Organizational Behaviour Concept and Problems

Introduction

The concept of organizational behaviour began to be recognized as a discipline only during the early years of the 20th century. The first person who can be credited with this (although in a very crude way) was Frederic Winslow Taylor through his principles of Scientific Management. The crude way mentioned above was due to the fact that the theory also equated employees with machines by breaking up individual tasks into actions. Little thought was given to the employee feelings and emotions although Taylor was of the opinion that employees will be motivated by compensation. It was only a decade later that employees and their behaviour began to be taken seriously through studies and theories like the Hawthorne experiments, Theory X and Theory Y by McGregor, and Weber’s Model of Bureaucracy. Now the discipline has grown to such an extent that it is an important component in human resources courses. It has also grown in complexity especially due to diversity in the workplace brought about by immigration and globalization. A model that depicts the modern concept of organizational behaviour is given below for reference. Its complexity and relationship with other components and factors in an organization can be clearly seen here.

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An organizational behaviour system Source: (Davis, and Newstrom, 2001) Organizational Behaviour. 11th edition, Tata McGraw-Hill
Figure 1: An organizational behaviour system Source: (Davis, and Newstrom, 2001) Organizational Behaviour. 11th edition, Tata McGraw-Hill

Review of the organization in terms of the overall OB concepts and perspectives

As mentioned earlier, Bredero Shaw is a multi-billion multinational company based in Canada. The diversity of its workforce is complex with the company having nearly 5000 employees in 27 locations across the world. The diversity of its workforce can be seen from its policy of employing people from many countries irrespective of culture, race, religion or nationality. The range of jobs available is also complex and huge. They need employees for administration, engineering, finance, manufacturing, warehousing, health, safety and environment, information technology, purchase, sales and marketing and student trainees.

The company’s policy with regard to employees is “investing in technology and people’ and many programs have been implemented in this regard. Even though there are many programs for employee benefits and motivation, the company faces some problems with regard to organizational behaviour especially due to the merger of the two companies. These problems will be discussed later in this section. Employees are trained to be more productive and also in improving relationships with customers, suppliers and other stakeholders. “ShawCor management is committed to the achievement of the Company’s Corporate Long-Term Goals through a culture of growth, continuous improvement and value creation that is shared by employees at all levels of the organization.” (The Global Reader. 2007). There is considerable stress on creating a working atmosphere that will be accepted by highly qualified and able employees. There is also focus on creating career advancement opportunities. The company has a dedicated department related to health, safety and environment protection. Bredero Shah and its parent company have tried to incorporate measures for the above into its daily operating processes. This has resulted in overall safety for the employees and other stakeholders. Job challenge is a highly motivating factor for employees and the company does its best to see that such challenging jobs and tasks are provided. The company tries to employ as much of local employees as possible to create a suitable working atmosphere in each market it operates. Training processes for employee advancement and improvement is also one of the features. The company also gives many financial benefits to its employees in addition to a industry standard compensation. Pension plans termed as future benefit obligations is an example. Some of these benefits vary from country to country. For example, employees in Canada are provided with life insurance schemes after retirement. Another example would be the post-employment benefit scheme to its part-time workers in Indonesia. Employees also have the option to buy stock in the company through its various stock option plans.

