Types of Organizational Structures
Companies or types of organizations can be identified from the organizational structure in a particular industry. Broadly there are four types of organizations based on the structure- flat, functional, divisional, and matrix organization.
An organization with a matrix structure include multiple reporting manager and employees are answerable to more than one team leader (Kishore, Pretorius and Chattopadhyay 2019). There are multiple people in the organization with managerial responsibility as well as accountability. Google is a matrix organization with few elements similar to a flat organization. A flat organization does not have levels in the hierarchy. There are multiple individuals with various expertise or job titles who self-manage and work at an equal level ( Rani et al. 2019). The leadership is distributed among employees. This type of organization s referred to as a cross-functional organization. This type of organization is considered diverse and beneficial for the development of individual management and communication skills. However, interactions among people with different personalities and cultures can develop tension in the team and affect their efficiency (Kaufmann and Wagner 2017). On the other hand, Amazon has a flat organization which means there are not many people in senior leadership positions. The organization divides teams for each department. This type of structure can lead to power struggles and increase risk due to a lack of guidance. Although, the organizations with flat structures maintain high transparency and it is highly agile and scalable (Pokluda 2018).
According to The Cameron and Quinn Competing Values Culture Model there are four types of organizational cultures. The culture of an organization can define the work environment, the organization’s values as well as attitude and behavior of employees.
Clan culture: The culture aims at developing a collaborative environment that focuses on agreement and implementation of organizational goals and values. Clan culture prioritizes interpersonal relationships and friendly caring interaction between team members and leaders (Liao 2018).
Hierarchical Culture: In hierarchical culture, a structure is followed where there are individuals at different levels of power and decision-making (Kim and Chang 2018). The values, processes, and rules are followed through this structure of power. The focus is to develop and maintain a stable organization.
Market culture: This culture is competitive and encourages result-oriented work by implementing a system of rewards that are based on individual or team performance. The culture is considered capitalistic that prioritizes profit margin and competition in the market (Liao 2018).
Adhocracy Culture: The Adhocracy Culture encourages innovation in organizations by the participation of individuals in the organization regardless of their position. It also promotes flexibility and adaptability among employees along with their empowerment (Kim and Chang 2018). The culture maintains transparency in the organization through organic decision-making.
Organizational culture can have an influence on the risk assessment and implementation of risk management. To ensure commitment toward risk assessment and strategies of management in the organization hierarchical culture can be considered. The hierarchical culture has a power structure that follows top to bottom control to handle practices in the organization. The culture promotes the empowerment of leadership that can further influence employee engagement in the organization. Apart from that, the instructions and guidance provided by the leaders are followed by the team. According to the deliberation of Pidgeon (2017), Strong leadership in an organization can encourage strategic thinking in a group and also help in the identification, analysis, and mitigation of risk. Those at a higher hierarchical level can guide everyone under them in risk assessment methods and management plans. They can perform scenario analysis to predict the occurrence of any situations and identify potential risks to prevent them. According to the risk management framework suggested by the Bank of International Settlements in their Basel norms, scenario analysis is an important element that involves creating rare fictional scenarios that can cause harm to organization (Pereira, Silva and Pereira 2018).
Organizational Cultures
In the paper by Barafort, Mesquida and Mas (2017), it is stated that employees’ commitment to risk management and its effective implementation highly depends on the leadership in the organization. Although, the efficiency in leadership can be achieved through the coordination of team members by implementing a hierarchical culture. The leaders at hierarchical organizations implement quick action during crises. The quick response and action can travel through the hierarchy without the fear of blame. Apart from that these leaders can utilize the application of 4Ts in the multidimensional risk management approach that was introduced by the European Foundation for Quality Model (EFQM) (Prashar and Aggarwal 2019). This risk management model involves terminating, treating, tolerating, and transferring the risk.The process of risk management in an organization involves the identification of risk, analysis of its impact, planning response, and monitoring its implementation. A thoughtful approach to risk management can ensure the effective use of available resources to control risk. Integrating and implementing thoughtfulness in risk assessment and risk analysis can ensure more positive effects than negative (Fournier and Srinivasan 2018). Managers in an organization can support thoughtfulness in risk assessment and risk management by giving the employees power to identify and monitor potential risks. Although the top-level executives are responsible for the decision-making and implementation of the risk management approach. The Managers in an organization with hierarchical culture can ensure that their team members have the tools to perform risk assessments. The distribution of power and resources also ensures accountability and management of risk across the organization. In the views of Smith and Merritt (2020), when identifying or assessing the impact of risk, team effort and important. Along with that, the team must also be aware of the definition of risk and the components of the Standard Risk Model. Managers can ensure that this information is communicated among the team members. Apart from this, a manager at an organization can encourage risk management skills in employees by arranging training programs to develop skills and mindset. These training programs can be helpful in the development of collective mindfulness that can further lead to mindful awareness of risk management. (Wu and Chan 2019). Hierarchical culture often follows a strict structure that can be challenged by managers to change the experience and perspectives of employees of the organization. This will help in more precise and close monitoring. Along with that, it is also beneficial to obtain new ideas that can be considered while planning risk management and related decision-making.
