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Study Unit 2

Organisational Behaviour and its Importance toManagement

Contents Page

Introduction 62

A. What Is Organisational Behaviour? 62

A Behavioural Approach in a Dynamic Environment 63

The Interface with Management Balancing Stakeholder Expectations 65

B. Human Relations School 65

Elton Mayo and the Hawthorne Studies 66

Key Insights of the Human Relations School 66

C. Organisational Structures and Culture 68

Characteristics of Organisational Culture 69

Classifications of Culture 69

Cultural Variance and Workplace Behaviour 75

D. Influencing Organisational Behaviour 77

Other Factors to be Considered 78

The Psychological Contract 79


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INTRODUCTION

As you learnt in the introductory unit, behavioural science uses theory and application fromsociology, psychology and anthropology to structure organisations and secure an optimumworking environment, i.e. reconciling the needs of the organisation with those of the

individual and group.

A. WHAT IS ORGANISATIONAL BEHAVIOUR?

We can summarise what we have meant by organisational behaviour so far, as follows:

Organisations of one kind or another are a necessary part of society and serve manyimportant needs. The decisions and actions of management in these organisations have anincreasing impact on individuals, other organisations and communities. It is, therefore,important to understand how organisations function and the nature of their influence on thebehaviour of people.

Organisational behaviour is the study of people in an organisational setting and involves theunderstanding and control of the behavioural factors that influence the performance of peopleas members of an organisation. Apart from in small firms, though, it does not mean thebehaviour of the organisation as a whole; it means the behaviour of the individuals andgroups that make up the organisation, and the inter-relationships between them.

While the individual is the basic behavioural building block in organisations, most interactwith others in groups, teams and various interactive relationships. Indeed this is the verybasis of effective co-ordination. Group working is fundamental to most organisations and ispotentially a critical mechanism in adapting successfully to a changing world, with regard togenerating and implementing new ideas. The behavioural approach incorporates the studyof social psychology and sociology to help understand the nature of these social interactions.

Management must recognise that the behavioural dimension embodies patterns ofrelationships between individuals and groups and this will produce different reactions,responses and behaviours according to how management structures the organisation.

Organisational behaviour also means understanding how the behaviour of people,management processes, the organisational context and environmental influences combine todrive organisational processes and the execution of tasks.

Organisations consist of people, and to understand their behaviour requires a grasp ofpsychology, to understand how they learn, how they process and communicate information,how they perceive the world, and form attitudes and opinions. It also requires anappreciation of how they interact with others, form groups and co-operate in pursuit oforganisational goals.

Organisational behaviour also considers both the formal aspects of organisation, and theinformal ones which may have powerful influence on the individual through the power of thegroup and the need for affiliation. The behavioural approach in effect recognises that theformal organisation is paralleled by the existence of an informal organisation with its ownleadership, norms of behaviour and communication networks which can work for or againstthe aims of those with legitimate authority.

In this unit we will build on this understanding of organisational behaviour and lookspecifically at the interface with management. We will also consider the human relationsschool of thought since the work of Elton Mayo and others represented the starting point forthe study of behavioural science.


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This leads naturally into a consideration of the characteristics of organisational culture. Wewill round off the unit by considering the ways in which behaviour is influenced inorganisations.

A Behavioural Approach in a Dynamic Environment

We saw in the last unit that the business world is dynamic and changing rapidly under theinfluence of factors such as:

the growth and development of multinationals

advances in communication and information technologies

the emergence of a global economy

dynamic growth in China and India relative to the older economies of Europe and NorthAmerica.

In a dynamic and changing world, it is vital to adjust and adapt the organisation to changesthat impact on its internal and external environment. This can only be achieved if the peoplewithin the organisation are prepared to change. The behavioural approach will facilitateachievement of such change by providing management with an understanding of individualpsychology, such as:

people's perceptions and how they interpret the world

how they form different attitudes and opinions and the processes by which these maybe changed

how they process information and learn new methods and techniques.

Managing organisations in a dynamic world requires leadership as well as efficientmanagement. The behavioural approach provides understanding of the nature of leadershipand its relevant traits, styles and power bases. It also recognises that different behaviours

will be required in different situations for leadership to be continuously effective.The above developments also produce opportunities and threats for organisations, and thekey to meeting them successfully is a function of organisational behaviour. Improvements inorganisational performance and effectiveness are a direct function of this behaviour andexcellence in management processes. It is important, as we will see in more detail in laterunits, for managers to understand behaviour in a number of areas:

Attitudes

Dynamic change in the environment demands corresponding change fromorganisations and this means their behaviour must change.

Employees are often resistant to change, since people feel more secure with the

familiar and habitual. They are naturally apprehensive and fear that they may bedisadvantaged by change and that they may not be able to learn new skills.

For managers to overcome this resistance, they must understand the attitudes andperceptions of their employees and respond proactively to reduce resistance and/orincrease driving forces for change.

This might involve open communication, participation in the change process and/or thedevelopment of a new wagework bargain.

Motivation

This is of central importance to the organisation achieving its goals. Managers mustnot only understand the needs that drive employee behaviour, they must appreciate the

processes involved in making motivation effective in improving performance.


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Needs may vary with the individual's position in the organisational hierarchy; what iseffective with one individual might not be with another.

Similarly managers must recognise that individuals will also be motivated by theirexpectations that certain actions will achieve an outcome that they regard as desirable;i.e. that individuals see a connection between effort, performance and reward.

Having the right equipment, people, skills and organisational framework is not aguarantee of excellent performance. Employees and managers must be motivated toachieve organisational goals.

