Introduction to People,

Organisations and
Management
 TABLE OF CONTENTS

Introduction....................................................................................................................................1

Analysis...........................................................................................................................................3

Organisational Structure..............................................................................................................3

Barclays Structure........................................................................................................................5

Recommendation.........................................................................................................................8

Leadership....................................................................................................................................9

Leadership Issue at Barclays......................................................................................................10

Recommendation.......................................................................................................................12

Conclusion....................................................................................................................................13

References.....................................................................................................................................15

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Introduction

Barclays is a British multinational investment bank and financial services company which was

founded in 1690 and is located in London, United Kingdom. The company is segregated into

four core business functions namely, personal banking, corporate banking, wealth management

and investment management. Barclays bank exists in more than 50 territories including Europe,

Asia, America and Africa and consists of more the 48 million customers. The company’s main

functions are moving, lending, investing and protecting money for customers and clients

worldwide. Barclays’ purpose is ‘Creating opportunities to rise’. They pride themselves on being

a company of opportunity makers working together to help people rise – customers, clients,

colleagues and society.

This paper will highlight the organisational structure and leadership at Barclays. It will discuss

the issues relating to these two areas and provide recommendations to solve the issues.

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Analysis
Organisational Structure

Minterzberg (1972), describes the organisational structure as the framework of the relations on

jobs, systems, operating process, people and groups making efforts to achieve the goals. An

organisational structure as defined by Child (1977), comprises of all the tangible and regularly

occurring features which help to shape the behaviour of its employees. Organizational structure

can be furthered explained as a set of methods dividing the task to determined duties and

coordinates them. The structure is illustrated in the form of an organisational chart which shows

the relations.

An organisational structure should be aligned to its environment and internal systems. This is

necessary for the effectiveness of the company’s progress and productivity. A well designed

organisational structure takes fit or alignment into consideration. Misaligned structures will not

fit its environment and internal systems and therefore will be less effective. Differentiation and

integration are also fundamental to an organisation structure. According to Lawrence and Lorsch

(1965), differentiation refers to division of labour in which work is broken down into its

component pieces and assigned to specialists in various parts of the organization, while

integration refers to the need to coordinate and meld the divided activities into a whole outcome

(product or service).

There are various types of organisational structures. These are:

 Hierarchical structure – the authority starts from the top and goes down to the bottom.

All lower level staff reports to a Supervisor.

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  Functional structure – the authority starts from the top and goes down to the lower

levels. However, employees are organized according to their specific skills and their

corresponding function in the company. Each department is managed independently.

 Horizontal or flat org structure – this structure has few levels between management

and lower employees. This is mostly used for small companies or business at start-up

level. There is less supervision in this type of structure and more involvement from all

employees.

 Divisional structures - in this structure the company various departments have control

over their own resources and operates like their own company within the larger company.

Each department has its own teams, such as marketing, IT. This empowers the

department to make decisions without everyone having to report to executives.

 Matrix structure – this structure looks like a grid and shows cross-functional teams that

form for special projects. The organisational structure accounts for both of these roles and

reporting relationships.

 Team-based structure – this organisational structure is meant to disrupt the traditional

hierarchy and focuses more on problem solving, cooperation, and giving employees more

control. It is built by teams based on the work required.

 Network org structure – this structure takes into consideration the spread of resources.

It can also describe an internal structure that focuses more on open communication and

relationships rather than hierarchy.

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Choosing a correct organisational structure is important for the effectiveness of a productive

company. A good organisation structure is necessary for better management, which helps to

improve teamwork and productivity. However, there are some factors which can affect the

choice of an appropriate structure for an organization. These factors are: size, life cycle,

strategy, environment, and technology.

Barclays Structure

Barclays operated from a hierarchical organisational structure. This structure helped Barclays to

define its levels of authority and responsibility. It showed who each person reported to and

motivated employees and created camaraderie between employees within the same department.

As the years went by Barclays started experiencing issues. Some of the issues experienced were,

a slowdown in innovation and important changes due to bureaucracy. Employees started acting

in interest of the department instead of the company as a whole. Lower levels employees felt as

though they could not have expressed themselves and ideas to their superiors.

Figure 1 - Barclays Old Structure

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Due to the financial crisis that began in 2008, the Government of the United Kingdom was

forced to ask the banking sector to reform their process and introduce ring-fencing of day-to-day

banking services with the aim to strengthen the financial system (Barclays website). This ring-

fencing required all the banks in the United Kingdom to separate their risk-taking investment and

their consumer deposit. With this requirement Barclays was now forced to change its

organisational structure in order to meet the legal requirement or face the reality of losing its

licence to operate in the United Kingdom.

As such in March 2016, Barclays was required to change their structure and to operate through

two principal business divisions: Barclays UK and Barclays International. This new structure

was new and strange. This change in structure now became a challenge to Barclays since there

proved to be a struggle in figuring out how to reorganise the bank under the ring-fencing project

and the problem of expected job cuts. Over 30,000 jobs were at stake. This would sure be

devastating to many employees.

