Report: Organisational Theory and Practice at British American Tobacco

This report provides a comprehensive analysis of British American Tobacco (BAT), examining its organisational theory and practices. It delves into the management style of BAT's CEO, highlighting the participative approach and the principles of management employed. The report explores BAT's organisational structure, including its functional structure and clan culture, and assesses its impact on employees. Furthermore, it analyses the leadership style of BAT's CEO, focusing on the transformational leadership model and its elements such as inspirational motivation, intellectual stimulation, idealised influence and individualised consideration. The report also investigates the effects of power, influence, and conflict within BAT, along with the various types of motivation used to enhance employee performance. The report concludes with suggestions for increasing organisational performance, supported by corporate examples and relevant literature.

Organisational Theory and
Practice

Table of Contents
INTRODUCTION...........................................................................................................................3
Task A..............................................................................................................................................4
Managementstyleand functions of management used by the CEO of British American Tobacco
.....................................................................................................................................................4
Task B..............................................................................................................................................5
Steps taken regarding organisational structure in order to achieve high performance and
organisational culture atBritish American Tobacco and its impact on employees......................5
Task C..............................................................................................................................................6
Leadership style of the CEO of British American Tobacco to enhance the organisational
effectiveness................................................................................................................................6
Task D..............................................................................................................................................8
Effects of power, influence and conflict at British American Tobacco......................................8
Task E..............................................................................................................................................9
Various types of motivation used at British American Tobacco.................................................9
Task F............................................................................................................................................11
Corporate examples and literature to justify your stand............................................................11
Task G............................................................................................................................................12
Suggestions / recommendations (strategies) to increase organisational performance...............12
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Organisational theory can be defined as set of different concepts, definition that explains
behaviour of individuals or groups who interact with each other to perform activities for
accomplishing their common objectives and goals. On the basis of theory different practices are
undertaken by the organisations, these practices are based on management of individuals and
groups within organisation. Management undertakes planning, coordinating, directing and
controlling of different activities within organisation. Concerned withBritish American
Tobaccoit is a business organisation. British American Tobacco is a British multinational
company, founded in 1902 and is headquartered at London, UK. Working in Tobacco industry
main products of the company are Cigarettes, Cigars and Nicotine products. British American
Tobacco is world’s largest tobacco manufacturing company along with being biggest retail
operations in world based on net sales (Dewhirst, 2019). British American Tobacco has its
operation in around 180 countries and also has several subsidiaries. The company was formed by
a joint venture of British imperial Tobacco company and American tobacco company. In order to
complete all the operations of the company, British American Tobacco employs around 55000
employees. This report is based on British American Tobacco and will discuss about
management style and principles and functions of management that are used by CEO of British
American Tobacco. Management style refers to approach and way in which organisation is
managed by the CEO. Further report will discuss organisational structure (organisation structure
is concerned with way in which responsibilities and roles are defined and carried out within
organisation) and organisational culture (organisational culture is set of beliefs, values and
practices that guide and inform actions of organisation) of British American Tobacco and how it
affects employees. This report will also discuss about leadership style (approach with which
organisation are headed) of CEO of British American Tobacco, it is an important element to
influence organisational effectiveness. This report will later analyse power, influence and
conflict and different types of motivation in context of British American Tobacco. Company is
facing issues in terms of lower margins and in order to deal with this issue company is planning
to cut jobs. Right understanding of organisational theories can help in reducing negative impact
on those existing employees.

Task A
Management style and functions of management used by the CEO of British American Tobacco
Management style is a particular way or approach in which management activities are
carried out by managers. This involves activities like planning, organising, coordinating and
controlling. Decision making and role of individuals at different levels of organisation in
decision-making is also part of management and management style. Concerned with
management style of British American Tobacco, CEO at the organisation has employed and
adopted participative management style.
Participative Management Style
Participative management style is one in which all individuals at different levels of
organisation participate in the process of decision-making in organisation (Kopia, 2016).
Employees and members of British American Tobacco are free to express their ideas and
opinions about particular situation and problem in organisation. There are several benefits of this
style of management in this style members are motivated to share their ideas and this lead to
getting creative suggestions. Members in this style of management gets a feeling of
belongingness with the organisation they are working for, this contribute in effective
performance of the organisation. Employees are more involved in their job role as they are
aware, they will be participating in decision-making. Other than this, when decisions are based
on their opinion in such situation, they get highly motivated and encouraged and actions are also
based on their decisions. Organisational performance gets improved because decisions become
more effective by input from different members of the organisation.
Principles of Management used by CEO of British American Tobacco
Division of Work- This involves that individuals should be given task according to their
expertise. This also requires focusing in development of employees so that they can effectively
work.
Authority and Responsibility- This means that individuals when are given responsibility they
should be provided with adequate authority.

