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Chapter One: Introduction

An organization has been defined as the planned co-ordination of the activities of a number of

people for the achievement of some common, explicit purpose or goal, through division of labour

and function, and through a hierarchy of authority and responsibility. Alternatively, an

organization is a consciously coordinated social unit, made up of a group of people, who work

together on common goals on a relatively continuous basis to achieve common sets of goals

(Robbins, 2009). This means that, there is formal planning, division of labour and leadership. For

an organization to function effectively and achieve its goals, it needs resources – human beings,

buildings, machinery and equipment etc. Employees constitute the most important resource of an

organisation; for an organisation to achieve its goals, it needs employees who understand its

objectives, are committed and share in the values and culture of the organization.

According to Schein (1968) Organizational Behavior (OB) is defined as “the study and

application of knowledge about how people, individuals, and groups act in organizations. It does

this by taking a system approach. That is, it interprets people-organization relationships in terms

of the whole person, whole group, whole organization, and whole social system. Its purpose is to

build better relationships by achieving human objectives, organizational objectives, and social

objectives”. Organizational Behaviour (OB) investigates how individuals, groups, and structure

affect and is affected by behaviour within organizations. Behaviour refers to what people do in

an organisation, how they perform, and what their attitudes are. The aim of OB is to apply such

knowledge toward improving organizational effectiveness for example with issues such as

absenteeism, turnover, productivity, motivation, working in groups and job satisfaction.

Individual and group factors interact at various organizational levels to affect the attitudes and

behaviours of members of an organization.

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OB lends itself to systematic study – looking at relationships, attempting to attribute causes and

effects and basing our conclusions on scientific evidence. OB is relevant beyond the workplace

and can help understand the interactions among family members, students working as a team on

a class assignment, among others. OB as a field of study has been contributed to by Psychology,

Sociology, Social Psychology, Anthropology and Political Science. It is thus crucial for

individuals, groups and organizations to understand the key areas of OB to ensure success at the

various points of interaction.

This report provides an in-depth description and discussion of organizational behaviour issues at

Star Assurance Company Limited. The specific objective was to find out how organizational

behaviour theories are being applied in Star Assurance Co. Ltd. A group of students (The

Diamond Group) pursuing their Master of Science (MSc) degree at GIMPA, in fulfilment of the

requirements for assessment and grading for the “Managing Organizations” course, undertook to

study Star Assurance Company Limited in relation to the applicability of the theories of

Organisational Behaviour; to get a feel of the issues, concerns and challenges managers go

through in their day to day activities. The choice of Star Assurance was because it has staff

strength of over one hundred (100). Five managers were randomly selected with the same set of

questionnaire administered to them by each individual of the group.

The report is organized under four (4) chapters. Chapter One provides a general introduction to

the report, whilst Chapter Two considers a review of major literature in selected OB topics.

Chapter Three focuses on the methodolody, analysis of data and findings. Chapter Four

considers the Strength/Weakness/Opportunity/Threat analysis of Star Assurance is done with

recommendations made to improve performance based on findings.

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Chapter Two: Literature Review

In this chapter, we focus our attention on the relevant literature of researchers and scholars who

have made contributions to the various related areas of OB. This section is structured to look at

Workplace motivation systems, Organizational design, Organizational culture, and

Organizational leadership, power and political systems.

Workplace Motivation Systems

The word motivation is coined from the Latin word "movere", which means to move. Motivation

is defined as an internal drive that activates behavior and gives it direction. The term motivation

theory is concerned with the processes that describe why and how human behavior is activated

and directed (Romando, 2010). The two main categories of motivation theories are the content

theories, and process theories (Shah & Shah, ). Also known as the needs theory, the content

theory of motivation mainly focuses on the internal factors (needs) that direct human behavior,

whilst the Process theories of motivation provide an opportunity to understand thought processes

that influence behavior.

Needs (Content) Theories

Abraham Maslow’s “Need Hierarchy Theory”:

This theory has received wide recognition, particularly among practicing managers mainly due to

its intuitive logic and ease of understanding. Psychologist Abraham Maslow saw human needs in

the form of a hierarchy, ascending from the lowest to the highest, and he concluded that when

one set of needs is substantially satisfied, the next need becomes dominant. These needs are:

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(i) Physiological needs: These are important and basic needs for sustaining the human life. It

includes food, water, warmth, shelter, sleep, medicine and education. Maslow writes that “for the

man who is extremely and dangerously hungry … he wants only food (Maslow, ).