The behavioural approach therefore provides insight into the means of improving themanagement of human resources. This includes the achievement of maximummotivation by achieving congruence between satisfying the needs of the individual andthe needs of the organisation.

Communication

Organisations depend on receiving and transmitting information to achieve the co-ordination necessary to achieve their goals.

Individuals are central to this process and their behaviour clearly impacts on itseffectiveness.

Managers must understand this behaviour if they are ensure a communication processthat allows a clear, understandable and fast transmission of information to supportdecision-making without unnecessary distortion or noise.

Individual perceptions, as well as the language itself, can cause problems, particularlywith information moving up and down the hierarchy.

Human nature also leads to extensive informal communications that do not follow thechain of command.

The behavioural approach contributes to understanding of the scope and nature ofcommunication within and between organisations and the behavioural barriers that mayarise. Communication is central to recognition of a changing world and the effectiveimplementation of responses to it.

Conflict

This can inhibit the achievement of organisational goals and adversely affect moraleand performance.

Managers with an understanding of organisational behaviour will appreciate thatconflict can be positively correlated with goal achievement where it releases tensions,stimulates ideas or challenges the status quo.

Managers also need to recognise the behavioural signs of negative conflict andunderstand the means by which this type of conflict may be resolved.

They have considerable scope to alter the situational factors that might be engenderingconflict and to secure unity between the goals of the organisation and those of groupsand individuals.

Organisation requires specialisation and co-ordination, both of which can produceconflicts. The behavioural approach provides insight into such conflict, both positiveand negative. As with resistance to change, it also supplies the potential means ofsuccessfully overcoming the negative aspects.

However, securing change is not just a matter of influencing the people dimension. Itrequires simultaneous achievement of the needs of management, the needs of taskfulfilment and the needs of the people involved.


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The Interface with Management Balancing Stakeholder Expectations

Stakeholders include any group or individual that can affect or is affected by the achievementof organisational goals. Management, itself an important internal stakeholder group, isresponsible for directing, co-ordinating and guiding others, both inside and outside theorganisation to achieve organisational goals. Can you think of other important stakeholder

groups that management must integrate into organisational activities if such effectiveness isto be achieved?

You may have thought of yourself as a stakeholder. You contribute skills, effort and creativityto the organisation and so affect the achievement of its goals. You may also contribute apositive attitude and a willingness to change. Similarly you will be affected by theorganisation's policies and the quality of its management, not to mention the opportunities itprovides for your career development. Other stakeholder groups you may have thought ofmight include workgroups, different departments, suppliers, distributors and of coursecustomers. Some would also include shareholders.

To be effective in achieving its objectives, any management must balance the expectations ofthese different stakeholder groups and mobilise their productivity, commitment and

contribution to the organisation's success. Central to this is the manager's ability to managestakeholders effectively, for without them there can be no meaningful outcome. This meansreconciling any conflicts of interest between individuals and groups and creating anorganisational climate in which they can work willingly and effectively together. This is nosimple task, as patterns of behaviour are diverse and no individual is "owned" by theorganisation. They come with their own attitudes and perceptions that may be influenced bya diverse range of social and cultural factors.

Most individuals and groups intend to perform effectively in organisations but this is notalways the case. When ineffective performance occurs, it is often the case that it is not whatmanagement has done but rather how they have tried to implement it. A workgroup, forexample, may agree with the need for changes in working methods in order to stay

competitive but feel very unhappy at the lack of consultation or re-training that themanagement has provided. Management is at the centre of everything that happens inorganisations and is, therefore, central to the outcome. It must, therefore, work on improvingits stakeholder relationships, seek to balance all the ingredients for organisational successand create the necessary climate for the various individuals and groups to work together.

In the next section, we will consider the school of management thought we omitted in the lastunit. We did this because this school emerged as a reaction to the classical theorists andfocussed not on structure or scientific principles but on social factors at work and thebehaviour of individuals within the organisation. For this reason it is known as the humanrelations approach to management and is primarily associated with the work of Elton Mayoand the Hawthorne experiments.

B. HUMAN RELATIONS SCHOOL

The main feature of the classical school is its concentration on structure rather as thoughwe tried to describe a person by stating her height and weight, then described her skeleton,muscular system, circulatory system and so on; in short, it is as if we simply outlinedanatomical features with no regard to the mind, soul or personality. This view sees theperson virtually as a machine, and indeed another term for this view of organisations is"mechanistic". (To complete our jargon, note that it is also called the "formal" organisation.)

Whenever we have looked at the implications of the classical theorists for management andorganisation in practice, we have noted that although the technical features are all there,

something is missing. We need to consider the human dimension the people who fill theposts in the organisation and their behaviour. Whilst there is some consideration of a need to


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take account of human factors, by and large the human dimension is not seen as importantto the form of organisation. This approach allows the theorists to propose ideal types oforganisation and management unencumbered by the problems that arise from actuallyhaving people involved in them.

In the 1920s and 1930s, greater attention began to be paid to the way in which the human

dimension affected the operation of organisations and what this meant for management. Thebasic idea underlying all the work considered in this section under the general heading of"human relations" is that to understand and improve an organisation, you need to understandthe people who work for it, take account of their various needs, build on their strengths andensure their weaknesses are either overcome or prevented from having an adverse effect onthe organisation's working.

Note that, unlike the classical theorists, the writers of the human relations school are notsuggesting any organisational solutions as such. They are more concerned to shed light onthe way organisations work in practice and to identify possible organisational practices whichmay bring the needs of the formal organisation in line with the reality of the way peoplebehave.

