Organisational Behaviour and Its Influences on the Employees - Assignment Example

?Organisational Behaviour Individual Case Study Assignment Table of Contents 0.Introduction 3 2.0.Methodology 4 3.0.Findings 5 3 Motivational States of Cost Wise Employees 5 3.3.Summary of the Main Managements and Organisational Problems 8 3.4.Diagnosis of the Problems 10 4.0.Conclusion 12 6.0.References 15 1.0. Introduction Organisational behaviour is a learning and application process of acquaintances regarding how populace, folks and groups operate within the organization. It is a study to gaze into certain aspects of the organization such as attitudes, interpersonal relationships, performance, productivity, job satisfaction, commitment of employees along with the management. It helps in perceiving ideas about organization, groups and individual employees involved in the organisational structure. Thus, the concept is often considered as a parameter pertaining to the explanation, understanding, forecasting and calculation of human behaviour in an organization (Pomsuwan, 2007). In order to access the individual or group performance in an organization, certain areas are primarily focused which include personality, perception, attitudes, job satisfaction, group dynamics, politics, leadership, job design, culture, communication chain, stress of work, and decision-making power that tend to influence the employees’ behaviour at large (Rollinson, 2008). This paper intends to present an understanding of the concept of organisational behaviour and its influences on the employees in case of mergers and acquisitions. Based on a case study scenario of David Orton and Cost Wise, the discussion in this paper also aims at identifying the various issues faced by the organizations and its employees due to structural changes as a result of acquisition. 2.0. Methodology Organisational behaviour is also known as organizational science which encompasses a prearranged study and cautious relevance of knowledge about how people operate in an organization. It is a psychology to comprehend the human resources and the administration of the organization (Rollinson, 2008). The aim of this paper is to analyse the impact of mergers and acquisitions on the Human Resource Management processes executed by the organisations, i.e. David Orton and Cost Wise. The factors which are considered in this regards are employee morale, job satisfaction, absenteeism rate, salary issues and various other inter as well as intra organisational conflicts. The approach considered for this project tends to be purely qualitative based on an objective-oriented research design. The data collected for this study majorly includes journals, books, articles related to the research issue and similar other relevant secondary sources. In order to gather primary data, interviews were conducted with the former employees of Cost Wise and the management personnel of David Orton. Observation technique was also used to identify the various dimensions of the work culture within the organisation from September 2011 to November 2011. In addition, staff visits have also been considered in this study to support the views of the other staffs associated with a similar industry. As often noted by researchers, mergers and acquisitions not only affects the organisational structure and the financial operations, but also influences the employees’ needs at the basic level (Salame, 2006). To conclude on this prediction, the analysis of the data collected will be based on the Maslow’s Need Hierarchy so as to determine the gap between the employees’ interest in these two companies before and after the merger. 3.0. Findings 3.1. Motivational States of Cost Wise Employees Motivation is typically referred as the forces that account for the arousal, selection, direction and continuation of behaviour. These forces act as foundations for enhancing both individual and organizational needs and can be better described by Abraham Maslow’s Hierarchy of Needs model. Maslow’s hierarchy of needs is often depicted as a pyramid consisting of five levels. The first four levels are associated collectively as deficiency needs and are directly related with the psychological needs of the individuals. The top level is termed as the growth need and is also a part of the associated needs in an individual’s life. The deficiency needs are the provisions of life and ought to be fulfilled, while, the growth needs are the desires that persistently shape the individual’s behaviour. The second level includes the safety needs of an employee indicating his/her security of employment and health. After the fulfilment of psychological and safety needs, the third segment is occupied by the social needs indicating relationships such as friends, family, and others (Maslow, 1987). In addition appears the layer of self esteem including the need to be respected by others as well as to owe admiration to others. Even though the deficiency needs are considered to be the basic needs, the growth or self actualization needs