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The essential introduction to management and organisational behaviour – over half a million
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Written in an engaging style and packed with contemporary references to management
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About the author
Laurie Mullins was formerly principal lecturer at the University of Portsmouth
Business School. Laurie specialised in managerial and organisational behaviour,
and managing people at work, and was subject leader for the behavioural and
human resource management group.
Laurie has experience of business, local government and university administration
and human resource management. For a number of years he was also a member
of, and an instructor in, the Territorial Army. He has undertaken a range of
consultancy work including with the United Nations Association International
Service (UNAIS); served as a visiting selector for Voluntary Service Overseas
( VSO); acted as adviser and tutor for a number of professional and educational
bodies including UNISON Education; and served as an external examiner for
university degree and postgraduate courses, and for professional organisations.
Laurie has undertaken a year’s academic exchange in the Management
Department, University of Wisconsin, USA and a visiting fellowship at the School
of Management, Royal Melbourne Institute of Technology University, Australia,
and is a visiting lecturer in the Netherlands. Laurie is also author of Hospitality
Management and Organisational Behaviour and Essentials of Organisational
Behaviour, both published by Pearson Education.
With Gill Christy
Principal Lecturer in the Department of Human Resource and Marketing
Management at the University of Portsmouth Business School
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First published in 1985 in Great Britain under the Pitman imprint
Fifth edition published in 1999 by Financial Times Pitman Publishing
Seventh edition 2005
Eighth edition 2007
Ninth edition 2010
© Laurie J. Mullins 1985, 1989, 1993, 1996, 1999, 2002, 2005, 2007, 2010
Chapters 4, 6 © Linda Carter and Laurie J. Mullins 1993, 1996, 1999, 2002, 2005, 2007
Chapter 5 © Linda Carter 1993, 1996, 1999, 2002, 2005, 2007
Chapter 16 © Peter Scott 2010
Chapter 17 © David Preece 1999, 2002, 2005, 2007
The right of Laurie J. Mullins to be identified as author of this work has been asserted by
him in accordance with the Copyright, Designs and Patents Act 1988.
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All trademarks used herein are the property of their respective owners. The use of any
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ISBN: 978-0-273-72408-7
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
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A catalog record for this book is available from the Library of Congress
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Typeset in 9.5/12 pt Giovanni by 35
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The publisher’s policy is to use paper manufactured from sustainable forests.
To my wife Pamela
and for Nathan
Contents in detail
Management in the news and case studies
About this book
Guided tour of the book
Guided tour of MyManagementLab
In acknowledgement and appreciation
Publisher’s acknowledgements
Chapter 1
Chapter 2
Chapter 3
The Nature of Organisational Behaviour
Approaches to Organisation and Management
The Nature and Context of Organisations
Individual Differences and Diversity
The Nature of Learning
Perception and Communication
Work Motivation and Job Satisfaction
Chapter 8 The Nature of Work Groups and Teams
Chapter 9 Working in Groups and Teams
Chapter 10 The Nature of Leadership
Chapter 11 The Role of the Manager
Chapter 12 Managerial Behaviour and Effectiveness
Chapter 13 Human Resource Management
Chapter 14 Organisation Strategy and Structure
Chapter 15 Patterns of Structure and Work Organisation
Chapter 16 Technology and Organisations
Organisational Control and Power
Corporate Responsibility and Ethics
Organisation Culture and Change
Organisational Performance and Effectiveness
Management & Organisational Behaviour, Ninth Edition
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Management in the news and case studies
About this book
Guided tour of the book
Guided tour of MyManagementLab
In acknowledgement and appreciation
Publisher’s acknowledgements
Part 1
1 The Nature of Organisational Behaviour
The meaning of organisational behaviour
The study of organisational behaviour
A framework of study
Influences on behaviour
A multidisciplinary approach
Organisational metaphors
Orientations to work and the work ethic
Management as an integrating activity
The psychological contract
Organisational practices
The Peter Principle
Parkinson’s Law
The changing world of work organisations
Globalisation and the international context
A cross-cultural approach to management
Is organisational behaviour culture-bound?
Five dimensions of culture: the contribution of Hofstede
Cultural diversity: the contribution of Trompenaars
Emerging frameworks for understanding culture
Convergence or culture-specific organisational
The importance of organisational behaviour
Review and discussion questions
Management in the news: A melting pot for forging
Assignments 1 and 2
Personal awareness and skills exercise
Case study: Virgin Atlantic and Ryanair
Notes and references
2 Approaches to Organisation and
Theory of management
Developments in management and organisational
The classical approach
Scientific management
Relevance of scientific management
Criticisms of bureaucracy
Evaluation of bureaucracy
The human relations approach
Evaluation of the human relations approach
Neo-human relations
The systems approach
The contingency approach
Other approaches to the study of organisations
The decision-making approach
Social action
A number of approaches
Relevance to management and organisational
Towards a scientific value approach?
Benefits to the manager
Review and discussion questions
Management in the news: The story of the
Personal awareness and skills exercise
Case study: Dell Computers: the world at your
Notes and references
3 The Nature and Context of
Perspectives of the organisation
The formal organisation
Basic components of an organisation
Private and public sector organisations
Social enterprise organisations
Production and service organisations
Types of authority and organisations
The classification of organisations
The organisation as an open system
Interactions with the environment
The comparative study of organisations
The analysis of work organisations
Contingency models of organisation
The informal organisation
Organisational conflict
Contrasting views of conflict
Positive and negative outcomes
The sources of conflict
Strategies for managing conflict
Organisational stress
Is stress necessarily to be avoided?
Causes of stress
Coping with stress
The work/life balance
The organisation of the future
Review and discussion questions
Management in the news: Watch out for
an epidemic of petty fraud
Assignments 1 and 2
Personal awareness and skills exercise
Case study: Grameen Bank: a case of applied
business ethics
Notes and references
Academic viewpoint
Part 1 Case study
Cadbury: organisation, culture and history
Part 2
4 Individual Differences and Diversity
The recognition of individuality
How do individuals differ?
Nomothetic and idiographic approaches
Nomothetic personality theories
Idiographic theoretical approaches
Complementary approaches
Applications within the work organisation
Emotions at work
Type A and Type B personalities
Emotional intelligence (EI)
Attitude change
Testing and assessment
Diversity management
The business case for diversity
Diversity training
Top performing organisations
Criticisms and limitations
Diversity, gender and organisations
Review and discussion questions
Management in the news: The Apprentice,
week nine
Personal awareness and skills exercise
Case study: B&Q: the business case for diversity
Notes and references
5 The Nature of Learning
The meaning and nature of learning
Organisations and the management of learning
How do people learn?
Operant conditioning
Social learning
Limitations of the behavioural theories
Cognitive theories
Learning styles
Knowledge management
Emerging technologies and learning
Problems of managing knowledge
Facilitating learning
Learning theory applied to study skills
Applications of learning theory to organisations
Review and discussion questions
Management in the news: UK follows Dutch
example with site simulations
Assignments 1 and 2
Personal awareness and skills exercise
Case study: VSO
Notes and references
6 Perception and Communication
The perceptual process
Selectivity in attention and perception
Internal factors
Cultural differences
External factors
Organisation and arrangement of stimuli
Perceptual illusions
Selection and attention
Organisation and judgement
Connection of the conscious, unconscious and
Perceiving other people
Non-verbal communication and body language
Interpersonal communications
Neuro-linguistic programming (NLP)
Transactional analysis (TA)
Attribution theory
Perceptual distortions and errors
The halo effect
Perceptual defence
Self-fulfilling prophecy
Understanding the organisational process
Review and discussion questions
Management in the news: How to be happy in life:
let out your anger
Assignments 1 and 2
Personal awareness and skills exercise
Case study: Behavioural economics
Notes and references
7 Work Motivation and Job Satisfaction
The meaning of motivation
Needs and expectations at work
Money as a motivator
Broader intrinsic motivation
Frustration-induced behaviour
Theories of motivation
Content theories of motivation
Maslow’s hierarchy of needs theory
Alderfer’s modified need hierarchy model
Herzberg’s two-factor theory
McClelland’s achievement motivation theory
Process theories of motivation
Vroom’s expectancy theory
The Porter and Lawler expectancy model
Lawler’s revised expectancy model
Implications for managers of expectancy theories
Equity theory of motivation
Goal theory
Attribution theory
Relevance today for the manager
Organisational behaviour modification
The motivation of knowledge workers
Cross-cultural dimensions of motivation
Job satisfaction
Alienation at work
A comprehensive model of job enrichment
Contextual factors in job design
Review and discussion questions
Management in the news: Top marks for the best
employee awards
Assignments 1 and 2
Personal awareness and skills exercise
Case study: Don’t get mad, get on-line!
Notes and references
Academic viewpoint
Part 2 Case study
Philanthropy: the resurgence of personal social
Part 3
8 The Nature of Work Groups and Teams 306
The meaning and importance of groups and teams
Differences between groups and teams
Group values and norms
Formal and informal groups
Reasons for formation of groups or teams
Group cohesiveness and performance
Work environment
Group development and maturity
Social identity theory
Potential disadvantages of strong, cohesive
Characteristics of an effective work group
The effects of technology
Virtual teams
Role relationships
Role conflict
The importance of teamwork
Review and discussion questions
Management in the news: Dragon boat racing on
the Thames
Assignments 1 and 2
Personal awareness and skills exercise
Case study: Mumbai’s dabbawalahs: a world-class
quality service
Notes and references
9 Working in Groups and Teams
Interactions among members
Belbin’s team roles
Patterns of communication
Analysis of individual behaviour
Interaction analysis
Frameworks of behavioural analysis
Balance between the team and the individual
Individual compared with group or team
Quality circles
Group dynamics
Self-managed work groups
Building successful teams
Review and discussion questions
Management in the news: Falling down
Assignments 1 and 2
Personal awareness and skills exercise
Case study: Top Gear
Notes and references
10 The Nature of Leadership
The meaning of leadership
Leadership or management?
Approaches to leadership
The qualities or traits approach
The functional (or group) approach
Action-centred leadership
Leadership as a behavioural category
Styles of leadership
Continuum of leadership behaviour
Contingency theories of leadership
Fiedler’s contingency model
Vroom and Yetton contingency model
The Vroom and Jago revised decision model
Path–goal theory
Readiness of the followers or group
Transformational leadership
Inspirational or visionary leadership
Leadership and innovation
The leadership relationship
Leadership effectiveness
Cross-cultural dimensions of leadership
Leadership development
No one best form of leadership
Leaders of the future
Review and discussion questions
Management in the news: Managing the mood
is crucial
Assignments 1 and 2
Personal awareness and skills exercise
Case study: Being Apple: Steve Jobs
Notes and references
Academic viewpoint
Part 3 Case study
The Eden Project
Part 4
11 The Role of the Manager
The meaning of management
The process of management
Principles of management
Management as a social process
The tasks and contribution of a manager
Essential nature of managerial work
Management in private enterprise and public
sector organisations
The work of a manager
Managerial roles
Behaviour pattern of general managers
Determining what real managers do
Patterns of managerial work and behaviour
What great managers do
The attributes and qualities of a manager
The importance of management skills
The changing role of managers
Review and discussion questions
Management in the news: Science of managing
Assignments 1 and 2
Personal awareness and skills exercise
Case study: Stuck in the middle?
