Exploring Dysfunctional Software's Organizational Culture and Structure

Project 2 is due at the end of Week 4 by Tuesday at 11:59 p.m. eastern time. Purpose This project will view a video and discuss the assigned organization's organizational culture and organizational structure. Outcome Met by Completing This Assignment  Organize human, physical, and financial resources for the effective and efficient attainment of company's goals. How to Set Up the Paper Create a Word or Rich Text Format (RTF) document that is double-spaced using 12-point font. The final product will be 5-6 pages in length , excluding the title and reference pages. Write clearly and concisely.

Provide a title page with a title, date, your name, course, and section number, and the instructor's name. Instructions: You have been hired as an associate for a software company, Dysfunctional Software. Dysfunctional Software offers support solutions to a wide range of software issues and business needs. Dysfunctional's client list exceeds 500 businesses in the United States and 200 businesses in other countries. The company has recently started to experience significant and rapid growth. As a result of the recent growth, Dysfunctional Software realizes it must respond to client and market demands more rapidly. Dysfunctional Software knows that it needs to attract and retain the highest quality employees in the market to develop a sustained competitive advantage. Accordingly, Dysfunctional Software desires to establish an organizational culture and climate that maximizes individual efficiency, productivity, and job satisfaction. Your manager, Harry Harried, has asked you to help create a recruiting video for Dysfunctional Software that will entice

potential new employees to work there and provide ideas management can pursue to explore to ensure a positive work culture is developed that maximizes efficiency and productivity at the corporate and individual level. He wants to portray Dysfunctional as a company with a deep commitment to its employees, a positive corporate culture, and employees embracing its core values and enjoying coming to work. As background for the task of developing the video, Mr. Harried provides you with a recruiting video for Spotify, acknowledged as a world-class employer by its 30-country global workforce. Mr. Harried believes that Spotify is an exceptional company in terms of its approach to employees, its hiring practices, its organizational culture, and its organizational structure. You are requested to view the video on Spotify: https://www.youtube.com/watch?v=ar4lq1l8pAc . (You may need to right-click on the link and open it in a new window.) Mr. Harried also requires you to read the material he has assigned (i.e., your course material for this project).

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After viewing the video read the assigned project material, you must write a report to Mr. Harried covering the information requested below. For the report, you are using only the Spotify video and course materials. Use the following center Bolded and left-justified Bolded headings and instructions to complete the project. Introduction  Write an Introduction paragraph. The introduction paragraph is the first paragraph of the paper and will describe the paper's intent to the reader, explaining the main points covered in the paper. The introduction ensures the reader knows exactly what is being covered in the paper. The introduction is often written after the paper is completed. (Use in-text citations as required.) Organizational Culture

 Discuss the seven dimensions of organizational culture. (Use headings below and in-text citations as required.)  Present examples for each of the seven dimensions of culture using Spotify's organizational culture. Your description of Spotify's organizational culture is accomplished by extracting facts from the video and matching those facts with the appropriate dimension descriptor. You must provide support, justification, and, where appropriate, in-text citation for the video facts matched with the dimension descriptors. (Use headings below and in-text citations as required.) Seven Dimensions of Culture Discussion (Use headings below and in-text citations as required.) Spotify's Video Facts/Examples (Use in-text citations as required.) Competitive Advantage

 Discuss how Spotify uses its corporate culture to create a competitive advantage. Provide examples supported by your analysis, as drawn from the video information and the course materials. (Use in-text citations as required.) Organizational Structure  Identify and discuss Spotify's organizational structure, as depicted in the video. Based on your examples ascertained from the video, use the course material to elaborate on two specific examples to fully explain the various types and aspects of organizational structure that you have selected from the video to analyze. (Use in-text citations as required.) Conclusion  Create a concluding paragraph. The conclusion paragraph highlights the major findings covered in the paper. (Use in- text citations as required.) References Review the Paper

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Read the paper to ensure all required elements are present. The following are specific requirements that you will follow. Use the checklist to mark that you have followed each specific requirement.

