Business Planning, Management Theories,
Change, Power, Leadership, Conflict.
ORGANIZATIONAL THEORY REVIEWER
UNIT 1 Evolution of Management
Management is the process of directing people, machines, materials and
money to attain common goals. Planning, Organizing, Staffing, Directing and
Controlling.
MANAGEMENT THEORIES
Classical School
Scientific
Management – In the US, Robert Owens in
the 1800’s believed that the vital machines are the workers, Charles Babbage developed scientific principles
to work processes to increase efficiency and lower expenses, an early advocate
of division of labor or specialization. Frederick
Winslow Taylor, father of
scientific management address to the question, “how would society develop the
skills of workers and make them more productive?” and published a book in 1911
called “The Principles of Scientific Management” which merged Owen’s and
Babbage’s approach to produce a remarkable management theory. He argued that
the objective of management is “to
secure maximum prosperity for employer, coupled with the maximum prosperity for
the employee.” He rested on four basic principles, best method, scientific
selection of workers, scientific training and development, friendly cooperation between management and labor. He used time and
motion study to set standards and encouraged employers to pay more productive
employees with higher rate called differential rate system, which lead to
higher productivity and higher earnings, however, lead to massive strikes and
opposition. Henry Gannt, Taylor’s
associate, improvised Taylor’s Differential rate system, not only were the
workers being rewarded but also the supervisor to encourage the supervisor to
better train his subordinate. Frank Gilberth,
concentrated on time and motion study, and instructed managers to teach
workers the best way. His wife, Lillian,
also added her expertise in psychology and pushed the standard workdays, rest
breaks and normal lunch periods. Child labor laws and safe working conditions
were established partly because of her efforts. Major Contribution: Efficiency Techniques and Scientific selection
and development of workers. Major
Limitation: workers are believed to be motivated only for money, overlooked
social needs, and specialization lead to routine tasks.
Administrative
Management – European management thinkers focused on the administration of the
enterprise. Henri Fayol, in the early 1900’s, a French contemporary of Taylor,
viewed management as a series of interrelated functions and developed 14 principles of management; Division
of Labor, Authority, Discipline, Unity of command, Unity of command, Unity of
direction, subordination of the individual interest to the common good,
remuneration, centralization, scalar chain, order, equity, stability and tenure
of staff, initiative, esprit de corps. Major
Contribution: Clarified the Job of manager and still valid effective
management principles. Major Limitation: Too general for today’s complex
organizations.
Bureaucratic Management – Max
Weber, a German Sociologist, considered this type of Management as the
ideal one. It is based on a formal set of rules, impersonal supervision,
division of labor, hierarchical structure, authority structure, lifelong
commitment and rationality. Major
Contribution: Efficiency and consistency. Major Limitation: Stifles Initiative and Creativity, Slow decision
making, incompatible with rapid changing work environment.
Behavioral School (Human Relations Approach)
Mary Parker Follett (Early 1900’s) agreed with Taylor about the
establishing a good relation between the management and employees by involving
subordinates in decision making process if it affects them. Chester Barnard, President of New
Jersey Bell, believes that an organization can only survive if the
Organization’s goals and that of the employees are kept balance. Elton Mayo, and the Hawthorne’s
Experiments conducted a study in Western Electric Company by experimenting lighting
level and its effect on the productivity of the employee. The level of
lighting, however, wasn’t the triggering factor that improved their
productivity, it was concluded that workers become more productive if the management was concerned about their
welfare and the supervisor paid special attention to them, if they felt that good interpersonal
relations prevail among workers and between workers and their supervisors and if
they were allowed some participation in decision-making processes. This
phenomenon was labelled the Hawthorne
Effect. It was also found out that Informal work groups, the social
environment of employees, positively affects productivity. The concept of Social Man – motivated by social needs,
had to replace the concept of “rational man” - motivated by personal economic
needs.
Major Contribution: Emphasis on Social Needs and improvement in
the Classical School’s view of productivity, stressed the importance of
leadership styles, awakened interest in dynamics of groups. Major Limitation: Satisfaction of
social needs of workers is just one of many factors that affect productivity.
