Organisational Behaviour In Definition Of Management Commerce Essay

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The definition of Management is varied when perception of various individuals is taken into account. In some contexts it is defined elaborately as "the organisational process that includes strategic planning, setting objectives, managing resources, and deploying the human and financial assets needed to achieve objectives and measuring results. It also includes recording and storing facts and information for later use or for the use of other individuals within the organisation", and in some cases the definition is as unsettling as "Management, is simply what managers do", but in simple words it can be defined as a group of individuals, equipped with various skills and expertise, working together to attain a common goal. However the word "management" is perceived, its functions and objectives definitely are critical for the efficient operation of an organisation. In this course-work we would be discussing some of the key factors for effective management such as:

Objective Setting, Planning and Decision Making.



Resource Management.

Employee Motivation.

These factors will be discussed in detail along structure of the course work with related case studies. To demonstrate the changing nature of modern work environment, the latter part of each of these factors would give a brief account to changes incorporated in the modern work environment and their relevance to these factors.

In the modern work environment it can be seen that there is a certain divide persistent within the employees in terms of their demographic. The work environment is divided into a young and energetic group and an old and experienced group. Both the groups have something good and something bad to offer to the organisation as a whole. In this course-work, at the latter part of each of these key points I would be focussing on this divide and the effects of this on the organisation with relevance to the key points.

Objective Setting, Planning and Decision Making:

Every organisation is spearheaded by its management. It is evident that management plays a very important role of providing a direction to any organisation. Hence it is clear that if the objectives of the management are obscure and vague, then the organisation itself is misled onto a wrong track.

It is essential for individuals in any organisation, be it the management or its employees, to understand the three basic questions?

What does their company really stand for or what values are incorporated in the organisation?

What exactly is the job each individual has to do?

These questions are of prime importance when the individual is a part of the management and is responsible for major decision making in the organisation. Objective setting in an organisation can be compared to Drucker's Management by Objectives theory or Locke's goal setting theory, but in this case, the objectives or not focussed on a single employee, but the organisation as a whole.

After the process of objective setting in an organisation it is essential to forecast and chronologically map the different activities needed to be carried out within the organisation, this process is termed as planning. Planning is vital in providing important feedback to the objectives in quantitative and qualitative terms. The proper planning in the organisation would aid in taking the right decisions for the organisation. Some of the common management models used in these types of decision making activities are- Rational decision-making model, Balance score card, etc.

Example: The Co-operative [1] .

The Co-operative group in the UK has around 3 million members and each member has equal rights to contribute to the decision making process in the company. The important factor that makes "The Co-operative" unique, is the stand taken by it, when it comes to the values inculcated and values portrayed. In recent years The Co-operative Group have taken up their concerns regarding policies in areas of diet and health. So as to strengthen their core values, the company explicated its own products with new products containing low-sodium salts, reduced saturated fats and less sugar. This move of corporate social responsibility made the consumers aware of the ethics inculcated in the organisation and further improved its Brand name.

When objective setting, planning and decision making is considered in a individual trait perspective, the younger employees have most of their objectives set to be more innovative within their organisation, constantly updating their skills, changing roles often, and yearn for swift growth and faster promotions. The younger generation are so comfortable with the idea of change that their objectives are unfocussed. They opt to change their objectives without any thought on the consequences. Whereas the older generation are not comfortable with change, which makes them focussed on their objectives. They are very patient in taking the right decision with careful considerations.


Leadership can be defined as ability or trait inculcated in an individual or a group of individuals, by the virtue of which they are able to influence and acquire the aid and support of other individuals to accomplish a common task.

Leadership is also a critical factor when it comes to organisational excellence. A positive leadership in an organisation can be capable of reviving and empowering the stand of the organisation as a whole.

The best way to know what kind of leader a person can be is to compare individuals to Lewin's Leadership styles:


He is a type of leader who would make decisions without consulting or without reference to any other individual or team. An autocratic style of leadership is often discouraged within an organisation, since it affects the working relationship between the leaders and their followers. On the positive side, this type of leader is more capable in executing decisions in a swift and efficient way. Ex: Hitler.


In this type of leadership style, the leader encourages the team to be participative in the process and values the ideas and opinions of his team members. This type of leadership style is effective in increasing the involvement of the employees in the organisation and has improved communication, since there is an exchange of views and ideas taking place rather than a monologue. On the negative side this type of leadership style would be more time consuming to implement. Ex: Nelson Mandela.


This type of leadership skills involves giving freedom to their subordinates to take decisions and utilize capabilities to their maximum potential. Ex: Work Culture at Google, the sub-ordinates are given the freedom to work and develop their individual ideas.


