Executive Summary

This report is based on two organizations from the insurance sector; giving details
about the relationship between organizational structures and culture in these two
organizations. The two organizations looked over was Allied Insurance Company of
the Maldives and Aasandha Company Limited. Organizational behavior can be
defined as the study that explores how organizational structures within an
organization affect the behavior by internal and external factors. The purpose of the
report is to evaluate the problems and identify the possible causes and appropriate
solutions for the problems so that the issues involved in these two organizations can
be set up to the clients.

Athika Ali

TABLE OF CONTENTS
1. Executive Summary ........3
2. Introduction .......5
3. Organizational Structures & Culture (P1.1) ..5
3.1 Organizational Structures .....5
3.2 Organizational Culture ..6
3.3 Similarities & Differences between the Organizations Structures ..7
3.4 Similarities & Differences between the Organizations Culture ...7
4. How the Relationship between the Structures and Culture of these Organizations can
Impact on the Performance of the Businesses (P1.2) 8
4.1 Relationship between Structure and Culture on: ..8
4.2 Impact of this Relationship on the Performance of the Businesses ..8
5. Factors that Influence the Individual Behavior of the Employees at Work .9
5.1 Positive and Negative Effects ....10
5.2 Conclusion 10
6. Compare the Effectiveness of Different Leadership Styles in Organizations (P2.1)
...10
6.1 Leadership Styles Practiced at Allied Insurance & Aasandha Company ..13
7. How Organizational Theory Underpins the Practice of Management (P2.2) ..14
7.1 Theories related to the Organization 15
8. Different Approaches to Management used by Organizations (P2.3) ..16
8.1 Extent to which Approaches used by the Organizations fulfill Organizational
Purposes .....16
8.2 Conclusion ....16
9. References ..17

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INTRODUCTION
Allied Insurance Company of the Maldives and Aasandha Company Limited are both
insurance companies, where Allied Insurance provides a total of five types of
insurances including Home Insurance, Health Insurance, Travel Insurance, Third
Party Motor Insurance and Comprehensive Motor Insurance. Rather than Allied
Insurance, Aasandha Company provides only Health Insurance. However, this report
is based after surveys on both companies. Looking into some more detailed account
of the surveys, it is analyzed on the relationship between organizational structure
and culture and different approaches to management and leadership of both the
companies. As this report is based on organizational behavior, it can be defined as
the study of both group and individual performance and activity within an
organization. Internal and external perceptions are two theories of how
organizational behavior can be analyzed by organizations.

ORGANIZATIONAL STRUCTURES & CULTURE (P1.1)

ORGANIZATIONAL STRUCTURES
Organizational structure can be defined as Design of the basic structure involves
such central issues as how the work of the organization will be divided and assigned
among positions, groups, departments, divisions, etc., and how the coordination
necessary to accomplish total organizational objectives will be achieved. (Dalton,
Lawrence, & Lorsch, 1970)
TYPE
Functional structure
Product based structure
Area based structure
Matrix based structure
Team-based structure
Multi-divisional structure

DEFINITION
Split into sub groups based on specialized functional
areas
Activities based on products or product lines which
are grouped
Divisions according to the geographic area
One where there are multiple reporting lines; having
more than one formal boss
Individuals with contemporary skills are grouped into
teams
Groups together employees for a particular product
type or market service and broken down further into
its own self-contained unit or division

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ORGANIZATIONAL CULTURE
The Websters New Collegiate Dictionary (1980) defines culture as the integrated
pattern of human behavior that includes thought, speech, action, and artifacts and
depends on mans capacity for learning and transmitting knowledge to succeeding
generations and the customary beliefs, social forms, and material traits of a racial,
religious or social group. (Nahavandi & Malekzadeh, 1993)

Power Culture: Power is held by few individuals who spread influence throughout
the organization.
Role Culture: Culture is based on rules and is highly controlled where everyone
knows what their roles and responsibilities are.
Task Culture: Teams are formed to address specific problems or progress projects.
Person Culture: Collection of individuals who happen to be working for the same
organization where they depend on the talents of the individuals.

