Introduction Hanh

8/22/2019 Introduction Hanh

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OB A1 QCF Jan 2013 NTU

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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.


-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.


-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.


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


-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


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-balance


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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.


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.


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.


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.


-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.


-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.


-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.


-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,
http://www.lg.com/http://www.lg.com/http://www.lg.com/http://www.lg.com/


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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

Documents

Introduction Hanh