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Chapter Two
Effectiveness in organizations
Objectives
Understanding the models of Organizational Behaviour Understanding effectiveness in organizations- goal approach and systems theory approach Knowing the time dimension of effectiveness Knowing the criteria of effectiveness Knowing the limitations of Organizational Behaviour Knowing the key forces affecting Organizational Behaviour Understanding the continuing challenges of Organizational Behaviour. Developing competencies for facing the challenges.
Models of Organizational Behaviour
Models of Organizational Behaviour constitute the belief system that dominates management’s thought and affects management’s actions in each organization. It is very important for the managers to recognize the nature, significance and effectiveness of their own models as well as the models of others around them.
Assumptions about Employees- Theory X and Theory Y by Mc Gregor (1957)
THEORY X
The typical person dislikes work and avoid it if possible
The typical person lacks responsibility, has little ambition and seeks security above all
Most people must be coerced, controlled, and threatened with punishment to get them to work
With these assumptions the managerial role is to coerce and control employees
THEORY Y
Work is as natural as play or rest .People are not inherently lazy. They have become that way as a result of experience
People will exercise self direction and self control in the service of the objectives to which they are committed
People have potential. Under proper condition they learn to accept and seek responsibility. They have imagination, ingenuity and creativity that can be applied to work
With these assumptions the managerial role is to develop the potential in employees and help them release that potential toward common objectives.
Five Models of Organizational Behaviour- The five models of Organizational Behaviour – Autocratic, Custodial, Supportive, Collegial and System, in the order mentioned , represent the historical evolution in management practice. Organizations differ amongst themselves in the model practiced by it. The practices may vary within the departments or branches of one organization. Also, the practices of individual managers may differ from their organization’s prevailing model because of the manager’s personal preference or different conditions in their department.
The models of organizational behaviour
(Source:from Organizational behaviour-Human behaviour at work by John W Newstrom, 12 th^ edition, McGrawHill Publication, pp30).
Autocratic Custodial Supportive Collegial System
Basis of Model Power Economic resources
Leadership Partnership Trust, Community, Meaning
Managerial Orientation
Authority Money Support Teamwork Caring, compassion
Employee Orientation
Obedience Security^ and benefits
Job performance
Responsible behaviour
Psychological ownership
Employee psychological result
Dependence on boss
Dependence on organization
Participation Self discipline Self motivation
Employee needs met
Subsistence Security Status and recognition
Self actualization
Wide range
Performance result
Minimum Passive cooperation
Awakened drives
Moderate enthusiasm
Passion and commitment to organizational goals.
Effectiveness in Organizations
Levi Strauss, an effective company practices the following value principles:
Despite shortcomings, the goal approach exerts a powerful influence on OB theory and management.
The Systems Theory Approach
It defines effectiveness in the broader context of the internal and external environment. It emphasizes that managers must deal with the internal and external aspects of organizational behavior and views the organization as one of many interdependent elements. The organization depends on the external environment for two kinds of inputs, which it transforms into outputs, and then releases in the hope that the external environment will accept them. These two inputs are:
a. Human Inputs—employees and natural resources
b. Non-human inputs (e.g., equipment, information, raw materials).
An important aspect of the systems theory is the feedback. Feedback, or information that reflects the outcomes of an act or series of acts, enables the organization to adjust to environmental demands. (Feedback would include market research, financial reports, customer complaints, etc.)
Systems theory emphasizes two important considerations:
a. An organization's ability to adapt to environmental demands;
b. Management’s ability to focus on the input-process-output cycle and maintain this three-part flows of activity.
The idea of the "learning organization," which evolves from the systems theory, suggests that organizations learn, adapt, and change by acquiring knowledge, distributing information, and interpreting information. Two types of learning are:
a. Generative learning— learning how to learn.
b. Facilitative learning—learning to learn through teaching.
Time dimension of Organizational effectiveness
Systems theory is used to integrate organizational effectiveness and time. In Systems theory the organization is considered as one element of a larger system of number of elements, the environment, that act interdependently. The organization takes resources (inputs) from the external environment, processes these resources and returns them in changed form (output).According to Systems theory,
effectiveness criteria must reflect the entire input-process-output cycle, not simply output and must also reflect the interrelationships between the organization and its outside environment. In relation to environmental circumstances organization passes through different phases of lifecycle like forming, developing, maturing and declining and the appropriate criteria of effectiveness must reflect the stage of the organization’s life cycle.
The criteria of effectiveness are also time based like Short run ( results of actions concluded in a year or less), Intermediate run ( when effectives of individual, group or organization is considered for a longer period, perhaps five years) and Long run ( for this the time frame is indefinite future).Four Short run effectiveness criteria are quality, productivity, efficiency and satisfaction. Three intermediate criteria are quality, adaptiveness, efficiency and satisfaction. The two long run criteria are quality and survival.
Criteria of Effectiveness
Effectiveness criteria must reflect the stage of the organization's life-cycle (which includes stages of growth, maturation and decline) and short, intermediate, and long-term perspectives.
- Quality—overarching criteria of effectiveness that involves meeting customers' needs and expectations. Statistical Quality Control (SQC) and Total Quality Control (TQC) rank among the most used programs for building quality throughout organizations, as well as in their products and services.
- Productivity—reflects the relationship between inputs and outputs. It excludes consideration of efficiency. Measures of productivity include profit, sales, market share, patients released, clients served.