Elton Mayo and the Hawthorne Studies

The key work which defines the human relations approach comes from Elton Mayo's studiesat the Hawthorne Plant of the Western Electric Company between 1927 and 1932. Withoutgoing into great detail about the studies, the background was that the researchers weretrying to find the optimum level of lighting in the plant in order to maximise productivity. Assuch, it started out as a strictly scientific management approach. However, the surprisingfinding was that productivity increased among the group of workers being studied both whenthe level of illumination was increased and when it was decreased. Subsequent studies byMayo led to the conclusion that what was affecting performance was the special attentionbeing paid to the group of workers rather than any external physical factors. Their workinglives had suddenly become more interesting because of the experiments which were takingplace, they felt important and valued, and the result was increased enthusiasm for their jobsand a higher output.

This phenomenon has become known as the "Hawthorne effect".

Having established from this that performance was related to psychological and sociologicalfactors as well as purely physical ones and the organisational structure, Mayo went on toinvestigate what other forces were at play in the workplace. In summary, his findings werethat:

workers are strongly motivated by social needs (for social interaction, self-esteem andrecognition, a sense of belonging and security) and seek satisfaction of those needsover and above any others, including the need for money once a certain level of

remuneration as been achieved;

individual workers belonged to groups at the workplace which had their own codes ofbehaviour, leaders and means of enforcement of the group norms (which includednotions of what appropriate output standards were), constituting a whole "informal"organisation within the formal one.

These startling discoveries shifted the entire emphasis in organisation and managementthinking. Mayo demonstrated that human attitudes and behaviour seem to be what governactivity at the workplace, and what was required was to examine the needs and interaction ofindividuals, the ways in which groups operate and what this means for management.

Key Insights of the Human Relations School

From the simple experiments of Elton Mayo, a vast body of work has now built up about thenature of the human dimension to organisations. Most of this work, led mainly by


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sociologists and psychologists, continues to explore the elements identified by Mayo thenature of the informal organisation and the needs of individuals at work and to developideas on how these factors can be taken account of in management.

(a) The informal organisation

It must be recognised that the formal structure, organisation, values and goals of an

undertaking are by no means the only, or even the main, determinant of behaviour inthe workplace. There will always be an informal network of workgroups andinteractions which constitute an alternative form of organisation for the workers, andone which is invariably far more important in their lives.

This "informal organisation" determines, to a large extent, workers' attitudes to theformal organisation and, therefore, how they view the formal structure of authority. It isworkgroup norms which tend to set standards of performance, such as timekeeping,output, quality, attitudes towards customers and clients and dress codes, andmanagement cannot impose standards which are not acceptable in this alternativeculture.

This is a major problem for management since managers themselves are party to theinformal organisation and culture as well. These patterns of relationships amongmanagers can be particularly complex as they cross the divide between identificationwith their management peers and their subordinates (and especially so in cases ofinternal promotion).

The notion of an alternative "culture" (see below), which operates against the interestsof the formal organisation, can be very damaging. It means that management has littlecontrol over working practices and standards of performance, and there is often verylow morale among the workforce. Of course, management can always use sanctionsto force compliance with formal authority, but this is likely to cause resentment and leadto conflict if the informal organisation does not accept the legitimacy of compulsion and there are many organisations where this is indeed the case.

The principle of the informal organisation and culture is easily observed in everydayexperience. Consider how difficult it can be to get certain things done in yourorganisation which, on the face of it, should be easily achievable in terms of formalrules and relationships. Consider as well how far your own view of the organisationaccords with the values and attitudes of your work colleagues, and how this affects themanner and extent of your work. Who really sets the rules the organisation itself oryou, the workers?

(b) Complexity of workers' needs

The second element identified by the human relations school is the extent to whichpeople come to work to gain satisfaction of needs other than that of simply earning

money. This is in stark contrast to the view of the classical school of managementtheory.

People have a great variety of needs in life, and, if you think about it, it is clear that theyare likely to want to have many of those met in the place where they spend aconsiderable amount of their time the workplace. Obviously there is a need to makea certain amount of money, but where this has been achieved (and in organisationswhich offer secure employment with salaried posts, this is relatively certain) theimperative of financial reward is considerably reduced. There is rather a need forsocial interaction, self esteem and being valued, achievement, and many others, andthese needs can be manifested in all sorts of ways. (For example, a worker'scomplaint may not necessarily be a recital of facts about a particular issue it may be a

symptom of the need for recognition or a product of feelings about status. In manycases, merely being able to voice the complaint may resolve the problem.) Managersignore these factors at their peril.


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The problem for management is to provide the conditions in the workplace for as manyof those needs to be met as possible. Thus, ensuring enthusiastic co-operation fromthe workforce is likely to require good communications, recognition of effort (not justeffectiveness) and providing scope for achievement and advancement.

The experiments were subject to technical criticisms but it cannot be doubted that their

publication ignited interest in human relations and personnel management. The insightthey provided into organisational behaviour represented a step change in theunderstanding of human needs at work. From this point, it became recognised thatindividual employees viewed their organisation through the prism of their peers' valuesand attitudes and this determined the extent of their drive and motivation at work.However, the focus of this school on industrial sociology, and in particular the needs ofthe individual and the group, meant that it tended to concentrate on people to theexclusion of the organisation and its wider environment.

We shall return to this subject in detail later in the course when we look at people'sbehaviour in organisations and, particularly, the topic of motivation. Writers such asMaslow will be seen to provide a strong link to the human relations school in the

development of a hierarchy of needs and personal development. Others writers suchas McGregor, Herzberg, Likert and Argyris sought to validate and develop the findingsof Mayo and his research team.

