23/11/2011

Historical Background of Organizational Behavior

Prepared for

Dr. Ataur Rahman

Organizational Behavior

Prepared By

Md. Jubair Bin Kibria - 3-09-17-022

November 23, 2011

Dr. Ataur Rahman

Professor, Department of Management Studies,

Faculty of Business Studies,

University of Dhaka

Dear Sir,

Subject: Submission of a report.

With due regards and respect I state that I am very thankful to you as you assigned us this

report on ‘‘Historical Background of Organizational Behavior”. It is a great opportunity for me to

acquire theoretical knowledge about organizational behavior and its development over the

years. I have tried my best to gather what I believe to be the most complete information

available.

Your kind acceptance and any type of appreciation would surely inspire me. I would always be

available and ready to explain further any of the context of the whenever asked.

Sincerely yours,

……………………….

Md. Jubair Bin Kibria

ID: 3-09-17-022

Table of Contents

TABLE OF CONTENTS ............................................................................................................................ 3

1 INTRODUCTION .............................................................................................................................. 7

1.1 BACKGROUND OF THE STUDY..............................................................................................................7

1.2 THE STATEMENT OF THE RESEARCH PROBLEM........................................................................................8

1.3 THE RESEARCH OBJECTIVES................................................................................................................8

1.4 THE DEFINITION OF THE TERMS...........................................................................................................8

CONSTITUTIVE DEFINITIONS:...............................................................................................................................81.5 LIMITATION OF THE STUDY.................................................................................................................9

2 THE RESEARCH METHODOLOGY ..................................................................................................... 9

3 ANALYSIS & FINDINGS .................................................................................................................... 9

3.1 THE MEANING OF ORGANIZATIONAL BEHAVIOR......................................................................................9

3.2 HISTORICAL ROOTS OF ORGANIZATIONAL BEHAVIOR..............................................................................11

3.2.1 PRE-CLASSICISTS................................................................................................................................123.2.1.1 Robert Owen (1771-1858)..........................................................................................................123.2.1.2 Charles Babbage (1792-1871).....................................................................................................123.2.2 THE CLASSICAL SCHOOL.......................................................................................................................133.2.2.1 Bureaucratic Management.........................................................................................................133.2.2.1.1 Max Weber (1864-1920)..........................................................................................................143.2.2.2 Scientific Management...............................................................................................................153.2.2.2.1 Frederick Winslow Taylor (1856-1915)....................................................................................153.2.2.2.2 Frank (1868-1924) and Lillian Gilbreth (1878-1972)................................................................173.2.2.3 Administrative Management......................................................................................................183.2.2.3.1 Henri Fayol (1841-1925)..........................................................................................................183.2.2.3.2 Chester Barnard (1886-1961)..................................................................................................203.2.3 THE BEHAVIORAL MOVEMENT..............................................................................................................213.2.3.1 Mary Parker Follett (1868-1933).................................................................................................213.2.3.2 The Hawthorne Experiments......................................................................................................223.2.4 HUMAN RELATIONS MOVEMENT...........................................................................................................243.2.4.1 Abraham H. Maslow (1908-1970)...............................................................................................253.2.4.2 Douglas McGregor (1906-1964).................................................................................................26

3.2.5 BEHAVIORAL RESEARCH MODELS..........................................................................................................273.2.5.1 Renesis Likert..............................................................................................................................273.2.5.2 Frederick Herzberg.....................................................................................................................283.2.5.3 David C. McClelland....................................................................................................................293.2.6 TOWARD ORGANIZATIONAL BEHAVIOR...................................................................................................293.2.6.1 Contemporary organizational behavior......................................................................................303.2.6.2 Contextual Perspectives on Organizational Behavior.................................................................323.2.6.2.1 The Systems Perspective.........................................................................................................333.2.6.2.2 The Contingency Perspective...................................................................................................34

4 CONCLUDING THOUGHTS ............................................................................................................. 35

THE BIBLIOGRAPHY ............................................................................................................................ 37

Executive SummeryThe evolution of management thought has followed societal trends of the nineteenth and

twentieth century’s. The nineteenth century works of Charles Babbage and Robert Owen were

concerned with the early factory system as well making social progress. The classical school

and bureaucratic school of the early twentieth century were the first efforts to generate a

comprehensive theory of management.

Frederick Taylor, the engineer, made a major effort to establish a form of the scientific method

of management. Henri Fayol was the father of the administrative management school. He had

a profound effect on much of administrative theory during the early part of the twentieth

century.

The behavioral school had a profound influence on management theory. It is a revolutionary

period of management theory. It includes the Nobel Prize winning critic of the early proverbs

of administration, Herbert Simon, as well as the landmark Hawthorne Experiment, ushering in

the human relation's branch of the bureaucratic method. The behavioral school also includes

the first female organizational theorist, Mary Parker Follett. A major result of the behavioral

school is the demise and repudiation of the classical school of management.

The human relation's school of management is extremely important in dealing with the concept

of employee motivation. Herbert Maslow developed the hierarchy of needs theory while

Douglas McGregor developed Theory X and Y. The behavioral research school applies much of

the needs theory, developed by Maslow, in actual organizational settings.

The contemporary management school brings a more interdisciplinary approach to the field of

management and has a major impact on the way today's organizations are managed. The

integrative methodologies of the systems approach and contingency theory give managers the

latitude they need to integrate the research of the many management schools.

1 Introduction

1.1 Background of the Study

The Importance of Organizational Behavior in any organization one can assume that the

main goal of that business is to succeed; what exactly does being a winning organization mean

and what does it take to get there? In the past companies placed a great amount of emphasis

on the numbers and how to achieve those numbers. The people who actually helped achieve

those numbers were graded on their technical skills, productivity, and budgets. Employees

were moneymaking machines and how they achieved those numbers was not a concern of their

managers as long as the numbers were being met.

Organizational behavior studies have become more important today than in previous

years because corporations must learn to adapt to the rapidly changing business cultures that

have stemmed from a competitive and fast-paced market. Organizational behavior was a topic

that was not discussed until an employee's behavior changed, productivity changed, or sales

decreased. In today's business world, managers are paying more attention to how employees

react to situations rather than if they respond. They are beginning to view organizational

behavior as an intricate piece of training and development of the workforce. Soft skills were

never a part of management training and it was rare that managers were commended for

having those skills.