contrive as motivations or drivers of individual behaviour which in turn tends to influence the achievement of the organization goals at large. Furthermore, it can be stated that satisfaction of an employee can be developed from the accomplishment of these needs and finally assist an organization to prosper in the long-run (Maslow, 1987). Fig-1 Maslow’s Hierarchy of Needs Source: (Maslow, 1987). With reference to the case study, it can be stated that the merger between the organisations, i.e. Ortons and Cost Wise shaped tribulations among the employees. This hindered the basic or the psychological needs of the employees, especially in Cost Wise. However, the employees’ morale and loyalty remained consistent as before due to security of job and family which satisfied their safety needs. The announcement of providing bonus for the retention period along with the salary also acted as a motivation for the employees of Cost Wise fulfilling their primary needs. Thus, the desire of achieving extra benefits opted as a driving force for the better performance of the employees. On the contrary, the salaries of the Cost Wise employees were recorded as inconsequential to that of the employees associated with Ortons. This in turn hampered their motive to perform better and thus can be stated to infringe their self-esteem as well as self-actualisation needs. In this context, it is the responsibility of the management to significantly consider this matter as it acts as a motivation for the working staffs and can certainly have a long-lasting impact on the organisational success. Conclusively, it can be confirmed that the employees can be retained only by the satisfaction of their hierarchy of needs (Herzberg, 2003). 3.2. Perceptions and Attitudes According to the case study, it can be avowed that the takeover twisted the whole picture of David Orton organizations after the merger of Cost Wise. As the employees were not informed about the merger at due time, it resulted in turbulence in the employee morale. Moreover, the perception of the work force towards security of the job reduced to a large extent which resulted in the collapse of human trust. The folding ups of previous headquarters of Cost Wise also acted as fuel to the fear of job insecurity among the employees. During the process of rebranding of the business portfolio, a certain amount of extra cost was incurred creating a panic among the employees of Cost Wise regarding the possibility of upcoming financial consequences. This affected the working attitudes of the employees which impeded their intrinsic motivations to perform better. Moreover, as the structure of Ortons reflected an autocratic culture, to which the Cost Wise employees were not used to, it resulted in poor communication processes. This can be evidently noted as one of the most significant causes of miscommunication and conflicts within the newly formed organisation (Rollinson, 2008). The conflicts and the hindrances to the basic needs of the Cost Wise employees in terms of job insecurity, lower pay scale and similar other factors also affected their morale to a large extent. Therefore, it can be stated that the merger of these two organisations had a positive impact on the employee needs of Cost Wise in the short-run. However, it also caused a strong negative impression on its employee morale and working attitude in the long-run having a mixed influence over the organisational behaviour of the newly formed David Orton Plc. 3.3. Summary of the Main Managements and Organisational Problems Owing to the transformation in the management structure in the David Ortons Plc after the merger, the managerial approaches followed by the previous store managers of Cost Wise also altered. The Cost Wise store managers at local level used to maintain certain powers such as recruitment of additional staffs, price determination according to local competitors and stock maintenance which were witnessed to be entirely transformed after the merger. In the later phase of the merger, every decision even at local level was controlled from the centre so as to gain a high degree of consistency among all stores. Although it seemed to be quite effective in order to attain a concentrated work culture, the self-esteem and actualisation needs of the Cost Wise store managers were hampered due to this strategy. The merger of Ortons with Cost Wise stores also shaped certain other significant changes in the organizational functioning. The value of the Cost Wise stores payable for the merger was underestimated by the Ortons as well as the rate of improvement of the stores also faded to some extent after the merger. From an overall perspective, the Cost Wise stores were not turning to be as advantageous as hoped due to the lacuna observed in the managerial decisions of the newly formed company. The success of the merger created severe doubts in the financial department as well in relation to the decision to merger, which formed a great deal of criticism on the management of the organization. In