British Gas: Resource Allocation, Theories, & Culture Impact Report

This report examines British Gas's approach to resource allocation in response to challenges like the Ukraine war, focusing on cost-cutting strategies and their impact on the company's organizational culture. It explores historical and contemporary organizational theories applicable for optimizing resource management and improving productivity. The report further analyzes how cost-cutting measures affect employee behavior, beliefs, and overall organizational culture, emphasizing the importance of human resource management in managing conflicts and improving workforce performance. Finally, it discusses various innovations, including product/service and business model innovations, that British Gas can adopt to achieve its cost-cutting objectives while maintaining a positive organizational culture and ensuring alignment between employee goals and organizational objectives. Desklib offers a wide range of study tools and solved assignments to support students in their academic journey.

Organisation Studies
(Scenario and
Assessment Questions)

Table of Contents
INTRODUCTION...........................................................................................................................1
Structure of Organisation and Resource Allocation........................................................................1
Historical and Contemporary Organisational Theories...................................................................2
Use of Organisational Theories..............................................................................................2
Strategic Goals Formation......................................................................................................2
Use of Information Technology.............................................................................................3
Effects on the Organisational Culture of the Company...................................................................3
Role of Employees on Organisational Culture.......................................................................3
Role of Leaders and Managers on Organisational Culture....................................................4
Role Importance of Human Resource Management Skills..............................................................4
Managing Conflicts................................................................................................................4
Improve Workforce Performance...........................................................................................4
Adoption of Innovation in the Organisation....................................................................................4
Product or Service Innovation................................................................................................5
Business Model Innovation....................................................................................................5
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
The business organisations face dynamic changes in their activities and operations due to the
various aspects throughout the world (Hamilton, & Webster, 2018). British Gas is an energy and
home service provider in the United Kingdom that operates on a large scale throughout the
United Kingdom. The Ukraine war with Russia has largely affected the supply of natural gas
within the UK due to which this giant UK energy company has to order strategies for cost cutting
for the upcoming year. The following report will be describing the resource allocation strategies
that can be adopted by the organisation for cost cutting. It will also provide the historical and
contemporary organisational theories that can be applied within the organisation for lowering
down the cost. Along with this, description of the impacts of cost cutting on the organisational
culture will be discussed. In the end, it will be discussed about human resource management
activities that can be helpful for cost cutting, and the innovations that can be adopted by the
company for cost cutting.
Structure of Organisation and Resource Allocation
Resource allocation can be explained as the activity of managing the resources and
operations within the organisation to achieve its strategic goals (CSAC, 2007). For properly
allocating the resources with the purpose of cost cutting can be done within the organisation by
making effective strategies and processes to use the resources in optimum manner. Knowing scope: With the prevailing need for the organisation to lower down the cost for
upcoming one year (medium term) proper resource allocation strategies can be used. Identification of resources: For a proper resource allocation strategy the company must
identify the required resources that are easily available and the equipment that the
organisation has to attain objectives. Skills and expertise to handle the resources: It is important that the organisation should
have such skills and abilities that can make the proper use of resources and they are
assigned the roles and responsibilities to optimise performance. Lowering the dependency on a single source: The organisation must not depend
completely on the one resource and it must have a contingency plan that could help it to
overcome the undermined situations.
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 Time scheduling: Proper scheduling can help the organisation to track the performance
of the team and their efficiency of using the resources (Bencivenga, Marchegiani and
Marchiori 2019).
 Proper allocation plan: It is important to develop such a resource allocation plan that has
a balanced budget, time and measurement criteria to achieve desired results.
It can help to keep track of all the resources, properly allocate the resources and make the use
of finances in optimum manner to achieve cost cutting within the organisation (Hatch, 2018).
The major challenges that can occur with resource allocation are that the managers within the
organisation need to simultaneously manage the resources make difficult decisions and ensure
effective strategies for achieving desired outcomes.
Historical and Contemporary Organisational Theories
Organisational theory can be explained as the composition of components and concepts that
shows the interconnectivity within an organisation for increasing collaborative performance and
productivity (Black and Warhurst, 2021).
