 Hi, this is Dr. Laura Portales and I'm here to talk a little bit about Unit 7 of our course managing people and here we'll be discussing some of the concepts that you learned and get into a little bit more detail about them. So let's get started. We're now on our seventh unit and our seventh unit we're going to talk about how to create a winning organizational culture. As you already know, the learning objectives tie directly to the practice exam as well as the real exam. So let's look at what the objectives are and as you complete this unit, just make sure that you're comfortable and familiar with all the learning objectives and are able to successfully meet them before you start the practice exam. So the first one is relate the dimensions of organizational culture such as employees, values and beliefs, common goals, leadership styles and shared assumptions. Our second one is describe the relationship between the external business environment and the organizational culture. The third is examine the relationship between leadership and development of subordinates to achieve organizational strategy and finally apply leadership practices such as mentoring and talent development to foster career progression of subordinates. Now let's take a look at our list of topics for this unit. The slide here lists the vocabulary that we will be discussing throughout this video and also words that you should know and be comfortable with to get yourself ready for the practice exam. Our topics for unit seven include organizational culture and organizational structure and we'll also talk about how those two intertwine with each other. We'll talk about external environments and also creating a culture of development within an organization. Our first topic is the idea of culture using the competing values framework and it's important to note that this is just a framework. There are many companies that won't fall exactly into one of these quadrants that we're going to discuss but it can serve as a good guide to help you understand what type of culture a company might have based on certain elements. So let's first look at those elements and then we'll dig in and look a little bit at each of the quadrants. So we have on the bottom stability and control this refers to how stable the industry is and how important control is within the organization and the opposite of that is flexibility on the top of the square and then on our left we have an internal focus which means the company focused internally versus an external focus where they may be focused more on markets or the external environment. So if we combine these and look at them let's start with the clan culture. So as you can see this culture has a internal focus and they also have flexibility. So that tends to create a family oriented environment where there's a lot of mentoring a lot of nurturing and participation. Oftentimes we see small startup organizations have this kind of culture because they need to be flexible as they start up and ultimately learn how the business should run. If we look below that as far as hierarchy that has an internal focus however the industry is more stable and therefore more control is needed. So we see a lot of large organizations like Fortune 500s with this type of culture because it requires a lot of structure it requires more control coordination and they want to focus on efficiency. Now next if we turn our attention to the right bottom this is a market culture and it has an external focus and also they have stability and control. So what we see is this type of culture is very results oriented they focus a lot on competition their doers they get the job done and there's a focus on achievement within this culture. Now if we move up we can see that there's an external focus but there's flexibility. So this results in a culture that tends to be more dynamic there's a lot more risk taking there's innovation and it tends to be more entrepreneurial even if it is a large organization. So again as we started off saying there's not necessarily one organization that fits exactly within any of these boxes but it can serve as a really good guide when we're thinking about culture and the different elements that go into creating an organizational culture. Another thing that's really important when we look at organizational culture is cultural dimensions and much research has been done about different cultures and the focus of the culture externally from a world perspective but also from an organizational perspective. So while the theory Hofstede's cultural dimensions was originally developed to look at countries and how countries ultimately deal with certain aspects of day to day life we can also use this model and use it to look at how a culture is focused internally. So let's look at Hofstede's different dimensions and talk about them in turn. A power distance refers to the idea of how comfortable people are with a specific hierarchy or different job titles. So we may see that a culture that is more like a clan culture for example would be focused on not having so much power distance where everybody has a say in making the decisions regardless of their job title. Next uncertainty avoidance is how comfortable the organization is not knowing what the future holds. So when we think of risk and risk taking the organization or a culture that is risk and verse is probably going to be very in uncertainty avoidance and that they want to avoid that risk taking and that uncertainty that they may face within their organization. The next element of culture is individualism versus collectivism. Individualism is how much focus is on the person and the job that an individual person is doing versus what the group is achieving. Our next element is masculinity versus femininity and this refers to what traits ultimately are valued. Is it traditional masculine traits that are valued within the culture or traditional feminine traits valued in the culture? Long-term orientation, some companies look out several years and make plans and decisions based on long-term where some companies are very focused in the short term. So this would be another element of culture that we would want to consider. And finally some organizations are focused more on indulgence, spending the money making decisions maybe a little bit more risk taking versus restraint which is more focused on being a little bit more uncertain and therefore maybe not taking extreme risks with the organization. So when we look at cultural dimensions, again normally we hear of Hofstede's cultural dimensions focused on a country and what they tend to be but we can also look at these and they can be a useful source to understand internal company culture as well. One of the big factors that contributes to organizational culture is the external environment and the external environment refers to anything outside the company. So we may look at elements like sociocultural forces, natural disasters, the government, politics, the economy and economic forces as well as technology and all of these are part of the external environment that can impact the decisions as managers but also it can impact our organizational culture as well. Next we can look at environmental complexity as well as environmental change. So an organization that's very complex refers to the number of elements that are within the environment that could impact the particular company. So we can look at this as being a simple environment or a more complex environment and then environmental change can be described as externally how much does the environment change? Is it stable or unstable? For example if you think of a technology company they probably would be relatively in an unstable external environment just because it's changing so rapidly. So these elements along with the other ones such as sociocultural forces when we combine all of them we can begin to understand how we want our company culture to be and how the culture will be serving of course to the organization and profitable but how it can help create the kind of culture a positive culture that we want within the company. We're now going to shift our attention a little and organizational structures and culture or company culture go hand in hand because a lot of times companies will start out with no real organizational structure but as they grow they will then need to focus a little bit more on formalized structures. So