UNIT 1

The Nature of Organisational Behaviour

And
The Nature of Organisation

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THE NATURE OF ORGANISATION BEHAVIOUR

1.1

The Meaning of Organisational Behaviour

Organisational behaviour is concerned with the study of the behaviour of
people within an organisational setting. In involves the understanding,
prediction and control of human behaviour.
Definitions of organisational behaviour (OB):
The study and understanding of individual and group behaviour, and
patterns of structure in order to help improve organisational
performance and effectiveness.
There is a close relation between organisational behaviour and
management theory and practice.
Organisational behaviour does not encompass the whole of
management; it is the narrower interpretation of providing a
behavioural approach to management.
The study of organisational
understanding of:

behaviour

embraces

therefore

an

The behaviour of people

The process of management
The organisational context in which the process of management
takes place
Organisational processes and the execution of work; and
Interactions with the external environment of which the
organisation is part

1.2

Influences on Behaviour in Organisations

1.2.1

The Individual

Organisations are made up of their individual members. The individual is a

central feature of organisational behaviour and a necessary part of any
behavioural situation, whether acting in isolation or as part of a group. It is
the task of management to provide a working environment which permits
the satisfaction of individual needs as well as the attainment of
organisational goals.

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1.2.2

The Group

Groups exist in all organisation and are essential to their working and
performance. The organisation is comprised of groups of people and
almost everyone in any organisation will be a member of one or more
groups. Group pressures can have a major influence 220778over the
behaviour and performance of individual members. An understanding of
group structure and behaviour complements a knowledge of individual
behaviour and adds a further dimension to organisational behaviour.
1.2.3

The Organisation

Organisation structure is created by management to establish relationships

between individuals and groups, to provide order and systems and to direct
the efforts of the organisation into goal-seeking activities. It is through the
formal structure that people carry out their organisational activities, styles
of leadership and systems of management the impact of organisation
structure on the behaviour of people within the organisation.
1.2.4

The Environment

The environment affects the organisation through, for example,

technological and scientific development, economic activity, social and
cultural influences and governmental actions. The effects of the operation
of the organisation within its environment are reflected in terms of the
management of opportunities and risks and the successful achievement of
its aims and objectives.

1.3

The Importance of the Study of Organisational Behaviour

Organisations are complex social systems which can be defined and
studied in a number of different ways. A significant approach to this broad
perspective on the nature of organisations and organisational behaviour is
provided by Morgan. Morgan identifies eight different ways of viewing
organisations as machines, organisms, brains, cultures, political systems,
psychic prisons, flux and transformation, and instruments of domination.
1.3.1

Machines

This suggests that organisations can be designed as if they are machines

with orderly relations between clearly defined parts. Viewing organisations
as machines can provide the basis for efficient operation in a routine,
reliable and predictable way. This form of bureaucratic structure provides
form, continuity and security. However, it may have adverse consequences
and limit the development of human capacities. Organisations viewed as
machine function better in a stable and protected environment.

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1.3.2

Organisms

The organisation is seen as behaving like a living system. In the same way
that biological mechanisms adapt to changes in their environment, so
organisations, as open systems, adapt to the changing external
environment. Organisations operating within a turbulent and dynamic
environment require an adaptable type of structure.
1.3.3

Brains

Viewing organisations as brains involves thinking about the organisation

as inventive and rational, and in a manner that provides for flexibility and
creative action. The challenge is to create new forms of organisation
capable of intelligent change and that can disperse brain like capacities.
1.3.4

Cultures

This sees organisations as complex system made up of their own

characteristic sets of ideology, values, rituals, and systems of belief and
practice. Attention to specific aspects of social development helps to
account for variations among organisations.
1.3.5

Political Systems

In the sense that ways must be found to create order and direct people,
organisations are intrinsically political. They are about authority, power,
superior-subordinate relationships and conflicting interests. Viewing
organisations as political systems helps in an understanding of day-to-day
organisational life, the wheeling and dealing, and pursuit of special
interests.
1.3.6

Psychic Prisons

These view organisations as psychic phenomena created and sustained by

conscious and unconscious processes. Organisations and their members
are constrained by their shadows or psychic prisons and become trapped
by constructions of reality. Their inherited or created mythical past places
affects the representation of the organisation to the outside world. Viewing
organisations as psychic prisons provides an understanding of the reality
and illusions of organisational behaviour.
1.3.7

Flux and Transformation

The universe is in a constant state of flux, embodying characteristics of

both permanence and change. Organisations can be seen as in a state of
flux and transformation. In order to understand the nature and social life of
organisations, it is necessary to understand the sources and logic of
transformations and change.

