Organizational Behavior Performance Management Styles Business Essay

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Organizational behavior is defined as a “actions and attitudes of individuals and groups toward one another and towards the organization as a whole, and its effect on the organization’s operation and performance” ( /definition/organizationalbehavior.html #ixzz16Vjf8nTW). So organizational performance always determined by organizational behavior. Organizational behavior is basically determined from the behavior of the people working for the organization. So while keeping in view organizational behavior, organizational performance includes multiple activities, which help in creating the goals of the organization, and monitor the advancement towards the target. In order to achieve goals more efficiently and effectively this is used to make adjustments. The frustration of most of the owners and business executives usually is for Organization Performance. This is so even as their employees are hard working and are busy doing their respective tasks, the company is unable to achieve the scheduled results. Results are achieved not due to the diligent efforts made by the employees but more due to unexpected events and good fortune. In order for the any business to be successful, tasks must be defined and accomplished. It is important for an organization to develop strategies that should be designed around the skills that would enhance the performance of the organization. This could be accomplished by introducing Organizational Performance Management Systems. These are a number of major movements and methods that could increase the performance of an organization. Each one of these methods includes regular recurring activities that are used to establish the goals of the organization. These activities are also required to monitor the progress of the organization towards the goals. They are used to make adjustments to achieve the desired targets more effectively and efficiently. ( So the organizational performance is determined by the organizational behavior and organizational behavior is determined by the following factors Management styles Motivations Organizational structure Culture Work environment Training and development

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1.1 Management styles

Management styles are democratic, autocratic and consultative. Selecting the correct management style may lead to greater motivation and productivity from your staff. However, it is not as easy as just ‘picking’ a style. Manager’s personalities and characteristics will influ+ence the type of style adopted. For example a timid manager will find an autocratic management style difficult to adopt.

Democratic Management Style

A democratic manager assigns authority to his/her staff, giving them responsibility to complete the task given to them (also known as empowerment). Staff will complete the tasks using their own work methods. However, the task must be completed on time. Employees are involved in decision making giving them a sense of belonging and motivating individuals. Because staffs feel a sense of belonging and are motivated the quality of decision making and work also improves. Although popular in business today, a democratic management style can slow decision making down because staffs need to be consulted. Also some employees may take advantage of the fact that their manager is democratic by not working to their full potential and allowing other group members to democratic manager delegates authority to his/her staff, giving them responsibility ‘carry’ them.

Autocratic Management Style

In contrast to the above an autocratic manager dictates orders to their staff and makes decisions without any consultation. The leader likes to control the situation they are in. Decisions are quick because staffs are not consulted and work is usually completed on time. However this type of management style can decrease motivation and increase staff turnover because staff are not consulted and do not feel valued. So the performance of organization decreased.

Consultative Management style

A consultative management style can be viewed as a combination of the above two. The manager will ask views and opinions from their staff, allowing them to feel involved but will ultimately make the final decision. This type of management increase staff motivation and commitment which increase the performance of organization.

1.2 Motivation

Motivation is the way to energize the employees to work for the organization to achieve the required goals of the organization. There are following motivational theories for the organizations developed over the time

Maslow’s Hierarchy of Needs

Maslow believed that all people are motivated by the same things. He identified 5 human needs he believed people wanted to satisfy. As one set of needs was satisfied by an individual, it would stop acting as a motivator, but the individual would then be motivated by the next set of needs.

Names for the Needs


Relevance to Business

Self Actualisation The need to fulfill your potential. Employers allow staff to work at what they are good at, and to organize their work in the ways they wish to do it. Ego (esteem) The need to be valued. Rewards if targets are met merit pay rises, promotion; employers offer praise and acknowledge the good work of the employee. Social (acceptance) The need to belong to and work in a group. Team meetings, company magazines, staff social events; working in groups. Safety (security) The need to be protected. Safe machinery; protection in employment; contracts etc Basic (physiological) Food, warmth, sleep, clothes Heating, toilets, canteen; wages

