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Structural Transformation in The Phoenix Group

  • 32 Pages
  • Published On: 06-12-2023
Introduction

The motive of this report is to carefully examine the factors and aspects which affect the smooth functioning of a business organisation, by studying the case of UK based company The Phoenix Group. The reason that this group is being studied is because the group underwent a significant organizational and structural change in 2018, whereby it acquired another business, Standard Life Assurance.

Question 1:Understanding Structure Culture and Leadership Through the Context of The Phoenix Group

The following section will explore the element of structure, culture and leadership in an organization in the context of the transition which The Phoenix Group is undergoing, in an attempt to critically analyse the wellbeing strategies it has in place.

1.1 Structural Change, Leadership and Wellness

The most important change that is taking place in The Phoenix Group is largely structural in nature, as the company underwent transitional change by acquiring Standard Life Insurance and growing from an organization which had 800 employees to an organization which has 4300 employees. It is clear, then, that the leadership structure needs to be changed drastically in order to adapt to the structural change in the company (www.employeebenefits.com).

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In order to understand the structural change in the organization, one needs to consider the idea of organizational structure and leadership. The idea of organizational structure is essential to the well being of the employees and encourages the innovation in a given company (Smit and Trigeorgis, 2012). Burns and Stalker (1961) were the first ones to elucidate on two different kinds of structure in organization; mechanistic structure which operates in stable business environment and organic structure which operates in unstable economic environments. Generally speaking, organizational structure is understood from the perspective of action, organisational structure is understood from the perspective of establishing control, which aspires to encourage employees to behave in a desirable manner (Cardinal, 2001). A similar style is put forward by Robbins (2005), who identifies components like strategy, organization size, technology, environment and power control in the theory of structure of an organization. According to him, environment and power control are two important components of the structure of an organization. Essentially, the corporate environment that The Phoenix Group makes up an important part of the company structure. While there has been mention of the company introducing policies like the employee assistance programme, the presence of an on-site counsellor for the purposes of employee wellbeing and the company diversity and inclusion network, so far the company has not revealed the policy-orientation with regards to the structural reorganisation of the company.

1.2 Leadership and Wellness

Mullins (2013) spoke of three styles of leadership; the authoritarian leadership style where the leader makes unilateral decisions about all the aspects of the company, the democratic style of leadership where the opinion and perspectives of all the employees are taken in order to arrive at a decision and the laissez-faire style of leadership, whereby the manager plays a minimal role to ensure that the work of the office is going well and regulates naturally, it won’t be practical for the company to take into account the opinions of all the 4300 employees.

With relation to the leadership and wellness, Armstrong (2012) finds out that, in the UK, around 6.5 billion pounds are lost by companies annually because of the time people take off by being sick. It is obvious from this discovery, then, that companies need to take a more proactive stance when it comes to employee wellness.

The Phoenix Group has a number of measures in place to ensure the wellness of their employees, like their plans to review the benefits plans. This needs to be evaluated to ensure that the new employees do not lose nay of their old benefits while at the same time, the older employees also do not get treated unfairly. The company has also decided to offer all of their employees the private medical insurance, which was previously an insurance which was only available to the highest three bands of employees in the five bands of employees that existed within the company structure. The management has declared that besides enduring the physical well-being of their employees, they are also wholly concerned with ensuring the mental well-being of their employees and some of those measures involve providing the employees with a counsellor who’d remain in the office at all times and the provision of an Employee Assistance Programme.

1.4 Culture and Employee Wellness

The idea of culture exists very much within an organization as well and it would be wrong to assume that the structural underpinnings which come with culture do not influence the professional outcomes. This is reiterated by Inayat-Khan and Katzenbach (2010), who postulate that even though the professional environment is an informal one, the negative and positive reinforcements which work in the cultural environment work in the informal space too. Janićijević (2011) has defined cultural organization as a collective system within which exists certain norms, values and assumptions which has been developed through the mutual experiences of the members of the organization.

