Organisational Behaviour: Models, Definitions, Scope, Importance, Nature and Concept
Organisational Behaviour provides a roadmap to the lives of people of the organisation. It helps the managers understand hopes, dreams, fears, frustrations of employees, take the decisions and make the policies accordingly.
OB helps an individual understand himself and others better which helps in improving interpersonal and group relations. On the other hand, if managers understand their employees, predict their behaviour, they will be able to motivate the employees better and achieve desired results.
OB is a field of study that helps in analysing the behaviour of employees in an organization. Many socialists and psychologists define the behaviour of employees in an organizational setting in various ways.
Organisational Behaviour is a field of study that investigates the impact that individuals, groups, and structure have on behaviour within organizations for the purpose of applying such knowledge toward improving an organization’s effectiveness.
1. Introduction to Organisational Behaviour 2. Definitions of Organisational Behaviour 3. Concept 4. Nature 5. Scope 6. Elements 7. Goals 8. Areas 9. Contemporary Factors 10. Importance 11. Models 12. Hawthorne Experiments for Studying Organizational Behaviour.
Organisational Behaviour: Introduction, Definitions, Models, Concept, Importance, Nature, Scope, Elements, Goals and Areas
- Introduction to Organisational Behaviour
- Definitions of Organisational Behaviour
- Concept of Organisational Behaviour
- Nature of Organisational Behaviour
- Scope of Organisational Behaviour
- Elements of Organisational Behaviour
- Goals of Organisational Behaviour
- Areas of Organisational Behaviour
- Contemporary Factors of Organisational Behaviour
- Importance of Organisational Behaviour
- Models of Organisational Behaviour
- Hawthorne Experiments for Studying Organizational Behaviour
Organisational Behaviour – Introduction
OB provides a roadmap to the lives of people of the organisation. It helps the managers understand hopes, dreams, fears, frustrations of employees, take the decisions and make the policies accordingly. OB helps an individual understand himself and others better which helps in improving interpersonal and group relations. On the other hand, if managers understand their employees, predict their behaviour, they will be able to motivate the employees better and achieve desired results. OB is a field of study that helps in analysing the behaviour of employees in an organization. Many socialists and psychologists define the behaviour of employees in an organizational setting in various ways.
OB, being an inexact science, the pattern of behaviour may change due to diversity of workforce, globalisation, restructuring the organisation, outsourcing non-core activities, etc.
Organizational behaviour is a study and application of managerial skills and knowledge to people in the organization to investigate individual and group behaviour. Various concepts and models in the field of organizational behaviour attempt to identify, not only the human behaviour but also modify their attitude and promote skills so that they can act more effectively.
This is done scientifically; therefore, organizational behaviour field is a scientific discipline. The knowledge and models are practically applied to workers, groups and organizational structure that provide tools for improved behaviour and dynamics of relationship.
The field of organizational behaviour also provides various systems and models for international relationship that are applied to organizations. Leaders must look for indicators (effects) of individual behaviour and of groups in any organization. Indicators have a root cause beneath.
As a leader, it is that symptom, which must be evaluated, and cause of human behaviour established so that if the behaviour is good, the manager can establish the norms of behaviour. If the behaviour is not conducive to achieve the organizational objective then suitable alternative model can be applied to channelize individual behaviour towards an appropriate organizational value system and thus individual behaviour modified.
An organization has three basic elements namely, people, structure, and technology. An organization must have suitable organizational structure, with appropriate number of tier and reporting system properly explained. Principle of unity of command, delegation of authority and responsibility, formulation of objectives and its allotment to various groups is very important so that workers achieve a required level of job satisfaction.
Organisational Behaviour – Definitions
OB is a field of study that investigates the impact that individuals, groups, and structure have on behaviour within organizations for the purpose of applying such knowledge toward improving an organization’s effectiveness.
Organizational behaviour is a field of study:
i. OB studies three determinants of behaviour in organizations – individuals, groups, and structure.
ii. OB applies the knowledge gained about individuals, groups, and the effect of structure on behaviour in order to make organizations work more effectively.
iii. OB is concerned with the study of what people do in an organization and how that behaviour affects the performance of the organization.
iv. There is increasing agreement as to the components of OB, but there is still considerable debate as to the relative importance of each – motivation, leader behaviour and power, interpersonal communication, group structure and processes, learning, attitude development and perception, change processes, conflict, work design, and work stress.
Each of us is a student of behaviour:
i. A casual or common sense approach to reading others can often lead to erroneous predictions.
ii. You can improve your predictive ability by replacing your intuitive opinions with a more systematic approach.
iii. The systematic approach will uncover important facts and relationships and will provide a base from which more accurate predictions of behaviour can be made.
iv. Behaviour generally is predictable if we know how the person perceived the situation and what is important to him or her.
v. While people’s behaviour may not appear to be rational to an outsider, there is reason to believe it usually is intended to be rational by the individual and that they see their behaviour as rational.
Organizational behaviour can be defined as – “the study and application of knowledge about human behaviour related to other elements of an organization such as structure, technology and social systems (LM Prasad).”
Stephen P Robins defines “Organizational behaviour as a systematic study of the actions and attitudes that people exhibit within organizations.”
It has been observed that we generally form our opinion based on the symptoms of an issue and do not really go to the root cause of the happening. Science of organizational behaviour is applied in nature. Disciplines like psychology, anthropology and political science have contributed in terms of various studies and theories to the field of organizational behaviour.
A leader should be able to communicate with his subordinate and keep them in picture as to the happenings in the organization. People promote organizational culture for mutual benefit. Politics is often used to create conflict with the aim of enlarging self-power base to the detrimental of organizational growth.
Politics, in Indian context has made in roads based on religion, caste system in the decision making process which has led to formation of informal groups in the organization that often exploit the organization for fulfilment of personal goals at the cost of organizational goals.
Conflict and manipulating power bases need to be handled in an appropriate manner to modify human behaviour and stimulate various individuals towards achieving higher productivity. Power dynamics plays a significant role in organization situations in different environment.
Organisational Behaviour – Nature
1. A Field of Study and Not a Discipline:
Organisational Behaviour can be treated as a distinct field of study and not a discipline or even emerging discipline.
A discipline is an accepted science with a theoretical foundation that serves as the basis for research and analysis.
Organisational Behaviour, because of its broad base, recent emergence and interdisciplinary orientation, is not accepted as a science.
2. Interdisciplinary Approach:
An interdisciplinary approach integrates the relevant knowledge drawn from different disciplines for some specific purpose.
