Management: Organisational Behaviour

Introduction

Various companies depending on their sizes adopt suitable organizational structures that help make sensible managerial frameworks. These structures are vital in ensuring efficiency within the organizations through proper storage and access of data. As a result, gains are made both in terms of company reputation as well as financial benefits. This report seeks to study the organizational structure that a communication company, Mobily Corporation has put into use.

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The project demonstrates the organisational structure context in undertakes the relevant concepts and theories. The essay follows a basic format where the organization is analyzed in the view of organisational structure theories and models. A detailed description of the organizational structure and its linkage to organisational goals, strategic plans, vision/mission statements for the organisation as expressed, shall also be examined in the light of any contingency factors.

In the process of obtaining relevant data, this project served the very important role of putting theory into practice by linking information garnered in lectures to practical application in real organizations. The researcher first presents an informative overview of the company’s its history and an analysis of its business performance in relation to its competitive efficacy in the industry. Subsequently, the relationship between organizational structure, organisational goals and other contingencies will be detailed in consideration of the organisational structure models. Finally, a summary of the study shall be provided while at the same time isolating the key areas that need improvement.

Informative Overview of the Organisation

Mobily wireless Corporation is the second largest of all the three telecommunication service providers in Saudi Arabia. The company specializes in provision of voice calls services as well as data solutions for both individual and corporate clients. Aside from fibre optic cables channelling, Mobily has established a strong GSM network covering 98% of populated areas in Saudi Arabia (Malki 2010). The enterprise is widely recognized for its relationship with the successful Etisalat telecommunication group, which is a leading group in the country. Etisalat also has an unchallenged presence in 18 other countries across the Middle East and Africa. According Saleem (2010) based on the statistics of percentage subscriptions, Etisalat is the19th largest operating group in the world, and is gradually inching towards joining top ten.

Mobily launched its services in May 2005 by royal decree. Its success as a new entrant into the market is particularly commendable especially because it has established itself as a dominant business enterprise. Like many other start-up companies, the corporation has had to device way to circumvent various. For instance, initially, the company had to depend on hired facilities but the costs proved to be on the higher side and so the management resorted to acquiring its own infrastructure. The company also went through sporadic financial challenges but it was able to acquire investors for its sustenance in proper time. The presence of the Etisalat group in particular helped Mobily get over many other obstacles by provision of consultancy and expert rotation services in addition to topping the list of investors. Etisalat was also instrumental in the success of Mobily’s Initial Public Offer (IPO) and has since then contributed to the company’s growth in the form of capital increase and loan holding. It is worth noting that Saudi has a closed society where traditions, habits, and religion have a significant affect in very many business affairs, notably in decision making, strategic planning, and organisation culture (Hardy 2006).

In terms of size, Mobily has in recent years gone through a rapid growth spurt exponentially increasing its customer base in the five years it has been in operation. The success of the company over time has seen it command an impressive 18.2 million subscribers (Mobily 2009a). To illustrate just how popular the network’s products and services are, it should be noted that the Saudi publication is 25 million (Ministry of Planning 2009). With the growth in company presence, the workforce has also had to go through a parallel increase standing at 3666 employees by last year (Alsheikh 2009). Mobily has come to appreciate the role played by to its staff to its stability. Krames (2003) attributes the success of any company to the creation of an enjoyable working climate as well as perceived employee satisfaction. Mobily as a company has therefore ensured that a desirable organisational culture has been developed which has seen it come to attain its organisational goals as well as stick to its strategic plans. This has been supported by Peter Handal CEO of Dale Carnegie management consulting organization who says:

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“We are delighted to recognize Mobily for its ongoing commitment to the development of a corporate culture based on their six values: Open, Respect, Energy, Progressive, Contemporary and Success, that foster trust-based empowerment at all levels of the organization” (Arab News 2009).

Another factor that is linked to successful companies is the potential for personal development for its staffs in a bid to encourage accountability. This has been stressed by Witte and Muijen (1999, p. 585) who purport that “More and more companies are abandoning the traditional hierarchical structure. Culture, transparent and stable norms and values have an important function organizing individual behaviour and providing the organizational members with structure”. Mobily has in more than a few occasions conducted common trainings to instil the concept of work ethics and to emphasise the importance of organisation values in relation to their effect on both organisational and personal goals.

