What is organizational behaviour

University Degree Business and Administrative studies

Leo EMT-1 SH-07-0002

Leo

EMT-1

SH-07-0002

2008/11/27

Organizational Behaviour

Introduction:

Manager plays an important role in the business management such as controlling, leading, organizing and planning. (Mullins, 2007) Planning is a process that includes defining goals, establishing strategy, and developing plans to coordinate activities. Organizing is to determining what tasks are to be done, who is to do them, how the tasks are to be grouped, who reports to whom, and where decisions are to be made. Leading is a function that includes motivating employees, directing others, selecting the most effective communication channels, and resolving conflicts. Controlling is monitoring activities to ensure they are being accomplished as planned and correcting any significant deviations. (Sukamal, 2008)

While organizational behavior is a systematic study of what people do in an organization (social system) and how that behavior affects the performance of the organization (its effectiveness and efficiency). (Mullins, 2007) Systematic study is looking at relationships, attempting to attribute causes and effects, and drawing conclusions based on scientific evidence. Not based on intuition. Intuition is a feeling not necessarily supported by research. (Mullins, 2007)

So OB helps a manager do well in an organization and its effectiveness and efficiency of most organization. (Sukamal, 2008) Moreover, OB is a multidiscipline study. There are 3 main disciplines: psychology, sociology and anthropology and there are areas of overlap between three disciplines. (Mullins, 2007) It can be shown in the following diagram.

Psychology means individual behavior, sociology means group behavior and social systems, and anthropology means the study of groups in different countries. Political science focuses on individuals and groups within specific conditions concerning the power dynamics. (Mullins, 2007) Important topics under here include structuring of conflict, allocation of power and how people manipulate power for individual self-interest etc. Economic applies event to the non-profit and voluntary organizations as well. One of the key elements in business economics is the focus on profit maximization. The profit maximization rule becomes the guiding principle for all decisions made by the managers. (Sukamal, 2008) Organizational behavior is concerned with the study of the behavior of people within an organizational setting. (Mullins, 2007) It involves the understanding, prediction and control of human behavior. The management theories are about how to organize people and manage them to achieve organizational goals. (Mullins, 2007)

There are 4 kinds of management theories: classical, human relations, systems, and contingency. (Mullins, 2007, page 41) There will be more details about the management theories in the following parts.

Content:

First of all, there are some backgrounds about the theories of management. Management theory is about how to organize people and manage them to achieve organizational goals. It has developed a lot from the past to present and passed through many different phases. Management theory is a central part of the study of organization and management. (Mullins, 2007, page 40) According to Mullins’ theory, there are 4 types of ...

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Content:

Classical theory

Classical theory is focus on the purpose, formal structure, hierarchy of management, technical requirements, and common principles of organization. (Mullins, 2007, page 41) The classical theory dominated US industry into the 1930’s and there were 3 fundamental tenets. First, organizations exist to accomplish production and economic goals. Second, there is one best way to organize for production. Third, production is maximized through specialization and division of labor. (Sukamal, 2008)

Classical theory included scientific management and bureaucracy. In scientific management, many people were associated with the improvement of management as a means of increasing productivity. While it focuses on the problem of using the technical structuring of the levels of output and the provision of monetary incentives as a motivation to motivate individual workers for higher levels of output. (Mullins, 2007, page 43) The most important person who contributed to this approach was F.W. Taylor (1856-1917). He believed that economic needs concept of motivation. Moreover, he identified that there is ‘one best way’ of doing a job. (Mullins, 2007, page 43) However, there are some critiques from sociological and psychological perspective. In sociological aspect, for example, treat workers as individual ‘units of production’ rather than social beings. In psychological aspect, for example, the ‘rationalization’ of work through division of work resulted in the de-skilling of workers. (Mullins, 2007, page 43)

Bureaucracy is a major form of structure in many large-scale organizations. (Mullins, page 47, 2007) Its importance is that it is often regarded as a sub-division under the classical heading. One of the writers on bureaucracy is Max Weber (1864-1920) who is a German sociologist. He claims that the development of bureaucracies is a means of introducing order and rationality into social life and bureaucracy is founded on a formal, clearly defined and hierarchical structure. (Mullins, page 48, 2007) However Argyris (1964) claims that bureaucracies restricts the psychological growth of the individual and cause feelings of failure, frustration and conflict as a critique from psychological perspective. (Mullins, page 49, 2007) In addition, from the sociological perspective, bureaucracies are lack of flexibility to adapt to changes in the external environment, for example, the changes in the needs of customers. (Mullins, page 49, 2007)

Human relations

The human relations theory assumes that organizations are cooperative social systems, but machine-like technical structures. (Brooks, page 130) In organizations the power of groups influences individual behavior more than managerial pressures to achieve company goals. (Brooks, page 130) In addition, workers are motivated by social needs, a person’s social and psychological needs are least as important as their monetary needs. There are 4 main proponents of relations approach to organization theory: Elton Mayo (1880-1949), Douglas McGregor (1906-1964), Abraham Maslow (1908-1970), and Frederick Herzberg (1966). It can be shown in the following diagram.