C. ORGANISATIONAL STRUCTURES AND CULTURE

In organisations, there are deep-set beliefs about the way in which work should beorganised, the way in which authority should be exercised, people rewarded and punished,etc. Culture embraces the influences that affect society's basic values, beliefs, perceptionsand behaviour. They are the characteristics of a particular society or sub-group within it. Itis, however, a difficult concept to describe since it is often not remarked on or recognised by

those most affected by it. Consider for a moment the following questions in relation to anytwo organisations with which you are familiar:

How formal is it? Do work hours matter, or dress?

Are there rules and procedures, oronly results?

Who is allowed to sign letters?

Do committees control, orindividuals?

Who do you have to go through tosee the boss?

It is likely that the answers to these questions will be different for each organisation.

These types of issue are encompassed in the structure and culture of the organisation.These both have a very strong influence on the way staff behave and on way in which theyare managed.

Organisational culture

The culture of an organisation refers to the deep-seated values underpinning theorganisation. It is manifested through a number of features (as discussed below) and itis increasingly being recognised that the culture is fundamental to the success orfailure of organisations in meeting their goals.

Organisational culture is not something that is written down or, necessarily, is easilystated. Rather, it is an intangible mixture of rules, relationships, values, customs,values and attitudes which, taken together, describe the distinctive "feel" of theorganisation. It is within this culture that individuals work and from which they learn thenorms and values to which they are expected to subscribe.


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There is an associated term "organisational climate", which refers to the ways inwhich people involved with the organisation (its stakeholders and its competitors)perceive that organisation for example, the degree to which it is friendly orformal/distant, whether it is people oriented or task oriented, how concerned it is withthe welfare of its employees, or whether it is characterised by conflict or co-operationbetween teams and departments.

Organisational structure

This is the arrangement and inter-relationship of the component parts and positions ofan organisation. Whereas culture is hidden, structure can be seen and drawn inorganisation charts. Structure may reflect culture.

Characteristics of Organisational Culture

We can identify a number of characteristics from which it is possible to develop anunderstanding of an organisation's culture.

The organisation's goals particularly its mission statement and the extent to which

they are clear, communicated to and embraced by all levels of the organisation. The dominant behaviour patterns applying to the interaction within the organisation

and between the organisation and its stakeholders (its existing and potentialcustomers, investors, owners, etc.) in respect of both what is expected and whetheractual behaviour lives up to these expectations.

The distribution of authority and decision-making through the organisation basically along a continuum from being concentrated at the top to being spreaddownwards to teams working close to customers by the empowerment of employees.

The structure of the organisation is closely related to the distribution of authority andmay be easier to identify through the use of organisation charts, etc.

The nature of leadership, which refers to the way in which power and authority areexercised, again along a continuum from authoritarian to democratic.

The values of the organisation in terms of its responsiveness to the needs andaspirations of its own staff and to those of its stakeholders.

The entrepreneurial spirit of the organisation, as revealed by the degree ofenterprise, innovation, competitiveness, flexibility and drive for excellence of theorganisation.

Its receptiveness to embracing change, arising from changes in its environment particularly whether it is proactive (anticipating and planning for change) or reactive(coping with change as and when it arises).

Classifications of Culture

A number of writers have analysed organisational culture and we shall consider twoapproaches here.

(a) Handy's four cultural types

Handy's classification identifies four types of culture power, role, task and person which are closely related to the organisational structure that is adopted by senior/topmanagement. He believes that organisations have a system of beliefs and values thatform the basis and foundation of their cultures.


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Entrepreneurial structure and power culture

The first structure identified by Handy is the entrepreneurial structure. Thisstructure places an emphasis on centralisation and central power. Such powerexudes from the core of the business and the figurehead is seen as a verypowerful and influential individual, with the power and authority to allocate and

control resources and to do this based on the fact that their position gives themcarte blanche to do what they want.

Handy suggests that the culture dominant in this type of structure is the powerculture, and we can characterise such organisations as being like a web with aruling spider. Those in the web are dependent on a central power source.

Figure 2.1: Power Culture (the Spider's Web)

Rays of power and influence spread out from a central figure or group. Theremay be a specialist or functional structure, but central control is exercised largelythrough appointing, loyal key individuals and on interventionist behaviour from thecentre. Such control may be exercised on whim and through personal influence

rather than, necessarily, on procedures or purely logical factors.Effectiveness is judged on results and, for the central figure, the ends can be heldto justify the means. Individuals succeed as long as they are power oriented,politically minded and risk-taking with a low need for security. The power ofmembers is based on control over resources and personal influence with thecentre.

This type of structure can be found in small and medium-sized organisations thatare evolving (growing), are organic by nature and are responsive to change.

The main advantage of such organisations is that they are strong, proud anddynamic, and are able to react quickly to external demands. However, powercultures may suffer from staff disaffection people in the middle layers may feel

they have insufficient scope, and the interventionist pressure and constant needto refer to the centre may create dysfunctional competition and jostling for thesupport of the boss. The organisation is also dependent on the ability and

judgement of the central power if it is weak, then the organisation will struggle.

As the power organisation grows, the centrist culture breaks down if it becomesimpossible for the centre to keep up its interventionist, co-ordinating role. Thelarge organisation may need to divisionalise (create other spiders' webs linked tothe central web).

Bureaucratic structure and role culture

The bureaucratic structure is based on logic and rationality. It places an

emphasis on roles within the organisation, rather than one central figure, andrelies heavily upon the distribution of power, authority, tasks and responsibilities.


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Handy indicated that the culture that is dominant in this structure is the roleculture.