Discipline- With this principle’s management can ensure honesty, integrity and transparency.
Discipline also ensures that members and employees in organisation are adhering to
organisational code of conduct.
Equity- This principle is highly valued in British American Tobacco in which they ensure that
every employee in organisation is equally valued and treated equally (Feller and et.al., 2017).
Functions of management at British American Tobacco
Planning- Activities for planning activities that are likely to be carried out in future.
Organising- This involves integrating different factors and people so that they can contribute in
achieving organisational objectives.
Leading- this is concerned with leading organisation and its people or this can be said that
ensuring everyone is working in same direction.
Controlling- this is concerned with measuring standards output and results with standard results
and output.
Task B
Steps taken regarding organisational structure in order to achieve high performance and
organisational culture atBritish American Tobacco and its impact on employees
Organisational Structure
Organisational structure is defined as direction of certain activities towards objectives
and goal achievement. These activities involve roles and responsibilities of individuals at
different positions and flow of information between different positions in organisation. Well
developed and properly defined structure of the organisation is highly important for ensuring
high and effective performance of the organisation. This is because organisational structure
involves different responsibilities and authorities for individuals at different positions in
organisation. Well defined structure will help them in understanding their authorities and
responsibilities with help of which they will be able to identify their role. Steps that are taken for
this involve determination of different roles and positions in an organisation(Raziq and et.al.,

2020). Organisational structure of British American Tobacco involves182 executives. Followed
by this in organisational structure there are CEO, Chairman of the Board, and 7 Directors
positions. These are followed by officers for all important managerial activities, these are
marketing, digital and marketing, legal and external affairs, other than this Scientific Research,
talent and culture, finance positions involved in structure of British American Tobacco. Steps
taken for organisational structure, outlines that there are positions with help of which all
activities in British American Tobacco get managed and carried out. These positions are also
responsible for managing performance and activities of other employees in British American
Tobacco.
Functional Organisational Structure
Functional Organisational structure is followed by British American Tobacco. In this
structure organisational structure involves departmentalization based on common job functions
in organisation.
Organisational Culture
Organisational culture can be defined as collection of values, practices, beliefs that guide
and inform activities of the organisation. Every organisation has their culture that differentiate
from other organisations and this is why British American Tobacco also has their culture
separating and differentiating them from other organisations (Kehoeand Greenhalgh, 2018).
Development of talent existing in organisation, encouraging and supporting effective and high
performance of individuals is part of British American Tobacco’s culture. Other than this,
considering opinion of employees, protecting their well being, encouraging quick learning and
becoming responsive to opportunity is also part of culture at British American Tobacco.
Clan culture is followed in British American Tobacco. This has impact on employees in
terms of their active participation in organisational activities and their job role. Employees in the
organisation work collaboratively to achieve organisational objectives.

Task C
Leadership style of the CEO of British American Tobacco to enhance the organisational
effectiveness
Leadership refers to carrying out set of activities that involve direction, motivation and
guidance to group the group of subordinates or the group that is being leaded by leader. There
are different styles of leadership this means that there are different ways in which leaders carry
out different functions. Leadership style make a important impact on overall success of the
organisation, this is because leadership style affect motivation, role of members, and role of
leader in a particular process. Transformational style of leadership is practiced and followed by
CEO of British American Tobacco. Transformational Styles of leadership has different elements
in which they are focusing on driving effective results for the organisation. British American
Tobacco and leadership of the organisation are focusing on sustainability of the organisation.
Transformational leadership focuses on effective and quick learning along with fast pace of
adaptation of changes required (Xieand et.al., 2018). Transformational leaders believe that
changes in organisation are basis for growth and success of future in growth.
Transformational Leadership
Transformational leadership in British American Tobacco is based on certain factors and
elements that collectively create a style that is known as transformational leadership. These
elements of transformational leadership are-
Inspirational Motivation
This is one of the most important elements of this style of leadership. In this element
leaders motivate followers by communicating vision in an appealing way that members and
employees are able to understand. Leaders needs to articulate vision so that employees are able
to understand what they need to do in order to contribute in realisation of vision. For example
purpose of British American Tobacco is to create a better tomorrow for all our stakeholders.
Leaders in transformational leadership need to articulate this vision in such way that employees
are able to understand what their role in fulfilling this purpose is. This will motivate employees
and members of British American Tobacco.