According to the views of Meyer, Mikes and Kaplan (2021), a speak-up culture needs to be cultivated by managers in an organization for successful risk management. The concerns can be communicated by employees through interactive workshops or a properly compiled report. This process will generate transparency about the role of different team members and leaders in risk mitigation. Apart from that, the introduction of risk-related discussion by managers can include change in the culture of the organization that can ensure that employees agree on the risk prioritization, risk mitigation actions, risk management policies, and resource allocation as the ultimate decision is made by managers or those who are higher in the hierarchy (Meyer, Mikes and Kaplan (2021). The agreement is a way to ensure that the employees are involved in risk assessment methods and strategies of management.
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Case 1 (Amazon) |
Case 2 (Google) |
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Organizational Culture type |
Hierarchy Culture |
Clan Culture |
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Type of company |
Here is Amazon where the organizational culture is harsh but also effective in contributing to the growth of the company. The Amazon follows a hierarchical organizational culture where the leaders always focus on innovations so that an effective change can be performed. Since the company was formed, Amazon has been involved in different areas within the industry from delivery, warehouse automation, electronic books, web servers, and also became popular on OTP platforms (Pfeffer 2016). The Amazon change management process has been focused on implementing innovation that helps to fuel success within the modern digital economy. It also helps to increase the speed of service. Generally, the organizational culture in Amazon follows 5 key principles: intense pressure on performance, constant optimization and reinvention within their organizational culture, operating like a startup, focused on customer-centricity, and also bringing diversity among the workforce. |
The organizational culture in Google follows clan culture where it is a more friendly collaborative culture that values employees regardless of their position. The organizational culture in Google is for innovation as well as supporting inventions. The company emphasizes the significance of openness within their workforce and promotes an innovative mindset (Shrivastava et al. 2018). For example, Google innovates its Technology and services offered to its customer through online advertising that is based on some different characteristics: openness, innovation, hands on approach, excellence through smartness, and forming an small company family rapport(Tran 2017). According to Khan et al. 2020, the leadership approach affects the performance of the employee as well as the organization. The leadership focus towards innovative work culture, employee education and training as well as relaxation allows companies to grow with clan based work culture where employees feel more valued and they spend much of their effort to bring innovative changes in organization as well as their work. The Google company objective is to promote openness towards encouraging dissemination of knowledge among employees that can support innovation. For example, the organizational culture motivates individual employees to be interested in each other at different times in their work day. Along with that the company’s motive towards bringing innovation for providing effective customer support is also relevant to the organizational culture and the company implements these changes through Technology and excellent work force motivated to work at Google. |
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Type of Organizational culture |
It has been observed that the organizational culture at Amazon represents an interesting paradox where some parts of the organization are harsh where employees need to give the maximum output and on the other hand the immense role of the company towards making the change in the global artifacts that allows people to join the Amazon workforce. 1. In 2015 Amazon organization culture has been criticized by New York times where the articles identifies specific laws within the organization regarding unrealistic standards of performance influence a word culture that is based on fear and employees also face lack of recognition. furthermore the organization culture of Amazon also being described as purposeful darwinism. This is also addressed in a study where according to the deliberation of Dhir, 2019 Amazon acquiring Zappos the company leveraged cultural synergy and the operational cost through utilizing merging cultures. Although the study has addressed that this merger is focused on improving firm competitiveness through innovation and providing a safe workplace. 2. The CEO Jeff Bezos emphasizes that constant adjustment within the culture helps to enhance the ability of the organization. The company is intensified on utilizing data based analytics and the performance of even the corporate culture. This company follows a lot of matrices to evaluate the employees’ performance constantly. 3. The company’s vision is also towards providing all types of products to its customers which makes Amazon a most user’s entry or customers entry company where customers can find almost everything. |