This type of leadership style involves the leader acting as a father figure. This type of leadership style can be very effective in maintaining a sense of order amongst the employees. The leader is trusted to make the right decisions and the leader meets the social requirements of the employees. But, this type of leadership style can be disastrous if the leader is ineffective in drafting the right decisions at the right time and the employees would lose interest and be dissatisfied with the leader if wrong decisions are made. Ex: Mahatma Gandhi (also a transformational leader).

It is not always necessary for a leader to have any one of these leadership styles. It can also be a combination of two or more. There are many theories on leadership qualities and the way it affects the management. Some of the theories are Transformational theory, Contingency theory, Behavioural theory, Trait theory, etc. We can see some of these theories with examples in the following case studies.

Example: Reliance India Limited - Dhirubhai Ambani [2] .

Reliance India Limited is a private sector Indian conglomerate with an annual turnover of over US$ 45 billion. It was started in the year 1958 [3] by Dhirubhai Ambani.

Dhirubhai Ambani can be characterised as a transformational leader. A transformational leader is one who not only brings about change in the individuals he mentors (employees) but also in the social system of the environment they work in. Examples for Transformational leader are Mahatma Gandhi-The Prime mover behind the success of Indian Independence in 1947 and Indira Gandhi-The first women prime minister of India. The reason for me to position Dhirubhai Ambani just next to the Gandhis is because all their achievements were the cause of motivation for the whole country. Dhirubhai Ambani's was always known for thinking big, he taught the Indians that even they can aim for bigger plants instead of small factories, even they can think in terms of millions and billions rather than just thousands. He changed the perception of business in any common business man.

In the modern work environment, it can be seen that due to the earlier discussed facts that the younger employees are prone to rash decision making, leadership would not be a consideration (but some exceptions exist, ex: Richard Branson). Whereas the older employees are more focussed on the job at hand and are more capable to run an organisation. Experience is one of the strongest forte of a leader, hence this can be utilised by the older employees.

Communication [4] .

Effective communication can be recognised as the most vital factor in an organisation. Communication in simple terms can be defined as "the process of exchange of information, which is imparted from one individual or sender to another individual or receiver through some medium". It can be seen in any organisation that if the manager is able to communicate his thoughts and ideas effectively to his subordinates, then the employees would understand what is needed from them, and what they are expected to do. An effective and open mode of communication between the managers and the employees would also mean that they understand each other and further it would lead to a more effective work environment.

Communication in an organisational context can be classified into two types:

Internal Communication: This type of communication takes place between the management and the employees.

External Communication: This type of communication takes place between the company's staff and their client, suppliers & vendors.

Example: Amway [5] .

It is known that effective communication is very important in any organisation, but in a company such as Amway where the supply chain is formed of more than 35000 individual distributors, communication would be the prime concern to the organisation. Amway mostly used All-channel communication and chain communication from Alex Bavelas- types of Communication networks.

Amway has been able to cope up with the communication needs by using various communication channels which are effective in serving their purpose.

Communication channel adopted by Amway:

Events (All-channel communication network):

Amway used corporate events as one of the methods of communication with their distributors. It would organise various conferences, seminars and product fairs to get to meet and communicate face-to-face with their distributors. Ex: Pace Setter Seminar, Direct Distributor Seminar, Leadership Seminar, etc.

Training (All-channel communication network):

Training at Amway was a method of improving the skills of their distributors and to increase their competency levels. The main task for a distributor was to start a positive mode of communication with a probable customer, because once the customer agrees to buy the products, the customer himself becomes one of the distributors. That is how the company expands. Hence it was very much necessary for their distributors to be trained to communicate with the consumers because in other words, training becomes one of the communication channel in which the company can talk to the consumers.

Lines of sponsorship (Chain communication Network):

Amway is a company based solely on its "people". The company cannot spread out without the effort of its distributors. In this company it can be seen that the experienced and established distributors are involved in helping the newly sponsored associates with sales of their Amway products. This increases the trust within the organisation and improves the work environment.

Publications (All-channel communication network):

Published source of communication is also used by Amway through many of its magazines and newsletters. Ex: Amagram, Diamond & Leaders' News, etc.

Other channels of communication (All-channel communication network):

For a big business like Amway employing of any communication channel keeps on changing as and when the need arises. Some of the other channels employed by Amway are: Toll free helpline to distributors as well as consumers, advertising campaign in Televisions was recently introduced to increase their brand awareness, Packaging slips would consist of short messages printed over them, Amway websites and Amway Newsrooms online, etc.

In the modern work environment communication is one of the strongest points of the younger generation. It is a common sight in today's offices that the employees are more closely knitted and are always in touch with each other, thanks to social networking sites like Facebook and Twitter. The younger generation has also altered the prude formal environment of the office to a socially able environment.

