Student ID: 94335-17-07

Organizational
Behaviour
09-Dec-2020
 Case Study
Question 1

5 Key People Issues that Xavier Santos needs to address are as below:

a) Organizational Culture
b) Leadership
c) Employee Motivation
d) Job Satisfaction
e) Performance Management

Let’s start off by defining the Organizational Culture.

Organizational culture is defined as the way of life of the organization and can evolve naturally
or be developed intentionally to reflect the strategy of the organization. The organizational
culture is usually pushed forward by the Chief Executive Officer (CEO) or the founder of the
organizational.

Organizational culture is maintained through the use of the HOME principle where –

H= History. New recruits should be given a brief explanation of the company and its members
who managed to meet the company’s strategic vision and goals.

O = Oneness. Shared vision and values

M = Membership. Relates to effective internal communication and willingness of employees to

expand time on behalf of the organization and spread culture to newly recruited employees.

E = Exchange. Exchange of information regarding trainings, communication and development or

company goals of objectives.

When So Fresh and Cadabra has merged, this HOME principles seems to be shattered as the two
companies had different organizational cultures. So Fresh was about personal touch,
empowering individual stores and the employees. Their way of management was decentralized
and they focus on delivering high quality, healthy and local foods. Whereas, Cadabra was all
about being fast, cheap and efficient, and enforces strict employee disciples and conduct cost
saving exercise to pass on to the customers. A strong culture is not always a proven support to
competitive advantage. A strong, change resistant culture may impede growth, earnings and
competitiveness as well.

Another issue to solve is leadership. Leadership is a process of influence where an individual

guides, directs and channels the behaviours of others. There are different leadership forms:
  Autocratic – Leader is bullish and doesn’t consult team in decision making. This is the
challenges that So Fresh employees are facing after the merger because they are not
being consulted in the decision making.
 Democratic – Leaders delegates and involves others in the decision making. In the case of
So Fresh, this was their leadership style before the merger.
 Laissez-Faire – Leaders are indifferent and hangs in between both approaches.

There are different leadership approaches also.

(1) Trait Approach: Here, the leader is believed to be born with innate capabilities, attributes,
traits eg. The leader is believed to have logical thinking, persistence, empowerment,
achievement-oriented and self-control.
(2) Behavioral Approach: This is the theory that leaders exhibit certain behaviour in all
circumstances.
(3) Situational leadership: This theory postulates that leaders exhibit different attributes
based on situations that they are faced with. This approach attempts to reduce casual
ambiguity of leadership behavioural outcomes.

Situational leadership is further differentiated to two different theories.

 Fiedler’s Contingency Theory: This theory postulates that leadership actions are
“contingent” on favourable or unfavourableness of the situation. Based on this theory,
there are two types of leaders. (i) task oriented and (ii) relationship oriented.

Task oriented leaders are best fit for situations with high favourableness or high
unfavourableness. They don’t show too much empathy. Such is the current leadership of
Cadabra after the merger.

Relationship oriented: This is when a leader exhibits empathy, supportiveness in finding

team to success. This leadership style is desirable when the team tasks are set out clearly.
This is the type of leadership that Go Fresh was oriented to, and this needs to be
continued.

 House’s Path-Goal Theory: This theory establishes a clear path between performance and
reward. It represents a clear-line of sight between the employee effort, performance and
reward.

A leader can use the following to achieve this:

Directive Approach > planning, setting performance standards, clarifying work

expectations and giving instructions.
 Supportive Approach > empathy and compassion

Participative Approach > empowering subordinates by using their ideas in problem

solving

Achievement-oriented Approach > delegation of authority and setting tasks that enhance
employee’s skillsets.

The path-goal theory focuses on two aspects of the leadership situation: (i) it looks at the
subordinate’s task abilities and needs for achievement (ii) it looks at the environmental
factors of task clarity, routineness & challenge. The leader must then match his behaviour
to the interplay of sub-ordinate characteristics and environmental factors.

Another challenge that Go Fresh is facing is relating to employees motivation. There are two
types of motivation theories: content theories and process theories.

A content theory of motivation specifies personality factors and human needs which triggers
work-related effort so it answers the question: “what specific needs cause motivation?”