In the business world today, I feel organizational behavior is an essential tool for

managing effective teams. If you can zone in on an employees' personality, creativity, and

adaptability, motivating that employee the way they need to be motivated is never a gray area

and a guaranteed success.

Organizational Behavior or as I call it - Discipline principles is a field of study that

investigates the impact that individuals, groups, and structure have on behavior within

organizations for the purpose of applying such knowledge.

1.2 The Statement of the Research Problem

This research attempts to find out the historical background of the organizational

behavior, contribution of scholars and organizations in it and its gradual improvement.

1.3 The Research Objectives

There are three research objectives that we have come up with. These objectives will help

maintain the focus of the study and its main purpose, as well as the outcome. The objectives

are:

Define organizational behavior.

Trace the historical roots of organizational behavior.

Discuss the emergence of contemporary organizational behavior, including its

precursors, the Hawthorne studies, and the human relations movement.

Describe contemporary organizational behavior—its characteristics, concepts, and

importance.

Identify and discuss contextual perspectives on organizational behavior

1.4 The Definition of the Terms

There are two categories of definition regarding the research, which are constitutive

and operational.

Constitutive definitions:

Organization: An organization is defined as a collection of people who work together to

achieve a wide variety of goals

Organizational Behavior: Organizational behavior is defined as the actions and attitudes

of people in organizations. The field of organizational behavior (OB) covers the body of

knowledge derived from these actions and attitudes. It can help managers understand the

complexity within organizations, identify problems, determine the best ways to correct them,

and establish whether the changes would make a significant difference

1.5 Limitation of the Study

This study is done based on the information available regarding the historical

background of organizational behavior on the internet. Because there are no variables

manipulated, there is no way to statistically analyze the results. In addition, the results of

observational studies are not repeatable, and so there can be no replication of the experiment

and reviewing of the results.

2 The Research Methodology

This is a theoretical research and I have chosen descriptive research methodology to

carry out this. I have mainly relied on secondary data which is historical, already assembled and

do not require to access respondents or subjects.

3 Analysis & Findings

In this Section, we begin with a comprehensive definition of organizational behavior

and a framework for its study. We then trace the field’s historical roots and its emergence as

an independent field. Next, we discuss contemporary organizational behavior and present an

overview of the rest of this book. Finally, we examine several contextual perspectives that

provide the general framework from which we can develop a more comprehensive examination

of human behavior at work.

3.1 The Meaning of Organizational Behavior

Organizational behavior (OB) is the study of human behavior in organizational settings,

how human behavior interacts with the organization, and the organization itself. Although we

can focus on any one of these three areas independently, we must remember that all three are

ultimately connected and necessary for a comprehensive understanding of organizational

behavior. For example, we can study individual behavior (such as the behavior of a company’s

Managing Director or of one of its employees) without explicitly considering the organization.

But because the organization influences and is influenced by the individual, we cannot fully

understand the individual’s behavior without knowing something about the organization.

Similarly, we can study an organization without focusing specifically on each individual within it.

But again, we are looking at only one piece of the puzzle. Eventually, we must consider the

other pieces to understand the whole.

Each individual brings to an organization a unique set of personal characteristics,

experiences from other organizations, and personal background. Therefore, organizational

behavior must look at the unique perspective that each individual brings to the work setting.

For example, suppose that Meghna Group of Companies hires a consultant to investigate

employee turnover. As a starting point, the consultant might analyze the types of people the

firm usually hires. The goal of this analysis would be to learn as much as possible about the

nature of the company’s workforce from the standpoint of the individual—their expectations,

their personal goals, and so forth.

But individuals do not work in isolation. They come in contact with other people and

with the organization in a variety of ways. Points of contact include managers, coworkers, the

formal policies and procedures of the organization, and various changes implemented by the

organization. Over time, the individual changes as a function of both personal experiences and

maturity and of work experiences with the organization. The organization, in turn, is affected

by the presence and eventual absence of the individual. Clearly, then, the study of

organizational behavior must consider the ways in which the individual and the organization

interact. Thus, the consultant studying turnover at Meghna Group of Companies might choose

to look at the orientation procedures for newcomers to the organization. The goal of this phase

of the study would be to understand some of the dynamics of how incoming individuals interact

within the broader organizational context.

An organization, of course, exists before a particular person joins it and continues to

exist long after he or she has left. Therefore, the organization itself represents a crucial

perspective from which to view organizational behavior. For instance, the consultant studying

turnover would also need to study the structure and culture of Meghna Group of Companies.

An understanding of factors such as the performance evaluation and reward systems, the

decision-making and communication patterns, and the design of the firm itself can provide

additional insight into why some people decide to stay while others elect to leave.

Clearly, the field of organizational behavior can be both exciting and complex. Myriad

variables and concepts impact the interactions described, and together these factors can

greatly complicate a manager’s ability to understand, appreciate, and manage others in an

organization. However, they can also provide unique opportunities to enhance personal and

organizational effectiveness. To provide some groundwork for understanding, we look first at

the historical roots of organizational behavior.

3.2 Historical Roots of Organizational Behavior

Many disciplines, such as physics and chemistry, are literally thousands of years old.

Management has also been around in one form or another for centuries. For example, the

writings of Aristotle and Plato abound as references and examples of management concepts

and practices. But because serious interest in the study of management did not emerge until

the turn of the twentieth century, organizational behavior is only a few decades old.

One reason for the relatively late development of management as a scientific field is

that very few large business organizations existed until around a hundred years ago. Although

management is just as important to a small organization as it is to a large one, large firms

provided both a stimulus and a laboratory for management research. Second, many of the

initial players interested in studying organizations were economists. Economists initially

assumed that management practices are by nature efficient and effective; therefore, they

concentrated on higher levels of analysis such as national economic policy and industrial

structures rather than on the internal structure of companies.

3.2.1 Pre-Classicists

In the nineteenth century, Robert Owen and Charles Babbage seriously addressed the quest for

the development of management theory. Owen was an entrepreneur and social reformer,

while Babbage was a noted mathematician with a strong managerial interest.