Based on its performance in the past few years, Mobily has the capacity to maintain its first-place position in the telecommunication market in the foreseeable future. This is because the business has come to cut a niche in the industry; a factor that played well to see the company make 557 million US Dollars (2.09 Billion Saudi Riyal) in 2008. This was as many other industries were collapsing as a result of the global financial crisis. In 2009 Mobily’s profit been increased to 804 million US Dollars (3.01 Billion Saudi Riyal). This upsurge in profits is indicative of a company that engages in the provision of highly competitive services and products. The performance also shows the effectiveness of the company’s extended network of sales channels which essentially arises from consistency and standardisation strategies. Mobily embraced all concepts of successful business by ensuring that there are focused management operations which help ensure that desirable profits are recognised in the business.

From this extensive description it can only be concluded that Mobily is soon to be a giant in the competitive world of telecommunication business. This is mainly deduced from analysing its increasing profits over the years which have seen the corporation command a substantial chunk of the market share.

Description of Mobily’s Organisational Structure

In today’s fast-paced economies it is prudent that all enterprises formulate strategies to enhance their competitiveness in the various areas of business that they are involved in. Mobily is no exception and its success has been testimony of its strong organizationally structure. Mobily has implemented the hierarchical structure in its day-to-day running. In this structure junior associates have to comply with instructions from their department heads whether or not the instructions make sense to them (Gill 2006). This structure has the advantage of ensuring that decisions are made well in time and also supports the idea of accountability.

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The major drawback with this structure is that it can end up causing both departmental and organizational paralysis. This is because once the commanding authority is absent, major decisions cannot be made and all the junior associates can assume redundancy and blame it on this absence. The hierarchy structure also limits the free flow of information and generally discourages open communication. The creativity and risk taking tendency of the company is diminished because in this structure the leader is always expected to pull rank when relating to junior associates, in the process stifling communication. According to Jensen and Heckling (1995, p. 13), “Control is the process and rules governing the measures of performance, and the rewards and punishments … in response to individual actions”. Mobily has however had to downplay the bureaucratic aspects its hierarchical structure in favour of a friendly chain of command. This has served to enable the organisation operate at the utmost efficacy levels while at the same time ensuring that decentralisation has been recognised. In a way most of the delegation is reserved to the middle management and this is in line with the administrative theory (Koppell 2008).

Mobily has also developed a formal chain of command that lays its foundation on effective communication. The company embraces the concept of less delegation while at the same time maintaining subtle control over workers. Unfortunately this has impacted negatively in some sections with the staff members realizing that they hold the power within the company. This results in a lack of trust towards senior management especially when it comes to measuring quality and other aspects demands of high-level decision making (Davis et al 2000). In most cases such lack of trust results in a resistance towards supporting organisational goals as pointed out by Zhang and Bartol (2010, p. 117) who claims that:

“Empowering leaders directly influence employee tendencies to engage in creative process, because an empowering leader tends to help a follower gain confidence, emphasize the importance of his or her work, and provide freedom to carry out the work. As a result, an employee may become more involved in his or her job by engaging in processes likely to lead to creative outcomes”.

In recent days, Mobily has adapted a more decentralised and empowering approach because of two main reasons. One reason is related to the geographical characteristics of the land the other is the growing organisational expansion. According to the world fact file the company covers 830,000 km2 of Saudi’s 2,150,000km2 (Saudi Geographical society n.d.). This has demanded that the organisational hierarchy of the company be divided into four regions namely Central, Western, Eastern and Southern. The company’s headquarters are in the Central region and it is from here that most of the corporation’s critical decisions emanate. This, however, does not mean that the other three regions are of less significance. In actual sense, all the four regions have their own area of speciality and it is only because the company needs a formal centre of command that the Central region appears to be more superior. This is as described by by Child (1973, p. 171) who purports that the “…larger organizations are more specialized, have more rules, more documentation, more extended hierarchies, and a greater decentralization of decision making further down such hierarchies”

Aside from the hierarchal structure and due to many products and services applied on both individuals and corporate sections, Mobily has adopted a matrix structure which helps to properly categorize its various operational activities as well as encourage functional collaboration (Grewal 2006) This approach has allowed the organisation ensure proper control in the management of its operations and performance evaluation.

Another factor that has direct influence on Mobily’s organisational structure is the leadership approach. Leadership is the definite role assigned to each and every manager. Mobily’s leadership style leadership style can generally be classified under transformational leadership. Transformational leadership has been described by Peter Northhouse (2001) as a process that brings about changes and general gives an individual a different viewpoint. This simply means that transformational leadership is an innate ability to make individuals seek change and to make general improvements in the way that that they handle their day-to-day lives. Mobily embraces a general task-oriented approach which encourages managerial openness in supporting organisational goals. This borrows heavily from Jung et al (2009, p. 589) who conclude that “a transformational leader’s active involvement in changing followers’ values so that followers are encouraged to accept group goals and work together toward a common goal and shared vision”

The company’s management realized the importance of open and transparent communication well in advance resulting in some decisions being deployed; a strategy which reflected positively on the output of subordinate staffs as well as the motivation of the general workforce in alignment with the organisational goals and strategic plans.