A process theory of motivation explains how behaviour is stimulated, directed, sustained or

stopped. Process theories introduce the importance of human percepts of environments in
motivation. Both types of motivation theories are helpful to manage levels of motivation.

The first content theory of motivation is Maslow’s Hierarchy of needs which are as follows:

1. Physiological needs – most basic – food, water, air, or the basic wage to be able to secure
these.
2. Safety/Security Needs – a safe dry place to live or a safe working environment
3. Social interaction – friendships, relationships, love or work colleagues to interact with.
4. Self-esteem – valuing ourselves and recognition by others.
5. Self-actualisation – reaching your full potential; such as gaining a qualification, promotion

The second content theory is Herzberge’s Two Factor Theory or the Motivator-Hygiene Theory.
It is based on two factors that needs to be met in order for an employee to be motivated. They
are hygiene factors (extrinsic rewards such as pay, working conditions, good supervisors) and
motivators (intrinsic rewards such as pride in work, satisfaction with tasks completed, personal
growth at work).

Go Fresh employees are feeling demotivated due to uncertainties related to wages, insurance
and job security. They used to be proud working for Go Fresh, but ever since the changes
happened, they feel that they are not being valued anymore.
Job Satisfaction is also a key work attitude that governs the perception of work events. It involves
5 facets of satisfaction:

(1) Satisfaction with pay

(2) Satisfaction with co-workers
(3) Satisfaction with promotion
(4) Satisfaction with work
(5) Satisfaction with supervisers.

Job satisfaction is determined by individual and organizational determinants. Individual

determinants include years in career and expectation. For example, one employee of So Fresh
has been working for 15 years, and for him, it became much more than a job. So he was
dissatisfied when the organization changed.

Organizational determinants of the job satisfaction include: job clarity, job challenge, rewards
and supervisor. The current problem that So Fresh faces after the merger is there was no job
clarity, for example: they were unclear about the scorecards that rates their performance which
makes them nervous about their job security.

Another issue that So Fresh needs to solve is regarding performance appraisal. Performance
appraisal is the quality and quantitative measures of work done by the employees. It is a great
way of creating clear line of sight for the employees. A key driver is the creation of goals, typically
using the SMART principle (Specific, Measurable, Achievable, Resource-based, Time Specific). The
lends itself well to Management by Objective (MBO). MBO follows the steps below to clearly
outline the requirement of employees.

(1) Analyze the mix of people, job roles within the business
(2) Plan the strategy, goals, training and communication plans
(3) Define the employees’s jobs in terms of content, authority and responsibility
(4) Articulate goal difficulty, clarity, numbers and feedback
(5) Mutual agreement about goals, methods and time frame
(6) Informal review – review of goals, achievement, methods and probable rewards and
revisions of goals and methods if necessary
(7) Formal review and distributes rewards.

These are some of the issues that needs to be addressed and details of the suggestions will follow
in No. 2.
Question 2

Regarding to the issues identified above, the biggest issue that was found was how the merger
could have been better handled. Firms evolve and the changes are often economic necessities,
such as in the merging of So Fresh and Cadabra. The way the changes are implemented raises or
dashes the hopes of employees and retains or drives away customers or investors.

Organizations have to change due to task environment risks to the firm:

(1) Environmental complexity: variety & number of external agents that can affect the firm
(2) Environmental change: stability of the external agents

Planned change is a generalized process that differs from specific techniques of organizational
development. Successful organizational programmes of planned change are holistic, detailed,
integrated, often widespread and driven by periodic data gathering and measurement of results.
It seems that a planned change was missing when So Fresh and Cadabra merged. Thus, the
employees of former So Fresh was so bewildered by the changes. So, in order for the success of
the merger, the Planned Change Process needs to be implemented.

The Planned Change Process improves 3 distinct phases:

1. Unfreezing
The firm recognizes the need for change. When both management and employees realize
they are dissatisfied with the old culture and processes in the organization. Unfreezing
broadens and spread through the firm when a large percentage of the workforce agrees
that it is not profitable to continue with things the way they’ve always done.
2. Changing
Action plans that address micro (individual), meso (teams) and macro (organization)
levels, specifying tasks and ownerships with time frame.
3. Refreezing
When change is made permanent and institutionalized.