3.2.1.1 Robert Owen (1771-1858)

Robert Owens’s ideas stemmed from his ownership of a cotton mill in New Lanark, Scotland,

where he developed a strong interest in the welfare of the 400 to 500 child employees. Owen

spearheaded a legislative movement to limit child employment to those over the age of ten

while reducing the workday to 10 1/2 hours.

In 1813, Owen published a pamphlet, A New View of Society, where he described his vision

of society. He also became active in improving living conditions of employees through the

implementation of improvements in housing, sanitation, public works, and establishing schools

for the children. Owen strongly believes that character is a product of circumstances and that

environment and early education is critical in forming good character. While being extremely

controversial during his lifetime, Owen is credited with being the forerunner of the modern

human relations school of management.

3.2.1.2 Charles Babbage (1792-1871)

Charles Babbage, a noted English mathematician, is credited as being the "father of the modern

computer" for performing the fundamental research for the first practical mechanical

calculator, as well as doing basic research and development on an "analytical engine"

acknowledged being the forerunner of today's modern computer. His interest in management

stemmed largely from his concerns with work specialization, or the degree to which work is

divided into its parts. This is now recognized as being the forerunner of contemporary

operations research.

Babbage's other major management contribution came from the development of a modern

profit-sharing plan including an employee bonus for useful suggestions as well as a share of the

company's profits.

While both Owen and Babbage were important nineteenth century management innovators,

their efforts lacked the central tenets of a theory of management. Owen was primarily credited

with making specific suggestions regarding management techniques in the areas of human

relations, while Babbage is credited with developing the concepts of specialization of labor and

profit sharing. These pre-classicists paved the way for the theoretical ferment of the classical

school of management.

3.2.2 The Classical School

The twentieth century witnessed a period of tremendous management theory ferment and

activity. Calls were heard for the development of a comprehensive management theory. The

classical school of management was primarily concerned with developing such a theory to

improve management effectiveness in organizations.

However, the classical school theorists went a step further. Not only did they seek to develop a

comprehensive theory of management, but they also wanted to provide the tools a manager

required for dealing with their organizational challenges. Within the classical school there are

the bureaucratic management, administrative management, and scientific management

branches.

3.2.2.1 Bureaucratic Management

Max Weber can be classified in the bureaucratic management branch of the classical school.

Weber, the son of a prominent Bismarckian era German politician, was raised in Berlin and

studied law at the University of Berlin. After assuming an appointment teaching law at the

University of Berlin, Weber assumed teaching appointments in economics at the Universities of

Freiburg, Heidelberg, Vienna, and Munich, ending with his death after a bout with pneumonia

at the University of Munich.

Weber's interest in organizations evolves from his view of the institutionalization of power and

authority in the modern Western world. He constructed a "rational-legal authority" model of

an ideal type bureaucracy. This ideal type rested on a belief in the "legality" of patterns of

normative rules, and the right of those elevated to authority to issue commands (legal

authority). Weber postulated that the rules and regulations of a bureaucracy serve to insulate

its members against the possibility of personal favoritism.

3.2.2.1.1 Max Weber (1864-1920)

Weber believes all bureaucracies have certain characteristics:

1. A well-defined hierarchy. All positions within a bureaucracy are structured in a way

permitting the higher positions to supervise and control the lower positions. This

provides a clear chain of command, facilitating control and order throughout the

organization.

2. Division of labor and specialization. All responsibilities in an organization are

rationalized to the point where each employee will have the necessary expertise to

master a particular task. This necessitates granting each employee the requisite

authority to complete all such tasks.

3. Rules and regulations. All organizational activities should be rationalized to the point

where standard operating procedures are developed to provide certainty and facilitate

coordination.

4. Impersonal relationships between managers and employees. Weber believes it is

necessary for managers to maintain an impersonal relationship with the employees,

because of the need to have a rational decision making process rather than one

influenced by favoritism and personal prejudice. This organizational atmosphere would

also facilitate rational evaluation of employee outcomes where personal prejudice

would not be a dominant consideration.

5. Competence. Competence should be the basis for all decisions made in hiring, job

assignments, and promotions. This would eliminate personal bias and the significance

of "knowing someone" in central personnel decisions. This fosters ability and merit as

the primary characteristics of a bureaucratic organization.

6. Records. Weber feels it is absolutely essential for a bureaucracy to maintain complete

files regarding all its activities. This advances an accurate organizational "memory"

where accurate and complete documents will be available concerning all bureaucratic

actions and determinations.

Weber's bureaucratic principles have been widely adopted throughout the world. Yet, there

are many critics.

The primary criticism of Weber's theory of bureaucracy is the overwhelming acceptance of

authority as its central tenet. This inevitably fosters an unrelenting need to develop additional

authority causing the bureaucracy to be unresponsive and lack effectiveness.

The emphasis on impersonality can lead to personal frustration for its employees while

generating red tape to reinforce previously authorized decisions. The bureaucracy is

increasingly viewed, both by its employees and the public, as a passionless instrument for

responding to human needs.

The need to divide labor and specialize can foster feelings of employee alienation and

estrangement. As the demands of society become even more complex, the need increases for

interpersonal communication and sharing between employees of the resulting organizations.

Unwittingly, Weber helped to foster an extremely negative attitude toward the concept of

bureaucracy, conjuring up images of a highly inflexible and inhumane organization, often

working at cross purposes with the needs of those it is supposed to serve.

3.2.2.2 Scientific Management

Another branch of the classical school of management is the scientific management approach.

The scientific management approach emphasized empirical research for developing a

comprehensive management solution. Scientific management principles are meant to be

applied by managers in a very specific fashion. A fundamental implication of scientific

management is the manager is primarily responsible for increasing an organization's

productivity. This has major implications for the American economy in the face of a consistent

lack of competitive productivity and GNP growth. The major representatives of this school of

thought are Frederick Winslow Taylor and Frank and Lillian Gilbreth.

3.2.2.2.1 Frederick Winslow Taylor (1856-1915)

Frederick Taylor is known as the "father of scientific management." Taylor began work at the

age of 18 as an apprentice to a pattern maker, and as a machinist. He later joined the Midvale

Steel Company as a laborer rising in eight years to chief engineer. During this period at the

steel mill, he performed exhaustive experiments on worker productivity, and tested what he

called the "task system," later developing into the Taylor System, and eventually progressing

into scientific management. His experiments involved determining the best way of performing

each work operation, the time it required, materials needed, and the work sequence. He

sought to establish a clear division of labor between management and employees.

