Why do organizations behave the way they do?

Posted on February 23, 2012 by sanjaygupta1408

Often wondering on this mystery, I thought it may be interesting to observe the different behaviour
patterns of organizations and to contemplate on the possible reasons of these diverse organizational
behaviour models.
There may be a plethora of factors that may attribute to such trends in organizations. As I go along I
will try to capture some of these possible parameters and delve deep to research the possible
impacts of these factors affecting organizational behaviour and finally what may be some possible
outcomes of such behaviour patterns.
These are thoughts which have evolved from my observations of how organizations behavethese
are not validated and researched data. The research has been happening in my mind. Neither there
is any input from any books/ source/ internet. The writing is purely a result of my curiosity to leran
more about the dynamics of organization and finally to use such information for further bettering
organization functioning (if I get a chance.).
Organizational Behaviour.what are you talking about
When we talk about Organizational Behaviour, it essentially means how a group of people in a
particular organization responds and behaves under a set of organizational conditions (this is what I
understand). Interestingly, it is an obvious observation that patterns of behaviour for a same set of
people are different when they are put in different organizations with a different leadership (or may
I say top management!! Not all top management acts as good leaders) Also, it is well known and
researched fact that leadership/ management styles at the top gives rise to distinct types of
organizational culture.
My experience of working and observing people & organizations say that behaviour changes are
directly influenced by the culture of the organization. Organizational culture is a direct impact of
how the top management or leadership in the organization behaves and responds to different
situations. Hence, in a way, organizational behaviour is a function of response patterns of the top
management.
This aspect of OB looked closely reveals the complex structure of organizations and the intricacies
involved in managing organizations; because what we are talking about is controlling and managing
human behaviour not of an individual but trying to align the behaviour of a group of people with
that of the organization. A conflict or a barrier in this process creates hurdle in the process of
creating balanced organizational dynamics.
Moreover, human behaviour in organizations can be best appreciated if we consider and analyse the
behaviour in 3 levels individual, team/ group behaviour and finally at an organization level. So in
the first level it is dealing with about individual perceptions, attitudes, philosophy; in the second
level we are dealing with coordination and communication methods, influences while working in a
work group or team; and finally at an organizational level how are organizations structured and
what are the operational behaviours of the organization and the outcomes of a particular set of
behaviour.

The OB Funnel 3 layer distribution



If we consider the 2nd level in this funnel, we will get some interesting observations. Let us assume
that an organization has 4 locations each of them functioning as a separate SBU with little influence
from other locations, and each of these locations being managed by a location head. Under such
circumstances if we consider each of these units as independent teams, we will observe that each of
these units will have a distinct behaviour pattern and will depend on the culture set in by the head
of that team. Though this may bring in intra-organizational cultural and behavioural diversity, such
difference in cultures may create unit or team level differences if these cultures do not complement
each other. So, often we see that there are multiple behaviour sets within the same organization.
Sometimes, such differences may create a disillusioned image about the organization in the minds of
the external stakeholder. The positive side of such a case may be that the organization is able to
position itself as one with multiple skill-based behaviour; this may be then presented as a deliberate
organization strategy with the message that the organization can cater to diverse client needs.
Managing Organization with OB
What has OB to do with organizational performance? How would managing OB help in better
organizational functioning? What if we continue to function as we function currently?

