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Organizational behaviour is defined as a "actions and attitudes of individuals and groups toward one another and towards the organization as a whole, and its effect on the organization's operation and performance"
So organizational performance always determined by organizational behaviour. Organizational behaviour is basically determined from the behaviour of the people working for the organization. So while keeping in view organizational behaviour, organizational performance includes multiple activities, which help in establishing the goals of the organization, and monitors the progress towards the target. It is used to make adjustments to accomplish goals more efficiently and effectively.
Organization Performance is what business executives and owners are usually frustrated about. This is so because, even though the employees of the company are hard-working, and are busy doing their tasks, their companies are unable to achieve the planned results. Results are achieved more due to unexpected events and good fortune rather than the efforts made by the employees.
However, for any business to be successful, functions must be defined and accomplished. It is important for an organization to develop strategies that should be designed around the skills that would enhance the performance of the organization.
This could be done by introducing Organizational Performance Management Systems. These are a number of major movements and methods that could increase the performance of an organization. Each one of these methods includes regular recurring activities that are used to establish the goals of the organization. These activities are also required to monitor the progress of the organization towards the goals. They are used to make adjustments to achieve the desired targets more effectively and efficiently.
So the organizational performance is determined by the organizational behaviour and organizational behaviour is determined by the following factors
Training and development
Management styles are democratic, autocratic and consultative. Selecting the correct management style may lead to greater motivation and productivity from your staff. However, it is not as easy as just 'picking' a style. Managers' personalities and characteristics will influence the type of style adopted. For example a timid manager will find an autocratic management style difficult to adopt.
Democratic Management Style
A democratic manager delegates authority to his/her staff, giving them responsibility to complete the task given to them (also known as empowerment). Staff will complete the tasks using their own work methods. However, the task must be completed on time. Employees are involved in decision making giving them a sense of belonging and motivating individuals. Because staffs feel a sense of belonging and are motivated the quality of decision making and work also improves. Although popular in business today, a democratic management style can slow decision making down because staffs need to be consulted. Also some employees may take advantage of the fact that their manager is democratic by not working to their full potential and allowing other group members to 'carry' them.
Autocratic Management Style
In contrast to the above an autocratic manager dictates orders to their staff and makes decisions without any consultation. The leader likes to control the situation they are in. Decisions are quick because staffs are not consulted and work is usually completed on time. However this type of management style can decrease motivation and increase staff turnover because staff are not consulted and do not feel valued. So the performance of organization decreased.
Consultative Management style
A consultative management style can be viewed as a combination of the above two. The manager will ask views and opinions from their staff, allowing them to feel involved but will ultimately make the final decision. This type of management increase staff motivation and commitment which increase the performance of organization.
Motivation is the way to energise the employees to work for the organization to achieve the required goals of the organization.
There are following motivational theories for the organizations developed over the time
Maslow's Hierarchy of Needs
Maslow believed that all people are motivated by the same things. He identified 5 human needs he believed people wanted to satisfy. As one set of needs was satisfied by an individual, it would stop acting as a motivator, but the individual would then be motivated by the next set of needs.
Names for the Needs
Relevance to Business
The need to fulfil your potential.
Employers allow staff to work at what they are good at, and to organise their work in the ways they wish to do it.
The need to be valued.
Rewards if targets are met merit pay rises, promotion; employers offer praise and acknowledge the good work of the employee.
The need to belong to and work in a group.
Team meetings, company magazines, staff social events; working in groups.
The need to be protected.
