Psb510 Organisational Culture And Structure Assessment Answers
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Questions:
Task
The purpose of this assignment is to provide an opportunity to utilise your knowledge of strategic management to assess three key aspects of the organisation of your choice.
You can also attach appendices to the report to provide coverage of information that, because of the report length constraint, could not be included in the main report. There is no limitation on the length of the appendices.
An ability to utilise sources such as the Internet and University library facilities to search, locate and summarise data relevant to the assignment
An ability to assess organisational culture
An ability to utilise appropriate theories about business strategy to assess the relevance of the three dimensions for the chosen organisation
An ability to assess the formal organizational structure and its impact on communications and decision-making
An ability to utilise appropriate theories to assess the linkages between specific dimensions of strategy
Presentation of appropriate arguments to justify your conclusion about the consistency and linkages in the chosen organisation
An ability to present a well written, well-structured report
Answers:
Introduction
In current competitive business industry, creating effective strategies and setting a creative organizational culture play an important and vital role. It requires the focus of organization on its key stakeholders like; employees, customers, clients etc. The organization must use an effective marketing process to access the market. Through this process, it can identify the needs and expectations of particular target segment and implement strategic dimensions to satisfy existing customers and enhance customer base. By analyzing the needs and wants of the customers, company has devised its generic and marketing strategies and then it set an effective organizational culture for the employees at the workplace. The focus of this report is to assess the strategic dimensions of Samsung organization. In order to assess strategic performance of the company, it includes the description about the Porter’s generic strategy, like; cost leadership, focus and cost differentiation. Furthermore, it includes the organizational culture and formal organizational culture of Samsung Company. The organization culture of Samsung is very flexible and innovative. The different level of organization is working for their assigned roles and responsibilities.Company Background
Established in 1938, Samsung is one of the industry leaders in different industries from power generation to smart phones. Headquarter of the company is situated in the Seoul, Korea and it has various service networks and plats in more than 65 different countries. It has around 196 subsidiaries around the world. Currently, the total employment of Samsung is more than 344,000 employees internationally. The company has various business operations and affiliated businesses. Each of its business operations follows the same vision of becoming the most desired supplier of products and suppliers to their customers, but the processes, which are used to attain this vision, are designed to grab the focus for specific market showing its adaptability (Grobart, 2013). In 2014, the total revenue of the company was $305 billion. After that, Samsung attained great results in the 2016 and that was the highest profit from last three years. It reported KRW 201.87 trillion for the year 2016 (Russell, 2017). Samsung is one of the most reputed brands available in the market, which targets to secure the leadership in this particular industry and earn competitive advantage by coordinating the manufacturing and development of product, marketing and sales. It maintains high position in the respective industry regularly from the year 1992 upholding its top rank and expands its financial framework throughout the industry. It has maintained itself as top company in the industry of televisions, computer gadgets, mobile phones, monitors, LCD screens and TFT (Samsung Electronics, 2007). The Major competitors of Samsung are Sony, Videocon, LG, Apple, Panasonic etc.Generic strategy
In the year 1980, Michael Porter introduced three generic strategies, which an organization could use to gain competitive advantage. These are the ways of competing in his competitive business environment. Company’s position in an industry defines whether the profitability of firm is below or above the average of industry (Anderson, Narus & Narayandas, 2009). Porter explained that there are two fundamental types of competitive advantages, which a firm can have, one is low cost and another is differentiation. Both the types of fundamentals combined with the objective of the firm and lead them to three generic strategies for enhancing the financial performance in the industry. These three strategies are like; cost leadership, focus and product differentiation. Porter argues that these three basic strategic options are available for the organizations, which are going ahead for achieving competitive advantage (Eldring, 2008).In order to gain competitive advantage and increase the profitability, Samsung is also implementing generic strategies. Samsung utilizes the cost leadership strategy because it enhances the profits and revenues by decreasing the costs, by charging comparatively lower prices in the market. This strategy can be regarded as core competencies of Samsung (Moon, 2010). The cost leadership strategy of the company was able to command better margins in comparison to its competitors in the industry because of the 35% cheaper labor as compared to other manufacturers. It has used new product design rules and methods and it outsources the raw materials, which cost 37% less than competitors due to better bargaining power and discount policy (Samsung Electronics, 2007).Apart from this strategy, product differentiation also best suitable to Samsung, as the organization is increasingly involved in the launching new and advanced technologies. It has adopted differentiation strategy by offering its customers various different products and services, online customer support, resolving online complaints and phone and customer support. It has implemented this strategy in all the segments, like; smart phones, home appliances and Samsung laptops and computer (Jung, 2014). Samsung invests at least 9% of sales revenue in the research and development process. It focuses on providing creative and quality products to the customers and it targeted at making the life of customer easier. Many features in these new products have assisted the company in covering huge market share and attaining customer loyalty. The company thinks in creative products and innovative advertising strategies. The company has planned to reach $400 billion revenues and it is becoming the biggest leader in global market by 2020. After the implementation of differentiation strategy, the net sales of the company, which was decreasing till 2009, increases to 220.1 billion and has increased continuously. Thus, the generic strategy of Samsung is a combination of both product differentiation and cost leadership.Organizational Culture
Organizational culture in an organization includes a system of shared values, beliefs and assumptions that regulates how the human resources behave in organizations. These values and beliefs have a strong impact on the people at the workplace and direct that how they act, dress and perform the tasks (Abraham, 2012). It is very important for the employees to have assigned stake in the growth of company. The people at work expect a contributory working environment, in which they can feel pride, dignity and ownership towards the vision of organization. Samsung Company attempts to build an innovative and creative organizational culture and accepts that the investment, which the company makes for fortifying the core competencies of employees, will have direct effect on their competitiveness. Samsung enhance a flexible working culture, which allows the employees to have a healthy work-life balance in challenging and creative working environment, which is not risk-averse (Hitt, Ireland & Hoskisson, 2009). As the Samsung is an international company, so it holds individuals with the different skills, abilities and backgrounds.Work and Life balance through Smart working