Taylor's task management methodology rests on a fundamental belief that management, the

entrepreneurs in Taylor's day, were not only superior intellectually to the average employee,

but had a positive duty to supervise them and organize their work activities to eliminate what

Taylor called "the natural tendency of workers to soldier" on the job.

In 1911, a paper Taylor originally prepared for presentation to the American Society of

Mechanical Engineers was published as The Principles of Scientific Management. Taylor

positioned scientific management as the best management approach for achieving productivity

increases. It rested on the manager's superior ability and responsibility to apply systematic

knowledge to the organizational work setting.

Taylor developed four principles of scientific management:

1. A scientific management methodology is to be developed.

2. Managers should assume the responsibility for selecting, training and developing the

employee.

3. Managers should fully cooperate with employees to insure the proper application of the

scientific management method.

4. Management should become involved with the work of their employees as much as

possible.

Scientific management consisted of a system for supervising employees, improving work

methods, and providing incentives to employees through the piece rate system. While Taylor

assumed there was an unquestioned necessity to supervise employees, he also sought the best

way of performing a job as well as to provide financial incentives for increased productivity by

paying employees by the piece through the piece rate system.

Taylor's Principles became enormously popular in America, as well as in Europe, providing

organizational theory an aura of science. Scientific management led to time and motion

studies, efficiency experts and others spreading the gospel. Taylor's optimistic belief that study

of the organization through his scientific method would provide the answers necessary to

resolve the most difficult productivity problems is extremely important to contemporary

management. He is the first to point out that it is management's primary responsibility to make

an organization productive.

However, other areas of his methodology have proven to be flawed. In particular, Taylor's

insistence on close supervision flies in the face of all contemporary organizational research

demonstrating close supervision is counterproductive. Additionally, the piece rate system, all

too often, is either inapplicable in today's computerized assembly lines, or is compromised by

management continually raising the quota.

3.2.2.2.2 Frank (1868-1924) and Lillian Gilbreth (1878-1972)

The Gilbreths were strong advocates of scientific management. Frank Gilbreth made his first

management studies of bricklayers. After extensive studies of bricklayers, he was able to

reduce the motions in bricklaying from 18 1/2 to 4. This produced an almost 170% increase in

the bricklayer's productivity, while not increasing the amount of effort needed.

Gilbreth was interested in developing the one best way of doing work. His system later became

known as "speed work" which was achieved by eliminating unnecessary motions.

Frank, working with his wife, Lillian, subsequently became heavily involved in time and motion

studies, isolating 17 basic work motions, which they termed therbligs (therblig is Gilbreth

spelled backwards). Their studies of work included the use of a cyclograph, a form of

stereoscopic movie camera, whereby the time and motions of a worker could be carefully

studied.

Lillian Gilbreth published one of the earliest works on the psychological study of management,

The Psychology of Management. She was also the earliest female pioneer in scientific

management.

The Gilbreths were immortalized by two of their children who wrote Cheaper by the Dozen,

chronicling life under the scientific management method of their parents.

3.2.2.3 Administrative Management

Henri Fayol belongs to the administrative management branch of the classical school. His

entire working career was spent with a mining company, Commentary-Fourchambault

Company, where he rose from an apprentice to General Manager in 1888, remaining there until

his retirement in 1918. He is credited with turning the company around from a threatened

bankruptcy into a strong financial position by the time of his retirement at age 77.

As a result of his management experience, Fayol strongly believed management theories could

be developed and taught to others. His first writing on administration, Administration

Industrielle et Generale, was published in 1916 in the Bulletin of the Society of Mineral

Industries and later appeared as a book. The book became prominent in the United States

after a second English translation appeared in 1949 under the title General and Industrial

Management.

3.2.2.3.1 Henri Fayol (1841-1925)

As a result of his long management career, Fayol developed fourteen management principles:

1. Division of Work. Division of work, specialization, produces more and better work with the

same effort. It focuses effort while maximizing employee productivity. It is applicable to all

work including technical applications. There are limitations to specialization, which are

determined by its application.

2. Authority and responsibility. Authority is the right to give orders and the power to exact

obedience. Distinction must be made between a manager's official authority deriving from

office, and personal authority created through individual personality, intelligence, and

experience. Authority creates responsibility.

3. Discipline. Obedience and respect between a firm and its employees based on clear and fair

agreements are absolutely essential to the functioning of any organization. Good discipline

requires managers to apply sanctions whenever violations become apparent.

4. Unity of command. An employee should receive orders from only one superior. Employees

cannot adapt to dual command.

5. Unity of direction. Organizational activities must have one central authority and one plan of

action.

6. Subordination of Individual Interest to General Interest. The interests of one employee or

group of employees are subordinate to the interests and goals of the organization and cannot

prevail over it.

7. Remuneration of Personnel. Salaries are the price of services rendered by employees. It should

be fair and provide satisfaction both to the employee and employer. The rate of remuneration

is dependent on the value of the services rendered as determined by the employment market.

8. Centralization. The optimum degree of centralization varies according to the dynamics of each

organization. The objective of centralization is the best utilization of personnel.

9. Scalar chain. A chain of authority exists from the highest organizational authority to the lowest

ranks. While needless departure from the chain of command should be discouraged, using the

"gang plank" principle of direct communication between employees can be extremely

expeditious and increase the effectiveness of organizational communication.

10. Order. Organizational order for materials and personnel is essential. The right materials and

the right employees are necessary for each organizational function and activity.

11. Equity. In organizations, equity is a combination of kindliness and justice. The desire for equity

and equality of treatment are aspirations to be taken into account in dealing with employees.

12. Stability of Tenure of Personnel. In order to attain the maximum productivity of personnel, it is

essential to maintain a stable work force. Management insecurity produces undesirable

consequences. Generally the managerial personnel of prosperous concerns is stable, that of

unsuccessful ones is unstable.

