2.Organizational Behaviour

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ORGANIZATIONAL BEHAVIOUR [8 L]

Different Schools of Management Thought: Scientific Management,

Administrative Theory, Theory of Bureaucracy, Human relations

theory (Elton Mayo).

Motivation: Concept, Different theories ( Maslow, ERG, Herzberg )

pose,.

Communication: Purpose, process, barriers to effective

communications, Guidelines to make communications effective

Perception: Process, importance, factors influencing perception,Shortcut to judging people-Halo effect, Stereotyping, Projection


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1.0 MANAGEMENT

Management is a set of people with some resources for the purpose of

attainments of organisational goals in an effective and efficientmanner through planning, organising, leading and controllingfunctions. Organisational resources include men (human resource),money, machines and materials collectively known as 4 Ms.

Effective means achieving organisational goals.

Efficient means achieving organisational goals with least waste ofresources.

Goals- a desired future state that an organisation endeavors to reach

- Goals provides sense of direction

- Goals help focus on efforts

- Goals guide plans and decisions

- Goals help evaluate and monitor progress


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1.1 G R JONES MODEL ON EFFECTIVENESS AND EFFICIENCY

EFFICIENCY

LOW HIGH

HIGH Managers achieve

goals but with poorultilisation ofresources

Product is over-priced

Managers achieve goals

but with goodultilisation of resources

Quality product at rightprice

LOW Managers pursuewrong goals andmake poor andwrong ultilisation ofresources

Product is of low

quality

Managers pursue wronggoals but make goodultilisation of resources

High quality product butprice is not affordable

EFFECT

IVENES

S


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2.0 FOUR ESSENTIAL FUNCTIONS OF MANAGEMENT

Organisation functions create a structure of task and authority

relationships in functioning of various departments.

2.1 Planning Are well thought set of programmes for achieving the variousobjectives leading to goals. Lack of Planning can ruin any organisations.Examples ..

2.2 Organising

2.3 Leading Act of motivating people to achieve objectives and goals set bythe organisation. It involves shared culture and values, communicatinggoals to employees, and infusing them with the desire to performcontinually at higher levels. Good leaders can raise an organisation to acommanding height. Examples Narayana Murthy, Azim Premji, Bill

Gates, Steve Jobs 2.4 Controlling To ensure actual performances at all levels conform to or are

better than planned ones, and with best utilisation of resources (men,machines, money and materials). It includes recourses to correctivemeasures and actions


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3. LEVELS OF MANAGERS

Top levelmanagers

Middle level

Managers

First line

managers

Functions / Departments:- HR, Finance, Technical,Design, Planning,

Manufacturing, Marketing,After Sales Service


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3.1 MANAGERS INVOLVMENT IN FOUR FUNCTIONS

Planning Organising Leading Controlling

T O P L E V E L

M I D D L E L E V E L

F I R S T L E V E L


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4.0 DIFFERENT SCHOOLS OF MANAGEMENT THOUGHT

Period Management Theory

and Advocator

Guiding Principles

1880

to

1940

Scientific ManagementTheory- Frederick Taylor(USA), Father of ScientificManagement;

Frank Galbreth and LillianGalbreth furthercontributed to this theory

1)Systematic and analytical approach towardsindustrial problems

2) Application of scientific t, echniques inrecruitment, selection, training of workers

3)Scientific study of production methods andtime study for finding best way forproduction

4)Scientific way for division work amongstworkmen, supervisors and managers, andfinally working out high productivity andefficiency

MAJOR AREA OF TAYLOR s COTRIBUTION:

METHOD STUDY, MOTION STUDY, TIMESTUDY, INCENTIVE SCHEMES.