Developing an organizational culture, which increases learning and development in the organization, is very important. Samsung Group has established a creative and development system to offer the employees with the opportunities to go ahead with the new and innovative ideas which take full advantage of employees’ talents and their professional skills (Rothaermel, 2015). This new initiative in the organization motivates the employees to be more innovative in developing new ideas, which can transform in the new businesses. In this duration, the employees will be free from other responsibilities and they will have dedicated working environment and required resources. Successful consequences are motivated by using an incentive program. There are some major features of organizational culture of Samsung, like;- Managing the diversity
- Talent based recruitment
- Work-life balance environment
- Focus on health and safety of employees
- Enhancing social contribution
- Integrity and honesty
Creative Environment
Generally, the public reward for those organizations, which differentiate themselves as major player in the innovative culture and who encourage the value of innovation is the influential tool to enhance the creative thinking throughout the organization (Lee, Kozlenkova & Palmatier, 2015). The knowledge management by the use of IT has increased the product and process improvement. This helps in open up the communication all over the organization and enhances the culture of creativity and sharing the knowledge. Samsung also introduced knowledge management solutions in the organization. After that there was a change in the organizational environment (Khanna, 2011). By this, the employees at the workplace are more confident to give suggestions in the interest of company and become more trustful and more reactive to the changes and ready to implement innovations. Samsung preferred the blog and forum postings as the place for sharing the knowledge.Effective teamwork
In today’s working environment, team-working is increasingly recognizing, as this method provides various economic advantages to organization. The organizations create cross-functional teams to develop different set of knowledge, which are required to solve the production problems, developing new businesses and implementing new and effective strategies. Working as a team requires higher commitment, participation and knowledge sharing. Samsung is also developing the organizational culture, which includes the effective team working (Kipley, & Jewe, 2014). For example, Obliging to the customer trends, Samsung has created a group of some businessmen; the group is known as Create New Business (CNB). This team has found the technological and social trends in the market and envisioned new products and services, which fulfill the demands of customers. Samsung has attained better results from effective team working and adherence to innovation and transformation from a low quality provider to become a strong brand, which develops stylish and innovative products for its customers. It helped the organization in enhancing its sales.Leadership
The leaders at Samsung plan than act after doing a detailed analysis. The founder of Samsung, Lee Byung Chull gives a higher preference to the recreation of rationality. He was an analytical and intended to start a new business by doing researches and well-settled systems. The core values of Samsung from its leaders are low risk taker, high rationality, compliance of rules and regulation, hard work and effectively planned processes (Lee & Song, 2014). An effective leadership and execution after detailed analysis at Samsung helped it in moving a step forward. The leaders at Samsung always give importance to the human resources. They focus on the quality management, talent management and speed management by conducting various training and development programs (Snowdon & Stonehouse, 2006).Formal Organizational Structure
In an organization, the relationship between its employees and management can be identified as the formal organizational structure. It includes the high level of administration and hierarchy. It includes the roles and responsibilities of the organizational people at different levels. This is a system, which includes the organizations policies and rules, which are designed to construct that how the roles and responsibilities of the human resources are assigned, coordinated and controlled. Organizational structure of a company also determines the flow of information from top to middle and from middle to lower level of management within the organization (Chun, 2015). Samsung Company manages its business according to different features in markets, technology and consumers like either Communication & Digital media (DMC) or Devise solution division, fortifying their autonomous operating structure. Further, DMC is categorized into consumer electronics and Information Technology divisions. The Consumer Electronics division has taken the charge of other two departments, such as; home appliances department and visual display department (Thompson & Martin, 2010).The Information Technology and Mobile communication division has taken the charge of handling the wireless businesses, providing IT solutions, managing digital displays and organizing the Media solution center (Warner, 2010). Changes in the Device Solution department have also taken place including development of the organization in controller, software and solution development to create separate team for each department. The company is using centralized organizational structure, as all the decisions are made and all the processes are managed by the top management level of the organization (Jung & Oliver, 2010). The COE of the company plays the role of decision maker in the organization. This reduces the chances of conflict among middle level and lower level employees, as they have to regard the decision by higher authority. It helps the organization in retaining control in the working environment and operations and it develops the organizational culture.Figure 1 Organizational Structure of Samsung Source:
This organizational structure shows the changes, which are made to the team with recruiting the new experts, which have become important part of the company. In this process, the roles and responsibilities of CEO are set by the Board of Director of organization or any other higher authority. It depends on the legal structure of organization. The CEO at Samsung has the responsibility of decision maker, director, leader, executor and manager. The decision making role can include the taking decisions regarding the strategy and policy. As a leader of the organization, the CEO suggests the BOD and encourages the employees and implements change in the organization (Chun, 2015). The CEO also manages the day-to-day operations of business. All departments have their own roles and responsibilities in the organization. There is an effective communication and decision making process at all the levels of Samsung organization. The people at Samsung like; supervisors, colleagues and other assigned staff communicate in an effective way. They have assigned the work to the people. It has created a team, which undertakes only making plans and marketing the products (Lee, 2016). Other members in the network took care of the production, technology, promotion and distribution.