Behavioral Science Approach – Concept of “Self-Actualizing Man,” Abraham Maslow said that there is a
hierarchy of needs and that the lower needs (Physiological Needs and Safety
Needs) must be first met, before the social, esteem and self-actualizing needs.
Major Contribution: Helped in understanding individual
motivations, group behaviour, interpersonal relationship at work, and the
importance of work to people. Insights on participatory leadership,
decentralization, sources and uses of power in organizations, conflict resolution,
organizational change and communication. Major
Limitation: Believed to have not yet reached its full potential, too
complicated and abstract, tend to differ in treating problems.
The Systems and Contingency Approaches and the
Quality Viewpoint
The Systems Approach – looks at organization as a unified system
composed of interrelated parts. A system has flows of information, human
resources, materials and energy as inputs and undergo into transformation
process and leave as outputs (goods and services). Development of Quantitative
models to aid managerial-decision making. Major
Contribution: Systems Analysis, anticipate immediate and long term
consequences. Major Limitation:
Can’t be used to handle the human side of management.
Contingency Approach – situational approach, uses any kind or
combination of classical, behavioural and systems approaches depending on the
circumstances. Major Contribution:
Emphasis on Flexibility. Major
Limitation: Nothing new with this theory or is not even a theory because
management principles must be applied with flexibility.
Quality Viewpoint – emphasizes in providing high quality
standards. W. Edwards Deming established Total Quality Management that build
quality from product planning to design, to preproduction, to purchasing of
needed materials, to production, to sales and to service. Quality is the top
priority (rather than short term profit). Poor Quality is not acceptable,
statistics evidence of quality should be monitored, raw supplies should be
quality, employees should be trained and retrained to use statistical methods. Major Contribution: Suppler management,
retooling of workers, empowered workers to report conditions that detract
quality, clear customer focus. Major
Limitation: not all have the capability to make TQM an economic
feasibility.
UNIT 2 Individual Behavior and Processes
Bases of managing individuals in organizations: Individual Attributes,
personal conceptions and work-related aspects, Values and Attitudes and how
they predict behaviour; perception and attribution; learning and reinforcement;
and motivation theories.
Individual Attributes and Personality Variables – Performance is a function of personal
attribute, willingness or work effort individuals give and the opportunity they
get from organizational support. Individual Attributes are categorized into Demographic, Competency and Personality.
Personality traits are very important in organizational behavior. In particular,
five personality traits especially related to job performance have recently emerged
from research. Characteristics of these traits can be summarized as follows: 1. Extroversion: Sociable, talkative
and assertive. 2. Agreeableness:
Good-natured, cooperative and trusting. 3.
Conscientiousness: Responsible, dependable, persistent and
achievement-oriented. 4. Emotional
Stability: Viewed from a negative standpoint such as tense, insecure and
nervous. 5. Openness to Experience:
Imaginative, artistically sensitive and intellectual. Identifying the above "big
five" traits related to performance reveals that personality plays an important
role in organizational behavior.
Personal Attributes: Demographic
Characteristics are background
variables (age, gender, race, religion, disability, etc.). Personal conceptions are how people
tend to think about their physical and social milieu as well as their core
belief system and views on a broad range of issues and are categorized into;
Locus of Control – the degree to which people feel capable of
influencing their lives (internal orientation – master of their destiny and
external orientation - environmental factors are responsible for what happens
to them).
Introversion/Extroversion
Tolerance to Ambiguity
Risk Propensity
Authoritarianism/Dogmatism – Rigidity of beliefs. Authoritarianism – clings rigidly to conventional values and obey
recognized authority while Dogmatism
– looks at legitimate authority as absolute and accepts/rejects other people on
the basis of how much he agrees with legitimate authority. People with high
rigidity of these beliefs have the tendency to follow even unethical orders of
superiors.
Machiavellianism – willingness to do whatever it takes to get
what he wants. Low-Mach personality has tendencies to be strongly guided by
ethical considerations.
Self-Monitoring – Ability of a person to adjust his behaviour
to the situation. High Self-Monitors have the desire to elicit positive
reaction and readily adjust their behaviour to do so, low-self monitors are
unwilling to make adjustments (what you see is what you get).
