Relationship between organizational theory and behaviour

Organizational behavior - Wikipedia

relationship between organizational theory and behaviour

Oct 17, This reaction paper will exhibit when organizational theories and behavioral theories are not aligned properly, an organization will become. Organizational behavior (OB) or organisational behaviour is "the study of human behavior in organizational settings, the interface between human behavior and the organization, and the organization itself". . LMX theory focuses on exchange relationships between individual supervisor-subordinate pairs. Path-goal theory is. The intersection of organizational behavior and psychological theory provides insight into. theories have different relationships with organizational behaviors.

In highly volatile industries, they noted the importance of giving managers at all levels the authority to make decisions over their domain.

Managers would be free to make decisions contingent on the current situation. Systems Theory Systems theory was originally proposed by Hungarian biologist Ludwig von Bertalanffy inalthough it has not been applied to organizations until recently Kast and Rosenzweig, ; Scott, The foundation of systems theory is that all the components of an organization are interrelated, and that changing one variable might impact many others.

Organizations are viewed as open systems, continually interacting with their environment. They are in a state of dynamic equilibrium as they adapt to environmental changes. Senge describes systems thinking as: If I believe that my current state was created by somebody else, or by forces outside my control, why should I hold a vision?

The central premise behind holding a vision is that somehow I can shape my future, Systems thinking helps us see how our own actions have shaped our current reality, thereby giving us confidence that we can create a different reality in the future.

Organizational behavior

Small changes in one variable can cause huge changes in another, and large changes in a variable might have only a nominal effect on another. The concept of nonlinearity adds enormous complexity to our understanding of organizations.

In fact, one of the most salient argument against systems theory is that the complexity introduced by nonlinearity makes it difficult or impossible to fully understand the relationships between variables.

Organizational Structure Until recently, nearly all organizations followed Weber's concept of bureaucratic structures. The increased complexity of multinational organizations created the necessity of a new structure that Drucker called "federal decentralization". In federal decentralization, a company is organized so that there are a number of independent units operating simultaneously.

The project management organizational structure has been used effectively in highly dynamic and technological environments French, Kast and Rosenzweig, The project manager becomes the focal point for information and activities related to a specific project.

The goal is to provide effective integration of an organization's resources towards the completion of a specific project. Impementing a project management approach often involves dramatic changes in the relationships of authority and responsibility. The matrix organizational structure evolved from the project management form Kolodny, It represents a compromise between the traditional bureuacratic approach and the autonomous project management approach. A matrix organization has permanently established departments that provide integration for project management.

The matrix form is superimposed on the hierarchical structure, resulting in dual authority and responsibilities.

Organisational Behaviour : Part-1

Permanent functionality departments allocate resources to be shared among departments and managers. Systems theory views organizational structure as the "established pattern of relationships among the parts of the organization" French, Kast, and Rosenzweig,p.

Of particular importance are the patterns in relationships and duties. These include themes of 1 integration the way activities are coordinated2 differentiation the way tasks are divided3 the structure of the hierarchical relationships authority systemsand 4 the formalized policies, procedures, and controls that guide the organization administrative systems.

The relationship between the environment and organizational structure is especially important.

relationship between organizational theory and behaviour

Organizations are open systems and depend on their environment for support. Generally, more complex environments lead to greater differentiation. The trend in organizations is currently away from stable mechanistic structures to more adaptive organic structures.

The advantage is that organizations become more dynamic and flexible. The disadvantage is that integration and coordination of activities require more time and effort. The relationship between an organization and its environment is characterized by a two-way flow of information and energy. Most organizations attempt to influence their environment. Advertising campaigns and lobbying efforts are two examples. Some theorists believe that ". Organizations select their environments from ranges of alternatives, then they subjectively perceive the environments they inhabit" Starbuck,p.

Strategic decisions regarding product lines and distribution channels contribute to the selection of the organizational structure and the environment. It is a commonly held tenant that people are less satisfied with their work in highly structured organizations. Many research studies have been conducted to examine the relationship between organizational structure and employee behavior e. However, the results of these studies are contradictory Dalton, et al.

Structural deficiencies can result in low motivation and morale, decisions lacking in timeliness or quality, lack of coordination and conflict, inefficient use of resources, and an inability to respond effectively to changes in the environment French, Kast, and Rosenzweig, One enduring and controversial debate about organizational structure is whether or not there is a maximum desirable size for an organization, after which there will be declining effectiveness.