Organisational Behaviour draws heavily from psychology, sociology and anthropology.
3. An Applied Science:
The basic objective of Organisational Behaviour is to make application of researches to solve the organisational problems, particularly related to human behaviour aspect.
4. Normative and Value Centred:
A normative science prescribes how the various findings of the research can be applied to get organisational results which are acceptable to the society, unlike pure science which suggests only cause effect relationship. What is acceptable by the society is a matter of values of the people concerned.
5. Humanistic and Optimistic:
Organisational Behaviour focuses the attention on people from humanistic point of view. It is based on the belief that needs and motivation of people are of high concern.
Further there is optimism about the innate potential of man to be independent, creative, productive and capable of contributing positively to the objectives of the organisation.
6. Orientation towards Organisational Objective:
Organisational Behaviour tries to integrate individual objectives with organisational objectives.
7. A Total System Approach:
Organisational Behaviour is a total system approach where in the living system of an organisation is viewed as an enlargement of a man. A persons behaviour can be analysed keeping in view his psychological framework, interpersonal orientation, group influence and social and cultural factors.
Organisational Behaviour – Scope
The scope of OB is wide and deep. From the width perspective, it covers both internal and external stimulus and response that affect the vision/mission. The discussion under ‘goal’ illustrates how OB can influence even external influencers. OB is also deep and gets into the details of even small stimulus and response.
For example, ‘openness’ is a personality factor that OB could address so that teams become more effective since open-minded individuals in a team would affect decision-making and cohesion in a team. This would enhance the innovative behaviour of the organisation and its ability to absorb the impact of external forces.
Guided by appropriate leadership, the organisation would then show proactive behaviour to change. You can see how proactive response/behaviour to an external stimulus can be drilled into the openness factor in an individual. This is how deep OB can go.
If the scope of OB is wide and deep, so are its contributing disciplines. The sciences of psychology, sociology, engineering, anthropology, politics, management practices and medicine have directly contributed to OB. The integration of these disciplines has created the independent discipline of OB. It is this integration that has made OB variables highly interactive and interdependent.
Let us analyse how some of these disciplines have contributed to OB as a discipline:
Scope # 1. Psychology:
The twilight of the nineteenth century saw the emergence of psychology as a discipline with several thinkers and practitioners from the world of medicine leading it. It later branched into clinical, experimental, military, organisational, and social psychology to name a few, and has added areas such as evolutionary psychology.
Organisational psychology overlaps considerably with OB as the former digs deep into personality, selection tools, and motivation. For instance, Johnson & Johnson, Valero Energy, and Chaparral Steel fine-tuned psychological methods for selection during Second World War. OB has also borrowed heavily from learning theories in psychology.
Scope # 2. Sociology:
It is the science of the society and has created a deep understanding of teams, groups, and the dynamics that govern these. One of the examples of borrowing from sociology is the concept of role.
Borrowing from Robert Merton’s role theory, several researchers have studied role conflict in organisational context. Role set theory has also been used to explain the effect of codes of ethics in organisations. Sociology also contributes to the leadership component of OB.
Scope # 3. Medicine:
It is the applied science of healing and treating faults and errors (diseases) in the health of an individual. It addresses several workplace- induced diseases such as hypertension, occupational health, and well-being, and has brought in behavioural modifications in the workplace to address these issues. These have led to corporate wellness programs such as Johnson & Johnson’s ‘Live for Life Program’.
Scope # 4. Management Practices:
It was originally called administrative science and it dealt with the study of overseeing activities and supervising people in organisations. For example, March and Simon take the human organisation and investigate administrative practices that enhance the effectiveness of the system.
Management then took ‘Modern Corporation’ as the unit of analysis, and studied organisations. This view later contributed to the evolution of OB as a discipline, quite distinct from organisational psychology.
Scope # 5. Biology:
It is the science that studies living organisms to include their genes. Management has borrowed several concepts from it; the systems theory being one of the most important among them. Organisations are considered akin to biological systems with their own independence and interdependence, having ability to absorb information from outside and change. Evolutional psychology and evolutionary genetics have also contributed significantly to OB.
Scope # 6. Engineering:
It is the applied science of energy and matter. It helps us to learn about work, usage of energy, efficacy, productivity, and related aspects. The scientific management movement started by Frederick Taylor, which will be dealt with in detail later, is based on engineering principles.
His notions on performance standards, differential piece-rate systems, and ‘one best way’ (now called best practices) dominate the thinking of several organisations. For instance, HR Insider series describe piece-rate systems as the preferred method in small and medium businesses, even now. Even larger organisations such as Black & Decker, IBM, and Infosys follow this. This is the depth and width of impact of engineering on OB.
Scope # 7. Anthropology:
It is the science of learned behaviour, and is crucial to understand culture, symbolic communication, and their effect on behaviour. The classic Hofstead’s study on national culture and organisational efficacy and Schwartz study on the corporate decay in General Motors and NASA using psychodynamic and anthropological methods of enquiry illustrate the influence of anthropology on OB.
Anthropology also enquires into leadership aspects in many ways; for example, how and why cultures throw up leaders or how pathological personalities create dysfunctional cultures.
Organisational Behaviour – 4 Important Elements: People, Structure, Technology and External Social System
Important Elements of Organisational Behaviour (OB):
3. Technology, and
4. External social system.
Element # 1. People:
Organisational behaviour mainly focuses on people, who constitute the internal social system of the organisation. They normally consist of individuals, small or large groups, which may be of formal or informal nature. People form the groups and nurture their development and structure. Groups have dynamic interactions leading to creativity and at times conflicts in the organisation.
When we take a single individual in an organisation, he has his personality, attitude, perception, career, motivation and also stress and strains of day to day work environment. People are the creator of the organisation and try to achieve its objective and goals. Modern organisations exist for the people and vice versa.
Element # 2. Structure:
It denotes the environment or the structure of relationship. In an organisational structure different personnel are assigned different roles. At the same time, they have definite relationship with others in the organisation. In a structure, division of labour is a very important matter; duties and responsibilities are clearly demarcated.
Managers will supervise and will assign duties to subordinates, who will obey and accomplish the assigned task/s. Every individual in an organisation will have the same objective – ‘To achieve the organisational goal.’ Structure defines the authority, duty, responsibility and accountability of each individual in an organisation.
Element # 3. Technology:
This provides all the infrastructural facilities required to perform the work, which includes the physical and economical factors. This can attribute the efficacy of individual performance. At the same time, the nature of the technology mostly depends on the nature of the organisation and the activities carried out in it.