Safe machinery; protection in employment; contracts etc
Food, warmth, sleep, clothes
Heating, toilets, canteen; wages
Dual-Factor Theory - Frederick Herzberg
Frederick Herzberg and his associates began their research into motivation during the 1950's, examining the models and assumptions of Maslow and others. The result of this work was the formulation of what Herzberg termed theÂ Motivation-Hygiene Theory (M-H). The basic hypotheses of this theory are that:
1. There are two types of motivators, one type which results in satisfaction with the job, and the other which merely prevents dissatisfaction. The two types are quite separate and distinct from one another. Herzberg called the factors which result in job satisfactionÂ motivatorsÂ and those that simply prevented dissatisfactionÂ hygiene's
2. The factors that lead to job satisfaction (the motivators) are:
3. The factors which may prevent dissatisfaction (the hygiene's) are:
company policy and administration
Douglas McGregor X and Y theory
McGregor's Theory X managers believes that an employee dislikes work and will avoid it if possible. As a result Theory X workers must be controlled, directed and threatened with punishment if necessary to make them work.
McGregor's Theory Y manager believes that an employee finds work as natural as play or rest. As a result they are able and willing to organise, control and direct themselves, and to accept authority and responsibility.
By adopting the influencing factor from these theories, required motivation level can be achieved which increase employees commitment and organizational performance.
The Importance of Business Culture
It took a long time for the importance of business culture to be recognised as an important factor in business success (or lack of success).
Building a Positive Corporate Culture
1. 'Culture Carriers'. These are key people, usually managers, who represent and spread the core values of the corporate culture.
2. Stability of the group. It is more difficult for a culture to emerge if people are changing all the time.
3. Stories. A group packages up its culture into stories which are frequently told and re-told,
4. Heroes. Individuals who typify to an extreme the values of the group.
5. Symbols. These may be staff mottoes, the corporate mission statement or anything that symbolises the core values.
6. Rites. These are specific occasions, such as the annual office party, when the core values are publicly displayed.
7. Rituals. This means a standard pattern of behaviour at a specific occasion, such as the office party if things are always done in a particular pattern.
8. Courses. Attending in-house courses is an important way of team-building and communicating the core values.
9. Cultural Networks. This means the informal contacts between employees where they reinforce core values, especially by passing them from older to younger group members.
Types of Corporate Culture
1. Adaptive Cultures. These have as a core value the ability to adapt to change, especially in response to changing external circumstances.
2. Inert Culture. This is a 'dead' culture totally unable to change.
3. Networked Organisations. These are very sociable networks of small teams. They are highly creative. But loyalty is low.
4. Mercenary Organisations. These are ruthless business machines dedicated to work and to success. But sociability is very low.
5. Fragmented Organisations. These are really loose alliances of very independent workers, such as lawyers. Sociability and loyalty are both very low.
6. Communal Organisations. These have high loyalty and high sociability. They act like one big happy family. Recruiting new staff with similar values is important.
Advantages of Strong Corporate Culture
1. Instructions are interpreted in a common way, so work is done to a similar standard and in a similar manner.
2. Loyalty is increased, and replacing workers is an expense to be avoided.
3. Motivation, and therefore productivity, is increased.
4. Management control is increased.
Disadvantage of Corporate Culture
1. In a Multi-National Corporation there will almost certainly be conflicts between the local national culture and the imported corporate culture.
2. Businesses are not places with a homogenous culture. Most businesses are too large for people to identify across the whole organisation. Instead, people identify with smaller sub-groups. So a business is, in fact, a mixture of sub-cultures some of which may even be deviant. There is also a strong likelihood of conflict between some of the different sub-cultures.
3. The relationship between a strong corporate culture and improved business performance is, as far as the data can tell, very weak. It may be then that corporate cultures are less about improved performance and more about making the managers feel they have achieved something; a cynic might argue that managers like to be surrounded by copies of themselves.
4. Business is rarely simple, clear and unambiguous enough to allow of one simple message of the kind envisaged by proponents of the corporate culture idea.
Organizational structure - is the formal system of task and reporting relationships that controls, coordinates, and motivates employees so that they cooperate to achieve an organization's goals.
TYPES OF STRUCTURE
Functional structure - groups people together because they hold similar positions in an organization, perform a similar set of tasks, or use the same kind of skills.
This division of labor and specialization allows an organization to become more effective.
Advantages of a Functional Structure
Easy communication among
Quick decisions -.