Handy characterised such structures as being like a Greek temple (Figure 2.2).The pillars of the bureaucracy represent functions and specialisms, usuallydelineated as separate departments for example, finance, design, marketing,

etc. Work within and between departments is controlled by procedures, roledescriptions and authority definitions. Communication takes place within well-defined systems and structures (committee constitutions and reports, proceduremanuals, official memoranda, etc.). There are mechanisms and rules forprocessing decisions and resolving conflicts. Matters are taken up the line to thetop of the structure where heads of functions can define a logical, rational andcorporate response. Co-ordination is implemented at the very top by the seniormanagement group.

Figure 2.2: Role Culture (Greek Temple)

Efficiency stems from the rational allocation of work and conscientious

performance of defined responsibility. Job position is central to this, but notnecessarily the job-holder as a person. People are appointed to a role based ontheir ability to carry out its functions so effectiveness is seen in terms ofsatisfactory performance of role. Indeed, performance over and above the role isnot expected and may disrupt.

Power is based on position, not personal expression, and the application of rulesand procedures are the major methods of influence.

Role cultures tend to develop in relatively stable environments and providepredictability, standardisation, consistency and conformity. They tend to beeffective where economies of scale are more important than flexibility, ortechnical expertise and specialisation are more important than product innovation

or product cost. However, role cultures may find it hard to adjust to change rules, procedures and tested ways of doing things may no longer fit thecircumstances.

Work in a role culture can be frustrating to someone who wants to exercisediscretion and the opportunity for innovation in his/her work. Those who areambitious will have to focus on exploiting existing procedures and methods, andwork within the committee structure. However, employees do benefit fromsecurity and predictability in working patterns, can develop and apply specialistskills without risk, and salary and career progression are predictable.

Examples of bureaucracies and role culture are local government and the civilservice, large insurance companies and IBM by the late 1980s. However, all

these organisations have undergone extensive change in response to thepressures of market competitiveness and various forms of de-centralisation and


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de-regulation. Downsizing, de-layering and competitive tendering are examplesof how such organisations have restructured to become more flexible andresponsive.

Matrix structure and task culture

The matrix structure places an emphasis on the completion of projects by means

of project teams or groups. Expertise is pooled in order to complete largeprojects that, ordinarily, could not be achieved by one person. The emphasis ison expertise and skill as opposed to power (in the entrepreneurial structure) androle (in the bureaucratic structure). Handy identified the culture that dominatesthe matrix structure as the task culture.

We can characterise this structure as a net with small teams of cells at theinterstices. It is very much a small team approach to organisations.

Figure 2.3: Task Culture (the Net)

As a culture, power and influence are distributed to the interstices of the net. Theemphasis is on results and getting things done. Resources are given to the rightpeople, at whatever level, who are brought together and given decision-makingpower to get on with the task. Individuals are empowered with discretion andcontrol over their work. The task and results are the main focus, and teamcomposition and working relationships are founded on capability rather thanstatus.

Task culture is essentially flexible and adaptable, with teams being formed forspecific purposes and then moving on, and team composition possibly changingaccording to the stage of the project. This allows flexibility and responsiveness toboth the environment and client needs. On the other hand, people in the teamwho want to specialise may be sucked into general problem-solving; and whenthe task changes, they must move with it rather than pursuing a particularscientific or professional specialism. Project-based working often involves high

risk and ambiguity, which means far less security and certainty for employees(particularly in comparison to bureaucracies).

Task culture is based on expert power with some personal and positional power.Influence tends to be more widely dispersed, with team members feeling thatthey each have more of it. In the team, status and individual style differences areof less significance the group achieves synergy to harness creativity, problem-solving and thus gain efficiency. The aspirations of the individual are integratedwith the objectives of the organisation.

Organisational control is exercised through the allocation of projects and target-setting, project budgets/resource allocation and monitoring/review by means ofprogress reporting systems. Where resources become scarce, top management

may intervene more, and there may be competition between project leaders foravailable resources. Morale may suffer and individual priorities and objectives


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take over, with the result that the task culture may become more like a powerculture.

We can see task cultures existing in arrangements such as networkorganisations, where a large organisation effectively consists of small groups thatco-operate to deliver a project; and matrix organisations which are entirely project

oriented with ever-changing project or contract teams. Independence structure and person culture

The focus of the independence structure is on the individual. Individuals withinthis structure are far more autonomous, but come together to make decisions thataffect them as a whole. This structure is present in small companies such asconsultancies, doctors' surgeries and law firms, where individuals have their ownobjectives and skills and, in some cases, are largely responsible for their ownincome-generation. Handy suggested that the culture that dominates theindependence structure is the person culture.

Figure 2.4: Person Culture (Cluster)

The structure exists only to serve the individuals within it it has nosuperordinate objective. Power and influence are shared, based on the fact thatindividuals are seen to be equal. They will tend to have strong individual valuesabout how they will work and these will respected by others. Where individualsfrom a person culture are working in other cultures, they will maintain their owncultural values for example, the consultant or specialist will do what is requiredto retain his/her position in the organisation, but essentially sees the organisationas a base on which he/she can build a career or carry out his/her own interests.As such, they are very difficult for the organisation to manage.

This cultural type may be the only acceptable organisation to particular groups such as workers' co-operatives or where individuals basically work on their ownbut find some back-up useful. It is becoming increasingly popular as the numberof consultancies increases.

It is possible that such organisations will only be effective for their originalmembers, or for small numbers of individuals. Where the organisation begins totake on its own identity, it will start to impose on individuals, so moving towardssome of the other types of culture.

