Organizational Theory and Practice: Improving Performance of KPMG

This report discusses the organizational structure and culture of KPMG, a multinational professional service provider. It evaluates the company's performance and suggests changes to improve it, such as fostering work-life balance, employee engagement, EPM analytics phases approach, and continuous learning. The report justifies these recommendations with appropriate examples.

ORGANIZATIONAL
THEORY AND PRACTICE

TABLE OF CONTENTS
INTRODUCTION................................................................................................................................4
MAIN BODY.......................................................................................................................................4
1. Organizational structure and culture.......................................................................................4
2. Changes to be made to improve the performance of the KPMG organization.......................7
3. Justify your recommendations using appropriate examples...................................................9
4. Change management model..................................................................................................10
CONCLUSION..................................................................................................................................12
REFERENCES.....................................................................................................................................1

INTRODUCTION
Organizational theory sociological study of operation and structure of organization contain
companies as well as bureaucratic institution. Organizational structure is a system that shape how
certain activities are directed for achieve organizational goals (Remenova, Skorkova, and
Jankelova, 2018). These activities may includes rules, responsibility and roles. Even structure also
elaborate how information flows between different levels within an organization. Organization
culture is the proper way to act within an organization. If the organizational culture and structure is
good then it creates positive impact on the company growth as well as success and also improve
their performance (Lubis and Hanum, 2020). KPMG is a multinational professional service
providers. This organization is operated in Germany, Europe as well as global. KPMG is one of the
big accounting firm. Have strong quality and trust perception between customers. Company offers
services such as financial services, tax, audit, controversy and dispute resolution services etc.
KPMG also offer services like legal advices, Audit, financial advisory, risk advisory and taxation
management consulting in the market.
This report includes a brief about the organization structure as well as culture. Along with
this the report also includes some KPMG structure and culture and also evaluate the company
performance that is they are performing well or not due to their structure and culture. This reports
also discuss come changes which help company to improve their performance. Moreover, the report
will give some recommendation to improve their performance with some example. Furthermore,
this report will also include change management model such as Kotter change model and implement
it to make changes in an organization.
MAIN BODY
1. Organizational structure and culture
Organizational structure refers to a framework which outlines the activities for a particular business,
that helps the business to attain its goals and objectives. These activities include all the roles,
responsibilities and rules which the businesses are bound to make in order to maintain a smooth
working in an organization (Joseph and Gaba, 2020). The organizational structure also decides the
flow of information between various levels that exists in the company and these structures are either
decentralized or centralized. Centralized organization is an organization which has a clear
commanding authority. Here, the accountabilities and roles of every individual is completely
defined and military is a very good example of this, Whereas, decentralized organization is the
system which is followed by many start up companies these days and it doest not involve clear roles
and responsibilities (Melick, 2020). Here, every team perform its operations individually without

consulting the superiors.
KPMG is an international company with a very good recognition across the globe. It has a
huge workforce of the employees with over 236,000 people working in it and the company has its
establishments in around 145 countries. The entire structure of the company comprise governance
bodies. It includes the Global board, the Global Council, Groups of Global Steering and a Global
management team.The structure of the company is mended especially by keeping in mind the
quality of the services that the company has to offer and the values which the company has agreed
to adhere for a lifetime. The members of the company also commit themselves towards the set of
values created by the company and it is ensured by the organization that all the standards are
followed by the members of the company when it comes to serving their clients. Various other firms
which are connected with the company and who use the name of KPMG are also supposed to
follow the same set of rules which are created by the company. KPMG on being an accountancy
firm, work and provide services in the areas of audit, advisory and tax. The structure of the
company comprise expertised professionals and the entire system of the company is centralized.
Every individual is accountable to some or the other person and through this the company is the
company is able to maintain a smooth flow of work in the workplace.
The organizational structures are also divided in 7 types namely,
 Functional structure- It refers to the organizational structure which is engaged in making
the teams according to the work specialization. In this functional structure there is one
leader with high experience in the job, who supervises the work of other people working
under. This structure mostly follows top-down decision-making I.e., centralized structure.
This particular structure is followed by KPMG as it provides great management of work.
 Divisional structure- This structure involves assigning a group of employees to overlook a
geographical area or a particular product. Divisional structure comprise teams which focus
on a specific product line or specific market. As the company operates on a huge level, it
also comprises divisional structure which regulates the daily flow of work.
 Matrix structure- The matrix structure is engaged with a single employee reporting to more
than 1 manager and supervisors (Elezaj, Morina and Kuqi, 2020). This enables an
organization to interact widely and deliver project on time with a good efficiency. KPMG's
work load sometimes make the inner structure of the organization follow matrix structure in
order to complete the work fast.
 Team structure- Team structure is engaged with creation of small units which focus on the
delivery of a particular service or product by making the individual decisions required in the