Dual-Factor Theory – Frederick Herzberg

Frederick Herzberg and his associates began their research into motivation during the 1950’s, examining the models and assumptions of Maslow and others. The result of this work was the formulation of what Herzberg termed theA Motivation-Hygiene Theory (M-H). The basic hypotheses of this theory are that: 1. There are two types of motivators, one type which results in satisfaction with the job, and the other which merely prevents dissatisfaction. The two types are quite separate and distinct from one another. Herzberg called the factors which result in job satisfactionA motivatorsA and those that simply prevented dissatisfactionA hygiene’s 2. The factors that lead to job satisfaction (the motivators) are: achievement recognition work itself responsibility advancement 3. The factors which may prevent dissatisfaction (the hygiene’s) are: company policy and administration working conditions supervision interpersonal relations money status security

Douglas McGregor X and Y theory

McGregor’s Theory X managers believes that an employee dislikes work and will avoid it if possible. As a result Theory X workers must be controlled, directed and threatened with punishment if necessary to make them work. McGregor’s Theory Y manager believes that an employee finds work as natural as play or rest. As a result they are able and willing to organize, control and direct themselves, and to accept authority and responsibility. By adopting the influencing factor from these theories, required motivation level can be achieved which increase employees commitment and organizational performance.

1.3 Organizational structure

Business Culture Importance

For the business culture importance it took a long time for it to be renowned as an important factor in business success (or lack of success).

Building a Positive Corporate Culture

1. ‘Culture Carriers’. These are key people, usually managers, who represent and spread the core values of the corporate culture. 2. Stability of the group. It is more difficult for a culture to emerge if people are changing all the time. 3. Stories. A group packages up its culture into stories which are frequently told and re-told, 4. Heroes. Individuals who typify to an extreme the values of the group. 5. Symbols. These may be staff mottoes, the corporate mission statement or anything that symbolizes the core values. 6. Rites. These are specific occasions, such as the annual office party, when the core values are publicly displayed. 7. Rituals. This means a standard pattern of behavior at a specific occasion, such as the office party if things are always done in a particular pattern. 8. Courses. Attending in-house courses is an important way of team-building and communicating the core values. 9. Cultural Networks. This means the informal contacts between employees where they reinforce core values, especially by passing them from older to younger group members.

Types of Corporate Culture

1. Adaptive Cultures. These have as a core value the ability to adapt to change, especially in response to changing external circumstances. 2. Inert Culture. This is a ‘dead’ culture totally unable to change. 3. Networked Organizations. These are very sociable networks of small teams. They are highly creative. But loyalty is low. 4. Mercenary Organizations. These are ruthless business machines dedicated to work and to success. But sociability is very low. 5. Fragmented Organizations. These are really loose alliances of very independent workers, such as lawyers. Sociability and loyalty are both very low. 6. Communal Organizations. These have high loyalty and high sociability. They act like one big happy family. Recruiting new staff with similar values is important.

Advantages of Strong Corporate Culture

1. Instructions are interpreted in a common way, so work is done to a similar standard and in a similar manner. 2. Loyalty is increased, and replacing workers is an expense to be avoided. 3. Motivation, and therefore productivity, is increased. 4. Management control is increased.

Disadvantage of Corporate Culture

1. In a Multi-National Corporation there will nearly be conflicts between the local national culture and the imported corporate culture. 2. Businesses are not places with a homogenous culture. Most businesses are too large for people to identify across the whole organization. Instead, people identify with smaller sub-groups. So a business is, in fact, a mixture of sub-cultures some of which may even be deviant. There is also a strong likelihood of conflict between some of the different sub-cultures. 3. The relationship between a improved business performance and strong corporate culture is, as far as the data can tell, very weak. It may be then that corporate cultures are less about improved performance and more about making the managers feel they have achieved something; a cynic might argue that managers like to be surrounded by copies of themselves. 4. Business is rarely simple, clear and unambiguous enough to allow of one simple message of the kind envisaged by proponents of the corporate Facilitates communication – between functions improve decision makinge culture idea.


Organizational structure – is the formal system of task and reporting relationships that controls, coordinates, and motivates employees so that they cooperate to achieve an organization’s goals.


Functional Structure

Functional structure – groups people together because they hold similar positions in an organization, perform a similar set of tasks, or use the same kind of skills. This division of labor and specialization allows an organization to become more effective.