(b) Peters and Waterman rational and excellence models

The management experts Peters and Waterman have provided a comparative

classification of what they see as the two main types of organisational structure andcultures found in modern society. They term these the rational model and the


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excellence model. The rational model derives its structure and culture from the ideasof classical and scientific management theory, whereas the excellence model is basedon Peters' own excellence theory, together with the work of Senge (on learningorganisations) and Deming (Japanese ideas).

The characteristics of the rational model are as follows:

Organisations are large, so that they can reap the economies of scale.

Low costs and cheapness of product or service are seen as the way to success.

All activities are carefully analysed and controlled for example, strict budgetsand cash flow analysis.

All targets are firmly set in numerical terms.

Low-range forecasts are produced in detail.

Orthodox thinking is encouraged and rewarded.

The manager's job is decision-making, and subordinates implement thesedecisions.

Organisational structures are complex, with detailed organisation charts and jobdescriptions.

People are treated as factors of production.

Money is used as a motivator, and productivity is rewarded by bonuses.

Staff who do not achieve performance targets are dismissed.

Inspection is used to achieve quality control.

Financial targets and their achievement are seen as the essence of business profits must be generated at once.

The organisation must continue to grow.

A useful way to remember the cultural and structural values characterised by therational or traditional model of an organisation is to use the acronym THROB:

T Tall. This means there are many layers of management, ranging from juniormanagers through middle management to top management. The many layers ofmanagement and supervisors mean that there is a narrow span of control, i.e.relatively few subordinates for each immediate superior. A tall organisation offersa long ladder for promotion as individuals move up the structure.

H Hierarchic. This refers to clearly defined layers of power and authority, withinstructions flowing downward from top to bottom, and information and feedback

of results being reported upward through the layers of management.R Rigid. The structure of the organisation is based on a clear set of principles

which can be applied to all organisations under all conditions.

O Organised. There is a strict division of labour: people are allocated to specificjobs, which are organised into departments, each of which has a specific functionto perform and concentrate upon to the exclusion of anything else.

B Bureaucratic. The organisation is run by a strict set of rules, is formal andimpersonal, and work roles are clearly defined. There is a ladder of promotionthat may be climbed by gaining qualifications and by long service.

Peters and Waterman criticise the rational model for, in particular, its the emphasis on

numerical analysis, the orthodoxy of thought and the stress on cost reduction which


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gives such organisations a built in conservative bias. In place of the rational model,they put forward their alternative model.

The excellence model is quite different from the rational model in that it has thefollowing characteristics:

An emphasis on quality and value rather than purely on price.

A search for new products or services.

A distrust of over-reliance on numerical analysis, because it leads to a fixationwith costs. A belief in the innovative qualities of staff.

The long view should replace short-termism in organisational decisions.

The main assets of an organisation are the people who work in it.

People should not be afraid of making mistakes as they strive to improve theorganisation.

Management and organisational structures should be flexible.

There is a stress on values instead of merely on profits. Parts of the organisation are encouraged to compete against each other.

Management should have vision and motivate others to share this vision.

Managers should realise that people are not always rational.

Organisational structures should be as simple and "flat" as possible.

You can remember the excellent or flexible model of an organisation by using theacronym FELT.

F Flat. This refers to there being few levels of management.

E Empowered. This means that workers have greater control over decisions whichaffect their work, making the culture more democratic.

L Lean. This refers to keeping stock-holding to a minimum by having just-in-time(JIT) deliveries and also to outsourcing all new core activities.

T Teams. This refers to the replacement of conventional departments with multi-functional teams. Within the teams, work roles are flexible and individuals areencouraged to learn and deploy new skills.

Cultural Variance and Workplace Behaviour

The above sections have been concerned with organisational culture but you will be awarethat national cultures also vary considerably and these will provide the more general cultural

context within which businesses operate. Trompenaars identified seven aspects where suchcultural variations may affect organisational behaviour:

Universal societies are characterised by rigid rule-based behaviour. Examples wouldinclude autocratic or totalitarian countries. At the opposite end of the continuum arecountries with so-called particular societies, where flexible interpretation of any rule orsituation is accepted (e.g. the USA).

Societies may be individual or collective in form. So, for example, Italian society isbased on the extended family whereas Japanese society is relatively hierarchical anddominated by very large corporations.

Societies may also vary from the emotional (e.g. Italy and Spain) to the neutral (e.g.

Germany and the reserved (e.g. English).


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Some societies are achievement based where success or a record of success is theyardstick for measuring individual accomplishment. In contrast, there are moretraditional societies where status is ascribed by virtue of family, age, gender or recordof good works.

Some societies have a very strong sense of the future, e.g. Hong Kong or California,

whilst others have a very strong sense of the past, e.g. Portugal or Greece. Some cultures are very specific, and business relationships are primarily contractual

and detached from other aspects of life. Others are referred to as "diffuse" as thewhole person is involved in the evolving relationships.

Societies are also seen to vary according to their attitude towards the widerenvironment. Some believe it can be controlled or manipulated to their will throughtechnology or pure effort, while others believe their fate is fundamentally sealed.

Review Points

1. Give a brief definition of organisational behaviour (in an examination you will beexpected to define all the key terms in a question; especially this one, since it is thename of the unit you are studying).

2. List what you understand organisational behaviour to involve at the individual, groupand organisational levels.

3. Who are the internal stakeholders of an organisation?

4. Who are the most important stakeholders in your organisation: the customers, theemployees or the managers?

5. Define the meaning of organisational culture and explain how you would recognise it.

6. Think of an organisational example for each of Handy's four cultural types and explainwhy you chose each one.

7. Of the rational and excellence models of organisational culture, which might performbest in the following circumstances and why?