This is important in the context of the employee groups in The Phoenix Group because of the integration of employees in the work place. The Phoenix Group has launched initiatives like the diversity and inclusion agenda which hopes to cater to the demands of all the different kinds of individuals who are working in the office. Two years before the acquisition of the company, The Phoenix Group started a Women in Finance Charter to ensure equal pay for all its female employees. Additionally, it is also launching programmes which would help people who come from different races and people of different sexualities to working together in an integrated fashion (employeebenefits.com).

Another important cultural aspect in the professional environment which leads to employee motivation is employee engagement. Armstrong (2010) defines the concept of discretionary behaviour, which is highly productive employee behaviour, which occurs when the employee feels valued and encouraged in the professional environment. He describes employee engagement as highly important because more levels of employee engagement leads to a higher level of employee initiative, engaging in discretionary behaviour and tailoring their behaviour in accordance with the values that the company preaches. In 2018, the company replaced its older engagement survey for a cultural survey, which is better encompassing the cultural diversity of the employees. The earlier engagement survey showed great results, whereby the employee engagement index has been over 80%. It remains to be seen what the cultural diversity initiative brings post-2018. It is an important step for the company as The Phoenix Group grew from a 400 employee operation to a 4300 strong not gradually, but suddenly. In this scenario, it is important that there are concrete steps taken by the management and the leaders who are leading the teams in inducing right steps in the direction integrating the new employees and boosting the morale of the older employees in such a way that there is not antagonism between employees and teams.

1.3 Examining the Relationship Between Organizational Structure, Culture and Leadership

The structure of an organization is intimately linked to the culture and leadership style of the organization. This is because the set of beliefs and assumptions which make up the informal culture of the organization is constructed and perpetuated by the managers who make up the formal structure of the organization (Schein, 2010).

It is frequently misinterpreted that the organizational structure of a company influences the culture of a company, when the case is it is usually the other way round. The structure of an organization must be formed in accordance with the culture it is trying to perpetuate. Taking the specific example of The Phoenix Group, the cultural policies which have been initiated by the company calls for a revelation in the gender pay statistics in an attempt to be more transparent about the gender wage gap. However, it needs to be accompanied by concrete efforts by the company in order to make practical strides in closing the gender gap. Alternatively, if the company passes executive decisions in favour of closing the gender wage gap, it would not need to sign charters or display numbers, as the female workers in the organisation would be content with the action taken. In order to effect actual change, the organization needs to start with changing the structure of the organization, to effect the culture of the company. Such an action will be catalysed by the leadership of the company (Janićijević, 2013; Cameron and Quinn 2011).

A good model of structural organization that the company can follow for this end is the Mintzberg model, which postulates that there are five different models of organization; namely simple model, bureaucratic model, professional model, adhocracy model and divisional model (Ali et al, 2021). Considering the three models, the bureaucratic model seems the most logical structure that can be followed by The Phoenix Group, which postulates for higher productivity with specialised division of labour. Such an end is going to be achieved by the effective division of labour through teams (Fells, 2000). The next section will elucidate on how the organisation can construct effective teams through the usage of heroes and relating them to the company.

Question 2: Building Effective Teams Through Motivation and Theories of Team Effectiveness in the Phoenix Group

The principle of building and maintaining an effective team are essential for the survival of an organization. The following section will discuss theories of team motivation and strategies for building effective teams and examine them in context of The Phoenix Group, in order to see which strategies are the most suitable for a company like The Phoenix Group.

2.1 Motivation Theory in the Context of The Phoenix Group

Motivation is the key which drives the employees towards action in an organization and encourages them to perform better (Rashid and Sambasivan, 2003). The following section will discuss three motivational theories in the context of The Phoenix Group in order to see which theories are most suitable for operationalisation in the company.

2.1.1 Alderfer’s ERG Theory

The Existence, Relatedness and Growth theory is a redefined theory of Maslow’s Hierarchy of Needs, elucidated by Clayton Alderfer. According to the theory, individuals have three needs; existence based which are physical needs, relatedness which are need for recognition and growth needs which relate to the self-development of an individual (Caulton, 2012).