Work-related Aspects – Positive
and Negative Affectivity (Work Ethic Orientation); People with High
Positive affectivity have the tendency to feel an overall sense of well-being,
see people, things and events positively and experience positive emotions and are
found to decide more accurately, give significant contributions to group
effectiveness and are rated by experts as possessively greater managerial
potential. Type A and Type B orientation,
Type A are very aggressive, competitive, irritable, and always in a hurry
while Type B are calm, laid-back and patient with other people. Job Performance: Type A work harder and
faster and seek more challenging work but due to too much hurry to finish
things, may often miss to be careful in their judgment. Interpersonal Relationship: As type As have a lot to do, they tend
to lose focus and experience more on-the-job conflict, they do not sit well
with other people. Health: Type As
have higher health risks.
Johari Window – A model for asking and giving feedback about
yourself and about others.
Known
to Self
|
Not
known to Self
|
|
Known
to others
|
ARENA
|
BLIND SPOT
|
Not
known to others
|
FACADE
|
UNKNOWN
|
Values, Attitudes, Perceptions and Attributions
Values – universal concept that guide thinking,
judgments, and actions in varied circumstances. Have been classified by Milton Rokeach as Terminal and Instrumental.
Terminal values – are those
that reflect a person’s preferences concerning “ends” to be achieved, important
goals people like to attain in their lifetime (freedom, happiness, pleasure,
sense of accomplishment). Instrumental
values – are the means for achieving lifetime goals (honesty, helpfulness,
courage, responsibility and capability) In 1990, Bruce Maglino came up with a
value system relevant for understanding values
in organizational behaviour: Achievement, Helping and concern for others,
Honesty, and Fairness to all. Value Congruence – happens when workers feel and act positively when they work with
people who share their values. Top nine values organizational specialists deem
important for the workforce are: Recognition,
Respect and Dignity, Personal Choice and Freedom, Involvement at work, pride in
one’s work, lifestyle quality, financial security, self-development, and health
and wellness.
Attitude - are relatively permanent feelings, beliefs,
and behavioral tendencies toward someone or something. Components of Attitude; Cognitive
Component – Composing of beliefs, opinion, or knowledge. Affective Component – refers to our
feeling (like or dislike) toward the person. Behavioral Component – is the predisposition to act in a certain
way.
Perception – the process of making sense of a variety of
sensory input from the environment is called perception. Perception are
determined by the Subject Characteristics (Sound, Appearance, Smell) and by the
Perceiver Variable (Characteristic of people perceiving them). Common
perception errors: Hallo Effect – An
attribute of person is used to make an overall impression. Similar-to-me Effect – is a favourable perception of others who are
like them. Stereotypes – assumptions
that members of certain groups share common traits. Selective perception – is the tendency to focus on specific aspects
of a person, object or situation that are consistent with one’s value, needs or
attributes. Projection – is the
tendency to believe that one’s value, beliefs and difficulties are the same to
the others. Expectancy – is hoping
to create or find in an individual or situation what you hoped to find in the
first place.
Attribution Theory – investigates how people try to understand
the causes of an event, determine who or what is responsible for what happened
and evaluate the characteristics of the actors in the event. Kelley’s theory of causal attribution suggests
that three factors help us judge internal
causality (within a person’s control) and external causality; Distinctiveness
– is the extent to which a person behave in the same manner in different
situations, Consensus – the extent
to which other people behave in the same manner as the particular person we are
judging, Consistency – is the extent
to which the person acts in the same manner across time. Two attribution errors: Fundamental Attribution Error – our
tendency to explain other’s failure in terms of internal factors and downplay
the effects of external causes. Self-serving bias – our tendency to
attribute our personal qualities and abilities our successes, and blame
external factors for our failures.
Learning and Reinforcement
Learning – a relatively change in behavior occurring as
a result of experience. Four approaches to learning: Classical conditioning – learning through stimulus, it involves the
manipulation of stimulus to influence behaviour. When the manager gives us challenging
assignments when he or she calls us to her or his office, we become conditioned
to feel excited whenever called to the office. Operant Conditioning – influencing behaviour by manipulating its
consequences (law of effect). If our actions have pleasant effects we tend to
repeat them in the future. Operant
Conditioning and Reinforcements – Positive reinforcement or rewards,
negative reinforcements or avoidance, punishments and extinction. Cognitive Learning – is achieved by
thinking about the perceived relationship between events and individual goals
and expectations. when an employee submits reports on time in order to earn the
boss’s compliments. The employee perceives that punctual submission of reports
pleases the boss and decides to always do it. Social Learning - learning that is achieved through the reciprocal
interaction between people and their environment.
