SUBMITTED TO:

Dr. Faheem ul Islam

SUBMITTED BY:
Sohaib Azeem (191610042)

CONTEMPORARY
ISSUES IN
ORGANIZATIONAL
MANAGEMENT
Learning Diary
Table of Contents
Managing new organizational forms...........................................................................................................4
Introduction.............................................................................................................................................4
Traditional models of organization..........................................................................................................4
Charting organizational design................................................................................................................5
The functional structure......................................................................................................................5
The product-focused structure............................................................................................................5
The geographic structure.....................................................................................................................5
The market structure...........................................................................................................................5
Contingency models of organization.......................................................................................................5
Mechanistic and organic structures.....................................................................................................5
Matrix design.......................................................................................................................................5
The vertical-integration argument.......................................................................................................5
Alternative perspectives..........................................................................................................................6
Population ecology..............................................................................................................................6
Institutionalism....................................................................................................................................6
New organizational forms.......................................................................................................................6
Features of new organizational forms.................................................................................................6
Bureaucracy transformed........................................................................................................................7
Flat structures......................................................................................................................................7
Customer-centric structures................................................................................................................7
Designing for order..............................................................................................................................8
Self-organizing teams..........................................................................................................................8
Networks of organizations...................................................................................................................8
Virtual organizations............................................................................................................................8
The adoption of new organizational forms..............................................................................................8
Individual differences in personality, values and attitudes..........................................................................9
Introduction.............................................................................................................................................9
Personality...............................................................................................................................................9
What is personality?............................................................................................................................9
When is personality predictive of behavior?.......................................................................................9
Personality traits....................................................................................................................................10
 The ‘big five’ personality traits..........................................................................................................10
Myers-Briggs Type Indicator..............................................................................................................10
Locus of control.................................................................................................................................11
Self-monitoring..................................................................................................................................11
Individual values....................................................................................................................................11
What are values?...............................................................................................................................11
The effect of values...........................................................................................................................11
Type of values........................................................................................................................................12
Rokeach's Value Survey.....................................................................................................................12
Hofstede’s cultural dimensions.........................................................................................................12
Schwartz Value Circumflex................................................................................................................13
Spirituality at work............................................................................................................................13
Work attitudes...................................................................................................................................13
Knowledge management.......................................................................................................................14
System Development.........................................................................................................................15
Seven Levers of Knowledge Management.........................................................................................16
Common Misconceptions..................................................................................................................16
The difference of U.S. and CHINA in Knowledge management..........................................................18
Psychology & Sociology of Organizations..............................................................................................19
Introduction Developing-Approaches................................................................................................19
Early Writing on Sociology of Organizations......................................................................................19
Industrial Organizational Psychology.................................................................................................19
Organizational culture...........................................................................................................................20
Analytical Approaches to Cultural Factors.........................................................................................21
Maslow’s hierarchy of needs – Asia Equivalent.................................................................................21
Organizational Behavior........................................................................................................................21
Organizational Theory...........................................................................................................................21
Strategic Human Resource Management..............................................................................................21
Human Resource Management.............................................................................................................21
Human Resource Development.............................................................................................................22
Organization Development....................................................................................................................22
Challenges and Opportunities for OB................................................................................................22
Job Characteristic Model.......................................................................................................................22
Contemporary Issues in Strategic Management....................................................................................23
Looking inward..................................................................................................................................23
How Bad Management Causes Most of Your Organizational Problems................................................24
1) Turnover........................................................................................................................................24
2) Productivity...................................................................................................................................25
3) Process Management....................................................................................................................25
4) Making their Numbers...................................................................................................................25
5) Job Role Design..............................................................................................................................26
6) Leadership Pipelines......................................................................................................................26
7) Relationships with Customers.......................................................................................................27
8) Being more Innovative...................................................................................................................27
Manages are the part of the iceberg you don’t see...........................................................................28
Managing new organizational forms

Introduction
1. Organizational design is the most tangible aspect of management, because the design’s
structure has an objective reality that managers can see and operate on.
2. The mind-set that drives organizational design is structural thinking, which is characterized by
several assumptions including: –
– Structure delivers strategy: structure is rational, in that it responds to the most important
corporate objectives.
– The most important questions for managers are those concerning efficiency and
effectiveness.
– These questions are technical questions, and a well-designed organizational structure
systematically deploys the right information to the right problems to generate optimal
solutions.
– Managers have the greatest knowledge of management and those below them in the
hierarchy are the objects of management.
– Structure has an objective reality, which can be mapped, and generates outcomes that can
be predicted and measured.
– Because a clear structure makes key production relationships explicit, managers can monitor
the value added and reduce marginal costs.
 – Organizational design is the managerial tool to create structure. This chapter outlines
traditional models of design, which are standards that exist throughout the world. It then
looks at new trends in organizational design. Rather than replacing the traditional hierarchic
bureaucracy, these new models are being incorporated into traditional designs.