Intellectual Stimulation
This is concerned with encouraging creativity among subordinates and members of the
organisation. Creativity and innovation are integral part of transformational leadership. Leaders
provide different opportunities to subordinates and members to learn and develop.
Idealised Influence
This means that leaders when are willing that members do particular activity. In this
situation they need to serve as role model for members. This involves trust and respect for
leaders, so members follow leaders.
Individualised Consideration
This element involves offering supporting to members according to their requirement and
capability (Xie and et.al., 2018). This involves that all members and employees are not equally
capable and competent. Leaders need to ensure that members get support as per need rather than
generalised support to all members.
Task D
Effects of power, influence and conflict at British American Tobacco
Power refers to a state in which individual possess capacity to affect and influence
decisions and actions of others. This power is exercised for those who are subordinates or are
working in subordinate positions. There are different sources through which individual can get
their powers.
Sources of power are-
Positional power- That comes from position of individual
Expert power- Power that comes from expertise that one is having
Referent power- This means power that comes from individual having desirable resources and
personal traits

Power in organisation has several effects which differentiate on the basis of source from which
power has been derived from. Effects of power in British American Tobacco are visible through
strict adherence to organisational rules and regulations. This means that leader and manager
utilise their power to ensure that all members in organisation are following regulations and code
of conduct of British American Tobacco (Taştan and Davoudi, 2017). Other than this, expert
power contributes in ensuring that everyone in organisation is using expertise from different
experts in completion of their job role. Power plays an important role in influencing and
affecting commitment of individuals and groups within organisation and for organisational
objectives. Overall with help of power individuals with power can make others do what they
want them to do.
Influence can be defined as effect and impact that one has on another individual or group.
There are different ways in which one can influence others, this can be positive as well as
negative. Influence on individuals involves influence of seniors or influence of co-workers or
teammates of individual. In British American Tobacco individuals and groups get influenced in
different ways, influence from seniors is very natural but because of organisational culture
individuals also get influenced from their co-workers and teammates.
Workplace Conflict and its effects
Workplace Conflict can be defined as difference of opinion and interest and disagreement
in individuals over certain decisions. Conflicts are expected to exert negative effects in
organisation and for performance of the organisation. In this conflict in two employees of British
American Tobacco is likely to influence other employees and their performance within
organisation. Conflicts are not desired in British American Tobacco as they encourage harmony
and teamwork. But there are certain reasons because of which conflicts can be positive and
desirable as well. These reasons are changes in old norms and practices, unity of the group,
enhance group cooperation, conflicts many of the times also help in identifying more creative
ways and solutions for perform certain task and or carry out certain activity (Samantaraand
Sharma, 2016). These are some of the reasons because of which conflicts are positive but
because of these negative impacts cannot be avoided. Negative effects of conflicts involve
decrease in productivity, can lead to employee absenteeism or turnover.

Task E
Various types of motivation used at British American Tobacco
Motivation refers to drivers that encourages and stimulate individuals and groups to work
towards attainment of particular goals and objectives. Motivation in context of business
organisations involves that individuals and groups are working towards attainment of
organisational objectives and goals. There are different types of motivations that British
American Tobacco can utilise to motivate individuals and groups. Intrinsic and extrinsic
motivation are main types of motivation that organisation can utilise. Intrinsic motivation is the
one in which an individual is motivated by internal desires. This can be said as doing something
that personally rewards individual. Feelings like satisfaction, contentment, fulfilment of desires
are some of the intrinsic motivations. Extrinsic motivation is another type of motivation in which
individuals are motivated by external desires (Jun, Hsieh and Reinecke, 2017). This means that
external factors stimulate particular behaviour of individuals that is directed towards
achievement of organisational objectives. Reward and fear based motivation is form of extrinsic
motivation. These both types of motivation are used by British American Tobacco and other
types of motivation that are used by British American Tobacco are-
Rewards or Incentive based motivation
Reward or incentive is one of the first and most important reasons because of which
individuals join any organisation. Compensation that individuals get in exchange of the services
that they provide to organisation is this form of motivation. Individuals seek to work as they are
likely to get compensated when they make efforts to achieve organisational goals and objectives
of British American Tobacco. Additionally, individuals when are likely to get extra benefits and
incentives for their extra efforts they make in organisational objectives achievement.
Maslow’s Hierarchy of needs can be used to justify different types of motivation. This theory
outlines a hierarchy of different needs that motivate individuals. These needs are-
Physiological needs
Basic needs through which individual can fulfil their fundamental and substantial needs.
This is important for survival of human being.