13. Initiative. Thinking out a plan and ensuring its success is an extremely strong motivator. At all

levels of the organizational ladder, zeal and energy on the part of employees are augmented by

initiative.

14. Esprit de Corps. Teamwork is fundamentally important to an organization. Creating work

teams and using extensive face-to-face verbal communication encourages this.

While subsequent organizational research has created controversy over many of Fayol's

principles, they are still widely used in management theory. Fayol's six primary functions of

management, which go hand in hand with the Principles, are as follows:

1. Forecasting.

2. Planning.

3. Organizing.

4. Commanding.

5. Coordinating.

3.2.2.3.2 Chester Barnard (1886-1961)

Another strong member of the administrative management school is Chester Barnard. Barnard

led a highly successful management career rising to the position of the President of New Jersey

Bell Telephone Company. He was also very active professionally, including acting as the head of

the Rockefeller Foundation. After giving a series of lectures on management, Barnard

published his only book, The Functions of the Executive, in 1938.

Basically, Barnard feels organizations are communication systems. He feels it is particularly

important for managers to develop a sense of common purpose where a willingness to

cooperate is strongly encouraged. He is credited with developing the acceptance theory of

management, emphasizing the willingness of people to accept those having authority to act.

He feels the manager's ability to exercise authority is strongly determined by the employee's

"zone of indifference", where orders are accepted without undue question.

Contrary to Weber beliefs that communication flows from the top of the organization to the

bottom, Barnard feels organizational communication flows from the bottom to the top. He

states there are four factors affecting the willingness of employees to accept authority:

1. The employees must understand the communication.

2. The employees accept the communication as being consistent with the organization's purposes.

3. The employees feel their actions will be consistent with the needs and desires of the other

employees.

4. The employees feel they are mentally and physically able to carry out the order from the higher

authority.

Barnard also feels informal organizations, within formal organizations; perform necessary and vital

communication functions for the overall organization. This is consistent with his belief that the

executive's main organizational function is acting as a channel of communication and maintaining the

organization in operation.

Barnard's sympathy for and understanding of employee needs in the dynamics of the organizational

communication process, positions him as a bridge to the behavioral school of management, many of

whose early members were his contemporaries.

3.2.3 The Behavioral Movement

As management research continued in the twentieth century, questions were increasingly

raised regarding the interactions and motivations of the individual in organizations.

Management principles developed during the classical period were simply not useful in dealing

with many management situations and could not explain the behavior of individual employees.

The principles of classical management theory were helpful in placing management objectives

in the perspective of an organization; however, they failed to fulfill one of their earliest goals,

i.e., providing management tools for dealing with organizational personnel challenges. In short,

classical theory ignored employee motivation and behavior.

Curiously, an experiment, the Hawthorne experiment, rigorously applied classical management

theory only to reveal its shortcomings. The behavioral school was a natural outgrowth of this

revolutionary management experiment. Its theorists include Mary Parker Follett and Herbert

Simon as well as numerous psychologists who turned from studying individual behavior to

organizational behavior.

3.2.3.1 Mary Parker Follett (1868-1933)

One of the earliest pioneers in the behavioral movement was Mary Parker Follett. Follett

received an education in political science and pursued a professional career as a social worker

where she became absorbed in workplace related issues. She strongly believes in the inherent

problem solving ability of people working in groups. Rather than assuming classical

management's strongly hierarchical position of power in organizations, Follett asserts power

should be cooperatively shared for the purpose of resolving conflict.

She is best known for her integration method of conflict resolution as opposed to the three

choices she cites of domination, compromise or voluntary submission by one side over another.

If, for example, an individual is sitting in a library on a warm spring day near an open window

and a second person decides to share the table but wishes to close the window to avoid the

draft, we have the basis of a conflict. Now one person could try and dominate the other and

force the windows to either be open or closed leaving the other person unhappy. A second

alternative is for one person to simply submit to the wishes of the other, but be very unhappy.

The third alternative is to compromise and close the window half way, which will not satisfy

either person.

Follett states the best way to handle this situation is to resolve the issue jointly through

"creative conflict resolution" where, in our example, the newcomer may voluntarily agree to sit

in another part of the library adjusting the window according to his/her preference. In this

case, both parties to the conflict are happy, as the issue has been resolved according to their

own desires. Creative conflict resolution involves cooperatively working with others to devise

inventive new ideas often providing strong interpersonal benefits.

3.2.3.2 The Hawthorne Experiments

The Hawthorne experiments were groundbreaking studies in human relations that were

conducted between 1924 and 1932 at Western Electric Company's Hawthorne Works in

Chicago. Originally designed as illumination studies to determine the relationship between

lighting and productivity, the initial tests were sponsored by the National Research Council

(NRC) of the National Academy of Sciences. In 1927 a research team from the Harvard Business

School was invited to join the studies after the illumination tests drew unanticipated results.

Two additional series of tests, the relay-assembly tests and the bank-wiring tests, followed the

illumination tests including a mass interviewing programme. The studies assumed the label

Hawthorne experiments or studies from the location of the Western Electric plant. Concluded

by 1932, the Hawthorne studies, with emphasis on a new interpretation of group behavior,

were the basis for the school of human relations.

Part I - Illumination Experiments (1924-27)

These experiments were performed to find out the effect of different levels of illumination

(lighting) on productivity of labor. The brightness of the light was increased and decreased to

find out the effect on the productivity of the test group. Surprisingly, the productivity increased

even when the level of illumination was decreased. It was concluded that factors other than

light were also important.

Part II - Relay Assembly Test Room Study (1927-1929)

Under these test two small groups of six female telephone relay assemblers were selected.

Each group was kept in separate rooms. From time to time, changes were made in working

hours, rest periods, lunch breaks, etc. They were allowed to choose their own rest periods and

to give suggestions. Output increased in both the control rooms. It was concluded that social

relationship among workers, participation in decision-making, etc. had a greater effect on

productivity than working conditions.

Part III - Mass Interviewing Programme (1928-1930)

21,000 employees were interviewed over a period of three years to find out reasons for

increased productivity. It was concluded that productivity can be increased if workers are

allowed to talk freely about matters that are important to them.