Introduction This paper analyzes and discusses Spotify’s organizational culture and structure to determine its significance and competitive advantage. By examining Spotify's innovative approach to a dynamic, agile, and people-oriented work environment, alongside its unique team-based network structure it is than possible to uncover how these elements contribute to the company's ability to innovate, adapt, and maintain its position as a market leader. Additionally, the paper highlights how Spotify's commitment to data-driven decision-making, employee empowerment, and customer-centric product development exemplifies best practices in aligning organizational culture and structure with overarching business goals. This paper also investigates Spotify’s growing success and makes connections to the 7 dimensions of organizational culture that an organization can use to identify, measure, and manage their culture more effectively (Rudy, n.d.). Studying the seven dimensions of organizational culture also provides a comprehensive framework for understanding the complexities and dynamics of Spotify's workplace environment and how these influence its operational success and innovation capabilities. The seven dimensions—Innovation, Detail Oriented, Outcome oriented, People Orientated, Team Orientated, Aggressiveness, and Stability—each play a crucial role in shaping the company's strategies, employee behaviors, and overall performance. Organizational Culture The first dimension of organizational culture is “detail oriented.” A company culture that is detail oriented prioritizes meticulous attention to detail, which is highly valued in customer-oriented industries (Rudy, n.d.). Spotify shows its attention to detail for its customers through data and algorithms to personalize the user experience based on their listening history, preferences, and behavior. Spotify is constantly searching for the best way to satisfy its users through an intuitive user interface, curated playlists, and an expansive and diverse selection of entertainment. This is also

displayed in their agile methodology management style also termed their “agile engineering culture.” Agile methodology is a set of principles and practices for software development that prioritize flexibility, collaboration, and iterative development. This agile methodology allows them to be extremely flexible, efficient and gives them the ability to rapidly address issues and meet the needs of their customers. The second dimension of organizational culture is “Innovative.” Spotify culture is experiment friendly, meaning Spotify employs strategies that foster creativity, experimentation, and technological advancement. This process is enhanced and made possible through their unique agile methodology mentioned previously. This methodology includes small teams also known as squads that are within a tribe. These squads are small cross functional self-organizing teams, usually less than eight people, that sit together and have end-to-end responsibility for the stuff that they build. This structure promotes a fast-paced, innovative environment where ideas can be tested and deployed rapidly. Spotify also has something called “Hack week” twice a year. Do whatever you want with whoever you want in whatever way, ending with a big demo party on Friday. The point is if enough ideas are created, they are bound to strike gold (QAgile Quality in Agile, 2019, 25:00). Hack week allows for creative freedom, rapid prototyping, and experimentation, and ultimately innovation. Spotify also constantly runs A/B testing. A/B testing is “comparing the outcomes of two different choices (A and B) by running a controlled mini- experiment" (Vallee, 2016). Spotify conducts these tests to make data driven decisions to determine what works and what does not. The third dimension of organizational culture is aggression. Although Spotify values collaboration and flexibility there are some aspects of the organization that can appear aggressive. To stay competitive Spotify pursued various partnerships and acquisitions to expand its content offering, enhance its technology, and increase its market reach. Spotify was a small company that needed to compete against big companies like YouTube, Google, Amazon, and Apple globally in the music market and they understood that to do that they needed to have the best speed and that is accomplished by

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learning the fastest, quick feedback and speeding up decision making. To achieve this Spotify did an overhaul of their organization. In 2008 when the first media player launched, Spotify was a scrum company made up of teams that grew too big for the bureaucratic approach that was essentially getting in the way. They realized agile mattered more than scrum. This system and their culture is used as a competitive advantage to compete with other players globally (4:00). Spotify also, to remain competitive, decided to boost podcasting on the platform by acquiring content and technology firms. These acquisitions included gimlet media, the ringer, anchor, pods, and megaphone, essentially controlling both the demand and supply. Spotify now supplies podcasters and podcast networks and provides the technology to support that with the goal to turbo charge its market share. As a result, Spotify grew from 185,000 podcasts to 3.2 million from 2018 to 2021. Spotify was able to report that it has more US listeners than Apple podcasts, which is a significant milestone (ColdFusion, 2022, 12:00). The fourth dimension is “outcome oriented” which is an organization all about results. It is evident that Spotify is driven by results, however they just choose a more humanistic approach. The culture is all about the people, focusing on motivation and trust rather than structure and control. This culture breeds innovation and creativity and improves employee engagement and productivity. Spotify also heavily relies on data and analytics to guide its decisions. By analyzing user behavior, preferences, and trends, Spotify sets clear objectives for improving its service and tailoring its offerings to better meet user needs. With loosely coupled and tightly aligned squads with an internal open-source model that do small and frequent releases which is enabled by decoupling the self-service model, this strategy minimizes the need for hand offs allowing stuff to get in to production early and often (QAgile Quality in Agile, 2019, 19:00). This contributes to their agile approach which allows it to quickly iterate on its offerings based on user feedback and performance metrics delivering outcomes that matter to its users, such as a seamless user experience, high-quality audio streaming, and personalized content. The founder Daniel Ek stated, we aim to make mistakes faster than anyone else. The idea is when you build

