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Organizational behaviour is the systematic study of form organization and of what people think, feel and do in and around organizations. I am going to discuss about Motivation, Organizational Design and Leadership in this essay
Motivation is the process that accounts for an individual's intensity, direction, and persistence of effort toward attaining a goal(Robbins S. And Judge T 2008, p69) .Motivation at work depends on certain factors like mainly salary and work conditions. If workers are not motivated enough then the performance of the company will be affected so this is a major concern for firms to keep their workforce motivated.
Motivation has been studied for a long time as managers want their workers to be motivated and perform well and do to this they work out reward plans for their workers for motivate them and encourage them to work even better.
There are two types of motivation theories. Content Theories and Process Theories. Content theories are focused on the internal factors in an individual which drives a person to do the work whereas process theories are focused on thoughts processes which influence the behaviour of workers at work.
I am going to discuss Maslow hierarchy of needs which is the most famous theory in this subject. Maslow in his theory describes that human beings have five basic needs which must be fulfilled. The five basic needs are physiological, safety, social, self esteem and self actualisation. These five basic needs can be arranged in a pyramid which the most important need which is the physiological need at the bottom and less important one which is self actualisation at the top. The main concept of this theory is that a person will strive to reach the next level of the pyramid after the one before is fulfilled. The most important one is physiological which are the important things for survival like food, money, and house. Then comes safety which refers to safe environment and work condition, health condition etc. Then comes the social needs which refers to receiving love and affection from others and friendships. Then comes self esteem which refers to respect and confidence in work place. The last basic need is self actualisation which refers to an individual fulfilling to their potential.
The theory can be argued as well. Maslow in his theory says that a person will not strive to fulfil one need at a time but a person might strive to fulfil different needs at the same time rather than just concentrating on one need. Other argument could be that it is generalises each and every person as everybody does not have the same needs and it is very difficult to find out which where the workers are on the pyramid of needs as there is no correct way find out. The other criticism about this theory is that the needs must be fulfilled in the given order which is not true for everyone. Maslow proposed that after each need is met it is not important for a person anymore which might not be true for everyone as physiological needs might still be important even if this need is met. Maslow provided no empirical substantiation, and several studies and sought to validate the theory found no support for it (Robbins S. And Judge T 2008, p71)
I will apply the theory discussed above to Tesco. Tesco is a large retailer in Britain with over 2200 stores in the whole world and it has a workforce of more than 468,000 employees (The Times 100, 2010). So for Tesco to perform good it has to have a motivated and skilled workforce as this reduces the labour costs and maintains the profit levels. So according to the theory the most basic need is the physiological need, as Tesco is based in Britain which is an advanced country economically so things like food, house and other basic needs are not of much concern as it is usually provided by the government and poverty is low in the country but within the organizations the needs could be regularly monthly pay, break times etc which Tesco provides to its employees to make sure that the employees' basic needs are fulfilled and they are motivated (The Times 100, 2010). Tesco's employees would not be worried about their wage as every organization in Britain is obliged to pay it workers minimum wage by the government so the most important part of the hierarchy is met for its employees so the employees strive to fulfil the next need which safety.
The next need is security which in this case refers to job security and safe working conditions for the workers. Tesco provides its employees the security of formal contracts so that the workers feel that their job is secured and it also provides them with pension schemes (The Times 100, 2010). The other aspect of this need is safe working conditions as according to Maslow if workers do not feel safe working they will not motivated as their life and safety is more important than their salaries. Tesco by law have to provide safe working conditions to employees or otherwise they will get into legal problems.
The next need is social need which includes employee relations, sense of belonging with the company. Tesco promotes teamwork at various levels to make sure that the employees' social needs are met (The Times 100, 2010). The company's management tool Steering Wheel assesses the performance of the teams and this helps the staff to learn and to work in a team (Tesco, 2005).
The next need is esteem which includes internal esteem factors such as self respect and external esteem factors such as status and recognition (Robbins S 1996, p214). For workers to fulfil this need they need to be awarded when they are doing good work and if someone achieves a target. Tesco values this need of the employees praises its workers for their hard work, it uses its self assessment, 360 degree feedback and appraisal system to recognize the contribution of the outstanding performing workers (The Times 100, 2010), so in this way workers will feel that their work is recognized and this will encourage them to work even harder.
The last need is self actualisation. It is the drive to become what one is capable of becoming (Robbins S 1996, p214). To meet this need of the workers Tesco offers Personal Development Plan, opportunity for promotions for the outstanding workers (The Times 100, 2010). It has a programme of fast track management which provides the workers who are capable to reach higher levels (The Times 100, 2010).
