Unit 2.2 Organisational Structure
Case Study: Charles Handy's "Shamrock Organisation"
Due of COVID and other external factors, the risks of running a music festival have grown!
These unpredictable factors have increased the risks of financial disaster!
Additionally, with a greater need for sustainability, specialist equipment and providers are needed to help deliver a festival that can be considered, ‘green’ or ‘sustainable’!
Wherever possible, organisers would like to make use of circular business models (CMB) as this helps to ensure the festival is as environmentally conscious as possible, but also creates a positive marketing edge too!
Given these problems… organisers are starting to consider whether Charles Handy’s “Shamrock Organisation” model can be applied to the festival.
Can you help Charles?
“Music festivals are growing in number globally. Festivals vary in location, size, and music genre.
They include commercial multiple-day events on farmland and community-led events in public owned parks. Before One PLC (BON), a European company, has organized music festivals since 2001.
In 2016, BON converted from a private limited company to a public limited company to raise finance for expansion. BON has 60 permanent employees but also relies on temporary workers and freelancers. BON organizes five music festivals each year and has contracts with five farmers to use their farmland for an average fee of $100000. BON must clean up after a festival at an average cost of $250000 per festival. BON’s directors regard environmental sustainability as significant challenge. BON’s festival season runs from May to August. Each music festival runs from Friday to Sunday.
Each festival site takes two weeks to set-up and one week to dismantle. Each site requires security fencing, 60 stages, enough space for camping, 3000 toilets, and 25000 waste bins.
QUESTIONS FROM THE CASE STUDY
1 Define Charles Handy’s “Shamrock Organisation” model [2]
2 Identify and explain two potential advantages and two disadvantages of implementing Charles Handy’s “Shamrock organisation” in a business [6]
3 Discuss how Charles Handy’s “Shamrock Organisation” could be applied to the staffing and organization of a music festival (like BON) to address the variety of challenges and costs in organizing a music festival [10]
Charles Handy’s Shamrock Organization model is based on a flexible approach to organizing and managing a workforce. The model is named after the three-leafed shamrock, representing the three different types of workers in the organization.
1. Short-Term Contracts and Job Enrichment: The Shamrock Organization places a strong emphasis on short-term contracts and job enrichment. Short-term contracts allow organizations to adapt quickly to changing market conditions and demand, fostering agility. Meanwhile, job enrichment focuses on enhancing the quality of work for employees, making their roles more meaningful and satisfying.
2. Flexible Working Patterns: A cornerstone of Handy’s model is the promotion of flexible working patterns. This flexibility accommodates the diverse needs and preferences of employees, contributing to increased job satisfaction and, consequently, higher productivity. The organization benefits from the ability to adjust its workforce based on fluctuating demands.
Three Designations of Workers: Handy identifies three categories of workers.
1 Core Workers:
Core workers are essential, full-time employees crucial to the long-term success and stability of the organization.
They often possess specialized skills and deep institutional knowledge, contributing to the core functions of the business.
2 Peripheral Workers:
Peripheral workers are part-time or temporary employees who provide additional support during peak periods or to address specific projects.
They contribute to the organization’s flexibility by offering expertise in areas that may not require a full-time commitment.
3 Contract Workers:
Contract workers are individuals engaged for short-term projects or specific tasks.
They allow the organization to access specialized skills on a temporary basis, promoting adaptability and cost-effectiveness.
Advantages of Charles Handy’s Shamrock Organisational Model:
Flexibility and Adaptability:
- Advantage: The model allows organizations to quickly adapt to changing market conditions and demands by employing a mix of core, peripheral, and contract workers.
Cost-Efficiency:
- Advantage: Utilizing peripheral and contract workers as needed can be cost-effective, as organizations only incur labor costs when specific expertise or additional support is required.
Enhanced Productivity:
- Advantage: Job enrichment and flexible working patterns contribute to higher job satisfaction and, subsequently, increased productivity among employees.