As mentioned earlier, the company has faced several problems with organizational behaviour especially due to the merger. ShawCor until the merger was a purely Canadian company and had no experience whatsoever in multinational business and cultural diversity management. Being unfamiliar with multi-racial and multi-ethnic employees created problems in handling and managing such employees. There was also a misconception among the top management of the parent company that employees of Bredero was much better paid when compared their employees. The work culture in both concerns (Bredero and ShawCor) was entirely different especially with regard to its core business and its operations. Bredero worked entirely on a contractual basis with almost all of its customers. The operations of the company were done on the following basis. Bredero would buy plants from other companies, work on it, dispose the plant, and then move on to another site. In effect, the company did not have huge volume of fixed assets like plant and machinery on a long term basis. It did not matter whether the site was in a remote location or not. ShawCor on the other hand personally owned each of the sites and locations it operated in. They owned the land, the machinery and other assets and had a long term vision and plans for each of these sites. It is only common sense to say that the basic work culture in these two scenarios is very different. A sudden merger of such two diverse work culture also created organizational behavioural problems for the company. The problems did not end here and were compounded by lack of effective communication from the top management to its employees worldwide. This could probably have been due to the inexperience in international operations for ShawCor. Moreover ShawCor at the time of merger still relied on spreadsheets and the like to maintain its employee database. This became impractical when the company suddenly grew in size and diversity after the merger. The need of the hour was properly developed database systems. Training opportunities to manage the diverse workforce was virtually nonexistent at that time creating further problems for the employees and the company. Career prospects were also limited and not properly planned. It so happened that many of the employees did not fit their assigned positions resulting in a case of ‘the wrong person for the job’. Many of the compensation and other benefits were centralized, meaning that it was the duty and responsibility of the vice-president of the human resources department to oversee this matter. For example, each salary increase anywhere in the world had to be personally approved by this person. They did not have regional human resource managers who would have been more knowledgeable about the employee under their care. HR managers in most cases would have been local persons and they would be in a better position to judge the psyche and capability of the employees. This is especially true because the workforce was extremely diverse and spread across many markets. The worst problem was the new entity did not even have a proper vision or mission statement that employees could identify with and work for.

The organization chart of the newly formed Bredero Shaw is given below for reference.

Organization chart of the newly formed Bredero Shaw
Figure 2. Organization chart of the newly formed Bredero Shaw

Organizational performance is greatly influenced by ability attitude and learning of the organizational personnel. In the new organization the degree of each factor has to be identified deeply to analyze the strength and weakness of the organization in meeting the employee motivation to improve their performance.

Organizational learning process: Organizational learning is very important for better functioning of each individual in the organization. Organizational learning is based on proper knowledge about the consequences of an action by the individuals. Feedback on performance must be available to the employees for applying corrective measures in time. Opportunity for developing interpersonal skills is necessary for ensuring improvement in the organizational strength.

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Every individual have the ability to learn from the organizational environment. Therefore a constructive environmental climate, encouraging, facilitating and rewarding the learning process is essential for better performance of the organization. Learning would help to restrict the resistance to change from the organizational personnel. It would develop positive attitude toward the policies of organization and to identify the draw backs of current policies. (Easterby-Smith, Araujo and Burgoyne, 1999, P. 220).

Attitude and behaviour: Attitude and behaviour of employees are influenced by several factors. Employees’ behaviour can change their attitude whereas influence of attitude on behaviour is only limited. The attitude of employees towards the different aspects of organizations is mainly based on their individual satisfaction in the organization.

Employees’ behaviour and Job satisfaction

According to Locke, job satisfaction is the “pleasurable or positive emotional state resulting from the appraisal of one’s job or job experiences.” (Saari and Judge, 2004, P. 2).

The feelings and attitude of employees have direct influence on job satisfaction. Job satisfaction is affected by cultural influences. Job disposition have influence on job satisfaction. Changes in job or company will have affect on the performance of employees. Employee satisfaction is directly related to their productivity and thus it has to be ensured in the organization for improving the performance of the employees. Employee attitude is influenced by cultural factors and culture is a strong measure of the attitude of employees.

In the new organization there is a crucial problem cross cultural issues. Bredero was a US based company and Shaw was a Canadian based company. Thus the merger of these two groups will face cross cultural issues in organizational structure. Organizational personnel in Bredero have no experience in multinational operations and thus they have limited capability to deal with cross cultural issues.

Work situation

Work situation have influence on attitude and job satisfaction of employees. With an effective compensation programme and proper supervision, interesting and challenging work environment should be created in the organization for motivating the employees. (Saari and Judge, 2004).

In the new organization, there is conflicting issue on the organizational process. Communications between the organizational personnel are also not ensured in the organization. The employees have no opportunity for getting proper training, talent growth, and career development. This will negatively affect their performance in the organization. In the organization no consideration for job satisfaction is provided by the management and this will reduce the productivity of the employees. The attitude of the employees also will negatively influenced by job disposition and job dissatisfaction in the organization.

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Job Satisfaction and Performance

“Recent study shows that happy workers don’t make firms more successful, but successful firms make their employees happier.” (Attitude and Behaviour: Job Satisfaction and Performance. 2006).