Motivation usually has a direct link with labour productivity so the reason why the managers try so hard to motivate its workers and it is also the reason for many theories been proposed on it. The theory which I discussed is just a theory and it will not always work if it is applied to the real world as managers have to think according to the situation and mostly the theories are generalised.
Organizational design is the manner in which a management achieves the right combination of differentiation and integration of the organization' operations. Differentiation refers to sub division of functional units so that each unit will concentrate on a particular aspect of the organization's operation. Integration is the opposite which refers to linking of differentiated units of an organization for better performance (Business Dictionary, 2010)
It is imperative for organizations to have an organizational structure so that it can define its workers their roles and responsibilities. According to Peter Drucker, the purpose of the work organization is to get the work done (Bratton 2007, p393). Organizational structure refers to formal division of work or labour, and the formal pattern of relationships that coordinate and control organizational activites (Bratton 2007, p393).
Smaller firms usually have simple structure but as the firms increase in size it has to create and organizational structure so that every employee knows his/her task and the person to report to. Structure also defines the chain of command in the business and this creates discipline in the business.
Through organizational structure businesses can specialise as it defines the clear role of each individual unit of the organization so workers in that unit will only focus on their work. So in this way there is chance that productivity will increase in the business but this has disadvantages as well like boredom in workers because of the repetitive work.
There are many approaches to structuring an organization. The two most common approaches towards structuring an organization which I am going to discuss are centralisation and decentralisation. Centralisation is the degree to which formal decision authority is held by a small group of people typically those at the top of the hierarchy (Bratton 2007, p397). This approach is useful if the workforce is not experienced enough then this approach should be used as it maintains control. It also hard to strike a balance between maintaining control and motivating the workforce through much more autonomy. A centralised organization will have a narrow span of control decision making will be from top to bottom. This approach has disadvantages as the business under utilises its workforce and motivation of the workforce is affected as workers have no say in the running of the business and they are just merely workers who are supposed to follow orders and there is no independence.
The other approach is decentralisation. It is the policy of delegating decision making authority down to the lower level of the organization. A decentralised organization will have a wide span of control and decision making will be from bottom to top. In contrast to this, centralisation is much favoured as it increases motivation and encourages workers to contribute to the company rather than just obeying orders from the managers. However it has disadvantages as well as during tough economic times like of now workers need to be ordered what to do rather than deciding themselves. If an organization has a new and an inexperienced workforce than this type of structure is not suitable for them as they would not know enough to make decisions. There might be conflict of interest as sometimes the lower level managers might have different objectives from the people top in the hierarchy which will create problems for the business. The other main disadvantage is that economies of scales are lost as many tasks are duplicated in each individual unit.
I will apply the design approach discussed above to Wal-Mart. It uses a decentralisation approach so it is using divisional structure (emaytix, 2005). A divisional structure is an organizational structure that groups employees around geographic areas, clients or outputs (Bratton. J 2007, pg 402). The advantage of a divisional structure is that it creates smaller and more manageable subunits within an organization (Jones, 2004). Wal-Mart groups its workers geographically as it is huge organization so each store of it has a separate manager who is accountable for the workers in the store.
Wal-Mart is the world's largest retailer and it employs 2.1 million people. It has more 8400 stores worldwide. So for organization such big it should have an efficient organization design to make more profits. The management must have understood that using the centralisation approach will not be helpful as commands may not get through because of its huge size and it is better to delegate authority to lower managers but with accountability so that managers will do their work more efficiently. The management should also take great care in appointing the regional managers as they must be highly skilled to manage their division.
Wal-Mart is structured in divisions catering to the different needs of its customers. The three divisions are Wal-stores US, Sam's club and Wal-mat International. Wal-Mart stores mainly are related to non grocery related items. Sam's club is related to grocery and food related items and last the Wal-Mart international is related to stores outside the USA. So as we can see this is the most efficient way of organizing organizations as it has made one division for the international market and one for the local market and within the local market it had divided the organization according to products. However Wal-Mart is losing out economies of scale here as certain tasks such as accounting are duplicated in each division which could have just been done once. The other disadvantage of designing organizations divisionally is that certain divisions might do well than others and this is loss of revenue as some managers might be better than others. So to avoid this it must consider restructuring so that unwanted jobs are not present to cut costs like many other companies are doing to cut costs.
Organizing the organization in the most efficient way is imperative for its success. However there is no one best way of organizing as it is different for every organization and according to the economic situation as well.