Access to Specialized Skills:
- Advantage: Contract workers provide access to specialized skills for short-term projects, allowing the organization to tap into diverse talents without the long-term commitment.
Effective Resource Management:
- Advantage: The Shamrock Model enables efficient resource allocation, aligning the workforce with the organization’s strategic needs at any given time.
Disadvantages of Charles Handy’s Shamrock Organisational Model:
Employee Insecurity:
- Disadvantage: Short-term contracts and the reliance on peripheral and contract workers may lead to job insecurity among employees, affecting morale and commitment.
Reduced Organizational Loyalty:
- Disadvantage: The model’s emphasis on flexibility may result in reduced loyalty from workers, especially peripheral and contract employees, who may not feel as invested in the organization.
Communication Challenges:
- Disadvantage: Coordinating and communicating effectively with a diverse workforce, including core, peripheral, and contract workers, can be challenging, potentially leading to misalignment and misunderstandings.
Potential for Skill Gaps:
- Disadvantage: Depending too heavily on peripheral and contract workers may result in skill gaps within the organization, especially if core workers do not possess the required expertise.
Legal and Regulatory Compliance Issues:
- Disadvantage: Managing the legal and regulatory aspects of employing a diverse workforce with different employment statuses can be complex and may pose compliance challenges.
SUGGESTED ANSWERS TO THE CASE STUDY
1. Define Charles Handy’s “Shamrock Organisation” model [2]
Charles Handy’s “Shamrock Organisation” model is a flexible organizational structure that categorizes the workforce into three main groups: core workers, peripheral workers, and contractual workers. Core workers are essential permanent employees, while peripheral workers are part-time or temporary staff. Contractual workers are engaged for short-term projects. This model allows organizations to adapt to changing conditions and manage costs efficiently.
2. Identify and explain two potential advantages and two disadvantages of implementing Charles Handy’s “Shamrock organisation” in a business [8]
Advantages:
a. Flexibility: Handy’s model provides flexibility by allowing the organization to adjust its workforce based on demand, reducing the risk of financial disaster in unpredictable circumstances like those caused by COVID.
b. Cost-Efficiency: Utilizing peripheral and contractual workers can be cost-effective, as organizations incur labor costs only when specific expertise or additional support is needed, addressing financial challenges.
Disadvantages:
a. Reduced Employee Loyalty: Reliance on peripheral and contractual workers may result in reduced employee loyalty, affecting morale and commitment, which could be a challenge in the context of sustainability goals.
b. Communication Challenges: Coordinating and communicating effectively with a diverse workforce, including core, peripheral, and contractual workers, can be challenging and may result in misalignment and misunderstandings.
3. Discuss how Charles Handy’s “Shamrock Organisation” could be applied to the staffing and organization of a music festival (like BON) to address the variety of challenges and costs in organizing a music festival [10]
Charles Handy’s “Shamrock Organisation” could be applied to a music festival like BON to address challenges and costs effectively:
a. Flexibility in Staffing: BON could utilize a core team of permanent employees for long-term planning and coordination, supplemented by peripheral workers during peak times (festival season) and contractual workers for specific tasks such as waste management and site setup.
b. Cost-Efficient Management: By employing temporary and contractual workers for tasks like site setup, BON can control costs associated with the setup and dismantling of festival sites, contributing to financial sustainability.
c. Sustainability Goals: The model allows BON to engage specialist providers and equipment on a short-term basis, aligning with sustainability objectives. Additionally, the flexibility to adapt the workforce based on sustainability needs supports the implementation of circular business models (CBM).
d. Enhanced Responsiveness: The model enables BON to respond promptly to external factors, such as unpredictable risks and the need for sustainability, by adjusting the workforce composition as required.
In summary, Charles Handy’s “Shamrock Organisation” model offers BON the flexibility to navigate the challenges of organizing music festivals, providing a versatile staffing approach to manage costs, address sustainability goals, and enhance organizational responsiveness.