Element # 4. External Social System:
Social system makes the external environment in which an organisation activates. In an organisation, we can feel two types of environments- physical and psychological; physical environment is the one in which an individual performs his job. The psychological environment is the perception of an individual, which mainly depends on his subjective analysis.
This means what it really ‘makes him feel’ or ‘what he means about it’. In an external environment there are a large number of organisations coming in contact with each other which can influence the people in their behaviour in many ways, viz. – competition, conflict and also work ethos, etc.
Organisational Behaviour – 5 Goals: Individual Component, Group/Team Component, Organisational Component and a Few Others
The overall goal of OB is to create behaviour that influences sustainable, effective, and optimal achievement of organisational vision/mission through sustainable competitive advantage.
Let us now consider the goals of each component of OB from this perspective:
Goal # 1. Individual Component:
The goal of OB is to enhance performance. However, to create sustainable competitive advantage in a complex and competitive world, OB should make people ‘intrapreneurial’. This is a term drawn from ‘entrepreneurial’ to refer to the behaviour of an employee who takes initiatives and risks, and in general, acts like an owner of a business. In turn, it implies learning, innovation, motivation, and risk-taking. While some individuals may be endowed with these qualities/skills, the goal of OB is to make this an enterprise wide phenomenon.
Goal # 2. Group/Team Component:
Work takes place in teams and groups. The goal of OB is also to create effective teams that compete and collaborate with each other to enhance efficiency, performance, and create sustained productivity.
Goal # 3. Organisational Component:
To achieve competitive advantage, employees have to be involved in all aspects of work and be engaged with the organisation. High job satisfaction, low turnover and absenteeism and effective structures and systems ensure that organisational goals are met. Work takes place in a social context.
Thus, organisational social context should accept high productivity, equity, high and contingent compensation, sensitivity for quality, continuous improvement, and customer orientation.
Goal # 4. Leadership Component:
OB should aim at institutionalising inspirational leadership at all levels. Building an inspirational vision statement is, perhaps, a humble first step, but percolating the same through the organisation enables in creating leadership at various levels. OB should create the environment for leadership to bloom and flourish at all levels.
Existence of leadership at all levels enables an organisation to undertake frequent changes smoothly. This would lead to creating a workforce that is difficult to imitate, and result in sustainable competitive advantage.
Goal # 5. External Environment:
The goal of OB is to perceive the impact of paradigm shifts in the environment, assess its impact on the components of OB, and prepare the organisation to respond appropriately. For example, if the impact of media/social media were correctly assessed, OB would have been able to use these external forces as stimuli to modify the behaviour of its people to create sustainable competitive advantage. Has OB done so?
Similarly, if a legal provision emerges limiting the acquisition of land, OB should prepare its people to upgrade their social responsibility activities to gain willing support of the society to set up a factory. It is evident that OB has challenging goals and strong potential to create sustained competitive advantage.
Organisational Behaviour – 5 Main Areas: Psychology, Sociology, Social Psychology, Anthropology and Political Science
Organizational behaviour is an applied behavioural science that is built upon contributions from a number of behavioural disciplines. The predominant areas are psychology, sociology, social psychology, anthropology, and political science.
Area # 1. Psychology:
Psychology is the science that seeks to measure, explain, and sometimes change the behaviour of humans and other animals. Early industrial/organizational psychologists concerned themselves with problems of fatigue, boredom, and other factors relevant to working conditions that could impede efficient work performance.
More recently, their contributions have been expanded to include learning, perception, personality, emotions, training, leadership effectiveness, needs and motivational forces, job satisfaction, decision making processes, performance appraisals, attitude measurement, employee selection techniques, work design, and job stress.
Area # 2. Sociology:
Sociologists study the social system in which individuals fill their roles; that is, sociology studies people in relation to their fellow human beings. Their greatest contribution to OB is through their study of group behaviour in organizations, particularly formal and complex organizations.
Area # 3. Social Psychology:
Social psychology blends the concepts of psychology and sociology. It focuses on the influence of people on one another. Major area—how to implement it and how to reduce barriers to its acceptance
Area # 4. Anthropology:
Anthropology is the study of societies to learn about human beings and their activities. Anthropologists work on cultures and environments; for instance, they have helped us understand differences in fundamental values, attitudes, and behaviour among people in different countries and within different organizations.
Area # 5. Political Science:
Frequently overlooked as a contributing discipline. Political science studies the behaviour of individuals and groups within a political environment. Political science has contributed to the field of Organizational behaviour. Stability of government at national level is one major factor for promotion of international business, financial investments, expansion and employment. Various government rules and regulations play a very decisive role in growth of the organization.
Organisational Behaviour – 14 Basic Assumptions: Every Individual is Different, A Whole Person, People Like Recognition, Behaviour is Caused and a Few Others
Every field of study, be it social science or physical science, is based on some universal assumptions e.g., law of gravity is universal, whether it be Delhi or London. The same applies to OB also i.e., there are some basic assumptions on which study of OB is based. These assumptions relate to people or organisations.
The basic assumptions are:
1. Every Individual is Different:
No two individuals are same, there may be some common things, but individual differences are certain to exist. One is different from other in several ways, such as physique, intelligence, personality. Everyone is unique and the environment in which one is brought up makes people more different. They cannot be stereotyped.
These individual differences have the inferences on OB as well. A particular incentive may motivate one employee to a great extent while having no effect on other due to the difference of psychology. In OB, it is necessary to study individual differences and take decisions accordingly. K. Aswathappa says “It is because of individual differences that OB begins with an individual.”
2. A Whole Person:
While taking selection decision, the skills of an individual are tested, but when an employee is hired, not only his skills but also his background, emotions, likes and dislikes must be considered. Employee cannot detach himself from his background; this background has an effect on his work.
For example, one who has been brought up in a poor family will take the decisions leading to betterment of poor workers. When a whole person, not only the skills are hired, the manager should respect the emotions, background of employees and try to make workplace, a home away from home (Aswathappa). Not only a better employee should be made, but a better human should be made.
3. People Like Recognition:
This is a natural fact that people like to be recognised and they work more efficiently when they are under study. This fact was also highlighted by Elton Mayo through Hawthorne Experiments. People are made to realise the feeling of recognition through training, motivation, leadership and incentive plans etc. Good performance should always be rewarded.