(ii) Security or Safety needs: These are the needs to be free of physical danger and of the fear of

losing a job, property, food or shelter. It also includes protection against any emotional harm.

These needs go beyond physical safety and include order, stability, routine, familiarity and

control over one’s life and environment (Schiffman & Kanuk, 2009).

(iii) Social needs: Since people are social beings, they need a sense of belonging and to be

accepted by others. People try to satisfy their need for affection, acceptance and friendship by

developing interpersonal relationships and maintaining strong family ties.

(iv) Esteem needs: According to Maslow, once people begin to satisfy their need to belong, they

tend to want to be held in esteem both by themselves and by others. It includes both internal

esteem factors like self-respect, autonomy and achievements; and external esteem factors such as

status, prestige, recognition and attention.

(v) Need for self-actualization: Maslow regards this as the highest need in his hierarchy. It is the

drive to become what one is capable of becoming; it includes growth, achieving one’s potential

and self-fulfillment. In Maslow’s own words, “what a man can be, he must be.” (Maslow, )

Figure 1 (Appendix I) depicts the Maslow’s Heirarchy of Needs.

Clayton Alderfer’s ERG Theory

Alderfer’s ERG (existence, relatedness, and growth) theory indicates that the existence need is

concerned mainly with activities and satisfactions that provide basic material existence.

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Relatedness refers to the need to maintain interpersonal relationship with other members in the

group. The Growth need is the intrinsic desire to grow and develop personally. The major

conclusions of this theory are:

1. In an individual, more than one need may be operative at the same time.

2. If a higher need goes unsatisfied then the desire to satisfy a lower need intensifies.

3. It also contains the frustration-regression dimension.

Frederick Herzberg’s motivation-hygiene theory (two-factor theory)

It states that there are certain satisfiers and dissatisfiers for employees at work. Intrinsic factors

are related to job satisfaction, while extrinsic factors are associated with dissatisfaction. Herzberg

states that the presence of certain factors in the organization is natural and the presence of the

same does not lead to motivation. However, their absence leads to demotivation. Hygiene factors

include security, status, relationship with subordinates, personal life, salary; whilst motivational

factors include growth prospectus, job advancement, responsibility, challenges, recognition and

achievements.

McClelland’s Theory of Needs

David McClelland also developed a theory based on three types of motivating needs:

1. Need for Power (nPow) – such people are inclined towards influence and control. They

like to be at the center and are good orators. They are demanding in nature, forceful in manners

and ambitious in life. They can be motivated to perform if they are given key positions or power

positions.

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2. Need for Affiliation (nAff) - these people who are social in nature. They try to affiliate

themselves with individuals and groups. Social recognition and affiliation with others provides

them motivation.

3. Need for Achievement (nAch) – such people are driven by the challenge of success and

the fear of failure; they are motivated to perform when they see at least some chances of success

with a moderately difficult task.

Process Theories of Motivation

Equity Theory

As per the equity theory of J. Stacey Adams, people are motivated by their beliefs about the

reward structure as being fair or unfair, relative to the inputs. People have a tendency to use

subjective judgment to balance the outcomes and inputs in the relationship for comparisons

between different individuals. Accordingly, if people feel that they are not equally rewarded they

either reduce the quantity or quality of work or migrate to some other organization. However, if

people perceive that they are rewarded higher, they may be motivated to work harder. This

theory is depicted in the diagram in Figure 2 (Appendix I).

Vroom’s Expectancy Theory:

The most widely accepted explanation of motivation has been propounded by Victor Vroom. The

theory simply states that an employee can be motivated to perform better when there is a belief

that better performance will lead to good performance appraisal and that this shall result into

realization of personal goal in form of some reward. Therefore an employee’s motivation is

defined as: Motivation = Valence x Expectancy

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The theory focuses on three things: Efforts and performance relationship, Performance and

reward relationship, and Rewards and personal goal relationship as depicted in Fig. 3 (App. I).