Organizational success and competitiveness depends on the productivity of the employers. The productivity, creativity and commitment to organization can be ensured by job satisfaction. Better career opportunity should be provided to retain the employees.

Employee attitude and commitment towards the organisation and employer is largely influenced by the level of satisfaction experienced by them. Since work satisfaction is that phenomenon which is influenced by multitudinous factors, the study of it needs exploration of many things. The factors attributable to the job satisfaction can be of external and internal to the organisation. The internal factors are largely of job specific and resultant employee attitude. Therefore, job satisfaction is one of the main job-related attitudes. Job satisfaction refers to one’s feelings towards one’s job. It can only be inferred but not seen. Positive attitudes towards the job are conceptually equivalent to job satisfaction and negative attitudes towards the job indicate job dissatisfaction. Thus, if one experiences a satisfactory work atmosphere, he will have high job satisfaction. In contrast to this if he dislikes his job intensely, he will experience job dissatisfaction.

There are many causes that influence employees’ good feeling or ill feeling. The most important among them are working conditions, wage structure, work group, nature of work and quality of supervision. Wages play a significant role in influencing job satisfaction as money plays an important role in fulfilling one’s needs.

Employees want a pay system, which is simple, fair, and in line with their expectations. If the pay system is not up to their expectations, they get dissatisfied. In addition to wages, compatible working conditions also contribute to job satisfaction. Working conditions are part of maintenance factors which, when provided, help remove dissatisfaction. Moreover, it is well known that, for many employees, work fills the need for social interaction. Thus, the workgroup serves as a source of satisfaction to individual employees. The workgroup is a stronger source of satisfaction when members have similar attitudes and values. Regarding the nature of work, jobs that have little challenge create boredom and on the other hand, too many challenges create frustration and a sense of failure. When the job is moderately challenging, workers experience pleasure and satisfaction. Promotions also play an important role in job satisfaction. Workers feel that promotions are major achievements in their career, and when they get promoted, they are extremely satisfied. (Employee Attitude Surveys; Rodwell, Kienzie and Shadur, 1999).

Consequences of Satisfaction and Dissatisfaction

It is imperative for managers today to arrive at suitable measures to increase the level of satisfaction among the employees. Otherwise organizations will fail to utilize the human resources to the optimal level. A low level of job satisfaction may lead to low productivity, high absenteeism, and labour turnover, increased job stress and high level of union activism. It is worthwhile to discuss the consequences in terms of various dimensions of job satisfaction. The productivity and employee satisfaction are highly related terms. Employee productivity will be high when they are satisfied and conversely, dissatisfied employee can contribute less to the organisation in terms of products and services. Therefore, there is consensus among the behavioural scientists that job satisfaction leads to increased productivity in the long run. Though there may not be a direct relationship between job satisfaction and productivity, performance may be affected indirectly by absenteeism or turnover which is negatively related to satisfaction. With regard to the relationship between job satisfaction and absenteeism, may studies have found that there is a positive correlation. It is among the various studies that while high job satisfaction will not necessarily result in low absenteeism, low satisfaction is likely to bring about high absenteeism. Further, it is also deduced that when people are dissatisfied with their jobs, company and supervisors, they are more liable to experience accidents. In addition, it is claimed that satisfied employees tend to have better mental and physical health and learn new job-related tasks more quickly. (Henne and Locke, 1985; Koys, 2006).

Employee Motivation

Motivation is the driving force, which drives human beings towards some activity, and in the process certain human needs are satisfied. “The fulfilment of human needs, physiological and psychological, to a large extent depends on certain internal and external factors. The internal factors may be job satisfaction, recognition, praise, accomplishment, etc, and external factors may be salary, working conditions, the organization, etc. The combination of such internal and external factors keeps the human beings to continue with the work assigned to them. If the employees are motivated properly by an appropriate combination of internal and external motivators, then one finds the morale of employees on a high pedestal and they exhibit exuberance at work place; else the employees are found to be irritating towards the work and fellow beings. But, the motivating factors are not uniform for all persons.” (Lindner, 1998; Wesley, 2007).

