This is a summary of all the material you need to know for your first Organizational Behaviour test. All theories and information are clearly and directly explained, sometimes with the help of images. Notions and important theorists are also listed.
Introduction
Individual level
Why does the individual act as they do?
Based on Psychology
- study people, the mind and behaviour
- how we think, act and feel
- measure, understand and sometimes change behaviour
Themes include: motivation, training, leadership, effectiveness, stress, personality
Group level
Why do groups act as they do?
Based on social psychology: how individuals influence each other
Also based on sociology: how the social environment shapes behavior
Themes include: teamwork, group dynamics, communication and decision making, power, group
change
Organizational level
Why does the organization act as it does?
Based on sociology: how societies (organizations) function
And anthropology: the values, cultures and rituals of a group or society
Themes include: culture, structure, leadership
Organizational Behavior: multiple perspectives
Organizational behavior is a product of multiple disciplines, each with its own outlook. OB has no
‘correct’ answers. It’s all about managers’ and employees’ perspectives, how to manage and also the
impacts of management on workers and society. Organizations as complex, messy and emotional
places – human element.
Chapter 2
Key terms
Bureaucracy: Official aspects of an organization, such as the hierarchical structure, rules, procedures,
and paperwork which allow control to be exerted over the whole organization.
Rational organizational design: As championed by Fayol, the design of bureaucratic features in the
most technically efficient way so as to achieve the organization’s goals.
Iron cage of bureaucracy: A phrase which summarizes Weber’s critique of bureaucracy and
rationality, suggesting that it is inescapable and leads to monotonous, dull routines.
Informating: Where a large amount of an organization’s activity and knowledge is stored as computer
code in a database.
Network: Where organizations are linked by sharing data through computer networks or through the
internet.
Loes de Gier, AHM1V.EB
, Gig economy: a modern day form of organization typical of the Fourth Industrial Revolution. For
example Uber and Deliveroo.
Direct control: managing and organizing in a personal, informal style.
Indirect control / Impersonal control: managing with more bureaucratic structures and procedures of
rational organizational design.
Rational-legal authority: where authority comes neither from tradition nor from the charisma of an
individual, but from the office they hold and the bureaucratic rules and procedures associated with
that position.
Matrix structure: people move between different teams rather than being in one fixed position or
workgroup within the hierarchy. More knowledge and information can be shared across the
organization and specialists with particular knowledge can be brought into particular project groups
where they are needed.
Fayol’s five functions of management (1949)
Planning / forecasting Looking to the future, trying to calculate and predict future circumstances (such
as demand, competitors, etc.), and acting so as to be prepared to respond to
these.
Organizing Building up the necessary structures, resources and people to best meet the
needs and goals of the organization.
Coordinating Bringing together the structural, human, and resource elements of the
organization to act in harmony in working towards the goals of the organization.
Commanding Giving orders and directions to people within the organization to maintain
activity aimed at achieving the organization’s goals.
Controlling Checking and inspecting work - monitoring and surveillance of work done,
rather than direct command.
Vertical and horizontal differentiation
The development of hierarchy creates vertical differentiation, where employees are separated
vertically from one level of the hierarchy to the next. Managers are also further differentiated by their
specific responsibilities.
Horizontal differentiation (or functional differentiation) describes the different ‘branches’ of the
structure, which might be grouped together.
In practice, most organizational structures use a mix of these.
Loes de Gier, AHM1V.EB
, Examples of rules, policies and procedures in organizations
Grievance Policies which outline how workers themselves may pursue grievances if they are
unhappy with how they are being managed.
Finance Procedures relating to expense claims, outlining what workers might legitimately claim
(e.g. car mileage or transport costs) and how much.
Equal opportunities Policies that ensure equality of treatment and prohibit discrimination on grounds such
as gender, race, age, sexual orientation, and disability.
Appraisal and promotion Procedures for monitoring the standard of work that employees do, often done in a
standardized appraisal procedure which feeds into decisions on promotion of pay
increases.
Recruitment and selection Policies that cover such decisions as where a job is advertised, criteria for selecting
candidates, and types of evidence required to demonstrate that candidates meet
different selection criteria.
Review questions
Describe. What are the main features of bureaucracy?
Explain.How does bureaucracy allow Fayol’s five functions of management to be implemented over
large-scale organizations?
Analyse.What is meant when bureaucracy is described as exerting ‘power’ over large numbers of
people?
Apply. Think of an organization that you engage with regularly. What kinds of structure, rules and
procedures, and record-keeping do they use? How does this help them to maintain order and control?
Bureaucratic techniques and Fayol’s five principles of management (1949) in large-scale
organizations
Planning / forecasting Standard rules and procedures make behavior and actions more predictable across the
organization and thus easier to plan for. Paperwork and computer records give data which
can be used for forecasting, e.g. planning staffing requirements.
Organizing A structure is created to encompass the vertical and horizontal levels of hierarchy needed to
achieve the organization’s aims. Tightly defined job roles and recruitment procedures allow
the development of an appropriately qualified workforce.
Coordinating Standard procedures (e.g. for pay) make it easier to coordinate activities across the
organization (e.g. through a payroll department). The bureaucratic structure and rules make
clear what each person does and how they relate and report to each other across the
organization.
Commanding Command is delegated through the hierarchical levels of bureaucratic structure. Rules and
procedures tell people what to do without a human presence being nearby.
Controlling Paper records and computer data can be used to monitor work performance and associated
issues, such as absence.
Loes de Gier, AHM1V.EB
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