Notes and references
12 Managerial Behaviour and
The importance of managerial style
Theory X and Theory Y management
The Managerial/Leadership Grid®
Management systems
Management by objectives (MBO)
Managing with and through people
The nature of people at work
Managerial effectiveness
Measures of effectiveness
The Management Standards Centre
The 3-D model of managerial behaviour
The management of time
Review and discussion questions
Management in the news: When a packed diary
betrays a busy fool
Personal awareness and skills exercise
Case study: Effective management: a question
of context?
Notes and references
13 Human Resource Management
The nature of human resource management
Human capital management
HRM policies, activities and functions
Organisation of the HRM function
Working in partnership with line managers
A strategic business partnering approach
The importance of HRM
Training and development
The management of training
Investors in People
Talent management
Performance management (PM)
Methods of measurement and review
360° feedback and upward feedback
Benefits of performance management
Employee relations
Unitary and pluralistic perspectives
Regulating the employment contract
International dimensions of HRM
Effectiveness of the HRM function
Review and discussion questions
Management in the news: The carrot and stick
Personal awareness and skills exercise
Case study: The changing role of HRM
Notes and references
Academic viewpoint
Part 4 Case study
Jamie Oliver: The Naked Manager?
Part 5
14 Organisation Strategy and Structure
The importance of strategy
SWOT analysis
Organisational goals
Objectives and policy
Dimensions of organisation structure
The importance of good structure
Levels of organisation
Underlying features of organisation structure
Division of work
Centralisation and decentralisation
Principles of organisation
Span of control
The chain of command
The importance of the hierarchy
Formal organisational relationships
Project teams and matrix organisation
Effects of a deficient organisation structure
Organisation charts
Empowerment and control
Review and discussion questions
Management in the news: A taxing merger
Assignments 1 and 2
Personal awareness and skills exercise
Case study: Zara: a dedicated follower of fashion
Notes and references
15 Patterns of Structure and Work
Variables influencing organisation structure
The contingency approach
Size of organisation
The Woodward study
Major dimensions of technology: the work
of Perrow
The Burns and Stalker study
‘Mixed’ forms of organisation structure
The Lawrence and Lorsch study
Evaluation of the contingency approach
Contribution of contingency theory
Culture as a contingent factor
The changing face of the workplace
The demand for flexibility
The shamrock organisation
Structure and organisational behaviour
Review and discussion questions
Management in the news: Independents will
always have their day
Assignments 1 and 2
Personal awareness and skills exercise
Case study: John Lewis, Waitrose and Ocado:
distinctively successful
Notes and references
16 Technology and Organisations
Peter Scott
Why study technology?
What do we mean by technology?
Approaches to technology and organisation
Decision-making processes
Involvement of HRM specialists and users of
Technology, work and organisational behaviour
Skill, work design and job quality
Centralisation versus decentralisation of control
Location of work
Nature of social interactions
The pace and intensity of work
The ‘digital divide’ and job security
Review and discussion questions
Management in the news: Should Twitter be
confined to the marketing department?
Personal awareness and skills exercise
Case study: Accessible technology: Tesco’s
accessible website
Notes and references
Academic viewpoint
Part 5 Case study
Part 6
17 Organisational Control and Power
The controversial nature of control
Expression of managerial behaviour
Elements of an organisational control system
Forms of control
Strategies of control in organisations
Characteristics of an effective control system
Power and management control
Perspectives of organisational power
Pluralistic approaches to power
The balance between order and flexibility
Behavioural factors in control systems
Financial and accounting systems of control
The concept of empowerment
The manager–subordinate relationship
Benefits of delegation
Reasons for lack of delegation
The art of delegation
A systematic approach to empowerment and
Does empowerment deliver?
Review and discussion questions
Management in the news: The undercover boss
Personal awareness and skills exercise
Case study: What you say is what you get . . .?
Notes and references
18 Corporate Responsibility and Ethics
Organisational ideologies and principles
Mission statements
The profit objective
The balanced scorecard
Corporate social responsibilities (CSRs)
Organisational stakeholders
The UN Global Compact
Values and ethics
Ethics and corporate social responsibility
Business ethics
Codes of business conduct (or ethics)
Review and discussion questions
Management in the news: Trade-offs in the
moral maze
Assignments 1 and 2
Personal awareness and skills exercise
Case study: The Fairtrade Foundation
Notes and references
Organisational climate
Employee commitment
The nature of organisational change
Planned organisational change
Resistance to change
The management of organisational change
Overcoming resistance to change
Review and discussion questions
Management in the news: The time is ripe for
fresh ideas
Assignments 1 and 2
Personal awareness and skills exercise
Case study: Moving with the times
Notes and references
20 Organisational Performance and
The nature of organisational effectiveness
The democratic enterprise
The learning organisation
Total quality management (TQM)
Business process re-engineering (BPR)
The importance of effective management
The meaning and nature of management
Management development process
Continuing professional development (CPD)
The EFQM Excellence Model
Assessing organisational performance
A range of different criteria
Successful organisations and people
Employee engagement
The future of work and management
Review and discussion questions
Management in the news: How to manage
the clever squad
Assignments 1 and 2
Personal awareness and skills exercise
Case study: Who says business is boring?
M&S’s rollercoaster ride
Notes and references
19 Organisation Culture and Change
Academic viewpoint
Organisation development, culture and change
Organisational culture
Types of organisational culture
Influences on the development of culture
The cultural web
The importance of culture
Part 6 Case study
Riverford Organic
Type of
Chapter 1
The Nature of
business person
Management A melting pot for
in the news
forging success
See how a well managed,
culturally diverse workforce can
come together to produce a better
Dillinger Hütte
Case study
How can two similar organisations
develop very different
organisational cultures?
Virgin Atlantic
Airways, Richard
Branson and
Ryanair, Michael
Management The story of the
in the news
This examination takes the pulse
of the current state of middle
Paul Osterman,
author of The Truth
about Middle
Case study
From small business to global
giant, Dell Computers mobilises
workers on three continents to get
your new PC to you
Dell Computers,
Michael Dell
Management Watch out for an
In a tough economy, many
in the news
epidemic of petty fraud companies are finding dishonesty
and fraud in the workplace on
the rise
Case study
Grameen Bank: a case
of applied business
How ingenuity coupled with
Grameen Bank,
enterprise can present an alternative Mohammed Yunus
to charity and government aid as
a route out of poverty
Part 1
The Organisational
Longer case
Cadbury: organisation,
culture and history
The historical context may change Cadbury
organisational practices, but doesn’t
necessarily change core values
Chapter 4
Differences and
Management The Apprentice, week
in the news
Employers learn the lessons of
making assumptions about age
and the experience and capability
of employees
Case study
Diversity in the workforce is shown B&Q
to be a strength and a way to
grow a business
Management UK follows Dutch
in the news
example with site
The construction industry uses
virtual reality to train its workers
Balfour Beatty
Case study
Discovering the value of learning
and sharing knowledge and the
changes it can make in people’s
Chapter 6
Perception and
Management How to be happy in
in the news
life: let out your anger
Case study
Chapter 7
Work Motivation
and Job
Management Top marks for the best
in the news
employee awards
Do weekly, monthly or yearly
awards provide incentive or cause
resentment among employees?
Kwik-Fit Financial
Case study
Don’t get mad, get
Blogging may open a new window
on organisational life, but it can
get you fired
Ellen Simonetti,
Queen of the Sky;
Part 2
The Individual
Longer case
Philanthropy: the
resurgence of personal
social responsibility?
It was big in the 19th century,
but is there a resurgence in
philanthropy as a new form of
ethical behaviour by business
Bill Gates,
Warren Buffet and
Anita Roddick
Chapter 2
Approaches to
Organisation and
Chapter 3
The Nature and
Context of
Chapter 5
The Meaning and
Nature of Learning
Virgin Atlantic and
Dell Computers: the
word at your fingertips
B&Q: The business
case for diversity
Harnessing your anger can lead to
personal and professional success
Behavioural economics Explore the links between
perception, thought and behaviour
and the decisions we make
Type of
Chapter 8
The Nature of
Work Groups and
business person
Management Dragon boat racing on
in the news
the Thames
Tight teamwork and simple
technique makes dragon boat
racing the perfect corporate
team sport
Thames Dragon
Boat Club
Case study
The extraordinary teamwork that
delivers thousands of hot lunches
from home to workplace every day
Management Falling down
in the news
Charting the rise and fall of
companies and the need to avoid
complacency in business
Jim Collins, author
of How the Mighty
Case study
A winning team in front of and
behind the cameras provide the
formula for television success
Top Gear, BBC,
Jeremy Clarkson,
James May,
Richard Hammond
and The Stig
Management Managing the mood
in the news
is crucial
Are moods contagious?
Temperament and character can
help stop a bad situation from
getting worse
Case study
Being Apple: Steve
This computer giant is quirky,
stylish and generates fierce loyalty
among its fans; but can it survive
without Steve?
Apple, Steve Jobs
Part 3
Groups, Teams
and Leadership
Longer case
The Eden Project
Promoting environmental
awareness may be an altruistic
aim, but the project need more
than good will and enthusiasm
to survive
Eden Project,
Tim Smit
Chapter 11
The Role of the
Management Science of managing
in the news
Is the key to success in the
managing of groups allowing
employees to follow their ‘animal’
Charles Jacobs,
author of
Case study
Stuck in the middle?
Most managers are middle
managers; but are they happy with
their lot?
Management When a packed diary
in the news
betrays a busy fool
Is a busy schedule a sign of
neurosis or an achievement?
How the balance between structure
and being accessible can save time
Case study
Merchant banking is an
aggressive, macho world, so how
does a working mum succeed?
Nicola Horlick,
Bramdean Asset
Management The carrot and stick
in the news
Should organisations reward
employees for adopting healthy
Unilever, Pitney
Case study
The changing role
of HRM
The HRM function has long been
seen as a service to line
managers, but can it be
outsourced successfully?
BT, Accenture
Part 4
The Nature of
Longer case
Jamie Oliver: The
Naked Manager?
In the fast and intense atmosphere Jamie Oliver,
of a kitchen, can a chef also be
a good manager?
