Major Theories of Organizational Behavior - Essay Example

Major Theories of Organizational Behavior of the Academia Research Organizational Theory is the study of how organizations function and how they affect and are affected by the environment in which they operate. Managers knowledgeable about the organizational theory are able to analyze the process of organizational design, make adjustments that help the organization to achieve its goals. Once a group of people has established an organization to accomplish collective goals, organizational structure evolves to increase the effectiveness of the organization's control of the activities necessary to achieve its goals.

Organizational structure is the formal system of task and authority relationships that control how people coordinate their actions and use resources to achieve organizational goals. In this paper we would discuss the ways the major organizational behavior theories have helped, guide the way for managers in the complex and changing global business environment.Literature ReviewThe principal purpose of organizational structure is one of control: to control the way people coordinate their actions to achieve organizational goals and to control the means used to motivate people to achieve these goals.

At Microsoft (Dumaine, 1990), for example, the control problems facing Bill Gates were how to coordinate scientists' activities to make the best use of their talents and how to reward scientists when they developed innovative products. Gate's solution was to place scientists in small, self-contained teams and to reward them with stock in Microsoft based on team performance.For any organization, an appropriate structure is one that facilitates effective responses to problems of coordination and motivation - problems that can arise for any number of environmental, technological, or human reasons.

As organizations grow and differentiate, the structure likewise evolves. Organizational structure can be managed and changed through the process of organizational design.At the same time that organizational structure is evolving, so is organizational culture. Organizational culture is the set of shared values and norms that control organizational members' interactions with each other and with suppliers, customers, and other people outside the organization. An organization's culture is shaped by the people inside the organization, by the ethics of the organization, by the employment rights given to the employees, and by the type of structure used by the organization.

Like organizational structure, organizational culture shapes and controls behavior within the organization. It influences how people respond to a situation and how they interpret the environment surrounding the organization. At Microsoft, Bill Gates attempted to create values that encouraged entrepreneurship and risk taking in order to build an organizational culture in which innovation was a valued activity (Cox, 1991). The small-team structure was helpful because scientists were continually meeting face-to-face to coordinate their activities and to learn from one another, which encouraged them to experiment and to find new ways of solving problems.

The cultures of organizations that provide essentially the same goods and services can be very different. For example, Coca-Cola and Pepsi-Cola are the two largest and most successful companies in the soft-drinks industry (Negandhi, 1997). Because they sell similar products and face similar environments, we might expect their cultures to be similar. But they are not. Coca-Cola takes pride in its long-term commitment to employees; its loyal managers, many of whom spend their entire careers with the organization; and its cautious and cooperative approach to planning.

By contrast, Pepsi-Cola has a highly political and competitive culture in which conflicts over decision making cause frequent turnover among top managers.Differences in the race, gender and national origin of organizational members have important implications for the values of an organization's culture and for organizational effectiveness. The quality of organizational decision making, for example, is a function of the diversity of the view points that get considered and of the kind of analysis that takes place.

Similarly, in many organizations, particularly service organizations, a large part of the work force are minority employees, whose needs and preferences must be taken into consideration. Also, changes in the characteristics of the work force, such as an influx of immigrant workers or the aging of the current work force, require attention and advance planning. An organization's structure and culture determine how effectively managers are able to coordinate and motivate workers.To conclude, the consequence of poor organizational design or lack of attention to organizational design is the decline of the organization.

Talented employees leave to take positions in strong, growing companies. Resources become harder and harder to acquire, and the whole process of value creation slows down. Neglecting organizational design until crisis threatens forces managers to make changes in organizational structure and culture that derail the company's strategy. ReferencesCox, Taylor Jr. 1991. "The Multicultural Organization," Academy of Management Executive, pp.34-47.Dumaine, Brian. 1990. "Creating a New Company Culture," Fortune, pp.127-131.Negandhi, Anant R. 1997. International Management.

Boston: Allyn and Bacon. Chap.8.