Organisational Theory and Practice

This document provides an in-depth analysis of the management style, organizational structure and culture, leadership style, and the effect of power and conflicts at BAT plc. It explores various theories and practices of organizational management and provides recommendations for enhancing organizational performance.

ORGANISATIONAL
THEORY AND PRACTICE

TABLE OF CONTENTS
ORGANISATIONAL THEORY AND PRACTICE.......................................................................1
INTRODUCTION...........................................................................................................................3
A) Management Style adapted by the CEO of BAT – Principles and Functions........................4
B) Organizational Structure and Culture of BAT........................................................................5
C) Leadership Style of the CEO..................................................................................................7
D) The effect of power, influencer and conflicts at the BAT plc................................................8
E) Types of Motivation at BAT plc.............................................................................................9
F) Literature Review..................................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
Organization is basically a system in which groups of individuals work together in order
to achieve certain objectives. It is mainly concerned with the employees individually, the teams
having more than 2 employees and the organization itself. Organizational Theories are used in
order to identify the common solutions to solve the issues and problems which can increase the
efficiency and the productivity and also fulfils the needs of the customers and the stakeholders
(Milov, 2016). The employees must know about the processes of the organization and how they
are performed.
There are many theories used in order to enhance the overall efficiency and progress.
When focusing on the individuals, the company mainly lays emphasis on the theories like
motivation, personality and role. When the discussion is about groups or teams, then leadership,
power and influence theories are used and when the organization comes in play then its structure
and culture are highlighted.
The British American Tobacco plc (BAT) is a multinational company that deals in
manufacturing and selling of cigarettes, tobacco and other nicotine products. Its headquarters are
in London, England, UK. The company is facing a rapid success since many years which made it
the largest maker of cigarettes in the world in terms of net sales. The company is performing its
operations in almost 180 countries. Its major brands of cigarette are Dunhill, Lucky Strike, Pall
Mall, Kent along with Vype and Vuse and Glo. BAT is a public limited company in the industry
of Tobacco serving the people worldwide. Its employees which are almost 55000 contributed
majorly in gaining the revenue of £25.877 billion and the net income of £5.849 billion as noted
in 2019 (British American Tobacco, 2019).
The report will evaluate the management style used by the CEO of the BAT along with
mentioning its principle and functions. It will be followed by analysing the Organizational
Structure and Culture of the British American Tobacco along with its impact on the employees.
The report will also discuss the leadership style of the CEO in order to enhance the effectiveness
of the organization. Various types of motivation will also be highlighted with respect to the
company. Various corporate examples will be used for justification. All the topics will use one or
the other model or theory. At the end, the report will also give some recommendations in order to
enhance the performance of the organization.
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A) Management Style adapted by the CEO of BAT – Principles and Functions
In terms of Market share, the company became the world’s largest tobacco group. It
focuses on producing cigarettes demanded by majority of the adult smokers instead of
motivating more people to smoke which helped it to hold robust market position in its regions
(King and et.al.,2018). To achieve this position, the major role is played by the managers of the
company.
Management style is the method in which the manager of the company exercises all the
functions including the planning, organizing, making decisions and managing the staff in order
to achieve certain goals. There are many management styles such as authoritarian, democratic,
Visionary, Pacesetting, transactional and many more. The company must choose the appropriate
management style in order to enhance the performance.
The CEO of the BAT, Mr. Jack Marie Henry David Bowles, adapted the Democratic
management style which is sometimes referred to as consensus, participative or collaborative
style among all. The theory of Democratic Management Style believes that two heads are
better than one (Ollong, 2017). the company followed this and starts believing that irrespective
of the position and designation, everyone deserves to have a say.
Managers of the BAT adopted this style by encouraging the employees to share their
ideas which enhances their participation in every task. This enabled the company to have a pool
of new ideas and opinions which made the company easy to bring in any type of innovation in
order to enhance the performance and growth.