It is important to monitor the change and close chaps in change environment and work
environment. To achieve successful implemented change, the following key challenges needs to
be confronted:

1. Recognizing the need for change – usually surfaces when the firm’s business model no
longer delivers an acceptable rate of return to investors and owners. Such is the case
when the merger was decided by investors.
 2. Diagnosis – to examine the problems faced by organization in detail to identify factors
and forces that are causing the problem and to find solutions. Diagnosis should be done
at organizational level, team level and at individual level.
3. Resistance – when employees fear the personal and organizational costs of change will
exceed the benefit. Try to turn the active vocal resisters to be advocators for change.
4. Carry-Over to the Working Setting – successful transfer depends on: elements of change
match work environment; change is immediately useful in work environment; and
changes are supported by others in the work environment. Such is the case of introducing
automation in gathering customer feedback. Employees should be given a training on
how the system was meant to be used to calm their fears and so that they will start to
support the changes also.
5. Evaluation – managers tend to judge change program success on good reactions of
employee participants but it tells us little about the soundness of the improvement
program’s goals of the quality of the implementation success. An effective steering
committee should also measure the quality of a planned change process, including the
program cost, the time necessary to meet milestones, employee’s satisfaction with
elements of the process and management’s judgement of the program’s ease of
installation.
6. Institutionalization – If the change has favourable outcomes, the firm can make its
features a permanent part of its systems, culture and structure.

Another recommendation for the company is to enforce a service-driven competitive advantage.

It is a good idea that touch screen rating system has been installed to have an automated system
of receiving customer feedback. But also the below approaches can also be considered:

(1) Conduct a service audit: To track customer satisfaction, isolate the features of service that
are important to customers and how they rank them. The audit’s goal is to see how well
the firm’s service elements compare to those of its rivals
(2) Develop a company-wide service strategy. A firm needs a service mission statement to
show everyone how its competitive advantage is based on resolving customer’s problems.
The service mission statement should answer the question: “Why should customers
choose us?” and all company systems and methods should reinforce the answer to that
question.
(3) Conduct “Wall-to-Wall” Employee training. Training employees to deliver excellent
service invests in future earnings. Managers in companies that deliver excellence service
sees the link between customer satisfaction, employee morale and service quality
training.
 (4) Implement the service improvement programme. All activities should re-align the firm’s
business model with the principle of identifying and solving customer’s problem. For
example, why are customers seeing empty shelves at So Fresh?
(5) Make the service improvement permanent. To make service improvements permanent,
practices such as performance measurement, incentive system design and
communication have to be changed. Employees must be rewarded when they succeed in
delivering excellent service. Through the use of incentives, excellent training and valued
rewards that are tied to service, So Fresh can create new values in its culture that focus
on service quality.

Furthermore, it is also important to re-enforce the organizational culture as below:

Indicators of Change
Methods of Change to Firm’s Work Outcome
Culture
Make company history and H Enliven and maintain High team
the purpose of the new the company’s cohesiveness
merger known history in its current
Tell stories of employees who business activities
exemplified strong firm values
Require all top managers to be O Create shared Excellent Customer
mentors expectations about Service
Do follow-up ethics and values the meaning of the
training for employees and firm’s core business
managers values
Design a reward system to M Raising the level of Process Innovation
give bonuses for excellent information sharing
service to customers among employees
Promote practices that and their team
emphasize on job security and members
work force flexibility
Conduct wall-to-wall trainings E Improve coordination Reduce cycle time
in customer service and between employees,
product quality vendors, distributors
Empower self-directed teams and customers
and encourage participation in
decision making

Performance appraisals can also be improved to focus more on results rather than processes,
which also gives the employees accountable for goals and the means to achieve them.
Performance appraisals can be done in five way:
 1. Absolute method
2. Graphic Scale Rating (GSR)
3. Behavioural anchored rating system (BARS)
4. Goal Setting Theory
5. Management by Objectives

The best method currently would be Goal setting and management by objectives (MBO) as it
channels employee behaviour towards outcomes that are valued by the firm, increase work
motivation and employee job performance, reduce the stress of conflicting or confusing work
expectations to employees and improve the accuracy and the validity of the firm’s performance
appraisal system.

Section II – Essay Questions

Question 1
In order to address the current team’s issues, let’s first discuss what a team is. A team is a group
of people formed to perform a particular duty at work. They are professionals who are working
together to achieve a common goal.