Learning - Makes it easier for people to learn from one another's experiences.
Facilitates performance evaluation for supervisor -
Facilitates performance evaluation for peers
Creates teamwork that promotes high performance.
Creates a career ladder
Disadvantages of a Functional Structure
Difficulty in serving needs of all products efficiently
Coordination - As organizations attract customer with different needs, they may find it hard to service these different needs by using a single set of functions.
As companies grow, they often expand their operations nationally, and servicing the needs of different regional customers by using a single set of manufacturing, sales, or purchasing functions becomes very difficult.
2-Divisional Structures: Product, Market, and Geographic
A divisional structure that overlay functional grouping allows an organization to coordinate intergroup relationships more effectively than does a functional structure.
Each product division contains the functions necessary to that service the specific goods or services it produces.
Market Structure - Group functions into divisions that can be responsive to the needs of particular types of customers.
Each geographic division has access to a full set of the functions it needs to provide its goods and services.
Advantages of a Divisional Structure
Quality products and customer service
Facilitates communication - between functions improve decision making, thereby increasing performance.
Customized management and problem solving
Facilitates decision making - As divisions develop a common identity and approach to solving problems, their cohesiveness in- creases, and the result is improved decision making.
Clear connection between performance and reward
Customized service - regional managers and employees are close to their customers and may develop personal relationships with them.
Identification with division - employees' close identification with their division can increase their commitment, loyalty, and job satisfaction.
Disadvantages of a Divisional Structure
High operating and managing costs
Poor communication between divisions
Conflicts among divisions
A complex form of differentiation that some organizations use to control their activities, results in the matrix structure, which simultaneously groups people in two ways- by the function of which they are a member and by the product team on which they are currently working.
In practice, the employees who are members of the product teams in a matrix structure have two bosses-a functional boss and a product boss.
Facilitates rapid product development
Maximizes communication and cooperation between team members
Facilitates innovation and creativity
Facilitates face-to-face problem solving (through teams)
Provides a work setting in which managers with different functional expertise can cooperate to solve non-programmed decision-making problems.
Facilitates frequent changes of membership in product teams
Disadvantages of a Matrix Structure
Increase role conflict and role ambiguity
High levels of work stress
Limited opportunities for promotion
Organizational Structure of Tarmac Ltd
In Tarmac Ltd. The organizational structure is of divisional as it has been divided into different division like production division, engineering division etc.
In this structure, all the employees are free to work and give their ideas for the future planning. In this way on one side the management gets different ideas but the ideas lack the professional approach as all the employees would not have professional qualification. In this way the implementation of those ideas can lead the organization away from the main goals of it.
In case of enterprise the organizational structure is mixed- divisional, functional and geographical. The owner of enterprise makes the main decision and it is transferred to all the employees in different division and geographical locations. But on the other hands the employees are also given the authority to decide on the spot according to the situation.
This type of organization structure helps the organization to grow and get more profit in the near future but on the other hands the control of the management looses on the employee.
RELATIONSHIP BETWEEN STRUCTURE AND CULTURE:
The task of a manager is to create an organizational structure and culture that:
Encourages employees to work hard and to develop supportive work attitudes
Allows people and groups to cooperate and work together effectively.
Structure and culture affect:
Teamwork and cooperation
Intergroup and Interdepartmental relationships
The way a structure or culture is designed or evolves over time affects the way people and groups behave within the organization.
Once an organization decides how it wants its members to behave, what attitudes it wants to encourage, and what it wants its members to accomplish, it can then design its structure and encourage the development of the cultural values and norm to obtain these desired attitudes, behaviors, and goals.
In case of Tarmac Ltd; the divisional structure and sharing culture describe the organizational in best. Its culture describes
Taking care of employees
Follow rules and regulations
This type of culture motivates the employees to work and enhance the performance of the organization.