Traditional models of organization

1. The archetypal example of structural thinking is provided by Frederick Taylor’s scientific
management, which orders the activities of workers according to managerial design that created
optimal efficiency and effectiveness.
2. Henri Fayol presents principles for the best way to manage organizations, most of which are
either focused on the organizational design or have strong implications for the organizational
design. These principles included: –
– Specialization of labor
– Authority
– Discipline
– Unity of command
– Unity of direction
– Subordination of individual interest
– Fair remuneration
– Centralization
– Scalar chain (i.e. chain of command)
– Order
– Equity
– Stability of tenure
– Initiative and
– Esprit d’ corps

Charting organizational design

The functional structure
The functional structure coordinates different elements of the production process e.g. machining,
assembly, painting and finishing. The structure generates efficiency when products are few and focus on
a single market.

The product-focused structure

The product-focused structure is divided by product, so that divisions can focus on gathering market
intelligence on the market serviced by their product and customize the product to the needs of that
market.

The geographic structure

The geographic structure is commonly used when:

– Different regions require different marketing approaches; or

– If supplies of inputs vary by region.
The market structure
The market structure provides finer degrees of product differentiation to niche interests. Of all the fixed
structures, the market structures is said to be the structure that delivers the strongest customer focus.

Contingency models of organization

Mechanistic and organic structures
Contingency theory suggests that organizational structure should adapt to meet contingencies in the
marketplace. Mechanistic structures, which look like the traditional corporate bureaucracy, work best
when there is pressure to provide a high-quality, standardized product at the least cost. Organic
structure is more fluid, and relationships between parts change frequently. This structure is preferred
when there is a need for creative responses to needs that are constantly changing.

Matrix design
Matrix design cross cuts a divisionalised structure, by forming teams made up of individuals from
different divisions. The design is said to breakdown information soiling, while the team structure
provides the creativity, adaptability and problem-solving capacity of the organic structure.

The vertical-integration argument

1. The value of vertical integration is questioned in ‘Talking Point 1’ on p. 13. In managerial theory,
we tend to frame vertical integration as a means of ensuring more efficient coordination of
assets.
2. However, economic theory suggests that the coordination of resources is provided more
efficiently by the invisible hand of the market. Economists theories 'perfect markets', which are
defined as places where there are many buyers and many sellers and each has perfect
information about the products that are sold. In perfect markets, quality and process will be
determined by a customer’s needs and their willingness to pay. Both price and quality will be
optimized, because other sellers are competing for a customer’s attention.
3. Perfect markets don’t exist. But in relatively free markets, such as Australia and the USA, this
process should ensure that organizations focus their activity on those parts of production in
which they have a competitive advantage. It makes little rational sense to try to produce value in
parts of the value chain where you lack the necessary core competence. Therefore, people tend
to specialize in one area of the value chain, which they call their ‘core business ‘and contract out
their ‘non-core’ business.
4. The coordination argument for vertical integration is not rational in well-functioning markets.
Merger and acquisition activity is often better understood as a strategic attempt to control, or
even pervert the marketplace. A company may acquire a distribution channel to close out access
to competitors. If it can gain monopoly control of a vital distribution channel, losses made in
production might be recouped by charging high prices at the distribution channel.
5. This might occur if a software company, like Microsoft, could also gain control of the
infrastructure that delivers data, including the optic cables. This would be vertical integration,
but there is an important distinction to be made between vertical integration for the purposes
of more efficient control of production, and vertical integration to increase market dominance.
Alternative perspectives
Alternative perspectives question the degree to which organizations are designed by intelligent
architects, who implement their designs to help achieve specific strategic visions.

Population ecology
Population ecology is a perspective that argues that organizational design is slow to adapt to changing
conditions in the environment. In competitive environments, companies with poorly adapted designs go
out of business. The presence in a market of particular organizational designs is a result of natural
selection.

Institutionalism
Institutionalism argues that organizations in particular industries tend to have designs that mirror one
another. Rather than design a particular structure, managers use well known structures from one
industry to the next. Institutionalism predicts similarity rather than difference across organizations.

New organizational forms

Features of new organizational forms
Today, organizations are experimenting with a variety of new features that are generally designed to
enhance their competitiveness, with regard to cost, quality and customization. These features include: –

– Delayering
– Outsourcing and alliances
– Atomization
– Control without ownership
– Casualization of the work force
– Horizontal linkages
– Devolution and
– Faint boundary lines

Bureaucracy transformed
Some contemporary accounts of organizational structure depict the structure of the production process
rather than the organizational chart. They talk about organizations as having a front end, which services
customers, and a back end, which takes in supplies of inputs.

