Organisational behaviour is the relationships between individuals i.e managers, groups such as employees and the structure of organisations. The importance of organisational behaviour to organisational success has been debated over time by many academics, business leaders and employees, theories developed from these discussions include Fordism, Taylorism, rationalisation and terms such as ‘mcdonaldized’ have been created to describe society (Ritzer 2015). Throughout history there have been many examples where organisational behaviour has been not only important to organisational success, but critical for the survival of some businesses. Organisations are not only profitable businesses but through the definition “An organization is a social arrangement for achieving controlled performance in pursuit of collective goals.” Huczynski & Buchanan (2001) we see that organisations may also include non-profitable organisations such as the NHS, local councils and schools- so success can be measured not only by monetary profit but by the benefits provided to the community, employee happiness and customer satisfaction. Other factors such as innovation, social trends, and government policies can also have a significant impact on organisational success.
Management roles within an organisation form a key part in organisational behaviour. Different leadership styles and management theories attribute to the success or demise of an organisation depending on several internal and external factors of said organisation. Rational organizational design is a scientific management theory that aims to lead an organisation in the most logical, systematic and efficient manner. Pal Vik (2017) argues in the article ‘The Computer says no’ that ‘Rationalisation drives depersonalisation’. Depersonalisation of customer service based businesses can have a negative impact on the businesses reputation as customers may have valued the human touch it once had. This can lead to a loss of repeat custom and ultimately a decrease in profits. As discussed in Pal Vik’s article, the move from the traditional structure of having one branch manager in each bank with significant control to a more centralised, bureaucratic structure where decisions were made at the top of the business as a whole, banks lost the personal touch they once had. This change did not necessarily have a negative impact on organisational success. Since the depersonalisation of the banking sector in the UK, Banks were able to increase efficiency in several ways. The authority of the traditional bank manager being reduced led to more practical ways of assessing a customer’s eligibility for products such as loans and mortgages- the introduction of a credit scoring system minimised risk for banks as it meant a more scientific approach was used rather than the judgement of one branch manager.
It has been shown throughout time that through the use of scientific management and adopting key aspects of Taylorism that organisations can greatly improve efficiency and therefore increase profits. The rise of Taylorism saw a decrease in the power of workers; Through standardization, tasks are broken down to the bare basics minimizing the skill and human labour needed. Individualisation and surveillance also meant that workers powers diminished as groups were broken up and constantly supervised. The strict nature of Taylorism means that using its techniques for organisational success is very difficult and is very much determined by the structure of the organisation and the social environment the organisation is in. Benefits of Taylorism were felt greatly in factories wartime production – factories were required to increase output quickly and efficiently with a lack of skilled workers they once had. This is where Taylorism’s standardisation was a huge success as weapons, vehicles and chemicals needed for the war effort could be produced to the scale required. It has been noted in Grey’s ‘A very short, fairly interesting and reasonably cheap book about studying organisations’ (2005) that it was the tanks manufactured using Taylorism that defeated Nazi Germany. Taylorism has seen its fair share of success but also faced backlash from workers, employees and the government. The implementation of Taylorism in factories especially automobile factories saw huge resistance from unions and individual workers through walkouts, sabotage and lockouts. Constant supervision and the increased pressures to increase output saw workers motivation decrease meaning efficiency also decreased. In 1976, 341000 working hours were lost due to strikes in the Hartmoor assembly plant Ulrich Jürgens et al. (1994) Breaking from Taylorism pp 114. This shows that the disruption caused by workers unrest under Taylorism may outweigh the successes seen.
Organisational culture is a key aspect of Organisational behaviour. It is formed by the values and behaviours of the organisation but also the social and psychological environment it operates in. Organisational culture can have a huge impact on employee motivation. Harold Garfinkel (1984) stressed the importance of membership and that employees had to learn to become a ‘member’ of a social group. This would fit into Psychological needs on Maslow’s Hierarchy of needs – where an organisation allows its employees to feel a sense of belonging it will in turn increase staff motivation and loyalty which will improve efficiency and creativity. Brown (1998) argued that ‘managers and employees do not behave in a value-free vacuum; they are governed, directed and tempered by the culture of the organization where they work’, this argument would further assert the statement that understanding organisational behaviour is key to organisational success. This is because the actions of managers and employees are directly influenced by the organisations culture – a strong sense of culture would engender dedication and enthusiasm, meaning employees and managers would be working for the best interest of the organisation.
In the ever-changing world of modern day technology, the roles of people and employees within an organisation are ever changing. Then human resource needs of a business such as a corner shop would be vastly different from the needs of an online business such as a clothing sales app. The move from physical business to cyber/online business has seen many setbacks and it can be argued that organisational behaviour still plays a pivotal role in organisation success through these changes. The innovative structure of the business Uber saw booming success in its first few years of operation. Minimising costs through making its drivers self- employed and not having to pay for physical premises meant that Uber became a very profitable business leader. However, the business has faced backlash recently due to disputes over its drivers not being paid minimum wage, holidays or sick pay. The ongoing disputes have had a big impact on Ubers customer confidence and led to them having their license revoked by London City Council due to concerns over driver and customer safety. This shows to us that Uber has failed to acknowledge the importance of understanding the behaviours within its organisation such as motivation of drivers, and its reputation within society. The difficulties Uber is currently facing could be argued to be the consequences of a failure to understand it’s organisational behaviour.
Employee Motivation is influenced by Organisational Behaviour. Taylor believed that workers had a ‘natural laziness’ (1911) and therefore paid workers piece rates in order to motivate them – this form of payment was deemed unsuccessful as workers felt it was unfair and unreasonable leading to more strikes and a fall in production due to motivation. Henry Ford scrapped this piece rate system in his factories paying all workers a 5 dollar day rate. This pay meant that staff were more motivated and many job seekers sought to work in Fords factories. Treating employees well and motivating them meant that Ford earned loyalty from his workers and gained respect from the public, in turn meaning his business saw great success. Employees are not only motivated by money, but by physiological and safety needs on Maslow’s hierarchy of needs – in organisations where employee working conditions are poor, employees will lose motivation which will cost the business through mistakes, staff turnover and idleness.
The different branches of organisational behaviour all tie together to form a pivotal part in determining the success of an organisation. As discussed, throughout history we have seen several instances where businesses have failed to get to grips with the fundamental values and behaviours of their organisation ultimately leading them to fail. Organisational Behaviour does not stand alone in influencing success or failure but plays hand in hand with several other factors that should also be considered. These factors include the current social climate an organisation is operating in. For example in today’s society there is an increase in concern for the environment, therefore businesses will see more success if they understand this trend and will benefit by implementing it into their own business culture and behaviours. Another important external influence of a businesses success that also must be considered in organisational behaviour is government policies especially concerning health and safety and employment laws – although theories such as Taylorism may be successful in improving efficiency, some aspects of the theory if taken literally may not fit into modern day regulation standards. I would conclude that the statement that ‘understanding organisational behaviour is important to organisational success’ is an understatement. I believe that understanding organisational behaviour is not only important but critical to organisational success as businesses that fail to understand the behaviours of its customers, employees and shareholders have never succeeded to their full potential.