if we take a look at this graphic here you can see that we are leaning more toward organic systems of organizational structure but let's talk about what organic systems and organic structures and mechanistic systems what the difference is between those two. So when we look at an organic system this is where there is less of a hierarchy and ideas tend to flow back and forth regardless of someone's title or position. This type of organizational structure tends to be effective in that there isn't a lot of red tape as we might call it to try to get things done within the organization and a mechanistic I always have a hard time saying that system is more structured it's much more formalized and a lot more rigid so depending on the results that we want within our organization the type of industry we're in and many other factors we may choose one type of structure versus another but next we're going to look at some examples of different types of organizational structures and as as we look at these I'd like you to think about how you've seen this in organizations that you worked for these types of structures and what you think the benefits to each structure are so let's take a look at each of those now our first structure is a functional structure and this is probably one of the more traditional organizational structures where you have headquarters or you have a CEO we're we're dividing out the organization into different functions so there's a production there's marketing there's a counting and so forth so again this structure is probably the most common that we see in organizations the challenge with this type of structure is that it does tend to be a little bit rigid where you end up with silos of marketing and production when really these these parts of the organization should be working closely together in the fast-paced environment that we're in but you'll find that most organizations still have somewhat of a functional structure and the different departments are divided up like this so let's take a look at our next organizational structure this structure is called a divisional organizational structure and as you can see from the figure we divide this structure into the different types of products that we offer so product a product b and then within each of these divisions then we have a functional structure that is divided up into marketing accounting manufacturing so the when you think about this structure a lot of very large companies have this they have many many different product lines and as a result they may have a head of each division that then is in charge of all of these elements this can be a very effective structure the important thing to remember about this type though is that the head of product a division and product b division should constantly be communicating about the sales of product the features their product development new products that they're going to offer and so forth to make sure there's not overlap so let's take a look at our next structure now this structure is focused on geographic region so as you can see we have the ceo and we have a vp of eastern region vp of southern region western region and so forth so one of the things to consider about the structure is for large companies that operate globally it can be really really useful to have this type of structure because then you can put individuals in place that are that are culturally competent in that particular area they speak the language and and so forth so that would be an advantage of this structure but you can also see that in the the bottom figure that we have here president vp of us operations vp of europe european operations that it's it's geographical at first but then we still go down to the functional structure within each geographic location where we're located so again the big advantage to this structure is you then have some more cultural competency as you're trying to organize around the different geographic and so that's all for organizational structures we're going to move on into our last topic but the one final note that i want to talk about as far as organizational structures is that they're really important as part of the creation of organizational culture which we started talking about at the beginning of the video the reason for that is these are ultimately formal networks where you're grouping people together that are going to be working together but can be really really important to think about the best organizational structure to get things done where there's not as much bureaucracy where people can move new ideas forward at a at a fast pace since that's an important part of culture and a dynamic environment so let's take a look at our next slide now our last topic for this unit is on the topic of company culture and employee development so when we talk about transformational leadership this type of leadership tends to be very supportive and visionary so have this this type of leadership we want to get the best from our employees of course so as we look at this we can think about how we can develop and make the environment in which we're leading and managing people we can make that environment conducive to learning and when we make that environment conducive to learning there are a lot of advantages that occur people have their upper level needs they tend to stay with the organization so you see less over you see higher productivity when people are continually growing within your organization so the idea here is to try to develop an environment that's conducive to learning to incentivize learning and also encourage informing so as you can see from the figure here there are several ways that we are able to do that we can do that by for example creating a system for knowledge management and knowledge management would be focused on how do we take what we know and the skills that we have of employees and put that on paper or document that somewhere so other people can learn from it also when we look at developing an environment that's conducive to learning we want to focus on our collective competencies as an organization and the abilities that we have as an organization and continue to work through those to make be more learned and more motivated in order to do the best job possible so that's not enough though we want to make sure that we incentivize people to engage in formal training so we may want to give time off to go to training seminars or even pay for those seminars we want to create communities where people can share ideas and ensure that people are able to develop their future careers the third aspect of this is to encourage info learning so while we just talked about formal learning we want to also encourage info learning so this could of engaging with one another when you're trying to solve a problem or solve an issue and valuing reflective experiences amongst employees and also supporting our employees as they try to grow and learn about things that may be directly related to their jobs or it may be other things outside of their jobs interests and hobbies that can be important to them so the idea here is that we use an entire system within the organization to create this culture of learning and once we do that and we meet each of these elements we tend to have a very strong company culture that is focused in growth and development which of course helps our organization and its productivity and probably profitability as well as we conclude this unit let's take a look at what we talked about and what you learned and we're going to tie those of course to our learning objectives we related the dimensions of organizational culture such as common goals beliefs leadership styles and assumptions we also described the relationship between the external business environment and business culture we talked about the relationship between leadership and development of subordinates to help us achieve our organizational strategy and meet our goals and we also talked about leadership practices such as mentoring and talent development which helps us foster the progression of our subordinates let's take a look now at what's next to prepare you for the practice exam I definitely recommend that you do another review of the material maybe especially some of the material that you had some challenges with once you review that material you should be all set to take the practice exam and I wish you the best of luck on that