Week 2 – Understanding the Nature of Organizations

Organization Behavioral Management Theory (1920s-1950s):

- a structured group of people working together - Hawthorne Studies: Conducted at the Western
towards common goals, possessing a formal Electric Hawthorne plant, revealed the impact
structure and established roles. of social factors and human behavior on
productivity.
Types
- Human Relations Movement: Emphasized the
- Public Sector Organization. importance of social and psychological factors
 entity that operates within the domain in the workplace, advocating for better
of the government and is responsible communication, motivation, and leadership.
for providing goods or services to the
Quantitative Management Theory (1950s-1960s):
public.
- Private Sector Organization. - Management Science: Application of
 a business or enterprise that operates mathematical and statistical techniques to
and functions independently of managerial problems, optimizing decision-
government control or ownership. making processes.
- Non-Government Organization - Operations Research: Using mathematical
 models to optimize complex systems and
 (NGO) is a legally constituted processes within organizations.
organization created by individuals or
groups, independent of government
control, whose primary purpose is to
address various social, environmental,
humanitarian, or developmental issues. Contemporary Management Theory (1960s-Present):
Importance of Organizations - Systems Theory: Views organizations as
- Achieving goals efficiently complex systems composed of interrelated and
 involves the strategic allocation of interdependent parts.
resources, streamlined processes, and - Contingency Theory: Asserts that there's no
effective time management to optimize one-size-fits-all approach to management;
productivity and minimize wastage effectiveness is contingent upon the situation or
- Providing goods/services context.
o involves meeting consumer demands by - Total Quality Management (TQM): Focuses on
offering products or solutions that fulfill continuous improvement, customer
specific needs or desires within the satisfaction, and employee involvement to
enhance product and service quality.
market.

- Creating employment opportunities Emerging Trends:

o involves generating job positions within - Strategic Management: Emphasizes long-term
industries, sectors, or organizations, planning, setting objectives, and aligning
thereby contributing to reducing resources to achieve organizational goals in a
unemployment rates and fostering dynamic environment.
economic growth. - Sustainability and Ethical Management:
- Driving economic growth Encourages responsible business practices that
o involves fostering productivity, consider environmental, social, and ethical
innovation, and investment, leading to implications.
an increase in a nation's gross domestic - Digital Transformation: Utilizing technology to
innovate processes, enhance communication,
product (GDP) and overall prosperity.
and adapt to the digital landscape.
Classical Management Theory (Late 19th to early 20th
century): Management
- refers to the process of planning, organizing,
- Scientific Management: Introduced by directing, coordinating, and controlling
Frederick Taylor, emphasizing systematic resources (human, financial, physical, and
analysis and optimization of work processes for informational) within an organization to achieve
increased efficiency. specific goals and objectives effectively and
- Administrative Management: Pioneered by efficiently.
Henri Fayol, focusing on the principles of
management—planning, organizing,
commanding, coordinating, and controlling.
Key aspects of management include:

- Planning:
o Setting goals, defining strategies, and
developing action plans to achieve
organizational objectives.
- Organizing:
o Structuring and arranging resources,
tasks, and responsibilities to facilitate
goal attainment. This involves
establishing hierarchies, delegating
tasks, and creating systems and
procedures.
- Leading or Directing:
o Guiding and motivating individuals or
teams to work towards achieving the
established goals. It involves effective
communication, inspiration, and
fostering a positive work environment.
- Coordinating:
o Ensuring that all activities and efforts
within the organization are
synchronized towards common
objectives. This involves managing
conflicts, aligning efforts, and
integrating resources.
- Controlling:
o Monitoring progress, evaluating
performance, and making necessary
adjustments to ensure that goals are
achieved efficiently and effectively. This
step involves setting standards,
measuring actual performance,
comparing results, and implementing
corrective actions if needed.
Week 3-4. Organizational Structure and Design o Enhances flexibility and efficient resource
utilization for projects but can lead to
Organizational structure refers to the way in which a
power struggles and complexity in decision-
company arranges its workforce and operational
making due to multiple reporting lines.
activities.

types of organizational structures commonly used in

businesses, each with its own characteristics,
advantages, and disadvantages.

- Functional Structure
o Organizes employees based on
specialized functions or roles (e.g.,
marketing, finance, operations).
o Clear hierarchy with each department
having its own manager.
o Promotes expertise in specific areas but
can create silos and hinder
- Hierarchical Structure
communication across departments.
o Traditional pyramid-shaped structure with
clear levels of authority and a chain of
command.
o Provides clear lines of communication and
control but can result in bureaucracy, slow
decision-making, and limited innovation.