Chapter 14
Structures and
Management A taxing merger
in the news
When two organisations merge,
creating a common culture can
prove difficult
Her Majesty’s
Revenue and
Customs (HMRC)
Case study
In the frenetic world of high street
fashion, innovative organisational
structures have created one of the
most sophisticated JIT operations
in the world
Zara, Inditex
Chapter 15
Patterns of
Structure and
Work Organisation
Management Independents will
in the news
always have their day
The indies of the business world
bring innovation to the
marketplace and force the big
players to up their game
Case study
An unusual organisational structure John Lewis,
leads to a very particular culture and Waitrose and
style of organisational behaviour
Chapter 9
Working in Groups
and Teams
Chapter 10
The Nature of
Chapter 12
Behaviour and
Chapter 13
Human Resource
Dabbawalahs: a worldclass quality service
Top Gear
Effective management:
a question of context?
Zara: a dedicated
follower of fashion
John Lewis, Waitrose
and Ocado:
distinctively successful
Type of
Chapter 16
Technology and
Management Should twitter be
Are the rewards worth the risk
in the news
confined to the
when organisations venture online
marketing department? in a ‘network society’?
Twitter, Don
Tapscott, Bernhard
Warner, Oliver
Case study
Part 5
Structures of
Chapter 17
Control and Power
Chapter 18
Responsibility and
Chapter 19
Culture and
Chapter 20
Performance and
Part 6
business person
Tesco’s accessible
How technical advances can
change people’s quality of life
Tesco, RNIB
Invented in the 19th century,
cooperatives are still going strong
Rochdale Equitable
Pioneers Society,
Management The undercover boss
in the news
A CEO dons a disguise and learns
that an effective, open dialogue is
the key to your communicating
key messages to staff
Clugston Group,
Stephen Walker
Case study
Gender differences in
communication may partly explain
the ‘glass ceiling’, but not
Female managers
in France, UK,
Germany and
Prof Michel Anteby,
Harvard Business
Longer case
What you say is what
you get . . . ?
Management Trade-offs in the moral
in the news
An examination into the moral
ambiguities of the workplace
versus the black and white world
of business ethics
Case study
As the popularity of fairtrade
The Fairtrade
increases, is its growth sustainable Foundation
or has commercialisation resulted
in a ‘cleanwashing’ of an idealistic
Management The time is ripe for
in the news
fresh ideas
Do recessionary times act as the
catalyst to spur changes in
organisational cultures?
Case study
Can hot-desking really work?
One team of professionals shows
the way
Moving with the times
NHS Workforce
Review Team
Management How to manage the
in the news
clever squad
Is it time to reframe the debate
over talent, and knowledge
Case study
Who says business is
boring? M&S’s
rollercoaster ride
How Marks & Spencer went from
takeover target to the toast of the
stock exchange
Marks & Spencer,
Stuart Rose
Riverford Organic
What does it mean to be an
‘ethical organisation’? Can an
organisation go even further to
actively reduce the environmental
impact of modern life?
Riverford Organic
Longer case
The Fairtrade
The concepts and ideas presented in this book provide a basis for an appraisal of contrasting perspectives on the structure, operation and management of organisations, and interactions among people who work in them. It is hoped that this will encourage a greater level
of awareness and sensitivity to organisational factors and management processes influencing
the behaviour and performance of people at work. The underlying theme of the book is the
need for organisational effectiveness based on an understanding of organisational behaviour, the people resource, and the role of management as an integrating activity. Adopting
a managerial perspective provides a clear focus of attention and helps to overcome any
perceived distinction between organisational behaviour and organisational analysis.
The aims of this book
The aims of this book are to:
relate the study of organisational behaviour with that of management;
provide an integrated view embracing both theory and practice;
point out applications of social science within work organisations and implications for
management action;
indicate ways in which organisational performance may be improved through better
understanding of human resources and the effective management of people.
The intended audience
The comprehensive coverage and progressive presentation of contents will appeal to students
at undergraduate level or on related professional courses; and to graduate and post-experience
students who through their course of study wish to enhance their knowledge and understanding of the subject area. It is also hoped that the book may appeal to those aspiring to
a managerial position.
The scope of this book
The behaviour and actions of people at work and the activities of an organisation are directed
towards the achievement of certain goals and also have social implications. The study of
organisational behaviour should not therefore be considered in a vacuum but related to
the process of management and to the wider organisational context and environment.
Broadening the scope of the subject matter beyond the concerns of traditional organisational behaviour texts is a distinctive feature of this book.
The study of organisational behaviour is a wide and essentially multidisciplinary field of
inquiry and no single book could hope to cover adequately all aspects of the subject
area. In order to attain a reasonable depth, this book concentrates on selected topics
of particular relevance to organisational behaviour and management of the human
resource, and which meet the needs of the intended audience. The design and contents
of this book mean that it is especially suitable across a range of different but related
modules, including single or double semester units, and will help provide an integrated approach to your course of study.
Format of this book
There is a logical flow to the sequencing of topic areas and each chapter of the book is selfcontained with appropriate cross-referencing to other chapters. Main sections are identified
clearly within each chapter and there are detailed headings and sub-headings. This provides
a flexible approach. The selection and ordering of chapters can be varied to suit the demands
of your particular courses of study or individual interests.
The book is written with a minimum of technical terminology and the format is clearly
structured. Each chapter is supported with illustrations and contains:
a short introduction and learning outcomes;
critical reflections throughout the text;
a synopsis of key points;
review and discussion questions;
a practical example of management in the news;
a personal awareness and skills exercise;
a case study;
detailed notes and references.
For each Part of the book there is also an academic viewpoint and an integrative case
Words set in colour throughout the main text indicate inclusion in the Glossary.
The ninth edition
The text retains the same underlying aims and approach that have been a hallmark of the
success of the book. For this ninth edition there have been an extensive review of the overall plan and order of contents between and within chapters; and considerable additional and
updated contents, figures and practical examples throughout. Readers familiar with previous
editions may wish to note the main changes in this ninth edition, including:
Reworking of Chapter 1 including expanded coverage of orientations to work, globalisation and cultural influences.
Major new section on social enterprise organisations, new section on the future of work
and the ‘Y’ factor, extended coverage of stress and work/life balance (Chapter 3).
Expanded coverage and major new organisational examples of diversity (Chapter 4).
New section on lifelong learning, extended coverage of the Honey and Mumford styles of
learning (Chapter 5) and material on learning organisations consolidated in Chapter 20.
Extended coverage with additional examples of cultural influences on perception and
communication (Chapter 6).
Major new section on organisational behaviour modification, and new section on the
ultimatum game (Chapter 7).
New sections on creative leadership and group development, and social identity theory
(Chapter 8).
Additional coverage of leadership effectiveness and cross-cultural dimensions (Chapter 10).
Increased attention to the changing role of management (Chapter 11).
Updated Management Standards (Chapter 12).
Reworking of Chapter 13 ‘Human Resource Management’ to provide greater emphasis on
a strategic approach, and new material throughout including Investors in People, performance management and a new section on talent management.
Organisation strategy moved to provide a closer link with organisation structure in a
rewritten Chapter 14.
Complete rewriting of Chapter 16, ‘Technology and Organisations’ with greater emphasis
on social implications and impact on people.
Expanded coverage of corporate responsibility and ethics in a separate Chapter 18.
Expanded coverage of organisational change including new section on the neuroscientific
approach to resistance to change (Chapter 19).
Consolidated material on the learning organisation, new material on organisational effectiveness, employee engagement, and the future of work and management (Chapter 20).
For each chapter there is now a set of six critical reflections throughout the text.
A completely new ‘Management in the news’ for every chapter; a significant number
of new and updated end of chapter Case studies; and the addition of an ‘Academic
viewpoint’ feature at the end of each Part of the book.
Attention continues to be focused on design features and overall appearance to provide a
manageable and attractive text with enhanced clarity and user friendliness.
Your study of this book
This book adopts an applied approach to the study of management and organisational behaviour. The objective analysis of organisations is supported, where appropriate, by a more
prescriptive stance. For example, the underlying need to establish a framework of order
through which the work of the organisation is undertaken demands attention to certain
basic principles and consideration of organisation and management.
The Critical reflections throughout each chapter are controversial statements to help
provoke critical thinking, inspire personal reflection about the areas you have just read
and about what happens in your own organisation.
The Review and discussion questions at the end of each chapter help test your knowledge and understanding of the contents, and provide a basis for revision and review of
The Management in the news, Assignments, Personal awareness and skills exercises,
and Case studies provide an opportunity to relate ideas, principles and practices to specific
work situations, to think and talk about major issues, and to discuss and compare views
with colleagues.
The Notes and references given at the end of each chapter are to encourage you to
pursue further any issues of particular interest.
The Academic viewpoint at the end of each Part relates to a recent article in an academic
journal that prompts you to explore and question a topic relating to that Part of the book.
The integrative Part Case studies provide a further opportunity to relate and discuss key
concepts and ideas to your reading of the text.
The comprehensive Glossary provides a brief description of key terms referred to in
the text.
In order to help relate the contents of the chapters to real-life situations, many of the
questions ask you to support your discussion with examples from your own organisation.
This can, of course, be your college or university. Alternatively, you may have work experience, even part-time or casual employment, in other organisations that you may draw
You are encouraged to complement your reading by drawing upon your own experiences
of work organisations. Search for both good and bad examples of organisational behaviour
and people management. Consider the manner in which concepts, ideas and examples presented in this book can best be applied in particular work situations. Contemporary examples
from your own observations should help illustrate real-life applications and further your
interest in the subject area.
I hope you will find satisfaction, and even some measure of enjoyment, from this book.
Laurie J. Mullins
Part 1
The Nature of Organisational Behaviour
Approaches to Organisation and Management
The Nature and Context of Organisations
The book is divided into six parts, each of which
opens with a list of chapters and a link to
relevant online video content.
The Global Context
Visit www.pearsoned.co.uk/mymanagementlab to access the online
video case study that complements Part 1: The Organisational Setting.
This video offers a real life example of how one company responds to
CASE STUDY the context of business today. Maersk is a global shipping company
with over 500 vessels moving nearly 2 million containers. In this video,
Customer Service Director Brian Godsafe describes how the company
operates and meets the varied needs of customers around the world.
Chapter introductions provide a
brief description of the key themes
in the chapter.
Learning outcomes enable you to
focus on what you should have
achieved by the end of the chapter.
The relationship between the organisation and its members is
influenced by what motivates them to work and the rewards and
fulfilment they derive from it. The nature of the work organisation,
styles of leadership and the design and content of jobs can have
a significant effect on the satisfaction of staff and their levels of
performance. The manager needs to know how best to elicit the
co-operation of staff and direct their efforts to achieving the goals
and objectives of the organisation.