In 2017, Barclays made significant progress reorganising the business to enable a sharper focus

on its strengths as a transatlantic consumer and wholesale bank with global reach. Products and

services designed for the larger corporate, wholesale and international banking clients continued

to be offered by Barclays International from within Barclays Bank PLC (Business Insider 2017).

Finally, on the April 1, 2018, Barclays UK was formally separated and the division was now a

new legal entity – Barclays Bank UK PLC – which became the UK ring-fenced bank.

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The Group Service Company delivers critical infrastructure services to businesses within the

Barclays Group and enhances operational continuity for the business units, facilitating the

execution of recovery and resolution plans in the event of financial difficulty. It will also

become a centre of excellence for services required by the business, such as fraud management

and cyber security, reducing duplication and promoting best practice across our businesses.

(Barclays website). The new organisational structure, now afforded Barclays to bring

complementary businesses more closely together, it created an enhanced focus on its client

proposition and offering across all target sectors.

Figure 2 - Barclays New Structure

Efficient decisions and adaption to changes can be made easily when a company is not bottled

neck. Having a Hierarchical structure can create bottlenecks. This can hamper decision-making

process, which will be counter-productive and have a negative effect on revenue.

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Recommendation

Barclays could have introduced a team to research current strategies and growth in order to have

their operations streamlined to benefit internationally since they are located several places.

Having a hierarchical structure proved to be less beneficial to the company over the years.

Because Barclays is located at various places and countries, it can be recommended that they

develop a divisional structures. The various locations will have their own control over their own

resources and operates like their own company within the larger company. With the divisional

structure, higher efficiency can be demonstrated in coordinating activities among divisions, there

can be greater flexibility in responding to changes in the local market and divisional expertise

can be more specialized.

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Leadership
Leadership is the process of influencing others to understand and agree about what needs to be

done and how to do it, and the process of facilitating individual and collective efforts to

accomplish shared objectives (Yukl, 2013, p. 23). Leadership is an important and central part on

management and organization behaviour (Schwandt and Marquardt, 2000). Leaders are required

to be strategic and aware with what is happening with the organization. Bass’ theory of

leadership continues to emphasize that people can decide to be leaders, meaning that they can

learn leadership skills (Spillane and Diamond, 2004).

Leadership can be placed on a scale from hierarchical to transformational. At the hierarchical

end, leadership is viewed as one of “power over,” the ability to exercise authoritative dominance

over others through hierarchical position, physical might or control of resources. This form of

leadership is agentic and is more commonly ascribed to men than women. Leaders who exhibit

agentic qualities have been commonly and traditionally described as aggressive, ambitious,

dominant, forceful, independent, daring, self-confident and competitive (Eagly and Johannesen-

Schmidt, 2001).

On the other hand, transformational leadership is characterised by “power with” or “power

through” due to the relationship between the leader and followers. Transformational leaders

recognise a need for change, have a vision and focus, pursue worthy goals, and inspire others to

work cooperatively to achieve a desired change (Gillis, 2005).

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Psychologist Kurt Lewin developed his framework in the 1930s, and it provided the foundation

of many of the approaches that followed afterwards. He argued that there are three major styles

of leadership.

 Autocratic or authoritarian - According to Adebakin and Gbadamosi (1996) an

autocratic leader can be described as a person who is aware of his position and has little

trust or confidence in his subordinates. This leader promotes a ‘Do as I say” attitude. All

decisions are made by this leader without an input from the team.

 Democratic or participative - Akpala (1990) contended that this type of administration

is asserted to be most punctual amongst all other authority style. Democratic leaders

share information with employees about anything that affects their work responsibilities.

They also seek employees' opinions before approving a final decision.

 Laissez-faire or free rain – this leadership style involves the least amount of oversight.

Employees are allowed to have much privilege and sometimes do as they wish. The

leader provides support with resources and advice when needed, but otherwise they do

not get involved.

Leadership Issue at Barclays

At Barclays, The Board sets all its strategy and oversees its implementation by the executive

committee. The Board sets the strategic direction and risk appetite of the Group and is the

ultimate decision-making body for matters of Group-wide strategic, financial, regulatory or

reputational significance. The Board is empowered through its Articles of Association to

delegate all or any of its powers, authorities and discretions to any committee or committees as it

thinks fit.

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The principal Board Committees are the Board Audit Committee, the Board Risk Committee, the

Board Nominations Committee and the Board Remuneration Committee. The Board has defined

the roles and objectives of each of the Board Committees, and provided specific levels of

discretion within which they can operate. Barclays demonstrates and Autocratic leadership style.

