Organizational Behavior and Development

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Organizational behavior is the study and implementation of knowledge about how individuals and groups act when in organizations. It refers to the culture, practices and values within an organization. (Organizational Behavior, 2007) An organization consists of individuals who have common goals and aspirations and work together to achieve their collective aims. They also share a common philosophy and vision. These similarities form an organizational culture , which in turn determines the leadership styles, communication methods and small-group dynamics within the organization. The quality of the culture of the organization affects the degree to which employees are motivated.

Organizational behavior interprets people-organization relationships and interactions and aims at establishing and maintaining relationships by achieving objectives set by individuals within the organization, the organization itself and the society. (Organizational Behavior, 2007)

Organizational development involves the systematic use of behavioral science knowledge on varying levels to bring about planned change. (Sanjeev Sharma, 2008)These different levels include the small group, the organization and inter-group. Organizational development aims at improving the quality of work life for all members of an organization, productivity, adaptability and effectiveness. It achieves these objectives by altering set norms in regards to attitudes, behaviors, beliefs, and structures so that the organization can adapt to the dynamic environment around it ,which includes the fast pace of technological change and competition.

There are several theories that can be used to explain organizational behavior and development. These include Abraham Maslow’s Hierarchy of Needs Theory and McGregor’s X and Y Theory.

Abraham Maslow , a renowned communications expert ,theorized that people in organizations act according to the hierarchy of needs.In the hierarchy of needs, a person works at fulfilling those needs that he considers most important to him, for example physiological requirements, before proceeding to other needs ,like economic achievement. Therefore, for employees in an organization to be productive, their basic needs must be met.

In the hierarchy of needs ,the base consists of the primary needs that a human being requires. These include food, sleep, water and shelter. The basic needs are followed by the need for companionship and fulfilling relationships. After satisfying these needs, a person can look forward to achieving some form of independence by performing socially acceptable tasks, for instance a career. When he has reached the pinnacle of his career, the next step would be to contribute to the community around him, in a way giving back. Finally, the top tier of the hierarchy has a person searching for self-actualization. This is where a person seeks to understand himself and his position in the world.

In any organization, the employees must be sufficiently motivated for them to produce quality work.A company cannot expect a significant number of innovations if those charged with the responsibility of coming up with creative solutions to problems are not particularly inspired or interested.

McGregor’s X and Y Theories bases its argument on the potential of employees in an organization. Theory X argues that most employees are not intrinsically motivated and have to be threatened or coerced in order for them to perform any tasks that they have been given. It argues that a dictatorial form of leadership has to be adopted because it is what will work. The employees’ subsistence needs are met leading to a minimal performance result. (Accel Team Development, 2008)

However, Theory Y looks at the potential of employees in a positive, assertive light. It argues that most employees are born with the need to perform well at their assigned tasks. They are naturally motivated and ambitious.They also do not have to be pushed and a participatory leadership style is proposed. The employees can get to achieve self-actualization giving a moderately enthusiastic performance result.(Accel Team Development. 2008)

The organizations that experience progressively increased corporate performance have the following characteristics:

  • Employees closest to customers are valued highly.
  • Decentralized management.
  • Clearly defined channels of communication.
  • Open and clear communication.

Management in the world’s successful organizations have realized this and have therefore put in place structures that provide a conducive environment for the realization of the set goals and objectives. Usually the theories overlap, with one model being predominant and it is therefore rare to find a company operating exclusively from one theory.

Innovation in an organization is affected by the culture in the organization. Culture refers to the beliefs, values, customs, language, traditions and practices of a particular society. People depend on their culture to offer them direction and give guideline as to how to behave in different contexts. The culture can further individualization or socialization. Individualization occurs when employees of an organization do not blindly accept set norms and instead influence change.

If an organization’s culture promotes high individualization and low socialization, the employees become rebellious. If the culture promotes low socialization and low individualization, the result is isolation. An organization should therefore endeavor to promote high socialization and high individualization for a creative environment. (Rail gazette, )

Using Korail as my case study, I will show how the internal conditions in an organization can facilitate or inhibit innovation. Korail is South Korea’s national railroad operator.According to the Korail website, it was established on January 1 2005 as a public corporation after the former Korean National Railway was spilt into separate operating and infrastructure companies. It was founded to increase efficiency and professionalism of railroad management and to contribute to railroad industry and improvement of the Korean economy. Korail has interests in metropolitan transit, freight and logistics business. In recent years it has established a hub network and also applied for a license to become a comprehensive logistics business by 2011.