Advantages of a Functional Structure

Coordination Advantages Easy communication among Quick decisions -. Learning – Makes it easier for people to learn from one another’s experiences.

Motivation Advantages

Facilitates performance evaluation for supervisor – Facilitates performance evaluation for peers Creates teamwork that promotes high performance. Creates a career ladder

Disadvantages of a Functional Structure

Difficulty in serving needs of all products efficiently Coordination – customer with varied needs are attracted to the organizations , they may find it hard to service these different needs by using a single set of functions. As companies grow, they often expand their operations nationally, and servicing the needs of different regional customers by using a single set of manufacturing, sales, or purchasing functions becomes very difficult.

3.0 Divisional Structures: Product, Market, and Geographic

A divisional structure that overlay functional grouping allows an organization to coordinate intergroup relationships more effectively than does a functional structure.

Product Structure

Each product division contains the functions necessary to that service the specific goods or services it produces. Market Structure – Group functions into divisions that can be responsive to the needs of particular types of customers.

Geographic Structure

Each geographic division has access to a full set of the functions it needs to provide its goods and services.

Advantages of a Divisional Structure

Coordination Advantages

Quality products and customer service Facilitates communication – between progress decision making functions, thereby increasing performance. Customized management and problem solving Facilitates teamwork Facilitates decision making – As divisions develop a common identity and approach to solving problems, their cohesiveness in- creases, and the result is improved decision making.

Motivation Advantages

Clear connection between performance and reward Customized service – regional managers and employees are close to their customers and may develop personal relationships with them. Identification with division – employees’ close identification with their section can increase their commitment, loyalty, and job satisfaction.

Disadvantages of a Divisional Structure

High operating and managing costs Poor communication between divisions Conflicts among divisions

4.0 Matrix Structure

A intricate form of differentiation that some organizations use to control their activities, results in the matrix structure, which simultaneously groups people in two ways- by the function of which they are a member and by the product team on which they are currently working. In practice, the employees who are members of the product teams in a matrix structure have two bosses-a functional boss and a product boss.

Coordination Advantages

Facilitates rapid product development Maximizes cooperation and communication between team members Facilitates innovation and creativity Facilitates face-to-face problem solving (through teams) Provides a work setting in which managers with different functional expertise can cooperate to solve non-programmed decision-making problems. Facilitates frequent changes of membership in product teams

Disadvantages of a Matrix Structure

Increase role conflict and role ambiguity High levels of work stress Limited opportunities for promotion

Organizational Structure of Tarmac Ltd

In Tarmac Ltd., the organizational structure is of divisional as it has been divided into different division like production division, engineering division etc. In this structure, all the employees are free to work and give their ideas for the future planning. In this way on one side the management gets different ideas but the ideas lack the professional approach as all the employees would not have professional qualification. In this way the implementation of those ideas can lead the organization away from the main goals of it.


In case of enterprise the organizational structure is mixed- divisional, functional and geographical. The owner of enterprise makes the main decision and it is transferred to all the employees in different division and geographical locations. But on the other hands the employees are also given the authority to decide on the spot according to the situation. This type of organization structure helps the organization to grow and get more profit in the near future but on the other hands the control of the management loses on the employee.


The task of a manager is to create an organizational structure and culture that: Encourages employees to work hard and to develop supportive work attitudes Allows people and groups to cooperate and work together effectively. Structure and culture affect: Behavior Motivation Performance Teamwork and cooperation Intergroup and Interdepartmental relationships The way a structure or culture is designed or evolves over time affects the way people and groups behave within the organization. Once an organization decides how it wants its members to behave, what attitudes it wants to encourage, and what it wants its members to accomplish, it can then design its structure and encourage the development of the cultural values and norm to obtain these desired attitudes, behaviors, and goals. In case of Tarmac Ltd; the divisional structure and sharing culture describe the organizational in best. Its culture describes Shared values Participative work Taking care of employees Follow rules and regulations Career development This type of culture motivates the employees to work and enhance the performance of the organization. On the other hands in case of Enterprise mixed structure and open communication developed the culture of Customer satisfaction Growth Employee development Profit But the company does not care about the social factor as to help the society and take care of the environment. This causes to create a negative image in the mind of the customers and can decrease the market share of the Enterprise. On the other hands the employees are not involved in the decision making and are supposed to follow the rules set by top management without employees’ involvement which cause the de-motivation in the employees.