Learning outcomes
After completing this chapter you should be able to:
explain the meaning and underlying concept of motivation;
detail main types of needs and expectations of people at work;
explain frustration-induced behaviour and possible reactions to frustration
at work;
examine main theories of motivation and evaluate their relevance to
particular work situations;
review the meaning, nature and dimensions of job satisfaction;
assess broader influences on motivation and job satisfaction;
evaluate the relationship between motivation, job satisfaction and work
Critical reflection
the top of the hierarchy. One of her most notable contributions was emphasis on the situational approach as one of the main forces in influencing the manager–subordinate relationship through the depersonalising of orders and obeying ‘the law of the situation’.48
Parker suggests that Follett’s ideas on human relations in the workforce foreshadowed the state
of things to come and continue to offer managers in the new century fresh food for thought.
Her proposals for best management practice have not only reflected much of what is portrayed
as new today but offer managers fresh insight into the task of leadership and management.49
The fact is that management ultimately depends on an understanding of human nature. I suggest
it goes much further than that. In the first place, good management depends on the acceptance
of certain basic values. It cannot be achieved without honesty and integrity, or without consideration for the interests of others. Secondly, it is the understanding of human foibles that we
all share, such as jealousy, envy, status, prejudice, perception, temperament, motivation and
talent, which provides the greatest challenge to managers.
HRH The Duke of Edinburgh50
Management is about human beings. Its task is to make people capable of joint performance, to
make their strengths effective and their weaknesses irrelevant. This is what organization is all
about, and it is the reason that management is the critical, determining factor . . . We depend on
management for our livelihoods and our ability to contribute and achieve.
‘Some writers argue that people do not lack motivation, only the right
triggers to motivate them. Some claim that motivation can only come from
within and attempts from other people to motivate you have little lasting
What are your views? In your own words, what motivates you most?
Management quotes provide insight
into managerial thinking.
Peter F. Drucker 51
Critical reflection
‘A number of eminent writers have drawn attention to the changing nature of management
and the work of the manager. Yet reading the ideas of other “gurus” such as Peter
Drucker and Mary Parker Follett it appears little is really new, and the underlying role of
management remains unchanged.’
What are your views? What specifically do you see as the likely role of the manager in
ten years’ time?
■ ‘Management’ is a generic term and subject to
many interpretations. A number of contrasting ideas
‘doing’ we can summarise the nature of managerial
work as clarification of objectives, planning, organis-
Critical reflections are controversial
statements to inspire critical thinking
about the areas you have just read.
The Academic viewpoint feature is new to this edition
and links you to relevant research that will help you
take your learning further by examining the applications
of various theoretical approaches, prompting you to
question and build up on what you have learnt so far.
The Management in the news feature
provides interesting journalistic comment
on relevant current issues and companies.
A melting pot for forging success
Below you will find the title and abstract of a recent article in an academic journal which explores a topic relevant
to the chapters in Part 3.
Purpose: The purpose of this paper is to examine the use of expletives and swearing in the workplace. It proposes to challenge leadership style and to suggest ideas for management best practice.
Design/methodology/approach: Case studies and qualitative analysis were applied, methods that
fit well for this sensitive topic.
Findings: This paper identifies the relevance, and even the importance, of using non-conventional
and sometimes uncivil language in the workplace.
Research limitations/implications: Sample size and representativeness present limitations.
Practical implications: There is a need for leaders to apply, under certain circumstances,
a permissive leadership culture. This paper advises leaders on how it may lead to positive
Originality/value: The paper is an original contribution to an area where research is scarce.
A certain originality element stems from the fact that, focusing on swearing language, the paper
found it necessary to use swear words (avoiding usage of the explicit form); bearing in mind the
purpose of the paper, the paper hopes that this will not cause offence to the readership of the
Academic discussion of topics such as
communication in relation to group dynamics,
workplace culture and leadership style tend to focus
on formal behaviours. However, the reality of many
work environments (and indeed the fictionalised
depiction of the workplace in film and on television) is
often characterised by informality and ‘colourful’
language including swearing. There is often an
assumption that swearing and bad language are
negative behaviours. This interesting paper challenges
that assumption, and suggests that there are different
types of swearing, some of which may be positive in
effect. It also reveals some interesting characteristics
of language use in terms of gender and culture; and it
concludes with some important observations about
the role of managers with regard to ‘industrial
N.B. The article itself contains a small number (12) of
annotated expletives to illustrate points.
The article might prompt you to consider the
following questions.
What does the information in the article tell us
about the importance of the ‘informal’ aspects of
group and team behaviour?
How can the study of workplace language,
including swearing, enhance our understanding of
the nature of managerial leadership?
What light do studies of this sort shed on problems
experienced by team members and team leaders
who are not part of a dominant organisational
How far do you think the idea of a workplace
‘language policy’, initiated by managers, is feasible?
them.’ In the tough business of making money out of
steelmaking, it helps if companies can offer something
special. In the effort to make this happen, the mix of
cultures at Dillinger provides a soufflé of experiences,
Mr Belche believes, that gives it a decent chance of
success even in the current uncertain climate.
Source: Marsh, P. ‘A Melting Pot for Forging Success’, Financial
Times, 8 March 2009. Copyright © 2009 The Financial Times
Limited, reproduced with permission.
Discussion questions
1 Analyse the organisational behaviour elements of
this article using the multidisciplinary framework
illustrated in Figure 1.3. What evidence can you
find about factors relevant to each of the five
2 In the light of ideas put forward by Hofstede,
Trompenaars and Hall, what do you think are
the advantages of having a culturally diverse
workforce like this? What particular challenges
do you think it poses for managers?
Discussion questions and Your tasks
encourage you to relate the Management
in the news and Case studies to theories
covered in the chapter.
No hippies here
For some decades the organic movement had a rather
hippie, ‘muck and magic’ image which viewed organic
production and consumption as an act of faith rather
than a business proposition. However, a variety of food
scares in the 1980s and 1990s, together with longerstanding concerns about the health and environmental
impact of chemicals used in food production, gradually
brought organic farming into the mainstream, and by
the turn of the century most major supermarkets
included at least some organic produce in the fruit and
vegetable section. This might have provided a better
outlook for organic growers, but the major food retailers
remained both powerful and strongly focused on price
and consistency, and this often made relationships with
suppliers combative and lopsided. Experience of the
power of supermarket buyers and a desire to escape
their stranglehold on vegetable distribution and sales
was one of the reasons why Riverford came about.1
The business was created by Guy Watson, who grew
up on his father’s farm in Devon. However, it took
Guy’s wider business expertise, partly gained during a
brief consultancy career in the mid 1980s, to create the
network of farms and the distribution system which
forms the basis of the organisation today. His insight,
which seems to have helped formulate the Riverford
strategy, was to see the market for organic produce as
similar in nature to the emerging markets he had been
involved with as a management consultant.2 This
insight has meant that, whilst true to the values of
Source: Courtesy of Riverford Organic Vegetables
Riverford Organic
What does it mean to be an ethical organisation?
Arguably an ethical business is one which operates fairly
and decently in its dealings with suppliers, customers
and workers, obeys the law and pays its taxes. However,
the meaning of ‘ethical’ as commonly used by the
media seems to have become equated with ‘green’ in
the environmental sense. Clearly, all organisations, both
public and private sector, can be challenged to run at
lower levels of energy use etc., and many now include
such objectives in their strategic plans. But is it possible
to go even further, and seek to develop products and
services which can actively reduce the environmental
impact of modern life? And if so, how can an
organisation be sure that what it is doing really achieves
that aim? One organisation that seems to be attempting
just this is Riverford Organic, a vegetable box delivery
scheme based in the south-west of England.
This mixing of the practical and theoretical must be linked to
a single aim: making good products that will do a better job of
solving customers’ problems.
Case studies conclude each chapter and each part,
providing insight into organisational behaviour in
a wide variety of contemporary UK and international
Source: Geoff Kuchera/iStockphoto
Baruch, Y. and Jenkins, S. ‘Swearing at Work and Permissive Leadership Culture’, Leadership and
Organizational Development Journal, vol. 28, no. 6, 2006, pp. 492–507.
Peter Marsh
Paul Belche uses a culinary metaphor to explain how
he tries to coax the best qualities from the mix of
cultures at the steel plant he runs in western Germany,
close to the borders with France and Luxembourg.
‘If you mix the yellow part of an egg with mustard and
oil without being careful, you will produce something
unexciting. But, if you pay correct attention to the
details, you end up with the best mayonnaise,’ he
says. He is explaining his approach to managing
Dillinger Hütte, a global leader in specialist steels for
applications such as oil pipelines. Mr Belche’s tactics
for getting the best out of his employees provide
wider lessons for managers of diverse workforces.
The company aims to take advantage of the
different cultural characteristics of Saarland – the
German state where it is based that, over the
centuries, has switched between French and German
sovereignty. Of the 5,500 employees in Dillinger, about
10 per cent have French as their main language, and
the rest German. Mr Belche, a 56-year-old physicist,
is from Luxembourg. ‘The Germans are strong when
it comes to practical work. The French are good at
theory and we try to get the best of these two
characteristics,’ he says. Mr Belche poses a question:
‘Who do you think would be better at plant safety –
the German [speakers] or the French? You might think
it would be the Germans. But actually it’s the French –
they realise they are possibly behind in this field and
so they work at it. Sometimes weakness can be a
strength – as long as it’s recognised.’
His approach, he says, is to put teams of people
from the different cultures together and encourage
them to learn from each other. The factory follows the
French approach to dining, with a siren announcing
the end of the lunchtime break at 3pm, an hour later
than is normal at other German steelworks. ‘This is to
give us time for a decent lunch,’ says Mr Belche.
When it comes to sales and technology, he says, the
aim is to link the practical aspects of steelmaking and
its applications, which he considers more German,
and the theoretical, which he considers more French.
This mixing of the practical and theoretical must be
linked to a single aim: making good products that will
do a better job of solving customers’ problems, Mr
Belche says.
He sums up his philosophy: ‘The biggest costs are
the ones that the accountant will miss. They come
from the products that you never developed or the
prices [of specific types of steel] that you never
reached because you weren’t good enough at selling
What does it mean to be an ‘ethical organisation’? Can an organisation
go even further actively to reduce the environmental impact of
modern life?
organic farming and environmentally sustainable
operating systems, Riverford has been able to become
a very large player in business terms. In 1992 Watson’s
vegetable box delivery scheme was typically small-scale,
local and focused around a single grower, serving about
200 customers in the south Devon area. In 2008 the
company made on average 47,000 deliveries a week in
England and Wales, with sales reaching £33 million.3
Five regional farms, each supporting a co-operative or
grower group of local farms, now form the network of
regional producers that operate under the Riverford
banner, and the boxes are delivered by 110 local
franchisees, who do the rounds which put the veg boxes
on customers’ doorsteps. The business has even
managed to sustain its sales volumes despite two very
bad growing seasons (2007 and 2008) and the
possibility that customers would cut back on organic
food purchases during the recession.