Principles and Functions
The managers following this style in managing the employees gives equal opportunities
to all the employees in expressing their views and opinions. All have the equal right to share
their idea and opinion (Sakib, 2018). Although the last decision is in the hands of the manager,
but it does this by collecting the views and recommendations of all the employees in order to
motivate and satisfy them and ensure that they are the major players who contribute in the
progress of the company. Sometimes, the employees come up with better solution to certain
problems than the manager think.
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This also makes the employees feel valued and encourages them to become able to solve
their own problems. This also gives more responsibility to the employees as they have major role
to play in the decision-making process. This also makes the employees more involved and
increases the productivity of the company by making the workplace more motivated. The
employees also wait for the end results because they are equally responsible for the results. The
British American Tobacco is greatly benefitted after following this management style in making
the employees and the customers more satisfied.
B) Organizational Structure and Culture of BAT
The British American Tobacco is one of the most international tobacco groups which
develops various strategies in order to build the long term shareholder value. It basically works
on 4 four building blocks i.e., Productivity, Growth, responsibility and developing a winning
organization. All the blocks are interdependent and contributes greatly to the overall progress of
the brand.
Although, consumption of its products are harmful for health and pose great risks but it
deals in legal products which are demanded by majority of the adult smokers. So, they work hard
along with complete responsibility to manufacture and sell its products making its business
sustainable (Kehoe and Greenhalgh, 2018). The company had made a strong reputation
internationally by performing its operations for more than 100 years in order to meet the
preferences of the customers.
The company gives the whole credit to its team and the workforce for its rapid and
substantial growth. It does not show biasness among the workforce of any designation instead
treat them equally. It also states that over past 5 years the company had a significant shareholder
value of approx. 89% (Kristijono and et.al.,2020). It can be viewed by the use of its
organizational Structure which is basically a visual diagram of the company that explains that
whom the employees must report to, their roles and sometimes the process of decision-making. It
is mainly useful for the new employees as they come to know about the management of the
company basically referred to as Chain of Command. The Organizational Structure of the BAT
is as follows:
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Figure 1: Organizational Structure of British American Tobacco
Source: Organizational Structure of British American Tobacco, 2019
The major thing to be focussed on the culture of BAT is the quality of its employees and
the team work they exercise in performing all the tasks. It lays emphasis on bringing changes
which shows that the employees are much ambitious, brave and adaptable to changes by facing
the challenges and opportunities in order to obtain the best results.
The executives try to analyse the talent of the employees, stretch it and support it regularly which
can be helpful in delivering the strategies. Its employers have a brand, popular as ‘Bring your
Difference’ has a strong presence both online and offline (Tanzim, 2018). BAT also followed the
Technological Innovation Model by using the advances technologies to increase its customer
base and the brand value. The company is also socially very active and is represented on every
social networking site like Facebook, Instagram etc. which made it to come on the top among all
its competitors.
Therefore, the company provides a safe environment to the employees and the customers with a
supportive culture with responsible employees which helps in attracting, engaging and retaining
the loyal customers.
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C) Leadership Style of the CEO
The CEO of the BAT, Mr. Jack Marie Henry David Bowles, followed the
Transformational Model in order to adapt the Transformative Leadership Style. This enabled it
to motivate the employees in contributing positively towards achieving the organizational goals
(Fang, Lee and Sejpal, 2017). In order to do this, the leaders must realize the mission and vision
of the company and aware the employees about the same. It must search for the right people to
perform the right task at right time in a right manner.
The theory of transformational Leadership is mainly classified into 4 components.
 Charisma influence measures the degree in which the leaders behave in such a way that it
becomes the role model for the employees by setting clear values.
 Inspirational influence is the degree at which the leaders inspire the employees to achieve
certain goal and perform tasks accordingly.
 Intellectual Stimulation examines the degree at which the leaders accept the challenges
and motivate the employees to fulfil them with the creativity to solve the problems in
order to achieve the goals and mission (Almas, 2016).
