Organizational Theory Reviewer

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.