Flat structures
1. Flat structure involves reducing layers of management to flatten the organizational hierarchy.
Flat structures are supposed to assist communication and make savings in managerial salaries.
However, the effect is an increase the load on the control function of managers.
2. The expectations of managers in flattening exercises are questioned in the Critical Reflection'
piece on p. 21. The savings that are projected in any planning exercise, depend on the
assumptions that are made about cost structures in any particular case.
 3. 3To arrive at a result of 2 per cent saving, Lex Donaldson and Fred Hilmer assume that pay on
average makes up only 25 per cent of the cost structure, and that each layer in the hierarchy
earns 1.5 times that of the layer below.
4. They also do not make any allowances for the support structures for each individual manager
that could be liquidated with his/her departure: office space, computers, support staff etc. Now,
as any, or all of these factors rise, so too does the total saving.
5. In most industries, the cost of wages as a percentage of the total is more than 25 per cent. What
is the proportion of pay to total costs in your organization? Is the salary differential between
level that you would abolish and the one below more than 1.5 per cent? Could you make extra
savings in space and other expenses?
6. Hilmer & Donaldson argue that the 2 per cent cost benefit that their scenario projects is more
than offset by the difficulties that the remaining managers would incur trying to manage spans
of control that increase from 7 to 25.
7. Does your organization enjoy any or all of the following preconditions for a successful delayering
process? –
– More managers than the complexity of interrelated tasks require; –
– Control systems are sufficiently rigorous, or the work is ordered, predictable and routine; –
– Social stability within the wider organization; or –
– Workers are able to develop their own career structures to compensate for the lack of
explicit ‘promotional’ opportunities.

Customer-centric structures
1. As the name suggests, the key design question is what structures can maximize customer
participation in the delivery of a good or service. Some organizations nurture customer
communities within their walls. These communities help the organization define the services
that they offer.
2. Another customer-centric structure is the ‘solutions delivery unit,’ which packages goods and
services from a variety of providers to meet sophisticated consumer demands.

Designing for order

1. Chaos theory provides some explanation of the constantly changing and unpredictable nature of
organizational life. It also suggests that life can be ordered by management, even if they cannot
hope to micro manage every decision and interaction.
2. Examples of such organizations include those that are designed to be a collection of
hierarchically ordered ‘fractals,’ each fractal is a mirror of the higher level’s overall shape, but
operates in its own characteristic fashion.

Self-organizing teams
Self-organizing teams take complete responsibility for the production of a specific range of goods and/or
services. Many self-managing teams are self-contained in that they have all the skills required to
produce their output.

Networks of organizations
1. Many organizations have been able to increase their capacity through forming alliances with
other organizations. As these alliances become more complex, we begin to think of a portfolio of
organizations operating to deliver particular products.
 2. Such organizations cannot be managed through traditional command structures. The
components of the network have sovereignty over their own activities. Therefore, they must be
managed by agreement.

Virtual organizations
Virtual organizations are networks that rely on electronic communication rather than hierarchic control
to provide coordination. In the case of a network organization, the partners may become so well
integrated that they give the appearance of being a single, unified organization.

The adoption of new organizational forms

1. Empirical studies into the actual implementation of these new organizational forms show as low
drift towards more widespread adoption. However, this adoption does not signal the end of
hierarchy or centralized control. Mostly, new organizational forms have been incorporated into
more traditional structures.
2. There are a number of imperatives and principles that are currently driving thinking about new
organizational design, including: –
– Hierarchy is here to stay
– The need for speed
– Creating internal networks through discrete business sub-units
– Designing internal competition
– Building arenas for internal competition
– Customizing distribution
– Integrating support functions according to contingencies
– Developing interagency performance information

Individual differences in personality, values and attitudes

Introduction
1. Organizations are interested in employees who are passionate, self-motivated and committed to
the organization and the work that it does.
2. This chapter distinguishes between personality, values and attitudes, and their role in individual
differences in contemporary organizations.
3. Understanding individual differences is critical for selecting and retaining employees.
4. Given it is not possible to provide a comprehensive review of all individual differences, this
chapter primarily focuses on personality, values and attitudes, because these variables influence
important organizational outcomes.
5. Job satisfaction and organizational commitment constitute two important areas of work
attitudes.

Personality
 1. Personality has an important role in determining individual’s values and attitudes.
2. Understanding what motivates people to do what they do requires an understanding of
personality and its influence on behavior.
3. Four personality temperaments (based on bodily fluids) identified by Hypocrites include:
sanguine (blood), melancholic (black bile), choleric (yellow bile) and phlegmatic (phlegm).
4. There are well-constructed measures of normal personality that generally do not have an
adverse impact on job applicants from minority groups.

What is personality?
1. The ‘mask definition’ of personality describes personality as the person’s outward superficial
appearance; how their behavior is described by those around them, their interpersonal
characteristics, or their reputation.
2. The ‘substance definition’ of personality emphasizes the inner nature or substance of the
person, including their thoughts, needs, values and temperaments.
3. Personality traits are generally stable and, to some degree innate, whereas values are subjective
judgments that are partly learnt through interaction with the environment.
4. Personality is both genetically inherited, and acquired through social interaction in early
childhood.
5. Based on Darwin’s theory of natural selection, evolutionary psychologists argue that humans
have acquired specific ways of thinking and feeling over the centuries, which influences how
humans behave and organize themselves.

When is personality predictive of behavior?

