A MICRO PERSPECTIVE OF ORGANIZATIONAL BEHAVIOUR

Definition

• The understanding, prediction, and management of human behaviour in

organizations.

• Organizational Behaviour is involved with the study and application of the human side of management and organization.

Challenges facing Management

• Academic field of OB has been around for just 25 – 30 years.

• Significant human-oriented problems continue to plague organizations.

• Of the companies which have downsized over the past 5 years, half of them reported increased profits, a third of them reported increase in productivity, while almost all (86%), reported experiencing greatly decreased morale.

The New Environment

• The first major environmental development is not just the workplace, nature, form and management of human resources, which has dramatically changed, but the surrounding environment, which has driven these changes.

• The second major environmental development is the second generation of the Information Age which has moved to automated decision making, more technology-based telecommunications and the information super highway.

Some interesting facts of IT • The global network of computers, telephones and TV

has increased its info carrying capacity a million times over during the past two decades.

• Computing power doubling about every 18 months.• A $2,000 laptop is many times more powerful than a

$100 million mainframe computer was about 20 years ago. Only 50,000 computers existed about 25 years ago. Today there are as many as 150 million.

• In 1960, a transatlantic telephone cable could carry only 138 conversations simultaneously. Today, a fibre optic cable can carry 1.5 million conversations.

• A 3-minute telephone call between New York and London costs only $2 today; in 1930 it cost a hundred times more (in dollars).

• A third major development is the “quality service revolution” that is occurring around the world.

• Total Quality Management, has become the need of the hour.

• The final major development that has had significant environmental impact on organization and management is diversity and ethics. Diversity has taken on the ethical implications of how management can eliminate all forms of discrimination (age, sex, race, ethnic origin, religion, disability) and provides equal opportunity in all aspects of employment.

Total Quality Management (TQM)

• This term is used to represent the wide array of changes made by organizations determined to improve their overall productivity and profit.

• A major technique of TQM to gain prominence is ‘reengineering’, or “starting all over on a clean piece of paper”. This actually means starting from scratch, totally redesigning the job and redoing the process.

The Hawthorne Effect

DESCRIPTION

• The Hawthorne Effects were a series of experiments conducted from 1924 to 1933, and famously analyzed by Professor Elton Mayo from 1927 to 1932. The term Hawthorne was coined, as the site for the experimental studies took place at Western Electric Hawthorne Work, Chicago.

• The Hawthorne experiments were a series of studies on the productivity of workers, wherein various conditions were manipulated (pay, light levels, humidity, rest breaks, etc.). Surprisingly, each change resulted in a productivity rising, including eventually a return to the original conditions. This was true of each of the individual workers as well as of the group mean.

What were the ‘studies’?

• Illumination studies attempted to examine the relationship between the light intensity on the shop floor of manual work sites and employee production. A test group and control group were used.

• The test group initially showed no increase or decrease in output in proportion to the increase or decrease in illumination.

• The control group with unchanged illumination increased output by the same amount overall as the test group.

• Subsequent phases brought the level of light down to moonlight intensity; the workers could barely see what they were doing, but productivity increased. The results baffled the researchers. It appeared that some variables were not being held constant or under control. It was something besides the level of illumination, which was causing the change in productivity. This change was the complex human variable.

• The results of the ‘illumination’ experiments provided the impetus for further study of human behaviour at work.

• Managers who apply and draw from the field of Organizational Behaviour are called ‘Human Resource Managers’. They have a Human Resource Management role because they all manage people. All managers, regardless of their technical function, are Human Resource Managers, because they deal with human behaviour in orgs. All managers need to have an understanding and perspective of Organizational Behaviour.

• Organizational Behaviour is the behavioural approach to management – NOT the whole of management.

• Clearly the variables the experimenters manipulated were not the only nor dominant causes of productivity changes.

• One interpretation, mainly due to Professor Elton Mayo and associates F.J. Roethlisberger and William J. Dickson, was that essentially, it was the workers' feeling they were being closely attended to which was the cause of the improvements in performance.

• This is now referred to as “Hawthorne effect”. Thus these experiments were among the first indications that any productivity model must factor in intangible attributes such as human behavior.

STRENGTHS OF THE HAWTHORNE

EXPERIMENTS

BENEFITS

• The method allows clear identification of the concerns of the workers.

• It solves productivity issues in a sustainable and long term basis, if it is properly and accurately modeled.

• It brings forth consistency in the assessment of the working situation when management needs to carry out long term envisioning.

LIMITATIONS OF THE HAWTHORNE EFFECT DISADVANTAGES• Difficult to identify the critical working environment

attributes as some are intrinsic like organization dynamics etc.

• Quantification of the parameters, a, b and c of the productivity model is also very subjective and depends on the discernment of the manager.

• Critical working attributes are dynamic and model needs to be updated constantly to reflect actual 'ground' situation.

• On the whole, the accuracy of the productivity model is highly correlated on the judgment and the acumen of the manager.

ASSUMPTIONS OF THE HAWTHORNE EFFECT

CONDITIONS

• Important working attributes can be captured sufficiently.

• No hidden or tacit informal knowledge is withheld.

Theoretical Framework

• Cognitive.

• Behaviouristic.

• Social Learning.

• Cognitive – (From cognition, which means the act of knowing an item of information). Emphasizes the positive and free-aspects of human behaviour. Uses concepts like, expectancy, demand and incentive.