Research has yielded that factors across these three categories, factors like higher wages, appreciation of good work and possibility of upwards mobility were big factors in motivating team members in organizations (Islam and Ismail, 2008). The Phoenix Group’s management needs to take initiatives to reward employees and not make pay cuts to streamline the operations.

2.1.2 McClleland’s Trichotomy of Needs

This theory suggests that there are three motivators to human behaviour; attainment of power, achievement and affiliation (McClleland, 2005). The company has revealed that motivating employees remains one of its key concerns, but motivation through fair competition and association with teams in the organisation are initiatives that have not been mentioned (employeebenefits.co.uk).

McClleland concluded that workplace motivations are far more powerful than general abstract motivations like self-actualisation, which Maslow elucidates (Steers et al, 2004).

2.1.3 Goal Setting Theory

A self-explanatory theory, the goal setting theory is concerned with motivating employees to set personal goals through providing constant feedback and encouraging them to do better (Phipps et al, 2012). The company needs an alteration of its employee goals after the acquisition, as goals are the basic motivators which team members need in order to improve in their performance as a part of the organization (Hill et al, 2012).

In the light of this, The Phoenix Group needs to set up a system of incentives which will aid the employees in concretely understanding a tangible set of incentives which they will get if they perform beyond their abilities.

A good way for the Phoenix Group to combine Alderfer's theory in this regard is by offering a combination of financial renumeration and recognition, through systems like ‘employee of the month’ and such a strategy has been known to foster positive relations between employees as well (creativegroupinc.com)

2.2 Team Effectiveness in The Phoenix Group

Team effectiveness can broadly be understood as the collective abilities of a groupM to meet certain pre-determined goals, in a manner whereby the general satisfaction of the team is improved and the mutual profit of the team is attained (Kozlowski and Ilgen, 2006; Salas et al, 2009; Marks et al, 2001).

Team effectiveness in the context of The Phoenix Group can be approached in several ways. Kozlowski and Klein (2000) speak of team effectiveness as being a multi-level phenomenon, whereby the individual’s micro-assertions were put aside to understand groups of individual from a top-down approach. This approach was arrived to from the perspectives of scholars like Herman and Hulin (1972), James and Jones (1976) and Rousseasu (1978).

Kozlowski and Klien (2000) understand team effectiveness to be centred around certain ‘constructs’, which are loosely specific aims of the organization. The more complex the aims of the organization, the more levels there are formed in the teams. For the purposes of The Phoenix Group, it will be better if teams are divided along the lines of clear aims and objectives to avoid confusion of roles and responsibilities with the other teams.

Kozlowski and Klien (2000) understand team effectiveness to be centred around certain ‘constructs’, which are loosely specific aims of the organization. The more complex the aims of the organization, the more levels there are formed in the teams. For the purposes of The Phoenix Group, it will be better if teams are divided along the lines of clear aims and objectives to avoid confusion of roles and responsibilities with the other teams.

Gilson and Mathieu (2006) look at team effectiveness from the perspective of empowerment and discover that the aspect of responsibility delegation and the freedom of teams to self-manage was directly related to the ability of the team to be more productive.

A similar result was obtained by Leach et al (2003) and Kirkman et al (1999) who discover that when the structure of the corporate environment directly delegates significant responsibility to the teams who are working in the company, the teams are more likely to be productive and when tasks are delegated in a narrow and limited manner, productivity falters. Hence, independence in task management and delegation of significant tasks becomes an important aim for The Phoenix Group to fulfil. It is also a convenient aim, as the company’s employee numbers have significantly gone up and it would be profitable for the company to delegate tasks to teams rather than doing everything at the managerial level.

Research by Cannon-Bowers et al (2007), Kozlowski and Bell (2013) and Mohammed et al (2010), reveal that the phenomenon of mental models which develop in a team when they are working in tandem towards a common goal and when they are going through similar experiences and challenges.