4. Behaviour is Caused:
If one behaves in a particular manner, there is surely a reason behind it. If an employee opposes his boss, there is surely a reason behind it, it is not casual. The manager needs to find the root cause to solve the problem. Therefore, the managers should analyse the behaviour, find the cause and effect relationship and correct the behaviour. For example, if a supervisor always scolds his subordinates, it can be due to his family background or upbringing.
5. Desired Behaviour can be Generated:
Cause and effect relationship works in behaviour. For every type of behaviour, there is a cause. It implies that to generate desired behaviour (effect), cause should be created but that cause will vary for different persons because every individual is different. For example if supervisor knows that an employee Mr. Z is motivated by financial incentives; he can be motivated to work more by giving higher rate of piece wage.
6. Human, not Just a Factor of Production:
Manpower should be treated as human, not as other passive factors of production. People should be treated with respect and dignity. It is the human resource which is responsible for efficient functioning of other passive resources of production (land, capital, technology). Therefore, this importance should be reflected in the manner, he/she is treated. Human approach to management also advocates same kind of behaviour with manpower.
7. Desire for Equality:
People like to be treated fairly and equally. Workers of same level should be treated in same manner. Feeling of partiality discourages people and relations are also adversely affected. Workers working at same level, in same department should be given similar compensation, similar facilities and incentives should be given.
8. Desire for Involvement:
Democratic style of leadership, concept of decentralisation advocate that people like to take responsibilities. They have an internal desire to be recognised and they like to be involved. Everyone wishes to prove himself as a responsible person, and strives for such a chance. Therefore, a manager should respect the feelings of employees and give them responsibilities; this will increase their confidence and sense of belonging. They will feel connected to the organisation.
People perceive the things differently and this perception depends on the person’s education, family background, etc. For example, the same interviewee may seem confident to one interviewer and arrogant to other, just because of difference of perception. The same supervisor may seem fair to one subordinate and unfair to other, because of difference in perception.
10. Organisation is a Social System:
Any organisation is a system where various factors of production and human resource are inputs. These inputs are processed with aid of some methods, tools, technology and finally output is for the society. Organisations are social systems, because they work in society and people working in organisations, are also an important part of the society.
Therefore, the activities of an organisation should be governed by social and psychological laws; however there may be differences in activities depending upon whether the system is formal or informal.
11. Mutual Interest:
Organisations need the employees and employees need the organisation. Both are interdependent. There is a sense of mutual interest. There are individual objectives and organisational objectives, but mutuality of interest states that these (individual goals and organisational goals) should be surrendered to superordinate goals which lead to mutual accomplishment of goals of employees, organisation and society.
12. Need for Efficient Management:
The purpose of study of organisational behaviour is to achieve organisational objectives. The achievement of objectives is the function of management. Therefore, the whole study of the field of OB is needed for efficient management.
13. Human Dignity:
Everyone has an internal desire for self-respect and dignity whether he is a manager or a supervisor or a labourer. So, everyone should be treated with respect, fairly without harming his/her dignity.
14. Holistic Concept:
All the above factors work together i.e., all are to be kept into mind simultaneously because these are basic foundations. This concept studies organisational behaviour in terms of whole person, whole organisation and whole social system. It takes a comprehensive view of people in the organisations to understand maximum factors that affect the behaviour.
Organisational Behaviour – Contemporary Factors: Diversity, Technology, Social Media, Ethics, Corporate Social Responsibility and a Few Other Factors
Factor # 1. Diversity:
Diversity can be defined as the condition of having different elements or different types of people from different cultures in a group or organisation. The idea of diversity emerged in the US sometime in the 1960s. Then it was called affirmative action, which meant complying with equal opportunity enshrined in law.
The concept behind this action was actually ‘tokenism’ and a person was hired because he/she differed from the dominant group in the organisation. The difference was primarily in race, ethnicity, and gender. In due course, it evolved into a social justice model. It meant that one should adhere to diversity not because of law, but because it was the right thing to do.
It, still indicated tokenism, but the scope of diversity extended to age, sexual orientation, and physical ability. It emerged into the concept of inclusion primarily because of globalisation, multicultural workforce and customers.
Diversity impacts and is impacted by self-concept, prejudices, discrimination, and stereotyping, culture, ethnocentrism, and inter-group conflict. Managing diversity is at the core of leadership today. From an organisational perspective, structural integration, informal integration, and institutional bias become relevant while managing diversity.
Research has shown mixed results on the effect of diversity. One view is that diversity adds value, as it increases productivity, problem-solving capabilities, and market share. It has a positive effect on social responsibility goals, cost, resource acquisition, marketing, creativity, problem-solving, and organisational flexibility. Some empirical researches support the increased productivity hypothesis.
Some researches show that in the short run, benefits are negative, in the medium term, it is equal, and in the long term, only one or two performance indicators turn out to be favourable. Some studies comparing the performance of diverse groups in Fortune 500 companies did not show any result in favour of diversity.
However, that inclusion and multiculturalism demands special behavioural competencies is well accepted. Despite these mixed results, most managers intuitively accept that diversity is likely to affect many elements of OB, and we have to make several behavioural changes to adapt to diversity.
Factor # 2. Technology:
Technology, and in particular IT, affects OB in many ways.
A few important effects are:
Would your perception of a company change, if you got a mail showing its location on the Google map, one day prior to an interview, and a welcome message on your mobile as you arrive at the gate? Can an Internet jam session with the CEO change your perception of the company? It is evident that technology can be used to change perceptions effectively.
ii. Learning through Interactivity:
An army unit known to the author introduced virtual reality-based training where a soldier could get into the virtual world of eliminating a terrorist. After a few rounds of the gunfight (in the virtual world), the soldier was able to make several moves, which he would not have normally made.
iii. Motivation through Self-Monitoring:
Students doing a leadership course in an MBA programme were taught how to use a journal (A method of recording important life events daily and differentiated from the term used in accounting) to keep note of the critical events in a leadership course. Since journals are often detested and hence forgotten, an automated reminder system was arranged, encouraging them to fill the journal every day.
Most people who spoke sceptically about journal-based learning, ended up accepting that they maintained the journal far more regularly, than they would have done without the reminder system. As the journal entries were more regular, than the learning too had increased. The reminder was a system to induce self-monitoring in making their journal entries, resulting in change in behaviour.
Armstrong Pame, an IAS officer, built 100 kilometres of road by ‘crowd funding’. Does it exemplify creativity?
