Lecture The evolution of management thought (6th edition) - Chapter 20: Organizational behavior and organization theory

The influx of behavioral scientists into business schools brought different perspectives, research tools, and ideas. Their impact was felt on organization design and job design. Personnel management evolved into human resource management. Organizational theory evolved from a number of factors, internal and external. Better theory, it was suggested, can be built by examining successful practice.

THE EVOLUTION OF MANAGEMENT

THOUGHT, 6TH

EDITION

Electronic Resource by:

Regina Greenwood and Julia Teahen

Organizational Behavior and Organization TheoryChapter Twenty

People and Organizations

Organizations and People

Organizational Behavior

http://www.bigphoto.com/themes/traffic/railway

Gordon & Howell Report

1959

behavioral and social sciences

trained differently in research methods

and drew on a different body of literature

these behavioral scientists, providing for a transition from human relations to

organizational behavior

laureates” are from non-business

disciplines

Keith Davis (1918-2002)

Mr Human Relations

human relations and

organizational behavior

“the integration of people into

a work situation in a way that motivates them to work

together productively,

cooperatively, and with

economic, psychological, and social satisfaction.”

Two Facets

Chris Argyris (1923 -

 Argyris was influenced by the humanist approach of Abraham Maslow and the socio-technical process of E Wight Bakke.

 Indicated his feelings about how

organizations neglected human needs.

 Influenced by W

Whyte, Argyris and Donald Schon

pioneered “action science” and “double- loop” learning

Chris Argyris courtesy of the University of Western

Ontario

Chris Argyris –

Personality vs Organization

the division of labor, interfered with the development of health human

management reacting by becoming

more autocratic or by turning to coated human relations.

sugar-Chris Argyris

of assumptions we make about people and our managerial style.

Douglas McGregor

Courtesy of University of Western Ontario

Theory X

 Management is responsible for organizing the

elements of productive enterprise – money,

materials, equipment, people – in the interest of economic ends.

 With respect to people, this is a process of directing their efforts, motivating them, controlling their

actions, modifying their behavior to fit the needs of the organization.

 Without this active intervention by management, people would be passive – even resistant – to

organizational needs They must, therefore, be

persuaded, rewarded, punished, controlled – their activities must be directed This is management’s task in managing subordinate managers or

workers We often sum it up by saying that

management consists of getting things done

through other people.

Theory X

several additional beliefs – less explicit, but widespread:

 The average man is by nature indolent – he works as little as possible.

 He lacks ambition, dislikes responsibility, prefers to be led.

 He is inherently self-centered, indifferent to organizational needs.

 He is by nature resistant to change.

 He is gullible, not very bright – the ready dupe of the charlatan and the demagogue.

Theory Y

 Management is responsible for organizing the elements

of productive enterprise – money, materials,

equipment, people – in the interest of economic ends.

 People are not by nature passive or resistant to

organizational needs They have become so as a result

of experience in organizations.

 The motivation, the potential for development, the

capacity for assuming responsibility, the readiness to direct behavior toward organizational goals are all

present in people Management does not put them

there It is a responsibility of management to make it possible for people to recognize and develop these

human characteristics for themselves.

 The essential task of management is to arrange

organizational conditions and methods of operation so that people can achieve their own goals best by

directing their own efforts toward organizational

objectives.

 Work is inherently

distasteful to most people.

 Most people are not

ambitious, have little desire

for responsibility, and

prefer to be directed.

 Most people have little

capacity for creativity in

solving organizational

problems.

 Motivation occurs only at

the physiological and safety

levels.

 Most people must be

closely controlled and often

 The capacity for creativity

in solving organizational problems is widely

distributed in the population.

 Motivation occurs at the social, esteem, and self- actualization levels, as well

as physiological and security levels.

 People can be self-directed and creative at work if properly motivated

Theory X Theory Y

Personnel/Human Resource

Management

always receive the attention it deserved

An example is the Gordon and Howell’s

1959 assessment of personnel

management.

the phrase “human resource.”

 E Wight Bakke appears to be the first person to cast personnel in a human

resources framework.

Personnel/Human Resource Management

first to add human

resources to a personnel

management text.

Strauss, Leonard Sayles,

and Thomas Kochan have

enriched human resource

management literature by

noting it is complementary

to industrial relations

Work Design: Frederick Herzberg (1923-2000)

 Herzberg’s research

emphasized job enrichment

(depth) rather than job

enlargement

 Job context (hygiene factors)

– needed to be optimal to

prevent job dissatisfaction

These factors (according to

Herzberg) did not motivate.

 Job content (motivators) –

factors that did lead to

motivation

 Money (according to

Herzberg) could motivate if it

was seen as a reward for

accomplishment; but if

money was given without

regard for merit, then it was

a hygiene factor.

Frederick Herzberg

Increased Responsibility Growth and Development

HYGIENE FACTORS

ENVIRONMENT WHAT THEY DOMOTIVATORS

Motivation and Hygiene

Factors

Frederick Herzberg

THE JOB ITSELF AND THE MOTIVATOR FACTORS

RESPONSIBILITY ACHIEVEMENT

WORK ITSELF RECOGNITION GROWTH

ADVANCEMENT

THE JOB SURROUNDINGS

AND THE HYGIENE FACTORS SUPERVISION

WORKING CONDITIONS

Motivation and Hygiene Factors

Work Design

Greg Oldham’s work extended

Herzberg’s notions by adding a

situational (it depends…) dimension

“growth-need strength,” these characteristics

could be amplified to make the job more meaningful

Motivation: Expectancy Theory Victor Vroom

 The expectancy

theory of

Victor Vroom helps

explain the choosing

process among

individuals in terms

of the value (valence)

of the reward and the

expectancy of

receiving the reward.