Use of Organisational Theories
There are various organisational theories such as Adam Smith Division of Labour, Marx's
Theory of Capital, Max Weber's organisational theory, Frederick Winslow Taylor's Scientific
Management theory, Henry Fayol's Administrative Principles, etc. that can be used by an
organisation for increasing its performance and productivity. The organisation can use these
theories and principles for improving and enhancing the resource management activities within
the organisation by aligning the activities together. For achieving the objective of cost cutting the
organisation must adopt such organisation theories precisely that support the optimum control on
the activities of the business (Research and Markets, 2020).
Strategic Goals Formation
For effective utilisation of finance within the organisation the strategic goals must be clear
and precise so that proper monitoring and controlling of processes can help to reduce the cost of
operations. Due to the war conditions in the Ukraine the company must focus on improving all
its activities for cost cutting. The company can make use of these theories for enhancing their
finance, marketing, operations, human resource and other activities. The marketers must
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understand the behaviour of the organisation so that they can improve the marketing activities for
achieving the goals of the organisation.
Use of Information Technology
The use of information technology can help to understand and serve the needs of the
organisation to reduce costs in all the activities (Swift, & Piff, 2014). Moreover, the human
resource activities can be helpful in cost cutting by improving the productivity of human
resource to work at optimum rates for providing higher benefits to the organisation with
minimum utilization of resources. With the help of appropriate organisation theory the company
can easily improve the overall corporate operations, precedes and functions to provide cost
cutting.
Effects on the Organisational Culture of the Company
Organisational culture can be explained as the common values, assumptions, beliefs,
practices, etc. that the people working together at a workplace develops. There are various
organisational cultures that are related to the occupation, work groups and hierarchy. The
organisational culture is developed by the individuals within an organisation as per the common
values derived from the organisation. The cost cutting activities will definitely have a great
impact on the cultural values of the organisation (Warhurst and Black, 2021). It may lead to the
fluctuations in the behaviours, beliefs, attributes and assumptions of the employees working
within the organisation.
Role of Employees on Organisational Culture
The organisational culture will be affected by the types of people hired by the organisation
and their contribution within the activities of the organisation (CIPD, 2020). The individual
employee cultures will have a great impact on the overall organisation culture because of the cost
cutting activities and will also lead to significant impact of the Ukraine war on the employee
behaviours. Organisation culture will also be affected due to the Ukraine conflict and its related
sanctions on the global workforces. The cost cutting may lead to the issues of job insecurity
within the employees at the workplace creating a disruptive workplace (Tixier and et. al., 2018).
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Role of Leaders and Managers on Organisational Culture
Moreover, the organisational culture may be weakened due to the lowering down of wages,
increasing workload, etc. of employees for cost cutting activities etc. It must be assured by the
organisation that the employees and workforce are not affected negatively during the cost
cutting, so that a positive organisation culture can be maintained.
Role Importance of Human Resource Management Skills
The human resource management activities within an organisation can be explained as the
activity of acquiring, training, directing, supervision, and remuneration of the workforce (ILO,
1998). There may be many effects of cost cutting activities on the management of human
resources.
Managing Conflicts
The cost cutting activities may require the human resource managers to acquire suitable
candidates within the organisation who accept reasonable remuneration. The cost cutting
activities may lead to the decline in the expenses of training of the employees at the workplace. It
may require the human resource managers to develop strategies to create learning and
development activities with the help of experienced staff members.
Improve Workforce Performance
In order to achieve the aim of cost cutting the HR managers within the organisation need to
maintain a proper balance of the needs and desires of employees as well as the objectives of the
organisation to achieve profitability. The organisation must focus on aligning the goals of the
employees with the goals and objectives of the organisation so that they work in optimum
manner for achieving these goals and objectives (Ward and Shortt eds., 2020). The functional
human resource management activities can help the organisation to increase the contribution of
the work force towards the achievement of organisational goals.
Adoption of Innovation in the Organisation
Innovations can be explained as the improvement, advancement or upgradation of existing
processes, products, methods, ideas, etc. within the organisation to improve performance (BCG,
2021). Innovations within an organisation can be related to the improvement or advancement of
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ideas, methods, products, processes etc. by developing new techniques or using new technology
for increasing performance.
