U4 Topic 2 PDF

TOPIC TWO: Organisation
Structure and Culture

Overview
Organisations need to be understood in their entirety in order to manage them
strategically. Two key concepts that explain organisations are structure and culture.
Organisation structure and its main elements – departmentalisation, specialisation,
centralisation of decision-making, chain of command, span of control and
formalisation – define organisations’ formal layout. There are various options for
how organisations are designed and, in theory at least, the chosen strategy should
dictate the relevant structure. Thus there is a link from strategy, in Topic One, to the
material here.
Public sector organisations are part of a system of representative democracy and

understanding them also requires that we consider power and politics. There
are some claims that top-down rigid processes and excessive red-tape in public
bureaucracies hinder democratic goals. In some organisations there has been a
trend from rigid bureaucracies to flexible and organic structures such as networks,
contracting and whole-of-government or joined-up government with decentralised
decision-making, fewer rules and regulations, and blurred or multiple chains of
command.
Culture can be explained informally as the ‘personality’ of an organisation that sets

it apart from others and describes ‘the way things are done around here’. Culture is
as important to management as strategy and structure. Culture influences the ability
of the organisation to implement strategy and deliver outcomes.
Strategy choices should be supported by a culture that is ‘in sync’ with the
desired values and outcomes. Culture serves many purposes including socialising
newcomers, guiding day-to-day operations, and helping organisation members
make sense of the way things are done. Culture derives from the organisation’s roots
and is promulgated in the form of myths, legends and lore. Public sector employees
share values that are not frequently found in the private sector, such as equity, public
value and social justice. Public sector culture is evolving from one of direct control
and ‘sameness in services’ to a responsive and client-focused logic. In addition, the
public sector is recognised for policy excellence and compliance values.
t o p i c t w o : o r g a n i s at i o n s t r u c t u r e a n d c u lt u r e 47
Learning Objectives
On successful completion of this topic, you will be able to:
1. Discuss elements of organisation structure and how they translate into organisation design.
2. Discuss public sector organisation structures.
3. Canvass views on organisation structure and apply them to an example of a network.
4. Define organisation culture and explain its elements and functions.
5. Analyse organisation culture in public organisations.
2.1. Organisation Structure

It is generally accepted that at least three levels of variables influence behaviour
in organisations. The three levels are: organisational such as strategy, structure and
culture; group or interpersonal such as group dynamics, the process of leadership,
and other group dynamics associated with human relations such as conflict, power
and negotiation. At the individual level of analysis, intrapersonal variables such as
perception, attitudes, personality, learning and ability, job satisfaction and motivation
(Robbins, Judge, Millett & Cacciope 2008) are relevant. Organisation strategists also
add the external environment (Johnson, Scholes & Whittington 2007). External
environmental influences (along the lines of PESTEL from Topic Two) dictate, control
and affect what goes on in organisations.
The topics in this unit are loosely organised around the three levels, organisation,
group and individual. We started with strategy in Topic One and now turn to
structure and culture. Organisations are complicated and difficult to grasp in all their
complexity.
Organizations are complex entities, often difficult to understand. Many factors make
organizational life complicated, ambiguous, and unpredictable.The biggest challenge for
managers and leaders is to find the right way to frame our organi¬zations in a world
that has become more global, competitive, and turbulent (Stadtlander 2007:48).
Strategic management, as we saw in the previous topic, includes examining the

external environment and formulating a structure to suit, though this may not
be well recognised. Classic strategic management theory tells us that organisation
structure should be based on a logical analysis of the external environment, and that
different structures are suited to different environments. Factors such as organisation
size, environment and technology determine strategy and structure, which are
interrelated. It is extremely difficult for large organisations to adopt anything but
a mechanistic structure. The mechanistic, bureaucratic structure suits organisations
focussed on cost control and risk aversion (ie many public sector organisations).
Organisation structure is a formal term, although it is easily represented by

organisation charts. It refers to the official or formal way that the work or tasks
of the organisation are divided, grouped and controlled as well as the designated
48 P S M U n i t 4 : M a n a g i n g d o w n : o p e r at i o n a l m a n a g e m e n t i n t h e p u b l i c s e c t o r
linkages between the tasks of individuals and groups, all designed to achieve the
organisation’s objectives (Robbins et al. 2008). Another formal definition is ‘the
configuration of hierarchical levels and specialised units and positions within
an organization, and the formal rules governing these arrangements’ (Rainey
2003:183).
In the public sector ‘architecture’ may be a more familiar term than structure.
For example, newly elected officials will often change the ‘architecture’ or
machinery of government, and we have seen this with the election of the Rudd
government. Structure changes when sections of one agency are moved to another
agency and so on. With the advent of the Rudd government, many changes
to department structure were initiated. Departments are created or abolished
through administrative order, and changes to central and other agencies reflect
government’s priorities or even the personal philosophy of prime ministers,
premiers or chief ministers (Althaus, Bridgman & Davis 2007). Further, initiatives
such as customer focus also represent machinery of government reorganisations
and require ‘considerable redeployment of personnel and a considerable shift in the
understandings of the nature of work in the public sector’ (Anderson, Griffin &
Teicher 2002:9).
2.1.1 Elements of Organisation Structure