Goal Setting Theory of Edwin Locke

Specific and pronounced objectives for a task help in achieving them faster. As goal clarity is

high, goal orientation avoids any misunderstandings in the work of the employees. The goal

setting theory states that when the goals to be achieved are set at a higher standard, employees

are motivated to perform better and put in maximum effort. It revolves around the concept of

“Self-efficacy” i.e. individual’s belief that he or she is capable of performing a hard task.

Reinforcement Theory

B. F. Skinner, who propounded the reinforcement theory, holds that by designing the

environment properly, individuals can be motivated. He states that work environment should be

made suitable to the individuals and that punishment actually leads to frustration and de-

motivation. Hence, the only way to motivate is to keep on making positive changes in the

external environment of the organization.

Organizational Design

Organizational design is the process of making the specific choices about how to arrange the

tasks and job relationships that comprise the organizational structure. Autry (1996) defined an

organizational design as “a process for improving the probability that an organization will be

successful by assessing and re-shaping structure and positions to better meet (business) goals. It

is a formal, guided process for integrating the people, information and technology of an

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organization”. The definition indicates that organizational design is about the physical layout of

structures and how positions are determined in order to enable the employees of an organization

to work and relate to each other or their superiors in a harmonious manner. It is used to match

the form of the organization as closely as possible to the purpose(s) the organization seeks to

achieve. Through the design process, organizations act to improve the probability that the

collective efforts of members will be successful. In all of this, the organizational structure is also

of vital importance and is the formal system of tasks and job reporting relationships that

determine how employees use resources to achieve the organization’s goals.

An organizations structure needs to be such that it enables it to respond to the set of factors or

conditions that affect it the most and cause it the most uncertainty. Three important

contingencies that have to be factored into the design of organizational structure are:

(1) The nature of the organization’s environment

(2) Advances in technology, and

(3) The characteristics of an organization’s human resources (George & Jones, 2008).

Organizational design is therefore “the process of creating a structure that best fits a purpose,

strategy, and environment” (DuBrin, 1997, p.212). An organizational design is very crucial to the

success of any business organization because a well structured design motivates employees to

perform well by enabling them to know who is responsible for which job, who to report to, and

even how to compensate employees’. The process of organization design is to match people,

information, and technology to the purpose, vision, and strategy of the organization. The

structure is designed to enhance communication and information flow among people. Systems

are designed to encourage individual responsibility and decision making. Technology is used to

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enhance human capabilities to accomplish meaningful work. The end product is an integrated

system of people and resources, tailored to the specific direction of the organization.

Organizational Culture

Organizational culture was once seen as “how things are done” (Drennan, 1992) but has since

evolved into a facet of management with a robust range of literature affording a far deeper

understanding. Schein’s (1985) definition can be summed up as the learned product of group

experience which affects the behavior of individuals. Organizational culture is the set of shared

values, beliefs, and norms that influences the way employees think, feel, and behave toward each

other and toward people outside the organization. An organization’s culture controls the way

employees perceive and respond to their environment, what they do with information, and how

they make decisions.

Organizational culture is differentiated from organizational climate in that it is not as explicit.

Organizational culture is also differentiated from organizational structure in that structure has

more to do with the relationships between individuals in an organization. Closely tied to

organizational culture is organizational ethics which are the moral values, beliefs and rules that

establish the right or appropriate ways in which one person or group should interact and deal

with another person or group. They are a product of individual, professional and societal ethics.

Culture has been pinpointed as an essential element of Japan’s resurgence after world war II

making it an important area to study for organizations. Schein (1990) touted culture as “a pattern

of shared basic assumptions a group learns as it solves its problems of external adaptation and

internal integration, that is considered valid, is taught to new members as the correct way you

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perceive, think and feel in relation to those problems”. An organization's culture is, in part, also

created and maintained by the organization's leadership. Executive level leadership is the

principal source for the generation and re-infusion of an organization's ideology, articulation of

core values and specification of norms. An organization's culture generally evolves from the

interaction of the following factors:

The personal and professional characteristics of people within the organization

Organizational ethics

The nature of the relationship between a company and its employees, and

The design of the organizational structure (Source: ………………………..).

[ Fig. 4 (Appendix I) shows various ways of transmitting organizational culture.]