Victor Vroom

Expectancy Theory

Lyman Porter and Edward Lawler extended Vroom’s work with their model of expectancy.

Expectancy Theory

Expectancy Theory (Lyman W. Porter – Edward E. Lawler III)

Performance (Accomplishments)

5

Abilities And Traits

4

Intrinsic Rewards

7A

Extrinsic Rewards

7B

Satisfaction

9

Perceived Equitable Rewards

Equity Theory

 Equity theory is not a

new one but focuses

Edwin Locke – Goal Setting Theory

 Over a 35 year period, research has demonstrated its practical and theoretical value.

 Money is a motivator because of its

“instrumentality” or as an economist would say,

money is a medium of exchange for the things we want.

 Goal setting theory is rooted in the work of Taylor, the Gilbreths, Drucker, Cecil Mace, and Thomas Ryan.

 Individuals need specific rather than general goals.

Edwin Locke

Edwin Locke – Goal Setting Theory

exceed the person’s ability

when people are already internally

motivated by a need to achieve

individuals with a lower need for

achievement, and when they are familiar and at ease with participative management techniques

terms of how goals are chosen and how

results are fed back

Leadership - Rensis Likert

(1903-1981)

 Leadership is a part

of general management theory

 Likert proposed four types of leadership termed System 1-4.

Leadership - Rensis Likert

 The key to good

 The use of group decision

making and supervision

“Link pins” is important

here.

 Setting high performance

goals

 “System 5” was further

developed by Jane Gibson

Likert – influenced by

Mary Parker Follett.

contingent upon certain

leader orientations and

Situational Leadership

 Depending on the

situation, high LPC or relationships-oriented leaders fared best in situations that were

1 Good Structured Strong Directive

found

Leadership Style Correlating with Effectiveness

Position Power

Task Structure

Leader­Member

Relations Condition

Group Situation

Fiedler Investigations of

Leadership

Leadership Theories

provide research in the area

for evil ends (Hitler, Bin Laden, etc.)

trend toward personality traits of leaders

Is charisma too unstable for

organizational continuity, as Max Weber suggests?

Max Weber and Charisma

Leadership Theories

 James McGregor Burns’ transactional and transformational leadership also reflects the trend toward personality traits of leaders

theory has enriched our study of

interpersonal relations

understanding of intra-organizational

connections

What is the difference between leaders and managers? Are they always the same person?

Leaders vs Managers

Cross Cultural Leadership Studies

Organizational Behavior Effectiveness (

GLOBE )

 Robert House led the15 plus year study

of 17,300 managers in 950

organizations in 62 countries

 Leadership is culturally dependent

 Cultural “clusters” exist

 Some cultural factors predict what leadership style might work better

 “leader team orientation and the

communication of vision, values, and

confidence in followers are reported to be

highly effective leader behaviors.” (House, p 7)

Organizations and People

 Organization theorists assumed a total organization of

goals, structure, and the processes necessary to accomplish organizational goals

 Mooney and Reiley found “Organization is as old as human society itself

 Aristotle wrote of centralized and decentralized authority, division of labor, and departmentation

 Daniel McCallum gave the organizational structure of the Erie Railroad the appearance of a tree and developed ideas about authority, accountability, and communication

 Max Weber, a contemporary of Taylor and Fayol whose

works were translated into English much later, described bureaucracy as an ideal form of organizations based on

rational-legal authority

Organizations and People

 Ludwig von Bertalanffy’s (1901-1972)

system theory furthered the idea of

organizations as open systems He was a biologist

as including investors, suppliers, etc was

an early example of viewing the

organization as an open system

Organizations as Open Systems Joan Woodward

 Joan Woodward

researched the impact of

technology on organizational structure.

organizations by the complexity of the technology used.

Joan Woodward

Organizations as Open Systems

considered technology but

arrived at different findings

than Woodward.

Lorsch's viewed the impact

results from decisions

Behavioral Theories of the Firm

coalitions, organizational learning,

conflict resolution, and so forth was a new approach Representatives of this approach are Richard Cyert & James

March, Daniel Katz & Robert Kahn, and Karl Weick

forces and factors as primary shapers of the organization Jeffrey Pfeffer &

Gerald Salancik, Michael Hannan & John Freeman, and John Meyer & Richard

Scott are representatives

Economic and Business

Economic and Business

Theories

of the Firm

 Marshall and Ronald Coase explained why a firm was more efficient than a marketplace;

 Edith Penrose’s work led to resource and

knowledge based views of firms; Oliver

Williamson built notions to explain the internal operations of firms

 Chester Barnard offers yet another view.

The Paradigm Wars

 “Paradigm,” a model, example, or pattern to help us view

organizations.

 Disagreements about the number

of contemporary paradigms exist

— some indicating this as a sign of progress and others seeing this as creating an organization theory jungle.

theories is important as he

indicates no organization theory high in estimated scientific validity

or usefulness in application.

Strategy and Structure

“structure follows strategy.”

structure and the “objectives, resources, and requirements” of the firm.

political factors influenced many

mergers and acquisitions as firms

diversified outside of their industry

History Lessons on Firm

Survivability

 The firms that grew and survived were able to

take advantage of changing technologies and

markets,

 They designed the appropriate corporate

structures to seize the opportunities offered by

these developments, and

 They fostered staying power by adapting to

internal and external changes over the long term

Oracle corporate headquarters

 The influx of behavioral scientists into business schools brought different perspectives,

research tools, and ideas.

 Their impact was felt on organization design and job design.

 Personnel management evolved into human resource management.

 Organizational theory evolved from a number

of factors, internal and external.

 Better theory, it was suggested, can be built by examining successful practice.