Why organic?
Watson often explains his decision to produce organic
vegetables in personal terms.
When I was growing up our family farm, like most
others, used loads of chemicals. As a teenager I got ill
after getting careless while spraying sweetcorn, not
wearing protection. My brother got paraquat poisoning.
Agribusiness uses chemicals to grow our food, while
neglecting the health of the soil.4
His farm gained organic status as far back as 1986, and
the door to door delivery scheme helped reduce the
As Riverford has grown, however, communication of
this sort has become more of a challenge. The staff
surveys too show that more work needs to be done here.
The relatively flat structure means that significant news
about the business can be communicated to all staff in
about two weeks; but the aim is to speed this up and
ensure it happens. There are quarterly briefing sessions
on all five farms across the country open to all staff and
attended by Guy and the Managing Director. They are
used to encourage suggestions and discussion as well as
to convey information about business progress. There is
also a staff committee of six elected representatives.
Promotion opportunities are limited by the flat
structure, but there are often chances to move sideways.
However, all staff are expected to be flexible and there is
a strongly anti-bureaucratic ethos. A number of staff
have moved from working on picking or box packing
to go into management or specialist roles such as IT.
The company aims to grow as many people from within
the business as possible; there is a staff development
programme lasting ten weeks for all new and also more
established staff who show an interest; this involves one
day a week spent in the key areas including box
planning, quality control, marketing and customer
services, the Field Kitchen and even accounts. Riverford
has run a management development programme using
external advisors, and is developing in-house
supervisory training.
Away from Devon, the 110 franchisees delivering the
boxes are the lifeblood of the business. As the growth of
2004–6 has stabilised, and supermarkets are now
competing both in terms of organics and home
deliveries, the company has recognised that franchisees
themselves need to become more sales-oriented and
more confident in talking to people about what
Riverford has to offer. In support of this, five regional
Sales Development Managers are being recruited to help
the franchisees to become more effective at
communicating this message. These appointments have
been difficult to make as the blend of sales knowledge,
a passion for food/cooking and a commitment to
organic values is hard to locate.
‘We want to use our business to make the world
a better place’16
The term ‘social entrepreneur’ has recently come into
use to describe business founders whose motives and
businesses are designed around a specific principle or
social problem which can benefit from a commercial
approach. Grameen Bank is one such organisation; so is
the Fifteen Foundation. Guy Watson’s approach seems
similar, and his concern is not confined to improving
eating habits or promoting environmentalism in the
UK. For a number of years Riverford has collaborated
with small-scale farmers in Uganda with a view to
improving trade opportunities with the UK by linking
directly with producers at local level. He has also
encouraged the development of sustainable agriculture
in Uganda through a training initiative. It is Watson’s
belief that trade and training can bring about beneficial
change, and in this respect we may add Riverford to
the growing list of social enterprises.
Your tasks
Explain the organisational control strategies that appear to be operating in the Riverford organisation. Why
and how have these control systems needed to change as the business grew?
Using an appropriate model (such as that at Figure 19.1) outline the key elements of Riverford’s
organisational culture. How might the culture need to change if the organisation is to survive both increased
competition and threats to its growth as a result of economic recession?
How important is management development to the future of Riverford? What would you include in a
management development programme for future leaders of the business? Explain the management
development techniques that would be appropriate, bearing in mind the nature of the organisation’s work
(principally agricultural), structure (regionalised and dispersed) and values.
Notes and references
1 Clarke, N., Cloke, P., Barnett, C. and Malpas, A. ‘The Spaces and Ethics of Organic Food’, Journal of Rural Studies, vol. 24, 2008,
pp. 219–30.
2 Watson, G. ‘Part of a Solution’, Resurgence, Issue 237, July/August 2006, available on-line at www.resurgence.org/magazine/
article369-PART-OF-A-SOLUTION.html (accessed 17 June 2009).
3 Stone, A. ‘How I Made It’, The Sunday Times, 27 July 2008.
4 Sowerby, N. ‘Organic Champion Guy Watson Takes On the Big Guns’, City Life online,
http://www.citylife.co.uk/restaurants/news/13685 (accessed 16 June 2009).
5 Slater, L. ‘Root Manoeuvre’, The Sunday Times, 31 August 2008.
6 Clarke et al. op. cit.
■ The application of organisational behaviour and
process of management take place not in a vacuum
but within the context of an organisational setting.
There are many different types of organisations set up
to serve different purposes and needs, and they come
in all forms, shapes and sizes. However, there are
at least three common factors in any organisation –
people, objectives and structure – to which can be
added a fourth factor – management. The qualities of
these factors determine organisational effectiveness.
■ Organisations can, traditionally, be distinguished
in terms of two generic groups: private enterprise and
public sector. The increasing rate of privatisation has
led, however, to a blurring of commercial interests
and service to the community. In recent years greater
attention has been given to social enterprise organisations. Another major distinction is arguably between
production and service organisations. In order to relate
the study of management and organisational behaviour to one particular type of organisation as distinct
from another, it is necessary to group similar types of
organisations together.
■ Organisations differ in many important respects
but they also share common features. Business organisations can be viewed as open systems in continual
interaction with the external environment of which
they are part. The open systems model enables the
comparative study and analysis of work organisations.
Within the organisation as a whole there are a number
of sub-systems interrelating and interacting with each
other. These sub-systems can be identified as task,
technology, structure, people, and management.
■ Whatever the type or nature of an organisation or
its formal structure, an informal organisation will
always be present and arises from the interactions of
people, their psychological and social needs and the
development of groups with their own relationships
and norms of behaviour. The informal organisation
serves a number of important functions and has
an influence on the morale, motivation, job satisfaction
and performance of staff.
Synopsis brings together the key concepts
of the chapter to aid your understanding.
■ It might be expected that a healthy organisational
climate would be reflected by complete harmony in
working relationships, but conflict is a reality of
management and organisational behaviour. There are
contrasting views of conflict and it can be seen to have
both positive and negative outcomes. The important
point is how conflict is handled and managed.
Managers need to adopt appropriate strategies for
dealing with the harmful effects of conflict.
■ There appears little doubt that stress at work is a
major concern and a potential source of mental and
physical ill-health. However, a certain amount of
pressure may arguably help promote a higher level
of performance. There are a number of measures to
help reduce the harmful effects of stress. Increasing
attention is focused on the role organisations play in
the lives of staff and with broader concerns for the
work/life balance and for meaning in people’s lives.
Organisations of the future need to be aware of the
importance of people and of new social contracts
between employers and employees.
1 How would you define an organisation and why do organisations exist? What are the common factors in any
2 Contrast various organisations, including your own, in terms of classifications based on (i) prime beneficiary,
and (ii) primary activity.
3 Discuss critically the extent to which differences among various organisations limit the value of the study of
management and organisational behaviour.
4 Assess critically the practical value to both the student and the manager of adopting an open systems view
of organisational analysis.
5 Distinguish between the formal and the informal organisation and explain their main characteristics. What
functions are served by the informal organisation?
6 To what extent do you accept the view that conflict is an inevitable feature of management and
organisational behaviour?
7 Why do you think increasing attention is being given to the work/life debate? Is this attention justified? As
a senior manager, what steps would you take to help improve the quality of working life for staff?
8 Give your own critical views on how you see the organisation of the future and the humanisation of organisations.
Review and discussion questions help you
to check your understanding of the topic,
stimulate further investigation and encourage
Assignments help you to understand theories
and challenge your assumptions by applying
ideas and analysis to your own experiences.
Personal awareness and skills exercises
develop your interpersonal and work-based
Stroop – illustrative experiment
(This is a development of Figure 6.11 and provides a further opportunity to review possible perceptual illusion.)
a Write two vertical lists of 20 colour names in felt tip pen. For the first list, use the correct colour pen for the
colour word you are writing (for example, blue pen for the word blue). Repeat some of the colours but place
them in random order.
b For the second list, use different colour pens for the colour word (for example, use a red pen for the word blue).
c Now ask a colleague to read out loud the colour that the word is written in (not the word itself). Compare the
amount of time it takes your colleague to read out the two lists. The second list probably not only took longer
but had more mistakes and more hesitations.
Completing this exercise should help you to enhance the following skills:
Distinguish between facts and assumptions or inferences.
Examine the basis upon which you make judgements.
Review the nature of your communication and decision-making processes.
After reading the following story you are required to:
1 Read the 15 statements about the story and check each to indicate whether you consider it to be true, false or?
‘T’ means that the statement is definitely true on the basis of the information presented in the story.
‘F’ means that it is definitely false.
‘?’ means that it may be either true or false and that you cannot be certain of which on the basis of the
information presented in the story. If any part of a statement is doubtful, mark it ‘?’.
William Stroop, who first conducted this experiment, noted that the task interferes with expected behaviour. It is
difficult to stop yourself from reading the word (the result of our early learning), which in this case directly
impairs performance.
Answer each statement in turn. You may refer to the story as often as needed but do not go back to change
any answer later and do not re-read any statements after you have answered them.
Form small groups and then undertake, individually, the following exercise.
2 After you have checked all 15 statements, work in small groups of three to five and discuss your individual
answers. How much agreement is there among members of your group? Do not change any of your first
individual answers. However, if as a result of your group discussion you would now give a different answer
to any of the statements, note this alongside your original answer.
The story
1 Read everything before you do anything.
2 Put your name in the upper right-hand corner of the paper, in
the space provided.
3 Circle the word ‘name’ in the second sentence, above.
4 Draw five small squares in the upper left-hand corner of this paper.
5 Put an X in each of the five small squares you have drawn.
6 Put a circle around each of those five small squares above.
A businessman had just turned off the lights in the store when a man appeared and demanded money.
The owner opened a cash register. The contents of the cash register were scooped up and the man sped away.
A member of the police force was notified promptly.
Statements about the story
7 Sign your name, under and to the left of the title above.
8 Draw a circle, in pen, around sentences 6 and 7 above.
12 If you feel that you have carefully followed these directions, call
out, loudly: ‘I have carefully followed directions!’
13 Add 107 and 278, and write the sum on the reverse, immediately
under the first figure that you wrote there.
9 Multiply 70 30 and write the result on the reverse side.
10 Draw a circle around the word ‘paper’ in sentence 4, above.
11 Please now call out your first name, loudly.
14 Circle that figure on the reverse.
15 In a normal voice, count aloud from 1–10.
A man appeared after the owner had turned off his store lights.
The robber was a man.
The man who appeared did not demand money.
The man who opened the cash register was the owner.
The storeowner scooped up the contents of the cash register and ran away.
Someone opened a cash register.