Budd (2005) noted that organizational culture is not a force which only acts in one direction

upon the individuals in an organization but is also acted upon by the individuals within an

organization. Early research suggested that strong cultures, or those with widely accepted beliefs

within the organization, performed better than those with a lack of shared values (Peter and

Waterman, 1982; Pascale and Athos, 1986; Deal and Kennedy, 1982). However, when culture is

too strong it can lead to stagnation and a reduced ability to adapt to changes in the environment

(Cloke and Goldsmith, 2002). In reference to organizational culture and leadership, Schein

(1985) actually predicts that the culture of the future would be the one that heavily promotes

active learning and training. Tools for measuring organizational culture include Organizational

Culture Profile developed by O’Reilly (1991) and the Competing Values Framework by Quinn

and Rohrbaugh (1983).

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Organizational leadership, power and political systems

Researchers often disagree about which characteristics best describe leadership; in general, two

types of leadership styles are regarded as most important. Leadership firstly, involves exerting

influence over other members of a group or organization. Secondly, leadership involves helping

a group or organization achieve its goals. Leadership can therefore be defined as the exercise of

influence by one member of a group or organization over other members to help the group

achieve its goals (Yukl, 1989). A leader is an individual who is able to influence group or

organizational members to help the group or organization achieve its goals. An effective leader

helps achieve goals; an ineffective one does not.

Two of the early approaches to leadership are: (1) the Leader Trait Approach which sought to

identify enduring personal traits that distinguish leaders from followers and effective from

ineffective leaders. (2) the Leader Behaviour Approach which rather focuses on what leaders

actually do with the argument that effective leaders perform certain behaviours, which may

include consideration, initiating structure, rewarding behaviour, and punishing behavior (George

& Jones, 2008, p393 – 394). Other contingency approaches takes into account both the

characteristics of leaders and the situations in which they are to lead. The Path-goal theory

describes how leaders can motivate their followers to perform at high levels and keep them

satisfied. The Vroom and Yetton approach deal with the extent to which leaders should involve

their subordinates in decision making, while the Leader-member exchange theory takes into

account the fact that leaders often do not treat each of their subordinates equally but instead

develop different kinds of relationships with different subordinates. The various perspectives add

to an understanding of what makes leadership effective in organizations.

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Whenever people come together in an organization, their activities must be directed and

controlled so that they can work together to achieve their common purpose and goals; with

leadership comes the need and importance of power. Power is defined as the ability of one

person or group to cause another person or group to do something they otherwise might not have

done. Power thus provides the principal means of directing and controlling organizational goals

and activities (Dahl, 1957; Emerson, 1962). The sources of organizational powers have been

distinguished into two: formal and informal power. Formal power originates from a person’s

position in the organization’s hierarchy. This follows from an individual accepting a position in

an organization. Formal power equips an individual with legitimate, reward, coercive and

information power. Informal power however, derives from an individual’s personal

characteristics such as personality, skills and capabilities.

Individuals employ various tactics to increase their power. Some cultivate both people and

information and build up a personal network of contacts in the organization – contacts they can

use to pursue their personal goals. Individuals generally seek to be in control or be found to be in

control and so engage in various activities to accomplish this. This is called organizational

politics.

Organizational politics refers to behaviours “that occur on an informal basis within an

organization and involve intentional acts of influence that are designed to protect or enhance

individuals’ professional careers when conflicting courses of actions are possible” (Drory, 1993;

Porter, Allen & Angel, 1981). Organizational politics can also result in segregations in the

workplace where individuals take sides with some other individuals or groups and share

information with such individuals or groups. Such politics are motivated by the quest for power

within an organization and can be harmful to its success if not carefully managed.

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Chapter Three: Methodology, Analysis and Findings

Methodology

Contemporary research on factors that affect employees’ performance in an organization are well

documented; these researches focuses primarily on interpersonal processes between individuals

normally leaders and followers, communication, employees’ perception of organizational politics

as well as its antecedents and consequences (Drory, 1993; Ferris et al., 1989; Ferris & Kacmar,

1992; Gandz & Murray, 1980). However, research is yet to unravel:

How organizational design affects individual performance?

How organizational culture influences employee performance?

How leaders use politics as a method of influence?