Leadership (and Management)
Leadership is the ability based on the personal qualities of the leader, to elicit the followers' voluntary compliance in a broad range of matters (Etzioni 1965, pp.690-91). An organization to perform efficiently it must have a good leader so that it motivates the workers to work even harder. Management on the other hand is the central process whereby work organizations achieve the semblance of congruence and direction (Bratton J. 2007, p133)
There are three styles of leaderships which have been put forward by Kurt Lewin. The first one is the autocratic style in which the leader makes the decision without consulting the workers, usually managers use this style when the workers are low skilled. The second one is democratic in which workers are consulted by the leader when making a decision. The last one which is the most liberal one is Laissez-Faire in which the leader gives the subordinates freedom to make their decision, this style is most effective when the employees are highly skilled.
Leadership is closely related to management. Management is about planning and doing the things as planned whereas leadership is about setting out new visions and inspiring employees to achieve that. John Kotter suggests that if work organizations are to survive, managers must be able to lead as well as manage. So leadership should be combined with management as new directions will be set and the resources will be managed efficiently as well.
According to Selznick, the critical tasks of leadership fall into four categories. The first one involves the definition of organizational mission and role. The second task is the institutional embodiment of purpose. The third task is to defend the organization's integrity and the final leadership task is the ordering of internal conflict (Selznick P. 1984, p 62-63)
I am going to discuss about path-goal theory of leadership now which was developed by Robert House. It is a contingency theory of leadership based on the expectancy theory of motivation which relates several leadership styles to specific employee and situational contingencies (Bratton J. 2007, p 145). In this theory the leaders use four leadership styles to help the subordinates to achieve their goals and remove obstacles. The four leadership styles are directive, supportive, and participative and achievement oriented. Leaders choose the style which suits the subordinates the best according to their potential. There is a concept of task structure in this theory in which employer analyzing the elements and nature of the job an employee is responsible for and reconfiguring the task to best suit the need of the employee's strength (eHow, 2010)
Directive style is when leaders give out clear instructions to the subordinates regarding what to do as it is mostly likely the subordinates could be low skilled. Supportive style is when the leaders care for the subordinates and they treat them equally as them, this style is appropriate when the work done is not complicated and the subordinates are skilled enough for the job. Participative style is when leaders consult the workers when making decisions. Achievement oriented style is used when leaders set challenging goals for the workers and expect them to achieve the goals and leaders show confidence in the workers ability to do work.
The main criticism of this theory is that it places a great deal of responsibilities on the leaders compared to the workers. It is a complex theory which makes it difficult to apply to an organization "Path-goal theory is so broad and encompasses so many interrelated sets of assumptions, it is difficult to use this theory fully in trying to improve the leadership process in a given organizational context" (Northouse 2009, p.134). The theory has not been tested enough to proven correct. In a Meta analysis of 120 field studies of path goal theory, half of it received mixed results and very few carried out complete tests of the model (Bratton J 2007, p.145). This theory mainly is concerned with leadership behaviour without acknowledging that worker behaviour also has an important role to play. It also assumes that only leaders affect the subordinates which not true always.
This theory was applied to a sample of companies in Taiwan and mixed results were found. (Silverthorne C 2001, pp151-158), Taiwan is used in this research because it is a newly industrialised country and studies on management have not been on par with the industrial development. This theory was tested to understand the relationships between leadership, task structures and subordinate acceptance of manager style. So in this research there were three samples. There were 46 managers, 46 peers and 92 subordinates. Data was collected from the groups. The scales were task structure, leader behaviour which included three subscales which were instrumental, participative and supportive leadership.
The result for the level of the task structure between the groups was perceived as the same by all the three groups, to find out whether the level of task structure was high or low the Taiwanese sample was compared with the American sample and the result was that the Taiwanese group perceived task structure to be higher than the American groups. It was found out that the leadership style of the managers would not be acceptable to the peers, this might be because they might downgrade leadership style of other managers or they think that their leadership style is better. The results for the subscales were not positively correlated, so for the theory to be correct the results should be correlated and consistent which was not the case which implies that it is not totally correct. The findings then suggested that relationship between the leaders and subordinates is positive and negative between leaders and their peers. So the theory is only valid for the relationship between leaders and subordinates (Emerald Insight http://www.emeraldinsight.com/journals.htm?articleid=1410607&show=html&)
Leadership has an important role in an organization as through quality leadership workers will know exactly what their roles are in the organization. However for a leader to be successful he should have good management skills as well as leadership without management is not useful as the subordinates need to be directed as well.