1. Personality is generally more likely to influence behavior in ‘weak situations’.
2. A weak situation is characterized by ambiguity about the meaning of the situation and the
appropriateness of various responses.
3. In a weak situation, there is generally an absence of a clear response to a particular situation,
and individuals’ abilities to respond may vary.
4. Organizations are generally considered to be ‘strong situations’, where situational cues induce
uniform expectancies regarding appropriate response pattern and provide adequate incentives
for the performance of that response pattern.
5. Due to strong situational factors, individual differences are more likely to be suppressed in a
particular functional role in organizations (such as customer-service jobs, which are so tightly
scripted that there is little room for individual personal differences).
6. The importance of individual differences, rather than the situational factors, in determining
behaviors in organizations continues to be a vigorously debated. This person-situation debate
has been highlighted in ‘Talking Point 1’ on p. 39, which questioning the rationale of personality
testing to select employees in organizations.

Personality traits
Four different frameworks have been discussed to describe various personality traits. The frameworks
include: the ‘big five’ personality traits, Myers-Briggs Type Indicator, locus of control and self-
monitoring.
The ‘big five’ personality traits
1. The ‘big five’ or ‘five-factor’ model is the most widely accepted framework to describe
personality traits.
2. The model captures the key aspects of personality in five dimensions: extroversion,
agreeableness, conscientiousness, openness to experience and emotional stability.
3. There is a growing need in today’s workplaces to understand better the effects of personality on
performance in jobs involving interpersonal interactions such as service-sector employment.
4. There is a growing body of evidence that shows that differences in the level of job satisfaction
between employees is also due, in part, to the influence of personality traits such as the ‘big
five’.

Myers-Briggs Type Indicator

1. The Myers-Briggs Type Indicator (MBTI) measures a person’s preference for evaluating and
processing information based on four personality traits: extroversion/introversion,
sensing/intuition, thinking/feeling, and judging/perceiving as described in Exhibit 2.2.
2. The MBTI is widely used for developmental purposes in organizations including team- building,
executive and management coaching, decision-making, communications training, leadership
development, and conflict resolution.
3. Knowledge of MBTI can help teams identify the contribution of each team member to the task,
as well as reduce conflict because members come to accept their differences as beneficial,
rather than divisive.
4. The instrument is, however, generally not considered to be suitable for use in selecting job
applicants.
5. The instrument has also been criticized due to its potential to stereotype people, and that it
might not protect people’s privacy. Rather than assisting people to understand their differences,
such tools can, in unqualified hands, lead to categorization and discrimination in areas such as
selection and promotion.

Locus of control
1. ‘Locus of control’ refers to people’s belief about the amount of control they have over their
lives.
2. Individuals with an external locus of control believe that what happens to them is beyond their
control and is determined by environmental forces, such as fate or bad luck.
3. Individuals with an internal locus of control believe that events are controlled by themselves and
that they control their own destiny.

Self-monitoring
Employees who are high in self-monitoring tend to be more effective leaders because their social
perceptiveness and behavioral flexibility enables them to select the leadership approach that best
matches the situation.

Individuals who are low in self-monitoring are more likely to display their personal characteristics and
moods, and so their behavior is more likely to be consistent from one situation to the next.

Individual values
 1. Values are at the core of our personality, influencing the choices we make, the people we trust,
the appeals we respond to, and the way we invest our time and energy.’
2. When an individual’s personal values are aligned with company values their behavior and
actions will reflect the goals of the organization.
3. Globalization has also increased the need for a better understanding of differences and
similarities in cultural values.

What are values?

1. A value is a subjective judgment that people make about what is right, good, or desirable in a
variety of situations – how they ‘ought’ or ‘ought not’ to behave.
2. Individual values are also learnt early in life from our socialization and interaction with
significant others, including our parents, extended family, friends, teachers and peers.
3. A value is therefore (a) a belief, (b) about desirable end-states or ways of behaving, (c)
transcends specific situations, (d) guides selection or evaluation of people and events; and(d) is
ordered by importance, relative to other values to form a system of values or a value hierarchy.
4. It is also important to distinguish between espoused values and values that are in-use or
enacted.
5. Because values are socially desirable, individuals and organizations often engage in impression
management by espousing values they want others to believe they hold.
6. The values that an individual or an organization actually use to guide their decisions and
behavior represent their theories-in-use, or their enacted values.
7. Discuss ‘Critical Reflection’ on p. 45 to discuss the conditions under which a person might
change his or her values.

The effect of values

1. Exhibit 2.3 offers two main ways, in which values are believed to influence outcomes.
2. Firstly, individual values can directly affect outcomes such as attitudes, decision-making and
performance.
3. Secondly, values are also influential when there is alignment, or congruence between an
individual’s values and the values of an ‘other’, such as the leader, a work team, or the
organization itself.
4. Employees who believe their values are congruent with the organizations are more likely to
engage in organizational citizenship behaviors, to display positive work attitudes, such as
improved job satisfaction and to be more committed to the organization

Type of values
1. Various typologies have been developed in order to understand the nature of individual values.
2. Three of the most commonly used values typologies are Rokeach’s Value Survey, Hofstede’s
cultural dimensions, and the Schwartz Value Circumplex.