Part IV - Bank Wiring Observation Room Experiment (1932)

A group of 14 male workers in the bank wiring room were placed under observation for six

months. A worker's pay depended on the performance of the group as a whole. The

researchers thought that the efficient workers would put pressure on the less efficient workers

to complete the work. However, it was found that the group established its own standards of

output, and social pressure was used to achieve the standards of output.

Conclusions of Hawthorne Studies / Experiments

The conclusions derived from the Hawthorne Studies were as follows :-

The social and psychological factors are responsible for workers' productivity and job

satisfaction. Only good physical working conditions are not enough to increase

productivity.

The informal relations among workers influence the workers' behavior and performance

more than the formal relations in the organization.

Employees will perform better if they are allowed to participate in decision-making

affecting their interests.

Employees will also work more efficiently, when they believe that the management is

interested in their welfare.

When employees are treated with respect and dignity, their performance will improve.

Financial incentives alone cannot increase the performance. Social and Psychological

needs must also be satisfied in order to increase productivity.

Good communication between the superiors and subordinates can improve the

relations and the productivity of the subordinates.

Special attention and freedom to express their views will improve the performance of

the workers.

Essentially the experimenters became a part of the study and influenced its outcome. This is

the origin of the term Hawthorne Effect describing the special attention researchers give to a

study's subjects and the impact it has on its findings.

While the result of the Hawthorne studies failed to answer the specific question of the relation

between illumination and worker productivity, the study did create a strong theoretical

foundation for the human relations view of management.

3.2.4 Human Relations MovementThe work of Mary Parker Follett, the Hawthorne experiments, and the criticism of the Classical

School by Herbert Simon, led to a deeper consideration of the needs of the employees and the

role of management as a provider for these needs. The two major organizational theorists in

the human relations movement are Abraham H. Maslow and Douglas McGregor.

3.2.4.1 Abraham H. Maslow (1908-1970)Receiving his doctorate in psychology, Abraham Maslow was the first psychologist to develop a

theory of motivation based upon a consideration of human needs. Maslow's theory of human

needs has three assumptions.

First, human needs are never completely satisfied.

Second, human behavior is purposeful and is motivated by need satisfaction.

Third, needs can be classified according to a hierarchical structure of importance from

the lowest to highest.

Maslow believes the needs hierarchy can be classified into five specific groups. To reach

successive levels of the hierarchy required the satisfaction of the lower level needs:

1. Physiological needs. Maslow groups all physical needs necessary for maintaining basic

human wellbeing into this category. These needs become acute and predominant if any

or all of these needs are unsatisfied. However, consistent with Maslow's theory of

motivation, once a need is satisfied, such as thirst, it no longer is a motivator.

2. Safety needs. These needs include the need for basic security, stability, protection, and

freedom from fear. A normal state exists for an individual to have all of these needs

generally satisfied. Otherwise, they become primary motivators.

3. The belongingness and love needs. Once the physical and safety are satisfied and no

longer are motivators, then the belongingness and love needs emerge as primary

motivators. The individual will strive to establish meaningful relationships with

significant others. Deprivation of the belongingness and love need will result in

significant personality maladjustment.

4. The esteem needs. An individual must develop self-confidence. In order to do this, it is

essential to the individual to have adequacy from achieving mastery and competence

leading to the achievement of status, reputation, fame and glory. This achieves

satisfaction of the self-esteem needs.

5. The need for self-actualization. Assuming all of the previous needs in the hierarchy are

satisfied, a "new discontent and restlessness will soon develop... A musician must make

music, an artist must paint, a poet must write ... What a man can be, he must be.

Maslow's hierarchy of needs theory helps the manager to visualize employee motivation. It helps in

understanding the motivations and needs employees have and the requirement to satisfy basic needs in

order to achieve higher-level motivation.

3.2.4.2 Douglas McGregor (1906-1964)McGregor is the other major theorist associated with the Human Relations school of

management. McGregor believes there are two basic kinds of managers. One type of

manager, Theory X, has a negative view of employees assuming they are lazy, untrustworthy

and incapable of assuming responsibility while the other type of manager, Theory Y, assumes

employees are trustworthy and capable of assuming responsibility having high levels of

motivation. McGregor's main theoretical assumptions are

THEORY X

1. Employees normally do not like to work and will try to avoid it.

2. Since employees do not like working, they have to be coerced, controlled, directed and

threatened with punishment to motivate them to work.

The average employee is lazy, shuns responsibility, is not ambitious, needs direction, and

principally desires security.

THEORY Y

1. Work is as natural as play and therefore people desire to work.

2. Employees are responsible for accomplishing their own work objectives.

3. Comparable personal rewards are important for employee commitment to achieving

work goals.

4. Under favorable conditions, the average employee will seek and accept responsibility.

5. Employees can be innovative in solving organizational problems.

6. Most organizations utilize only a small proportion of their employees' abilities.

Mcgregor's Theory X and Y are appealing to managers and dramatically demonstrate the

divergence in management viewpoints toward employees. As such, Theory X and Y have been

extremely helpful in promoting management understanding of supervisory styles and employee

motivational assumptions.

3.2.5 Behavioral Research ModelsA great deal of behavioral research has been done on organizations attempting to delineate the

best supervisory management models. Two of these researchers are Renesis Likert and

Frederick Herzberg.

3.2.5.1 Renesis LikertWhile being the director of the Institute of Human Relations at Ann Arbor, Michigan, Likert

conducted a series of empirical studies on the differences between good and bad supervisors

defined on the basis of high and low productivity. His research is based on employee

interviews, in separate departments, in many different organizations where a scale of feelings is

developed, the Likert scale, regarding employee attitudes toward their supervisors. This was

correlated with their productivity.

Based on his research, Likert developed a four level managerial classification system. System 1

utilizes a supervisory system based primarily on fear and punishment. This results in an

authoritarian supervisory system where employees are usually not consulted concerning major

decisions.

In System 2 organizations, rewards are used to motivate employees with some freedom being

allowed to comment on organizational decisions. However, managers have the primary

decision making responsibility and employees in a System 2 organization must act cautiously.

System 3 organizations are more open to employee consultation regarding the managerial

decision making process and overt managerial threats are avoided.

Likert states the System 4 organization is the most open and participative and is the ideal state

managers should strive to achieve.i This is termed the democratic model. Likert states, the

more an organization's management approximates the System 4 model, the more productive it

will be.

