INSTITUTE OF PERSONAL MANAGEMENT SRI LANKA

CASE STUDY
ORGANIZATIONAL BEHAVIOUR
MODULE 12 PQHRM / KDY / 05

PQKDY/05/035

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Case Study

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CASE STUDY MODULE 12

Introduction
Alakkaty Foundation is a multinational building construction company and it has been in operation for over 15 years and five years ago it was made into a public quoted company as it achieved significant business success. This organization had under gone the same problem that other organizations face like bribery, corruption and underhand dealing are all apart of running the business. But Alakkady is different and running on the motivation and principles only. The principles are,
1. Virtue No bribes or incentives of any sort was offered to anyone in any

organization to be successful in securing the tenders or anything else thus their overheads were minimal. With a reasonable profit margin their pricing became very competitive. They never advertise about their service through any media except the word of mouth.
2. Benevolence Since the majority of the workers were without a roof above

their heads, the company started to build flats for the employees who dont have a proper place to live.
3. Responsibility No employees were ever terminated for whatever reason and

the employees even though they were alcoholics, drug addicts, pimps, gamblers and crooks. This is evidence that it is possible for an organization to be a company of character and operate fully on moral and principles and still be successful and achieves its objectives as well.

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Organizational behavior
Organizational behavior (OB) is a term related to the study of individual and group dynamics in an organizational setting, as well as the nature of the organizations themselves. Whenever people interact in organizations, many factors come into play. The subject of Organizational Studies attempts to understand and model these factors. This subject is becoming more important as people with diverse backgrounds and cultural values have to work together effectively and efficiently. OB seeks to emphasize the understanding of behavior in organizations so as to develop competencies in foreseeing how people are likely to behave. This knowledge may then help in controlling those behaviors that are not befitting the objectives of the organizations. Factors like objectivity, replicability and sustainability are important while selecting the methods for this purpose. Questionnaire, interview, simulation and survey are generally used to elicit responses of individuals located in different types of organizations. To a large extent their personalities affect the nature of their responses. Organizational behavior encompasses a wide range of topics, such as human behavior, change, leadership, teams, etc. The organization's base rests on management's philosophy, values, vision and goals. This in turn drives the organizational culture which is composed of the formal organization, informal organization, and the social environment. The culture determines the type of leadership, communication, and group dynamics within the organization. The workers perceive this as the quality of work life which directs their degree of motivation. The final outcomes are performance, individual satisfaction, and personal growth and development. All these elements combine to build the model or framework that the organization operates from. There are four major models or frameworks that organizations operate out of, Autocratic, Custodial, Supportive, and Collegial Autocratic The basis of this model is power with a managerial orientation of authority. The employees in turn are oriented towards obedience and dependence on the boss. The employee need that is met is subsistence. The performance result is minimal.

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Custodial The basis of this model is economic resources with a managerial orientation of money. The employees in turn are oriented towards security and benefits and dependence on the organization. The employee need that is met is security. The performance result is passive cooperation. Supportive The basis of this model is leadership with a managerial orientation of support. The employees in turn are oriented towards job performance and participation. The employee need that is met is status and recognition. The performance result is awakened drives. Collegial The basis of this model is partnership with a managerial orientation of teamwork. The employees in turn are oriented towards responsible behavior and selfdiscipline. The employee need that is met is self-actualization. The performance result is moderate enthusiasm. Although there are four separate models, almost no organization operates exclusively in one. There will usually be a predominate one, with one or more areas over-lapping in the other models. The first model, autocratic, has its roots in the industrial revolution. The managers of this type of organization operate mostly out of McGregor's Theory X. The next three models begin to build on McGregor's Theory Y. They have each evolved over a period of time and there is no one best model. In addition, the collegial model should not be thought as the last or best model, but the beginning of a new model or paradigm.