Work environment

Basically the culture determines the working environment of the organization. Positive and friendly working environment always increase the output of the employees. So because of the positive and friendly environment the performance of organization improves.

Development and Training

From the performance appraisal the deficiencies of the employees are assessed. To fill the skills gap of the employees for the job, suitable training is designed. The process of training assessment normally starts from the recruitment process, to fill the skill gap. The need for training assessment and development of training strategy is explained by the flow chart as below (

Development and training Process

After assessment of the training and development, training strategy is developed and individuals are selected for training. The development of training strategies starts from the review of business strategy which determines the skills requirement and help in the development of training strategy for the employees. After developing training strategy, top management select the traininr for the effective training. Training may be of two types On the job training Off the job training The type of training depend upon the availability of traininer and level of training required. It is axplianed by the flow chart below. ( The delivery methods are selected, either practical training on job or class room training. Training contents are developed according to the new skills required by the trainee and dynamic nature of the job. If the development and training strategy is implemented, the performance of the organization increase because of the availability of right skills required for the jobs in the organizations. This also increases the employee motivation level.

6.0 Role of technology in business performance:

Technology plays an important role in the success of the business. In this era of technology and modern ways of communication, technology plays its role for the success of the business in the following ways. Cheep and mass communication with the customers by advertisement on line on the internet and on the TV etc Easy and quick communication by using different ways like telephone, internet etc Attracting more customers Online shopping facility Management the business from one location in different geographical location In the case of Tarmac Ltd, it is using the technology in the following ways for the success of the company Managing the utilization and production functions effectively and efficiently by using the latest computer technology Online survey of the customers and feedback from the customers so that the management of Tarmac ltd would be able to assess the market needs and produce the products required by the customers Alignment of the different divisions for the proper functioning of the company to achieve its goals. Effective supply chain management to save the cost and increase its profit along with the customers’ satisfaction. In this way the technology is playing its part for the success of the business.

Obstacles in organizational performance

There are following limitation which limit the improvement of organizational performance Cost Time limitation Behavioural factors Legal requirements Technological changes


Cost limits the performance of the organizations because the organizations are performing tor the profit motives. If the cost of the organizations is high, the profit will decrease, so it will not be possible to for the organization to achieve it profit goals. On the other hands the availability of the finance is not free of cost. If organizations run out of cash during the normal activities of business, it will cause the default of the organization. In this way the cost is the main obstacle in the performance of the organization.

Time limitation:

The main goal of the organizations is to achieve its targets as planned by the organization. If the tasks are not achieved according to the planning, it means the organization is not performing well. Some times to achieve the targets, organization required extra resources like more employees and machinery. The acquirements of extra resources incur cost to the company, so it is restricted by the financial resources. In this way there is always an opportunity cost for the organization in using the resources which decrease the performance of organization.

Legal requirements

There are always legal requirement for every activity of the organization. These legal requirements put an upper and lower cap on the performance of the company.

7.0 Role of Management in Change process:

Management plays an important role in the change process. In technological dynamic environment it is the responsibility of the management to assess the change in the technology and arrange training for the employee so that employees can have required competences to perform their job efficiently and effectively. On the other hands everybody wants career development for better job and better performance. So in the modern dynamic environment most of the employees of the companies look into the requirement of the market and acquire new skills to fill the skill gap in the market. The training for the new skill helps them to get better position in the organizations. So it is both employer and employees who assess the need for new skills to fill the skills gap in the dynamic modern society.

8.0 Conclusion

On the basis of above analysis it is clear that organizational behavior play an important role in the performance of the organization. The management styles, organizational structure, employee motivation level and training for the new skill are the key factors which help in the improvement of the organizational performance. In the modern dynamic society employees and employers (managers) play equally important role to fill the skill gap in the dynamic technology through training and improve the performance of the organization.

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Organizational Behavior Performance Management Styles Business Essay. (2017, Jun 26). Retrieved January 31, 2023 , from

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