Resource Management.

Resource management can defined as the process of utilizing the resources available to the organisation in an efficient and effective way. The various resources available to an organisation are: Human resource, financial resources, Infrastructure, resources in the form of raw materials, resources in the form of Intellectual properties (patents), resources in the form of knowledge in established management employees (Knowledge management), etc. But in these, Human resource management and knowledge management are one of the relevant resources to our organisational studies.

Human Resource Management:

Human resource management as defined by Michael Armstrong is a

"strategic and coherent approach to the management of an organization's most valued assets - the people working there, who individually and collectively contribute to the achievement of the objectives of the business [6] "

Some of them prime duties involved in Human resource management are:

Recruitment of personnel in the organisation.

To select the right type of people for a particular position, in the right number and to place them at the right place and the right time.

Managing and motivating the employees to improve their performance and in turn benefit the organisation.

Maintain the values inculcated into the workforce, such that they are congruent to the culture and structure of the organisation.

Training and development.

Knowledge management:

Knowledge management can be defined as the practise inculcated in an organisation to preserve the intellectual knowledge, skills, insights and experiences that are embedded within the organisation either in the form of employees or in the practises of the organisation itself.

Even though both tacit knowledge and explicit knowledge are both important for effective knowledge management to be practised in an organisation, tacit knowledge has far more value compared to explicit knowledge, because it is knowledge which can highlight the core competencies of the organisation. It cannot be easily copied or duplicated. Therefore it can be used to induce innovation within the organisation. This innovation can be utilized as a competitive advantage to the organisation against its competitors.

Example: Tata Steels [7] .

In the mid 90's one of the Indian steel giant Tata steel introduced the knowledge management initiatives into its organisation. It initially formed small group of employees within the organisation, this group of individuals shared their knowledge and experiences with others in the group. This was done to enhance the transfer of not only explicit knowledge but also the tacit knowledge, with the personal experience being offered as a first hand information, some individuals, if not all, would be capable of comprehending and harnessing the information provided to them, and incentives were given to these employees who had the most to offer. These groups were collectively called as a "knowledge repository".

In a modern work environment it can be seen that due to the increased level of communication and the ability of young employees to grasp skills quickly, gives the organisation a higher knowledge management index. The work culture of yesteryears would usually consist of individuals who are not very keen on sharing their knowledge with others. This would be a major drawback for knowledge management. As far as HR management is concerned the negative aspects of the younger employees is that they get uninterested very quickly. They are also always in a lookout for new opportunities and don't mind taking the risk to change their company if another company would offer them a hiked salary of just a few percent. This shows decreased loyalty of the young employees towards their organisation. On the other hand the older generation employees are more loyal towards their organisation. The loyalty may either be as a result of years of working for the organisation and the factor of adaptability in an organisation or it may also be so as not to jeopardise their retirement settlements.

Employee Motivation.

Employee motivation is not only the basis of Human Resource management but plays a very important role in preserving stability in the Knowledge management activities of the organisation. Some of the common motivators are:

Salary Hike

Paid Vacations

Bonuses and incentives

Executive Job titles.


Social gatherings

Praise & Recognition from superiors

Leadership Roles

Casual Dress Day

Share options

It is a known fact that every individual or employee works for the organisation to gain some materialistic or non-materialistic needs. It is important for a manager or leader to understand these needs and to use them to leverage the productivity of the employee and further improve the productivity of the company.

Example: Infosys, India.

The system adopted by Infosys to induce motivation amongst the employees can be more elaborately comprehended by using Maslow's theory which brings in the concept of "Hierarchy of needs".

According to Abraham Maslow the needs of any human being can be characterised in a shape of a pyramid, with the most primal requirements such as basic necessities like monthly pay, good working environment, etc., are based at the bottom of the pyramid. The intermediate levels of the pyramid, which get progressively acute, represent the increase in level of what the individual perceives as "needs". The top level is the point of self actualisation where the individual would aspire for everything that he/she is capable to achieve.

Maslow's - Hierarchy of needs

Implementation of Maslow's - Hierarchy of Needs at Infosys:

Basic/Physical Needs [8] , [9] :

Infosys provides its employees with competitive salaries with the best amenities for their physical comfort. It has some of the most sophisticated and detailed campuses at various locations around the world. The commercial developments amount most of the times amount to a self-contained city able to occupy up to 20000 employees with inclusion of shops, restaurants, heath clubs, basketball court and even a golf course in some cases.

Security Needs [10] , [11] :

Infosys provides its employees with benefits such as Health care, medical benefits, paid leaves and also provides eligible employees with a retirement gratuity plan and pension.