Product or Service Innovation
There are various types of innovations within an organisation that can be undertaken for
improving the performance or achieving the cost cutting objective of the organisation (Warhurst
and Black, 2021). The company can use organisational innovation or process improvement to
optimise the development of new solutions and processes that provide cost benefits. Product
development or service innovation can be used for developing such innovative products or
services that can be sold to the customers at more beneficial rates (OECD, 2005).
Business Model Innovation
Business model innovation involves the innovation or development of the overall business
model and finding the new streams for creating revenues for the business. The organisation can
use various degrees of innovation such as incremental innovation, disruptive innovation that can
provide opportunities for cost cutting by developing effective products, ideas, methods and
processes.
CONCLUSION
It has been concluded from the above report that the business organisations face many
changes that affect their activities and operations. It has been discussed that an organisation can
use resource allocation for managing the resources effectively for lowering down the overall
cost. Moreover, organisational theories such as Henry Fayol's Administrative Principles, FW
Taylor's Scientific Management, etc. can be used within an organisation to improve its
performance. Furthermore, it has been discussed that there are many effects on organisational
culture that must be handled effectively to improve organisational performance. Along with this
human resource Management has been discussed that can be helpful in achieving the aims and
objectives of the organisation. Finally, the innovations that can be adopted by the organisation
have been discussed to attain cost-cutting objectives.
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REFERENCES
Books and Journals
BCG, 2021. Business Model Innovation Delivers Competitive Advantage. [Online] Available at:
https://www.bcg.com/en-gb/capabilities/innovation-strategy-delivery/business-model-
innovation
Bencivenga, R., Marchegiani, L. and Marchiori, M., 2019. A Process Toward a Good
Organisation?. Business Ethics and Care in Organizations.
Black, K. and Warhurst, R. eds., 2021. Organisation Studies and Human Resource Management:
An Educator's Handbook. Routledge.
Black, K. and Warhurst, R., 2021. ORGANISATION STUDIES AND HUMAN RESOURCE
MANAGEMENT.
CIPD, 2020. Contracts of employment. [Online] Available at:
https://www.cipd.co.uk/knowledge/fundamentals/emp-law/terms-conditions/contracts-
factsheet
CSAC, 2007. Analysing Resources and Capabilities. In: CSAC. Carlifornia: CSAC, pp. 123-168.
Hamilton, L., & Webster, P., 2018. The International Business Environment (4th ed.). Oxford:
Oxford University Press.
Hatch, M. J., 2018. Organization Theory - Modern, Symbolic, and Postmodern Perspectives.
Oxford:Oxford University Press.
ILO, 1998. ILO Declaration on Fundamental Principles and Rights at Work. [Online] Available
at: https://www.ilo.org/declaration/thedeclaration/textdeclaration/lang--en/index.htm
OECD, 2005. ORGANISATIONAL INNOVATION. [Online] Available at:
https://stats.oecd.org/glossary/detail.asp?ID=6873#:~:text=Definition%3A,workplace
%20organisation%20or%20external%20relations.
Research and Markets., 2020. Air France & COVID-19 Case Study, 2020: Overview of the
Global Situation, Impact on the Airline Industry & Air France, Future Outlook. Retrieved
April 16, 2021, from https://www.prnewswire.com/news-releases/air-france--covid-19-
case-study2020-overview-of-the-global-situation-impact-on-the-airline-industry--air-
france-futureoutlook-301041122.html
Swift, L., & Piff, S., 2014. Quantitative Methods for Business, Management and Finance (4th
ed.). Basingstoke: Palgrave Macmillan.
Tixier, J. and et. al., 2018. Entrepreneurship education effectiveness: what we can learn from
education and organisation studies. In International Enterprise Education (pp. 69-91).
Routledge.
Ward, J. and Shortt, H. eds., 2020. Using arts-based research methods: Creative approaches for
researching business, organisation and humanities. Springer Nature.
Warhurst, R. and Black, K., 2021. Introduction: Professionalising education in Organisation
Studies and Human Resource Management. In Organisation Studies and Human
Resource Management (pp. 1-19). Routledge.
Warhurst, R. and Black, K., 2021. The future for OS and HR educational
excellence. Organisation Studies and Human Resource Management: An Educator's
Handbook, p.46.
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