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1.3.8

Instruments of Domination

In this view organisations are associated with processes of domination, and

individuals and groups imposing their will on others. A feature of
organisations is asymmetrical power relations that result in the pursuit of
the goals of the few through the efforts of the many. Organisations are best
understood in terms of variations in the mode of social domination and
control of their members.
However, Morgan points out that these metaphors are not fixed categories
and are not mutually exclusive. An organisation can be a mix of each, and
predominantly a combination of two or three metaphors. Furthermore,
these combinations may change over a period of time.

1.4

The Psychological Contract

One significant aspect of the relationship between the individual and the
organisation is the concept of the psychological contract. This is not a
written document, but implies a series of mutual expectations and
satisfaction of needs arising from the people-organisation relationship. It
involves a process of giving and receiving by the individual and by the
organisation. The psychological contract covers a range of expectations of
rights and privileges, duties and obligations, which do not form part of a
formal agreement but still have an important influence on peoples
behaviour.
1.4.1

Individuals Expectations

The nature and extent of individuals expectations: Provide safe and hygienic working conditions
Make every reasonable effort to provide job security
Attempt to provide challenging and satisfying jobs and reduce
alienating aspects of work
Adopt equitable personnel policies and procedures
Allow staff genuine participation in decisions which affect them
Implement best practice in equal opportunity policies and
procedures
Provide reasonable opportunities for personal development and
career progression
Treat members of staff with respect

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Demonstrate an understanding and considerate attitude towards

personal problems of staff
1.4.2

The Organisations Expectation

The organisation will also have implicit expectations of its members: To accept the ideology of the organisation
To work diligently in pursuit of organisational objectives
Not to abuse goodwill shown by management
To uphold the image of the organisation
To show loyalty
Not to betray positions of trust
To observe reasonable and acceptable standards of dress and
appearance
1.4.3

Process of Balancing

It is unlikely that all expectations of the individual or of the organisation

will be met fully. There is a continual process of balancing, and explicit
and implicit bargaining.

1.5

Bureaucracy
A form of structure to be found in many large-scale organisations is
bureaucracy. The development of bureaucracies as a means of introducing
order and rationality into social life.
1.5.1

Main Characteristics of Bureaucracies

The tasks of the organisation are allocated

There is an implied clear-cut division of labour and a high level of
specialisation
A hierarchical authority applies to the organisation of offices and
positions
Uniformity of decisions and actions is achieved through formally
established systems of rules and regulations. This enables the coordination of various activities within the organisation

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An impersonal orientation is expected from officials in their

dealings with clients and other officials
Employment by the organisation is based on technical
qualifications and constitutes a lifelong career for the officials
1.5.2

The Four Main Features of Bureaucracy

Specialisation applies more to the job than to the person

undertaking the job. This makes for continuity because the job usually
continues if the present jobholder leaves.
Hierarchy of authority makes for a sharp distinction between
administrators and the administered, or between management and
workers. Within the management ranks there are clearly defined levels
of authority.
System of rules aims to provide for an efficient and impersonal
operation. The system of rules is generally stable, although some rules
may be changed or modified with time. Knowledge of the rules is a
requisite of holding a job in a bureaucracy.
Impersonality means that allocation of privileges and the exercise
of authority should not be arbitrary, but in accordance with the laiddown system of rules.
1.5.3

Criticisms of Bureaucracy

The over-emphasis on rules and procedures, record keeping and

paperwork may become more important in its own right than as a
means to an end.
Officials may develop a dependence upon bureaucratic status,
symbols and rules.
Initiative may be stifled and when a situation is not covered by a
complete set of rules or procedures there may be a lack of flexibility or
adaptation to changing circumstances.
Position and responsibilities in the organisation can lead to
officious bureaucratic behaviour. There may also be a tendency to
conceal administrative procedures from outsiders.
Impersonal relations can lead to stereotyped behaviour and a lack
of responsiveness to individual incidents or problems.
Question

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THE NATURE OF ORGANISATION BEHAVIOUR

To what extent is there anything positive to be said for bureaucratic

structures? Select a large-scale organisation of your choice and suggest
ways in which it displays characteristics of a bureaucracy.