A recent search of the literature did not reveal many current references on
organisation structure, which suggests either that the elements have remained the
same over the years or that academics and theorists have turned their attention
to other more significant aspects of organisations. A number of dimensions or
elements build up a picture of any particular organisation’s structure. The main ones
are defined and explained in Table 2.1. As you read, reflect on each element and
how it fits with your organisation.
Table 2.1 Elements that produce various organisation structures
Element Definition Example/comments
Departmentalisation The basis on which work tasks are • The public sector is generally
grouped (e.g. by function, client, departmentalised on a functional basis –
process, geography or product) ‘like’ work is carried out within specialised
agencies such as Treasury, Auditing,
Health, Education and so on
• Within agencies, departmentalisation also
tends to be on a functional basis with
sections or branches constituted from IT
specialists, HR professionals, different
types of tax specialists, social policy
advisers and so on
• Recent trends are towards
departmentalisation by client
• Organisations like Centrelink cross
functional boundaries and are structured
for client focus, which is innovative
Work specialisation or job The extent to which a task is broken • High specialisation – a processing officer
design down into smaller, more limited tasks is responsible for checking the accuracy
and allocated to different roles of claims only for unemployment benefits
for a large group of (undifferentiated)
clients before passing the claim on
to another officer for the next level of
processing
• Low specialisation – a client service
officer is responsible for all aspects
of processing claims for all of
unemployment benefits, family payments
and Veterans’ Affairs payments for a
specified group of clients
Chain of command and The official designation of authority • Traditionally large organisations have
authority to positions that reside ‘over’ other an unbroken chain of command from
positions the bottom to the top, with very clear
reporting boundaries and clear ideas
about who has authority to make
decisions
• The military is the obvious example
• Going thorough the ‘proper channels’
• Typically ‘staff’ functions have little direct
authority over ‘line’ functions – they are
not part of the chain of command being
specialist advisers such as IT, HR and so
on
• Recent reforms have blurred these
boundaries somewhat, both internally,
with the use of multi-skilled teams and
tasks forces, as well as at the boundaries
between the organisation and other
organisations, as with contracting out and
today the challenge is to overcome these
old structures in order to do whole-of-
government or joined-up government
• Contractors are not part of the agency
chain of command, and managers have
not direct authority over them so how can
they be managed?
Span of control, or span of How many direct reports a manager • Evidence suggests that organisational
management has. How many people are they restructuring in the form of downsizing
personally responsible for. For and delayering has increased the span
example, do you have three or five of control of managers. That is, there
people in your team? There has are fewer managers, with more people
been an on-going debate about the reporting to them
ideal number of staff a manager can • For example, in Telstra, some manager
efficiently and effectively manage. It positions in the regions were eliminated,
used to be 3–7. Some agencies are with the remaining managers assuming
reporting that (after the delayering of responsibility for staff, thus increasing
the 1990s) some organisations are their span of control
creating new middle management
levels to reduce the span of control
Centralisation versus The level in the organisation at which • In centralised organisations, decisions
decentralisation decisions can be made may have to be referred up through
several layers of management. Decisions
are made at or near the top. Power and
authority are concentrated in higher levels
• Highly decentralised organisations assign
low-level employees significant autonomy
in decision-making
• In some universities, financial decision-
making is highly centralised. Work unit
managers have no financial discretion
at all, and some decisions, such as
international travel, must be referred
to the CEO (in this case, the Vice-
Chancellor)
• An example of autonomy would be an
officer in a department of child welfare
being able to make significant decisions
concerning child protection in the field,
based on their professional assessment
rather than referring to set organisational
procedures, or getting sign-off from
someone more senior
Delegation or empowerment The extent to which lower-level See above

positions in the organisation are
given autonomy, decision-making
power and control over their own
work. Not all authors include
this element as it is the same as
centralisation in reverse
Formalisation The extent to which written policy, • The public sector is highly formalised
procedure, rules and regulations – seen in comments that it is rigid, rule
dictate how work is done bound and hampered by too much red-
tape
• A shift to less formalisation is occurring,
with values-based decision-making an
example
Red-tape Burdensome administrative rules and • This term was not commonly used in
requirements formal discussions of organisation
structure but is used in the public
management literature
• Is an extension of formalisation
• Originates from the UK Civil Service
where official documents were bound with
red-tape
• Can be seen by the number of forms
a member of the public has to fill in to
access an agency’s services and how
many different parts of the organisation
they have to deal with
• For example relocating an old house from
one block of land to another requires
three different forms in triplicate and
dealing with four different sections of the
local council
Sources: Robbins et al. 2008 Bartol et al. 1999;Wood et al. 2001; Rainey 2003.
2.1.2 Organisation Design
The elements of structure, when combined in different ways, produce a range of
organisational designs varying from mechanistic to organic. The number of sections,
or subunits, combined with the number of levels in the hierarchy and the degree of
specialisation constitute the complexity of any organisation structure (Rainey 2003).
Mechanistic organisations include typical bureaucracies in the public and private
sectors, such as large public sector agencies, banks and manufacturing organisations.
For example, both IBM and ANZ had mechanistic structures up to the 1980s, and
still do to a certain extent. Changes in the private sector have led to some large
firms being more a mix of mechanistic and organic designs. Organic organisations
are typically portrayed as being smaller and more dynamic and include clover-leaf
structures, networks and others. More currently we are seeing small sections of large
public bureaucracies taking on organic characteristics and doing things differently
to solve some of the problems faced by the sector, particularly in Queensland. As we
saw in Managing Out, using the internet to deliver government services changes the
structure of organisations and their relationships with their external environments
including clients (Wen & Cheng 2007).
Table 2.2 presents the extremes of these elements, to contrast the most mechanistic
with the most organic structures.
Table 2.2 Contrasting mechanistic and organic designs
Departmentalisation Functional or process Customer
Work specialisation or job Highly specialised – duty statements Broad job responsibilities, work assigned
design emphasise skills, fixed duties, to teams not individuals, ‘jobs’ may even be
individual responsibilities outside the organisation
Chain of command and Rigid and clearly defined, few Blurred and shifting, no clear boundaries,
authority deviations authority based on capability
Span of control, or span of Narrow, to enable tight control Broad, to enable commitment rather than
management control
Centralisation versus Highly centralised – employees have Highly decentralised – decisions made as
decentralisation (delegation limited autonomy, specific detailed close to the ‘customer’ or ‘coalface’ as possible
or empowerment) goals and detailed inflexible plans
Empowered staff
High degree of autonomy
Input to the system starts with those nearest to

the preferred outcome
Formalisation Highly formalised, many rigid rules Few rules and regulations, minimal red-tape
and regulations
Source: adapted from Burns & Stalker 1961; McNamara 2002, Robbins et al. 2008.
The distinction between mechanistic and organic structures is simplified in Table 2.2,
however there are more complex ideas and issues surrounding structure particularly
as we shall see later in the topic. Also, although the organisation structure chart
dictates who reports to whom along which lines of communication, much actual
communication in organisations is based on personal informal relationships outside
of the formal structure. In fact, in some organisations these personal networks are
powerful influences on whether or not things get done (Sawada 2008).
2.2 Organisation Structure in the Public