In this diagram, it shows each proponent’s theories. Mayo’s Hawthorne studies is about that when people received special attention, they will probably work better and if workers in groups were influence by the exerting social pressures of individual, the level of their output might increase. (Brooks, page 131) McGregor’s theories included theory X and theory Y. Theory X means the manager uses some reward and punishment to motivate their employees. Theory Y means managers create setting to encourage commitment to goals and provide opportunities to employees so that employees committed to managers and do better for the organization. (McGregor, D. 1960) Maslow’s theory of human needs is about how to motivate. It claimed that managers should try to understand their employees’ needs and show them the job can satisfy their needs. Hertzberg’s two factor theory included motivator needs and hygiene needs. Motivator needs are higher-level of needs such as ego and self-actualization needs. While hygiene needs are lower-level needs such as physiological, safety and social. (Sukamal, 2008)

However, there are some critiques of the human relations theory of organizations. In sociological perspective, it does not consider the impact of stakeholders in the external environment on work behavior in the organization. In psychological perspective, the result of satisfying human needs is a happy worker but not a necessarily productive worker. (Mullins, page 54, 2007)

Systems

The system approach considers the organization as a socio-technical system interacting with the environment outside the organization. (Brook, 2007, page 131) The socio-technical system is concerned with the interaction between the psychological and social factors of the human side of the organization, and its structural and technological requirements. (Mullins, page 56, 2007) Moreover, it focuses on the total work organization and the interrelationships of structure and behavior, and the range of variables within the organization. (Mullins, page 55, 2007) It can be shown in the following diagram.

The proponents of systems theory are Hersey and Blanchard (1993) and the Tavistock Institute of Human Relations. Hersey and Blanchard suggest that an organization is made up of four subsystems: the social, the administrative and structure, the informational and decision making, and the economical and technological. (Sukamal, 2008) In the study of the effects of changing technology in the coal-mining industry in the 1940s of the Tavistock Institute of Human Relations, the increasing use of mechanization and the introduction of coal-cutters and mechanical conveyors enabled coal to be extracted on a ‘longwall’ method. (Trist, E. L. et al, 1963)

There are also some critiques in systems theory. System theory suggests a greater degree of stability and order in organizations that might actually exist across time. (Brooks, page 133, 2007) In addition, there is less emphasis on teams as one of the best ways of managing difficult problem-solving tasks and coping with organizational change. (Brooks, page 133, 2007)

Contingency

The contingency theory is a leadership theory of industrial and organizational psychology. (Wikipedia, 2008) The contingency approach suggests that each organization is unique and to the contrary of the classical theory, it rejects the idea of ‘one best way’ to manage. But similarly, employees differ in attitudes, needs and experience. (Sukamal, 2008) Its organization is different in business environment, technology and size such as nature of competition. The contingency approach showed renewed concern with the importance of structure as a significant influence on organizational performance. (Mullins, page 57, 2007) In addition, it suggests that there is a great variety of ways of organizing and managing. (Brooks, 2006, page 134) It goes a step further in relating the environment, and other variables to specific structures of the organization. (Mullins, page 603, 2007)

There are 2 proponents of the contingency theory: Burns & stalker (1961) and the Aston studies (1960-1970s). Burns & stalker (1961) suggested that ‘mechanistic’ or bureaucratic structures were less able to adapt in a rapidly changing market. In addition, the Aston studies suggested that organizational size is associated with increased bureaucracy. (Mullins, page 57, 2007)

However, there are also some critiques. For example, there are some difficulties to apply in the real workplace. (Brooks, page 136, 2006) Moreover, it is impossible to identify all the factors in both internal and external which affect a company’s performance, however, contingency theory just can give a partial picture. In addition, contingency theorists underplay the significance of human aspects of organization, such as power, multiple stakeholders and organization culture. (Brooks, page 137, 2006)

Conclusion:

In the 21 century, the major challenge that managers need to face is globalization. (Mullins, page 20, 2007) Globalization refers to organizations integrating, operating and competing in a world economy. (Mullins, page 2007, 2007) Beside, managers are also facing improving customer service, quality and productivity and stimulating Innovation and Change. So managers must develop organization systems that are flexible enough to take into account the meaning of work and the relative value of rewards within the range of cultures where they operate. (Mullins, page 23, 2007) In a conclusion, the contingency theory is more suitable to the 21 century because it’s more able to adapt the rapidly changing market. Moreover, contingency theory has sought to formulate broad generalization about the formal structures that are typically associated with or best fit the use of different technologies. (Wikipedia, 2008)

An example of contingency theory is the blue-collar workers generally want to know exactly what they are supposed to do. Therefore, their work environment is usually highly structured. The leader’s position power is strong if management backs his or her decision. Finally, even though the leader may not be relationship-oriented, leader-member relations may be extremely strong if he or she is able to gain promotions and salary increases for subordinates. Under these situations is the task-oriented style of leadership is preferred over the relationship-oriented style. (Wikipedia, 2008)

Bibliography:

Brooks, I., (2006) Organizational Behavior: Individuals, Groups and the Organization (2nd edition). Financial Times/ Pitman Publishing.
McGregor, D. The Human Size of Enterprise. McGraw-Hill Publishing.
Mullins, L.J., (2007) Essentials of Organizational Behavior. Financial Times/ Prentice Hall
Sukamal De, (2008): lecture notes.
Trist, E. et al. (1963) Organizational Choice. Tavistock Publications.
Wikipedia. (2008) [online] Contingency Theory. Available at: