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Importance of Organizational Behaviour on Teamwork

Paper Type: Free Essay Subject: Business
Wordcount: 4442 words Published: 2nd Jan 2018

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According to Keith Davis “organizational behavior is the study and application of knowledge about how people act within organizations. It is human tool for the human benefit. It applies broadly to behavior of people in all type of organization such as business, government, schools, etc. it helps people, structure, technology, and the external environment blend together in to an effective operative system”. Fred Luthans defines organizational behavior as “understanding, predicting and controlling human behavior at work”.


Stephen Robins defines organizational behavior as a “field of study that investigates the impact that individuals, groups, and structure have an organization for the purpose of applying such knowledge improving an organization’s effectiveness”.

According to Stephen Robbins, “four elements make up the Organizational Behavior life cycle. They are Leadership, Employees of the Company, Organization Behavior Guidelines and time frame, Organizational Framework. Organizational Behavior is an important aspect to maintain interaction levels amongst employees in the company and also to enhance healthy relationships between them. Other attributes like leadership qualities of the employees, openness to discuss problems between the top level and ground level employees, challenge-initiative are all embedded in to this basic concept of Organizational Behavior to help the business in achieving its strategic and sometimes its business objectives.

“What Case Study Says”

The General Electric(GE), the conglomeratecorporation incorporated in the State of New York, USA, is famous for its organizational culture. In GE, the management philosophy followed by the management is to Encourage employees to share their views in a collaborative culture, Vest greater responsibility, power, and accountability with front-line employees, Eliminate wasteful, irrational, and repetitive steps in the work process (which would come to light through employee feedback), Dismantle the boundaries that prevent thecross-pollination of ideasand efforts and they consider customers and community as the emperor. They gave former importance to team job and gave respect to each other. All these optimistic aspects helped the company to get strong faithfulness of millions of employees during the long 120 years since the Company was founded by Thomas Edison. Jeffrey Immelt managed the whole company in a well-known style that has been very legendary till now. In 2000 to till now, when GE passed away correspondingly, along with the obituary wordings it was noted by writers, that the founders’ legacy was not the reason for the huge growth of GE-but it was the one and only GE Way.

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But after the merger of GE with ITT Corporation,Ling-Temco-Vought,Tenneco, the things misrepresented upside down. Former GE people like former dissection heads, managers, engineers, and all the employees says about the GE Way as something special. General Electric usually visited the corporation halls, interrelate with community and staff about their projects, their troubles etc. They keep in mind that at time everybody valued everybody else.

The actual issues started when John Francis Welch Jr, was hired from outside as GE’s Chairman and CEO. He stuck hard to the productivity of the company. A background of fear started among the staffs which never be real before. The main complaints against him were valuing money more than people, maltreatment lay-offs and creating a culture which is inequitable to the staff’s. His intentions didn’t match with GE’s visions. They saw revenue only as a bludgeon to achieve other objectives which are given equal value. The other objectives include welfare of the employees, customers etc.

The above case was all about GE Way. It is a across the world held opinion that GE Way played a critical role in Company’s achievement. Critics may say that to support an excellent corporate civilization, the company should be at its superior times. But people of GE who have experienced GE Way will never agree this because GE’s most struggling times were also the times when GE Way was established at its best.


1) The contribution, motivation, rewards and roles of individuals within these groups and teams

According to Stephen P. Robbins, “motivation is the willingness to exert high levels of effort toward organizational goals, conditioned by the effort’s ability to satisfy some individual need.”

Fred Luthans views motivation as “a process that starts with a physiological or psychological deficiency or need that activates behavior or a drive that is aimed at a goal or incentive.”

Each and every function of life is accompanied with one or other type of motivation. There are two main kinds of motivation: intrinsic and extrinsic. Internal motivation is known as intrinsic motivation. When external factors compel the person to do something, then it is extrinsic motivation.



Elton Mayo has the opinion that a employee having societal links at the place of work will be motivated more. Mayo believed that employees can also be motivated by acknowledging their social needs and making them feel important among others. This is what is done by General Electric in the case of GE Way. The employees who have skilled the actual GE Way says that “everyone is valued by everybody else” which means all the employees are given significance and also the opportunity to articulate their thoughts and views. Employees were given liberty to make decisions on the work and superior concentration was paid to relaxed work groups. This model is named as Hawthorne effect by Elton Mayo.