Rokeach's Value Survey

1. The Rokeach Value Survey (RVS) includes 36 values subdivided into eighteen terminal and
eighteen instrumental values (see Exhibit 2.4).
 2. Terminal values are the desired end-states that a person strives to achieve such as ‘a
comfortable life’, ‘freedom’, or ‘wisdom’.
3. Instrumental values are the modes of behavior or the means used to achieve desired end-states,
such as ‘honesty’ and ‘helpfulness’. Instrumental values are commonly used to describe an
organization’s culture.

Hofstede’s cultural dimensions

1. The most common framework used to understand differences in national cultural values. The
framework is based on any similarities found by Geert Hofstede in the underlying value
dimensions of employees in different countries.
2. The four cultural dimensions originally identified by Hofstede, and a fifth dimension later
identified with Michael Bond (1989), are summarized in Exhibit 2.5, including power distance,
individualism/collectivism, achievement/nurturing, uncertainty avoidance, long-term/short-
term orientation.
3. Exhibit 2.6 gives rankings for selected countries, including Australia, based on their score for
each of the five cultural dimensions identified by Hofstede.
4. The study has been criticized on the grounds that it is methodologically flawed, and due to some
concerns about the representativeness of the sample. Moreover, the findings are now more
than 25-years old, and that significant world events have occurred that may have influenced
underlying cultural values.
5. The Global Leadership and Organizational Behavior Effectiveness (GLOBE) project team,
collected data on cultural values and leadership attributes from 18,000 middle managers located
in 62 countries, which supports the validity of Hofstede’s five original cultural dimensions.
6. The GLOBE research team also identified an additional four cultural dimensions in their study:
in-group collectivism, performance orientation, gender differentiation, and humane orientation
(see the bottom half of Exhibit 2.5).

Schwartz Value Circumflex

1. Values are derived from three universal human requirements: biological needs, social
interaction requisites and the survival and welfare needs of groups.
2. As these values derive from universal human needs they should apply to people from all
cultures.
3. The resulting Circumflex (see Exhibit 2.7) distinguishes between ten specific value types or
motivational domains (described in Exhibit 2.8). We can classify virtually all of the values
identified in other typologies into one of these ten motivational domains.
4. The Schwartz Value Circumflex is actually more than a typology, because it suggests
relationships among values, as shown by its circular structure and opposing dimensions.
5. The two opposing dimensions are openness to change versus conservation (whether the values
motivate behavior along unpredictable, versus predictable paths) and self-enhancement versus
self-transcendence (whether the values motivate self-interested actions or promote the welfare
of others).

Spirituality at work
1. Spirituality, encompasses the values of ‘living a spiritual life, meaning or purpose in life, inner
harmony and detachment from worldly concerns’ (Schwartz 1992: 61).
 2. Although spirituality has always been important to human beings, its association with the
workplace is a relatively recent phenomenon.
3. It remains to be seen whether the incorporation of spiritual values in the workplace delivers any
permanent or measurable long-term benefits to the organization.
4. A major concern about spirituality at work centers on whether it violates Western liberal values,
such as freedom of conscious and individual rights. It may also result in greater divisiveness,
because of the potential for coercion and favoritism.
5. Discuss ‘Critical Reflection’ on p. 53: Do spiritual values have a role in the workplace?

Work attitudes
1. Attitudes (a) are evaluative statements – either favorable or unfavorable – about people, objects
or events; (b) are represented in memory; and (c) have cognitive, affective, and behavioral
components.
2. Attitudes differ from values in that values represent global beliefs that influence behavior across
all situations, while attitudes relate only to behavior directed towards specific persons, objects
or events.
3. Work attitudes are believed to influence important job-related behaviors, including
performance, turnover, absenteeism and organizational citizenship behaviors.
4. Values and beliefs have an important influence on how a person feels about their job (see
Exhibit 2.9).
5. Cognitive-dissonance theory proposes that when people feel an inconsistency between two or
more attitudes, or between their beliefs, feelings and behavior, they will be motivated to reduce
the dissonance and bring about consistency
Knowledge management
Knowledge Management is the explicit and systematic management of vital knowledge - and its
associated processes of creation, organization, diffusion, use and exploitation.
System Development
Seven Levers of Knowledge Management
r Customer Knowledge - the most vital knowledge

r Knowledge in Products - add value

r Knowledge in People - but people ‘walk’

r Knowledge in Processes - know-how when needed

r Organizational Memory - do we know what we know?

r Knowledge in Relationships - richness and depth

r Knowledge Assets - intellectual capital

Common Misconceptions
Smaller companies, who often claim that they can’t afford to undertake KM activities, are wrong on two
counts!
 1. Knowledge is just as important, if not more so, to a smaller company trying to compete in the
rapidly changing global marketplace. Smaller companies must capture, assimilate, and capitalize
on every advantage they can find, including KNOWLEDGE
2. Smaller firms have the advantages from Culture and Organizational structure in place that is
much more conducive to implementing knowledge management effort such as type of
environment, which is predicated more on social relationship, familiarity and trust between
employees

A little Knowledge that acts is worth more than much knowledge that is idle. (Kahlil Gibran)

r Cultural Factors Impacting knowledge Management

r Internationalization creates a need to know how peoples in different countries to apply

knowledge management.