Sector
Public sector organisation structures are an arm of government and play a
significant role in government processes. They affect public policy development
and implementation and therefore have an impact on the ‘authoritative allocation
of values’ in society. Public sector organisations influence decisions about what
is important across the national and sub-national levels of society, whether it be
in Australia,Victoria, Perth and the farthest reaches of the country. Therefore,
understanding the concepts behind how they work is crucial.
General theories and concepts about organisation structure apply in the public
sector, but public status imposes additional political mandates and overarching
principles and constraints on structure. Public sector organisation structures
reflect the ‘jurisdictional structures of the government body under which they
operate’ including legislation, system-wide rules about areas such as personnel and
purchasing, and oversight agencies such as finance, audit and legislatures. Public
sector managers, however, still have some authority over structures and can make
decisions about technology and work processes’ (Rainey 2003:209).
Generic or universal models of organisation structure fail because they do not take
account of the unique difference influencing public sector organisations – politics
and power.
Public employees operating at lower levels in bureaus, especially those in non-boundary-

spanning positions, may not recognize or care much about the political environment
because the way they work may be somewhat similar to the way an employee in the
private sector works. However, when one examines positions at higher levels of the
bureau, or when the behaviour of the public organization as an entity is the focus
of attention, the political environment becomes an essential element in the equation
(Gortner, Mahler and Nicholson 1997:70)
In theory, clients and constituents control performance standards in public sector

organisations meaning that the control process itself is affected and also the
structure. However, as other material in Unit Four shows, public organisations are
still mostly only accountable to Treasury.
2.2.2 Public Sector Structures are Changing

Many public sector agencies, by the definitions and elements listed in Table 2.1,
would be described as highly complex. In the public sector, tasks are organised
on a rule-governed basis, they are highly formalised. There is a preference for
hierarchy and centralisation (Aulich, Halligan & Nutley 2001). Public services and
utilities up to the 1980s had a bureaucratic organisation structure (Smith 2004).
Local government organisation structures in particular were, and often still are,
departmentalised on functional lines, with a diverse spread of specialists ranging from
engineers, town planners, plumbers, animal controllers, accountants, librarians, health
inspectors, building inspectors, parking officers, to employees repairing roads and
removing rubbish (Jones 1989).
Significant economies of scale and efficiencies can be derived from the mechanistic,
bureaucratic design. Formalised, centralised bureaucracies work well in a stable,
simple environment. They are very efficient for executing routine, repetitive tasks
(Rainey 2003:190). However, in a fluctuating and complicated environment the
system of rules, position descriptions and chain of command can be ‘cumbersome’
and managers are ‘unable to evolve and process information rapidly’ (Rainey
2003:190). Coordination is also very difficult when there are many ‘silos’ in an
organisation (Jones 1989).
This combination of bureaucracy and flexibility can be seen in state and territory
health services. Nurses and doctors now communicate more equally, with horizontal
communication instead of reporting up through the nursing chain of command and
back down the medical chain of command. Nurses now make some decisions about
patients formerly the preserve of doctors, making health care more of a team process.
2.2.3 Has There Been Enough Change?

Public sector organisations have experienced frequent changes to their structure
(restructuring) in recent times. This represents manipulation of the elements in Table
2.1, frequently without due understanding of their interrelationships, not to mention
the influence of organisation culture as we shall see later in the topic.
Decentralisation involves devolving power and decision-making authority to lower

levels, although those at the top in the public sector may feel vulnerable and desire to
retain control of the outcomes. They may do this by nominally delegating decisions
but at the same time instituting a series of new constraints on decision-making,
producing ‘pseudo-devolution’. These constraints range from mandatory proformas
for strategic management, detailed decision-making criteria that effectively limit
discretion, and reporting systems that leave no room for flexibility. ‘This system is
made all the more pervasive and unbreachable by dressing it up in the language of
post corporatism’, resulting in too much attention to detail and not enough attention
to creating public value (Limerick et al. 2002:85).
Fox and Miller (1995:xiv) argue that representative democracy is neither

representative nor democratic. Top-down bureaucratic rule of the type found in
public sector organisation structures ‘is but petty autocracy’. Negative features of
mechanistic bureaucracies include top-heavy hierarchical structures, rigid rules and
regulations and tight control of processes. They tend to be tall organisations with
small spans of control, which can result in over-control of employees, expensive
layers of management and slow communication between levels. The bureaucratic
structure of public sector organisations has been criticised for ‘concentrating power,
reducing freedom and usurping political will’ (Hughes 1994:57).
There is a widespread conviction that public sector organisations are dominated by
‘extensive and excessive rules and hierarchical controls’ (Rainey 2003:205).
Activity 2.1 – Red tape