Social Needs [12] :

Infosys recently introduced "Social Business software" known as iEngage. It is a form of a social networking site which accessible only to Infosys employees only. This software would allow its employees to communicate amongst themselves and have a social gathering at a virtual level. This site also acted as a platform to enhance the Knowledge management index of the organisation.

Self Esteem [13] , [14] :

Working in Infosys with greats such as NR Narayana Murthy itself is considered as a privilege to many employees within the organisation. This fact itself increases the self-esteem of the employees and brings about a sense of loyalty to their organisation. Infosys also believes in mentoring and motivating their employees by means of bonuses and incentives. These benefits are provided to its employees on the basis of a 360° feedback and appraisal system. In this system the appraisal is provided by all the sources that directly come in contact with the employee within the organisation.

Self-actualisation [15] :

Many of the appraisal methods which the employee would undergo in the past would be effective enough to improve the skills and talents of the employees and would provide him/her ability to be promoted to higher executive levels within the organisation. In Infosys, the practise is that the employees would not be promoted on a regular basis, since they have to acquire the maturity to take the position judiciously, and also, it would be a demoralising fact to the other employees if any particular employee would be promoted before his/her time. But when the employee has proven himself to the management about his skills and abilities then the perks involved in the promotion increase the self-worth of the individual.

In the modern work environment it can be seen that the employee motivation is a key player in having a sense of control over the young employees. Young employees have potential that can be utilized by using motivators more effectively. Opportunities for young achievers in the modern corporate market are high. Hence it is very vital to understand the requirements and needs of their employees. Since the older employees are more loyal to the organisation, the motivators required to gain their trust is considerably lower than the young employees.

Obstacles to effective organisational performance:

Some of the common obstacles attributed to decrease in organisational performance are:

Shortage staff in terms of number as well as applied skills:

Inadequacy in the number of staff employees can have severe adverse effects on the productivity of any organisation, be it manufacturing or service based industry.

Decrease in skill level in the employee would also decrease the efficiency of the operations within the organisation and hence decrease productivity. Therefore care should be taken that the organisation is always well staffed with skilled employees.

No support from the top management to the lower level employees.

Many a times it can be seen that the middle and lower management level employees are not supported by its organisation. This may cause employees to form union and go on strikes and further decrease the productivity of the organisation. The best example for this is the TFL-Transport for London, there are strikes happening so often due to misalignment between the views of the staff and the management. Employing a simple feedback system can solve this problem.

Disagreement between employees:

Disagreement between employees in an organisation is sometimes the reason for a foul work environment within the organisation. Managers should take the initiative to thwart any discord between employees and maintain a cordial work environment.


Pareto's 80-20 principle can be applied to the organisations as well. In some organisations it can be seen that 80% of the work is done by the 20% of the people. The managers should identify characters within the organisation who do not contribute any value to the organisation and just comment on the work actually done by the performers.

Excessive stress levels:

In some organisation it can be seen that employees are always working at full capacity. In terms of operations management, measures are taken to see that none of the machines/operations are running at full capacity all the times, this would mean that when an increase in demand arises then the machines are incapacitated to produce more. The same terms stand fair for humans too. Excessive work load would increase the stress levels in the employees and would cause de-motivation in the employee and also increases the probability of errors to take place.

So as to avoid increase stress level in employees, periodic social gathering or corporate retreats can be considered.


It can be said that management is more of an art than a science. Management is always dependant on the perception of the individuals that constitute it. Management can be responsible for the making or breaking of an organisation. Usually it is found that the members of the management are seasoned by years of experience and only then given such a position. They are mature enough to take the decisions judiciously in the best interest of the organisation, but they should always stand by the decisions they have taken and not blame others for their wrongdoings.

In this class-work I have tried to highlight some of the factors which would be of great importance for the management in any organisation. Different theories in organisational studies have proved vital in this subject to understand the situations that various organisations undergo in some of these case-studies.

Even though the management plays a vital role in providing the organisation with the important decisions, only the combined effort of all the employees can be responsible for organisational excellence.

Before I started this class of OB, I thought I knew most of what the organisational behaviour is all about, with account of my previous work experiences, I mainly thought that OB would be more related to HR and its duties, but as the weeks have passed by my perception of the subject has completely changed. In more literal terms, OB is not only about the people and their behaviour but how these individual behaviours collectively effect the organisation; it can be as simple as a broken heater in the office, to a catastrophe such as an economic meltdown. Every internal and external factor affects the manner in how each individual performs in an organisation.

This module was quintessential in providing insights on how an organisation functions with the involvement of every individual in internal and external environment. It gives us a brief overview as to how important the behaviour of each individual, their cultures, their perception, and how these issues would affect the organisation as a whole.