That technology increases stress in the work place is well-accepted. Let us look at how it can reduce stress. An alumnus of the school where I teach the MBA programme is an entrepreneur. He has distributed gadgets that count the number of steps that you take in a day.
You are to create a team of seven members and walk 10,000 steps a day as a group. The group can start from a virtual start point (say Paris) and plan to tour to any place connected by land say Moscow (also virtual). He finds that several corporate people have signed up for his programme to ward off stress-related problems in the organisation by walking more. This is how behaviour is changed using technology.
vi. Interpersonal Behaviour:
What happens if you go on Skype and wish a workplace colleague sitting in Europe on his/her birthday? Do you think it will improve your relationship with him?
Our human resources faculty group has one person located some 400 kilometres away for administrative reasons. We meet frequently to take collective decisions, except that it is conducted on videoconferencing. Does technology enable us to create better group dynamics?
viii. Power and Influence:
Several leaders create their own websites in which they share their life experiences and work. People read them, get motivated, and also make better impression about the leader. This is a way to increase one’s influence over people. Of course, you can use Twitter and other such methods too, to align the actions of your followers better.
ix. Work Design:
Joseph’s wife works from home for a medical transcription company and takes care of our extended home too. She has perhaps visited her office which is 500 kilometres away, once. On days she is busy at home, she accepts only a few files to work on and on some days, she opts to take a break.
When there is some urgent work, the company calls her and she has no qualms about jumping out of the bed and completing it immediately. Has work design undergone some fundamental changes?
Ms Sandy is the vice-president, brand management, in a personal care product company. Over 100 people report to her directly and she does an excellent job of checking their progress, giving suggestions, providing motivational support, and ensuring that resource reach her people well on time.
Her span of control is a little over 100. What happened to the management axiom that span of control should not be more than 20 as a guideline?
xi. Learning and Innovation:
Every time we go for a conference, we return and make a report on the lessons learnt. Indeed it has always been so, except that the report would seldom be read even if an abstract of it found its way to the quarterly newsletter. Today, it is classified subject-wise and stored in computers.
Several people keep tag of it using the abstract. They can drill deeper and apply the learning. Has not technology changed our learning and innovation capabilities?
Last summer, a student did an internship project to create a dashboard for training. Eventually, it turned out that the dashboard ‘ could track people with deficiency in competency and collate them. The HR manager who used to grope in the dark on who should do what training, suddenly had a list of people who should attend a skill development programme.
HCL is a leading IT company of India which puts its employees first, and customers second. Any employee can mail directly to the CEO, who answers about 100 mails a week. Look at the change in effectiveness of personal communication.
We have deliberated a lot on the impact of technology, on organisation and OB. Interestingly, even as you read this, technology would change and impact OB even more.
Factor # 3. Social Media:
Andreas Kaplan and Michael Haenlein define social media as ‘a group of Internet-based applications that build on the ideological and technological foundations of Web 2.0 that allow the creation and exchange of user generated content’. Social media makes it possible to create a message, share it with others in a community, give opinion, discuss, change content, and co-create messages. Cross mobility of the communication across multiple communities leads to viral effect.
Let us examine how it can influence OB:
Social media can create/change perception on almost anything rapidly. Hence, the need to be proactive and transparent.
It is a good tool to enhance motivation through participation.
iii. Impact on Self-Perception, Self-Confidence, and Stress:
Social media is an effective stress buster to many. They find solace that their opinion is valued by many with the ‘like’ remark, and feel a sense of self-control. It enhances self-perception and self-confidence. Of course, the danger of its negative effect on self-confidence and self-perception also needs focus.
iv. Interpersonal Behaviour:
Would social media impact interpersonal relationship in an organisation? The answer is affirmative. If the social media discusses rude behaviour of a person, the chances are that the person in question will quickly modify his/her behaviour. Also, other people may desist from such behaviour. Similarly, if the social media discusses an empathising behaviour, people would tend to exhibit that behaviour more often.
In the workplace, we struggle to create effective informal groups and dub them as ‘water cooler conversation groups’. Their voice, though very important, is impossible to capture. Creating an informal group is automatic in social media. It makes more sense to encourage people to be a part of organisation-sponsored social media groups because, then, the organisation can listen in and correct perceptions.
vi. Learning and Innovation:
Social media has the potential to facilitate learning from every critical event on a real-time basis, a capability that no other communication system can match. The learning repository of an organisation is usually based on data mining and systematic retrieval of the same.
However, critical events take place every day, and at every moment. The sarcastic language that we use with a colleague or customer, the concern we show them, a successful negotiation, or a customer reaction are examples of daily critical events. Social media can capture these and facilitate learning from them, on a real-time basis.
It suffices to say that social media is the voice of the informal group in the formal organisation, and this communication has tremendous effect on the target. It naturally leads to change in behaviour.
Factor # 4. Ethics:
The area of ethics, corporate social responsibility, and sustainability is ever emerging and overlapping. Government as well as corporates tend to take undue advantage of it and often have to be reined by the courts.
Ethics is a set of concepts and principles that guide us in determining what behaviour helps or harms others. The term ‘ethics’ is drawn from ethos meaning ‘character’ in Greek. Shubh Labh (meaning profit from goodness or honest profit) is perhaps the Indian version of it.
The term became more formal around the 1970s when ethical codes began to be adopted by business. There are several studies that establish the relationship between ethics and behaviour, at both the individual and organisational level. For example, ethical climate reduces turnover intentions, interpersonal conflicts, emotional exhaustion, and increases trust in the supervisor and job satisfaction.
Ethical conflict is negatively associated with organisational commitment and positively associated with turnover intentions, ethics reduce workplace deviance and counterproductive behaviour such as aggression, sabotage, and intention to hurt others. It also mitigates the impact of anger.
An ethical climate increases organisational commitment and reduces organisational bullying. Research indicates that creating an appropriate structure, followed by creating an ethical culture is what leads to ethical behaviour.
Factor # 5. Corporate Social Responsibility:
In 2008, The Economist reported the importance of corporate social responsibility (CSR). A global survey of 1,122 top executives found that these CEOs considered CSR to be very important because it is very attractive to potential and existing employees. If it is attractive to the employees, it follows that it would have an impact on their behaviour.
The logic behind CSR is that the company uses several resources of the society such as land, which is a source of livelihood. Companies pollute and cause water shortage, which have a negative impact. So, the company has a responsibility to mitigate this.
Defining CSR is a challenge. The UN has coined a term ‘triple bottom line’ which means the bottom line or profit of a company should be more broad based, to cover the impact a company has on society (people), and environment (planet), and should not be confined to financial profits.