After the man who demanded the money scooped up the contents of the cash register,
he ran away.
While the cash register contained money, the story does not state how much.
The robber demanded money of the owner.
A businessman had just turned off the lights when a man appeared in the store.
It was broad daylight when the man appeared.
The man who appeared opened the cash register.
No one demanded money.
The story concerns a series of events in which only three persons are referred to:
the owner of the store, a man who demanded money and a member of the police force.
The following events occurred: someone demanded money, a cash register was opened,
its contents were scooped up and a man dashed out of the store.
Source: From Hanley, W. V. Communications and Interpersonal Relations, Texts and Cases, sixth edition, Irwin (1992), p. 213.
16 If no one else has said it, say now, ‘I am the leader!’
17 Now that you have read all of the foregoing, very carefully,
please complete ONLY sentences 1 and 2.
What conclusions do you draw from this exercise?
How would you explain differences in individual perceptions of the same statement?
On what basis did members of your group give different answers and how did their perception of
the statements about the story differ?
To what extent can you be absolutely certain about anything?
The ninth edition of Management & Organisational Behaviour comes with
MyManagementLab, a personalised and innovative online study and testing resource that
provides a variety of tools to enable you to assess and progress your own learning.
To get started, open your access kit, which is included inside this book. This access kit will
enable you to register online.
Register and log-in
Go to www.pearsoned.co.uk/mymanagementlab and click on the option to register as a
student user. Enter your course ID if you have already been given this by your lecturer. If you
don’t have a course ID then search for the author and book title to register and log-in and
follow the instructions on-screen using the code in your access kit.
The log-in screen will look like this:
Now you should be registered with your own password and ready to log-in to your own course.
When you log-in to your course for the first time, the course homepage will look like this:
Now follow the steps below for the chapter you are studying.
Step 1: Take a diagnostic test
There is a diagnostic test for each chapter. This will enable you to test yourself to see how
much you already know about a particular topic and will then identify the areas in which you
need practice.
Step 2: Review your study plan
The results of the diagnostic test you have taken will be incorporated into your study plan,
showing you what sections you have mastered and what sections you need to study further
– helping you make the most efficient use of your self-study time.
Don’t forget that you can click on the e-book link to read the relevant part of your textbook
from the home page
Step 3: Have a go at an exercise
From the study plan, click on the section of the book you are studying and have a go at the
interactive Exercises.
Good luck getting started with MyManagementLab.
A warm and special tribute is paid to my wife Pamela and family for their love, continuing
support and encouragement for this ninth edition.
Special thanks
This is to record a special debt of thanks and gratitude to friends and colleagues Linda Carter
and David Preece for their significant contribution to earlier editions of Management and
Organisational Behaviour.
I wish also to welcome friends and colleagues Gill Christy and Peter Scott for their invaluable contribution to the eighth edition and to the present text.
Thanks and gratitude also to:
Richard Christy, Ray French, Robyn Miller, Christine Paterson, Anne Riches, Amanda
Stevens, Lynn Thomson.
Managers who kindly gave permission to reproduce material from their own
The team at Pearson Education including Gabrielle James, Joe Vella, Simon Lake,
Matthew Walker, Alison Westwood, Emma Violet, Colin Reed; and colleagues in
marketing and sales.
Those who in a variety of ways through their friendship and support have helped in
the completion of this ninth edition, including: Brigitte Bjorn; Di and Mike Blyth;
John Bradley; Chris and John Grant; Jenny and Tony Hart; Karen Meudell, Lynn and
Wayne Miller; Jeanette Smith and colleagues at Bath Travel.
Thanks and appreciation to the following reviewers, approached by the publishers, for their
insightful and constructive comments that have helped shape the contents of this ninth
Dr Nicola Bown, Leeds University Business School
Marilyn Farmer, Buckinghamshire New University
David Godfrey, Hull College
Sarah Horne, Colchester Institute
Dr Phil Kelly, Liverpool John Moores University
Paul Leonard, Northumbria University
Samantha Lynch, Kent Business School
Dr Louise Preget, Bournemouth University
Paul Rowlandson, University of Ulster, Department of International Business
Bob Smale, University of Brighton Business School
Rod Smith, University of Bedfordshire
Wendy Yellowley, Buckinghamshire New University
Laurie J. Mullins
We are grateful to the following for permission to reproduce copyright material:
Figure 1.1: Adapted from Management, eighth edition, South-Western Publishing (Hellriegel,
D., Jackson, S. E. and Slocum, J. W., Jr. 1998), p. 6. Copyright © 1999 South-Western, a part
of Cengage Learning, Inc. Reproduced by permission (www.cengage.com/permissions);
Figure 1.7: From Organisational Behavior: Individuals, Groups and Organisations, third edition,
Financial Times Prentice Hall (Brooks, I. 2006), p. 272. Reproduced with permission from
Pearson Education Ltd; Figures 1.8, 2.3, 3.10, 4.8, 5.7, 6.14, 7.14, 8.2, 9.8, 10.8, 11.8, 12.7,
13.4, 14.13, 15.8, 17.7, 18.2, 19.3 and 20.4: Copyright © 2008 The Virtual Learning
Materials Workshop. Reproduced with permission; Figures 3.7 and 15.1: Adapted from
Corporate Strategy, fourth edition, Financial Times Prentice Hall (Lynch, R. 2006). Reproduced
with permission of Pearson Education Ltd; Figure 3.9: Adapted from ‘Organisational Analysis’,
supplement to Manager, The British Journal of Administrative Management, No. 18, March/
April (Lysons, K. 1997). Reproduced with permission of the Institute of Administrative
Management; Figure 3.11: From Tackling Stress: The Management Standards Approach, publication no. indg406, July (Health and Safety Executive 2005). Reproduced under the terms
of the Click-Use License; Figure 4.3: Modified and reproduced by special permission of the
publisher, CPP, Inc., Mountain View, CA 94043 from the Introduction to Type®, sixth edition
booklet by Isabel Briggs Myers, revised by Linda K. Kirby and Katharine D. Myers. Copyright
© 1998 by Peter B. Myers and Katharine D. Myers, All rights reserved. Further reproduction
is prohibited without the publisher’s written consent. Introduction to Type® is a registered
trademark of the MBTI Trust, Inc. in the United States and other countries; Figure 4.4:
Adapted from The Structure of Human Abilities, Methuen and Co. (Vernon, P. E. 1950).
Reprinted with permission from Taylor & Francis Books (UK); Figure 4.5: From ‘Three Faces
of Intellect’, American Psychologist, vol. 14, pp. 469–79 (Guilford, J. P. 1959). Published by
APA and reprinted with permission; Figure 4.6: Adapted from Emotional Competence Inventory,
Version 2, Hay Acquisition Company, Inc. (2002) Copyright © 2002 Hay Acquisition
Company, Inc. All rights reserved; Figure 4.7: Adapted from Office for National Statistics
(ONS), www.statistics.gov.uk, Crown copyright material is reproduced with the permission of the Controller, Office of Public Sector Information (OPSI); Figure 5.5: Adapted
from Managing Change: A Human Resource Strategy Approach, Financial Times Prentice Hall
(Thornhill, A., Lewis, P., Millmore, M. and Saunders, M. 2000), p. 289, Pearson Education
Ltd; Figure 5.6: Adapted from Assessment Issues in Higher Education, October, Department of
Employment (Atkins, M. J., Beattie, J. and Dockrell, W. B. 1993), p. 51. Crown Copyright ©
1993, reproduced under the terms of the Click-Use License; Figure 6.8: Adapted from
Introduction to Psychology, third edition, McGraw-Hill (King, R. 1996). Reproduced with permission from the author, Professor Richard King; Figure 6.12: Adapted from Odd Perceptions,
Methuen (Gregory, R. L. 1986), p. 71. Reprinted by permission of the publishers, Routledge,
a division of Taylor & Francis, Ltd; Figures 6.13 and 8.5: Adapted from Interactive Behaviour
at Work, third edition, Financial Times Prentice Hall (Guirdham, M. 2002). Reproduced
with permission from Pearson Education Ltd; Figure 6.15: From Nick Fitzherbert applies
rules of magic to coaching business people in communication skills, www.fitzherbert.co.uk,
with permission from Nick Fitzherbert; Figure 7.9: Adapted from Managerial Attitudes and
Performance, Irwin (Porter, L. W. and Lawler, E. E. 1968), p. 165. Copyright © Richard D.
Irwin Inc., reprinted by permission of The McGraw-Hill Companies, Inc; Figure 7.13:
Adapted from ‘Knowledge Workers: The New Management Challenge’, Professional Manager,
November, p. 13 (Tampoe, M. 1994). Reproduced with permission from the Chartered
Management Institute; Figure 7.15: Adapted from Work Redesign, Addison-Wesley
(Hackman, J. R. and Oldham, G. R. 1980), Figure 4.6, p. 90. Reproduced with permission
from Pearson Education, Inc.; Figure 8.1: Adapted from Beyond the Team, ButterworthHeinemann (Belbin, R. M. 2000). Copyright © 2000. Reproduced with permission from
Elsevier Ltd; Figure 9.2: Adapted from Behavior in Organisations, sixth edition, Prentice Hall
(Greenberg, J. and Baron, R. A. 1995), p. 306. Reproduced with permission from Pearson
Education, Inc.; Figure 10.2: Adapted from Action-Centred Leadership, Gower Press (Adair, J.
1979), p. 10. Reproduced with permission from John Adair; Figure 10.4: Reprinted by permission of Harvard Business Review from ‘How to Choose a Leadership Pattern’, Harvard
Business Review, May/June, p. 167 (Tannenbaum, R. and Schmidt, W. H. 1973). Copyright ©
1973 by Harvard Business School Publishing Corporation, all rights reserved; Figure 10.5:
Adapted from A Theory of Leadership Effectiveness, McGraw-Hill (Fielder, F. E. 1967), p. 146.
Reproduced with permission from Fred E. Fielder; Figure 10.7: Adapted from The Situational
Leadership®. Copyright © 2006. Reprinted with permission of the Center for Leadership
Studies, Inc., Escondido, CA 92025 (www.situational.com). All rights reserved; Figure 10.9:
Adapted from Leadership for Innovation: The Impact of Leadership on Innovation, Advanced
Institute of Management Research (AIM) (Munshi, N. et al. 2005), Figure 5, p. 18.
Reproduced with thanks to AIM fellows and scholars: A. Munshi, A. Oke, P. Puranam, M.