Specifically, this study examines how employees’ performances are affected by organizational

design, culture, motivation and leadership and political systems in the organization. Having

settled on Star Assurance Co. Ltd. as the case study, researchers individually administered the

questionnaires to the managers randomly selected. In all each researcher/group member

administered the same questionnaire, bringing the total questionnaires administered to five. The

questionnaires were administered through personal interviews by the researchers to five (5)

managers. All the people interviewed were located at the Ridge branch office of the company.

The five interviewees used for the study occupied the positions of Manager (Broker Relations

Workgroup), Manager (Reinsurance, Research & Investment), Assistant Manager (Broker

Relations), Manager (Corporate Relations) and Head of Technical Operations. Analysis of data is

done based on the individual sections of the questionnaire used. A sample of the questionnaire is

attached as Appendix II.

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General View of Respondents

This aspect of the interview covered the roles, expectations and general views of selected

interviewees (managers) in relation to their position at Star Assurance. Responses show that to

be qualified for consideration to a managerial position at Star Assurance, academic or

professional qualifications are equally important as work experience. One either rises through the

ranks to such a position or is strategically poached from another company. Our interview of the

managers revealed that they were all university graduates with a first degree and also either had a

master’s degree or were pursuing one. Most of them were either qualified professionals or had

made significant progress in their professional education. Some of the managers responded that

they look for personal characteristics, experience in the field and then education in those they

consider for employment with Star Assurance. The managers are variously evaluated by either

the Head of Technical Operations or the Deputy Managing Director (DMD). This evaluation is

mainly based on the performance or output of each manager in meeting targets set at the

beginning of each year. These targets are reviewed quarterly following job appraisals.

According to the managers, interpersonal skills is very important since they usually get things

done through other people. They further mentioned that when a manager has good interpersonal

relations with his subordinates, it enables them assign and allocate tasks to their subordinates

based on their skill sets and abilities; they easily know which employee can best handle a

particular task. Aside that, it motivates the employees’ and they try to put in their best for the

company. Star Assurance operates in the services industry and because their products are

intangible, dealing with clients require a very friendly and welcoming disposition. They receive

clients with open arms and smiles. Everybody has to wear a smiling face all the time. Dress code

at Star Assurance is also very important. Employees must appear officially dressed at all times.

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Some of the rewards of being a manager other than financial include networking (one gets the

opportunity meet and interact with a lot of business people) and the experience acquired through

the interaction with people of different backgrounds, personalities and “views of the world” is

quite enriching. The greatest frustrations of being a manager at Star Assurance include inability

to meet targets set despite having put in one’s best, managing other people and being called upon

to make crucial decisions in the heat of things with its far reaching implications. The company’s

communication flow could be described as vertical. Information normally flows from the CEO or

the top management to the lower level staff and back through the same channels to the top.

Managers get information relating to happenings within the company from their superiors and

also cascade same downwards.

Organizational Overview

Star Assurance Company Limited was incorporated in 1984 and is licensed under the Insurance

Law, 1989 (PNDCL 227) to carry on composite insurance business in Ghana. The company,

which commenced business in April 1985, is now among the top five insurance companies in the

country. The company's capability in handling all classes of general insurance is reflected in the

skills and expertise of its staff. The company's management team is made up of seasoned

chartered insurers, marketers, accountants and lawyers, most of whom have over ten years

experience in the insurance industry. The company has its head office in Accra, with fifteen (15)

branch offices. The company operates agency offices in the Central, Upper West and Upper East

regions.

Vision – To be a leading Ghanaian insurance company with sustained world-class performance

in the provision of financial security products.

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Mission – To provide world class financial security products through excellent customer service,

professionalism and innovation.

This is to be achieved by:

Making customer satisfaction our topmost priority.

Providing a congenial work environment for our staff.

Investing in the development of our staff and thereby boosting productivity.

Motivating staff and commission sales representatives to strive for higher performance by

providing the appropriate incentives.

Providing innovative products to meet the changing needs and wants of the insuring

public.

Improving the company's productivity through the computerization of its key business

processes.

With twenty-five years of operational experience, Star Assurance has emerged as the biggest

indigenous private insurance enterprise in terms of assets, and the second biggest private

enterprise in Ghana in terms of premium income. With a 2009 gross and net premium of GH¢

19.13m and GH¢ 11.72m respectively, the company has been awarded an international “A”

rating status denoting a high claims paying ability.