The World Business Council for Sustainable Development (WBCSD) is a CEO-led organisation of forward-thinking companies. It galvanises the global business community to create a sustainable future for business, society, and the environment.
It defines CSR as ‘the continuing commitment by business, to contribute to economic development, while improving the quality of life of the workforce and their families, as well as of the community and society at large.’ Jones defined CSR as the notion that corporations have an obligation to constituent groups in society other than stockholders, and beyond that prescribed by the law and union contract.
CSR and its influence on OB are under-investigated. Most investigations are focused on its attraction to prospective employees, while some others focus on how it impacts specific dimensions of organisational commitment.
However, researchers feel that because of the multidimensional nature of CSR, it can influence a wide range of organisational attitudes and behaviour; for instance, it can influence the perception of organisational justice, organisational citizenship behaviour, organisational identity, trust, job satisfaction, organisational citizenship behaviour, and workplace deviance.
Factor # 6. Sustainability:
The term ‘sustainability’ is derived from the Latin root sustinere and roughly means ‘hold up’. Classical dictionary meanings are ‘maintain’, ‘support’, and ‘endure’. Alarmed by the depletion of natural resources, the UN deliberated and coined the term ‘sustainability’ sometime in the late 1980s.
The Brundtland Commission defined it as ‘development that meets the needs of the present without compromising the ability of future generations to meet their own needs’. The term primarily refers to natural resources.
Over a period of time, the term ‘sustainability’ has gained wider connotation and the UN now speaks of economic, social, and environmental sustainability and organisational theorists of organisational sustainability, and so on.
There is growing evidence that sustainable practices, OB, and performance are linked.
Research on this front reveals the following:
i. High sustainability companies (those that voluntarily adopt sustainability practices) outperform the low sustainability ones (those that are compelled to do so).
ii. Ethical and multicultural values are important for planning and implementing effective management practices and organisational sustainability.
iii. Organisational citizenship behaviour is correlated with eco-initiatives, eco-civic engagement, and eco-helping.
iv. Adoption of environmental standards leads to higher commitment, and such organisations tend to give more training and encourage more interpersonal interactions.
v. Transformational leadership behaviour related to environmentally sustainable practices leads to greater adoption of such practices.
vi. Organisational citizenship behaviour (OCB) towards the environment emerges as something distinct and different from the dimensions of general OCB such as perceived organisational support (POS) or affective commitment (AC). Employees believe that sustainability is important both in general and for one’s current organisation.
Research is still in progress to identify how sustainable practices impact OB. However, there is growing evidence that sustainable practices have an influence on behaviour.
Factor # 7. Change Management:
The issues such as globalisation and technology indicate that rapid change is the order of the day. Hence, managing change itself is a challenge and has many linkages to OB. Several business schools have a course on managing change and the Australian Institute of Change Management has introduced a diploma programme in it.
Change can be defined as the process of persuading people to accept new vision/mission, and adopting matching goals, organisation structure, systems, processes, practices, and procedures. That OB influences change is perhaps an understatement. For example, individual variants such as an open personality, perceptual biases, and attitudes influence the willingness of people to change.
Team/Group-level dynamics are often crucial in accepting or rejecting change. Organisational structures enable or disable change management. At the same time, change itself affects OB variables such as perception and, can even change the personality to some extent.
Factor # 8. Organisational Transformation:
Consider the following cases:
i. In 2010, Tata Tea adopted the name Tata Global Beverages. However, much before that, it had given up focus on tea estate business and had shifted to selling branded tea. It had taken over the Tetley global brand and was earning some 70% of its revenues from the sales of tea and related beverages outside India. This is an example of a proactive change, as the company moved out of its traditional tea estate business through transformation.
ii. IBM gave up its hardware business and shifted to the business of providing business solutions.
iii. Haier, a traditional, Chinese company with no focus on quality, upgraded itself in a short period time after it was compelled by the forces of globalisation.
All these are examples of transformational changes, which shook the very root of business. Tata Tea embraced change anticipating changes in the global business environment. This can be considered a proactive change. Haier changed due to compulsion of the globalisation forces and can be considered reactive transformation. The case of IBM is, perhaps, somewhere in between.
Most modern managers would have heard the term ‘organisational transformation’. From an OB perspective, transformation involves changes in all OB variables related to the teams/groups, leadership, and organisation. It also impacts several individual OB variables such as perception, attitude, and learning.
Factor # 9. Co-Creation:
Co-Creation is an important concept that has crept into the management world and affected OB in a big way. In 1994, while the author was travelling with a strict vegetarian friend through the interior areas of South Africa, we had to stop over in small way-side restaurant for lunch. Famished after a long drive, we were ready to eat anything.
The restaurant had not heard about a vegetarian meal or dish; yet the cook wanted to help. Frustrated with his attempts, the cook invited my friend, Srivatsava, into the kitchen, and together they made a mixed vegetable dish sans the spices of India. It is another matter that while we who feasted on the exotic African meat dishes paid heavily, Srivatsava not only got his lunch free, but was also thanked several times for his kindness to help.
This basic concept of creating something valuable to the consumer using his/her input has now proliferated through the business world, enabled by the social media. Nivea, the well-known body care company, for example, took input from dozens of social media sites and collaborated with the customers to create a deodorant that addresses the stain problem. This is an example of co-creation.
Institutionalising co-creation requires empowerment of employees. For instance, the cook could invite Srivatsava to the kitchen and make the dish which most restaurants would not permit. The employees should be able to perceive the needs of the customers, have a positive attitude, a learning orientation and motivation to experiment with the new.
When they co-create, the perception and attitudes of employees towards customers and business change. Customer-oriented teams emerge, and organisational structures tend to collapse. Thus, when co-creation is institutionalised, it begins to impact OB.
Factor # 10. Empowerment:
Empowerment is a natural ally of the co-creation, change, and transformation, because unless employees are empowered, it is not possible to do any of these. In many organisations, people are considered partners and associates, rather than workers or employees, to signal empowerment.
Empowerment can be defined as giving degrees of freedom to the employees to take decision. Some might fear that ‘control’, a management on fundamentals of an organisation and management and empowerment are dichotomous. In reality, they are not so. It is possible to do both by introducing control measures only at critical points.
Empowerment changes the behaviour of people, teams, and organisations. Empowered employees are more accountable and get motivated because of high self-esteem associated with empowerment. As a result, absenteeism reduces and job satisfaction increases. Team/group cohesion also improves.