As noted by Washburn (2009) employees will lose motivation, if they discovered that a company’s management is more profit oriented. On the other hand if the junior employees acknowledged a balance in task achievement, and social development and proper communication, they would work harmoniously together with senior management and this will reflect positively on work environment resulting in the attainment of the organisation’s goals. As stated by Kourteli (2000, p. 412), “The role of the people within the organization is upgraded, since the interpretation of any interrelationships between the organization and its environment depends upon people’s communicational abilities”.

Mobily’s Organizational Goals, Strategic Plans, and Contingencies

This section shall examine the organisational goals strategic plans and various other Mobily contingencies.

Mobily’s primary organisational goals is crystallised in its focus to be a market leader. This has been actualized by continuously strengthening Mobily as a brand name (Baltaji 2010) and ensuring that the financial returns of the company are maximized. The company has been able to reliably commit to stakeholders as well as ensured an increase in its customer base. Furthermore, the institution has been able to attain a majority of its goals by properly factoring in catalysts presenting in the form of the organization’s mission and vision, which have served to give it clarity in terms of the objectives and perceived deliverables. As mentioned by the Mobility’s Chief Executive Officer, the vision the company is to be a pioneer in providing customers with the most innovative technology (Ameinfo 2010). This objective has been entrenched in its slogan ‘Mobily…My world…My choice’ which essentially means that company is on a mission to conquer the world.

From the last annual financial report Mobily achieved 40% from the market share and predictions have it that this upward trend will be maintained in the future (Mobily 2009b). This basically indicates that Mobily has set course on a long-term plan and its management knows very well how to achieve goals especially by not letting opportunities pass them by.

Even with its successes, Mobily has in the past made two doubtful acquisitions. First was the acquisition of 99.9% stake of Bayanat al-Oula Corporation by forking out 1.5 billion Saudi Riyal (an equivalent of $400 million) and the second was the purchased of 94% stake of Zajil Corporation parting with 80 million Saudi Riyal (an equivalent of $21.3 million). All this buying-ins happened concurrently, after the company had lost a bid for a landline license. Mobily’s strategic decision when analyzed in consideration of local opportunities reveals that the company made a sensible decision in the purchase because Bayanat al-Oula Corporation has since then become one of two only organisations country-wide licensed to position, construct, run, and utilize the data and wireless “WiMax” network. Zajil corporation on its side has grown to be an established internet provider especially for corporates across Saudi (Hammond 2008).

This example conclusively demonstrates that Mobily has emphasised a strategic approach to the attainment of its goals through practical application of the contingency approach. This has had the resounding effect of guaranteeing diversity and adequately laying influence on the company’s market share and profits. The strategy has also seen a synchronisation of competitive advancement especially where specific approaches have to be devised to manage particular challenges. The immense success of the company has been attributed to the company seeking alternative solutions as prescribed by Van Buren (2008). In addition it clearly distinguishes a leadership that is in control and this argument has been supported by Linstead et al (2004, p.29) who suggest that a good leader is leadership is the one who scan the external factors to inject organization resources and extend opportunities.

Organisational size has affected Mobily’s structure in recent times, with the organisation’s growth surpassing expectations. This has ended up calling for a separation of duties and responsibilities, and some units within the company have been forced to go into specialization. Mobily has ensured that there is balance between organisational structure characteristics and other contingencies. This has augured well within the arguable element of organisational size. The group has been able to downplay the issue of organisational dimensions based on size especially since technology can be incorporated into an organisation’s base structure to even out the gaps that traditionally made it challenging to run large enterprises (Reid 1995). Linstead et al (2004, p. 27) also supports this position by declaring that technology affects all the ranks within an organisation. Mobily has utilized sub-systems which have resulted in the creation of environments that necessitate other sub-structural constructions in a way that has seen a balance between organisational structure to support overall organisational goals (Lawrence and Lorsch 1967). It should also be noted that embracing the horizontal administrative structure would do the company more good as it will be in a better position to handle ambiguity and environmental changes where speed in response is required. This, as described by Pitts et al (2010, p. 5) will result in the efficacy levels going up further contributing positively to the attainment of the organisational goals. “Horizontal organizations were best for uncertain environments since they permitted fast response to environmental shifts” (Pittes et al 2010, p. 5).