The most obvious stakeholders of Star Assurance are its employees, owners, customers and the

insurance regulator. It has indirect stakeholders such as competitors, the industry, the

government, and the environment. Competition in the insurance industry in Ghana is getting

keener and as result Star Assurance’s strategy is to have close interactions with its clients which

allow the company to get to know their problems and offer solutions. The company operates a

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vertical organizational structure. The hierarchy of authority revolves around the CEO/MD the

Executive Directors and the Deputy Managing Director. Below them is the Head of Technical

Operations and the unit heads. The company is a member of Ghana Club 100.

Organizational Design

The relationship between managers and their employees is fundamental to an organization’s

success. The alignment of managers and employees is much like the spine of the organization.

An organization that uses strategic organizational design to create a well-aligned “spine” can

maximize employee potential and productivity according to Capelle Associates Incorporated.

Our interview indicated that Star Assurance has realized the importance of organizational design

to its success and has therefore paid good attention to its design. The organizational design at

Star Assurance is the manager-direct report relationship type where the manager is one level

above the employees. The company operates a vertical organizational structure. Activities are

organized and coordinated by the formal hierarchy of the organization. At Star Assurance the

final decision-making authority is vested on those highest in the vertically structured hierarchy.

Employees are also included in decision making; however, the final decisions usually were made

by top management. There is division of labour, departmentalization (workgroup system) and a

span of control. But the span of control is a weak one with managers having more than 7

subordinates; one manager even had a span of control of 12.

An organizational structure could not be readily made available to us. However, a description of

the design indicated that the company in 2006 made a switch from the traditional unit into the

work group concept; prior to the change, the company operated with separate departments for

every insurance product, for example, there was the fire department, motor department, etc. this

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system inhibited growth as employees in a particular department were ill informed of the

functions and operations of other departments. The change to the work group concept resulted in

Star Assurance being organized around three main departments according to the type of clients

served. These are:

Broker Relations – this section deals with all insurance products (life and non-life)

relating to brokers.

Corporate Relations – this section deals with all insurance products (life and non-life)

relating to corporate organizations.

SME & Retail Relations – this section deals with all insurance products (life and non-life)

relating to small and medium sized enterprises and individuals.

This new design of work structure has been very effective in promulgating the company to its

new heights as it is able to provide customer satisfaction through effective and efficient delivery

of services.

Workplace Motivation Systems

Motivation in the workplace is valuable in terms of both revenue and production. Organizations

are run by people and as a result there should be a way of making them work continually for the

success of the organization. Motivation drives people to do more or put extra effort in whatever

they do. At Star Assurance, the company realizes that motivation is vital for the success of the

Company and has set up formal and informal structures for rewarding employees that behave or

perform according to standards. These rewards consist of a mix of internal rewards, such as a

lunch outing or even benefitting from having to drive the car of the MD/CEO over a weekend.

These reward systems tend to address the five universal needs Maslow regards as a necessity to

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improve performance. Some of the extrinsic motivational rewards identified as available to

various categories of staff are the quarterly best worker awards scheme, where employees and

workgroups who distinguish themselves are given huge amounts of money for sharing, and

bonuses.

Intrinsically, employees are motivated by the recognition of their hard work by their managers,

also managers explain how their work improves the company or makes a difference. They are

also made to set targets for themselves, the achievement of these targets yields satisfying

rewards. As one respondent puts it, “we are generally healthy and happy with the work we do”;

this supports the goal setting theory of motivation. Also, because financial rewards is linked with

performance, it indicates that Star Assurance have put in place mechanisms that support Vroom’s

Expectancy theory; because workers know that rewards are linked with performance, they put in

more effort so that they can get sufficient rewards. This is further strengthened by the fact that

mid-year bonuses were not paid despite the efforts of staff which resulted in reduced

performance due to reduced motivation (expectancy); however, the payment of end of year

bonuses reinforced worker motivation and at the time of the interview, work was going on

smoothly.

Organizational Culture

Star Assurance exudes a high level of professionalism ensuring that seamless services are

provided in a timely manner. Star Assurance’s belief is inducing a passion for excellence in their

employees and returning exceptional value to their stakeholders and society. The culture of Star

Assurance embodies its collective symbols, visions and heroes of the past and the present. For

instance, Star Assurance’s culture is expressed in the collective pride of its accomplishments

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(normally the awards it has received, e.g., Best Insurance Company in 2001 by CIMG; Best

Insurance Company in 2005, INDUTECH National Awards).