Self-directed teams are put together in organizations with the aim to achieve sustained, high
performance; solve potential conflict disputes; interpersonal relationships and merge socio
and technical aspects of work.

A high-functioning team has achieved cohesiveness. This means that it values membership,
works well together, resists transfer, celebrate its successes and laments its failures.

Being able to recognize a work group’s stage of development encourages further

development of the group to sustain high performance. In the current organization, the
current team is still in forming stage, so in order to achieve this stage and pass onto the
performing stage, as defined by Tuckerman’s Four Stages of Groups, each stage’s dynamics
has to be understood.

Forming – entry of members is smoothed. Issues such as team composition, size and goals
are discussed. The role of the team leader in this stage is to take a direct stand and tell
members of the groups what the goals are. I believe in the current team, this has not been
addressed well, thus the forming stage is still being turbulent.

Storming – Conflicts can emerge in this stage and conflict resolution techniques should be
discussed. It is also important to make decisions regarding decision-making techniques such
 as brain-storming, nominal group technique and Delphii approach. A team leader’s role at
that stage is conflict management.

Norming – Groups develop norms, members are aware of their role and commitment of the
group. In this stage, groupthink and other process losses may occur. Groupthink occurs when
members minimize conflict and reach a consensus decision without critical evaluation of
alternative ideas or viewpoints. Thus, leader functions as a coach at this stage and in order to
keep away from group think, leader can encourage members to question team decisions,
form sub-groups to take separate independent decisions before the entire group’s decision,
and etc.

Performing – Group is mature, aware of their function and is performing as expected.

Rewards should be implemented at this stage. Leader should start delegating in this stage.

To make the team effective, Belbin’s Theorem of Roles will work: eg. Implementer etc. in
team composition, and also follow the below mechanisms to keep the team at “Performing”:

 Provide ongoing training

 Provide motivation (clear line of sight between performance and award)
 Delegate authority: self-direct teams (SDTs) should have authority for work outcomes
 Implement a good appraisal system based on two-tiered reward (individual and group –
Scanlon, Rucker)
 Implement good management information system.

Different team scenarios present different set of issues which may need to be handled
differently. Thus, a team leader should adopt a variety of conflict resolution options based on the
situation. They are:

Avoidance – if the issue is not significant

Accommodating – if the team does not have the time to deliberate on the conflict or the leader
was wrong initially and needs to show their reasonableness or when you want to show a way to
learn to your subordinates

Compromise – Where dissenting views need to be considered and negotiated towards the best
outcome of the group

Collaboration – where team members need to work together to solve a problem permanently
through mutual commitment to the solution
Forcing – where the leader uses their power, coercion or pressure to impose a solution though
intimidation when a decisive action is vital.

Leadership styles and approaches can also vary to ensure that leader’s reactions to team
situations are fit-for-purpose and work towards maintain team cohesiveness while achieving
team objectives.

There are three semi-dependent approaches for leadership.

1. Trait Approach – here, the leader is believed to be born with innate capabilities attributes
or traits such as logical thinking, persistence, empowerment, achievement oriented and
self-control. However, these days, this theory of “Leaders are born. Not Made” have been
challenged.
2. Behavioural Approach – This is the theory that leaders exhibit certain behaviours in all
circumstances such as initiating structure or task form of leadership, and consideration:
this is when a leader is supportive, participative and shows empathy to members.
3. Situational Leadership: This theory postulates that leaders exhibit different attributes
based on situations they are faced with. This approach attempts to reduce casual
ambiguity of leadership behavioural outcomes.

House’s Path-Goal theory focuses on two aspects of leadership situations. (i) It looks at the
subordinate’s tasks abilities and needs for achievements (ii) it looks at the environmental
factors of task clarity, routines and challenges. The leader must then match his behaviour to
the interplay of sub-ordinate characteristics and environmental factors.

Question 2

Personality is what makes individuals unique and it is a complex multi-dimensional concept.

It is defined as a relatively permanent set of psychological characteristics that create, guide
and monitor human behaviour. Personalities usually stabilizes and reaches maturity by the
age of 30.

Let’s discuss individual differences or personality traits that are related to employee needs
and operational effectiveness. Individual differences are defined as basic aspects of
personality that predict or explain what people do at work.