- Efficiency— it is the ratio of outputs to inputs. Efficiency focuses on the entire input-process-output cycle, emphasizing input and process. Measures of efficiency include rate of return on capital or assets, unit cost, scrappage and waste, downtime, occupancy rates and cost per patient/student/client etc.
- Satisfaction—the extent to which the organization meets employee needs. It recognizes the organization as a social system that must benefit its participants. Measures of satisfaction include turnover, absenteeism, and employee attitudes.
- Adaptiveness—degree to which the organization can and does respond to internal and external changes. It relates to management's ability to sense environmental changes and changes within the organization. There are no specific, concrete measures of adaptiveness, but certain programs (e.g., employee training and career counseling) increase its capacity to deal with it.
Technology - Technology consists of the intellectual and mechanical processes used by an organization to transform inputs into products or services that meet organizational goals. Technology provides the resources with which people work and affects the tasks that they perform.
Environment - All organizations operate within an internal and external environment. It is a part of larger system that contains many other elements, such as government, family, society at large and other organizations. Numerous changes in the environment create demands on organizations. All these factors influence one another in a complex system that creates a dynamic even chaotic context for a group of people which influences the attitudes of people, affects working conditions and provides competition for resources and power.
Based on these four forces, the different challenges faced by the managers today are:
Managing in a global environment - Changes in the global marketplace have brought the need to think globally. For any company competing in the global marketplace it is essential to understand the diverse cultures of the individuals involved and develop cross cultural sensitivity. Hofstede(1983) found five dimensions of cultural differences that formed the basis for work related attitudes. These are Individualism (a cultural orientation in which people belong to loose social framework and their primary concern is for themselves and their families)versus collectivism(a cultural orientation in which people belong to tightly knit social framework and they depend strongly on large extended families or clans); power distance(the degree to which culture accepts unequal distribution of power); uncertainty avoidance(the degree to which a culture tolerates ambiguity and uncertainty); masculinity(the cultural orientation in which assertiveness and materialism are valued) versus femininity(the cultural orientation in which relationships and concern for others are valued) and time dimension(whether a culture’s values are oriented towards the future or towards the past and present). It is also required for these companies to bring in structural changes as and when required based on the demands of the global environment. Many organizational structures have become flatter as a measure of lowering cost and remaining competitive while some structures have grown more complex as a result of mergers, acquisitions and new ventures. Several organizations are hiring contingent workforces while others are moving from a traditional to a team based structure.
Managing workforce diversity - Workforce diversity has always been an important issue for organizations. Diversity encompasses all forms of differences among individuals, including culture, gender, age, ability, religious affiliation, personality, economic class, social status, military attachment and sexual orientation. Today the workforce has become richly diverse in terms of age, gender, educational backgrounds, talents and perspectives to their jobs. New labour force has emerged and management’s leadership practices must change to match the new conditions. These fast moving developments have given new emphasis to leadership ability. Some companies are discovering that demonstrating a sense of caring, really listening to employees and being concerned with both competence and relationships are among the keys to the motivation of the present workforce. Other companies are urging their managers to respond to a diverse workforce by building pride without devaluing others, empowering some without exploiting others , and demonstrating openness, confidence, authentic compassion and vulnerability. Diversity can enhance organizational performance
but five problems are particularly important: resistance to change, cohesiveness, communication problems, conflicts and decision making.
Managing Technological Innovation - Examples of the impact of technology includes the increasing use of robots and automated control system in the assembly lines, shift from manufacturing to service economy, widespread use of Internet and the need to respond to societal demands for improved quality of goods and services at acceptable prices. The great benefit of technology is that it allows people to do more and better work, but it also restricts people in many ways-thus having both benefits as well as costs. Each of the technological advancements places increased pressure on OB to maintain a delicate balance between technical and social systems.Technological innovations like expert systems, robotics, world wide web etc have been responsible to large extent for the advent of alternative work arrangements like Telecommuting, Hoteling and Satellite offices and also has started affecting the very nature of the management job like developing technical competency of themselves and also of the workers, motivating employees for reinvention, dealing with employee stress, depression, anxiety and helping employees to adjust to technological changes.
Managing ethical issues at work - Formal relationships create complex problems of cooperation, negotiation and decision making due to differences in resource power .This may give rise to many ethical issues in the organization like employee theft, comparable worth of employees, conflict of interest, sexual harassment, romantic involvements, organizational justice, whistle blowing. Managers must confront these ethical challenges of individual and group level and also those ethical issues that are encountered in organizational level like environmental issues and corporate social responsibility and handle them successfully.
Value of OB in developing competencies for facing the challenges: These four challenges are important because the way managers handle them shapes employee behaviour. Organizational behaviour can be used to do this effectively. OB helps people attain the competencies ( an interrelated set of abilities, behaviors, attitudes, and knowledge needed by an individual to be effective in most professional and managerial positions) needed to become effective employees, team leaders/members, or managers. Seven Foundation Competencies are:
Managing Self
Managing Communication
Managing Diversity
Managing Ethics
Managing Across Cultures
Managing Teams
Managing Change
Questions
- What are the various models of Organizational Behaviour? Discuss the similarities and differences among five models of organizational behavior.
- What is organizational effectiveness? Critically evaluate the goal approach and systems theory approach of defining effectiveness.
- Discuss the criteria of effectiveness with reference to the time dimension of effectiveness.
- Describe with examples the limitations of Organizational Behaviour
- What are the key forces affecting Organizational Behaviour?
- What are the continuing challenges of Organizational Behaviour? Describe how the seven competencies help in facing these challenges.