How much red tape do you conform to in your workplace? How much of it is necessary? What can
you do to make changes?
In some ways we can’t live without bureaucracies but that doesn’t mean we have to
accept all their worst features, as the following indicates:
• It is difficult to imagine how work in the colossal organisational structures of the

public sector could be linked and harmonised without hierarchy, bureaucracy and
autocracy.Yet employees know from personal experience that hierarchies generate
inequalities of power and privilege that separate them from one another based on
artificial standards of superiority and inferiority, that bureaucracies tie creativity
in a knot, and that autocracies impose their will on subordinates without
considering what they think or feel.
• What we fail to realise is that hierarchy, bureaucracy and autocracy cannot

function without management and that management cannot function without
hierarchy, bureaucracy and autocracy.Through normal everyday actions, managers
and employees create hierarchy, bureaucracy and autocracy, and these in turn
produce the expectations, demands and assumptions that create and support
managers.Together they form a powerful interlocking system in which each
buttresses and depends on the other, resulting in increased stability and making
it difficult to change one without fundamentally altering the other.We will not
succeed in making organisations more agile, creative and responsive to customer
needs without a deeper understanding of how, regardless of the intentions of
individual managers, the system of management automatically and inevitably
generates these values, structures, systems, processes and relationships. (Cloke &
Goldsmith 2002:82)
In order to change something, we must first understand it. It also requires us to

challenge the assumptions (or mental models) that organisations have to run this
way (Cloke & Goldsmith 2002).
2.3 Critique and Emerging Ideas: Networks

In this section we look at some different ways of thinking about organisation
structure, starting off with a post-modern perspective. This may not be to
everyone’s taste, but it certainly provides some food for thought.
Postmodernism can ‘irritate the corners of your brain and psyche’ but it does
challenge many cherished ideas about management and organisations (Goodsell in
Fox & Miller 1995: xiv). ‘Postmodernism’ is a new way of thinking and a new era,
following the ‘modern’ which was about Fordist mass production, Weber’s hierarchy
and bureaucracy, and the nuclear family. Postmodernism is the information age,
fragmented households and loose network organisations and alliances. Postmodern
writers don’t always offer practical alternatives, which can be frustrating, but they do
make us question prevailing orthodoxy and ‘take bold steps away from well-worn
paths’. This is an appropriate process in a postgraduate university program where
‘critical thinking’ is encouraged.
Here we look at some different organisation structures that are working in practice,
albeit retaining some of the flaws criticised in postmodernism. Collaboration,
networking, joining up and integration or whole-of-government are the imperatives
for public sector organisations in this country and overseas. Many programs,
including community and welfare services, are being delivered through whole-of-
government or ‘shared’ structures. These structures challenge traditional public sector
models whose accountability mechanisms are designed for vertical relationships and
are inadequate for horizontal relationships across and between agencies (Ryan &
Walsh 2004:621). Hence the idea of network structures (Limerick et al. 2002).
Network organisation structures ‘lie beyond hierarchy’ and can be seen as a ‘giant
leap’ for the typical bureaucracy. Interestingly, they are not that new, stemming from
the nineteenth century. They are more ‘fluid’ and ‘lighter on their feet’ and can be
a more effective organisation structure in periods of discontinuity such as we are
experiencing now. Effective networks involve more than just redrawing the lines and
rubbing out a few boxes on an organisation chart. They require a complete overhaul
of strategy, structure and culture (Limerick et al. 2002:62).
A true network of loosely-coupled, collaborative individuals works because the

elements themselves seek synergy and collaboration, not because it is imposed on
them by structures, rules, and contracts. Networks need a ‘robust social architecture’
rather than a formal organisation structure. In other words, it comes down to the
issues discussed in Unit Four, particularly the soft factors of emotional intelligence
and personality. The role of this architecture is to surface conflicts, negotiate
agreements and trade-offs, and focus on the issues and priorities not on personal
power bases and politics (Limerick et al. 2002:62:64). This point can be seen in
Leblanc’s (2004) argument that most attempts to reform governance by focusing on
changing organisation structure, for example the independence of review boards, do
not improve governance. Changes need to be social and cultural not structural.
Changes that are happening in practice include the virtual organisation and the
boundaryless organisation (Robbins et al. 2008). One change to organisation
structure embraced quite extensively is shared services. This is the provision of a
service by only one part of an organisation or group rather than each group or
organisation supplying its own:
Shared services arrangements in the Australian third sector are becoming more common.
Notably, however, there is a lack of information to guide nonprofit organisations
through the development and engagement of shared structures. …. Overall, this
article highlights the need for further research and analysis of issues relating to shared
services arrangements in order to assist the increasing number of Australian nonprofit
organisations engaging these collective arrangements and structures (Walsh, McGregor-
Lowndes & Newton 2008:200).
There hasn’t been much evaluation of whether shared services deliver efficiencies
to organisations or better service to clients. One theme that is common from
individuals who have gone though this change is that it is difficult and not
necessarily justified.
2.3.1 An Example: the Australian Greenhouse Office

Network structures are illustrated in Connecting Government by the Management
Advisory Committee (MAC 2004). For example, the Australian Greenhouse
Office (AGO) cuts across thirteen different federal agencies; along with state and
local agencies; business and industry, including six different organisations such as
the Business Council of Australia and Australian Industry Greenhouse Network;
and non-government organisations such as Greenpeace. Traditional, hierarchical
structures are less effective in this case, where the need is to coordinate a whole-
of-government, or joined-up national response to the country’s obligations and
climate change and greenhouse emission policy objectives.
You can imagine the difficulty of creating a network spanning these multiple
organisations each with their own strategy, structure and culture. One of the key
learnings from the AGO case is the need to recruit and retain the right people to
promulgate a culture that ‘works’ in a networked, whole-of-government approach.
The culture is one that values collaboration and shared outcomes. This required
employees to ‘let go’ of the specific greenhouse programs they brought with them
from their ‘home’ agencies and organisations. As the MAC noted, organisation
culture ‘is paramount and supersedes any emphasis on structural overlay’ (2004:139).
Required Reading 2.1