- Divisional Structure
o Divides the organization into self-contained
units based on products, services,
geographical locations, or customer groups.
o Each division operates independently, with
its own functional departments (e.g.,
marketing, HR, finance).
o Enhances focus and accountability within Factor Influencing Organizational Design
each division but may lead to duplication of
- refers to the process of structuring and
resources and increased overhead.
arranging an organization's resources,
processes, and systems to achieve its strategic
objectives effectively.
- Strategy and Goals
o The organization's strategy and goals
heavily influence its design. Different
strategies may require different
structures. For instance, a focus on
innovation might necessitate a more
flexible and decentralized structure,
while cost leadership might favor a
more centralized approach.
- Size and Complexity
o The size of an organization impacts its
design. Larger organizations may
- Matrix Structure require more complex structures to
o Combines functional and divisional manage various functions and divisions
structures, employees report to both effectively. Smaller organizations might
functional managers and project managers. have simpler, more centralized
structures due to fewer layers of
management.
- Technology and Innovation
o The type of technology an organization
uses can influence its structure. Highly
innovative or technology-driven
organizations might adopt flatter, more
flexible structures to facilitate quick
decision-making and adaptability.
 - Environment and External Factors - Strong cultures that promote teamwork,
o External factors such as market collaboration, and a focus on goals can enhance
conditions, industry regulations, productivity.
economic trends, and global
Innovation and Adaptability
competition can influence
- Certain cultures encourage risk-taking,
organizational design. For example, a
creativity, and innovation. An organizational
rapidly changing market might require a
culture that supports experimentation and
more agile and adaptable structure.
learning from failures fosters innovation,
- Culture and Leadership Style
adaptability, and the ability to respond
o Organizational culture and leadership
effectively to changes in the market or industry.
preferences also shape design choices.
Some cultures value autonomy and Decision-Making and Problem-Solving
creativity, leading to decentralized - Culture influences decision-making processes
structures, while others may prefer within an organization. A culture that
more hierarchical and centralized encourages open communication, inclusivity,
control. and transparency can lead to better decision-
- Employee Skills and Preferences making and more effective problem-solving.
o The skills, competencies, and
preferences of employees can impact
organizational design. Employees with Customer Service and Satisfaction
diverse skills may require a structure - Organizational culture directly affects how
that allows cross-functional employees interact with customers. A culture
collaboration, while others might thrive that prioritizes customer service and
in specialized functional units. satisfaction can lead to improved customer
- Geographical Dispersion experiences, loyalty, and positive brand
o Organizations with multiple locations or reputation.
global operations may require Employee Behavior and Ethics
structures that support coordination
and communication across various - Culture sets the tone for acceptable behavior
geographical locations. and ethical standards within an organization. A
- Regulatory and Legal Requirements strong ethical culture helps prevent misconduct
o Compliance with legal regulations and and unethical practices, fostering trust among
industry standards can influence employees and stakeholders.
organizational design. Certain industries
with strict regulations may need specific Attraction and Retention of Talent
structures to ensure compliance. - A compelling organizational culture acts as a
- Customer Needs and Market Demands: magnet for attracting top talent. Organizations
o Organizations might tailor their with reputations for positive cultures often find
structures to meet specific customer it easier to attract and retain skilled individuals
needs or respond to market demands. who align with their values.
Customer-centric structures aim to Change Management and Adaptation
align the organization to better serve its - Cultures that are flexible and adaptable
customers. facilitate smoother transitions during times of
- Financial Considerations change. Employees in such cultures are more
o Budget constraints, resource allocation, receptive to change initiatives, making
and cost-effectiveness can impact organizational transformations more successful.
organizational design decisions.
Efficient structures that optimize Organizational Identity and Branding
resource utilization may be preferred. - Culture influences an organization's identity and
brand. A strong and unique culture can
Organizational Culture and Its impact on Performance differentiate an organization in the market,
- refers to the shared values, beliefs, behaviors, attracting customers who resonate with the
and norms that characterize an organization. values and mission of the company.
- plays a significant role in shaping the work Financial Performance and Longevity
environment, influencing employee behavior, - Strong organizational cultures that promote
and impacting overall organizational efficiency, innovation, and employee
performance in several ways: satisfaction often correlate with improved
Employee Engagement and Satisfaction financial performance and long-term
sustainability.
- A positive organizational culture fosters an
environment where employees feel valued,
engaged, and motivated.