Organizational culture
Organizational culture, sometimes also referred to as corporate culture, is a general term that outlines the collective attitudes, beliefs, common experiences, procedures, and values that are prevalent in an organization and others similar to it. Organizational culture is the phrase much more likely to be used within the corporate world itself, as it also affects shareholders, who may or may not be directly involved beyond ownership of x number of shares of company stock. This philosophy also includes the beliefs and ideas of what the goals should be. The

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point here is to have individuals think about the collective larger good of the company, since the prospering of the company is going to come around to benefit the individuals who work for it, as well. Because of this, a general standard of behavior is expected, so every worker knows to some extent what is expected out of them before even the first day. This helps to create unity and increase general worker efficiency. Organizational culture helps to establish the expected guidelines, expectations, and rules that will help the company achieve their goals. Organizational culture tends to be the larger shared goals and vision for a company, but that doesn't make it the end all, be all. Within the larger organizational culture will be many smaller sub-cultures that are still dedicated to the larger picture, but have their own system of operating and working to be more efficient in their task, and their part of the larger picture. A classic example of this would be computer tech people. Because of the extremely specialized nature of their expertise, computer technicians are likely to have their own odd behaviors, working conditions, and strategies to getting the job done. Computer language leads to a whole series of terminologies or technologies that many non computer people won't have a clue about--but their organizational sub culture affects the larger organizational culture as a whole, for the better or worse of the company, but hopefully for the better. There are different measures of this as well. A company or corporation that has a staff which responds strongly to organizational values and can successfully pass that on to the workers at every level are considered to be part of a "strong culture." Inversely, if the opposite is true where overly restrictive rules, procedures, and bureaucracy are necessary to enforce the company's vision, then that is definitely considered "weak culture." Weak organizational culture is a detriment to a company for obvious reasons. The extra supervision, rules, and bureaucracy cause the company to be less efficient and less effective. In addition, having these extra layers also tends to be much more expensive, which will obviously show on the bottom line. Weak cultures cannot take advantage of an opportunity that demands quick, decisive action.

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Strong organizational culture tends to be a good thing, but there are also some dangers that have to be watched. For one, if everyone is completely in line with the organizational culture of a company, and holds the same centralized beliefs on how the goals should be accomplished, then there is a danger of "group think." This is where an entire group thinks in such similar terms that they lose the ability to become innovative or take a unique approach to a problem. To put it another way, they lose their ability to "think outside the box." Organizational culture is still necessary for any company of size, and a strong organizational culture combined with openness to new creative ideas and problem solving can be the building blocks to something amazing. There's been a great deal of literature generated over the past decade about the concept of organizational culture; particularly in regard to learning how to change organizational culture. Organizational change efforts are rumored to fail the vast majority of the time. Usually, this failure is credited to lack of understanding about the strong role of culture and the role it plays in organizations. That's one of the reasons that many strategic planners now place as much emphasis on identifying strategic values as they do mission and vision. There are different types of culture just like there are different types of personality as following four types of cultures. Academy Culture - Employees are highly skilled and tend to stay in the organization, while working their way up the ranks. The organizations provide a stable environment in which employees can development and exercise their skills. Examples are universities, hospitals, large corporations, etc. Baseball Team Culture - Employees are "free agents" who have highly prized skills. They are in high demand and can rather easily get jobs elsewhere. This type of culture exists in fast-paced, high-risk organizations, such as investment banking, advertising, etc. Club Culture - The most important requirement for employees in this culture is to fit into the group. Usually employees start at the bottom and stay with the organization. The organization promotes from within and highly values seniority. Examples are the military, some law firms, etc.

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Fortress Culture - Employees don't know if they'll be laid off or not. These organizations often undergo massive reorganization. There are many opportunities for those with timely, specialized skills. Examples are savings and loans, large car companies, etc.

1. Is it practical to run an organization based on principles? Yes / No

Not exactly, Alakkaty foundation is an organization which already has a good reputation. It was a public quoted company for five years period with a good financial stability that they dont have any finance issues though they build flats for their employees these who have no proper place to live. The other thing is that they dont make any advertising to publish their service to the society regarding their construction company to the customers. Therefore, the principle of this organization helps them to uphold their integrity and good will of the company. A company like this can do these practices even though a lot of financial backing is needed. But a new company would face a challenge if they try to run a business in this industry based on principals Reformation needs to be compatible with what we are trying to achieve by the reforming. The process of design must be complementary with the objectives. This means the design and implementation process is critical. If it wants flexibility and participation within the work group as an output of the design, then how they go about designing the organization has to be flexible, interactive and participatory. If the completed work system will depend upon high levels of meaningful flexibility in accomplishing the work, then it is through a process of meaningful flexibility that the system needs to be built. New technologies require people to learn and change. These abilities have to be developed through the work itself. Therefore, specify as little as possible concerning how tasks combine into jobs and how people are to interact within jobs. The creation of a well-designed work team must involve dialogue and decisions being made by the people involved. The trick in building a team that works is to specify no more than is absolutely necessary about the task or how jobs relate to the task, or how people relate to individual jobs.