 Individual attention mainly focuses on attending the employees individually ensuring
their needs to be fulfilled along with appreciating them for their contribution towards the
objectives.
The CEO of the BAT company wanted to bring innovation and creativity in all its
operations that is why motivated and encouraged the employees to perform according to the
changes and always be adaptable to the change needed for enhancing the productivity and profit
(ADHIAMBO MILDRED, 2017). The transformative Leadership can be proved beneficial in
enhancing the effectiveness of the organization by making the employees always ready to come
out of the boxes and accept the challenges.
The transformative leadership mainly focuses on providing new perspectives to the employees in
viewing their work. Along with the interest of the individual, the employees must be more
concerned about achieving the objectives of the organization by being aware of its mission and
vision. This can be done by motivating the employees and the followers. The enhanced
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performance of the employees will contribute positively in increasing the effectiveness of the
organization.
The transformational leader follows the 4Is that are as follows:
Idealized influence: The leaders behave in such a way that they become the inspiration or the
role model for the members and the followers.
Inspirational Motivation: Leaders change their behaviour in such a way that they motivate and
inspire the people around them and also challenges the work done by its followers.
Intellectual Stimulation: Here, the leaders try to stimulate the efforts of the followers in order
to bring innovation and creativity in the organization.
Individualized Consideration: By acting as a coach or a mentor, the leader focuses on the
needs of the individual in order to achieve the goals of the company and face a rapid growth.
By following these ways, the transformational leadership can enhance the effectiveness of all the
processes of the organization.
D) The effect of power, influencer and conflicts at the BAT plc
British American Tobacco plc is a British manufacturer and retailer company that is
headquartered in London, UK. It has established strong brand reputation in the retail sector due
to wide variety product portfolio. Diversified product portfolio is the major power of the BAT
plc because this helps company to enhance purchasing behaviour of customers. Wide product
portfolio helps to build strong customer base in the UK market. It is quite obvious if company
has wide customer base that automatically supports to expand its business in multiple countries
through which it enables to generate high revenue on its product (Bouzenita and Boulanouar,
2016). Due to this, it has achieved good brand positioning in the global market as largest
cigarette maker. Company has strong workforce because Mr Jack Bowles always conducts
training and development program for the staff so that they can improve their existing skills and
develops new skills which improves their professional personality.
Company also conducts technical skills program in order to improve technical skills in
individuals so that they can deal with any new technic effectively in the workplace. These
initiatives of BAT plc CEO create innovative working environment and establishes healthy
working relationship between employees and employers. It has strong distribution network that
is also considered one of the major powers of among others. With the strong distribution
network, it enables to sell its product into multiple countries across the world and brings
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satisfaction in customers for its product and services. Multicultural suppliers’ strategy also
follows by British Association Tobacco that supports get raw material at lower cost with high
quality through which it is able to generate high profit margin on its products. These powers
support company to stay long run in its market and leads competitive advantage as well.
There are numerous opportunities that can improve organization’s functioning in the UK
market. For example, UK’s government has announced that transportation cost will be
decreased. This is beneficial opportunity for the company because it will bring down cost of
shipping that ultimately decrease cost of the products. With this opportunity company enables to
improve purchasing behaviour of customers and in exchange brings advanced economic benefits.
British Tobacco Association has opportunity of emerging market through which it enables to
expand its business in other new country and capture large market share on its products as well.
These opportunities are act as growth stimulants through which it can enhance profitability,
performance and business operations.
Limited availability of talented and skilled suppliers in the UK market is the major
conflict issue for the business because it unable to generate high profit margin on its existing
product portfolio. Emerging technology and technology development are another conflict issue
for the company because number of employees often resist to implement new changes which
often become reason of conflicts (Balaji and et.al., 2020). But Mr. Jack Henry is the CEO of
BAT plc practices change management leadership style to deal with all conflict issues related to
management and employees effectively.