Morgan, G 1997, ‘Organisation as flux and transformation’, in Images of organization, Sage, London,
pp. 251–301.
If you favour thinking that is rational, logical, structured and systematic, you may find this reading to
be extremely challenging. It is however an important reading for precisely that reason. Those of us
who favour a logical, rational approach may be an endangered species in today’s shifting, complex
and chaotic world! Authors like Morgan believe that other ways of thinking and conceptualising are
needed. His reading is an excellent example of those other ways. The reading challenges accepted
ideas of organisation structures such as mechanistic bureaucracies and builds on alternative ideas
such as networks, introduced in this topic from Limerick et al.
2.4 Organisation Culture

The other key element that describes and defines organisations is culture. In
contrast to structure, organisation culture is informal, unofficial, more difficult
to control and intangible. It can’t be sketched out on an organisation chart. It
is a powerful influence on individual behaviour. For example, humans want to
believe in and value something better or have a higher purpose for their work.
Culture that contradicts this is draining (Grazier 2005:4). Culture has received a
lot more attention in recent years as organisations gradually realise that changing
culture is more significant (and more difficult) than changing structure. It is easy
to reconfigure the organisation chart but hard to reconfigure the hearts, minds and
values of those people who slot into it.
Culture is a very important subject due to its influence on many facets of

organisation life including the success of change initiatives. For example, a large
European project on information management across the public sector on the
continent specifically looked at the role of culture in impeding or facilitating new
information management initiatives (McHenry & Corbin 2007). Closer to home
in Victoria, a report across the state indicated that overarching public sector culture
did not always support joined-up-government and that joined-up thinking needs to
be embedded in the culture (State Services Commission 2007). Similarly Crowley
(2007) in a report to the Tasmanian Premier on reducing government greenhouse
gas emissions indicates that changing culture is an important part of achieving
the aim. A further example is that emerging culture and technology are eliding
old public sector professionalism in filing, records and document management
(Hodgkinson 2008).
To use an analogy that may be particularly familiar to Victorian participants or

anyone interested in Australian Rules football, each club has its own culture – what
the members think it stands for, what they value and what sets the club apart from
others. For example, the Saints are developing a new winning culture of self-belief
whereas the Brisbane Lions have an established culture of sticking by the club. How
is this relevant? Good question. Have a look at the DIMIA example (Reading 2.3
below) to get some feel for the issues.
Culture can be analysed on a range of primary characteristics. Look at how various

authors define six elements of culture and the purposes it serves, as shown in Table
2.3
Table 2.3 Comparing different ideas about the elements and purpose of culture
Elements Purpose or function Source
1. The internal game, the How to survive and get on in the organisation Shapiro 1995
set of unwritten rules
2. Sense-making Organisation members interpret and understand what Rainey 2003

mechanism goes on around them
3. Unconscious, everyday Guides how employees operate day-to-day Stewart & Walsh 1992
expectations and
assumptions
4. Collective learning Helps employees deal with day-to-day problems and Wood et al. 2001
issues
Is taught to new members as ‘the correct way to think and
feel’, helping them to adapt to their new role
5. Values and collective Sets standards for ethical practice Wood et al. 2001
beliefs
6. Common goals and If culture is strongly held and widely shared, the culture Wood et al. 2001
outcomes can serve as a unifying force joining organisation
members in commitment
Activity 2.2 – The culture of your workplace
Take each of the six points in the table in turn and try and articulate the culture of your workplace or
agency on each point. Give examples to back up your argument

Robbins, S, Judge, TA, Millett, B & Waters-Marsh, T 2008, Ch 17 Organisational Culture, in
Organisational Behaviour, 5th edn, Pearson Education Australia, Frenchs Forest NSW, pp. 574-607.
This text book chapter gives a good description of the main concepts or theory of organisation
culture. Start with the definition on page 577 and then give some thought to how your agency
or work group rates on culture’s seven primary characteristics on page 577-78. Pay attention to
dominant versus sub-cultures and weak and strong cultures on page 579. This is likely to be relevant
in the context of large and diverse public sector organisations. For example Queensland Health
and Queensland Ambulance Service often report differences between urban and remote cultures.
What cultures do on pages 581-584 is significant and should be studied carefully due to its role
in organisation change. The sections on creating and sustaining culture and how employees learn
culture are useful because the material there can be translated into advice about how to change
culture if it isn’t supporting the organisation’s goals and priorities, or strengthening it. There is a
useful critical analysis presenting opposing views about whether culture can be changed or not.
We saw in the Robbins et al. reading how important senior leadership is in

promoting the right culture and values in the organisation (Aitken 2007). This
assertion has been born out by many PSM Program participants who also
acknowledge their influence on the behavior of their team. Organisation members
view their organisation culture in a more positive light if the leaders ‘walk-the-walk’.
2.4.1 Public Sector Culture

Political culture is a second variable that needs to be taken into account in the
public sector along with organisation culture (Henderson 2004). Political culture
depends on:
• the history of government and how it developed
• how the community perceives the role of government
• structure and processes considered ‘proper’ for government
• values, mores and habits of politicians (not just public sector employees and
management).
These factors influence how public sector managers operate and create different
identities for various governments. For example, compare the United States and
Canada which have many features in common, but in the US political activity on
the part of public sector employees is more acceptable. Other differences in culture
affect various administrative and political processes such as the extent to which the
letter of the law is observed, and the amount of protection offered for unauthorised
information release (Gortner et al. 1997:71).
2.4.2 Culture and Change
Culture stems from myths, legends, stories and ‘lore’. Myths are old stories, usually
about a great person or a great situation. They are also unproven collective beliefs.
Legends are stories handed down by tradition from earlier times and are non-
verifiable. Lore is the accumulated body of knowledge about a subject stemming
from traditional, anecdotal or popular sources (Gibbs 2003:103). Myths, legend and
lore form and shape culture. They add to the richness and depth of organisational
identity and are a powerful force to fashion newcomers’ beliefs, values and actions.
Think of colourful and influential public sector characters such as Nugget Coombs,
‘Max-the-Axe’ Moore-Wilton, Peter Shergold and Andrew Podger.
Some commentators believe we have witnessed a change in public sector culture

