ORGANISATION BEHAVIOUR

1. ORGANISATION BEHAVIOUR

2. ORGANISATION BEHAVIOUR “Organisation Behaviour is concerned with the study of what people do in an organisation and how that behaviour affects the performance of the organisation.” (Robbins: 1998,9)

3. ORGANISATION BEHAVIOUR The study of Organisational Behaviour involves: • consideration of the interaction among the formal structure (organisational context in which the process of management takes place) • the tasks to be undertaken • the technology employed and the methods of carrying out work • the behaviour of people • the process of management • the external environment

4. ORGANISATION BEHAVIOUR Interrelated dimensions influencing behaviour: • The Individual - working environment should satisfy individual needs as well as attainment of organisational goals. • The Group - formal and informal. Understanding of groups complements a knowledge of individual behaviour. • The Organisation - impact of organisation structure and design, and patterns of management, on behaviour. • The Environment - technological and scientific development, economic activity, governmental actions.

5. IMPORTANCE OF MANAGEMENT THEORY • What leading writers say is an important part of the study of management. • It is necessary to view the interrelationships between the development of theory, behaviour in organisations and management practice. • An understanding of the development of management thinking helps in understanding principles underlying the process of management. • Knowledge of the history helps in understanding the nature of management and organisation behaviour. • Many earlier ideas are still important and are often incorporated into more current management thinking. 1

6. MANAGEMENT THEORY Theory provides a sound basis for action BUT if the action is to be effective the theory must be adequate and appropriate to the task and to improved organisational performance.

7. MANAGEMENT THEORY In theory, theory and practice are the same. In practice, theory and practice are different. From “LEADERSHIP ... with a human touch” 20 October 1998

8. DIVISION OF LABOUR Definition: “The extent to which the organisation’s work is separated into different jobs to be done by different people.” (Moorhead and Griffin:1998,448)

9. Major purpose or function Product or service Location Nature of the work performed Common time scales Common processes Staff employed Customer or people to be served DIVISION OF LABOUR

10. ADVANTAGES Efficient use of labour Reduced training costs Increased standardisation and uniformity of output Increased expertise from repetition of tasks DISADVANTAGES Routine, repetitive jobs Reduced job satisfaction Decreased worker involvement and commitment Increased worker alienation Possible incompatibility with computerised manufacturing technologies DIVISION OF LABOUR

11. DIVISION OF LABOUR Decisions on division of work should take account of: • the need for co-ordination • the identification of clearly defined divisions of work • economy • the process of managing the activities • avoiding conflict • the design of work organisation should take account of the nature and interests of staff and job satisfaction.

12. DIVISION OF LABOUR Mintzberg’s five basic elements of structure which Serve as co-ordinating mechanisms for the work of the organisation. 1.Mutual Adjustment 2. Direct Supervision 3. Standardisation of Work Processes 4. Standardisation of Work Output 5. Standardisation of Worker Skills

13. DIVISION OF LABOUR ADVANTAGES OF CENTRALISATION • Easier implementation of a common policy for the organisation as a whole. • Prevents sub-units becoming too dependent. • Easier co-ordination and management control. • Improved economies of scale and a reduction in overhead costs. • Greater use of specialisation, including better facilities and equipment. • Improved decision-making which might otherwise be slower.

14. DIVISION OF LABOUR ARGUMENTS AGAINST CENTRALISATION • More mechanistic structure • Lengthens scalar chain (number of different levels in the structure of an organisation).

15. DIVISION OF LABOUR ADVANTAGES OF DECENTRALISATION • Enables decisions to be made closer to the operational level of work. • Support services will be more effective if they are closer to the activities they are intended to serve. • Opportunities for training in management. Tends to be easier to implement in private sector organisations rather than the public sector - accountability, regularity, uniformity.

16. DIVISION OF LABOUR Six key elements to be addressed when designing structure: • Work Specialisation • Departmentalisation • Chain of Command (Scalar Chain) • Span of Control (Number of subordinates reporting directly to a manager or supervisor.) • Centralisation and Decentralisation • Formalisation

17. CLASSICAL APPROACH • Emphasis on purpose, formal structure, hierarchy of management, technical requirements and common principles of organisation. • This perspective was concerned with structuring organisations effectively. • Two major sub-groupings of this approach are: • Bureaucracy • Scientific Management (sometimes categorised as an approach in its own right)

18. Major Contributors: Henri Fayol Linda Urwick Max Weber – most prominent of the three. Weber proposed a bureaucratic form of structure that he believed would work for all organisations. Embraced logic, rationality, efficiency. CLASSICAL APPROACH

19. Weber’s Ideal Bureaucracy Job Specialisation Authority Hierarchy Formal Selection Formal Rules and Regulations Impersonality Career Orientation Criticisms of Bureaucracy Lack of attention to the informal organisation. Restriction of psychological growth Bureaucratic dysfunction CLASSICAL APPROACH

20. CLASSICAL APPROACH SCIENTIFIC MANAGEMENT Emphasis on obtaining increased productivity from individual workers through the technical structuring of the work organisation and the provision of monetary incentives as the motivator for higher levels of output. Major Contributor - FW TAYLOR (1856 - 1917) - held the view that there was a best working method by which people should undertake their jobs.