Some people would have an internal locus of control, where they believe that they can have
an impact on their situation and outcomes. Others will have an external locus of control or
externalizers, and others will be internalizers or have an internal locus of control where they
believe that they do not have any control and are in the hands of circumstances and the
organization. Thus, for a manager, it is better to understand their subordinates better if they
understand what locus of control they are. For example, internalizers are motivated and
better performers if they believe that performance is skill-based and they are sensitive to
organizational attempts to influence their thinking and behaviours. As for externalizers, they
are likely to experience adverse emotional reactions if performance-oriented pressure is put
on them and have a low tolerance for job-induced frustration.

Other personality types that people have are extroversion and introversion. Extroverts have
active social lives, enjoy crowds and has the need to obtain as much social stimulation from
the environment as possible. Thus, when confronted with dull work, they are more likely to
engage in irrelevant behaviours that undermine the productivity of co-workers. So for
extroverts, jobs such as marketing and sales or public relations would be an ideal job position
for them. The opposite people are introverts, who avoid external stimulation in favour of
internally oriented, contemplative activity. Such individuals attempt to reduce the amount of
social interaction in their environment because they are more sensitive to personal feelings.
They perform better in situations that dampen/lessen external distractions and too much
external stimulation causes performance to drop quickly due to a rising sense of discomfort.
Thus, positions of accountants, computer science related positions are ideal for such
introverts.

In addition, there are also people who are Machiavellians, who believes they are far superior
than others, manipulates others, hold cynical views of the colleagues, has a suspicious nature
and are detached from the lives of others. They focus only on their personal goals and will
use unethical means to achieve them. High Machs people experience satisfaction from
successful manipulations, such as trying to turn a team work into their own work, which can
lower team productivity. Executives may manipulate the firm’s goals and strategy to advance
their personal agendas and ignore needs of investors and employees, which promotes
practices that are distorted, such as favoritism, paternalism and nepotism. So, many checks
and balances are needed in an organization for high Machs to avoid their manipulation
tendencies.

Another personal attribute is emotional intelligence that includes: appraising and expressing
emotions in self and others, managing emotions in self and others and adaptively expressing
emotions to direct behaviour and solve problems. Thus, managers need to understand the
role of emotions in work settings so as to preserve a focus on performance and problem
solving. Managers who exhibit emotional intelligence succeed when it comes to the human
resources aspects of management and also thrive in Y organizations.
 In addition, McLelland’s socially acquired needs are also relevant:

 Need for achievement: needing to get positive results, see progress, get promotions.
Managers can capitalize on achievement motivation by: screening job applicants for
achievers; promote achievers with records of good performance; design jobs with goals
that are moderately challenging; and reward employee creativity such as institutionalizing
the role of “idea champions”

 Need for affiliation: wanting to fit in, be liked; Managers can shape these types of
subordinates by assigning them arbitrators of work group disputes; evaluate social
demands of a job and match employees with a high need for affiliation; be involved in
community affairs that parallel work interests and develop and use as many forms of
social rewards as possible for them

 Need for Power: need to gain influence and control. To manage employees with a need
for power: 1. Select and promote employees with socialized power skills over employees
who exhibit personalized power motives. 2. Give socialized power positions high visibility
in the firm. 3. Assign managers with socialized power skills to groups with low
performance and morale. 4. Because they are more likely to work through people than
though the task, encourage social power managers to delegate authority. 5. Do no block
career paths for managers with socialized power needs.

Socialized need for power skill set is the most important in relation to the three socially
acquired needs. Absence of these skills in a manager with a high need for achievement is
a weakness.

Thus, it is important to use psychometric testing to strengthen competitive advantage.

Personality testing is a useful tool to improve recruiting, job matching and correct positioning of
attractive job candidates to positions which they can quickly add value to the firm and its
competitive advantages. Some of the benefits of personality testing includes:

o Predicting a candidate’s potential for job success before he gets hired can greatly
reduce the emotional and financial costs of early job dissatisfaction
o Firms can lower costly unwanted turnover over time
o Raise the quality of the job candidate pool over time
o Provide firms with an invaluable asset in the event of legal challenges mounted by
dissatisfied job candidates who object to not being selected
If a manager is aware of these different personalities of his or her subordinates, it can be useful
for managers to better manage their team and can also improve on the job satisfaction of the
subordinates as well.