Stafylarakis, S. Towells, K. Moeslein and A. Neely; Figure 10.10: Adapted from ‘A Good Fit Is
Essential’, Professional Manager, vol.15, no. 3, May, p. 38 (Cutler, A. 2005). Reproduced with
permission from Chartered Management Institute and Alan Cutler; Figure 11.1: Adapted
from Management, Organisation and Employment Strategy, Routledge & Kegan Paul (Watson,
T. J. 1986), p. 29. Reproduced by permission of Routledge, a division of Taylor & Francis,
Ltd; Figure 11.3: Adapted from ‘Managing in the 21st Century’, Manager, The British Journal
of Administrative Management, January/February, p. 10 (Moorcroft, R. 2000). Reproduced
with permission from The Institute of Administrative Management; Figure 11.6: Reprinted
with permission of Harvard Business Review from ‘The Manager’s Job: Folklore and Fact’,
Harvard Business Review Classic, March–April, p. 168 (Mintzberg, H. 1990). Copyright ©
1990 by Harvard Business School Publishing Corporation, all rights reserved. Reprinted by
permission of Harvard Business Review; Figure 12.1: Adapted from Leadership Dilemmas –
Grid Solutions, Butterworth-Heinemann (Blake, R. R. and McCanse, A. A. 1991), grid figure,
p. 29, paternalism figure, p. 30 and opportunism figure, p. 31. Copyright © Elsevier 1991;
Figure 12.2: Adapted from The Human Organization, McGraw-Hill (Likert, R. 1967), p. 137.
Reproduced with permission from the McGraw-Hill Companies, Inc.; Figure 13.3: Adapted
from ‘Appraising Employee Performance’, Professional Manager, July, p. 31 (Kermally, S.
2002). Reproduced with permission from the Chartered Management Institute; Figure 15.4:
Adapted from ‘The Structures Behind Global Companies’, in Pickford, J. (ed) Mastering
Management 2.0, Financial Times Prentice Hall, p. 76 (Birkinshaw, J. 2001). Reprinted
with permission from Julian Birkinshaw; Figure 15.5: Adapted from Industrial Organization:
Theory and Practice, second edition, Oxford University Press (Woodward, J. 1980), p. 128.
Reproduced by permission of Oxford University Press; Figure 15.6: Adapted from People in
Organisations, second edition, McGraw-Hill (Mitchell, T. R. 1982), p. 32. Reprinted with
permission from The McGraw-Hill Companies, Inc.; Figure 15.7: Adapted from Reed
Business Information Ltd. Copyright © Reed Business Information Ltd., reprinted with permission; Figure 15.10: Adapted from Organisational Behaviour: Concepts and Applications,
fourth edition, Merrill/Prentice Hall (Gray. J. L. and Starke. F. A. 1988), p. 431. Reproduced
with permission from Pearson Education, Inc; Figure 16.2: Adapted from Organisations and
Technical Change: Strategy, Objectives and Involvement, Routledge/ITBP (Preece, D. A. 1995),
p. 7; Figure 17.3: Adapted from Organization: Contemporary Principles and Practice, Blackwell
Publishing (Child, J. 2005), p. 121. Reprinted by permission of Wiley-Blackwell; Figure 17.4:
Adapted with permission of The Free Press, a Division of Simon & Schuster, Inc. from
Comparative Analysis of Complex Organizations, revised edition by Amitai Etzioni. Copyright ©
1961 by The Free Press. All rights reserved; Figure 19.1: Adapted from Exploring Corporate
Strategy, seventh edition, Financial Times Prentice Hall (Johnson, G., Scholes, K. and
Whittington, R. 2005), p. 202. Reproduced with permission of Pearson Education Ltd;
Figure 19.2: Adapted from ‘Get engaged’, Management Today, April, p. 40 (De Vita, E. 2007).
Reproduced from Management Today magazine with the permission of the copyright owner,
Haymarket Business Publications Limited; Figure 20.1: From Understanding Organizations,
fourth edition, Penguin Books (Handy, C. B. 1993), p. 15. Copyright © Charles Handy, 1976,
1981, 1985, 1993, 1999. Reproduced by permission of Penguin Books Ltd; Figure 20.2: ‘The
McKinsey 7-S Framework’ from In Search of Excellence: Lessons From America’s Best Run
Companies by Peters, T J. and Waterman, Jr, R. H. Copyright © 1982 by Thomas J. Peters and
Robert H. Waterman, Jr. Reprinted by permission of HarperCollins Publishers; Figure 20.3:
Adapted from The Democratic Enterprise, Financial Times Prentice Hall (Gratton, L. 2004),
p. 35. Reproduced with permission of Pearson Education Ltd; Figure 20.5: Adapted from
EFQM (www.efqm.org). Copyright © 2009 EFQM. The EFQM Excellence Model is a registered trademark of the EFQM; Figure 20.6: Adapted from Living Strategy: Putting People at
the Heart of Corporate Purpose, Financial Times Prentice Hall (Gratton, L. 2000), p. 101.
Reproduced with permission of Pearson Education Ltd; Figure 20.7: Adapted from
Management Futures: The World in 2018, March, Chartered Management Institute (Chartered
Management Institute 2008), Figure 1, p. 14. Reproduced with permission.
Table 1.1: Adapted from ‘The Customized Workplace’, in Chowdhury, S. (ed.) Management
21C, Financial Times Prentice Hall (Bouchikhi, H. and Kimberly, J. R., 2000), p. 215.
Reproduced with permission of Pearson Education Ltd; Table 3.1: Adapted from ‘Service Is
Different’, The TQM Magazine, vol. 6, no. 1, p. 6 (Macdonald, J. 1994). Copyright © Emerald
Group Publishing Limited, all rights reserved; Table 3.2: Adapted from Organizational
Behavior: Concepts and Applications, fourth edition, Merrill Publishing Company (Gray, J. L.
and Starke F. A. 1988), p. 432. Reproduced with permission from Pearson Education Inc.;
Table 4.4: Adapted from Identity and the Life Cycle (Erikson, E. H.). Copyright © 1980 by W.
W. Norton & Company, Inc. Copyright © 1959 by International Universities Press, Inc. Used
by permission of W. W. Norton & Company, Inc; Table 4.6: Adapted from ‘Feeling and
Smiling’, The Psychologist, vol. 12, no. 1, January, pp. 16–19 (Briner, R. 1999). Reproduced
with permission from the British Psychological Society; Table 5.1: Adapted from ‘The Debate
Starts Here’ in People Management in Perspective: A Collection of Key Articles Published in the Last
Year on Training and Development, IPD, April, pp. 16–17 (Burgoyne, J., Cunningham, I.,
Garratt, B., Honey, P., Mayo, A., Mumford, A., Pearn, M. and Pedler, M. 1999). Reproduced
with permission from Chartered Institute of Personnel and Development (CIPD); Table 6.1:
Adapted from Perceptual Distortion of Height as a Function of Ascribed Academic Status,
Journal of Social Psychology, no. 74, pp. 97–102 (Wilson, P. R., 1968). Copyright 1968 by
Taylor & Francis Informa UK Ltd. – Journals. Reproduced with permission of Taylor & Francis
Informa UK Ltd. – Journals in the format Textbook via Copyright Clearance Center, Inc.;
Table 6.2: Adapted from People in Organisations, second edition, McGraw-Hill (Mitchell, T. R.
1982), p. 104. Reprinted with permission from The McGraw-Hill Companies, Inc.; Table
7.1: Adapted from Motivation and Work Behaviour, fifth edition, McGraw-Hill (Steers, R. M.
and Porter, L. W. 1991), p. 35. Reprinted by permission of The McGraw-Hill Companies,
Inc; Table 7.3: Adapted from ‘Job Satisfaction: A Method of Analysis’, Personnel Review, vol.
20, no. 3, p. 14 (Mumford, E. 1991). Copyright © Emerald Group Publishing Limited. All
rights reserved; Table 9.1: Adapted from Team Roles at Work, Butterworth-Heinemann (Belbin,
R. M. 1993), p. 23. Reproduced with permission of Belbin Associates (www.belbin.com);
Table 12.1: Adapted from Leadership Dilemmas – Grid Solutions, Butterworth-Heinemann
(Blake, R. R. and McCanse, A. A. 1991), p. 29. Copyright © Elsevier 1991; Table 15.1:
Adapted from The Analysis of Organisations, second edition, John Wiley & Sons (Litterer, J. A.
1973), p. 339. Reproduced with permission from the estate of Joseph A. Litterer; Table 16.1:
Adapted from Organisations and Technical Change: Strategy, Objectives and Involvement,
Routledge/ITBP (Preece, D. A., 1995); Table 17.1: Adapted from Industrial Organisation:
Theory and Practice, second edition, Oxford University Press (Woodward, J. 1980), p. xxi.
Reproduced by permission of Oxford University Press.
Page 35: Exercise after ‘So What’s Your Work Ethic?’, Professional Manager, May, p. 38 (2003).
Reproduced with permission from the Chartered Management Institute and Your Future
Looks Bright, Preston Beach, p. 98 (Walmsley, C. J. 2002); 71: Activity adapted from Human
Relations: A Job-Oriented Approach, Reston/Prentice Hall (DuBrin, A. J. 1978), pp. 296–7.
Reproduced with permission from Pearson Education, Inc.; 115: Activity adapted from ‘Our
Organizational Society: Your Association with Organizations’ in Experimental Exercises and
Cases in Management, McGraw-Hill, pp. 13–15 (Kast, F. E. and Rosenzweig. J. E. 1976).
Reproduced with permission from the McGraw-Hill Companies, Inc; 163: Article from
‘The Apprentice, Week Nine’, People Management Online, 27 May 2009 (Ball, M.) (www.
peoplemanagement.co.uk). Reproduced by permission of People Management magazine and
the author; 201: Article from ‘UK Follows Dutch Example with Site Simulations’, People
Management Online, 20 May 2009 (Phillips, L.), (www.peoplemanagement.co.uk).
Reproduced by permission of People Management magazine and the author; 215: Exhibit
adapted from Diversity Resource Handbook (Portsmouth Hospitals NHS Trust). Reproduced
with permission; 215 and 217: Extracts from Going Dutch in Beijing, Profile Books (McCrum,
M. 2007). Reproduced by permission of Profile Books Ltd; 245: Article adapted from ‘How
to Be Happy in Life: Let Out Your Anger’, Observer, 1 March (Hill, A. 2009). Copyright ©
Guardian News & Media Ltd 2009; 332: Exhibit adapted from In Search of European
Excellence, Profile Books (Heller, R. 1997), p. 231. Reprinted by permission of A. P. Watt Ltd.
on behalf of Heller Arts Ltd. and Profile Books Ltd; 409: Activity adapted from Managing
Organizational Behaviour, fourth edition, John Wiley & Sons (Schermerhorn, J. R., Jr, Hunt, J.