Star Assurance has received a number of awards for its services and employee’s are proud of this

accomplishment. There are paintings and pictures of Star Assurance receiving these awards on

its walls. In other words, values important to the Company are illustrated through stories about

past successes and failures (these form a living history which guides managers). The type of

culture at Star Assurance is the “hard work / play hard” organizational culture. This is because

the Company is large and dependant on strong customer service. Because of this, a general

standard of behavior is expected, so every worker knows to some extent what is expected of

them at the beginning of each day. This helps create unity and increased general worker

efficiency. At Star Assurance, newly employed staffs are socialized through an orientation

program, get together dinner for all employees, having lunch or breakfast together at the

company canteen, weekend sporting activities, etc. The culture at Star Assurance can be seen as

a strong motivating force by embodying the values sanctioned by the Company, framing the

boundaries of acceptable attitudes and behavior and creating a shared ethos.

Moreover, to instill such core values in its workers, the company has developed a Mentorship

Programme that enables workers to select managers they are comfortable with as their mentor.

Their mentor guides and advices them in both work and personal related problems. Also, to

ensure that employees are always reminded of its culture, the company’s culture has been

organized into core values that are placed on the walls of every unit. These core values read

“Professionalism, Innovation, Teamwork, Ownership and Winning Spirit.”

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Organizational Leadership, Power and Political System

Our interview revealed that leadership and political powers rests on the CEO/MD of the

Company, the Executive Directors and the Deputy Managing Director. But managers also have

the authority to act or influence people and so are a part of the leadership and political system of

the Company. We also discovered that there is no workers union at Star Assurance. The main

reason given by the respondents was that privately owned organizations or companies in Ghana

do not have workers unions and particularly also because past experiences of the founder of the

company led him to bar workers union. On the other hand, it is said that to entrench a sense of

belongingness and openness, all issues agitating one’s mind can receive the direct attention of

the CEO/MD, if the direct line manager fails to answer or respond to the satisfaction of the staff

concerned. It can be said that even though there is no workers union at Star Assurance, the

employees are to a very large extent happy with the way the leaders give attention to them during

decision making process and also take up their requests seriously. Understanding of

organization’s political systems at Star Assurance shows that the leaders use political leverage

available to them under different situations in order to promote the organizational interests as

well as their personal interests. Leaders exploit organizational politics to progress further in the

organization. This is done by:

Timing the opportunity to highlight their contribution

Ensure top management support for difficult decisions or initiatives

Show respect for hierarchy in spite of the hurdles that it may create

Lobbying for promotion by developing special relationships with executive management.

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Chapter Four – SWOT Analysis, Recommendations & Conclusion

SWOT Analysis

After a careful analysis of responses gathered from the managers interviewed, a strength-

weakness/opportunity-threat analysis done with respect to data gathered on organizational

design, culture, motivation and leadership, power and politics revealed the following strengths

and weaknesses:

Strengths:

1. Good Organizational Design – Star Assurance boasts of an effective and efficient

organizational design organized around its major clients in order to provide specialized services

towards clients. The use of the work group design has improved work dramatically since 2006

and taken the company to the heights it enjoys today including the international ‘A’ rating. The

advantages of the system in use is that all workers in a single unit can handle any type of

insurance service requested (whether life or non-life) as opposed to the traditional unit where a

fire department worker cannot undertake motor insurance. This has resulted in improved work

speed and the ability of other workers to perform colleague’s tasks where they are unavailable.

Also, it has resulted in a versatile and knowledgeable workforce that promotes organizational

effectiveness.

2. Organizational Structure – the change to work group design has resulted in a flat

organizational structure which is positive for decision making and communication flow.

3. Strong Organizational Culture – the stress on a strong culture embodied in the five core

values of “Professionalism, Innovation, Teamwork, Ownership and Winning Spirit” is also

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largely responsible for the success of Star Assurance as it provides a serene work atmosphere

where workers are absolutely professional in every detail of their tasks. The stress on teamwork,

innovation and a winning spirit urges employees on to greater heights.