process, without involving any third party. The company doesn't follow the team structure as
it believes in offering the best to its clients, it completely restricts the individual decision-
making in the firm.
 Network structure- This structure is associated with joining two organizations with a
common goal that concerns one service or product. This network structure typically
outsources independent vendors or contractors for the completion of work. The company
does not believe in following this structure but when it becomes necessary, no other option
is left with company but to follow, as it has a wide network of operations.
 Hierarchical structure- This is the most common structure that is followed in the
organizations (Romme, 2019). It involves a chain of commands which flows from the top-
level to bottom. KPMG also follows this hierarchical structure in order to ensure
sustainability in the future.
 Flat structure- This structure is engaged with making the employees feel a sense of
belonging as it involves middle managers in between the top managers and employees.
KPMG also believes in this structure and to some extent follow the flat structure in order to
gain the employees trust.
KPMG's organizational culture believes in recognizing the potential, rewarding the high
performance and nurturing the talents of the employees within the organization. The environment of
the place develop a long-lasting change and develop a sense of fulfilment of the purpose amongst
the employee (Rohim and Budhiasa, 2019). The culture of the organization is an open culture where
every single person who is working can invest in the organization as well in the self at the same
time to be their own best.
The culture and the organizational structure of KPMG is a fast growing culture which opens
great doors for the employees working in there. The structure of the company also attract a good
number of candidates towards itself. KPMG is one of the biggest organization in the world and also
comes in Big 4, but the entire structure of the company sometimes lack in the centralized system
which it follows. So the company should also plan and think to shift to the decentralized structure as
the company operates on a large scale. It will give the company a benefit of smooth and fast
functioning. Other than this, the company has a very good culture and structure where it is giving its
most to deliver the best to its clients.

2. Changes to be made to improve the performance of the KPMG organization
The multinational corporation of KPMG (named on the initials of its founding members) is
widely known for its financial services such as advisory service offers, tax consultancy provisions,
and audit tasks. KPMG is a globally based organization with a lot of of diverse branches and it has
an excellent organizational culture and structure. As per the 2020-21 report statistics it has been
found that the global corporation has been facing some key notable challenges mainly including
issues related with its performance management of workplace which is one of the crucial elements
that every business sector has to acknowledge (Widmann and Mulder, 2018). Here the overall
employees' and management team's workplace performance is being talked about. With regard to
the same concept, it can be defined as the corporate tool to analyze, regulate, and track the work
performing ability of the involved staff members the leadership practices of which are keenly
reflected through its managerial teams. Thus given below are some key essential performance
improvement practices in context of the UK based KPMG multinational firm.
Practices for improving performance
The widespread global subsidiary branches of the financial firm KPMG consist of several
monetary and finance based service provider workforce teams which excel in prodviding
consultancy to high profile brands. The business organization has a warm office culture where the
new recruits are given a welcome and hospitable atmosphere and the existing work personnel is
regularly trained amidst an extremely supportive environment. Inspite of incorporating such a good
organizational structure the KPMG firm still faces certain occupational downsides in terms of its
workplace productivity. In context of the same some helpful corporate changes have been provided
below that the firm can make use of in order to improve its performance scale (Ogbeifun, 2018).
Foster work-life balance
According to this concept, the KPMG organization is required to create a well structured
environment in the office so which can help an individual employee to maintain their health and
safet. A flexible work environment is the best way nowadays for the employee so that they can both
easily conduct and maintain their roles. There are many kinds of regulations an organization can
adopt in their company and can help the employee to increase the productivity as they will be able
to focus on both areas of life. The company can deliver the flexible hours, a good engagement with
employee, healthy work environment, a better training, etc. for improving staff performance (Sun
and Bunchapattanasakda, 2019).
Employee engagement
Employee engagement is one the reason why firms like KPMG can further increase their
productivity and growth. In many organizations at times the management is not even aware of the