At the organisational level, the structures can become less bureaucratic and spans of control can increase, thus making the organisation more productive. At the leadership level, creating trust, setting the right direction and inspiring people are essential for empowering people.
Factor # 11. Managing Managers:
Globalisation has compelled all organisations to consolidate and scale up operations and co-create. As a result, organisations have often become a cluster of managers, and managing managers has become a major challenge in modern organisations. This, of course, is very different from managing workers.
In service-driven organisations such as banks, insurance, and consulting, this challenge is very pronounced. If you look at a new generation bank, seldom do you see a non-manager. There are many lessons one can pick up from the 14 principles of management, scientific management, and relationship school to create a mental model of managing managers. There are many books, articles, and blogs on the subject.
Conceptually, they boil down to the following:
i. Managers need to be given a clear job role, responsibility, and authority to act. If the job is too narrow or over specialised, managers get bored or feel worthless. If it is too large, they will feel overwhelmed.
ii. The nature of the job in the modern context demands a matrix, networked or virtual organisational structure. This makes it difficult to follow the principle of unity of command and makes conflict commonplace. The need to be creative in demarcating the area of responsibility, having clear targets in each area, and corresponding reporting channels and promotions based on a holistic evaluation of performance are the challenges that organisations have to handle. This makes organisations more complex.
iii. Complexity demands greater participation and transparency in all areas—goal setting, laying down performance standards, decision making, resource allocation, and choice of a basket of responsibilities. This underscores the role of dialogue and leadership.
iv. Though there is a managerial hierarchy even today, this hierarchy has to work like a networked team.
From an OB perspective, the core of managing managers is creating self- managing teams. This means that inspirational leadership becomes more important than structure. Motivation would have to hinge on self-esteem and self-actualisation, and the organisation would have to be a learning entity. This leads to renewed focus on several individual OB variables such as the right personality, perception, and attitude.
Organisational Behaviour – Importance
1. Organisational behaviour (OB) and HRM have got a very close and integrated function in an organisation.
2. OB mainly focuses on people and/or other factors connected to it are economic, technical, social, etc.
3. It attempts to improve human relation in an organisation.
4. OB helps in understanding the people and assigning adequate importance to develop human skills.
5. It inculcates team work and cooperation amongst people to accomplish the task willingly in an effective manner as per the organisational schedule.
6. Organisational behaviour tries to motivate people to work and also to maintain efficiency in performance.
7. OB is an interdisciplinary approach, it integrates knowledge from different subjects/disciplines and has close association with HRM, psychology, sociology and anthropology, and also other social sciences. By integrating knowledge, it applies the same for organisational developmental activities.
8. OB also makes effort to reduce the wasteful activities in an organisation.
Organisational Behaviour – Top 5 Models by Newstrom
Direction is all about understanding the behaviour of people. Effective directions depend upon different models which depend upon the nature of human beings. People have complex nature and no uniform set of assumptions can be made about how they will behave in similar or dissimilar situations. There are different models (also called models of organisational behaviour) which make different assumptions about the nature and behaviour of human beings.
People have different needs, some of which are overlapping which they want to satisfy through their job. A good direction policy takes care of complex nature of human beings and is contingent in nature. It depends upon different nature and behaviour of people at different points of time. It is, thus, situational in nature.
Different organisations behave differently because managers follow different models of organisational behaviour in different organisations. Organisation behaviour models are based on management’s assumptions about —
i. People, and
ii. Vision of management about the organisations.
These assumptions lead to managerial behaviour in a certain way. Managers behave the way they think is the best for the organisations, based on assumptions about people. This behaviour results in an organisation behaviour model that prevails in the entire organisation.
The following organisation behaviour models have been described by Newstrom which represent beliefs about how managers think and act:
1. Autocratic Model
2. Custodial Model
3. Supportive Model
4. Collegial Model
5. Systems Model
Model # 1. Autocratic Model:
This model assumes that workers are lazy and dislike work. They do not assume responsibility for work and prefer to be directed by managers. They do not take initiative to work. Managers work in a formal environment and make use of authority to get the work done. Employees follow the orders and become dependent on them for fulfilment of their needs. Managers issue orders and instructions by virtue of their position and authority.
They use negative forces of motivation like threats and punishments to which the employees simply obey. They are not committed to the managers. There is strict and close supervision to get the desired performance from the employees, communication is one-way (top to bottom) and interaction of managers with employees is minimum.
This model is largely based on McGregor’s. Theory X assumptions about motivating employees which believes in external control to deal with employees or the exploitative- authoritative style of leadership. Employees’ performance is bare minimum in such situations as managers can use their authority to fire the employees.
Though this model is not much in use in the contemporary business environment, its use is appropriate when:
i. Urgent action is required
ii. Employees are unskilled, inexperienced and submissive
iii. Employees have strong lower-order needs to satisfy.
Model # 2. Custodial Model:
Use of autocratic model develops frustration amongst employees as it is based on economic concept of the man. It assumes that people work mainly to satisfy their physiological needs. As this is not the case, there develops a sense of insecurity amongst employees and they look forward to satisfy their security needs also. In order to overcome the feeling of frustration and develop better relationship with employees, managers follow the custodial model of direction.
Managers use economic resources to provide fringe benefits and other economic rewards, like pension, gratuity etc. to employees. Money is used as a strong motivator to satisfy their security needs (job security); though, however, their physiological needs are largely met in the autocratic model. Rather than being dependent on the managers or boss, employees become dependent on the organisation in this model. They want the organisation to provide them fair wages for which they cooperate with the management.
Money serves as a maintenance factor as propounded by Herzberg. It, thus believes in power of money rather than power of authority. Though workers are not dissatisfied with their jobs, they are not motivated to perform better. They are not allowed to participate in the decision-making process, they cannot decide their rewards and, therefore, they are happy but are not motivated.
It assumes that managers know what the best is for them. They are their custodians and decide what is good for them. This approach of paternalism does not work for employees who have strong higher-order needs of ego satisfaction, recognition and achievement. Workers in this approach are, thus, happy but not productive.
Model # 3. Supportive Model:
While autocratic model aims at satisfying workers’ physiological needs through use of power and custodial model aims at satisfying their safety needs through use of money, the supportive model aims to satisfy their psychological needs also besides physiological and safety needs through participative style of management. Managers adopt relationship-oriented behaviour and allow employees to participate in the decision-making process.