r People from the United States and China have a distinctive prevailing decision style that reflects
differences in cultural values

r Theory A, Theory J, Theory Z

The difference of American and Chinese in personal character

The difference of U.S. and CHINA in Knowledge management
Psychology & Sociology of Organizations
Introduction Developing-Approaches

The study of organizations varies within sociology, between academic disciplines, and across the globe,
limiting in-depth communication. Studies of political parties by political scientists, private-sector firms by
economists, and employees by industrial psychologists and sociologists within the United States and
abroad may claim to predate the sociology of organizations. However, according to Scott (2003:9), there
are three defining features of the sociology of organizations: (1) Examination is empirical, not normative;
(2) organization is considered sui generis, not the aggregate of its members; and (3) an effort is made to
generalize the analysis beyond analysis of the specific form of organization studied. These criteria
became institutionalized after the 1960s and will be used to explore its refracted development.

Early Writing on Sociology of Organizations

The Pyramids at Giza, the Roman conquests, and the spread of Christianity were accomplished through
organizations and illustrate how the issues of organization stretch back in time. These large-scale
organizational efforts represented attempts to grapple with the ambitions and stubborn facts of their
day. The stability of societies was at stake, and their survival attracted powerful intellectual
contemplation. As James March (1965) comments, “There is scarcely a major philosopher, historian, or
biographer who has overlooked the management and perversities of organization. The church, the
army, and the state had to be managed” (p. xi). After all, religions passed into obscurity, armies were
defeated, and states fell. Impressive as an intellectual fascination and operational challenge, the term
bureaucracy appears rather late in Western history.

The concept of bureaucracy appeared in the eighteenth century as a semantic partitioning of society and
a new element in the stratification of society. The French term bureau, understood as table, took on the
additional meaning of where officials worked. Bureaucracy represented a new group of rulers and a new
method of government in contrast to monarchy, aristocracy, and democracy. The concept of
bureaucracy began to refer to power over the population. By the nineteenth century, the theme of
bureaucracy as a threat to democracy developed into ideas that democracy was the fundamental
corrective to the routine, inflexibility, and power that came to characterize bureaucracy.

Industrial Organizational Psychology

In the United Kingdom, industrial and organizational psychologists are referred to as occupational
psychologists. Occupational psychology in the UK is one of nine "protected titles" within the profession
"practitioner psychologist" regulated by the Health and Care Professions Council. In the UK, graduate
programs in psychology, including occupational psychology, are accredited by the British Psychological
Society.
In Australia, the title organizational psychologist is protected by law, and regulated by the Australian
Health Practitioner Regulation Agency (AHPRA). Organizational psychology is one of nine areas of
specialist endorsement for psychology practice in Australia
In Europe, someone with a specialist EuroPsy Certificate in Work and Organisational Psychology is a fully
qualified psychologist and a specialist in the work psychology field. Industrial and organizational
psychologists reaching the EuroPsy standard are recorded in the Register of European Psychologists and
industrial and organizational psychology is one of the three main psychology specializations in Europe.
In South Africa, industrial psychology is a registration category for the profession of psychologist as
regulated by the Health Professions Council of South Africa (HPCSA).

Organizational culture

While there is no universal definition for organizational culture, a collective understanding shares the
following assumptions:
... that they are related to history and tradition, have some depth, are difficult to grasp and account for,
and must be interpreted; that they are collective and shared by members of groups and primarily
ideational in character, having to do with values, understandings, beliefs, knowledge, and other
intangibles; and that they are holistic and subjective rather than strictly rational and analytical.
Organizational culture has been shown to affect important organizational outcomes such as
performance, attraction, recruitment, retention, employee satisfaction, and employee well-being. There
are three levels of organizational culture: artifacts, shared values, and basic beliefs and
assumptions. Artifacts comprise the physical components of the organization that relay cultural
meaning. Shared values are individuals' preferences regarding certain aspects of the organization's
culture (e.g., loyalty, customer service). Basic beliefs and assumptions include individuals' impressions
about the trustworthiness and supportiveness of an organization, and are often deeply ingrained within
the organization's culture.
In addition to an overall culture, organizations also have subcultures Subcultures can be departmental
(e.g. different work units) or defined by geographical distinction. While there is no single "type" of
organizational culture, some researchers have developed models to describe different organizational
cultures.
Analytical Approaches to Cultural Factors
Maslow’s hierarchy of needs – Asia Equivalent

Organizational Behavior
Is the micro approach to organizations? It focuses on the individuals within organizations as the relevant
units of analysis. It examines concepts such as motivation, leadership style, and personality and is
concerned with cognitive and emotional differences among people within organizations. Simply it is
“The psychology of Organizations”.

Organizational Theory
Is the macro approach to organizations? It analyzes the whole organization as a unit. Organization
Theory is concerned with people aggregated into departments and organizations and with the
differences in structure and behavior at the organization level analysis. Simply it is “The sociology of
Organizations”.