From researches conducted by various scholars, it is evident that environmental and other social factors have a big role to play particular in augmenting the organisational structure in the effort to achieve organisational goals. According to Linstead et al (2004, p. 30), the perceived social factor is one of the conservative constrains of structural inertia. This provides an explanation as to why Mobily has experienced a spirited call to participation in social activity in Saudi Arabia. The company has been instrumental in provision of sponsorship for sporting, charity donation and general contribution to other social events.

Recent studies have however come to exclude the financial return from the primary business motivators, instead placing priority to recognition and job design satisfaction (Smith and Boyns 2005). From the case study, the protocol is however majorly dependent on management and how decision makers in Mobily formulate, perceive, and identify environmental elements. The way prominence is given to one aspect over the others generally reflects on the values of the company’s leadership. From the discussion above, it is clear that the environmental factor has a significant influence in determining the social position of the institution’s organisational structure.

Mobily as a member of a global group organisation, has adopted a contingency approach and it has maintained its independence from its mother company. This has seen it adequately cope within the local business climate in line with Bertalanffy’s system theory which purports that there is an interactive relationship between the internal and the external aspects of an organisation (Linstead et al, 2004, p. 20). In this way, Mobily has been in a position to sufficiently address its contingencies. This should be taken as an indicator for progress and development as opposed to barriers and obstacles as noted by Yates (2006, p. 439) who declared that “large firms may purchase the same technological artefact but use it quite differently, with different effects on themselves and on future development of that artefact”.

The Fit between organisational structure, goals, and other contingencies

In this section the researcher shall present a discussion of how the organizational structure, goals, and contingencies fit into one another.

Even with Mobily being primarily involved in the business of selling technological serves it is of prime importance to realize that such organisations have a tendency to be flat in structure (Linstead et al, 2004, p.142). Mobily has been able to establish effective subsystems and its involvement in a dynamic environment requires that it comes up with strategies customized to fit the market that it is involved in. It, however, ought to be considered that even with the hierarchical structure presented in the company, much of the power still has to be decentralised among the Saudi populace especially in regions where autonomy is required (Ginsberg and Venkatraman 1985). In Mobily, there is a combination of internal structure, external goals and contingencies which have helped the company build a homogenous organisational environment. The institution’s inherent characteristics replicate in some of the elements constituting the organisational structure and this makes it easier for the organization to achieve the goals it sets out to.

In the wake of advancements in technology, the company has been able to sufficiently operate among informal groups by developing electronic communication forums which give the employee some sense of freedom. This Michie’s and Sheehan’s (2003, p. 135) argument that “increased functional flexibility is significantly positively correlated with all categories of innovation and, in particular, with process innovation”

In general, it can be said that some of the most important aspects of Mobily’s organisational system are structural type and formalisation. This is in addition to effective centralisation which has come to present well for the corporation in terms of bureaucratic structures and other elements of structural design. Organisational performance generally covers a broad range of dimensions including standard financial and other strategic oriented measures like productivity and effectiveness, which were all combine to support organisational goals. Hofstede et al (2002), argue that globalisation is secured by achieved local targets Being able to effectively entrench the demands of globalization as well as conform to local culture is a complex and challenging task and Mobily’s success is commendable. However, localisation successful depends on the leader and how can demonstrates realize and actual targets, as there is no universal goals can be applied generally. Collectively, all these factors contribute to the development of a perfect fit within various administrative levels at Mobily as an autonomous organisation.

Mobily is one of the success stories in business emanating from the Middle East. The growth of the company from a humble regional enterprise to a multinational company turning over several million dollars is a feat that only a committed business-minded enterprise can achieve. This report has analyzed both the business and the leadership strategies involved in the light of other approaches could be used to improve the company’s returns. It has been well established that the transformational leadership style that she embraced is best suited for the kind of business that Mobily is involved in. This strategy should therefore be maintained even in the wake of the paradigm shift facing most companies. The involvement of junior staffs in the decision- making process has also weighed in to improve Mobily’s performance. This is in line Argenti’s (1998, p. 199) articulation that “part of the problem at many companies is that senior managers fail to involve other employees in the decision-making process. This makes these employees feel alienated and less willing to accept changes that managers then impose upon them”.

In conclusion, it should be realized that in order for Mobily to give substance to its slogan ‘Mobily…My world…My choice’ the company has to retain the authority it has currently been able to hitherto been able to command. Thus, the company’s management has to regularly keep a balance between control and monitoring to respond proactively to market changes.

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