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1.6 The Meaning of Organisation Behaviour

1. All organizations have some functions to perform. Organizations
exist in order to achieve objectives and to provide satisfaction for their
members. Organizations enable objectives to be achieved that could
not be achieved by the efforts of individuals on their own.
Organizations are an integral part of society involving both public and
private sectors.
2. There are then many different type of organizations which are set
up to serve a number of different purposes and to meet a variety of
needs. Organizations come in all forms, shapes and sizes e.g. Hotel,
school, retail shop, government department, airport, pharmaceutical
company, motorcar manufacturer, bank, hospital, etc.
3. The structure, management and functioning of these organizations
will all vary because of differences in the nature and type of the
organization, their respective goals and objectives, and their behaviour
of the people who work in them.

1.7

Common Factors In Organizations

1. Despite the differences among various organizations, there are at least
three common factors in any organization:

People,

Objectives, and

Structure.

2. It is the interaction of people in order to achieve objectives which

form the basis of an organization. Some form of structure is needed by
which peoples interactions and efforts are channeled and co-ordinated.
To which we can add a fourth factor:

Management

Some process of managementis required by which the activities of

the organization, and the efforts of its members, are directed and
controlled towards the pursuit of objectives.
3. The actual effectiveness of the organization will be dependent upon
the quality of its people, its objectives and structure, and the resources
available t it. There are two broad categories of resources:

Non-human physical assets, materials and facilities; and

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Human members abilities and influence, and their

management.
4. The interrelationship of people, objectives and structure, together
with the efficient use of available non-human and human resources,
will determine the success or failure of the organization and the extents
of its effectiveness.

1.8

The Formal Organization

1. A formal organization has been defined by Schein as:
the planned co-ordination of the activities of a number of people for
the achievement of some common, explicit purpose or goal, through
division of labour and function, and through a hierarchy of authority
and responsibility.
2. The formal organization is:

Deliberately planned and created;

Concerned with the co-ordination of activities;

Hierarchically structured with stated objectives, the

specification of tasks, and defined relationships of authority and
responsibility.
3. An organizational chart, for example, gives a representation of the
formal structure. Other examples of the formal organization are rules
and regulations, policy manuals, standing orders and job descriptions.

1.9

The Informal Organization

The informal organization arises from the interaction of people working in
the organization, their psychological and social needs, and the
development of groups with their own relationships and norms of
behaviours, irrespective of those defined within the formal structure.
The informal organization is flexible and loosely structured.
Relationships may be left undefined.
Membership is spontaneous and with varying degrees of
involvement.
1.9.1

Functions of the Informal Organization

1. The informal organization can serve a number of important functions.

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It provides satisfaction of members social needs, and a

sense of personal identity and belonging.

It provides for additional channels of communication for

example, through the grapevine information of importance to
particular members is communicated quickly.

It provides a means of motivation for example, through

status, social interaction, variety in routine or tedious jobs, and
informal methods of work.

It provides a feeling of stability and security, and through

informal norms of behaviour can exercise a form of control over
members.

It provides a means of highlighting deficiencies or

weaknesses in the formal organization for example, areas of
duties or responsibilities not covered in job descriptions or
outdated systems and procedures. The informal organization may
also be used when formal methods would take too long, or not be
appropriate, to deal with an unusual or unforeseen situations.
2. The informal organization, therefore, has an important influence on
the morale, motivation, job satisfaction and performance of staff. It
can provide members with greater opportunity to use their initiative
and creativity in both personal and organizational development.

1.10 Types of Authority and Organizations

1. The three types of authority relate to different types of organizations.

In traditional organizations, authority is legitimized by

custom and long-standing belief in the natural right to rule, or is
possessed by traditional (proper) procedure. Examples would be
authority of the Pope, kings or queens or a paternalistic employer.