Strategic Human Resource Management

Linking HRM with strategic goals and objectives to improve business performance and develop
organizational cultures fostering innovation and flexibility.

Human Resource Management

The policies and practices involved in carrying out the “people” or human resource aspects of a
management position, including recruiting, screening, training, rewarding, and appraising.

Human Resource Development

Human Resource Development (HRD) is the framework for helping employees develop their personal
and organizational skills, knowledge, and abilities.

Organization Development
Long-range efforts and programs aimed at improving an organization’s ability to survive by changing
problem-solving and renewal processes.

Change management is a structured approach to shifting/transitioning individuals, teams, and

organization from a current state to a desired future state. It is an organizational process aimed at
empowering employees to accept and embrace changes in their current business environment.

Challenges and Opportunities for OB

• Responding to Globalization
– Increased foreign assignments
– Working with people from different cultures
– Coping with anti-capitalism criticism
– Overseeing movement of jobs to countries with low-cost labor
– Managing people during the war on terror.
• Managing Workforce Diversity
– Embracing diversity
– Changing demographics
– Implications for managers
– Recognizing and responding to differences
• Improving Quality and Productivity
– Quality management (QM)
– Process reengineering
• Responding to the Labor Shortage
– Changing work force demographics
– Fewer skilled laborers
– Early retirements and older workers
• Improving Customer Service
– Increased expectation of service quality
– Customer-responsive cultures
• Improving People Skills
• Empowering People
• Stimulating Innovation and Change
• Working in Networked Organizations
• Helping Employees Balance Work/Life Conflicts
• Improving Ethical Behavior
Job Characteristic Model

Contemporary Issues in Strategic Management

Most companies have some key characteristics that make them believe they’re different: a combination
of their business model, mission, product, and other factors. But when you look inside these companies,
quite a bit about them is the same, too: structure, job titles, common challenges, etc.

Despite the many differences in execution and strategy, most organizational problems in particular are
the same across companies.

Looking inward

Research from Chris Zook and James Allen of Bain, (authors of The Founder’s Mentality) has shown that
94% of business challenges are internal. When founders and CEOs are asked what their biggest
challenge is, they typically fall among this set:

• Productivity

• Process management

• Shipping times/revenue cycles

• Job role design

• People and leadership pipelines

• Relationships with customers

• The need to be more innovative

Notice, almost all of them are completely under a company’s control. However, taken as individual
items, this list is pretty daunting. Where do you even begin?

Fortunately, there’s actually a relatively simple place to begin to help you alleviate many of these major
organizational problems at once: begin with a focus on improving your managers.

How Bad Management Causes Most of Your Organizational

Problems
You can run down the list of all the organizational problems on the mind of senior leaders and see that
the fingerprints of managers are all over them.

Over and over, it’s the actions (or inaction) of managers that combine to be the hidden, root cause of
these major, valid concerns.

Let’s take a closer look at them.

1) Turnover

It starts with one of the biggest, most painful organizational problems that can plague a company:
turnover.

When turnover strikes, unfortunately the problem is usually mis-diagnosed. Multiple studies show that
managers falsely attribute employee turnover to either the quality of the job offer, or claim the
employee wasn’t a fit anyways.

The truth shows something quite different.

Most research done directly with employees who recently left their job shows an overwhelming
majority leave because of their manager. This can be because of a direct problem with their manager
(50% of Americans have left a job for this reason), or a variety of secondary reasons that are also caused
by managers.

Employee turnover is a high cost at every organization, with The Center for American Progress even
indicating it costs an organization as much as 213% of the salary for highly-trained employees.

Losing good people will cause any leader to lose sleep at night, and bad managers are the biggest reason
it happens.
2) Productivity

No one has a bigger impact on team effectiveness than the manager of that team.

According to Gallup’s research, managers account for 70% of the variance in employee engagement.
This is huge when you consider the relationship between engagement and a variety of benefits:

Meanwhile, research from Evolv and Wharton (UPenn) has shown the absolute largest variance in
predicting employee performance is how effective their manager is.

Despite these facts, most employees do not have an effective manager helping them perform at a high
level.

Only about 21% of employees feel they’re managed in a motivating way, and only 34% of managers can
even name the strengths of their employees.

It’s hard to be productive if your manager doesn’t take advantage of your strengths, nor do the things
that make you engaged at work.

3) Process Management

Managers determine the best process for their teams. Whether by building consensus or dictating, the
decisions they make determine what and how things get done.

Good managers do this by enabling and empowering the strengths of their team. In First, Break All The
Rules, Marcus Buckingham shows through a variety of workplace research that focusing on the strengths
of your team is hugely beneficial:

“People who focus on their strengths every day are 6 times more likely to be engaged in their jobs, more
productive and more likely to say they have an excellent quality of life.”

Unfortunately, your bad managers do the opposite. They use politics and play favorites to assign work.
They add heavy process and bottleneck decision making through them.

This slows down decision-making, product releases, customer issue resolutions, addressing PR/social
media postings in times of crisis, and other issues teams tackle every day. Because of this, these bad
managers frustrate their teams and hurt the company’s reputation one slow to resolve issue at a time.

