What are the foundations of organisational behaviour? - Chapter 1


Organisational behaviour observes the interactions and habits of people and organisations. It tries to improve the organisations effectiveness. The three levels of analysis in organisational behaviour are the individual, the group, and the organisation.

Pfeffer found evidence that ‘people-centred practices’ are strongly associated with higher profits and significantly lower employee turnover. This means that orginisations should pay more attention to their  employees.

There are seven people-centred practices that are used by successful companies, which are:

  • Job security: eliminate fear of losing a job

  • Careful hiring: the emphasis should be on good fit with company culture

  • Power to the people: decentralisation and self-managed teams

  • Generous pay for performance

  • Lots of training

  • Less emphasis on status: to build a ‘we’ feeling

  • Trust-building: through the sharing of critical information

Organisations have become more global over the years. Globalisation itself does not have an impact on organisational behaviour, but the amount of emphasis on organisational behaviour depends on the location.

Where did the study of organisational behaviour start?

In the 19th century, Karl Marx, Emile Durkheim and Max Weber studied the effects of the industrial revolution. Marx studied the development of the working class. Durkheim studied the loss of solidarity in the new society. Weber is known for his work on bureaucracy, and  was the first to study organisational behaviour.

Who are the big names in the rational-system view?

Frederick Taylor

Frederick Taylor is the founder of scientific management. This is an approach to management in which all tasks in organisations are analysed, routinised, divided and standardised in depth, instead of using rules of thumb. This leads to more efficiency due to the increasing pace of working because of the divided subtasks.

The consequences of this approach to management are:

  • Higher output

  • Standardisation

  • Control and predictability

  • The routine of the tasks allowed the replacement of skilled workers by non-skilled workers

  • Thinking is for managers, workers only work

  • Optimisation of the tools for each worker

Both employees and managers were analysed. Managers were provided with subtasks. Even though Taylor raised the loans, he got a lot of resistance from the employees. Many employees felt as if they lost their value as skilled employees. Due to misinterpretation and misuse, Taylor had a bad reputation for pressuring workers by letting them use inhumane work methods and forcing them to work at speed to enrich management.

Henri Fayol

Henri Fayol is the founder of ‘management’. Based on his research, he introduced five basic management tasks.

The five basic management tasks are:

  • Planning: predicting a course of action to meet the planned goals.

  • Organising: allocating materials and organising people. Authority, discipline, control are key concepts of management.

  • Leading: giving directions and orders to employees. Convince, influence and motivate others to make them accomplish the goals.

  • Co-ordinating: harmonise different departments to one unit, working for the general interest of the company.

  • Controlling: to what extent the goals were met + orders are followed. Carried out by an independent + competent employee.

To execute the basic tasks named above, the following fourteen management principles should be obeyed:

  • Division of labour

  • Authority and responsibility

  • Discipline

  • Unity of command

  • Unity of direction

  • Subordination of individual interest to the general interest

  • Fair remuneration of personnel

  • Centralisation

  • Hierarchy

  • Order

  • Equity

  • Stability of tenure of personnel: low turnover

  • Initiative by every employee

  • Unity among the employees

The six skills a manager should possess are:

  • Physical qualities

  • Mental qualities

  • Moral qualities

  • General education

  • Specific education

  • Experience

Fayol admired Taylor, they both aim at universal descriptions of organising. However, Fayol focused on the manager, while Taylor focused on the worker.

Chester Barnard

Barnard built his theory on general principles of co-operative systems. He describes individuals as separate beings but not totally independent. The freedom of an individual is bounded by biological and physical limitations. The effectiveness in the workplace will increase by co-operative actions. Three necessary elements for co-operative action are willingness to co-operate, a common purpose and communication.

He also states that organisations consist of smaller, less formal groups, which all have their own goals. Management should align those goals to the overall organisational goal. Barnard's main contribution was including individual choice, power and informal groups in organisational theory.

What are the big names in the human relations movement?

The human relations movement was stablished because unions wanted better working conditions and researchers wanted more attention to the human factor within an organisation.

Elton Mayo

Mayo conducted research into the relationship between environmental factors (such as lighting) and worker output at Western Electric’s Hawthorne plant. The Hawthorne studies found no correcation between working conditions and output. Instead, they found that output was influenced by the motivational effects of the attention they got from being part of the experiment, and the different kind of supervision (by researchers, not their own supervisor). In addition, they found that members of informal groups don't always belong to the same formal groups. Every groups creates their own norms and values. Unfortunately, re-analysis did not support the initial claims of the Hawthorne studies. Nonetheless, they did support the human relations movement.