Does an organization become increasingly dysfunctional as it exceeds its "ideal" size? Several researchers have hypothesized that organizational growth is beneficial only up to a point Hedberg, Nystrom, and Starbuck, ; Meyer, ; Perrow, Most researchers support a curvilinear growth theory.

Pfeffer and Salancik found that profitability increases with size and then tapers off. Warwick reported that the growth in the U. State Department resulted in decreased flexibility and responsiveness, even though specific steps had been taken to abate these problems. There are several theories to explain these findings. The most common explanation is based on the fact that an organization's size is usually positively correlated with age.

Another popular theory is that in larger organizations, workers' jobs become more specialized. The lack of variety creates a less motivating environment. Other theories have proposed that excessive size creates crippling coordination problems Filley and Aldag, ; Zald and Ash, Organizational Birth and Growth Clearly, one of the most dominant themes in the literature has been to define organizations from the perspective of their position on a growth curve.

Cameron and Whetten reviewed thirty life-cycle models from the organizational development literature.

What Is the Relationship Between Organizational Behavior & Psychological Theories? |

They summarized the studies into an aggregate model containing four stages. The first stage is "entrepreneurial", characterized by early innovation, niche formation and high creativity. This is followed by a stage of "collectivity", where there is high cohesion and commitment among the members. The next stage is one of "formalization and control", where the goals are stability and institutionalization.

The last stage is one of "elaboration", characterized by domain expansion and decentralization. The striking feature of these life-cycle models is that they did not include any notion of organizational decline.

They covered birth, growth, and maturity, but none included decline or death. The classic S-curve typifies these life-cycle models. Whetten points out that these theories are a reflection of the s and s, two highly growth oriented decades.

Land and Jarman have attempted to redefine the traditional S-curve that defines birth, growth, and maturity. The first phase in organizational growth is the entrepreneurial stage.

The entrepreneur is convinced that their idea for a product or service is needed and wanted in the marketplace. The common characteristic of all entrepreneurs and new businesses is the desire to find a pattern of operation that will survive in the marketplace.

Nearly all new businesses fail within the first five years. Land and Jarman argue that this is "natural", and that even in nature, cell mutations do not usually survive. This phase is the beginning of the S-curve.

The second phase in organizational growth is characterized by a complete reversal in strategy. Where the entrepreneurial stage involves a series of trial and error endeavors, the next stage is the standardization of rules that define how the organizational system operates and interacts with the environment.

The chaotic methods of the entrepreneur are replaced with structured patterns of operation. Internal processes are regulated and uniformity is sought. During this phase, growth actually occurs by limiting diversity. This phase is the rapid rise on the S-curve. Organizational growth does not continue indefinitely.

An upper asymptopic limit can be imposed by a number of factors. Land and Jarmanp. Most organizations are not able to make these changes, and they do not survive. The organization needs to continue its core business, while at the same time engaging in inventing new business.

This bifurcation is necessary because the entrepreneurial environment of inventing business is incompatible with the controlling environment of the core business. The goal is a continuing integration of the new inventions into the mainstream business, where a re-created organization emerges. The core business is changed by the inventions it assimilates, and the organization takes on a new form.

Land and Jarman believe that the greatest challenge facing today's organizations is the transition from phase two to phase three. The most obvious is that growth is a by-product of another successful strategy.

A second factor is that growth is deliberately sought because it facilitates management goals. For example, it provides increased potential for promotion, greater challenge, prestige, and earning potential. A third factor is that growth makes an organization less vulnerable to environmental consequences. Larger organizations tend to be more stable and less likely to go out of business Caves, ; Marris and Wood, ; Singh, Increased resources make diversification feasible, thereby adding to the security of the organization.

Child and Kieser suggest four distinct operational models for organizational growth. This is often manifest as a striving for dominance within its field. Diversification is a common strategy for lowering overall risk, and new domains often provide fertile new markets. However, as Whetten points out, it is difficult to establish cause and effect in these models.

Do technological advancements stimulate growth, or does growth stimulate the development of technological breakthroughs? With the lack of controlled experiments, it is difficult to choose between the chicken and the egg. Organizational Decline Until recently, most theories about organization development viewed decline as a symptom of ineffective performance. Well-managed organizations were expected to grow year after year.

Implicit in these theories was the idea that organizational growth is synonymous with expansion. These theories reflected what scholars observed in the business world. Organizational growth was an indicator of successful management.

relationship between organizational theory and behaviour

Kenneth Boulding proposed a biological model of economics, characterized by birth, maturation, decline, and death. He argued that in all organisms, there is an "inexorable and irreversible movement towards the equilibrium of death. They maintained that organizations are not constrained by a defined life cycle, and there is no indication that all organizations need to die.