Productivity and Performance

Week 5-6. Leadership and Motivation o Belongingness and Love Needs:
Desiring relationships, friendships,
Leadership styles and theories
acceptance, and a sense of belonging
- provide frameworks for understanding the
within a social group.
different approaches and behaviors that leaders
o Esteem Needs: Consisting of the need
exhibit.
for recognition, respect, self-worth,
Trait Theory achievement, and competence.
o Self-Actualization Needs: The highest
- Trait theory suggests that certain inherent traits level, involving the desire for personal
or characteristics distinguish effective leaders growth, fulfillment of potential,
from non-leaders. creativity, and pursuing meaningful
Behavioral Theory goals.

- Behavioral theories focus on the behaviors and

actions of leaders rather than innate traits. Herzberg's Two-Factor Theory (Motivation-Hygiene
- Two main behavioral leadership styles Theory:
identified:
o Task-Oriented Behavior: Leaders who - Frederick Herzberg proposed this theory,
focus on achieving specific objectives, distinguishing between factors that lead to
clarifying roles, and monitoring satisfaction (motivators) and those that prevent
performance. dissatisfaction (hygiene factors) in the
o Relationship-Oriented Behavior: workplace.
Leaders who prioritize building - Motivator Factors: These factors are intrinsic to
relationships, fostering collaboration, the job and contribute to satisfaction and
and supporting team members. motivation, such as achievement, recognition,
responsibility, growth, and meaningful work.
Situational Leadership Theory: Their presence leads to satisfaction and
- Developed by Hersey and Blanchard, situational motivation.
leadership theory posits that effective leaders - Hygiene Factors: These factors are extrinsic to
adapt their style based on the readiness or the job and include aspects like salary, working
maturity level of their followers. conditions, company policies, interpersonal
relationships, and job security. Their absence
Transformational Leadership: causes dissatisfaction but their presence does
- Transformational leadership involves inspiring not necessarily lead to satisfaction; they only
and motivating followers to achieve prevent dissatisfaction.
extraordinary outcomes and transcend their - Herzberg argued that meeting hygiene factors
self-interest for the greater good of the eliminates job dissatisfaction, while the
organization. presence of motivator factors leads to
increased job satisfaction and motivation.
Servant Leadership:

- Servant leadership emphasizes the leader's role

as a servant to their followers, prioritizing their Leadership plays a crucial role in motivating employees
needs, growth, and well-being. within an organization. Effective leaders understand
that motivation is not a one-size-fits-all concept and
utilize various strategies to inspire and engage their
teams.
Motivational theories

- aim to explain the factors that drive human

behavior, particularly in the workplace. Setting Clear Goals and Expectations:

- Leaders establish clear, achievable goals that

align with the organization's objectives. When
Maslow's Hierarchy of Needs:
employees understand what is expected of
- Proposed by Abraham Maslow, this theory them, it provides a sense of direction and
presents a hierarchical model of human needs purpose, motivating them to work towards
arranged in a pyramid with five levels: those goals.
o Physiological Needs: These are the
Providing Support and Resources:
basic needs for survival, such as food,
water, shelter, and sleep. - Good leaders offer support, resources, and
o Safety Needs: Including security, necessary tools to help employees perform
stability, protection from harm, and a their jobs effectively. Lack of resources or
safe working environment. assistance can demotivate employees, while
adequate support fosters a sense of
empowerment and confidence.
Recognition and Appreciation:

- Effective leaders acknowledge and appreciate

the efforts and contributions of their team
members. Recognizing individual and team
achievements reinforces positive behavior and
boosts morale, encouraging employees to
continue performing well.

Empowerment and Autonomy:

- Leaders who empower their employees by

delegating responsibilities and granting
autonomy in decision-making foster a sense of
ownership and accountability. This autonomy
encourages

Effective Communication:

- Open, transparent communication from leaders

helps employees understand the organization's
vision, updates on progress, and provides
feedback.

Creating a Positive Work Environment:

- Leaders play a pivotal role in shaping the

organizational culture. A positive work
environment characterized by fairness, respect,
inclusivity, and a healthy work-life balance can
significantly boost employee morale and
motivation.

Supporting Personal Development:

- Leaders who invest in the growth and

development of their employees by offering
training opportunities, mentorship, and career
advancement paths demonstrate a
commitment to their team members'
professional growth, leading to higher
motivation and job satisfaction.

Leading by Example:

- Leaders who embody the values they promote,

demonstrate resilience, integrity, and a strong
work ethic inspire their team members.
Modeling desired behaviors can motivate
employees to emulate those qualities.