21. CLASSICAL APPROACH TAYLOR’S PRINCIPLES • the development of a true science for each person’s work • the scientific selection, training and development of the workers • co-operation with the workers to ensure work is carried out in the prescribed way • the division of work and responsibility between management and the workers.

22. CLASSICAL APPROACH REACTIONS AGAINST SCIENTIFIC MANAGEMENT • opposition because its specific goal was to get more output from the workers • argument that his incentive system would dehumanise the workplace • inadequate views of employee motivation • allegations that he falsified some of his research findings and paid someone to do his writing for him.

23. HUMAN RELATIONS APPROACH • During the 1920s, attention began to focus on social factors at work, groups, leadership, the informal organisation and behaviour of people. • ‘Behavioural’ and ‘informal’ are alternative headings sometimes given to this approach. • Turning point came with the famous Hawthorne experiments at the Western Electric Company in America (1924-32) • One of the researchers (leader) was ELTON MAYO (1880-1949)

24. HUMAN RELATIONS APPROACH Four Main Phases to the Hawthorne Experiments • The Illumination Experiments - level of production was influenced by factors other than changes in physical conditions of work. • The Relay Assembly Test Room - attention and interest by management reason for higher productivity. • The Interviewing Programme -20,000 interviews. Gave impetus to present-day personnel management and use of counselling interviews. Highlighted the need for management to listen to workers. • The Bank Wiring Observation Room - Piecework Incentive Scheme. Group pressures stronger than financial incentives offered by management.

25. NEO-HUMAN RELATIONS APPROACH • Writers in the 1950s and 1960s who adopted a more psychological orientation. • Major focus was the personal adjustment of the individual within the work organisation and the effects of group relationships and leadership styles. • Main contributors: MASLOW, HERZBERG AND McGREGOR.

26. NEO-HUMAN RELATIONS APPROACH MASLOW’S HIERARCHY OF HUMAN NEEDS General ExamplesNEEDSOrganisational Examples Achievement SELF-ACTUALISATION Challenging Job Status ESTEEM Job Title Friendship BELONGINGNESS Friends in the Work Group Stability SECURITY Pension Plan Sustenance PHYSIOLOGICAL Base Salary

27. NEO-HUMAN RELATIONS APPROACH HERZBERG isolated two different sets of factors affecting motivation and satisfaction at work. 1. Hygiene or Maintenance Factors - concerned basically with job environment. Extrinsic to the work itself. 2. Motivators or Growth Factors - concerned with job content. Intrinsic to the work itself. Goal of managers is to achieve a state of no dissatisfaction by addressing Hygiene Factors. Task of improving motivation is then by addressing the Motivators.

28. NEO-HUMAN RELATIONS APPROACH McGREGOR argued that the style of Management adopted is a function of the manager’s attitudes towards human nature and behaviour at work. He put forward two suppositions called Theory X and Theory Y which are based on popular assumptions about work and people.

29. NEO-HUMAN RELATIONS APPROACH THEORY X ASSUMPTIONS • People do not like work and try to avoid it. • People do not like work, so managers have to control, direct, coerce, and threaten employees to get them to work toward organisational goals. • People prefer to be directed, to avoid responsibility, to want security, and have little ambition.

30. NEO-HUMAN RELATIONS APPROACH THEORY Y ASSUMPTIONS • People do not naturally dislike work; work is a natural part of their lives. • People are internally motivated to reach goals to which they are committed. • People are committed to goals to the degree that they receive personal rewards when they reach their objectives. • People will seek and accept responsibility under favourable conditions. • People have the capacity to be innovative in solving organisational problems. • People are bright, but generally their potentials are under-utilised.

31. SYSTEMS APPROACH • Integration of the classical and human relations approaches. Attempts to reconcile the work of the formal and the informal writers. • Importance of the socio-technical system. • Attention is focused on the total work organisation and the interrelationships of structure and behaviour, and the range of variables within the organisation. • The Systems Approach encourages managers to view the organisation both as a whole and as part of a larger environment.

32. CONTINGENCY APPROACH • Best viewed as an extension of the systems approach. • Highlights possible means of differentiating between alternative forms of organisation structure and systems of management. • There is no one best design of organisation. • Most appropriate structure and system of management is dependent upon the contingencies of the situation for the particular organisation.