepared for changes through communication and training. This minimises disruptions and allows optimisation of processes for improved outcomes.
Planned change is carefully designed and tailored in advance, involving phases of analysis, planning, implementation, and evaluation (Spacey, 2016). Senior leaders steer the initiative through a structured framework of milestones and metrics. It produces more predictable results but limits flexibility to adapt to new information. Emergent change occurs gradually through a flexible, organic process of experimentation. Multiple ideas are tried iteratively to discover the optimal solution. However, emergence makes planning difficult and sometimes fails to fully address underlying issues.
2.4 Models for How Change Is Experienced
Tannenbaum and Hanna’s three-stage model
Please click the following icon to access this assessment in full