Allied
Insurance

Matrix based
Structure

Functional
Structure

Power
Culture

Task Culture

Aasandha
Company

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SIMILARITIES
STRUCTURES

&

DIFFERENCES

SIMILARITIES

BETWEEN

THE

ORGANIZATIONS

DIFFERENCES

As Allied is matrix based and

Aasandha is functional based
functional departmental heads
are there

Employees has a single superior in Aasandha

as functional based structure is followed
where as two superiors are in matrix based
structure which is followed by Allied

Both companies, Allied and

Aasandha are team oriented

Functional structure in Aasandha does not

encourage interdivisional cooperation and
knowledge sharing but as matrix based structure
is followed by Allied, it highly encourages
knowledge sharing and cooperation between
divisions

SIMILARITIES & DIFFERENCES BETWEEN THE ORGANIZATIONS CULTURES

SIMILARITIES

Both power and task cultures are

based on small organizations like
Allied and Aasandha
Both organizations are task oriented
as power and task culture are
followed

DIFFERENCES
In Aasandha as task culture is followed high
standards are maintained with optimal efficeincy
rather than power culture which is followed by
Allied
In Allied a central figure influences throughout the
organization while in Aasandha team is
empowered to make decisions

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HOW THE RELATIONSHIP BETWEEN THE STRUCTURES AND CULTURE OF

THESE ORGANIZATIONS CAN IMPACT ON THE PERFORMANCE OF THE
BUSINESSES (P1.2)
RELATIONSHIP BETWEEN STRUCTURE AND CULTURE ON:
(a) Decision Making Process & Time Consuming
As functional structure and task culture is followed by Aasandha a decentralized
method is used where authority is delegated to heads of departments who makes
decisions to short term related issues then and there. However, long term related
issues are sent to the board of directors where the decision is made by top
management.
b) Closeness to Customers
Aasandha is very much related to customers, meaning their satisfaction means
everything to the organization. Therefore, by using task culture, Aasandha is
more team based as customer satisfaction is increased by responding to their
needs and queries as soon as possible. Also, payments for the invoices are
made before the stated deadlines which increase job satisfaction.
c) Formalization & Functional Specialization
Departments are formed to their functions accordingly and tasks are subdivided.
Departments are separated as such: Claims Processing and Stakeholder
Relations, Fraud and Investigation etc. Organization functions formally and can
be classified further into task culture where certain rules and regulations are
made and need to be followed.

IMPACT OF THIS RELATIONSHIP ON THE PERFORMANCE OF THE

BUSINESS
Structure and culture can be classified as the backbone of the organization.
Progress of the organization is either positively or negatively affected. As task
culture is followed by Aasandha, certain policies, rules and regulations are made
and followed. A teamwork based approach is practiced to complete tasks in a
certain period of time. Also, tasks are subdivided and departments are separated
to perform their functions consequently. A tall structure is followed by the
organization where span of control is highly dispersed among all the levels of
organization. Therefore, decision making is quite fast and lower levels of
employees can also participate in the process, making them highly motivated. In
addition, it also provides appropriate standards for the working environment
which increases work efficiency. Looking at the drawbacks of a complex structure
or culture, decision making process will be slow and employees will be demotivated.
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FACTORS THAT INFLUENCE THE INDIVIDUAL BEHAVIOR OF THE

EMPLOYEES AT WORK (P1.3)
Organizations are based on individuals who have somehow organized in a form,
to attain a common objective. Each and every individual is contradistinctive and
behaves as such. Behavior of individuals can be affected by both innate and
environmental factors. This is because abilities, skills, perception, attitudes and
personality in one individual vary from another. Some of the factors that affect the
individual behavior are as follows:
Leadership - established by the management to provide assistance,
direction and coaching to employees. Positive effects on employees as
leaders stand by them as a strong source of inspiration and negative
effects if the manager is too strict.
Work Culture - workplace needs to be a comfortable place for employees
to stay positive and happy. By enforcing uniform rules and regulations for
all the employees a positive impression is on employees. However, if
reporting systems are complicated and there is no transparency, a
negative impression is on employees.