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Research also suggests that transactive memory systems are formed when team events take place and team leaders are born because of these events (Ibid). The Phoenix Group’s initiatives, in achieving this, has shown considerable advancement as the company has introduced several policies whereby the employees can participate in social events and sporting events in order to foster within themselves the feeling of camaraderie (employeebenefits.co.uk).

Conclusion

The document revealed that the transitionary nature of the company is a key factor in determining the changes that need to be made in the structure and team effectiveness strategies in the company. It was revealed that while the company has taken some impressive strides in improving the culture of the company in terms of increasing camaraderie and the physical and mental health of the workers, it needs to attempt a structural and leadership reorganisation of the company before it undertakes team effectiveness measures in the company. Additionally, the company needs to undertake motivational strategies like incentives to encourage team effectiveness.

References

Rashid, Z.A., Sambasivan, M. and Johari, J., 2003. The influence of corporate culture and organisational commitment on performance. Journal of management development.

Caulton, J.R., 2012. The development and use of the theory of ERG: A literature review. Emerging Leadership Journeys, 5(1), pp.2-8.

Islam, R. and Ismail, A.Z.H., 2008. Employee motivation: a Malaysian perspective. International Journal of Commerce and Management.

Steers, R.M., Mowday, R.T. and Shapiro, D.L., 2004. The future of work motivation theory. Academy of Management review, 29(3), pp.379-387.

Phipps, S.T., Prieto, L.C. and Verma, S., 2012. Holding the helm: Exploring the influence of transformational leadership on group creativity, and the moderating role of organizational learning culture. Journal of Organizational Culture, Communications and Conflict, 16(2), p.135.

Hill, N.S., Seo, M.G., Kang, J.H. and Taylor, M.S., 2012. Building employee commitment to change across organizational levels: The influence of hierarchical distance and direct managers' transformational leadership. Organization Science, 23(3), pp.758-777.

Kozlowski, S.W. and Ilgen, D.R., 2006. Enhancing the effectiveness of work groups and teams. Psychological science in the public interest, 7(3), pp.77-124.

Salas, E., Goodwin, G.F. and Burke, C.S., 2008. Team effectiveness in complex organizations: Cross-disciplinary perspectives and approaches. Routledge.

Marks, M.A., Mathieu, J.E. and Zaccaro, S.J., 2001. A temporally based framework and taxonomy of team processes. Academy of management review, 26(3), pp.356-376.

Herman, J.B. and Hulin, C.L., 1972. Studying organizational attitudes from individual and organizational frames of reference. Organizational Behavior and Human Performance, 8(1), pp.84-108.

Mathieu, J.E., Gilson, L.L. and Ruddy, T.M., 2006. Empowerment and team effectiveness: An empirical test of an integrated model. Journal of applied psychology, 91(1), p.97.

Leach, D.J., Wall, T.D. and Jackson, P.R., 2003. The effect of empowerment on job knowledge: An empirical test involving operators of complex technology. Journal of Occupational and Organizational Psychology, 76(1), pp.27-52.

Kirkman, B.L., Rosen, B., Tesluk, P.E. and Gibson, C.B., 2004. The impact of team empowerment on virtual team performance: The moderating role of face-to-face interaction. Academy of management journal, 47(2), pp.175-192.

Cannon-Bowers, J.A., Salas, E., Blickensderfer, E. and Bowers, C.A., 1998. The impact of cross-training and workload on team functioning: A replication and extension of initial findings. Human factors, 40(1), pp.92-101.

Borman, W.C., Ilgen, D.R. and Klimoski, R.J., 2003. Handbook of psychology: Industrial and organizational psychology, Vol. 12. John Wiley & Sons Inc.

Mohammed, S., Ferzandi, L. and Hamilton, K., 2010. Metaphor no more: A 15-year review of the team mental model construct. Journal of management, 36(4), pp.876-910.

Smit, H.T. and Trigeorgis, L., 2012. Strategic investment: Real options and games. Princeton University Press.