Korail ’s new President and CEO, Kang Kyung-Ho, asserts that generating higher profits through train operations is limited, and so Korail has embarked on a diversification strategy aimed at boosting non-core income. Some of the activities that Korail is involved in include property development, tourism ,facilities maintenance and parking management. Additionally, it intends to develop its international consultancy business. Currently, Korail advises Malaysia on rolling stock maintenance, Texas High Speed Rail and Transport Corp and the government of Brazil on the construction and operation of high speed lines.

In 2007 ,Korail recorded increases in both passenger and freight traffic, which together with substantial income from its property development projects allowed it to declare its first profit, estimated at 133 billion won. The launch of high speed services has seen Korail record a steady increase in traffic.With infrastructure authority KR working to electrify more of the rail network, Korail expects its market share to increase over the next few years.

At the moment ,Korail is working on its Future Korail vision for 2015.This envisions the railway being transformed into a comprehensive transportation group operating both domestic and international services. CEO Kang has created a reputation of encouraging innovation ,with particular intensity on environmental initiatives targeted at ‘enhancing the quality of life for the whole nation’.

Three clear objectives have been set:

  • Customer focus.
  • Creating value.
  • Trustworthy management.

The management of Korail asserts that its first consideration will be the client’s comfort.It intends to create value by being the leader corporation of social values and to ensure trustworthy management through mutual respect of labor and management, ensuring safety of clients and socially well-respected corporation management through ethical management.

To achieve these objectives, CEO Kang envisages further decentralization of management responsibility to the operating business units, generating profits for future investments and maximizing the efficient use of company resources.

Korail has three levels of management ,beginning with the President, who directly supervises the Council ,Inspection, the Publicity office, the Secretary office and the Business innovation office. The Vice President oversees the rest of the departments in the company.

The CEO’s management philosophy is four-fold ;it encompasses basis-type innovation, participating innovation, service innovation and being the first in innovation. Innovation in Korail is of utmost importance. The innovation culture was introduced as a result of common crisis awareness. One of the major innovations undertaken by Korail is 6 sigma business. 6 Sigma is a business process that enables companies to increase profits by streamlining operations, improving quality and eliminating defects or mistakes in all the companies activities. (Vadim Kotelnikov, 2008)

6 sigma business was thought up as a solution to the declining productivity of the corporation. Its execution depended upon the employees of Korail finding proper problems, choosing adequate competent persons to do the job, proper training and equipment ,a suitable compensatory scheme for employees and a supportive Finance department.(Korail, 2007)

6 Sigma business has made several encouraging accomplishments. Client value has increased within Korail. Employees now treat clients as valuable ,a trait not usual to publicly-owned corporations. Secondly, the employees of Korail have learnt to believe that they are co-owners of the company and that their contributions benefit the company. Similarly, they understand that their lack of participation in the organization’s activities affects its performance and consequently their lives.

Another accomplishment is the increased financial performance of the corporation. Korail recorded its first profit in 2007 and expects that this good showing should continue into 2008. Its diversification into property development ,logistics and freight business, which are not core businesses, have proved to be shrewd profitable risks.

A fourth accomplishment is the creation of a railroad culture among South Koreans. Korail introduced high speed trains which have revolutionalised rail road transport in Korea. More and more Koreans use the train to commute in and around the region. With its extensive railroad network, and plans for future expansion. Korail is set to increase its share of the market.

Lastly, Korail’ s 6 Sigma business has assured the public that it is a competent public corporation, with a profitable financial outlook, and that they are guaranteed to receive high quality service in all their businesses.


Accel Team Development. 2008. Human Relations Contributors. Web.

Korail (2007). Introducing Korail. Web.

M Rhydderch, G Elwyn, M Marshall, R Grol. 2004. Organizational Matters. Organizational Change theory and the use of indicators in general practice. Web.

Organizational Behavior (2007). Web.

Sanjeev Sharma. BPO Center GTL Limited. Organizational Development- A Basic Research Report. 2008. Web.

UIC e-News. 2008. WCRR Report. Web.

Vadim Kotelnikov. 2008. What Is Six Sigma? Web.

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