Organizational Behavior
Management refers to the
systematic application of positive reinforcements in the organizational
settings to increase the incidence of desirable organizational behaviors. It is
also known as organizational behaviour
modification or OB mod. OB mod is done by these steps: 1. Identifying the
desired behavior 2. Performing a baseline 3. Setting a standard 4. Providing a
reinforcer 5. Shaping 6. Periodic re-evaluation.
Discipline – weeding out undesirable behavior.
Motivation Theories
Motivation - refers to the processes that arouse; direct;
and maintain behavior toward a goal. Two Important considerations: Basis of
Performance (but good performance doesn’t always mean a person is highly
motivated, he may be highly capable of doing the job) and Motivation is
multi-faceted.
Theories of Motivation. Two Categories: content theories - focus on what is within a person or in his or
her environment and process theories
of motivation - provide an understanding of the thoughts or cognitive processes
that act to influence the behavior of people.
CONTENT THEORIES
Maslow’s Hierarchy of Needs – Abraham Maslow theorized that people have
five types of needs that tend to be activated in a hierarchical manner. These
are the physiological needs; safety needs; social needs, esteem needs, and
self-actualization needs.
Alderfer’s ERG Theory - Alderfer presents only three types of needs
and any of these needs may be activated at any time. Alderfer also asserts that
more than one need may be activated at the same time. These needs are the needs
for existence, relatedness and growth.
McClelland’s Acquired Needs
Theory – Thematic Apperception
Test (TAT). Need for affiliation or nAff — this refers to the desire to
establish and maintain warm and harmonious relations with others. Need for
achievement or nAch — this revolves around the desire to do things better, to
find solutions to problems, or to master complex task. Need for power or nPow —
this pertains to the desire to lead, influence and/or control others.
Herzberg’s Two-Factor Theory. Frederick Herzberg and his associates came up
with the two-factor theory. The two factors are the satisfiers or motivation
factors and the dissatisfiers or hygiene factors. Motivational factors are
those that are associated with the jolt content. These are achievement,
recognition, work itself responsibility, advancement, and growth. Hygiene
factors, meanwhile, are related with the job context or the environment in
which people work. These are company policy and administration, supervision,
interpersonal relationships, working conditions, salary, and status.
PROCESS THEORIES
Equity Theory - was introduced mainly through the work of Stacy
Adams in 1965. The theory views motivation from the perspective of the social comparisons
people make, or what they perceive when they compare themselves to others. It
holds that people are motivated to maintain fair or equitable, relationships with
each other and turn away from relationships that are unfair, or inequitable.
Expectancy Theory - states that people are motivated to work
when they expect that they can achieve the things that they want from their jobs.
The motivation to work is due to three factors: 1. Expectancy, or the belief
that work effort results in performance 2. Instrumentality, or the belief that
performance leads to rewards, and 3. Valence, or the value attached to the
rewards. Expectancy theory holds that motivation (M) is the product of
expectancy (E), instrumentality (I), and valence (V).
GROUP BEHAVIOR AND PROCESSES
Social scientists have defined a group
as a collection of two or more people with a stable pattern of relationships
who work with each other regularly to achieve common goals and who perceive
themselves as being a group. Stages: Forming, Storming, Norming, Performing,
Adjourning. Types: Formal (Command Group, Rask Force, standing committees, ad
hoc committees). Informal Group (friendship, interest groups)
GROUP EFFECTIVENESS. An effective group is one that achieves both
high levels of task performance and good human resource maintenance. Group
effectiveness means successfully transforming inputs into outputs. Constraints:
Culturally Diverse Groups and Social Loafing.
TEAMS - a group of people with complementary skills
who work together to achieve specific goals for which they hold themselves collectively
accountable.