(i) A period of steady and sustained economic development;

(ii) A period of dynamic but uncertain change.

8. Compare the cultural characteristics of your own country with those of England or the

USA.


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D. INFLUENCING ORGANISATIONAL BEHAVIOUR

Influencing behaviour, whether at the individual, group or organisational level, is one of theprimary concerns of the rest of this study text. We have already considered some significantinfluences. Can you think what these were?

The first was the mission and objectives set for the organisation. Senior managementformulate these and one of their major functions is to develop commitment from individualsand groups towards the activities of the organisation. Goals are necessary for concertedeffort to be achieved and an organisation can only move forward effectively if all membersare pulling in the same direction. Whether mission statements and the goals derived fromthem do influence behaviour may depend on how they are formulated and whose intereststhey serve. If top management merely hand them down as if on tablets of stone and withoutany form of consultation then it may be no surprise if many in the workforce are unaffected,or if conflict results.

If, on the other hand, the goals do seek to reconcile the interests of the workforce with thoseof management and the latter demonstrate a willingness to listen to or even involve the

workforce, then more influence on behaviour will result. As we will find in future units, thosewho have contributed to the formulation of objectives often develop a strong commitment toachieving them. Indeed, the development of high morale in a workforce is largely the productof congruency in goals and effective leadership in achieving them.

A second influence on behaviour we have considered is that of ideas and, to a degree,organisational values. We have traced the history of management ideology through scientificmanagement and structural analysis to the development of bureaucracy and itsimpersonality. These approaches influenced the style and nature of management then andwe continue to feel influences today, despite considerable change in the social and economicenvironment. You have also just studied the origins of the human relations school and theinfluence of the likes of Mayo, Maslow and McGregor. Their ideas continue to influence the

behaviour of management and largely explain the current importance of human relationsdepartments. Modern ideas have moved on, with a greater stress on organisations thatmatch the situation they face. This has put a premium on flexible structures and adaptabilityto change. Also, there is more concern with outcomes, effectiveness and performance, withgreater attention being given to the ingredients that produce excellence.

A third influence on behaviour is the atmosphere or feel of an organisation. Culture, as youhave just been considering, concerns the less-tangible aspects of organisational life. It is acommon frame of reference shared by most organisational members but largely taken forgranted. It is acquired through exposure to the organisation and forms a set of unwrittenrules that govern behaviour. Some refer to it as "the way we do things round here" and it islearnt by all new recruits to an organisation. It is the customary way of behaving; reflectingas it does the underlying values of the organisation, and it ensures you are accepted by bothindividuals and the group.

Schein viewed culture as a series of overlapping layers. At its core are the fundamentalbeliefs that are almost taken for granted by its members. These assumptions will vary bytype of organisation in that an environmental pressure group will believe in sustainabilitywhereas a firm may believe in the full force of market forces. Overlapping these will bevalues and beliefs that flow directly from the assumptions and drive behaviour. Theenvironmental pressure group will believe in re-use, re-design and recycling and the firm willvalue de-regulation and enterprise. The final layer is the most visible reflection of culture.Can you think of the different ways in which cultural values are expressed in yourorganisation whether by word or behaviour? Can you think of examples of the following inyour organisation?


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Codes of behaviour these are often called norms and reflect underlying values andassumptions, e.g. managers must be the last to leave and be first to arrive if they are toachieve promotion.

Language reflected in the way managers talk to subordinates or the jargon that isused by those "in the loop".

Rites these are organisational habits and ceremonies that signal appropriatebehaviours, e.g. dress codes, after-work get-togethers.

Symbols these are things like office layout, the size of desks, and the number ofsupport staff, which are seen as demonstrating relative importance and authority.

Organisational folklore these are stories or anecdotes that convey the central valuesof the organisation and underline what it views as desirable behaviour.

Taboos these signal the "don'ts" in terms of unacceptable behaviour, e.g. cheating inexaminations.

Other Factors to be Considered

Future units will consider a number of important factors that also influence behaviour. Youshould be aware of these so you can appreciate the involved and inter-related nature of themanagement task. If management wish to positively influence human behaviour then theyhave a number of approaches at their disposal, although deciding on the optimumcombination of influences for maximum effect is the mark of the great leader. The followingis a summary of the main approaches yet to be considered:

Personality and perception

These refer to the individual and their contribution to organisational behaviour.Perception is a mental process involving the selection, organisation, structuring andinterpretation of information in order to make inferences and give meaning to it.

Personality, on the other hand, is those stable and enduring aspects of an individualthat distinguishes them from others and at the same time forms the basis for predictingfuture behaviour. These both clearly affect individual behaviour but are less readilyinfluenced by management.

Attitudes, learning and stress

Attitudes also refer to the individual and their contribution to behaviour. They are amental state of readiness, organised through experience to behave in a characteristicway towards the object of the resistance. Attitudes drive behaviour and the morestrongly they are held, the more resistant they are to change. Learning is theacquisition of skills that enables someone to do something. This changes behaviourand is much more susceptible to managerial influence through training and

development. Stress is the degree of tension or anxiety experienced by a person.Some stress may have a positive effect on performance but generally speaking it ismore likely to impact negatively on behaviour. Management will have more scope torelieve the negative stressors and secure a positive behavioural response.

Motivation

This is clearly one of the main means of influencing behaviour that we will consider.Motivation is a state in which a person perceives that it is appropriate to pursue acertain course of action, directed at achieving a specified outcome and in which theperson chooses to pursue that outcome with a degree of vigour and persistence. Inother words, behaviour is directed at achieving a goal and management will be veryinterested in understanding how to influence such behaviour.