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To build a high performance team the rule is to FIX as little as possible. This means to identify and specify no more than what is absolutely critical. Generally the critical information is about output expected. Effective teams need the legitimacy to find out where things go wrong and deal with variance where it occurs. The goal is to minimize exporting problems to others. The assumption that is safe to make is that people know what good work looks like. Exporting problems and unsatisfied customer needs is the mark of a team that lacks options. Define what is expected in terms of performance early and clearly and then support adaptations toward appropriate means by which the group can achieve ends. This is an adaptability principle, which recognizes that we are designing living systems rather than machines.

2. What is the main challenge of the chairman of Alakkaty Foundation?

The main challenges of the chairman of the Alakkaty construction organization would be survive and grow in an industry while making profits with the corrupted business environment. In addition, reformation of the employees to fit the value system of the society. The reputation of the organization by improving the customer loyalty. In the other hand it should have the ability to change the individuals attitudes effectively, understanding the behaviors by individuals differences. Moreover the chairman of the Alakkaty has to introduce an effective working environment by solving conflict and implementing necessary procedures and practices to face to the competition in the field. Further he should have to prevent the underhand dealing as possible he can to change the culture to avoid such dealings with the customers. The other difficulty he has to recruit the right employees to the company and recognize the people in the good attitude and the loyalty. After the organizational culture assessment, people wonder how they personally fit into current and preferred culture. Especially people in a leading position make a big difference when it comes to culture change. If they don't, sustainable change is not going to happen. Managers play a crucial role in organizational culture for various reasons. They have the power to influence daily behavior: They give some employees interesting projects, they listen to some, they approve of vacation periods and they make up the performance appraisals.

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In contrast, leaders represent the archetypical authority that people respond automatically. Whether that's by obeying immediately or by resistance, authority affects their behavior. This is why absolute commitment by the chairman and other top people, the board of directors, or whatever your top dogs are called, is a necessary condition for culture change and organization development. If they believe in the change they must be the change, for action speaks louder than words. That's for starters. Next to their beliefs, they must adjust their management style to the preferred culture type to start influencing their employees. This organizational leadership is one of the six culture aspects that is assessed in the Alakkaty Foundation.

3. What are the pillars that give strength to the organization?

Three features that determine a culture's strength can be identified. The first is thickness of culture, measured by the number of important shared assumptions. Thick cultures have many such assumptions, thin cultures few. The second dimension is extent of sharing. In strong cultures, layers and layers of beliefs are shared. Clarity of ordering is the third determinant of cultural strength. Product quality and customer service are clearly the highest priorities, but the two goals appear to be equally important. In some cultures, shared beliefs and values are clearly ordered, and their importance in relation to one another is known. Strength of culture is significant because strong culturesthat is, thick cultures in which the sharing of clearly ordered beliefs and values is pervasiveare more resistant to change than are weak cultures. Two factors affect the strength of an organizational culture: the number of employees and geographic dispersion. Small work forces and more localized operations contribute to the development of strong cultures because beliefs and values easily develop and become shared. These characteristics are not essential for a strong culture, however. Strong cultures are not always desirable. There appear to be organizational conditions that do not necessarily warrant them. If one looks at organizations as mechanisms for governing transaction costs (the organization requires something of the employee, who in turn benefits from the organization), there are three ways to manage those transaction costs. Whichever method is used to mediate costs, it must be viewed as equitable to everyone.