In charismatic organizations, authority if legitimized by

belief in the personal qualities of the leader; authority is based on
the leaders strength of personality and inspiration. This process
tends to transform a charismatic organization into either a
traditional organization or bureaucratic organization.

In bureaucratic organizations, authority is based on the

acceptance of the law or formal rules and procedures, and on
impersonal principles. Examples are the armed forces and the
authority of government ministers or college principals.

1.11 The Classification of Organizations

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1. Organizations can be distinguished by their nature and type, goods or

services provided, size, aims and objectives, and people who are
employed by or who work in them.

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2. Classification by major purpose

A common classification of organizations is by their major purpose.

Business firms (economic organizations);

Armies, trade unions and police forces (protective

organizations);

Clubs and societies (associative organizations);

Local authorities
organizations); and

and

hospitals

(public

service

Churches (religious organizations).

1.12 Prime Beneficiary of the Organization

1. Organizations are then classified on the basis of who benefits that is,
which of the four categories is the prime beneficiary of its operations.
Four types of organizations are identified on this basis:

Mutual-benefit associations, where the prime beneficiary

is the membership, such as political parties, trade unions and
professional associations;

Business concerns, where the owners are the prime

beneficiaries, such as industrial and other firms privately owned
and operated for profit;

Service organizations, where the client group is the main

beneficiary, such as hospitals, schools and welfare agencies;

Commonweal organizations, where the prime beneficiary

is the public-at-large, such as central government departments, the
armed services and the police.
2. Problems associated with each types of organization
Problems are associated with each types of organization.

In mutual-benefit organizations, the main problem is that

of providing for participation and control by the membership, and
of maintaining internal democracy.

In business concerns, the central problem is that of

maximizing operational efficiency in a competitive environment.

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In service organizations, the problem is reconciling

conflict between professional service to clients and administrative
procedures.

In commonweal organizations, the important problem is

ensuring democratic procedures by which they are held
accountable to the public for their actions.
1.12.1 Primary Activity of the Organization

Productive or economic concerned with the creation of

wealth, the manufacture of goods, and the provision of services for
the public.

Maintenance for example, schools and churches,

concerned with the socialization of people to fulfill roles in other
organizations and in society.

Adaptive for example, research establishments,

concerned with the pursuit of knowledge and the development and
testing of theory.

Managerial or political for example, government

departments, trade unions, and pressure groups. These are
concerned with adjudication, co-ordination and control of physical
and human resources and other sub-systems.
Object-Moulding or People-Moulding
Object-moulding organizations are concerned with physical or
material objects as the nature of work being carried out for example,
a manufacturing plant, a coalmine or an oil company.
People-moulding organizations are concerned with human beings
as the basis of the nature of work being carried out for example, a
school or a leisure center. In people-moulding organizations, a further
distinction can be made between:
People-processing organizations for example, an employment
agency or a social security benefit office; and
People-changing organizations for example, a mental hospital or
an open prison.

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1.13 The Influence of Technology

1. Technology and the Behaviour of People
The nature of the technology can influence the behaviour of people in
work organizations in many ways including, for example, the
following.

In influences the specific design of each members pattern

of work including the nature and variety of activities performed,
and the extent if autonomy and freedom of action.

It affects the nature of social interactions for example, the

size and nature of work groups, the extent of physical mobility and
of contacts with other people. A person working continuously on a
single, isolated machine in a mass production factory will have
limited social interactions compared with, a team of receptionists in
a large conference hotel.

It can affect role position and the nature of rewards. People

with higher levels of specialist technical knowledge and expertise
such as engineers or system analysts tend to receive higher status
and pay than machine operators on the assembly line.

It can impose time dimensions on workers and may require

set times for attending to operations and a set pace of work for
example, the mechanical pacing of work on a mass-production
assembly line.

It can result in distinguishing features of appearance for

example, the requirement to wear a standard uniform or protective
clothing, compared with a personal choice of smart clothes.

1.14 Review and Discussion Questions

1. What is an organization and why do organizations exist ? What are the
common factors in any organization ?
2. Distinguish between the formal and the informal organization, and
explain their main characteristics. What functions are served by the
informal organization ?
3. Discuss the importance of technology in the structure, management
and functioning of work organizations. Give practical examples of
how the nature of technology can influence the systems nature of
organizations.

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