addition, the stepping down of Mr. Orton from the managerial hierarchy also created a dramatic influence over the newly formed company. It is because, in the early period Mr. Orton solely controlled the entire managerial affairs of the Ortons and thus after the inclusion of other parties, such as the management group of Cost Wise, the management structure of David Orton Plc also had to be transformed completely. On the contrary, the changed management also showed certain recovery signs which led to the success of the organization. All the stores were grouped in 6 major areas in U.K. Moreover, a number of regional distribution centres were opened and the reporting status of the franchises was also revised. New headquarter was opened at Yorkshire and the previous Cost Wise office was closed creating a panic among the employees of Cost Wise. In addition, the new management adopted the policy of providing cost targets to the employees to enhance the company’s financial position which was very unpleasant for the Cost Wise employees. Moreover, low salary rate, extensive turnover ratio, and infringement of retention bonus increased the dissatisfaction level amid the Cost Wise employees. 3.4. Diagnosis of the Problems In mid 2005, Ortons, which was then an increasingly popular food chain in the British market, merged with the Cost Wise, forming a new entity named David Orton Plc. At the initial stage, it is the duty of the management to inform all the shareholders as well as stakeholders prior to execute any changes in the managerial process and organisational structure. But, in this case, the information of merger did not reach the employees at the exact time, which hindered their morale to a large extent. Moreover, the collapse of Cost Wise stores and diminishing values of employee needs also created a fear of job insecurity which was apparently affecting the security needs of the individuals as can be revealed with reference to the Maslow’s Needs Hierarchy framework. Additionally, hindrance of bonus fuelled up the job dissatisfaction among the employees who were formerly associated with Cost Wise causing a negative impact on their basic needs. The profitability of the organization also reduced due to the merger which motivated the management to consider cost cutting measures that resulted in lower employee retention ratio. The merger also created cultural differences between the employees of the two organisations as they not only differed in terms of size or ideology, but also differed in terms of management structures. As a consequence, the increasing absenteeism rate and hindrance of employee morale was observed amid the employees of the newly formed company. Moreover, various rumours affected employee anxiety, stress and tension which led to dysfunctional outcomes. Besides, job insecurity was critically related to organisational commitment, conviction, job pleasure, and job presentation which was also negative affected due to the merger (Robbins, 2009). From an in-depth point of view, it can be stated that culture also plays an important role during merger of two firms. The autocratic culture became one of the major issues which led to the down fall of Orton group. In this type of culture, an employee is likely to become unable to communicate properly with the management leading to many discrepancies among them (Robbins, 2009). Thus, a barrier was created among the employee and the management level which in turn reduced the profitability of both the employees and the organization. Moreover, due to merger, huge cost was realized by the organization that led to certain financial inconsistencies within the organisation. This again caused perplexities among the employees regarding their future prospects as well as among the management personnel in relation to the success of the merger. Considering the various issues identified as the consequences of merger between Orton and Cost Wise, it can be evidently stated that the main problem was the inconsistency in executing the change process within the newly formed organisation. As a matter of fact, employees are reluctant to change and thus they require a driving force to motivate them in this context which was not considered with due significance in this case (Hallgrimsson, 2008). 4.0. Conclusion With reference to the facts identified in the case study regarding the impact of merger on the perceived employee morale, competency and organisational structure at large, it can be stated that the changes manipulated with an organisation should be considered as quite significant. Unfortunately, in the merger of Cost Wise and Ortons, the management was unable to execute the change quite effective within the newly formed organisational structure, due to which the satisfaction and morale of the employees shattered and job dissatisfaction rose to a large extent. Moreover, changes in the management structure of the company also created a negative impact on the employees, especially the former employees of Cost Wise creating communication gap between the employees and the organisation. The profitability of the firm diminished resulting in detoriation of the image amid the stakeholders and the community members at large. Cultural discrepancies and ineffectively monitored changes in the newly formed organisational structure also caused various issues regarding employee productivity (Glowa, 2001). 