E) Types of Motivation at BAT plc
There are numerous motivation theories that have followed by British American Tobacco
plc to motivate its staff in the workplace effectively, Content theory is the motivational theory
that is proposed to encourage individuals to giver best performance in the workplace that brings
success in business in its retail industry. However, content theory contains various motivational
theories which are used to understand individuals needs through which motivates individuals in
the UK market in precise manner (Shaari, 2019). Maslow’s hierarchical needs is one of the major
motivation model in the content theory which was designed by Abrahams Maslow to provide
understanding in businessman significance of human needs and requirements for the business
success.
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CEO of BAT plc implements this motivation theory in its company to fulfil all needs and
demands of the individuals in the company. This model contains five type needs i.e.
physiological, safety. Self-esteem, social and self-actualization. Physiological needs include air-
conditioning working place, refreshment, adequate sitting arrangement and others that brings
satisfaction in individuals and encourages them to give additional hours except working hours.
British American Tobacco plc provides effective working environment with proper light and
sitting arrangement so that employees feel comfortable while working in the workplace and
prefer to work in office instead of work from home. Safety needs are another essential need of
human being i.e. individual expects that wherever they offer their service that place must be safe.
In addition, it brings high productivity of staff in the workplace. Safety needs are workplace
safety, health insurance policy, job security etc. leads satisfaction in individuals and their family
for the job. Mr Jack Bowles offers workplace safety and health insurance policy that promotes
staff to work comfortably. Open communication, team working, involvement in decision-making
process etc. are known as social needs which requires by individuals and these maintains
wellbeing of the them.
Company promotes two-way communication that supports employees to communicate
with upper management directly regarding any issues related to salary, work pressure and others.
Management of the BAT plc always supports team working that encourages individuals to give
best performance in the company and deals with own stress management. Self-esteem needs are
appreciation, recognition and respects which expects by employees in the company. However,
upper management of the BAT plc controls all business activities and takes decision by
maintaining dignity of individuals to gather their reviews before implementing decisions (Amiri,
Qayoumi and Soltani, 2017). Thus, company accomplishes all needs and expectations of
individuals which they desire from business. It is evident by its brand image in the global market.
F) Literature Review
According to the al Habibi, (2019), organization behaviour is highly essential for the
business success because when company has healthy organization culture then it inspires
individuals to give productive performance in the workplace as resultant company will gain all
proposed objectives within timeframes. Effective organization culture is the source of
individuals’ satisfaction because management always concentrates on employees needs and
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provides those services in the workplace that promotes them to work like that expected outcomes
can have received by company over the period. A healthy organization culture is not only
promoted employees but also brings perceived value for the users or customers in the company.
So, it will be justified to say that an effective organization culture always inspires individuals to
implement emerging changes successfully. Motivation is also another success factor that
supports to stay motivated individuals for long period. Motivation tools and emotional
intelligence, Adam’s equity model, Maslow’s hierarchical needs etc. applies by companies to
keep individual motivated in the workplace and it also needs satisfaction in them for the job.
Soni and Soni, (2016) have quoted over the organizational culture and motivation theory
through an example of Marks & Spencer in their published research articles. M&S has
successfully achieved good brand image in the UK market due to its effective organization
culture. Company always focuses on customers’ needs so that it can offer those product or
services which brings satisfaction in individuals for the product and services and retains them
prolong time. Maslow’s hierarchical needs is the motivation theory that follows by management
of M&S plc to fulfil needs of staff members so that they can retain talented staff in the workplace
for long time. Overall, M&S has quite effective organizational culture that’s why it has achieved
all framed objectives within timeframe.
CONCLUSION
The report above discussed about the management style i.e., democratic which is adapted by
the CEO of the British American Tobacco with its principles and functions which gives equal
participation to all the employees in the decision-making. It also analysed the steps taken by the
company in terms of its structure and culture and its impact on the employees which suggested
that the company must carry on with its culture of treating all the employees equally irrespective
of their posts and safeguards them. The report also used a model to show the leadership style i.e.,
transformational style of Leadership used by the CEO of BAT. It also examined the effect of
Power, Influence and Conflict on BAT. The motivational Model was used in order to show the
various types of motivation used there.