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Recommendations

It is seen from this case study of Bredero Shaw merger that several issues have cropped up due to a variety of reasons, in terms of disparities in organisational cultures, work ethos, management styles, work culture and interpersonal communication systems. It is necessary that necessary reconciliation procedures be taken up that could possible address the major areas of divergences and find solutions that would not only compromise on the long term objectives of the merged company and the interests of shareholders, employees and creditors, but bring benefits to the merged corporate on a long term perspective.

First and foremost, a mission and vision statement need to be made that could provide direction and focus to tasks involved. These statements would delineate what goals and objectives the company is pursuing and how the management proposes to achieve them.

Next, it is necessary to establish strong communication systems among the employees and top management at different hierarchical levels and enforce strong management information systems. It could also be in terms of key executives of Bredero relocated to Canada to understand Shaw Pipe’s style of functioning and similarly, key persons of Shaw could also be provided rotational training in many of the site offices and plants of Bredero Shaw.

This could ensure a cordial and congenial understanding of each other’s work culture and management reporting styles and formats. It is also suggested that every month, there are meetings held between all the functional heads and executives of the merged company, including project, finance, marketing and procurement executives to discuss and solve problems through dialogue and negotiations. These meetings and dialogues could definitely prove useful and a strong deterrent against deadlocks and misunderstandings. These meetings could even be chaired by the CEO of Shaw Bredero. It is to be ensured that such meetings are conducted in cordial and effusive manner with each member of the merged company contributing, irrespective of what happened prior to the merger. It needs to be strongly communicated that, with the merger of the two giant pipe coating companies, the earlier identities have been merged into the synergized Model imbibing the strengths and benefits of both companies.

Further, in HR department, it is necessary that psychometric assessments needs to be conducted by Organisational Development (OD) and Behavioural Expert consultants to ensure that work allotments are scientifically, systematically and logically made, seeking to put the right person for the job.

The company needs to enforce regular Employee Appraisals System, ensure high levels of motivation through reward and recognition systems, and adopt standard promotional and salary incremental procedures in a decentralised environment.

In a large multinational company like Shaw Bredero with offices and project sites operating in different parts of the world, it is necessary that efficient and speedy systems needs to be set into place that could reduce time, efforts and procedural delays.

(2) The 20th Century psychologist propagated the Three Step change model which is concerned about “unfreezing, change and refreezing” procedure. (Kurt Lewin’s Change Model. (2007).

It is seen that most people resist change, especially organisational ones, since change connotes insecurity and changes in known and established work practices. However, applying Kurt Lewin’s model, first and foremost, it is necessary for the personnel in Shaw Bredero to accept that the present system is defective and needs to be reformed. Thus, it needs to be established that the present communication systems need to be changes, and the organisation needs to provide goals, objectives and targets for employee accountability and gauging performance. Moreover, in the absence of corporate benchmarks, employees tend to lower productivity and their incomes levels. There are apparent flaws in the present system which needs to be understood and corrected. Objectivity and goal pursuits are important aspects of organisational behaviour and therefore mission and vision statements are envisioned and provided to all members of the workforce. This enjoins performance parameters and motivates the employees to perform better. Since communications and interpersonal dialogues are important aspects, regular interfacing and dialogues have been recommended. This could also be in terms of video conferencing where personal interactions are not possible. Once the doubts are cleared in the psyches of people, the next stage would be with regard to introducing the agents of change.

  • This could be in terms of providing copies of mission and vision statement of the Company to each and every member
  • Ensuring compulsory interacting during meetings and briefings, regular exchange of business related problems and how these could be solved
  • Motivating, training and retraining employees at every level through the use of behavioural expert consultants and also attending individual and group sessions for work efficiency and effectiveness
  • Decentralised and delegated work culture promotes work distribution and overall efficiencies

In the next stage, it is seen that refreezing is carried out, in that the changes that have been proposed are slowly institutionalised and monitored, whether they are producing the desired results.

This stage is most critical, since critical changes need to be consolidated, or enforced in order to achieve business plans, management needs to oversee that changes are well accepted and serve to achieve pre-determined ends and objectives. In case of minor hitches, necessary alterations need to be conducted in order to realign the plans according to settings.