4) Making their Numbers

The philosophy, “What’s measured is what matters” has many benefits when running an organization; it
brings focus, creates clarity for evaluating performance, and can get large organizations moving in one
general direction. However, it’s far from perfect.

It can reward terrible behaviors that happen to lead to short term gains. Look no further than recent
scandals in Silicon Valley, where great numbers led to overlooking increasingly bad behavior.
Another drawback is that it misses tracking and rewarding things like soft skills that are often the root
cause of missed targets or success.

For example, a manager that communicates terribly will often have a team that misses targets. The
tracking method most companies use will reveal the missed targets, but not the poor communication.

As a result, the poor communication is likely to continue. Only once the missed targets lead to more
dramatic changes to the team or manager will things improve.

While a focus on numbers brings many benefits, numbers alone do not tell the whole story. If not
investigated, the root causes can be missed and never fixed.

5) Job Role Design

They’re called, “hiring managers” for a reason. The best managers understand what headcount they
need, have detailed conversations with their top-of-funnel recruiters (HR) about what they’re looking
for, and then bring in finalists to interact with the pre-existing team.

The worst managers define the need for headcount around how busy they are (as opposed to which role
would add the most value), barely speak to HR, and then complain when the process doesn’t unfold as
they’d hope.

“Total Motivation” creator Lindsay McGregor has noted that a clear job role can be almost 2x more
important than compensation in determining productive motivation among employees once you hire
and onboard them.

Teaching your managers to define job roles well scales a solution to this problem. If every team finds
good people for the right roles, it’s one less organizational problem to worry about.

6) Leadership Pipelines

Across the last three years, Josh Bersin has repeatedly found leadership pipelines to be a top concern of
executives. For those companies that invest in addressing this issue, he’s found they experience
significantly higher long-term revenue per employee and gross profit margin.

Despite these benefits, leadership pipelines continue to be an unresolved problem for many companies.

Employee development begins at the managerial level. Yet, many managers aren’t doing it. There are
plenty of excuses: other tasks piling up, demands to hit numbers, and many other responsibilities.
Meanwhile, it continues to be the #1 perk people want at work, and look for in future jobs in study after
study.

When you don’t develop your talent pipeline, you will lack the leaders who can drive great performance
of their teams. This then manifests itself in a variety of organizational problems (see the Peter Principle)
where people are not ready for their new responsibilities.
A lack of investment in developing people for their next role comes back to bite companies when they
look to promote from within and fill roles as they grow.

7) Relationships with Customers

Managers set the tone for how their teams treat customers. There is nothing more powerful than
leadership by example.

If they’re careful and diligent, their team will be, too.

If they’re curt and brief, unfortunately, so will their team.

This can be extremely costly. However, many of these costs are hidden from senior leaders. A few stats
from HelpScout paint a stark picture:

• How many bad experiences are happening you don’t know about? A typical business hears from
4% of its dissatisfied customers.

• How much are unhappy customers not spending with you? On average, loyal customers are
worth up to 10 times as much as their first purchase.

• Are poor customer experiences tolerated? News of bad customer service reaches more than
twice as many ears as praise for a good service experience.

Manager’s show what’s acceptable based on what they fix and what they don’t. If they’re not taking
care of customers well, neither will their teams. This can cause huge problems for senior leaders, when
bad customer experiences compound to cost you major clients.

8) Being more Innovative

Every company claims to be innovative, and wants to be thought of as an industry leader. Yet, many fail
to get beyond buzzwords and marketing claims.

The best ideas are often surfaced from front-line staff; they are closest to the pain points and needs of
your customer. Unfortunately, many companies fail to tap into this great source.

One company that has succeeded in this area is Toyota. Listening to front line employees is a key part of
their “Total Production System.” Managers are trained to listen to and help develop employee ideas, not
come up with their own.

Unfortunately, Justin Berg’s research out of Stanford shows that managers are typically poor judges of
new ideas. Not every idea will be innovative, and managers need to learn to say no, but the wrong
managerial gatekeepers prevent the creation of new revenue streams when a good idea isn’t given the
light of day.
Even worse, if managers take credit for their team’s ideas, they are discouraging them from coming to
them with future ideas. Yet, that’s too often what’s happening. Bamboo HR’s study found it’s the #1
complaint of employees about their boss.

Good managers listen to their team’s ideas and give them credit when due. If a lack of innovation is one
of your organizational problems, look no further than your managers who are stifling innovation on their
teams.

Manages are the part of the iceberg you don’t see.

Most areas of business (and life) have an iceberg analogy; what you see is often a small part of a bigger
problem. What the crew of the Titanic didn’t see was the part of the iceberg that ripped the fatal hole in
the ship.

Bad management is the hidden part of the iceberg for organizational problems. It’s hard to directly track
someone being a bad manager on a balance sheet, unless they miss numbers. Yet, there are many ways
we’ve discussed today they can still cause costly problems despite hitting numbers in the short term.

Fixing organizational problems are never easy, but starting by improving your managers can have a
major impact on most of them. This is the difference between treating problems at the surface and
getting to the root cause.