In the case study, General Electric were very victorious in inspiring their employees by simply being down to earth. They never forget to visit their employees, to interact with them and to know their troubles and also to find answers. From all these illustration we can say motivation is what propels life. In everything we do motivation plays a major role. To care about output, learning, means, employment, achievement, victory, breakdown, etc motivation should be there

An example for motivation, in management and organizational behavior:

Example: Under-performing of employees which resulted in performance outcome

A unexpected collapse in the profits was experienced by Company A. The company’s management executive found out that this returns fall is as a result of under-performing of their employees. The performance of the employees was extremely much under the expectations of the management. This resulted in a rapid action from the company’s part by firing about 6 employees and a new batch of people was hired. The company unsuccessful to understand in an earlier stage that the manager’s incapability was the basis cause of under-performance of the employees. The manager unsuccessful to provide them safer working conditions and this de-motivated the employees which resulted in decrease of productivity. This incident really opened their eyes which made them to execute strategies which help the company as well as employees to come from Under performance era.


The motivation process is demonstrated through several theories. They are as follows:

  1. Need-based theories: Need based theories include Maslow’s need hierarchy, McGregor’s Theory X and Theory, Herzberg’s two-factor theory, Alderfer’s ERG theory and McClelland’s need theory
  2. Process based theories include Expectancy theory, Goal-setting theory, Reinforcement theory, Attribution theory
  3. Individual-organizational goal-congruence theories consists of Exchange, Accommodation, Socialization, Identification

Maslow’s Need Hierarchy is all about a hierarchy of five basic needs which includes Physiological needs: hunger, thirst, shelter etc. Safety needs: security and protection from physical and emotional harm, Social needs: affection, belongingness, love, acceptance, and friendship, Esteem needs: internal esteem and external esteem, Needs for self-actualization: the drive to best realize one’s potential.

Alderfer’s ERG theory talks about three types of needs-Existence needs consisting of physiological and safety needs, Relatedness needs including the desire for maintaining important interpersonal relationships: social needs, and the external components of the esteem needs and Growth needs: an intrinsic desire for personal development: the intrinsic component of esteem, and self-actualization.

McGregor’s theory X and theory Y Theory X has the assumption that employees don’t like work, and they are lazy, not willing to take responsibility, and not motivated. Theory Y has the assumptions that employees like work, are creative, responsibilities seekers, and are self motivated. Herberg’s two-factor theory talks about two contrasting views of satisfaction and dissatisfaction and it also talks about two factors-motivational factors and hygiene factors. McClelland’s Need Theory deals with the need for achievement. In other words it talks about a drive to excel, to set a higher goal, to seek higher responsibility, and to strive to succeed.

All these theories more or less deals with what all factors create motivation in people and also the influence of motivation in an business. In the case of GENERAL ELECTRIC (GE), earlier the company was very good in mounting employee morale and thereby improving the efficiency of the operations of the company. But after the merger, the things totally fell upside down. The new top level authorities intense only on the profitability and not on the employee morale. This paved the way for dissatisfaction in employees which negatively affected the productivity of the company.

Reward system consists of financial rewards and employee benefits, which is collectively known as total remuneration. They also include non-monetary rewards such as appreciation, promotion, praise, achievement, responsibility and personal growth. Recent studies and researches on reward system shows that reward criteria of the organizations, both monetary and non-monetary rewards have great influence on the employees and performance and the performance of the employees. As an answer to the question, why reward system is required, we can find out a number of reasons like it can improve organizational effectiveness, it is capable of achieving integration, motivate the employees, compete in the labor market, increased commitment towards work, it can attract employees having fair and improved skills, improved quality, develop team working.

Singh et.al. (1977) in a study of organizational culture and its impact onmanagerial remuneration concluded that the demands for money was significantly influenced by the quality of organizational culture and that it can substantially be reduced by improving the quality of organizational culture. Findings such as those suggest that satisfaction, task involvement, demand for money and commitment are largely determined by organizational culture.

Steve Williams and Fred Luthans (1992) stated that, “the choice of reward interacting with feedback had a positive impact on task performance”. According to Theodore R. Buyniski (1995),”Despite the tendency in recent years to down grade the importance of money as an organizational reward, there is ample evidence that money can be positively reinforcing for most people. Teams are also important in an organizational context because it bring together people with different skills and experiences that enable the organization to quickly respond to innovation, changes in the business environment, and changes in the customers need faster and more effectively. Teams also solve problems quicker because of increased communication (Katzenbach & Smith, 1999). The positions that are defined by a set of expectations about behavior of any job incumbent are termed as Roles. A set of tasks and responsibilities that may or may not be spelled out is accompanied with each and every role. Since money is being paid for the performance of the roles, there is prestige attached to a role, and a sense of accomplishment or challenge, roles have a powerful effect on behavior.