something there is failure, each failure is a learning experience, when they fail, they want it to happen fast, to learn fast, and therefore improve fast (20:00). After each failure there is an analysis through a postmortem which is a part of their incident management workflow, and it is not closed until they capture the learnings to avoid the same problem in the future. Overall, Spotify has a culture of continuous improvement driven from below and supported from above (21:00). The fifth dimension is “stable” which is an environment characterized by predictability, consistency, and reliability in operations, policies, and employee expectations. While elements of stability exist in terms of the company's long-term vision and certain operational practices, Spotify's culture leans more towards flexibility, rapid change, and continuous improvement. Spotify cares more about innovation than predictability and 100% predictability mean 0% innovation (24:00). What does remain consistent is Spotify mission and core values. The mission offers a consistent purpose that unites the team, and the vision guides the company’s long-term decisions and initiatives, from product development to market expansion, providing a stable direction for growth and innovation. The sixth dimension is people-oriented, which is an organization that values fairness and is supportive of individuals’ rights and dignity (Rudy, n.d.). In a survey conducted by Spotify 95% of Its employees indicated that they are happy about working at Spotify. They create a positive work environment where employees feel valued, supported, and motivated. They empower their employees through autonomy. The company's organizational structure, based on autonomous teams, allows employees to take ownership of projects and make decisions. This autonomy fosters a sense of responsibility and engagement among employees. These core values, which include innovation, collaboration, transparency, and passion, provide a stable foundation that informs how employees interact with each other, approach their work, and engage with the broader community. This laissez- faire approach includes the servant leader philosophy that focuses primarily on the growth and well- being of people and the communities to which they belong. Instead of focusing on the accumulation and

exercise of power by the top of the pyramid, servant leadership is about prioritizing the needs of others to ensure their development, empowerment, and well-being, fostering a supportive and collaborative work environment (5:52). The seventh-dimension team oriented, which is an organization that values collaboration and cooperation with other team members. The office is optimized for collaboration where team members of a squad work closely together with adjustable desks and easy access to each other's screens. They have a lounge for things like planning sessions and retrospectives, and almost all walls are white boards (6:45). Although each squad has its own mission, they need to be aligned with product strategy, company priorities and other squads requiring each member to be a good citizen in the Spotify ecosystem. There are teams that branch over to other teams called guilds or chapters, which share common interest or communities of practice that inspire each other. Spotify identifies that culture is important, which is why they have groups like people operations and about 30 agile coaches spread across all squads. Spotify also runs boot camps where new hires form a temporary squad where they get to solve real problems and learn to work as a team. Within its principles and methodologies, agile practices such as sprint planning, retrospectives, and continuous feedback loops emphasize teamwork, adaptability, and collective problem-solving. This culture not only enhances employee engagement and satisfaction but also drives innovation and performance, helping Spotify maintain its position as a leader in the music streaming industry. Competitive Advantage Spotify culture is a critical source of competitive advantage in many ways. One of the ways that is unique to Spotify is its agile work practices. As indicated above, by eliminating bureaucracy and having autonomous squads, Spotify can iterate rapidly on product development, test new ideas efficiently, and remain adaptable in a fast-changing industry. Another critical aspect of Spotify is its customer centric approach, Spotify mission and vision is to enhance the user experience and you can clearly see that in