effective applications of employee engagement which leads to negative results from such ignorance.
Organizations who understand and follow the improvement tactic of employee engagement
experience a multitude of benefits as workforce personnel feel satisfied and secure at their firms and
are more committed towards achieving the company's objectives. A strong connection and
communication between the management and employee creates a feeling of staying at the particular
workplace for the longer period. It helps the company to drive the innovation and increases the
productivity in a judicious manner thereby notably improving its performance management
standards (Pichler, Beenen and Wood, 2020).
EPM analytics phases approach
Another one of the performance management approaches for the KPMG firm is the
dynamic, evolutionary, and powerful methodology of Enterprise Performance Management (EPM).
It is dynamic because of its all-time changing features as per the organizational structure and it is
evolutionary as it keeps on advancing according to modern business analytics. It has three primary
phases that can help improve firms like KPMG's performance levels (Kearney, 2018).
 Descriptive analytics – As cab be understood by the term itself the descriptive analytics
approach means answering the question “what has happened” over time in an organizational
context. Global financial corporations like KPMG can make use of this in its managerial
framework by analyzing ongoing current data statistics of its employee base.
 Diagnostic analytics – Sometimes the performance level of a business firm declines due to
various internal factors such as manufacturing defects or product line mismanagement.
Intrinsic factors like these can be addressed efficiently well if the chosen firm in context
through a problem solving approach.
 Predictive analytics – As the name suggests, the performance management approach of
predictive analytics delves into the question of future growth strategies. For instance the
KPMG corporation can try to predict its financial credit scores for leveraging profit.
Practice continuous learning: continuous learning goes in hand with the improvement in the
continuous manner. Employees in the organization should be given opportunities to learn the new
things even if the things are not related to the roles assigned to the employees related to their
present job roles in the organization. Investment from the side of organization in educating the
employees is a beneficial signal and it shows that the organization is focusing on the growth of the
organization and its employees with concern in the team. Continuous learning helps in the
expansion of the knowledge and their skills. The improvement and continuous learning also helps in
the reinforcements of the skills and knowledge that have been learned in the previous period.

Giving the opportunities of the frequent feed backs: management authorities by focusing on
every individual in the organization should do the constant feed backs with guiding them for the
improvement in their performance. The managers must not focus on the periodic performance
review and giving them solicit feedbacks about the personal performance of the individual
employees. Open communication in the employees and authorities of the management department
helps in the improvement and capitalization of the individual strengths. This also helps in the
improvement of the weakness of the employees. By giving the opportunities in the giving and
receiving the feedbacks the things should be taken care like listening to the feedbacks given, being
aware of the response, being open to the employees, understand and reflect, and follow up.
3. Justify your recommendations using appropriate examples
As per above discussion it can be critically observed that the concept of performance
management and its constant improvement is extremely significant in all sorts of business
organizations. A properly organized system of managing work performing levels of employees and
the entire business firm is particularly important in high profile corporate firms like KPMG which is
vastly spread in almost all global corners. This indicates that its workforce strength is majorly
comprising different kinds of working people from all backgrounds with their own individual
aspirations and personal goals. Lately, organizations have beern experiencing certain internal and
external clashes that drastically hampers the workflow management and immediately needs to be
dealt with. This can be precisely done with the help of the following recommendations:
Compensatory feedback
In order to accurately make head and tail of understanding what is wrong within an
organizational culture and structure, one of the suggestible recommendations can be obtaining peer
feeback which is impersonal in nature and that is exacly why it will be insightful in grasping the
true origins of a firm's weakness. For instance, the global manufacturing and service provider
chemical and energy firm of Sasol corporation effectively leveraged its decreasing revenue outputs
by realizing its internal defects of hidden talent. The faster the company invested its human resource
potential in its research and development department, the higher its sales increased. This can be
equally helpful in the context of KPMG firms too (Ara and Das, 2021).
Continuous annual appraisals
While talking about intrinsic and extrinsic motivating factors for employees, one of the vital
aspects is salary appraisals and internal encouragement through personal development and training,
etc. This serves two major purposes – firstly it fulfils the monthly, quarterly, and yearly appraisal
performances that is directly proportional to a good employee management standard. The second

purpose it accomplishes is that of introducing promotional policies in its organizational framework
that facilitates an overall improvement assessment in work personnel's daily output along with a
holistic development of its managerial and executive approach. One prime example of this is the
goal accomplishment of the Generac company that was made possible Avature through the
unification of of its entrepreneurial initiatives.
Mentor, Coach, and Develop
One of the best considered managerial and executive strategies for generating organizational
improvement levels is constant mentoring of the particular organization's employee force. In
addition to theoretical learning and training sessions, the company personnel should employ the
helpful method of 'on the job' practical learning which will assist in a continual professional
development of KPMG workforce personnel (Konovalova, Aghgashyan and Galazova, 2021). This
strategic approach will help in solidifying the job specific productive capacities of its workers
which will not only motivate them to work in judicious manner but will also enable them to become
more open and clear in sharing their thoughts, ideas, and feelings regarding the company's goals.
For instance, UK's largest service provider hotel chain of Premier Inn increased its professional
employee engagement by a whopping 74% score and exuded an impressive work performance
output in its business functions.
4. Change management model
Change management models are methodologies, concepts and theories that offers an
framework to the organizational change. Its main aim is to navigating transformation process,
leader or guide making changes and also make sure that the change are accepted along with this
they put into practice as well (Jayatilleke, and Lai, 2018). A change model also helps in determine
potential areas of the resistance as well as implementation strategies planed to eliminate or even
reduce resistance before change process begin. A benefit is that the model of change management
helps to make an effective communication strategy. It is important because without effective
communication strategies company can not adopt change in effective manner. Change management
plays important role in every organization. Mainly the change management focuses on people side
of the change. A change management model simplifies as well as describe process in way everyone
can easily understand. If the organization not use change model then there is a risk of not achieving
intended change. Change management model attract various professional role as well as offers
accountability for such role in success of change management process (Jain, 2020). Kotter's change
management model is the process that planned to help managers and leaders to successfully utilize
change in their organization. Mostly, this framework focuses on creating or making urgency for