Safety needs
Satisfaction of physiological needs generate safety needs (Hale and et.al., 2019). There
are different types of safety and security that individuals seeks to have, like safety of health,
financial safety and security
Social needs
This is need which involves need of feeling of belongingness. This also is known as need
for human relationships.
Self-esteem needs
This is another type of motivation that is used by British American Tobacco. This type of
need involves different types of achievement that encourage and motivate individuals to carry
out certain task and following particular action. This means that completing certain task lead to
particular title and position that individual is seeking for motivates individuals.
Self-Actualisation needs
This need in the hierarchy is concerned with realisation of one’s potential and self-
fulfilment and individuals are seeking for personal growth.
By identifying different needs and requirements of its employees at different levels in
organisation British American Tobacco can ensure employees in organisation are motivated.
This is because this needs differentiate on the basis of level in organisation and its hierarchy.
Task F
Corporate examples and literature to justify your stand
As stated by Gunasekaran and et.al., 2018 organisational theory refers to set of different
set of different interrelated concepts and definitions that explains and outlines different
behaviour of individuals in an organisation as individual as well as in groups. There are different
organisational theories in which different behaviours and interactions among individuals and
groups. Further organisational theories also guide and directdifferent actions and decisions.

British American Tobacco also manages its organisational decisions and actions based on
different theories of organisation.
This report discussed about different theories and concepts of organisation is context of
British American Tobacco. Management styles and functions and principles were firstly
discussed and it was identified through different initiatives and articles about British American
Tobacco and its management. Later organisational culture was discussed and information
regarding organisational culture was collected from website of the British American Tobacco.
Discussion and research regarding British American Tobacco and different organisational
concepts suggest that British American Tobacco is being effectively managed. These practices
effectively contribute in attainment of organisational purpose of British American Tobacco.
Creation of suitable environment and culture of organisation is also important and British
American Tobacco ensures that they are able to contribute in attainment of organisation purpose.
Task G
Suggestions / recommendations (strategies) to increase organisational performance
On the basis of above discussion it can be concluded that British American Tobacco has
employed effective practices for carrying out organisation practices. This also outlines that
practices and different organisational strategies of British American Tobacco also are similar to
most of the organisations operating in modern business environment. Discussion regarding
British American Tobacco outlines that organisations seeks to train and develop its internal
people so that they can fulfil different organisational positions. This means that external
recruitment is not considered for the position of senior management in organisation.
 British American Tobacco should consider external recruitment in order to enhance
quality of the personnel within organisation. Because senior management hired from
external sources will bring advance knowledge and add value to British American
Tobacco in terms of varied experience (Ahmed and Ahmed, 2019). This is because
employees hired internally only has experience of British American Tobacco, but those
who will join from outside organisation will bring different types of knowledge that will

be useful for British American Tobacco. In times of intense competition it is important
that organisation has people with different skills and knowledge.
 Another recommendation is related to motivation of the employees. Concerned with this
British American Tobacco is using effective means of external motivation but intrinsic
motivation is also important. Specifically in present business environment where
organisations are employing more employees in top and corporate positions with high
qualification and intrinsic motivation is important. Organisations continuously looking
for qualified employees and employees are also looking for working in organisation
where they can fulfil their intrinsic motivation. This is why in order to employ qualified
and competent employees British American Tobacco should work on intrinsic
motivation.
CONCLUSION
On the basis of above discussion it can be concluded that understanding of different
organisational theories and practices organisations can help organisation in ensuring required
behaviour of employees. British American Tobacco can also encourage right and expected
behaviour of its employees with help of these theories. Theories discussed above involve
different elements of organisation that affect and influence behaviour of individual in a
organisation. These elements are power, influence, motivation and culture of organisation.

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