Conclusion
Samsung has attracted various customers nowadays by implementing different marketing strategies. The major goal of the company’s key people is to drive their brand all over the world that demonstrates that it has effective management and aim to identify their operations to global while develop and improve the products with quality. The effective generic strategies of the company, i.e. cost leadership and product differentiation contribute to develop a good brand image worldwide.All three strategic dimensions are linked with each other. There is the linkage and consistency between generic strategy, organization culture and organizational structure. Like; Samsung has structured the organization in the way, so it can promote the teamwork, reduce the costs of the products, enhance efficiency and effectiveness and create cooperation and effective communication among all the levels of management. The structure of this organization shows that it follows its generic strategy. The works are assigned to different departments separately by considering the collective goal of organization. It is developing a flexible working environment for achieving its goals and mission. Prior to this, Samsung was using a different structure, but now it restructured the structure and made the changes to the workforce by hiring new power experts. The company introduced intention to make a shift by being soft-driven organization. It is implementing smart workplace activities for them, so they can work with efficiency and enthusiasm. Company is pursuing flexible organization culture that creates the environment, which is open for communication and production. It helps the company in clarifying the strategy implementation. The employees at Samsung are motivated by its organizational culture, so that they try to fit in the strategy in order to achieve its goals. Thus, it shows that there is consistency between these three strategic dimensions of Samsung.It has converted from low quality producer to a highly reputed brand, which manufactures stylish and quality products. In order to develop an innovative organizational culture, the company is identifying some key human resources, like; promoters, project leaders, etc. so they can play different role in creating innovation in the organization. The company is working by developing knowledge management system, integrity management, effective decision making and good communication with the support of mentors. The company is making efforts to create a learning organization, which sustain the innovative competency of Samsung.References
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Grobart, S, 2013, How Samsung Became the World’s No. 1 Smartphone Maker”, Bloomberg Business. Retrieved from https://www.bloomberg.com/bw/articles/2013-03- 28/how-samsung-became-the-worlds-no-dot-1-smartphone-maker#p2.Hitt, M. A., Ireland, R. D., & Hoskisson, R. E, 2009, Strategic management: Competitiveness and globalization, concepts and cases. Mason: Cengage Learning, South-Western.Samsung Electronics, 2017, Building a Creative Corporate Culture, Retrieved from https://www.samsung.com/us/aboutsamsung/sustainability/integritymanagement/download/building_a_creative_corporate_culture.pdf.Jung, S.C, 2014, The Analysis of Strategic Management of Samsung Electronics Company through the Generic Value Chain Model, International Journal of Software Engineering and Its Applications Vol. 8, No. 12, pp. 133-142.Jung, S. & Oliver, C, 2010, Samsung’s Corporate Culture in Focus, Retrieved from https://www.ft.com/content/1f35cd3e-3782-11df-88c6-00144feabdc0.Khanna, T, 2011, The Paradox of Samsung's Rise”, Havard Business Review.Kipley, D. & Jewe, R, (2014). Effective Strategic Management: From Analysis to Implementation. Cognnella.Lee, K & Song, J, 2014, The Samsung Way: Transformational Management Strategies from the World Leader in Innovation and Design, McGraw-Hill Education.
Lee, N.S, 2016, Understanding Samsung's Governance Structure Change and its Impact on Strategy after the Asian Financial Crisis: from Diversification to Diversification to Focused Strategy, Chung-Ang University.Lee, J.Y., Kozlenkova, I.V. & Palmatier, R.W., 2015. Structural marketing: using organizational structure to achieve marketing objectives. Journal of the Academy of Marketing Science, 43(1), pp.73-99.Moon, H.C, 2010, Global Business Strategy: Asian Perspective, World Scientific Publishing Co Inc.
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