5.0. Recommendations With due consideration to the negative impact of the merger witnessed by the David Orton Plc, it can be stated that certain recommendations should be taken to improve the competency of the firm. Notably, the most affected segment in the newly formed organisation can be identified as the human resource segment and thus effective strategies should be adopted by the company for the betterment of the situation. Some of the strategies have been suggested as follows: 5.1. Motivational Motivation is one of the major areas of concern for enhancing employee morale and so it was the duty of the organization to include certain factors for encouraging the employees. With this intention, the news of achieving bonus was shared by the company which acted as a driving force for the members and it boosted the morale and satisfaction towards work after the merger. However, the strategy was not executed efficiently which resulted in the hindrance of the employee morale to a large extent. It is in this context that the organisation should consider the basic needs of the employees and intend to improve their belongingness towards the organisation. Extensive motivational efforts should be considered by the organisation to increase competency and coherence amid the workforce (Pettinger, 2010). 5.2. Perception Communication gap rose due to the changes in the managerial ideology and the structure also created noteworthy issues within the organisation. With this concern, the management should focus on developing a managerial hierarchy and structure permitting easy flow of information. This is likely to allow the team spirit to grow among the workers in the organisation (Health, 1999). 5.3. Attitudes The miscommunication among employees and the difference in the pay system for the former employees of Cost Wise and Ortons also led to the infringement of attitude amongst the employees of David Orton Plc. With this view, the organisation required regenerating the morale of the employees to perform better for the organisation’s interests which in turn shall also satisfy their personal needs (Pettinger, 2010). 5.4. Cost/Benefits/Implications Cost or additional benefits are the motivational factors which the organization should provide in order to accelerate the productivity of the workforce. Moreover, extra incentives or bonus to the employees can also improve the sustainability of the firm enhancing its growth prospects in the long-run (Health, 1999). Mergers and similar activities tend to incur a certain amount of additional cost for the newly formed company. Increased efficiency and consistent employee morale in this context can prove to be highly beneficial in rewarding the company with better competency and productivity. In other words, this can assist the organization in bearing the extra cost required during the merger. Furthermore, the implementation of certain fringe benefits can improve the efficiency of both the organization as well as the employees. 6.0. References Bruning, S. N., No Date. Introduction to Organisational Behaviour – A Safety and Health. Introduction. [Online] Available at: http://pdf-world.net/pdf/60474/Introduction-to-Organisational-Behavior-%E2%80%93-A-Safety-and-Health-...-pdf.php [Accessed November 18, 2011]. Glowa, 2001. White Paper: Examining Starbucks Utilizing the 7s Method and Less Than Perfect Information. Organisational Behaviour. [Online] Available at: http://www.glowa.ca/Starbucks_7s_Method.pdf [Accessed November 18, 2011]. Hallgrimsson, T., 2008. Organizational Change and Change Readiness: Employees’ Attitudes during Times of Proposed Merger. Universitetet i Tromso. Health, C., 1999. On the Social Psychology of Agency Relationships: Lay Theories of Motivation Overemphasize Extrinsic Incentives. Organisational Behaviour and Human Decision Processes. [Online] Available at: http://faculty-gsb.stanford.edu/heath/documents/social%20psych%20of%20agency.pdf [Accessed November 18, 2011]. Herzberg, F., 2003. One More Time: How to Motivate Employees? Harvard Business review. Maslow, H. A., 1987. Motivation and Personality. Pearson Education. Mcginnis, K.S., No Date. Organisational Behaviour and Management Thinking. Jones and Bartlett Publishers. Pomsuwan, 2007. Organisation Behaviour and Concepts. Bangkok University Press. Pettinger, R., 2010. Organisational Behaviour. Routledge. Rollinson, D., 2008. Organisational Behaviour and Analysis an Integrated Approach. Pearson Education. Robbins, P. S., 2009. Organisational Behaviour: Global and Southern African Perspectives. Pearson South Africa. Salame, R., 2006. Why Do Mergers Fail? What Can Be Done to Improve their Chances of Success? Key Strategy Limited. Read More