from norms and values of administration, hierarchy and professionalism to
entrepreneurialism (Stewart & Walsh 1992). To elaborate, there has arguably been a
shift away from entrenched culture of:
• self-sufficiency – where a public sector organisation provides a function with
directly employed staff
• direct control through close supervision and monitoring – where ‘command
and control’ style supervision occurs in hierarchical layers
• uniformity – where a service is provided in the same way at all times to all
(eligible) individuals
• accountability upwards – where public sector employees are accountable to
the public via an upward political process, not a direct one to the public
• standardised and established procedures and regulations – where standard
conditions of employment exist for everyone (Stewart & Walsh 1992).
Activity 2.3 – Culture and change

The points listed above come from quite a long time ago. Has your agency changed or does it still
subscribe to the old ideas?
In the United States, early public sector culture was described as ‘government by
gentlemen’. Today’s culture shares values of merit, accountability, flexibility and
entrepreneurialism (Henderson 2004:234). In terms of local entrepreneurialism,
the Queensland Government bought an event-management software company to
position the state as a premiere location for major national and international events.
Government going into and out of business isn’t an unusual phenomenon, but in the
past it has generally been in more ‘staid’ areas such as banks and utilities. For a further
illustration of how organisation change requires a shift in culture see the following
excerpt from Skalen (2004:254):
The introduction of business planning into museums in Canada … substituted the

previous cultural logic with a business logic. ‘Within this new logic, people in the
organizations are encouraged to see themselves, perhaps for the first time, as working
in businesses rather than working in museums that are run in a businesslike manner’
(Oaks et al. 1998:279).
The shift can be seen in contracting, and ‘managing out’, however it is questionable
how much of the new espoused culture has permeated the sector. What do you
think?
Queensland may or may not be typical of state health systems but it has certainly
come in for its share of criticism in recent times. Reading between the lines of
damning and perhaps biased media reports it is possible to see that culture is
the culprit behind many instances of failure, along with structural and systemic
failings (see Queensland Government 2005a & b for details of recent reviews into
Queensland’s health system). There is the much-publicised case of Dr Death in
north Queensland along with system overload on the Queensland Ambulance
Service with the advent of universal cover. Fairly reported or not, these anecdotal
examples suggest a lack of ‘high performance culture’ in these institutions.

Metcalfe, A 2007, Enhancing ethics and governance while transforming the business: Ethical
leadership and governance in the public sector, Leadership and Governance Conference,
Department of Immigration and Citizenship, Canberra, viewed 19/08/08 <http://www.immi.gov.
au/about/speeches-pres/_pdf/2007-05-09-leadership-and-governance-conference.pdf>.
This reading is an excellent case study from the then Australian Department of Immigration,
Multicultural and Indigenous Affairs (DIMIA), which experienced some well-publicised failures
and has been through a rebuilding phase. As with Queensland Health following the ‘Doctor Death’
scandal, subsequent reviews identified organisation culture as a contributing factor. As you read,
note the differences between the old and new (or intended) culture and consider how culture was
linked to the poor performance of the organisation. Culture isn’t the only influence on organisation
performance so also take note of what other organisation factors were addressed.
Activity 2.4 – Required Reading 2.1 - Developing change and

culture
Revisit the Robbins et al. reading to identify what the theory says about developing and changing
culture. Then look at the DIMIA case and identify whether the organisation followed ‘textbook’
principles for changing the old culture and developing a new one. What observations would you
make based on what you have found?
Activity 2.5 – Revisiting the Grampians water case

Revisit Required Reading 1.2 from Topic One in order to apply the concepts of structure and culture
to the Grampians Water case – Pyman, A, Mathieson, I, Craig, A & Doherty, K 2004, ‘Water industry
reform – stopping the leaking tap?’.
1. Draw up an organisation chart to represent the structure before Grampians Water was
formed and compare it to how it would be now (see for example p. 552).
2. Examine the organisation chart shown on p. 549. On what basis is the organisation
departmentalised? What could be said about the chain of command? The case mentions
several aspects of the geographical organisation of Grampians Water which are not shown
on the structure chart. On page 548 it mentions a corporate office in Horsham, district
offices in Ararat and Stawell and thee operational depots (location unspecified). Therefore
it seems likely that as well as the form of departmentalisation shown on the structure chart,
the Grampians Water organisation structure may also be departmentalised by geography.
Give some thought to the implications of overlaying the geographic locations on the existing
structure chart. The case mentions on p. 555 that the number of district offices was reduced
from five to two, so it seems that there was more geographic ‘complexity’ at the start of the
case.
3. There is a lot of evidence of a change in organisation culture in the Grampians Water case.
Make some notes of the various pieces of evidence (see pp. 550; 552; 553 for example) What
did it change from and to? How successful was this change and what evidence is there to
support your argument? Given what the Robbins et al. (2001) reading says about how culture
is established and changed, what signs (if any) are there of a deliberate effort on the part of
Grampians Water management to address culture change?
The Queensland Department of Main Roads aimed to change the organisation

culture from one that was:
• Bureaucratic
• Technical
• Inward looking
To one that was