Recommendations
The report recommends that 360-degree feedback strategy will be the best strategy that will
support BAT plc to keep wellbeing of individuals as well as improves effectiveness of
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implemented strategies. With this strategy Mr. Jack Bowles can collect reviews of individuals
over the implemented strategies and their issues while maintaining their dignity that brings
satisfaction in them and maintains their wellbeing as well. So, company must implement this
strategy on its business.
It also suggests that the company must continue valuing the employees because employees
play a major part in enhancing the performance which leads to the progress. The company must
also not stick to one leadership and management style but must combine one or two so that the
company can get advantages of them and compensating the demerits of one.
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REFERENCES
Books and Journals
ADHIAMBO MILDRED, O., 2017. AN EVALUATION ON THE EFFECT OF HUMAN
RESOURCE PLANNING PRACTICES ON ORGANIZATIONAL PERFORMANCE:
A CASE OF BRITISH AMERICAN TOBACCO COMPANY LTD. MIGORI
COUNTY.
al Habibi, B., 2019. HR practices of Marks & Spencer, Selfridges, Primark, and
Sainsbury’s (Doctoral dissertation, University of Science & Technology).
Almas, A., 2016. Measuring consumer preference of Benson & Hedges British American
Tobacco Bangladesh.
Amiri, S.R.S., Qayoumi, A. and Soltani, M., 2017. Study the Relationship between Organization
Culture and Employee's Creativity in Cultural Organizations: A Case Study. Arabian
Journal of Business and Management Review (Oman Chapter), 6(10), pp.1-8.
Balaji, M.S and et.al., 2020. Letting go or getting back: How organization culture shapes
frontline employee response to customer incivility. Journal of Business Research, 111,
pp.1-11.
Bouzenita, A.I. and Boulanouar, A.W., 2016. Maslow’s hierarchy of needs: An Islamic
critique. Intellectual Discourse, 24(1).
Fang, J., Lee, K. and Sejpal, N., 2017. The China national tobacco corporation: from domestic to
global dragon?. Global Public Health. 12(3). pp.315-334.
Kehoe, T.J. and Greenhalgh, E.M., 2018. ‘An indispensable luxury’: British American Tobacco
in the occupation of Germany, 1945–1948. Business History.
King, B.A. and et.al.,2018. Electronic cigarette sales in the United States, 2013-
2017. Jama. 320(13). pp.1379-1380.
Kristijono, N. and et.al.,2020. Social Media Data Explication to Support Study on Leadership
Style for Sustainable Investing. International Journal of Control and Automation. 13(4).
pp.626-657.
Milov, S., 2016. Smoking as Statecraft: Promoting American Tobacco Production and Global
Cigarette Consumption, 1947–1970. Journal of Policy History. 28(4). pp.707-735.
Ollong, K.A., 2017. Contentious corporate social responsibility practices by British American
Tobacco in Cameroon. Conjuntura Austral. 8(41). pp.86-105.
Sakib, S., 2018. Implementation of the integrated work system in the secondary manufacturing
department of British American Tobacco Bangladesh.
Shaari, N., 2019. Organization Culture As The Source Of Competitive Advantage. Asian Journal
of Research in Education and Social Sciences, 1(1), pp.26-38.
Soni, B. and Soni, R., 2016, July. Enhancing Maslow's hierarchy of needs for effective
leadership. In Competition Forum (Vol. 14, No. 2, p. 259). American Society for
Competitiveness.
Tanzim, M., 2018. Implementation of campaign activations in modern trade and business
development team of British American Tobacco Bangladesh.
Online
British American Tobacco, 2019. [ONLINE]. Available through: <
https://en.wikipedia.org/wiki/British_American_Tobacco>
Organizational Structure of British American Tobacco, 2019. [ONLINE]. Available through :<
https://issuu.com/reganahmed/docs/british_american_tobacco_report/8>
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