4. Good Decision Making – employee involvement in decision making and targets for

achievement enables employees to feel part of the organization and own their targets thus

working hard to achieve them. Decisions made are therefore well known and communicated

amongst employees.

5. Good Motivational Indicators – the use of Vroom’s expectancy theory through linking

rewards to performance, and the goal setting theory by allowing employees to develop their

targets for achievement which when achieved creates a sense of fulfillment indicates that

motivation at Star Assurance is very high. Intrinsic and extrinsic motivators also exist at Star

Assurance in order to fulfill the needs expectations of workers.

6. Mentorship Programme – the existence of a mentorship programme that enables workers

to choose managers they are comfortable with as their mentors also serves as a means of

encouraging lower level employees to continue to strive to get to the top. This programme

provides various means for addressing employee problems and conflicts; learning from an

experienced and successful manager at Star Assurance shapes employees for a better future at

Star.

7. Workforce Diversity – the company boasts of a young, dynamic workforce from different

ethnic and religious backgrounds. The blend of diversity encourages creativity and innovation.

The ability to have an active workforce diversity with no problems provide more options for Star

Assurance, and this is also responsible for the company’s performance so far.

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8. Successful change management processes – having successfully made the change from

traditional units to work groups which have resulted in effectiveness and efficiency at Star

Assurance indicate the company undertakes changes when the need arises and such changes are

done carefully and constructively to ensure it benefits the organization as planned.

Weaknesses:

1. Communication – despite the flat nature of the organizational structure, communication

in the company is yet to reach desired levels. Limited flow of information slows work and results

in frustrations.

2. Employee Grievance Handling – with the employees having no worker union, employees

are permitted to report to top management directly when they feel their immediate superior is not

doing enough to address their concerns; the problem with such system is the internal conflict it

creates and the friction between employees and their immediate superiors when employees go

beyond them to report their grievances to higher level management. It makes immediate

superiors feel they are inefficient and this tends to create some form of enmity amongst

employees and superiors. To prevent this, most employees will just ignore their grievance

whether or not their immediate superiors are doing everything they can to solve their concerns.

3. Understaffing – some departments are understaffed and though according to the head of

technical operations this issue is being overlooked so that workers can go the extra mile and not

remain idle, the issue of understaffing slows work and overworks the employees in the unit that

is understaffed. Stressing out workers can have negative effects on worker performance.

4. Large span of control – with managers directly responsible for twelve or more workers, it

represents a large span of control which results in poor supervision of subordinates. The

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preferred span of control according to literature is 7, therefore having more than seven can affect

performance of managers. This is summarized by one respondent as “quite difficult”.

Recommendations

Employees are important because they are life blood of an organization and therefore they need

to be handled well in order to make them happy to give off their best for the success of the

company. Employees function effectively and efficiently when they are in good condition and

work in a conducive environment as well. The following recommendations are made to enable

employees to give their best at Star Assurance to improve its performance beyond its current

operational performance:

There should be regular reviews of employee performance to ensure that workers are at

giving their best at all times.

Formal structures should be set in place for training and development.

Communication flow should be improved by ensuring formal communication processes

are adopted at Star Assurance. Some of these processes could include communication

through notices, emails to staff, and regular staff meetings with unit heads, among others.

The organizational structure of the company should be properly laid out and

communicated to all staff.

The company must design formal grievance handling procedures that will not create any

form of tension between workers and superiors.

Employee involvement in decision making should be improved as major decisions are

only made by top management.

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Span of control of managers should be reviewed to enable managers supervise

subordinates effectively.

Conclusion

A careful look at the results of this study indicates that the study has been a successful exercise.

The findings of this study have led to the conclusion that employee performance is affected by

factors such the organizational design, culture, workplace motivation and organizational

leadership and political systems.

Star Assurance places high emphasis on its workers and as such strive to create an enabling

environment for them to perform effectively. Workers are well motivated and work has been

designed to suit the nature of work. Leadership in the organization has been more liberal which

have ensured closeness between workers and management; thus, they all regard themselves as

one big family.

The importance Star Assurance has placed on people management and organizational behavior

has resulted in its consistent success which has seen it emerge as one of the best insurance

companies in Ghana today. A careful consideration of the other organizational behavior issues

raised and the recommendations made will enable the company achieve even greater heights.

This applies to all organizations.