The advantages and justifications with regard to changes are that they would eliminate stress and areas of conflict, improve communication networks, consolidate market gains and integrate members of the entire organisation into a strong, viable and cohesive team.

Discussion of recommendations with HR Manager in Bredero Shaw

I had two personal sessions with the HR manager of the company. The first one was to hand over the report and lasted only for a short time. The second was more productive and happened after he had gone in detail over the report. The discussion was very cordial and the manager was kind enough to go over the report again with me. Overall almost all the recommendations were accepted in principle and the person said that all practical recommendations will be implemented at the earliest. The points discussed are given below in detail.

Mission Statement

The HR manager was in complete agreement over this point. He expressed his helplessness in the sense that this topic was not within his authority. He added that he would make the necessary and strong recommendation to the board of directors to see that a proper mission statement be formulated.

Proper Communications

The HR manager agreed with the report on this point and said that the problems and confusion caused by the merger had indeed resulted in a communication break. He said that he would look into the matter and gave word that a proper system will be up and running within a period of two months. He would also inform other departments (with the approval of the board) about this issue and set up a meeting with individual heads to see that the problem is corrected in the organization as a whole. He did not agree with the recommendation of sending Bredero executives to Canada. The reason given was very simple and logical. According to him, the Canadian division had no experience in international business and diversity management and that Bredero had much more experience in this regard. It would be more pertinent to sent ShawCor executives to the various offices in Bredero instead. This might create some ego problems among the company executives, but can be managed with a little tact and patience. He agreed that executives of Bredero can periodically visit the HQ for more understanding of the culture that exists in ShawCor. He also felt that training in many areas like employee improvement and diversity management is also necessary for many employees.

Meetings

The HR manager agreed with the particular recommendation about conducting monthly meetings. This will definitely go a long way in easing the probable tensions and misunderstandings that might exist among the employees of the merged company.

Psychometric assessments and work appraisal

The suggestion was also welcomed by the HR manager who added that it can wait until other major issues are sorted out. He also said that this will need professional help from outside to conduct such an assessment. He added that a system for work appraisal was already being made and will be implemented as soon as it is completed.

Resistance of change

The HR manager conceded that he had already sensed the resistance among many of the employees including those working under him. He said that this is a serious and important issue and will be looked into as soon as possible. He also needed more time to study the Kurt Lewin Change Model in detail.

The effort has been a very satisfactory experience for me since many of my recommendations were accepted in principal and others being readied for implementation. It has also given me a lot of confidence in conducing research and preparing a report with well-laid out recommendations. It has also given me valuable insight into how employees behave in real life situations especially in critical times like mergers and acquisitions.

Bibliography

  1. Attitude and Behaviour: Job Satisfaction and Performance. (2006). [online].
  2. EASTERBY-SMITH, Mark., ARAUJO, Luis., and BURGOYNE, John G. (1999). Organizational Learning and the Learning Organization: Developments in Theory and Practice. [online]. SAGE. P. 220. Web.
  3. Employee Attitude Surveys. [online]. National Business Research Institute.
  4. HENNE, Douglas., and LOCKE, Edwin A. (1985). Job Dissatisfaction: What are the Consequences? [online]. Informaworld.
  5. KOYS, Daniel J. (2006). The Effects of Employee Satisfaction, Organizational Citizenship Behaviour, and Turnover on Organizational Effectiveness: A Unit-Level, Longitudinal Study. [online]. Wiley Inter Science.
  6. Kurt Lewin’s Change Model. (2007). [online]. Leadership at Work.
  7. LINDNER, James R. (1998). Understanding Employee Motivation. [online]. Journal of Extension.
  8. RODWELL, John J., KIENZIE, Rene., and SHADUR, Mark A. (1999). The Relationship among Work-Related Perceptions, Employee Attitudes, and Employee Performance: The Integral Role of Communications. [online]. Wiley Inter Science.
  9. SAARI, Lise M., and JUDGE, Timothy, A. (2004). Employee Attitudes and Job Satisfaction. [online]. Human Resource Management. P. 2.
  10. The Global Reader. (2007). [online]. ShawCor. 2007 Annual Report.
  11. WESLEY, John. (2007). Increase Motivation. [online]. PickTheBrain. Web.
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