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Job satisfaction and job re-design

This provides a fundamental means of influencing behaviour since job satisfaction is apleasurable and positive emotional state, resulting from a person's appraisal of their jobor job experience. So long as a happy worker is also a productive worker there is noconflict of interest. Job design is the means by which management can manipulate the

nature and responsibilities of the job to create the satisfaction. Group working

This is the characteristic method of working in many organisations and group behaviourhas its own dynamic. Management are in a position to influence behaviour in formalgroup but not directly in the informal group which often provides a buffer between theindividual and the organisation. Groups may be effective or ineffective according totheir characteristics, composition and development and it is up to management toensure they have the blended roles and skills to realise this.

Leadership

Since leadership is the process by which individuals are influenced so that they are

prepared to participate in the achievement of organisational or group goals, this mustrepresent one of the main factors driving behaviour. We will look at nature ofleadership and in particular the exercise of power and authority. We will also recognisethat different styles of leadership are effective in different situations.

Communication

This is a necessary process if any influence on behaviour is going to be achieved.Management must be aware that it does not happen of its own accord, except perhapsin the informal organisation, and barriers must be recognised and overcome if it is to beeffective. Failing to communicate will affect behaviour just as much as whencommunication takes place and we will explore this in the final unit.

As you can see there are a number of ways in which behaviour is influenced inorganisations and you may need to draw on your understanding of these processesacross the syllabus in order to answer examination questions on this aspect.

The Psychological Contract

L J Mullins uses the above concept to define one significant aspect of the relationshipbetween the individual worker and the organisation. It forms an unwritten statement of themutual expectations they hold. It is a two-way process of give and take that covers a rangeof considerations that do not normally form part of the contractual agreement but haveimportant effects on people's behaviour at work. The nature and extent of theseexpectations, rights and duties vary by type of organisation and sector, and also change overtime. However, Mullins included the following as a representative list:

Provide safe and hygienic working conditions;

Make every reasonable effort to provide job security;

Attempt to provide challenging and satisfying jobs and reduce alienating aspects ofwork;

Adopt equitable personnel policies and procedures;

Allow staff genuine participation in decisions that affect them;

Implement best practice in equal opportunity policies and procedures;

Provide reasonable opportunities for personal development and career progression;

Treat members of staff with respect;


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Demonstrate an understanding and considerate attitude towards personal problems.

On the other hand, the organisation will also have expectations of its members which mightinclude:

Accepting the values and ideology of the organisation;

Working hard in pursuit of organisational objectives; Not abusing the goodwill shown by management;

Showing loyalty to the organisation;

Observing reasonable standards of personal behaviour and appearance.

You will not be surprised to learn that some of these expectations may conflict and that it isunlikely that all of them will be achieved at one time. Management will, however, seek tonegotiate an on-going compromise between any competing demands. The fact that theexpectations are not precisely defined allows this process to proceed in this manner. Theexperience of this contract will also have a significant impact on newly recruited staff and willlargely determine the willingness of staff to remain with the organisation over time.

In the next unit, we will turn our attention to the individual's contribution to our understandingof organisational behaviour. You should be able to identify with the discussion of personalityat a personal level as well as apply the understanding of perception that will be provided.


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End of Unit Thinking Points

Having studied this unit on organisational behaviour and its importance to management, youshould be in a position to answer a range of examination-type questions. As part of yourreflection upon the content of this unit, make brief answer notes on the following questions?

1. Define the main characteristics of organisations and explain the behavioural approachto managing organisations in a dynamic and changing world;

2. Distinguish between organisational culture and organisational climate. What factorsare relevant to an understanding of an organisation's culture?

3. Outline the strengths and weaknesses of the classical school of management andcompare this approach with one based on human relationships.

The initial part of the first question requires you to refer back to the opening unit of this StudyManual to refresh your memory about organisational characteristics. Notice how

examination questions may draw on different parts of the syllabus. "Define" suggests thatyou briefly list the main characteristics. The second part of the question requires an answerset in the context of a dynamic and changing world as well as an explanation of thebehavioural approach as discussed in the first section of this unit.

The second question requires a distinction or comparison to be made between the two termsonce they have been defined. The following might form a good answer to this part of thequestion:

Organisational culture refers to the deep-seated values, attitudes, perceptions and behaviourunderpinning the organisation. Organisational climate is a variable condition that reflects thecurrent state of the organisation as perceived by key stakeholders such as employees andmanagers.

Culture is recognised as a key success (or failure) factor in the achievement of theorganisational mission and goals. Whether an organisational is perceived as beingcharacterised by conflict or co-operation will reflect its climate.

Culture tends to be an intangible that is not formally written down or evenacknowledged. Climate is also intangible but may be experienced in the degree towhich the organisation is seen as friendly or formal.

Culture is a mixture of rules, accepted modes of conduct, values, customs andrelationships that together provide a unique and distinctive "feel" for an organisation.Climate is important in terms of achieving goals or accepting necessary change.

New recruits will be socialised by learning the norms and values to which they areexpected to adhere. Organisational climate will also be conditioned by the degree ofconcern for the welfare of employees.

Since eight marks are likely to be available for an exam question of this type, this answerprovides more than enough comparison points to achieve full marks. The second part of thequestion requires a statement of the characteristics listed in the section on culture. You willachieve very good marks in an exam question like this if you show why the characteristicsare relevant.

The third question is straightforward so long as you draw on the strengths and weaknessesof the classical school outlined in the last unit and compare them to the approach taken bythe human relations theorists.


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Documents

Ob 11 Organisational_behaviour