Job Responsibilities employees should be assigned the best task they

can perform and encouraging them to improve their skills, would be a
positive impact on them but overburdening them can be a negative impact.
Effective Communication the need of effective communication
between manager and employees are crucial as letting them express their
views and opinions make them feel more important creating a positive
impression. But if employees feel left out interest in work is diminished
creating a negative impression.

Family and Personal Life conflicts in personal life can lead to stress
and irrational behavior leaving negative impressions. Trying to keep
personal and professional life separate by not bringing personal problems
to work will leave positive impressions.
Relationships at work as having friends are necessary at the
workplace, people are needed to discuss and share experiences with as
this would be a positive impact. Restraining employees to interact with
other employers will lead to stress and frustration leaving a negative
impact.

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Personality is the total pattern of characteristic ways of thinking, feeling and

behaving that constitute the individuals distinctive method of relating to the
environment. (Media, 2010) Classification of personality traits and types of
individuals are very important in working environment. This possibly will be
categorized into introvert and extrovert, where extroverts are people people,
meaning that they are full of energy when they have people around them. However,
introverts are people not liking attention from a crowd and prefer to remain isolated.
They are often labeled as shy and inscrutable.
Contemplating Allied Insurance and Aasandha Company, most employees of both
companies are extroverts, who are habitually outgoing and establish contact with
new people effortlessly. These employees adapt easily to a given situation or
changes better than others. Therefore, they are more attuned to the responsibilities
and others individuality.
POSITIVE AND NEGATIVE EFFECTS
Even though, both companies mainly comprise of extroverts, there are positive and
negative effects likewise. Some of these positive and negative effects are outlined
below.

POSITIVE
Excellent motivators and works well in
teams helps to achieve organizational
motives
Easy going and can get in touch with
anyone so level of customer satisfacton
increases

NEGATIVE
Gets bored easily and concentration level
decreases when slow and repetitive tasks
are assigned, leading to a resistance in
achieving goals
Being not good listeners, create conflicts to
arise between co-employees consuming
more time to attain goals

CONCLUSION
Consecutively for being a flourishing organization, both Allied Insurance and
Aasandha Company needs to appoint more extroverts who can be in touch with
customers. This would increase customer satisfaction which would lead to attain
organizational motives. Also, employees need to think of ways to approach slow and
repetitive tasks so that they can work more effectively to achieve the assigned goals.
In addition, as extroverts are excellent motivators who can work well in teams will
help to achieve these goals faster. Therefore, organizational factors such as physical
facilities, structure and design, leadership and reward system can be set up to
motivate the employees for more effective working.

Athika Ali

COMPARE THE EFFECTIVENESS OF DIFFERENT LEADERSHIP STYLES IN

ORGANIZATIONS (P2.1)
As leadership is hard to define, according to BusinessDictionary.com it can be
defined as the activity of leading a group of people or an organization or the ability
to do this. An effective leader creates an inspiring vision of the future and tries to
motivate and inspire employees to engage with this vision. The different styles of
leadership styles are:

Opportunist
Diplomat
Expert
Achiever
Strategist
Magician
Autocratic
Democratic

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The following table below gives more details of these leadership styles.
LEADERSHIP
STYLES

CHARACTERISTICS

BENEFITS

DRAWBACKS

Opportunist

Puts self first, winning

most important,
manipulative, might
makes right

Often successful at
sales/making money

Alienates others over

time, Doesnt inspire
relationships or trust,
closed feedback

Diplomat

Focused on fitting in,

avoids conflict, and looks
to others for answers

The boss everyone likes

personally, builds a
cohesive team and is
easy to get along with

Afraid to make tough

choice. Afraid to
innovate

Rules by logic and

expertise, being right are
most important, Always
wants to find the right
answer

Has a lot of knowledge to

share. Willing to think
rationally and stick to
his/her guns

Often ignore or belittle

the opinions of others.
Has a hard time seeing
other points of view,
Can believe that being
right is more important
than being practical

Achiever

Getting things done well

is important, Meets
strategic goals. Focused
on long-term goals and
success

Very successful in setting

up business goals and
systems, committed to
short-term and long-term
profitability and growth.
Inspires trust in those
around him/her. Creative
problem-solver