In the context of the case of GENERAL ELECTRIC(GE), even though reward plays a vital role, the morale of the employees was more affected by changes in the psychological environment of the organization and also sudden change in the culture of the organization. As they were practicing a different culture of informality, they find it difficult to a survive the new environment which is so formal and which gave no importance to their opinions. When an organization gives importance to the views and opinions of employees, they feel it better to work in such conditions because it is human nature to wish to be recognized. Better performance will be the result if the individuals are given some roles to perform.


[Steve Williams & Fred Luthans (1992), ‘ The Impact of Choice of Rewards and Feed Back on Task Performance, Journal Of organizational Behavior. Vol. 13, P: 653-666]

[Katzenbach, J.R. & Smith, D.K. (1999). The Wisdom Of Teams. New York: HarperBusinees]


(b) Management and leadership relating to both groups and teams

Alan Keith stated that, “Leadership is ultimately about creating a way for people to contribute to making something extraordinary happen.” Tom DeMarco says that leadership needs to be distinguished from posturing. Northouse says that leadership is a process whereby an individual influences a group of individuals to achieve a common goal. Mary Parker Follett defined management as “the art of getting things done through people”. Setting a new direction or vision for a group to accomplish the objectives of that group is known as leadership. But management is the controlling body or directing body of people and resources available in a group according to already established values. Even the terms management and leadership are often confused, they are actually different, but interrelated. The GENERAL ELECTRIC(GE) Way dealt with the legendary management style of two leaders Bill Hewlett and Dave Packard who through their leadership skills and qualities, developed the organization as a single family giving respect to each other. It is evident from the growth of GENERAL ELECTRIC(GE) that they were very successful in managing the people.

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Warren Bennis and Burt Nanus (1997) said “leadership is like the Abominable Snowman, whose footprints are everywhere but who is nowhere to be seen”. Leadership is everywhere but no one seems to be able to determine or figure out what makes up good leadership. It has been discussed by Bass in his book a study by H.L. Smith and Krueger (1933) in which they researched various primitive cultures around the world and finally reached a conclusion that leadership exists among all people, regardless of their culture, race or beliefs. Even though if societies do not have established or elected leaders, chiefs, or rulers, someone always exists who initiates a process and plays a critical role in the decision making process of a group (Bass, 1990). Hewlett and Packard found out that leadership qualities are lying hidden in each and every individual and thus they developed a culture of respecting each other developing a sense of integrity in the organization.

According to Hollander, leadership is a process that involves three main components. One is the leader, the second is the employees, and the third is the culture of the organization. If the relationship between these three components is not compatible then in a long term perspective leadership will fail and so will the team. The first component of leadership is the leader. A leader must possess certain beliefs, perceptions, characteristics, and skills for good leadership to occur in teams. A leader must hold the Wallenda factor closely. The Wallenda factor is the ability to only think about succeeding, and concentrating on the task at hand and not even thinking about failing. The Wallenda factor was named after a famous tightrope walker Karl Wallenda who fell to his death. Karl Wallenda was preparing for his most challenging stunt of his life. But what he could think for 3 months before stunt was about failing, instead of working hard for the stunt. Checking and supervising the construction of his rope, he has never done it before and due to the thoughts of failing he checked it for the first time. (Bennis & Nanus, 1997).

The willingness to share power and control with the team should be a quality of the leader. Acting like a traditional boss is not good for a leader; he should be like a player or coach to the team. As already seen in the case of GENERAL ELECTRIC(GE), leaders must be there for support and encourage employees to solve problems on their own. Hewlett and Packard were typical leaders in the sense that they regularly visited company halls to interact with people and to solve their problems. GENERAL ELECTRIC(GE) Way, as the employees feel was a life and the leaders were like colleagues not bosses. They treat employees like equals and there were nothing that could be communicated only to managers and not to employees.


[Bass, M.B. (1990). Bass & Stogdill’s Handbook of Leadership. New York, NY: The Free Press]

[Bennis, W. & Nanus, B. (1997).Leaders: Strategies for Taking Charge. New York, NY: HarperCollins]


[Hollander, E.P. (1978). Leadership Dynamics. New York: The Free Press]






Boundary Management Chart

Harvey Robbins created a chart that helps leaders and the team members to know their boundaries specifically. This chart is having goals and objectives in the middle box, resources in the box above it and quality in the box below it. The quantity box is to the left of goals and objectives and to the right is the schedule box. When a team member becomes more skilled the leader will put his or her name in one of the boxes and then that team member will be responsible for that job. The other boxes deal with being in charge of the quality of the product produced, the quantity of the product produced, and in charge of the resources used to produce the product. Other responsibilities assigned to other employees could be added to the chart if needed.