Cardinal, L.B., 2001. Technological innovation in the pharmaceutical industry: The use of organizational control in managing research and development. Organization science, 12(1), pp.19-36.

Burns, T. and Stalker, G.M., 1961. Mechanistic and organic systems. Classics of organizational theory, pp.209-214.

Robins, S.P., 2005. Organizational behaviour: Concept controversy and application.

Thephoenixgroup.com. 2021. Why Invest?. [online] Available at: [Accessed 6 February 2021].

Mullins, L.J., 2013. Management and organisational behaviour. Pearson education.

Schein, E.H., 2010. Organizational culture and leadership (Vol. 2). John Wiley & Sons.

Janićijević, N., 2013. The mutual impact of organizational culture and structure. Economic annals, 58(198), pp.35-60.

Cameron, K.S. and Quinn, R.E., 2011. Diagnosing and changing organizational culture. The competing values culture assessment. A tool from the competing values product line. Retrieved December, 3, p.2015.

Ali, M. and Varoğlu, M.A., 2021. Revisiting the Mintzberg, Lawrence, and Lorsch theories about organisational structure, strategy, and environmental dynamism from the perspective of small firms. Technology Analysis & Strategic Management, pp.1-15.

Fells, M.J., 2000. Fayol stands the test of time. Journal of Management History.

Creative Group. 2021. Incentives at Work: Motivation for Employees | Creative Group. [online] Available at: [Accessed 11 March 2021].

McClelland, D.A.V.I.D., 2005. Achievement motivation theory. Organizational behavior: Essential theories of motivation and leadership, pp.46-60.

Building Effective Teams Through Motivation and Theories of Team Effectiveness in the Phoenix Group

HRM4002

People in Organisations

Case Study - Report and Presentation

Student Name: Tutor Name: Submission Date:

Motivation Theory and Phoenix Group

The key to action by employees in an organization is motivation, which influences employees.

Alderfer speaks of three major motivators; existence for survival, relatedness for recognition, growth for development in an organization (Caulton, 2012)

The Phoenix Group needs to take initiatives to reward and recognise employees for their actions in order to motivate them

McClleland criticised Maslow's hierarchy of needs, arguing that employees are more motivated through immediate co mpetition than self-actualisation (McClleland, 2005)

Goal setting theory argues that motivation is borne by personal goal setting by the employees and they form the foundation of improvement of individual performance in the organization (Phipps et al, 2012; Hill et al, 2012).

By the logic of this, the company needs to introduce initiative of incentives, whereby the employees would be able to realistically see what they will be achieving if the perform better than what is expected of them.

Incentives can use a combination of financial renumeration and recognition (through strategies like 'employee of the month') in order to motivate employees (creativegroupinc.com).

The collective abilities and efforts of a group to meet certain pre- determined goals can generally be defined as team effectiveness (Kozlowski and Ilgen, 2006; Salas et al , 2009; Marks et al, 2001).

Team effectiveness can be understood as a multi- level phenomenon, where individual assertions are put aside and decisions follow a top-down approach (Kozlowski and Klein, 2000)

'Constructs' form a part of an organization and these constructs are operationalised in forms of teams (Ibid).

Hence, the company needs to clearly state aims and objectives to define its constructs before making teams.

Freedom to delegate tasks on their own and managing oneself by their own forms an important part in making and managing effective teams (Gilson and Mathieu, 2006).

To prevent faltering of productivity, more decision-making power needs to be in the hand of the individual teams (Leach et al , 2003; Kirkman et al, 1999).

The company needs to ensure there are not multiple layers of delegation between the management and the team in order to successfully manage the relatively larger number of employees they have acquired.

Employees develop mental modes when going through common experiences together, which includes challenges and professional goals.

Because of this, teams are held together by 'transactive' memory systems, which are not limited to only professional achievements. These can be related to personal common experiences between the team members too.

The company's initiatives towards social and sporting events is indicative of good strategy with regards to this end.


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