May focus on the goals

at the expense of self or
even larger questions of
why? Can be neglectful
of less goal-oriented
facets of work and life

Strategist

Able to inspire
organizational and
personal change, Able to
enact practical and
transformational
initiatives

Able to inspire others

(team and clients), able to
hold a long term growth
vision and steadily work
towards it

Magician

Often spring to action

when impossible
situations arise. Have the
power to inspire others
and change the way a
culture perceives reality

Attempt to convert
imaginary concepts into
real things, inspire others
and help individuals look
inside them

Autocratic

Provide clear
expectations of what
needs to be done, when
it should be done and
how it should be done

Expert

Democratic

Everyone given the

opportunity to participate,
ideas are exchanged
freely, and discussion is
encouraged

Strongly focused on both

command by the leader
and control of the
followers. Leader makes
decisions independently
Tend to focus on group
equality and free flow of
ideas, leads to higher
productivity, better
contributions from
employees and increased
group morale

Might sacrifice shortterm pay days for the

longer term picture
(although whether this is
a weakness depends on
your point of view)
Sometimes not practical
and may ignore
common sense
obstacles, experience
repeated failures and
may begin to lose faith
in their abilities
Decision-making is less
creative. Style usually
viewed as controlling,
bossy and dictatorial
Roles are unclear, lead
to communication
failures, employees
might not have the
necessary knowledge or
expertise to make
quality contributions

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LEADERSHIP STYLES PRACTICED AT ALLIED INSURANCE & AASANDHA

COMPANY
BUSINESS OBJECTIVES

ALLIED INSURANCE

AASANDHA COMPANY

Decrease customer complaints

Improve both customer and employee

satisfaction

Minimize risks to achieve short-term goals

Increase productivity and make payments

within 20 days

PROBLEMS

ALLIED INSURANCE

AASANDHA COMPANY

Increased goal redundancies and conflicts

Customer satisfaction rate declined

Lack of trainings for new employeees

Dissatisfied employees with greater

absenteeism

Allied Insurance practice Autocratic leadership style, which helps to achieve their
objectives and eliminate problems by providing clear information what needs to be
done and how it can be done. This aids to minimize risks while attaining short-term
goals. Though, the leader makes the decisions proper trainings of how work should
be done were carried out for new employees. Also, by communicating effectively
across the organization decreased goal redundancies and conflicts, as goal sharing
helped employees to support each other. These aspects directed the organization
towards its goals.
As Aasandha Company follow Democratic leadership style, every employee is given
the chance to participate and exchange ideas freely, which aids to reach their goals
by eradicating problems faced. This helped to convince employees and shrink
absenteeism as their ideas were heard and applied too. Moreover, this increased the
efficiency of employees to make payments within 20 days rather than 30, which also
assisted to decline dissatisfied customer rate. Therefore, employees being more
motivated and happy lead the organization to achieve its motives.

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HOW ORGANIZATIONAL
MANAGEMENT (P2.2)

THEORY

UNDERPINS

THE

PRACTICE

OF

When applied in practice organizational theory is very important because it can

influence the overall performance of the organization. This also helps the managers
to clearly understand their role in the organization which assists to respond
sufficiently to the changes occurring in order to achieve organizational goals more
effectively. Various organizational theories are as follows:

Scientific Management
Classical Administration
Bureaucracy
Human Relation Approach
System Approach
Contingency Approach
Management Today

SCIENTIFIC MANAGEMENT
-

Application of scientific methods to tasks performed

Increase efficiency as well reduce physical strain on employees through
observation and improvements
Information technology used to develop, modify and eliminate organizational
procedures

CLASSICAL ADMINISTRATION
-

Focus in a way that leads to a better management of the organization as it

concentrates more on the role and functions of managers
Enhance effectiveness of employees and organizations based on
management practices
Effective communication and organizing makes a successful management

BUREAUCRACY
-

Emphasis on the guidelines for structuring with formalization of rules,

procedures and a clear division of labor
Rules and regulations applied uniformly on employees keep the organization
running smoothly and efficiently
Necessary for big governmental agencies to operate