• Outward looking
• Learning focussed
• Relationship orientated
• Whole-of-government
• Commercial
• Community based
• Social justice oriented (DMR 2008:52)
Culture change was initiated using a dialogic communication mode. However this
didn’t work with front line, lower level staff who saw it as ‘weak, imprecise and
inconsistent’. Senior managers did not execute culture change well when it came to
the lower organisation levels.
As we have noted at several points in this course, the skills shortage is an important
issue facing organisations today. Losing individuals though voluntary turnover
exacerbates this problem.
It is well documented that organizations face both direct and indirect costs from this
type of turnover. Direct costs include what an organization has to spend to search for
and train new employees. Indirect costs include reductions in productivity and quality
of output that stem from protracted job vacancies, diminished staff expertise and other
problems associated with turnover (Mohr, Burgess & Young 2008:29).
Research with nurses shows that creating a teamwork culture reduces turnover. If
individuals feel part of a valued team they are less likely to leave the organisation. If
leadership behaviours influence a positive culture that aligns with employees’ values
they are more likely to stay (Mohr, Burgess & Young 2008).
Support from politicians has a big impact on organisation culture and structure.
If organisations receive political support in terms of trust, confidence and
administrative freedom, they are more able to foster a culture of development,
adaptation and learning. On the other hand, a ‘gotcha’ mentality from officials
who micromanage their departments results in a defensive, cautious, rule-bound
culture, because risk-taking is punished rather than rewarded. A well-supported
development culture enables red-tape to be reduced because it enables organisation
members to have an external (customer) focus and be flexible on internal matters,
particularly when there are clear goals and strategies. If public organisations are at
the whim of their political masters and public sentiment, public sector managers
are likely to rely on rule-bound practices for self-preservation. Criticising public
organisations on the grounds of excess bureaucracy and red-tape is likely to
produce more of the same (Chen & Williams 2007).
Sometimes public sector managers are uninterested in performance or a

performance culture because the term invokes visions, images and ideas that
are anathema to their values. Alternatively, mention of ‘performance’ raises an
apparition of measurement, metrics, audits and more red tape. The challenge is for
public sector professionals to define performance on their own terms. Performance
in the public sector means:
• more housing for the homeless,
• more fulfilment, adaptation and achievement of intrinsic potential for
students in schools
• better health for the population
• more individuals given a new lease on life
• more of the state’s forests preserved for the next generation
• more useful information provided across agencies to counter terrorism
• better preparedness to avert or ameliorate the effects of disaster
• more employers receiving a fair days work for the pay they provide to
employees or conversely fewer employees being exploited by unscrupulous
employers
It may be that what happens in some agencies is too much about politics, red
tape, accepting the status quo and appearing to avoid risk rather than innovating
exciting, leading-edge and best-value solutions.Various sources (including PSM
Program assessment items) reveal an inward looking, cautious, tick-the-boxes
culture of inbred conformity and compliance. The challenge for public sector
managers is to step up and change the system by relying on their intimate and
intricate professional knowledge of the issues under review.
2.5 Summary
In summary, two organisational variables that influence any manager’s ability to
deliver results are organisation structure and culture. Structure refers to the official or
formal way that work tasks are divided, grouped and controlled. In the contemporary
environment, structural rules and procedures may extend beyond the boundaries of
what traditionally constituted the organisation to whole-of-government or joined-
up government. Seven main elements that define structure are: work specialisation
or job design, departmentalisation, chain of command, span of control, centralisation
(empowerment or delegation), and formalisation. These elements produce a range of
organisational designs varying from mechanistic to organic. Organic structures are
more nimble and value producing but less controlled and compliant and therefore
more risky.
All organisations have their own particular ‘personality’, that is, a set of characteristics
that distinguishes them from others. Culture is the internal game, the set of
unwritten rules about how to survive and get on in the organisation. In the public
sector there is also a political culture that needs to be taken into account.
Public sector organisation culture is said to be moving from one that values
close control, rules, uniformity in service provision, upwards accountability and
standardised procedures, to one that embraces a business logic, service quality, value
for money and, in some limited cases, entrepreneurialism. However recent high-
profile failures in the Department of Immigration and Queensland Health, both of
which have been attributed to problems of ‘culture’, suggest that changing culture
should be high on the agenda of those seeking to increase public value.
Review
Having completed this unit you should now be able to:
1. Discuss elements of organisation structure and how they translate into organisation design.
2. Discuss public sector organisation structures.
3. Canvass views on organisation structure and apply them to an example of a network.
4. Define organisation culture and explain its elements and functions.
5. Analyse organisation culture in public organisations.
Required Reading
Reading 2.1 Morgan, G 1997, ‘Organisation as flux and transformation’, in Images of
organization, Sage, London, pp. 251–301.
Reading 2.2 Robbins, S, Judge, T A, Millett, B & Waters-Marsh, T 2008, Ch 17