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The first two mechanisms, the marketplace and bureaucracy, are used under conditions of fairly low uncertainty and complexity. The market form, appropriate in competitive situations, manages transaction costs with a price mechanism. Contracts are made and kept between parties at a "fair" price so that competitors won't take over the business. Bureaucracy creates the appearance of equity by creating an employment contract, whereby employees contract to receive wages and in turn submit to supervision, which is designed to reduce uncertainty and monitor employee performance. A hallmark of bureaucracy is the simplification of complex tasks into discrete, easily monitored activities. The bureaucracy uses the mechanism of rules or standards of behavior; as long as uncertainty is low, the rules in place can guide behavior. When uncertainty or complexity increases, these mechanisms do not work. A third mechanism, a clan or culture, then becomes viable. The clan is a culturally homogeneous organization in which members share a common set of values, objectives, and beliefs; this common core empowers them to act with greater flexibility in a fluid situation. This approach addresses the social exchange problem quite differently than either the marketplace or bureaucracy method: it socializes parties to the exchange in such a way that all participants see their objectives in the exchange as congruent. Clans require a tremendous amount of group process activity. Virtue No bribes or incentives of any sort were offered to any one in any organization to be successful in securing the trade or anything else thus their overheads are minimal. With a reasonable profit merging their pricing become very competitive. They never advertise about their service through any media except the word of mouth. Organizational Vision and Mission statements and its objectives Benevolence Loyalty of the employees by making shelters to them and maintaining good faith of the company among the employees. Responsibility - No employees were ever terminated for whatever reason in the Alakkaty Foundation and the employees including alcoholics, drug addicts, pimps, gamblers and crooks.

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4. If you are the new Chairman of Alakkaty Foundation what changes would
you do? Why? The culture of a profit oriented business is different from a social organization, the motto of which is service. Even the dress code is different. In a corporate, it is a `system`. Inputs are society, profession, value of competition, service, etc; the process is based on our assumptions, value and norms, value as money, times, facilities, space and people. Outputs are organizational behavior, technologies, strategies, image, products, services, appearances, etc. Culture becomes imperative when organizational changes are attempted. These changes must incorporate not only changing structure and processes, but also changing the corporate culture itself. There has been sufficient literature on the concept of organizational culture, especially in regard to how to change the organizational culture. Many a time, efforts to change organizational culture have failed. This failure is due to lack of understanding about the vital need and role culture plays in organizations. That is why many strategy planners place a lot of emphasis on identifying strategic values as they do on mission and vision. Introduce an organizational culture - Alakkaty foundation needs to undergo with a snail walk improvement for its prevailing structure. Sudden changes made are disastrous since the employees maintain their own culture. Need to introduce top and middle level management in order to comply with the standards and get rid of the past culture. Set a vision & mission statement - Running a completely transparent operation gives employees a sense of ownership. They know beyond the shadow of a doubt what the company stands for and where it's going. Besides, when employees have a clear picture of the mission and vision, the goals it will help them to make sense to. They'll be more likely to buy into and achieve those goals. Implementation of relevant policies Disciplinary procedure for the company is a must. Since it is full of bribery, corruption and underhand dealing, as the chairman of this company, has to address this unpleasant work environment. Need to use up hold the challenge of changing the attitude and behaviors of these people. Have to identify

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each with individual differences. So that it should make sure that it wont happen again. In addition to the disciplinary procedure, a proper recruitment policy to be introduced, hence a company to be run smooth and efficient, it need the right people. Counseling & rehabilitation programs People who are employed in Alakkaty foundation is with different mindset. So, that they has to be reformed to a better mindset either using counseling or any rehabilitations programs. Though these people are in to bad habits, occupationally they are with the right skills, their competency is high. Therefore, organizationally this would be the secret of success. So retention of the prevailing employees is vital at this stage. Rewards & punishments These are motivation factors that every organization aims for. Both of these together make sense and enhance the profitability. Empowerment Though these people are educationally below, they have the ability to perform the tasks related to construction. There are leader among them who can control the employees more than to the chairman. People will listen to these leaders other than what the chairman says. Identify these leaders and assign the responsibilities. This could help the management to reduce the pressure from the worker level. Intervention of new technology Though this company has not used any advertising, it should use the marketing strategies in order to enhance the business and compete. So, advertising should be budgeted. It will make a good impact, if advertisements show how Alakkaty uses new machineries and how it treats the workers. So it will be a method of finding knowledgeable people. Awareness on investing for workers People at Alakkaty foundation are with different mindset. They have a tendency of spending everything at a nick of time. They should be given awareness on how to save money for future purposes.

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