Adapting Leadership Style to Individual Needs:

- Understanding that different individuals may

require different motivational approaches,
adaptive leadership allows leaders to tailor their
leadership style to meet individual needs,
strengths, and preferences.
Week 7-8. Decision Making and Problem Solving Intuitive Decision-Making Model:

Decision-making - Based on intuition, gut feelings, or tacit

knowledge, this model relies on the decision-
- critical aspect of management that involves
maker's experience, expertise, and instincts. It
selecting the best course of action among
involves making quick judgments without
several alternatives to achieve desired goals or
extensive analysis.
solve problems.

Rational Decision-Making Model:

- The rational model follows a systematic, step-

by-step approach:
o Define the problem or goal.
o Identify relevant criteria for evaluating
alternatives.
o Generate and analyze potential
solutions or alternatives.
o Evaluate each alternative based on
criteria and select the best one.
o Implement the chosen alternative and
assess the outcome. Incremental Decision-Making Model:

- This model involves making decisions in small,

incremental steps rather than large-scale,
drastic changes.

Bounded Rationality Model:

- Recognizes that decision-makers have

limitations in processing information and Garbage Can Model:
making perfectly rational decisions. They use
simplified strategies to make satisfactory - Describes decision-making in organizations as a
decisions within constraints. chaotic process influenced by random events,
shifting goals, and multiple solutions floating in
an open 'garbage can.

Satisficing Model:

- Coined by Herbert Simon, this model suggests

that decision-makers aim for solutions that
satisfy minimum criteria rather than seeking the
optimal solution.
Factors influencing decision making Root Cause Analysis (RCA): Identify the underlying
causes of a problem rather than addressing only the
Personal Values and Beliefs: Personal values,
symptoms. Techniques like the "5 Whys" involve
principles, and beliefs significantly impact decision-
repeatedly asking "why" to drill down to the root cause.
making.
SWOT Analysis: Assess the organization's Strengths,
Cognitive Biases and Heuristics: Various cognitive
Weaknesses, Opportunities, and Threats. This
biases (e.g., confirmation bias, availability heuristic,
framework helps in understanding internal capabilities
anchoring bias) can influence decision-making by
and external factors impacting the problem.
causing individuals to rely on mental shortcuts or
patterns that may lead to systematic errors in Brainstorming: Encourage a free flow of ideas among
judgment. team members to generate a wide range of potential
solutions without criticism. Techniques such as mind
Emotions and Emotional State: Emotional states, such
mapping or nominal group technique can structure
as fear, happiness, stress, or excitement, can influence
brainstorming sessions.
decision-making. Emotional responses might alter
perceptions of risks and benefits, impacting choices. Fishbone Diagram (Ishikawa or Cause-and-Effect
Diagram): Visualize the potential causes contributing to
Past Experiences and Learning: Previous experiences,
a problem by categorizing factors into main categories
both successes, and failures, shape decision-making by
like people, processes, environment, etc.
providing a reference for future choices. Individuals
often learn from past decisions to inform their current Simulation and Modeling: Use computer-based or
ones. analog simulations to model the problem scenario and
test various solutions in a risk-free environment before
Information and Knowledge: Limited or inaccurate
implementation.
information can lead to suboptimal choices, while
access to comprehensive and reliable data can improve Design Thinking: Empathize with stakeholders, define
decision outcomes. the problem, ideate potential solutions, prototype, and
test them iteratively, focusing on user-centric problem-
Social and Cultural Factors: Social norms, peer
solving.
pressure, societal expectations, and cultural influences
can affect decision-making. Individuals may conform to
group norms or cultural values when making choices.

Time Constraints and Pressure: The urgency or time

constraints associated with a decision can impact the
decision-making process. In situations with time
pressure, individuals might rely on quick, instinctive
decisions rather than thorough analysis.

Risk Tolerance and Uncertainty: People's tolerance for

risk influences decision-making. Some individuals prefer
cautious decisions with minimal risk, while others are
more comfortable with higher levels of uncertainty and
risk.

Motivation and Goals: Individual motivations,

aspirations, and goals significantly influence decision-
making. Decisions are often made to align with personal
or organizational objectives.

Peer Influence and Social Context: Decisions can be

influenced by the opinions, advice, or behaviors of
peers, family, colleagues, or leaders. Social dynamics
and relationships can impact the choices individuals
make.

Environmental and Situational Factors: External

circumstances, such as economic conditions, market
trends, political climate, or environmental factors, can
impact decision-making by presenting opportunities or
constraints.

Biological Factors: Neurological differences, genetics,

brain chemistry, and individual physiological states can
also play a role in decision-making processes, affecting
how individuals perceive and respond to choices.