3.2.5.2 Frederick HerzbergHerzberg performed additional empirical research on 200 engineers and accountants. The

research objective was to determine work situations where the subjects feel highly satisfied

and motivated as opposed to those where the reverse is true. The research reveals that the

work itself, and achievement, as well as recognition for the achievement, are the primary

motivators. Herzberg terms these factors satisfiers or motivators.

Factors having a negative motivation impact on the research subjects are the working

conditions, salary, job security, supervisory methods, and the general company management

climate. Herzberg terms these factors hygiene factors or dissatisfies.

From this research Herzberg developed the motivation-hygiene model of management. The

model states that employee motivation is achieved with challenging enjoyable work, where

achievement, growth, responsibility, and advancement are encouraged and recognized. The

environmental or hygiene factors, such as poor lighting, ventilation, poor working conditions,

low salaries, and poor supervisory relations, serve as dissatisfiers.

The difference between motivators and hygiene factors is that motivators cause an employee

to develop his/her own internal motivations, whereas hygiene factors can make an employee

unhappy and dissatisfied, but cannot motivate him/her. The job itself is the motivator.

3.2.5.3 David C. McClellandDavid C. McClelland of Harvard University performed research on motivation patterns. Most

notably this was done with the Thematic Apperception Test (TAT) where an individual writes a

descriptive analysis of their individual reactions from unstructured pictures. McClelland

determines the motivational state of the subjects from these descriptions.

Based upon this research, McClelland developed an achievement motivation theory consisting

of four sets of needs: achievement, affiliation, competence and power.ii

Achievement motivation is a need people have to succeed through overcoming challenges. The

affiliation motivation is similar to Maslow's belongingness and love need where people relate to

others on a social basis. The competence need is the desire to accomplish a job well done, and

the power motivation is the need to control others and make a difference in the outcome of a

given situation.

McClelland believes people have strong needs. His achievement motivation theory is important

for managers seeking understanding of employee motivational patterns.

3.2.6 Toward Organizational Behavior Most scholars would agree that organizational behavior began to emerge as a mature field of

study in the late 1950s and early 1960s. That period saw the field’s evolution from the simple

assumptions and behavioral models of the human religionists to the concepts and

methodologies of a scientific discipline. Since that time, organizational behavior as a scientific

field of inquiry has made considerable strides, although there have been occasional steps

backward as well. Many of the ideas discussed in this book have emerged over the past two

decades. We turn now to contemporary organizational behavior.

3.2.6.1 Contemporary organizational behavior Contemporary organizational behavior has two fundamental characteristics that warrant

special discussion. It also generally accepts a set of concepts to define its domain.

Characteristics of the field

Researchers and managers who use concepts and ideas from organizational behavior must

recognize that it has an interdisciplinary focus and a descriptive nature; that is, it draws from a

variety of fields and attempts to describe behavior (as opposed to prescribing how behavior can

be changed in consistent and predictable ways).

An Interdisciplinary Focus

In many ways, organizational behavior synthesizes several other fields of study. Psychology,

especially organizational psychology, is perhaps the greatest contributor to the field of

organizational behavior. Psychologists study human behavior, whereas organizational

psychologists specifically address the behavior of people in organizational settings. Many of the

concepts that interest psychologists, such as individual differences and motivation, are also

central to studying of organizational behavior.

Sociology also has had a major impact on the field of organizational behavior. Sociologists

study social systems such as families, occupational classes, and organizations. Because a major

concern of organizational behavior is the study of organization structures, the field clearly

overlaps with areas of sociology that focus on the organization as a social system.

Anthropology is concerned with the interactions between people and their environments,

especially their cultural environment. Culture is major influence on the structure of

organizations as well as on the behavior of individual people within organizations.

Political science also interests organizational behaviorists. We usually think of political science

as the study of political systems such as governments. But themes of interest to political

scientists include how and why people acquire power, political behavior, decision making,

conflict, the behavior of interest groups, and coalition formation. These are also major areas of

interest in organizational behavior.

Economists study the production, distribution, and consumption of goods and services.

Organizational behaviorists share the economist’s interest of topics such as labor market

dynamics, productivity, human resource planning and forecasting, and cost-benefit analysis.

Engineering has also influenced the field of organizational behavior. Industrial engineering in

particular has long been concerned with work measurement, productivity measurement, work

flow analysis and design, job design, and labor relations. Obviously these areas are also

relevant to organizational behavior.

Most recently, medicine has influenced organizational behavior in connection with study of

human behavior at work, specifically in the area of stress. Increasing research is showing that

controlling the causes and consequences of stress in and out of organizational settings is

important for the well-being of the individual as well as that of the organization.

A Descriptive Nature

A primary goal of organizational behavior is to describe relationships between two or more

behavioral variables. The theories and concepts of the field, for example, cannot predict with

certainty that changing a specific set of workplace variables will improve an individual

employee’s performance by a certain amount. At best, theories can suggest that certain

general concepts or variables tend to be related to one another in particular settings. For

instance, research might indicate that in one organization, employee satisfaction and individual

perceptions of working conditions correlate positively. Nevertheless, we may not know if

better working conditions lead to more satisfaction, if more satisfied people see their jobs

differently from unsatisfied people, or if both satisfaction and perceptions of working

conditions are actually related through other variables. Also, the observed relationship

between satisfaction and perceptions of working conditions may be considerably stronger,

weaker, or nonexistent in other settings.

Organizational behavior is descriptive for several reasons: the immaturity of the field, the

complexities inherent in studying human behavior, and the lack of valid, reliable, and accepted

definitions and measures. Whether the field will ever be able to make definitive predictions

and prescriptions is still an open question. But the value of studying organizational behavior

nonetheless is firmly established. Because behavioral processes pervade most managerial

functions and roles, and because the work of organizations is done primarily by people, the

knowledge and understanding gained from the field can help managers in significant ways.

The Importance of Organizational Behavior

Although the importance of organizational behavior may be clear, we should still take a few

moments to emphasize certain points. People are born and educated in organizations, acquire

most of their material possessions from organizations, and die as members of organizations.