According to BBC news in 2015, Antony Jenkins, the chief executive of Barclays, was fired after

falling out with the board over the bank's cost cutting and profitability. It was assumed that

Board members are believed to have wanted bigger cost cuts and more focus on the investment

bank's performance. The news informed the public that the Chairman indicated that the bank

needed to become more efficient: "What we need is profit improvement. Barclays is not

efficient. We are cumbersome." (John McFarlane). Mr Jenkins was chief executive at Barclays

since 2012. Research showed that Jenkins was appointed Chief Executive Officer in 2012 and

was required to guide Barclays through a particularly turbulent period, due to the fact that

Barclays was implicated in a series of financial scandals that had damaged the business both

financially and its reputation. Jenkins proposed a strategy for a Project Transform, this involved

a major organisational culture change programme which everyone in the business had to

complete. It seemed as this proposal was not good enough for the Board. They wanted Mr.

Jenkins to move much faster in cutting cost in order to make Barclays more efficient and

profitable.

Some of the Board members were discontent with his performance as the Chief Executive

Officer. The Board probably preferred not to be concerned with an organisational change but

just wanted to focus on cutting costs and working harder to raise revenues. This clearly showed

their authoritarian style.

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While there are various benefits to an autocratic leadership style, there are also a number of

disadvantages associated with it as well. According to an article written by Talent Acquisition

Specialist Renji Rajan for LinkedIn, the Autocratic leadership can certainly bring about

resentment, low morale, and even anger from employees. Too much scrutiny can make your

employees feel inadequate and become more anxious than necessary. With the change in the

Chief Executive Officer, the employees will now be required to readjust to decisions. This can

certainly slow down productivity.

Recommendation

It is recommended that Barclays adapt a democratic leadership style. This will benefit the bank,

because it will include team involvement, participation, and engagement, according to a

LinkedIn article written by Financial Analyst Surendra Jakhar. The performance of each

employee will be acknowledged and the best results among workers will be rewarded.

Essentially, there is a higher morale in an environment under democratic leadership. Employees

will be more productive and develop more innovative and creative ideas for the overall growth of

the company.

This type of leadership style gives the employees the opportunity to set their own and achieve

them. Employees will have greater job satisfaction in this type of work environment due to the

collaboration and team building activities that take place. It also introduces better

communication among managers and employees.

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Conclusion

While a hierarchical organisational structure is a common way to organize a business, it creates a

vertical structure where every person within the organization is a subordinate to another single

individual. The person with the top rank appears at the top of the structure, which is often

visualized as a pyramid, with direct reports then coming in descending order as the various

company teams are included. Barclays consisted of a hierarchical organisational structure and

later ran into issues when the Government of the United Kingdom was forced to ask the banking

sector to reform their process and introduce ring-fencing of day-to-day banking services with the

aim to strengthen the financial system. Much restructuring was required to be done by the bank.

It was there recommended that Barclays changed their structure to one of a divisional one to

comply with the regulations. A divisional organizational structure gives the organisation the

ability to segregate large sections of the organisation's business into semi-autonomous groups.

This structure will be a perfect fit for Barclays because of its main functions, which are moving,

lending, investing and protecting money for customers and clients worldwide.

Leadership plays a critical role in the management of an organisation. Good leaders help to

make an organisation prosper. An authoritarian style can lead all group input to essentially

disappear. In addition, within this type of leadership approach, no reward or recognition is ever

really given to the employees working for the manager, according to The Economic Times. As

such, this may hurt the workers’ morale. Since this type of leadership style imitates that of a

dictator, many argue that this will be damaging for employees in the long run. Essentially, this

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type of management style leads to low employee morale and can bring about reduced efficiency

on the job among workers.

The success of Barclays bank is attributed to its excellent managers who have superior leadership

qualities. Managers in the bank have frequently utilized process theory of leadership to solve

managerial problems. Therefore the managers need to continue being democratic to ensure good

management. It is the responsibility of the managers to learn the mood of workers and other

stakeholders and create correct techniques of solving their concerns. Self-interest is one of the

factors that demoralize change agents in the organization.

According to Tittemore (2003), change should be introduced in stages in order to allow

individuals to adjust accordingly. New methods can be mastered with time instead of rushing

people to learn them quickly. Therefore, Barclays must not force its subsidiaries in the

developing world to copy western organizational cultures. Each country has its own laws, which

vary from one country to another.

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References

Hewlett, R. (2006). The Cognitive leader. New York, NY: Rowman & Littlefield.
Ivy Panda. (2019) 'Managers in the Barclays Bank'. 28 September.
https://ivypanda.com/essays/managers-in-the-barclays-bank-research-paper/ (Accessed: 7 August
2020).

Lawrence, P. and Lorsch, J. (1965). Organization and Environment. London: Harvard

McCluskey, M. (2004). How Mature is Your Service Operation?” Supply Chain Management
Review, 8(5).

Montana, J., & Bruce, H. (2008). Management Hauppauge. New York, NY: Barron’s
Educational Series.

Spillane, J., & Diamond, J. (2004). Towards a theory of leadership practice. Journal of
Curriculum Studies, 36(1).

Tittemore, J.A. (2003), Leadership at all Levels. Toronto: Boskwa Publishing.

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