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Spotify many features and constant experimentation. Spotify also relies heavily on the data it collects and analytics for decision-making that allows it to understand user behavior deeply and tailor its services accordingly. This data-driven approach leads to informed strategic decisions and effective targeting of user needs. Spotify also encourages open communication and transparency between squads, chapters, guilds, and tribes. Although decisions can be made without checking in with other squad everybody shares their decision through email that everyone reads. Regular meetings are also scheduled with teams and team leaders to share ideas, collaborate, and communicate progress and even failures. The culture that is fostered in Spotify encourages teamwork and collaboration that essentially breeds diverse perspectives and rapid problem-solving, enhancing Spotify's ability to innovate and adapt. Organizational Structure Spotify has over 50 squads spread out across 4 cities. Currently squads are grouped into squads. A tribe is a lightweight matrix. Each person is a member of a squad as well as a chapter. The squad is the primary dimension focusing on product delivery and quality while the chapter is a competency area such as quality assistance, agile coaching, or web development. As a squad member, the chapter lead is a formal line manager, a servant leader focusing on coaching and mentoring the engineer. It is possible to switch squads without getting a new manager. However, in reality the line is not nice and straight and tends to keep changing. To support communication between squads and chapters, guilds are formed, which is a lightweight community of interest where people across the whole company gather and share knowledge within a specific area (13:30) Most organizational charts are an illusion and Spotify focuses on community rather than hierarchical structures. When looking at the Lumen Learning material, Spotify falls within the customer structure. The customer structure segments the business based on the needs of the customer. This is implemented throughout the organizations’ tribes, squads, guilds and chapters where each squad is focusing on a specific aspect of the Spotify product or service. Some squads are formed around technical needs that

support customer experiences indirectly, such as improving the mobile experience of a certain part of the Spotify application. Though not directly interacting with users, these squads play a crucial role in meeting customer needs by ensuring the platform is reliable, fast, and secure. Tribes are groups focused on specific facets of the Spotify platform like user experience, desktop interface, algorithms, etc. Chapters are groups organized around a specialty skill like designers, programmers, and marketing (Space Refinery, 2023). This structure allows Spotify to segment its efforts to meet various customer needs directly and efficiently. Spotify also incorporates a team-based network structure, a flexible, dynamic, and decentralized approach to management and operations, where the emphasis is placed on cross-functional teams (or squads) working autonomously towards common goals. This structure is characterized by a high degree of collaboration, communication, and fluidity, with teams forming and disbanding as needed to address specific projects or challenges. It contrasts with traditional hierarchical models by promoting agility, innovation, and direct problem-solving among team members (Rudy, n.d.). Spotify’s organizational structure, which I referred to as the agile methodology, serves as a prime example of a team-based network structure through its implementation of the Spotify model. Conclusion In conclusion, Spotify's distinctive organizational culture and structure are pivotal to its success and competitive advantage in the dynamic music streaming industry. Through its innovative, agile, people-oriented, and team-based network structure, Spotify has cultivated an environment that fosters creativity, rapid adaptation, and a deep focus on user satisfaction. The company's implementation of squads, tribes, chapters, and guilds exemplifies a modern approach to organizational design, emphasizing autonomy, flexibility, and collaboration. This structure not only enhances Spotify's ability to innovate and respond to market changes but also supports a workplace culture that attracts and retains top talent. By prioritizing data-driven decision-making, customer-centric product development, and

continuous learning, Spotify has established itself as a leader in the digital music space, demonstrating the significant impact of aligning organizational culture and structure with strategic business objectives.

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References QAgile Quality in Agile. (2019, May 8). Spotify model & culture - A true story? . YouTube. https://www.youtube.com/watch?v=ar4lq1l8pAc Vallee, A. (2016, December 15). What is a/B testing and how is it used?: HBS Online . Business Insights Blog. https://online.hbs.edu/blog/post/what-is-ab-testing Admin. (2024, January 18). Spotify SWOT analysis - The strategy story . The Strategy Story - Simplifying Business Strategies. https://thestrategystory.com/blog/spotify-swot-analysis/ ColdFusion. (2022, August 5). The story of Spotify . YouTube. https://www.youtube.com/watch? v=ZiKXebOGNL0&t= 764s Space Refinery. (2023, December 12). What you can learn from Spotify squads and agile design . https://www.spacerefinery.com/blog/learn-from-spotify#:~:text=For%20example%2C%20a %20Squad%20may,and%20who%20will%20do%20what Learning, L., & Thompson, D. J. (n.d.). Common Organizational Structures . Lumen Learning. https://courses.lumenlearning.com/wmopen-principlesofmanagement/chapter/common- organizational-structures/

BMGT Organizational Culture

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