• Behaviouristic Framework - Most of the principles of learning, organizational reward systems and behavioural management approach, are based on this framework. Uses the stimulus-response (S-R) explanation of human behaviour. A stimulus elicits a response. Whenever an S-R connection is made, learning takes place.

• Social Learning – Recognizes that behaviour is the appropriate unit of analysis. The approach suggests that people are self-aware and engage in purposeful behaviour. Being comprehensive and of an interactive nature, it serves as an appropriate theoretical framework for developing a model of OB.

The OB Model

• This is more of a Social Learning approach, which incorporates both, the cognitive and behaviouristic concepts, which has Stimulus, Organism, Behaviour and Consequence as its 4 pillars.

• S – Environmental Situation; (Stimulus.)• O - Cognitive Mediating Processes of the

Organizational Participants; (Organism.)• B - Organizational Behaviou; (Behaviour.)• C - Organizational and Behavioural Dynamics

and Consequences; (Consequence).

Today’s Organizations IT, TQM and Organizational Learning

IT - Has had amazing impact on organizations

Joseph Schumpeter’s 50-year model revealed:

• 1780s – 1840s: First wave, brought steam power that drove the industrial revolution.

• 1840s – 1890s: Second wave, brought the railroads.

• 1890s – 1930s: Third wave, electric power.

• 1930s – 1980s: Fourth wave, cheap oil and the automobile.

• 1980s onwards: Fifth wave is now powered by Informational Technology

Flattening and Downsizing of Organizations

• IT has had a flattening and downsizing effect on today’s org.

• Downsizing or “right sizing” is the process of reducing the number of people in the org.

• In the current decade, downsizing has been at the middle level mgt, where IT has eliminated many jobs, which were handled by ML mgrs.

• Human aspect of this has been devastating. It has had great impact on the employee stress.

• E-mail and the Intranet have eliminated the need for levels of bureaucracy and a long chain of command. The org has become ‘flatter’.

• Even while there may have been short run cost savings, the overall outcomes like increased resistance to change, decreased employee commitment and a loss of trust among the survivors, have had a significant negative long run impact on the org.

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TOTAL QUALITY MANAGEMENT (TQM)

• TQM is a subject much ‘cussed’ and ‘discussed’ by people.

• TQM is an organizational strategy with accompanying techniques that deliver quality products and/or services to customers.

The “Total” perspective of TQM

• The “total” part of TQM differentiates the approach from the traditional inspection, quality control, or quality assurance approach. TQM is an overall organizational strategy that is formulated at the top mgt level and then diffused throughout the entire org. Everyone in an org, right from the CEO to the lowest-paid hourly worker and clerk, is involved in the TQM process.

• The “total” part also encompasses not only the external end user and purchaser of the product, but also internal customers and outside suppliers and support personnel.

Core values of TQM• Make it right for the customer at any cost.• Internal customers are as important as external

customers.• Respond to every customer inquiry or complaint by the

end of the day.• Answer the phone within two rings.• The customer is always right.• Meet customer’s expectations and also delight customers

in the process.• Teamwork and cooperation are more important than

individual action and gamesmanship.• Everyone is involved in the quality effort; no exceptions

or bench sitting is permitted.• Respond to every employee suggestion for quality

improvement within one week.• Never be satisfied with the level of quality; always strive

for continuous improvement.

What does “Quality” stand for in TQM?

• The term ‘quality’ implies defect-free goods. In TQM, it implies much more than this. It is more concerned with quality service than quality products. It is defined as meeting or exceeding customer expectations. Quality, is therefore defined by the customer, not the org or the manager or the quality assurance dept. Customer expectations are highly individualized by age, gender, personality, occupation, location, socio economic class, past experience with the org and many other variables. What appears as ‘quality’ to one customer may not be quality to another. TQM strives to deliver ‘quality’ to ALL customers.

What is the “Management” dimension in TQM ?

• While the ‘Management’ approach is what “M” implies in TQM, it is quite likely that this aspect will be headed by someone from the QC branch; TQM is of the view that somebody from another dept, someone who is respected, a good coordinator – a doer, should be the TQM project manager. This manager should not only thoroughly understand and be able to train others in TQM, but should also be a strong advocate and report directly to the Gen Mgr/CEO. TQM is a very people-oriented mgt approach and has many implications for the study and application of Organizational Behaviour.

• Three popular TQM techniques relevant to OB are: re-engineering, benchmarking and empowerment.

Benchmarking

• It is the process of comparing work and service methods against the best practices and outcomes for the purpose of identifying changes that will result in higher-quality output.

• Benchmark metrics can be used to set targets that are pursued, identified and then used as a basis for future action.

Benefits to the organization

• Helps orgs compare themselves with successful companies for the purpose of identifying improvement strategies.

• Enables orgs to learn from others.

• Helps create a need for change by showing the org how procedures and work assignments should be altered and resources reallocated.

Empowerment• It is the “recognizing and releasing into the org the

power that people already have in their wealth of useful knowledge and internal motivation”.

• It is the authority to make decisions within ones area of operations without having to get approval from anyone else.

• It is the TQM in Action: Just Do It.• The basic conditions necessary for empowerment

to become embedded in the organizational culture and become operational are : -– Participation.– Innovation.– Access to information.– Accountability.