Mary Parker Follett

Mary Parker Follett stressed the importance of human relations in organisations, particularly the improvement of the relationship between management and employees. Employees were the key parts, paying attention to their needs was the way to improve productivity. Follett’s view on management was the integration of the individual and the organisation. She focused on the interests and needs of the workers and managers. The six most important themes of Follett’s work are:

  • Dynamism

  • Empowerment

  • Participation

  • Leadership

  • Conflict

  • Experience

Douglas McGregor

Douglas McGregor formulated two different approaches regarding the human nature, theory X and theory Y. Theory X is the negative way managers traditionally perceived employees, theory Y was formulated to help them break out of this negative view.

The outdated (theory X) assumptions about workers are:

  • Most people dislike work.
  • Most people must be coerced to work, close direction is necessary.
  • Most people avoid responsibility, have little ambition, and prefer to be directed.

The modern (theory Y) assumptions about people at work are:

  • Work is a natural activity.
  • If committed to objectives, people are capable of self-direction.
  • When people are rewarded they become commited to organisational objectives.
  • Most people can learn to accept and seek out responsibility
  • Most people have imagination, ingenuity and creativity.

What are Morgan's 8 organisational metaphors?

According to Gareth Morgan, everyone has a different image of how organisations look. These images are only partial views of how organisations actually work. You need to combine them to get a realistic image. Morgan summarised the different images in eight metaphors: machines, organisms, brains, culture, politics, psychic prisons, flux and transformation, and instruments of domination.


This methaphor describes orderly relationships, a clearly defined logical system with subsystems, and predictability and controllability. However, it does not take the point of view of single individuals.


The organism metaphor sees an organisation as the human body. It describes an organisation as an open system that transforms inputs into outputs. Organisations must try to adapt to their environment in order to survive. Principles of open systems, change, and life cycles fit in this view. A disadvantage is not enough emphasis on structure, too much emphasis on change.


In the organisation as brains metaphor, the information-processing capacity is the most crucial aspect. Brains have a complex and flexible way of processing. Every worker has  valuable knowledge and is able to learn. Self-regulation is key.


In this metaphor the development of norms, language, shared values and mental models are emphasized. The members of the organisation construc their own subjecive reality. This metaphor relates to the view of organisations as symbolic interactionism. the main theorist is Karl Weick, who posits that we create an organisation by talking about it. Therefore, it is a social construct. Because this is subjective, two people might look at the same data and come to different conclusions.

Postmodernism takes this subjectivity even further, claiming that there is no one truth. Because of this, a postmodern view makes it impossible to develop general applicable theories.     


The politics metaphor is competative. Resources in an organisation are scarce, and individuals have personal goals that do not always match organisation goals. Central values are: conflict, power, coalitions, influence and competition. Resource dependence is a view that looks at the ways in which organisations are interdependent with their environments.

Psychic prison

In the psychic prison metaphor, the identification with an organisation becomes so strong that it controls how we think. However, organisations are created by people, so the prison is self-built. The development of a psychic prison happens unconsciously.

Flux and transformation

This metaphor sees an organisation as being in a state of constant change. The organisation can exist over time, but inside it is constantly changing. There are four images used in this metaphor.

  • Biology: an organism is constantly creating itself.
  • Chaos theory: where patterns are found in chaotic system such as a flock of birds flying together.
  • Mutual causality: an organisation exists of both negative and positive feedback loops.
  • Dialectical change: every concept has an opposite, and cannot exist without its opposite.

Instruments of domination

Organisations can create many positive outcomes for the world, but can also be very destructive to humans and the environment. For example: pollution, production of cigarettes, child labour. Organisations can also be harmful to their employees: their self-image might be connected to an organisation that does harm to the world, or they may be forced to overwork.

Conflict theory

All social structures are based on conflict. There is never stability, because people always have different goals and world views. Scarce resources create conflict and conflict is a source of change. Karl Marx's theories are an important foundation of conflict theory.

Critical theory

The field of critical theory is very broad, so a single definition is difficult to find. However, all agree on the cristicism of functionalism and capitalism. Critical theory is also based on Marx´s theories, and has an emphasis on power as the dominant system in organisations.

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