CRITISISM : IGNORED HUMAN ELEMENTS;

INCREASED CONFLICT


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Period Management Theory

and Advocator

Guiding Principles

1890 to

1920:continuedtill 1970/80

Administrative Theory-

Max Weber(Germany),Social Scientiest;

Theory of Bureaucracy

1)Labour is divided with clear definitions of

authority and responsibility2)Hiererchies of authorities fom from

highest level to lowest level ofmanagement and each position reports tonext higher one

3)Rules and regulations determine andstandardise behaviour

4)Adminsitrative acts and decisions arerecorded in writing

5)Mangement is separate from ownership


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Period Management

Theoryand Advocator

Guiding Principles

1916 to1925:continuedtill 1980/

90

PRINCIPLES OFMANAGEMENT byHenry Fayol,

enriched

AdministrativeTheory with 12principles

1)Division of work into discrete tasks and assignspecific responsibilities to individuals

2)Authority- delegate authority along withresponsibility

3)Discpline: make expectations clear and punishviolations

4)Unity of command: each employee assigned toonly one supervisor

5)Unity of direction: employee effort to befocused to companys objective

6)Subordination of individual interest to generalinterest

7)Remuneration; reward efforts systematically

8)Centralisation: Determine relative importanceof superior and subordinate roles


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Period Management

Theoryand Advocator

Guiding Principles (Contd.)

1916 to1925:continuedtill 1980/

90

PRINCIPLES OFMANAGEMENT byHenry Fayol,

enriched

AdministrativeTheory with 12principles

9) Scalar Chain: Follow communication in linewith chain of command

10) Order jobs and materials so as to meetorganisation objectives

11) Equity: Fair discipline and order, enhanceemployees commitment

12) Stability and Tenure of Personnel: promoteemployee loyalty and longevity

13) Initiative: Encourage employee to act of theirown in support of organisations directions

14) Esprit de Corps ( Team Sprit and Unity isStrength )- Promote a unity of interestbetween employees and management


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Period Management

Theoryand Advocator

Guiding Principles

1920 s

To1990s

Human RelationsApproach

Or BehaviouralManagement

Theory- EltonMayo, Professorof IndustrialResearch,Harvard Schoolof Business

Hawthorne Studies conducted at Western ElectricCompany, USA plant (1924-32):

1)Illumination study (1924-32)- lighting decreasedover successive periods for the experimental group

of workmen, kept at constant level for control group;But productivity was rising for both the groups.

Conclusion : Poorer lighting did not affectproductivity

2) Relay Assembly Room Study (1927-33)-Experiment done on a group of 5 assembly workers.

Formal supervision by line supervisors werewithdrawn, instead the researchers took theirpositions. A flexi time slots for personal requirementsere accommodated for the workmen. They werealso given variations in the methods of payment.

Conclusion : Change in supervisory arrangement

increased productivity


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Period Management

Theoryand Advocator

Guiding Principles

1920 s

To1990s

Human RelationsApproach

Or BehaviouralManagement

Theory- EltonMayo, Professorof IndustrialResearch,Harvard Schoolof Business

3) Bank Wiring Room Study (1931-32):

One group of 14 men in a standard shop conditionsand continuous supervision;

The other group in same shop condition but

practically with no supervision. One supervisor onlyplaying the role of facilitator noted and provided theworkers support requirement. After about 3 weeks,observed the second group performed better inproductivity.

CONCLUSION: IT LAID THE FOUNDATION OF HUMAN

RELATIONS MANAGEMENT IN WORKPLACE;Peoples social and Psychological Behaviour in

workplace


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4.1 ELTON MAYOS HUMAN RELATIONS APPROACH

Elton Mayos Human Relations Approach came as a turning point in managementthought.

During and consequent upon Hawthornes studies Elton Mayo came up with new

thoughts of management known as Hman Relations Theory which included:

1) Human factor is important and it plays dominant role in organisational

performance. Their social and psychological needs in the workplacecan not be ignored

2) Non-economic awards: Workers do not only work for money andmonetary incentives, and needed recognition, sense of participationand belonging

3) Social man: Human beings are more responsive to the social forces ofthe group and find identity through social relationship with others

4) Organisation a Social System: Important relationship is more importantthan formal structure and relationships


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In his 1960 book, The Human Side of Enterprise, Douglas McGregorproposed two theories by which to view employee motivation: Theory Xand Theory Y. Both of these theories begin with the premise thatmanagement's role is to assemble the factors of production, includingpeople, for the economic benefit of the firm. Beyond this point, the twotheories of management diverge.Theory X

Theory X assumes that the average person: Dislikes work and attempts toavoid it.Has no ambition, wants no responsibility, and would rather follow thanlead.Is self-centered and therefore does not care about organizational goals.