Organisational Culture, in Organisational Behaviour, 5th edn, Pearson Education
Australia, Frenchs Forest NSW, pp. 574–607
Reading 2.3 Metcalfe, A 2007, Enhancing ethics and governance while transforming
the business: Ethical leadership and governance in the public sector, Leadership and
Governance Conference, Department of Immigration and Citizenship, Canberra,
viewed 19/08/08 <http://www.immi.gov.au/about/speeches-pres/_pdf/2007-
05-09-leadership-and-governance-conference.pdf>.
Reading 2.4 Pyman, A, Mathieson, I, Craig, A & Doherty, K 2004, ‘Water industry
reform – stopping the leaking tap?’, Pearson Learning, Melbourne (NB this is
the case from Topic One. It is not reproduced in this topic. Return to Topic One
to read the case again at the appointed time.)
Further Reading
Langbert, M, Stanchina, M & Grunewald, D 2008, ‘Howard Roark and the ghost of
Admiral Rickover’, Cross Cultural Management, vol. 15, no. 2, pp. 194–216.
This case study aims to ‘illustrate the interaction of organizational culture, human
resource (HR) policy and firm performance. It contrasts the cultures of two science-
driven organizations – the Navy’s nuclear submarine force and Merck, the large
pharmaceutical firm – and traces the reaction of one individual to two organizations
(p.194). Participants who like stories, case studies and examples will find this
illuminating.
Jane, A & Dollery, B 2006, ‘Public Sector Reform in Australia: An Evaluation of
the Corporatisation of Sydney Water, 1995 to 2002’, Australian Journal of Public
Administration, vol. 65, no. 4, pp. 54–67.
The corporatisation of Sydney Water from 1995 onwards formed part of a much
broader process of public sector reform in Australia. However, Sydney Water
represents an unusual case study of corporatisation since it has embodied two distinct
forms of corporate structure over the period 1995 to 2002; both the company model
and the statutory model. This article seeks to evaluate the success or otherwise of
this corporatisation process using ‘internal’ measures of the performance appraisals
undertaken by ‘outside’ bodies in six main forums: The independent assessments
against operating licence conditions; NSW government’s annual assessments of
government businesses performance; Sydney Water’s own performance measurement
against corporate business plans; water reform measures stipulated by the Council of
Australian Governments; industry financial performance indicators as measured by
the Water Services Association of Australia; and an international assessment conducted
by the UK Office of Water Services (p. 54).
Bradley, LM & Parker, R 2006, ‘Do Australian public sector employees have the type of
culture they want in the era of new public management?’ Australian Journal of Public
Administration, vol. 65, no. 1, pp. 89–99.
This paper is a good research study based on a good sample from Queensland. Focus
on the introduction to get an overview of culture and the discussion and conclusion
to find out about the state of play and what needs to be done.
The Australian Journal of Public Administration should be your bible. It will assist you
to keep up with trends, research and emerging ideas in public sector management
and assist you to execute evidence-based policy and practice.
66
Topic 2: Required Reading
Morgan, G 1997, ‘Organisation as flux and
transformation’, in Images of organization,
Sage, London, pp. 251–301.
P S M U n i t 4 : M a n a g i n g d o w n : o p e r at i o n a l m a n a g e m e n t i n t h e p u b l i c s e c t o r
Robbins, S, Judge, T A, Millett, B & Waters-Marsh, T 2008, Ch 17 Organisational
Culture, in Organisational Behaviour, 5th edn, Pearson Education Australia,
Frenchs Forest NSW, pp. 574–607
Metcalfe, A 2007, Enhancing ethics and governance while transforming the business:
Ethical leadership and governance in the public sector, Leadership and Governance
Conference, Department of Immigration and Citizenship, Canberra, viewed
19/08/08 <http://www.immi.gov.au/about/speeches-pres/_pdf/2007-05-09-
leadership-and-governance-conference.pdf>.

U4 Topic 2 PDF

Загружено:

Сведения о документе

Оригинальное название

Авторское право

Доступные форматы

Поделиться этим документом

Поделиться или встроить документ

Параметры публикации

Этот документ был вам полезен?

Это неприемлемый материал?

Авторское право:

Доступные форматы

U4 Topic 2 PDF

Загружено:

Авторское право:

Доступные форматы

TOPIC TWO: Organisation

Structure and Culture

Public sector organisations are part of a system of representative democracy and

Culture can be explained informally as the ‘personality’ of an organisation that sets

2. Discuss public sector organisation structures.

3. Canvass views on organisation structure and apply them to an example of a network.

4. Define organisation culture and explain its elements and functions.

5. Analyse organisation culture in public organisations.

2.1. Organisation Structure

Strategic management, as we saw in the previous topic, includes examining the

Organisation structure is a formal term, although it is easily represented by

2.1.1 Elements of Organisation Structure

Table 2.1 Elements that produce various organisation structures

Element Definition Example/comments

Delegation or empowerment The extent to which lower-level See above

Table 2.2 Contrasting mechanistic and organic designs

Element Definition Example/comments

Departmentalisation Functional or process Customer

High degree of autonomy

Input to the system starts with those nearest to

2.2 Organisation Structure in the Public

Public employees operating at lower levels in bureaus, especially those in non-boundary-

In theory, clients and constituents control performance standards in public sector

2.2.2 Public Sector Structures are Changing

2.2.3 Has There Been Enough Change?

Decentralisation involves devolving power and decision-making authority to lower

Fox and Miller (1995:xiv) argue that representative democracy is neither

Activity 2.1 – Red tape

• It is difficult to imagine how work in the colossal organisational structures of the

• What we fail to realise is that hierarchy, bureaucracy and autocracy cannot

In order to change something, we must first understand it. It also requires us to

2.3 Critique and Emerging Ideas: Networks

A true network of loosely-coupled, collaborative individuals works because the

2.3.1 An Example: the Australian Greenhouse Office

Required Reading 2.1

2.4 Organisation Culture

Culture is a very important subject due to its influence on many facets of

To use an analogy that may be particularly familiar to Victorian participants or

Culture can be analysed on a range of primary characteristics. Look at how various

Elements Purpose or function Source

2. Sense-making Organisation members interpret and understand what Rainey 2003

Required Reading 2.2

We saw in the Robbins et al. reading how important senior leadership is in

2.4.1 Public Sector Culture

Some commentators believe we have witnessed a change in public sector culture

Activity 2.3 – Culture and change

The introduction of business planning into museums in Canada … substituted the

Required Reading 2.3

Activity 2.4 – Required Reading 2.1 - Developing change and

Activity 2.5 – Revisiting the Grampians water case

The Queensland Department of Main Roads aimed to change the organisation

To one that was

Sometimes public sector managers are uninterested in performance or a

2. Discuss public sector organisation structures.

3. Canvass views on organisation structure and apply them to an example of a network.

4. Define organisation culture and explain its elements and functions.

5. Analyse organisation culture in public organisations.

Reading 2.2 Robbins, S, Judge, T A, Millett, B & Waters-Marsh, T 2008, Ch 17

Вам также может понравиться