HUMAN RELATION APPROACH

-

Highlights on importance of human attitudes, values and relationships for the

participation of employees in the management
Increases customer satisfaction and productivity through motivation and good
human relations
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Feedbacks and support enables employees to develop their professional

capability whilst personal development is a key strategy

SYSTEM APPROACH
-

System of cultural relationship that exists between external and internal

environment of the organization
Facilitates the interaction between organization and its environment for
attaining goals more effectively
Organizations mostly treated as open systems as it interacts with the
environment by way of inputs, throughputs and outputs

CONTINGENCY APPROACH
-

Based on the theory that management effectiveness is dependant, upon the

interplay between the application of management behaviors and specific
situations
Able to achieve the organizational goals as the managed way changes
depending on the circumstances
Internationally operating organizations might have to adapt their structures,
managerial practices and products or services to differing cultural values,
expectations and preferences

MANAGEMENT TODAY
-

Involves structures and cultures that can settle in swiftly to changes respond
to customer demands flexibly
Employees are motivated to believe that they work for customers rather than
their managers, which increase customer satisfaction
Commonly used in a lot of organizations especially large ones

THEORIES RELATED TO THE ORGANIZATION

Allied Insurance uses Open System Approach theory, as the company is a nationwide insurance organization. As this system interacts with the environment by taking
inputs of the people an output is made. This means the organization is connected
and interacts with the people, taking up their ideas and suggestions, in return
influencing the people by the organizations insurance products and insurance
schemes. Also, due to continuous feedback and responses, a better understanding
is between environment and the organization. When enough feedbacks are received,
based on this, results are produced with more clearly directed planning, constructive
products and essential services.
Human Relation Approach theory is used by Aasandha Company, since it provides
health insurance nationally. This system emphasizes human attitudes, values and
relationships of employees, meaning that regular reviews and support encourage
employees to reflect upon the contributions that they make. This also means that
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13

employees are human beings and contributions to productivity is determined as

much by their physical capacity as their willingness to work. Also, without quality
workplace relationships, employees are less likely to be able to build up and
contribute to the solutions that organizations need.
DIFFERENT APPROACHES TO MANAGEMENT USED BY ORGANIZATIONS
(P2.3)

Allied
Insurance

Open System
Approach

Human
Relation
Approach

Aasandha
Company

EXTENT TO WHICH APPROACHES USED BY THE ORGANIZATIONS FULFILL

ORGANIZATIONAL PURPOSES
Open System Approach is used by Allied Insurance as this approach assists in
achieving organizational goals more effectively by interacting between the
organization and its environment.
Aasandha Company uses Human Relation Approach, as this increases customer
satisfaction as well motivates the employees through good human relations whilst
attaining organizational motives more efficiently.
CONCLUSION
To conclude, I would like to say that, the current approaches used by both the
companies are the most excellent approaches. This is because these approaches
facilitated to reach the main aims and objectives of the organizations. Also, in Allied
they could approach to customers personally and ask for feedbacks which will be
more effective. In addition, management of Aasandha also can personally approach
the employees from time to time and make sure that employees remain interested
and engaged.

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14

REFERENCES
Dalton, Lawrence, & Lorsch, 1970. Organizational Structure & Design. s.l.:Richard D.
Irwin; Dorsey Press.
Nahavandi & Malekzadeh, 1993. Organizational Culture in the Management of
Mergers. s.l.:Quorum Books.
BPP Learning Media. 2010. Business essentials: organizations and behavior.
London: BPP Learning Media.
Kondalkar, V.G. 2007. Organizational Behavior. New Delhi: New Age Publications
Miner, B. J. 2002. Organizational behavior: foundations, theories and analyses.
[Online] Oxford: Oxford University Press. Available through: Questiaschool.com
website http://www.questiaschool.com/read/105078997/organizational-behaviorfoundations-theories-and [Accessed: April 25, 2015]
Law Teacher. November 2013. Compare And Contrast Different Organizational
Structure And Culture Law Essay. [online]. Available from:
http://www.lawteacher.net/free-law-essays/international-law/compare-and-contrastdifferent-organizational-structure-and-culture-law-essay.php?cref=1 [Accessed 8
June 2015].
Class Resources
http://aasandha.mv/
http://allied.mv/

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