making change in an organization. It has 8 steps that have to be followed in an organization. It has
very easy steps which specifically provides clear guidance and description as well on full process of
the change as well as implementation.
Creating an urgency of change in an organization: This is the basic stage of change management.
The first step is make a urgency about the requirement and need for change. The implementation
can do by simply highlights repercussions and threats that also give impact on organizations future.
Here, the opportunities are also considered which will give positive impact. The main purpose of
this step is to make employees prepare for upcoming changes and also inspire them to take part in
change. In this step company identify their existing opportunities as well as problems then they will
discuss openly with their employees about why change is needed. Then create discussion form to
talk about threats, challenges and possible solutions. As KPMG find that they have to update their
technologies and also focuses on work-group (Rajan and Ganesan, 2017).
Forming powerful and effective team: This can be achieved by creating effectively working of
managers and leaders as well as authorities by just involving them in change management process.
The organization can be make change by work as team. In this step, the leaders determine weak
areas in their team. KPMG also focuses on their team to work together to implement change and
improve their performance.
Process of vision and strategy: In this step the managers and leaders just tell employees about
change and why is necessaries and inspire them to change accordingly. KPMG have to explain why
change is make and also give a clear understanding of the change to their employees. Managers
must communicate their visions and strategies so, its easy for workforce to understand the change.
So the KPMG must focuses on clear system as well as processes for tracking progress, monitoring
issues,, making decision as well as resolving disagreements. Communicating the vision: vision
created by the management is related with all feature of the company like development and training,
performance, etc. Here, the main focuses on issues or problem of the customers or employees in the
organization should be handled to take out the positive outcome. The problem or issue in KMPG
company is of performance, so they to change accordingly.
Removing or eliminate the obstacles: The next phase of this model is to eliminate or removing
obstacles of change. The organizational processes should be simple, straight and structured with the
vision and strategy of organization or even according to the change. By effective communication in
an organization can motivate their workforce to take change and do work in proper and effective
manner. KPMG have to put attention on technology advancements and by providing training to
their employees they can remove obstacles from adopting change.
Celebrate short-term wins: In this step of the model refers to celebrate success as well as wins of

enforcement of change at the company which motivates their employee and staff members to work
accordingly in the effective manner. KPMG company is required to celebrate their wins by small
gathering parties and even by brunch type grouping by the organization. By which they will
encourage and motivate staffs to feel valuable at the workplace which makes them loyal with the
organization as well. Short term wins is an achievement for employee for give them a reward and
appraisal for their efforts for adopting the change.
Build on change: Build on change refers as process of the change for better development and
growth of the company. KPMG company focuses on the change process after implement the change
to know the areas of improvement are improved in the proper manner or not. So the proper
monitoring is required in this step. So if the performance is not matched with the standard one then
the leaders or mangers can take corrective action on time. In this step company have to focuses on
their changing process.
Changes in corporate culture: The last step of this change model is defining changes in the
corporate culture where the organization has to stick with change in proper order. KPMG has
implemented the change so now this step refers to make sure that the change has been native by the
employees in successful manner. It creates a new and effective culture where change can be
continuous. For making change stick company discuss importance of new changes by provide
advantages. Embrace and identify change supporting values and norms. By creating new
development and change programs to assist staffs in gaining skills to adapt changes. As KPMG
advance their technologies, so they can provide training to their employees, so they will easily
adopt change in the effective manner (Tang, 2019).
CONCLUSION
From the above report it has been concluded that organization culture and structure give
impact on the performance of the organization. In an effective working culture workforce give their
100 per cent to do work in proper manner. KPMG has follow organizational structure and
organizationals culture. Which helps company to achieve their vision and mission. The above report
includes a brief about the organizational culture and structure. KPMG have to improve their
performance such as action based learning, focuses on the practise more rather than process,
updating with the technology etc. so improving their performance they have to focus on theses. The
above report also make some recommendation to improve their performance by adopting change.
Moreover, the above report has discussed concept of change management and along with this the
organization implement change by applying Kotter's change management model. The change
management model is very beneficial, appropriate and suitable for the working of an organization in

particular. The Kotter model provides clear and meaningful steps that provide guidance as well as
support to the change management process. Hence, this report gives a precise and a brief discussion
regarding each and every topic or segment that is mentioned above, it gives a detailed and brief
discussion for better understanding and clear interpretation of the stages, benefits, disadvantages
and other aspects of the process of change management within an organization or company.

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