On the other hands in case of Enterprise mixed structure and open communication developed the culture of
But the company does not care about the social factor as to help the society and take care of the environment. This causes to create a negative image in the mind of the customers and can decrease the market share of the Enterprise. On the other hands the employees are not involved in the decision making and are supposed to follow the rules set by top management without employees' involvement which cause the de-motivation in the employees.
Basically the culture determines the working environment of the organization. Positive and friendly working environment always increase the output of the employees. So because of the positive and friendly environment the performance of organization improves.
Development and Training
From the performance appraisal the deficiencies of the employees are assessed. To fill the skills gap of the employees for the job, suitable training is designed.
The process of training assessment normally starts from the recruitment process, to fill the skill gap. The need for training assessment and development of training strategy is explained by the flow chart as below
Development and training Process
After assessment of the training and development, training strategy is developed and individuals are selected for training. The development of training strategies starts from the review of business strategy which determines the skills requirement and help in the development of training strategy for the employees.
After developing training strategy, topmanagement select the traininr for the effective training. Training may be of two types
On the job training
Off the job training
The type of training depend upon the availability of traininer and level of training required. It is axplianed by the flow chart below.
The delivery methods are selected, either practical training on job or class room training. Training contents are developed according to the new skills required by the trainee and dynamic nature of the job.
If the development and training strategy is implemented, the performance of the organization increase because of the availability of right skills required for the jobs in the organizations. This also increases the employee motivation level.
Role of technology in business performance:
Technology plays an important role in the success of the business. In this era of technology and modern ways of communication, technology plays its role for the success of the business in the following ways.
Cheep and mass communication with the customers by advertisement on line on the internet and on the TV etc
Easy and quick communication by using different ways like telephone, internet etc
Attracting more customers
Online shopping facility
Management the business from one location in different geographical location
In the case of Tarmac Ltd, it is using the technology in the following ways for the success of the company
Managing the utilization and production functions effectively and efficiently by using the latest computer technology
Online survey of the customers and feedback from the customers so that the management of Tarmac ltd would be able to assess the market needs and produce the products required by the customers
Alignment of the different divisions for the proper functioning of the company to achieve its goals.
Effective supply chain management to save the cost and increase its profit along with the customers' satisfaction.
In this way the technology is playing its part for the success of the business.
Obstacles in organizational performance
There are following limitation which limit the improvement of organizational performance
Cost limits the performance of the organizations because the organizations are performing tor the profit motives. If the cost of the organizations is high, the profit will decrease, so it will not be possible to for the organization to achieve it profit goals.
On the other hands the availability of the finance is not free of cost. If organizations run out of cash during the normal activities of business, it will cause the default of the organization. In this way the cost is the main obstacle in the performance of the organization.
The main goal of the organizations is to achieve its targets as planned by the organization. If the tasks are not achieved according to the planning, it means the organization is not performing well. Some times to achieve the targets, organization required extra resources like more employees and machinery. The acquirements of extra resources incur cost to the company, so it is restricted by the financial resources. In this way there is always an opportunity cost for the organization in using the resources which decrease the performance of organization.
There are always legal requirement for every activity of the organization. These legal requirements put an upper and lower cap on the performance of the company.
Role of Management in Change process:
Management plays an important role in the change process. In technological dynamic environment it is the responsibility of the management to assess the change in the technology and arrange training for the employee so that employees can have required competences to perform their job efficiently and effectively.
On the other hands everybody wants career development for better job and better performance. So in the modern dynamic environment most of the employees of the companies look into the requirement of the market and acquire new skills to fill the skill gap in the market. The training for the new skill helps them to get better position in the organizations.
So it is both employer and employees who assess the need for new skills to fill the skills gap in the dynamic modern society.
On the basis of above analysis it is clear that organizational behaviour play an important role in the performance of the organization. The management styles, organizational structure, employee motivation level and training for the new skill are the key factors which help in the improvement of the organizational performance. In the modern dynamic society employees and employers (managers) play equally important role to fill the skill gap in the dynamic technology through training and improve the performance of the organization.