The only box, according to Harvey Robbins, that is not negotiable is the center box: goals and objectives. Leaders are not ready to completely give up control of goals and objectives because they must make sure the team members’ goals and objectives are matching with the organization’s goals and objectives. But the team members will be given the opportunity to involve in decision-making (H. Robbins, personal communication, September 15, 1999)

An important element of good leadership is trust. Trust can be earned through many ways. In case of GENERAL ELECTRIC(GE), one way of creating trust was sharing of information and access to upward communication. A second was allowing team members to take risks without fear of punishment. Instead of firing or giving punishments the culture in GENERAL ELECTRIC(GE) was to give reassignments of jobs from which they can learn their mistakes.

c) Group structures, goals and objectives.

The group structures are important since it plays a vital role in determining the productivity of a group. A group can do better than the collective effect of employees working independently. A successful group leader can lead a group to success. Different organizations structure their groups differently based on their goals and objectives. Groups should not be over crowded with skilled people, at the same time should not lack skills and talents. A group lacking skilled personnel may fail to achieve the said objectives. Goals and objectives provide the team members with the means of doing an act, and the end result will be their successful accomplishment. The group’s goals, work plans, procedures, resources etc should be successfully arranged to get good results.

When the work is carried out in well managed groups, the groups will enjoy operational and managerial freedom, which can increase their satisfaction towards work. The members of the group should be aware of his/her contribution towards the group and it is being valued, each individual starts viewing the group as an attractive entity. Well managed group structures enable the employees to work in co-operation.

The statements that describe about the vision to be accomplished, or the results of any action that will be achieved in the future are known as goals and objectives. Goals provide a wide context of what the vision is and what is it trying to achieve. Objectives are more statements that describe in a narrow context i.e. specific, tangible products, deliverables and fruits that will be delivered as a result of the action. Compared to objectives goals are high level statements.

Goals may include more than one objective to achieve since it is at a higher level. To be more precise, achievement of many objectives may result in the accomplishment of a goal. Generally goals cannot be measured. Goals are defined as long-term aims, in which validation is possible in the future while objective accomplishment is a step by step process and can lead to the successful accomplishment of a goal.

What the action is trying to achieve is what that matters in objectives. The objectives are concrete statements which should be written at a lower level. Then only it will be possible to evaluate at the conclusion of a goal to check whether it was achieved or not. Compared to goal statements, objectives should not be vague. An excellent objective will be specific, measurable, attainable/achievable, realistic and time-bound. Even though goals and objectives are often used interchangeably, there is a main difference in their level of concreteness. Goals are less structured compared to objectives which are more concrete. In the case study Hewlett and Packard were having clear cut objectives and goals which never hampered the satisfaction of the employees and customers. They considered profitability as a tool to enable other objectives which are equally important to them. But the problems started when the management failed to align the objectives of the organization and the objectives of the employees together.





Organizational behavior is so important because it studies or investigates about the impact of individuals and groups on behavior within organizations and it is used for the purpose of applying such knowledge towards improving the effectiveness of the organization. Organizational behavior provides the managers and leaders of the organization, the way through which they should travel and also make their employees travel to achieve organizational goals and objectives. For managers to build up a better work related understanding of themselves and their followers it is important to learn about organizational behavior in today’s business environment. As the definition says, a manager has to get his things done through others; the organizational skills become a valuable talent or asset for him.

The role of the managers has become more sensitive due to the changing nature of today’s business environment. It is now essential to be familiar with handling new work forces, dealing with the complication of new environment and so on. For this, business people have to develop their information about attitude and behavior of individuals, and groups in organizations.

In any organization or company, motivation and communication are two important elements in determining the success of the company. Based on motivation itself many theories have been developed to study behavior and characteristics of employees. The internal theory focuses on the differences within the individual that give rise to motivation and behavior. There are also theories about relation between personal needs or desires and organizational needs. The process theory focuses on the relationship of the employees with the company. The external theories focus on the various components in the environment making it a basis explanation of the behavior of the employees at work. Communication is the so important since it is the basis of all activities and it is used by all the employees regardless of their position whether upper or lower for informing about what is going on in the organization or company. An important motivating factor for employees is harmonious relationship in Maslow’s theory, which is a type of affiliation. The prior position in determining the satisfaction of the employees is occupied by working environment of the company.

The employees when given roles to perform and rewards for their performance can perform better. This is the reason for many companies setting up teams to work and develops a healthy competition among the teams. Management and leadership also play an important role in the ultimate success of the company. Both these terms are essential because one without the other will make the operations of the business incomplete. Leaders can make sure that the team possesses clearly defined goals that match with the overall vision, goals and objectives of the company. Leaders and managers are concerned with effectiveness which will be reflected in the company’s operations. Conclusively, OB can create an environment having happy moments of bonding together that can make each employee more intact that can help to maintain teamwork.


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