Communication is two-way and a healthy work climate is ensured which takes care of the human side of the organisation. It provides supportive climate in the organisation where employees’ innovative abilities are exploited to their fullest and they contribute to organisational goals to the best of their abilities.
Managers, thus, focus on human relations and attribute organisational success to satisfaction of human needs. There is synchronisation of individual goals with organisational goals as both, organisation and the employees work to satisfy each other’s needs. They have an attitude of care and understanding for each other.
This model is similar to Theory Y assumptions of McGregor’s theory of motivation.
This model is appropriate when:
i. Workers’ higher-order needs are predominant
ii. They are self-motivated to work
iii. Managers have trust and confidence in the employees.
Model # 4. Collegial Model:
‘Collegial’ means a body of people working together for a common purpose. This model aims at teamwork. People work together as a team. They are self-directed and take independent charge of their work. They set high targets, have full potential for development and are skilled at their work. This model is an extension of supportive model. The manager, however, does not need to direct the workers through some kind of incentives.
People have strong higher-order needs and produce goods results at work. Since the managers know that their team is confident, capable and motivated, they often step back and let the people go on with their tasks. Managers empower the group to achieve their goals by handing over ownership to them. People look at organisational tasks as their own tasks and work hard to bring goodwill to the company.
This model is appropriate when:
i. Work is unstructured that requires people to use their innovative abilities.
ii. Work is intellectually challenging where people are required to exhibit behavioural flexibility.
iii. People have freedom to work to fulfil their higher-order needs; achievement; recognition; challenge at work.
Model # 5. Systems Model:
Under this model, people work to satisfy their self-actualisation needs; need to become what they want to become or to do what they want to do. They look for challenge and meaning in their work and are not satisfied by mere financial rewards. Employees do not see organisations as different from themselves. They go beyond self- discipline and self-motivation and work to create organisational culture that serves as a benchmark for others.
Organisations take benefit of such employees and employees also view organisations as a source of fulfilment of their needs. There is, thus, synchronisation or mutuality of interests between the organisation and the employees. It requires transformational leaders who let the people decide for themselves and also for their organisations.
On analysing these models, it cannot be generalised whether one model is better than the other or any model is the best. These models are based on assumptions about people and how they react to different situations. Primarily, adoption of these models depends upon need hierarchy of the individuals. As one moves up the hierarchy, there is a shift in the model from autocratic to systems model.
When people have:
1. Strong physiological needs, managers adopt autocratic model;
2. In case of strong security needs, custodial model works better;
3. In case of social and esteem needs, the best results are given when supportive model is adopted;
4. High-order needs of achievement and self-actualisation are met through collegial and systems model.
Thus, it is observed that as one moves up the need hierarchy, each successive model focuses on human side of organisations.
Use of these models is contingent upon the situation, which may relate to policies of the organisation, its culture and climate, the level at which people work, their level of maturity, work environment, personality factors etc. However, in the contemporary business environment, people are viewed as important assets of the organisation and managers no more see them as passive and immature workers.
They are independent, mature and prefer to work in an environment of participative style of management. There is, thus, a tendency to focus more on supportive models. These models get the best out of workers, help in morale building and achieve the ultimate objective; organisational effectiveness.
Organisational Behaviour – Hawthorne Experiments for Studying Organizational Behaviour
Hawthorne Western Electric Plant began in 1924, where numerous experiments were conducted to study the work- related factors that affect the employees’ morale and productivity. These experiments laid the foundation of industrial psychology and evolved as the study of employee motivation, morale, and human relations.
According to Blum and Naylor “The Hawthorne studies are of utmost significance as they form an honest and concerted attempt to understand the human factor rarely understood in industry, recognizing the employee attitudes, his social situation on the job and his personal history and background.”
1. Illumination Experiments (1924-1927):
Hawthorne Western Electric Co. conducted illumination experiments or Hawthorne-Harvard experiments in 1924-1927 to study the effects of changed illuminations on the work of employees. In illumination experiments, two groups were formed. The first group (control group) was made to work under the existing illumination condition throughout the experiment tenure and the second group (experimental group) was made to work in the changed illumination conditions.
The findings were astonishing because the productivity of both the groups increased. In the second chance, the researchers decreased the light intensity. This time also the productivity went up for both the groups.
Therefore, they reached at a conclusion that there was something more than wages, incentives, working hours, and working conditions that was eventually driving the productivity of employees. The reason could not be identified and these experiments paved the way for another series of experiments, called relay room experiments.
2. Relay Room Experiments (1927-1932):
Relay room experiments were conducted by Prof. Elton Mayo and his associates in 1927. These experiments were conducted in a test room with the help of two girls. The two girls were asked to select four more girls and all the six girls were given the task of assembling telephone relays.
These experiments incorporated manipulation in numerous factors, such as incentives, work duration, and rest periods’ duration to measure their influence on the productivity of girls. The performance and productivity of girls were observed for five years by changing various factors from time to time.
The findings suggested that the variations in factors, such as pay, incentives, rest, and working hours (independent variables), do not cause variations in factors, such as productivity (dependent variable).
3. Mica Splitting Test Room Experiments:
Mica splitting test room experiments were conducted to find if the productivity of workers is influenced by the incentives plan alone. During these experiments, the piece wage system was kept constant and changes in work conditions were incorporated. It was observed that the productivity of workers increased by 15% for a period of fourteen months.
In the words of Rothlisberger and Dickson- there was no evidence to support the hypothesis that the constant rise in productivity in the relay test room could be attributed to the wage incentive variable alone.
4. Mass Interviewing Program (1928-1930):
Another Hawthorne experiment was plant-wide mass interviewing program that was implemented in Western Electric Co. From 1928 to 1930, 21,000 employees were interviewed to record their concerns and grievances. The findings indicated that certain factors have an impact on the productivity of workers. When the workers talk and speak out their grievances then their morale increases. Workers’ satisfaction is directly related to the social status of the working organization.
5. Bank Wiring Room Study (1931-1932):
The final Hawthorne experiment, called the bank wiring room study, was conducted to observe and analyze the dynamics of a work group, when incentive was introduced. For the purpose of experiments, a group of 14 workers was employed on bank wiring. The work was distributed between nine wiremen, three solder men, and two inspectors.
In bank wiring room study, the work group formed a rule that the group would perform a certain pre-decided quantity of work in a day. The entire work group adhered to this rule regardless of pay, which implies that group rules were more important for the members. Thus, it was suggested to bring the management and worker’s objectives in line to work towards the common goals for the betterment of the organization.