Many of our activities are regulated by organizations called governments. And most adults

spend the better part of their lives working in organizations. Because organizations influence

our lives so powerfully, we have every reason to be concerned about how and why those

organizations function.

In our relationships with organizations, we may adopt any one of several roles or identities. For

example, we can be consumers, employees, or investors. Because most readers of this study

are either present of future managers, we adopt a managerial perspective throughout.

Organizational behavior can greatly clarify the factors that affect how managers manage. It is

the field’s job to describe the complex human context in which managers’ work and to define

the problems associated with that realm. The value of organizational behavior is that it isolates

important aspects of the manager’s job and offers specific perspectives on the human side of

management: people as organizations, people as resources, and people as people.

3.2.6.2 Contextual Perspectives on Organizational Behavior Several contextual perspectives have increasingly influenced organizational behavior: the

systems approach and contingency perspectives, the interactional view, and the popular-press

perspectives. Many of the concepts and theories we discuss in the chapters that follow reflect

these perspectives; they represent basic points of view that influence much of our

contemporary thinking about behavior in organizations.

The systems and contingency perspectives take related viewpoints on organizations and how

they function. Each is concerned with interrelationship among organizational elements and

between organizational and environmental elements.

3.2.6.2.1 The Systems Perspective

The systems perspective, or the theory of systems, was first developed in the physical sciences,

but it has been extended to other areas, such as management. A system is an interrelated set

of elements that function as a whole.

An organizational system receives four kinds of inputs form its environment: material, human,

financial, and informational. The organization then combines and transforms the inputs and

returns them to the environment in the form of products or services, profits or losses,

employee behaviors, and additional information. Finally, the system receives feedback from

the environment regarding these outputs. As an example, we can apply systems theory to an oil

company. Material input includes pipelines, crude oil, and the machinery used to refine

petroleum. Financial input includes the money received from oil and gas sales, stockholder

investment, and so forth. Human input includes the effort put forth by oil field workers,

refinery workers, office staff, and other people employed by the company. Finally, the

company receives information input from forecasts about future oil supplies, geological surveys

on potential drilling sites, sales projections, and similar analyses.

Through complex refining and other processes, these inputs are combined and transformed to

create products such as gasoline and motor oil. As outputs, these products are sold to the

consuming public. Profits from operations are fed back into the environment through taxes,

investments, and dividends; losses, when they occur, hit the environment by reducing

stockholders’ incomes. In addition to having on-the-job contacts with customers and suppliers,

employees live in the community and participate in a variety of activities away from the

workplace. In varying degrees, at least some part of this behavior is influenced by their

experiences as workers. Finally, information about the company and its operations is also

released into the environment. The environment, in turn, responds to these outputs and

influences future inputs. For example, consumers many buy more or less gasoline depending

on the quality and price of the product, and banks may be more or less willing to lend the

company money based on financial information about the company.

3.2.6.2.2 The Contingency Perspective

Another useful viewpoint for understanding behavior in organizations comes from the

contingency perspective. In the early days of management studies, managers searched for

universal answers to organizational questions. They sought prescriptions that could be applied

to any organization under any conditions. For example, early leadership researchers tried to

discover forms of leadership behavior that would always increase employee satisfaction and

effort. Eventually, however, researchers realized that the complexities of human behavior and

organizational settings make universal conclusions virtually impossible. They discovered that in

organizations, most situations and outcomes are contingent; that is, the relationship between

any two variables is likely to be influenced by other variables.

The universal approach, shown at the top of the exhibit presumes a direct cause-and-effect

linkage between variables. For example, it suggests that whenever a manager encounters a

certain problem or situation (such as motivating employees to work harder), a universal

approach exists that will lead to the desired outcome (such as raising pay or increasing

autonomy). The contingency approach, on the other hand, acknowledges several other

variables that alter the direct relationship. In other words, appropriate managerial actions in

any given situation depend on elements of that situation.

Interactionalism

Interactionalism is a relatively new approach to understanding behavior in organizational

settings. First presented in terms of interactional psychology, this view assumes that individual

behavior results from a continuous and multidirectional interaction between the characteristics

of a person and characteristics of a situation. More specifically, interactionalism attempts to

explain how people select, interpret, and change various situations

The interactional view implies that simple cause-and-effect descriptions of organizational

phenomena are not enough. For example, one set of research studies may suggest that job

changes will lead to improved employee attitudes. Another set of studies may propose that

attitudes influence how people perceive their jobs in the first place. Both positions are

probably incomplete: employee attitudes may influence job perception, but these perceptions

may in turn influence future attitudes. Because interactionalism is a fairly recent contribution

to the field, it is less prominent in the chapters that follow than the systems and contingency

theories. Nonetheless, the interactional view appears to offer many promising ideas for future

development in the field.

While some of the evidence provided by current research is open to a variety of different

interpretations, they have focused popular attention on many of the important issues and

problems confronting business today. As a result, managers of the 1990s better appreciate

both their problems and their prospects in working toward more effective organizational

practices in the years to come.

4 Concluding Thoughts

Organizational Behavior is one of the most talked-about issues in terms of management and

human resource. There are many aspects and information that are related with it, and this

varies from personality, emotion and feelings, group relationship, motivation, attitudes, and

other psychological and management aspects. However, there are other important and depth

information that are needed to be considered in order to fully understand the OB. Using all of

the resources that have been mentioned in this paper, there are different and new information

that had helped me to understand more regarding OB. One of this is the historical development

of OB as well as the different theories that are related to it, such as motivation. Furthermore,

personality and other psychological aspect of an individual can greatly impact the physical and

emotional working environment, and vice versa. Team work of group relationship is also an

important aspect in OB. In addition, culture is considered as one of the most important aspects

that must be considered in any working relationship in any organization and business. The said

aspect is important due to the growing number of multinational companies and multi-cultural

companies.

Communication plays an important role in managing the organizational behavior. This

can be done by managing effective communication channel and medium that can help to lessen

the different negative impact of cultural differences.

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http://kalyan-city.blogspot.com/2011/04/hawthorne-studies-experiments-4-parts.html

http://www.nwlink.com/~donclark/hrd/history/xy.html

http://www.enotes.com/theory-x-theory-y-reference/theory-x-theory-y

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