The 's ushered in a new era where organizational decline was apparent everywhere. Management strategies involved reducing employees, salary freezes and reductions, cutting administrative overhead, and consolidating operations.

It became clear that the traditional S-curve model was incomplete and did not address the issues of declining organizations. One of the problems in the literature is that it is difficult to agree on a precise definition of organizational decline. Is a company in decline when it cuts back the number of employees in order to become more profitable?

A common definition of decline is a decrease in profit or budget. Most theorists agree that decline negatively impacts individuals and the organization as a whole. Cameron, Whetten, and Kim argue that decline results in decreased morale, innovativeness, participation, leader influence, and long-term planning. They associate decline with, conflict, secrecy, rigidity, centralization, formalization, scapegoating, and conservatism.

Nystrom and Starbuck attribute organizational decline to over-confidence. According to this theory, a successful past can lure an organization to become over-confident in its ability to prosper. This leads to a lackadaisical attitude towards new innovations, quality, and customer satisfaction. Another theory is that large size promotes rigidity, which makes it cumbersome for an organization to respond to environmental changes Whetten, In applying the biological life-cycle model to organizations, Wilson identified two different types of organizational decline: When an organization has reached the upper asymptopic limit defined by carrying capacity of its niche, it declines because of k-extinction.

The organization has exhausted its environmental resources, or other organizations have begun competing for limited resources. When an organization falls short of its upper asymptopic limit, and begins declining without reaching its maximum potential, it is called r-extinction. Bad management or a failure to remain competitive are the most common reasons for r-extinction.

Bibeault proposed a four-stage model to describe the process of turning around an organization in decline. The key to the process was to replace the top personnel. Bibeault argued that only way to reverse a decline is to 1 change the management, the rationale being that "problem causers have little credibility as problem solvers" Whetten,p. Chaffee also stressed the symbolic value of changing administrative personnel. Change in management is followed by 2 an evaluation stage, 3 implementing emergency actions and stabilization procedures, and finally, 4 a return to growth.

A different approach for describing organizational turnaround was proposed by Zammuto and Cameron Their model was based on the idea that turnaround could be accomplished by addressing five process domains.

An example would be an organization that forms a common-purpose coalition with other organizations. In contrast to these theories, Harrigan, and Porter have looked at how organizations respond to decline as a result of environmental limitations i.

Organizational activities often involve attempts to focus on a specific market niche in which the organization might have a competitive advantage. Another approach is to rapidly liquidate the organization, and extract as much remaining value as possible, although Harrigan notes that there are often financial, legal, structural, and emotional obstacles to this strategy.

relationship between organizational theory and behaviour

The most common response to organizational decline is retrenchment. Whetten identifies three sequential stages involved in the process.

What Is the Relationship Between Organizational Behavior & Psychological Theories?

The first is one of identification. Management must be sensitive to problems when they first appear, and be able to meet the problems head on.

Sorenson later clarified that Fordism developed independently of Taylor. The success of the scientific method and Fordism resulted in the widespread adoption of these methods.

In the s, the Hawthorne Works Western Electric factory commissioned the first of what was to become known as the Hawthorne Studies.

These studies initially adhered to the traditional scientific method, but also investigated whether workers would be more productive with higher or lower lighting levels. The results showed that regardless of lighting levels, when workers were being studied, productivity increased, but when the studies ended, worker productivity would return to normal. In following experiments, Elton Mayo concluded that job performance and the so-called Hawthorne Effect was strongly correlated to social relationships and job content.

A range of theories emerged in the s and s and include theories from notable OB researchers such as: These theories underline employee motivation, work performanceand job satisfaction. Simon, along with Chester Barnardargued that people make decisions differently inside an organization when compared to their decisions outside of an organization. While classical economic theories assume that people are rational decision-makers, Simon argued a contrary point. He argued that cognition is limited because of bounded rationality For example, decision-makers often employ satisficingthe process of utilizing the first marginally acceptable solution rather than the most optimal solution.

This gave rise to contingency theoryinstitutional theoryand organizational ecology. Current state of the field[ edit ] Research in and the teaching of OB primarily takes place in university management departments in colleges of business. Sometimes OB topics are taught in industrial and organizational psychology graduate programs. This section does not cite any sources.