Resists change.Is gullible and not particularly intelligent.

Essentially, Theory X assumes that people work only for money andsecurity.

MCGREGOR THEORY ON MOTIVATION: THEORY X AND THEORY Y


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Maslow's Hierarchy of Needs is a "content theory"

of motivation" (the other main one is Herzberg'sTwo Factor Theory).

Maslow's theory consisted of two parts:

(1) The classification of human needs, and

(2) Consideration of how the classes are related toeach other


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MASLOWs THEORY ON NEED OF HIERARCHY


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- A person starts at the bottom of the hierarchy (pyramid) and will initially

seek to satisfy basic needs (e.g. food, shelter)

- Once these physiological needs have been satisfied, they are no longer

a motivator. the individual moves up to the next level

- Safety needs at work could include physical safety (e.g. protective

clothing) as well as protection against unemployment, loss of incomethrough sickness etc)

- Social needs recognise that most people want to belong to a group.

These would include the need for love and belonging (e.g. working with

colleague who support you at work, teamwork, communication)


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- Esteem needs are about being given recognition for a job well done.

They reflect the fact that many people seek the esteem and respect of

others. A promotion at work might achieve this

- Self-actualisation is about how people think about themselves - this is

often measured by the extent of success and/or challenge at work

Maslow's model has great potential appeal in the business world. Themessage is clear - if management can find out which level each employee

has reached, then they can decide on suitable rewards.


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PROBLEMS WITH THE MASLOW MODEL

Problems with the Maslow model when real-life working practice is

considered:

- Individual behaviour seems to respond to several needs - not justone

- The same need (e.g. the need to interact socially at work) may cause

quite different behaviour in different individuals

- There is a problem in deciding when a level has actually been"satisfied"

- The model ignores the often-observed behaviour of individuals who

tolerate low-pay for the promise of future benefits

- There is little empirical evidence to support the model. Some criticssuggest that Maslow's model is only really relevant to understandingthe behaviour of middle-class workers in the UK and the USA (whereMaslow undertook his research).


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In his 1960 book, The Human Side of Enterprise, Douglas McGregorproposed two theories by which to view employee motivation: Theory X

and Theory Y; Management's role is to assemble the factors of production,including people, for the economic benefit of the firm. Beyond this point,the two theories of management diverge.THEORY X

Theory X assumes that the average person: Dislikes work and attempts toavoid it.Has no ambition, wants no responsibility, and would rather follow thanlead.Is self-centered and therefore does not care about organizational goals.Resists change.

Is gullible and not particularly intelligent.

Essentially, Theory X assumes that people work only for money andsecurity.

MCGREGOR THEORY ON MOTIVATION: THEORY X AND THEORY Y


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THEORY Y: makes the following general assumptions:

Work can be as natural as play and rest.

People will be self-directed to meet their work objectives if they are

committed to them.

People will be committed to their objectives if rewards are in place that

address higher needs such as self-fulfillment.

Under these conditions, people will seek responsibility.

Most people commonly have creativity and

Under these assumptions, there is an opportunity to align personal goals

with organizational goals by using the employee's own quest for fulfillment

as the motivator.

McGregor recognized that some people may not have reached the level of

maturity assumed by Theory Y and therefore may need tighter controls that

can be relaxed as the employee develops.


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Theory Y Management Implications

If Theory Y holds, the firm can motivate its employees in following

ways:1)Decentralization and Delegation - If firms decentralize control andreduce the number of levels of management, each manager will havemore subordinates and consequently will be forced to delegate someresponsibility and decision making to them.

2)Job Enlargement - Broadening the scope of an employee's job addsvariety and opportunities to satisfy ego needs.

3)Participative Management - Consulting employees in the decisionmaking process taps their creative capacity and provides them withsome control over their work environment.

4)Performance Appraisals - Having the employee set objectives andparticipate in the process of evaluating how well they were met.


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For further reading refer to hand out in addition toclass lecture on

MotivationCommunicationPerception

Documents

2.Organizational Behaviour