The aspect to look is to research if there is a better way that organizations can function if the
behaviour patterns are managed well; or to what extent the performance of organizations are
dependent on the behaviour or culture. We will try to take the organization management/
leadership aspect and see how this works.
What is the ultimate objective of an organization and hence its people? Maximising performance,
managing performance and measuring performance leading to creation of wealth (read as value-
added wealth) for its people, society and country at large may be defined as the objective of
business organizations. The keywords here are performance and wealth creation. Wealth
creation is maximised by better performance of people in the organization; so we are referring to
enhanced people productivity leading to better profitability.
The Performance Parameter
The culture the top management sets in the organization is a critical function determining the
productivity of the organization as a whole. If we consider performance as one of the critical
review parameters, then some of the questions that we may ask are is the top level very conscious
of determining and monitoring proficiency and performance of people are there effective systems
of business intelligence which can track and give output/ results in a dashboard mode.are there
mechanisms where the management reviews and communicates performance indicators.is there a
system to translate the performance of people into overall productivity of the organization.what
kind of reward system the organization has to recognize high performance resources.
Imagining an organization which has all such systems in place the behaviour of its people also
become performance oriented; important point to be noted here is to see whether there is a
balance between expectation from the people in terms of performance and the kind of platform the
organization provides to nurture and reward performance without becoming too mechanical in
the process. if the balance is not met in such a scenario it may lead to negative results like high levels
of attrition, stress and poor productivity in the long-run.
If there is a congenial environment which motivates people to perform, logical and reasonable
targets of performance, strong feedback and reward systems, learning & development systems
which actually complements the performance oriented culture the results will be positive.
Contrary to such an environment there are organizations where the management/ leadership have
little concern about performance issues. Such behaviour at the top easily percolates down to all
people and can be seen in the overall behaviour of these organizations. Very interestingly, though
many organizations may perish in the long run, many others sustain and even grow over the years.
We will analyse how organizations sustain/ do not sustain and factors responsible for either of these
in a later section.
As of now, I will like to focus attention on another very important aspect of Organizational behaviour
Growth; how is growth related to organizational behaviour or vice versa; what are high growth/
low growth organizations and how it affects individuals and organization as a whole.
Growth
Growth, very crudely defined, would mean the amount of value/ learning we add to ourselves. If we
consider professional growth, apart from the financial enhancements that may happen over a period
of time, it relates to the amount of professional learning that takes place in terms of doing our work
more effectively and productively. It also means the increased scope of responsibility and
accountability associated with our role and function and the depth and breadth of our arena of
deliverable. Apart from the professional work delivery, this may mean more accountability in terms
of team management, taking care of additional functional processes, learning about finances and
accounts, cross functional applications, managing resources etc. In general, a moderate person
always looks ahead for some value addition and learning at all stages of life.
Interestingly, an organization also contributes tremendously in inculcating this sense of growth.
Organizations which promote individual growth are also high growth organizations. We will try to
see how this works.
Let us assume this organization mncinc.mnc is an organization with a top management which is
focussed on the professional work delivery.this organization has grown over the years but the
growth has not been a planned one. The demands of the marketplace and the good (not excellent)
quality deliverables have helped the organization to be where it is today a respected organization
to the outside world. The workplace demands and expectation from members of the organization
are limited. Performance structures exist but not highly adhered and referred to. Evaluation and
assessment mechanisms are weak and do not affect the cosmetic growth the members. Overall a
relaxed environment with less accountability shared with the middle and the lower levels.
Such a culture (or rather the organizational behaviour arising out of behaviour of the management
at the top) gives rise to a low-growth organization. Individuals in the organization also start to lose
focus on their individual growth and aspirations. Growth in such organizations, many a times, means
adding cosmetic beauty to the position names and continuing to do the same set of work under the
new avatar.
Members who still continue to remain achievement focussed find it difficult to align themselves with
the low pace of growth and learning available and tend to part with the organization. Also, people
who stay on develop a syndrome of adjusting themselves to this culture.their potential to perform
also becomes a limitation and in reality their actual potential lies under-utilised. Unfortunately,
people who stay on with this culture do not envisage this because they have already become a part
of the system. This behaviour may be termed as vestigial organ syndrome I am there but what
value am I adding, either to myself or to the organization. If we observe such organizations closely,
we will notice that people with high requirements of learning do not stay on in such organizations.
Hence the organization also starts losing good people.
Three things may happen with people in such organizations. Firstly, people who become deeply
engrained in the existing system develop the ostrich syndrome.they pretend to oversee the
problems and continue with the limited growth/ responsibility and value add (what a waste of talent
and learning!).
Then there is a second set of people who continue but keeps their need for intellectual hunger
satisfied by means of constant learning at a personal level.
The final group of people find themselves in a fulcrum trying to find the perfect balance between
their thirst for learning & growth and what the organization can offer them. They start comparing
themselves with the array of work that certain peers do at the same level outside of their
organization. They evaluate their own potential and assess if what they are doing would meet their
learning and growth aspirations. And if they find that continuing in the same organization may not
help them to reach their planned benchmark they become conscious and panicky. Under such
circumstances two things may be possible. Depending upon the ownership culture of the
organization some people may put in some effort to bring about the desired change in the behaviour
of the organization by trying to communicate and influence the leadership; but most of the times
these members try looking for other avenues to satisfy their need for learning and growth.
Flexibility and Communication
While it necessary for all organisations to be flexible to certain extent in their approach of doing
things, being more accommodative towards situational needs of employees, what is important at
the same time is how such philosophies are communicated down the line. As someone was telling
the other day only those trees can survive the strong winds which can swing along the winds. No
doubt, flexibility is important for all organisations; it helps in creating employee engagement and in
turn leads to better retention of manpower. Employee engagement activities are critical to to
maintain a committed and dedicated pool of human resource. While such interventions are
imperative to create an environment of motivation and respect, there needs to be proper balance of
policy implications and flexibility to tweak such policies for benefit of a certain section of the
workforce. However, such changes in policies are often perceived as a new policy by other
employees and often creates confusion as such changes in policies are misinterpreted.