The Google organization culture is widely integrated on different human resource development programs in order to appreciate excellence among the employees and this includes training programs towards inhen Singh the knowledge of employees and also promoting smartness at the workplace. Google also intensifies their data driven culture towards evaluating organizational performance and outcomes. Comparing the employees satisfaction level, it has been observed that the Google company offers a great flexible workplace environment where employees’ work -life balance, career management and growth is higher than Amazon (Alamsyah, Ayu and Rikumahu, 2019). Currently it has been observed that regardless of the intense physical and emotional pressure on the employees, it also attracts a huge number of people who are willing to work at Amazon. |
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Success factor |
The success factor behind Amazon is that the company regardless of the size with around 1.3 million people worldwide the company still maintains the organizational process which is startup mentality mostly at the time of taking decisions or experimenting. The company offers flexibility of the business and always deeply into their organizational culture (Solanki 2019). Another reason behind Amazon’s success is the diversified workforce at the core of Amazon’s organizational culture. The company has GL Amazon which is an affinity group of employees with different cultures and mindset sets. This diversified work culture in Amazon allows it to make it much more popular as an effective organization. |
Another success factor of Google is the company promotes out of the box thinking in order to discover or invent new solutions in the emerging market.the hands on approach is very much effective for Google in development of Human resource were the cultural characteristics is ended utilizing the experimental learning as an efficient way towards him to win the knowledge, skills and ability of employees. Along with that, the Google company also supports different small companies and focuses on improving the social interactions among the employees. For example, Google utilizes a warm work environment in which employees can share ideas easily through face-to-face talk, and the main Motivation behind this approach is to optimize the internal communication for generating new ideas as well as maintenance mode performance with no or very minimal conflicts. |
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Conclusion Therefore it can be seen from the discussion that both the company is focused on enhancing their employee’s performance towards making growth. However, the differences are in the approach within the organizational culture. In Amazon, it follows a hierarchical work culture where the main motive of the company is to improve customer satisfaction through enhancing their employees’ performance as well as data-driven decision making. On the other hand, the Google company follows the clan culture where it values its employees and maintains a good work culture so that employees always become innovative and less involved in conflict situations. |
References
Alamsyah, A., Ayu, S.P. and Rikumahu, B., 2019, July. Exploring relationship between headline news sentiment and stock return. In 2019 7th International Conference on Information and Communication Technology (ICoICT) (pp. 1-6). IEEE.
Barafort, B., Mesquida, A.L. and Mas, A., 2017. Integrating risk management in IT settings from ISO standards and management systems perspectives. Computer Standards & Interfaces, 54, pp.176-185.
Fournier, S. and Srinivasan, S., 2018. Branding and the risk management imperative. NIM Marketing Intelligence Review, 10(1), pp.10-17.
Kim, T. and Chang, J., 2018. Organizational culture and performance: a macro-level longitudinal study. Leadership & Organization Development Journal.
Liao, Z., 2018. Corporate culture, environmental innovation and financial performance. Business Strategy and the Environment, 27(8), pp.1368-1375.
Meyer, K., Mikes, A. and Kaplan, B., 2021. When every employee is a risk manager. Harvard Business Review Blog.
Pereira, P., Silva, E.S. and Pereira, A., 2018. Operational risk management: The basel II. The International Journal of Business Management and Technology, 2.
Pfeffer, J., 2016. Why the assholes are winning: Money trumps all. Journal of Management Studies, 53(4), pp.663-669
Pidgeon, K., 2017. The keys for success: Leadership core competencies. Journal of Trauma Nursing| JTN, 24(6), pp.338-341.
Prashar, A. and Aggarwal, S., 2019. Modeling enablers of supply chain.
Rani, P.U., Cynthia, A.R., Priyankaa, S. and Kandaswamy, K.M., 2019. A flat organization model for agile workforce with reference to holacracy. International Journal of Recent Technology and Engineering, 8(2S8), pp.1525-1527.
Shrivastava, S., Nagdev, K. and Rajesh, A., 2018. Redefining HR using people analytics: the case of Google. Human Resource Management International Digest.
Smith, P.G. and Merritt, G.M., 2020. Proactive risk management. productivity press.
Soral, P., Arayankalam, J. and Pandey, J., 2020. The impact of ambivalent perception of bureaucratic structure on cyberloafing. Australasian Journal of Information Systems, 24.
Solanki, K., 2019. To what extent does Amazon. Com, Inc.’s success accredited to its organizational culture and ND Jeff Bezos’s leadership style. Archives of Business Research, 7(11), pp.21-40.
Wu, C.M. and Chen, T.J., 2019. Inspiring prosociality in hotel workplaces: Roles of authentic leadership, collective mindfulness, and collective thriving. Tourism Management Perspectives, 31, pp.123-135.
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