G. and Osborn, R. N. 1991), p. 484. Reproduced with permission from John Wiley & Sons
Inc; 409: Exercise adapted from The Path to Leadership: Developing a Sustainable Model within
Organisations, CBI in association with Harvey Nash (Confederation of British Industry
2005). Reproduced with kind permission of CBI and Caspian Publishing Ltd; 487: Exercise
adapted from ‘Do People Trust You?’, Professional Manager, vol. 14, July, p. 32 (Bibb, S. and
Kourdi, J., 2004). Reproduced with permission from Chartered Management Institute; 510:
Exhibit from ‘War Goes On for the Talent Pool’, Professional Manager, vol. 17, no. 1, January,
p. 25 (Mann, S. 2008). Reproduced with permission from Chartered Management Institute;
578: Activity adapted from Organization: Contemporary Principles and Practice, Blackwell
Publishing (Child, J., 2005), p. 22. Reprinted by permission of Wiley-Blackwell; 607: Exhibit
adapted from ‘Home Alone Stir Crazy’, Management Today, March, p. 75 (Eatherden, R.
2005). Reproduced with permission from Haymarket Publishing Ltd; 644: Exhibit
adapted from Trades Union Congress Report of Congress 2007 (Trades Union Congress 2007),
pp. 19–20. Reproduced with permission from Trades Union Congress; 697: Activity adapted
from Organizational Behaviour: An Experimental Approach, seventh edition, Prentice Hall
(Osland, J. S., Kolb, D. A., and Rubin, I. M., 2001), p. 381, Copyright © Pearson Education,
Inc. reproduced with permission; 698: Exercise adapted from ‘People Who Can’t Let Go’,
Management Today, March, p. 47 (Kirwan-Taylor, H. 2007). Reproduced from Management
Today magazine with the permission of the copyright owner, Haymarket Business
Publications Limited; 765: Article from ‘The Time Is Ripe for Fresh Ideas’, Financial Times,
5 February 2009 (Gratton, L.); 766: Activity from ‘Understanding Your Organisation’s Image
and Style’ (www.lm.learningmatters.com) with permission from Echelon Learning Ltd; 767:
Activity adapted from ‘Rate Your Readiness to Change’, Fortune, 7 February 1994, pp. 63–4
(Stewart, T. A.). Copyright © 1994 Time Inc. All rights reserved; 792: Extract adapted from
EFQM (European Foundation for Quality Management) (www.efqm.org); 807: Exercise
adapted from John Bourn for a UNISON distance learning course and is used with permission of the Education Officer, UNISON Open College.
The Financial Times
Page 34: Article from ‘A Melting Pot for Forging Success’, Financial Times, 8 March 2009
(Marsh, P.); 70: From ‘The Story of the Middleman’, Financial Times, 25 February 2009
(Stern, S.); 291: From ‘Top Marks for the Best Employee Awards’, Financial Times, 11 May
2009 (Rigby, R.); 335: From ‘Dragon Boat Racing on the Thames’, Financial Times, 4 April
2009 (Bliss, D.); 366: From ‘Falling Down’, Financial Times, 3 June 2009 (Stern, S.); 407:
From ‘Managing the Mood Is Crucial’, Financial Times, 23 March 2009 (Stern, S.); 450: From
‘Science of Managing Monkeys’, Financial Times, 20 May 2009 (Stern, S.); 529: From ‘The
Carrot and Stick Approach’, Financial Times, 28 May 2009 (Clegg, A.); 577: From ‘A Taxing
Merger’, Financial Times, 10 July 2008 (Houlder, V.); 647: From ‘Should Twitter Be Confined
to the Marketing Department?’, Financial Times, 13 May 2009; 695: From ‘The Undercover
Boss’, Financial Times, 8 June 2009 (Stern, S.); 728: From ‘Trade-offs in the Moral Maze’,
Financial Times, 9 March 2009 (Jones, A.); 804: From ‘How to Manage the Clever Squad’,
Financial Times, 25 May 2009 (Stern, S.).
The publisher would like to thank the following for their kind permission to reproduce their
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‘Many of us spend a good deal of our life working. We make friends at
work, we learn about ourselves when we work, we grow and develop,
and we become innovative, energized and stimulated. Working cooperatively with others, we are able to create positive energy that gives
us joy and added value to our companies. All of these wonderful
human experiences can take place during the times we are engaged
in work. I call these times Hot Spots. Hot Spots are places and times
when cooperation flourishes, creating great energy, innovation,
productivity and excitement. Hot Spots can be workplaces, teams,
departments, companies, factories, cities, industries, coffee shops,
hallways, conferences – any place or time where people are working
together in exceptionally creative and collaborative ways.’
Lynda Gratton (2007) Hot Spots, Financial Times Prentice Hall, p. xi.
Part 1
The Nature of Organisational Behaviour
Approaches to Organisation and Management
The Nature and Context of Organisations
The Global Context
Visit www.pearsoned.co.uk/mymanagementlab to access the online
video case study that complements Part 1: The Organisational Setting.
This video offers a real life example of how one company responds to
CASE STUDY the context of business today. Maersk is a global shipping company
with over 500 vessels moving nearly 2 million containers. In this video,
Customer Service Director Brian Godsafe describes how the company
operates and meets the varied needs of customers around the world.
There is a multiplicity of interrelated factors that influence
the decisions and actions of people as members of a work
organisation. The scope for the examination of organisational
behaviour is therefore very wide. In an increasingly global and
competitive business environment it is especially important
to understand the main influences on behaviour in work
organisations, the effective management of the human element
and the nature of the people–organisation relationship.
Learning outcomes
After completing this chapter you should be able to:
explain the nature and main features of organisational behaviour;
detail contrasting perspectives of orientations to work;
outline the importance of management as an integrating activity;
assess the nature and importance of the psychological contract;
explain the relevance of the Peter Principle and Parkinson’s Law;
review the changing nature of work organisations;
assess the impact of globalisation and the international context.
Critical reflection
‘Although a commonly used term, organisational behaviour is a misnomer.
Rarely do all members act collectively in such a way as to represent the
behaviour of the organisation as a whole. In practice, we are talking about
the attitudes and actions of individuals or small groups within the
Do you agree? What term would you suggest best explains this subject area?
However much of a cliché, it is still an inescapable fact that people are the main resource of
any organisation. Without its members, an organisation is nothing; an organisation is only
as good as the people who work within it. In today’s increasingly dynamic, global and competitive environment an understanding of the effective management of the people resource
is even more important for organisational survival and success.
Organisational behaviour is concerned with the study of the behaviour of people within
an organisational setting. It involves the understanding, prediction and control of human
behaviour. Common definitions of organisational behaviour (OB) are generally along the
lines of: the study and understanding of individual and group behaviour and patterns of
structure in order to help improve organisational performance and effectiveness.1
There is a close relationship between organisational behaviour and management theory
and practice. It is sometimes suggested that organisational behaviour and management are
synonymous, but this is an over-simplification because there are many broader facets to
management. Organisational behaviour does not encompass the whole of management;
it is more accurately described in the narrower interpretation of providing a behavioural
approach to management. Some writers appear critical of a managerial approach to organisational behaviour. Yet, while the role, responsibilities and actions of management are of
course subject to legitimate debate, what cannot be denied is the growing importance of
effective management, in whatever form or with whatever emphasis it is perceived, to the
successful performance of the work organisation.
Applications of organisational behaviour and the effective management of people at work
take place in the context of the wider environmental setting, including the changing patterns
of organisations and work. The world of work is changing and this is discussed later in this
The use of separate topic areas is a recognised academic means of aiding study and explanation of the subject. In practice, however, the activities of an organisation and the role
of management cannot be isolated neatly into discrete categories. The majority of actions
are likely to involve a number of simultaneous functions that relate to the total processes
within an organisation.2 Consider, for example, a manager briefing departmental staff on a
major unexpected, important and urgent task. Such a briefing is likely to include consideration of goals and objectives, organisation strategy and structure, management system, process of delegation and empowerment, systems of communication, teamwork, leadership
style, motivation and control systems. The behaviour of the staff will be influenced by a combination of individual, group, organisational and environmental factors.
Topic studies in organisational behaviour should not be regarded, therefore, as
entirely free-standing. Any study inevitably covers several aspects and is used to a greater or
lesser extent to confirm generalisations made about particular topic areas. The use of the
same studies to illustrate different aspects of management and organisational behaviour
serves as useful revision and reinforcement and helps to bring about a greater awareness and
understanding of the subject.
The relevance of theory
In the study of management and organisational behaviour you will come across many
theories. However, you should not be put off by the use of the word ‘theory’. Most rational
decisions are based on some form of theory. Theory contains a message on how managers
might behave. This will influence attitudes towards management practice and lead to changes
in actual patterns of behaviour. Theory helps in building generalised models applicable
to a range of organisations or situations. It further provides a conceptual framework and
gives a perspective for the practical study of the subject. Thus theory and practice are
inseparable. Together they lead to a better understanding of factors influencing patterns of
behaviour in work organisations and applications of the process of management.3
However, to be of any help to the practising manager, theory has to be appropriate. For
example, Lee refers to:
. . . the danger of adopting theories because they are teachable, rather than because they are effective
. . . [however,] without appropriate theory, there would be very little communication of the insights of
scientific theory to practising managers.4
Patching suggests that all managers who think about what they do are practical students of
organisational theory.
Theory is not something unique to academics, but something we all work with in arriving at our attitudes, beliefs and decisions as managers. It seems obvious to most of us that some theories are better
than others. Many managerial discussions which we undertake in meetings focus upon trying to agree
upon which theory will be best for a particular decision.5
Alternative approaches
There are a number of alternative approaches to the study of organisational behaviour.
For example, in addition to a managerial approach, Drummond refers to two other intellectual standpoints, interpretative and critical. The interpretative standpoint views ambiguity,
paradox and contradictions as part of the natural experiences of organisations, with an
emphasis upon understanding the subtleties and dynamics of organisational life. The critical standpoint believes that reality is very real and people have only a marginal amount of
freedom, and regards management science as bogus, a means of legitimising economic
exploitation.6 While the existence and potential contributions of both these standpoints
should be acknowledged, such a broad and diverse area of study demands attention to effective management as an integrating and co-ordinating activity.
The realities of organisational behaviour
However one looks at the nature or disciplines of organisational behaviour it is important
to remember, as Morgan reminds us, that ‘the reality of organisational life usually comprises
numerous different realities!’7
Hellriegel, Slocum and Woodman suggest:
One way to recognise why people behave as they do at work is to view an organisation as an iceberg.
What sinks ships isn’t always what sailors can see, but what they can’t see.8
The overt, formal aspects focus only on the tip of the iceberg (organisation). It is just as
important to focus on what you can’t see – the covert, behavioural aspects (see Figure 1.1).
The behaviour of people at work cannot be studied in isolation. It is necessary to understand
interrelationships with other variables that together comprise the total organisation. This
involves consideration of interactions among the aims and objectives of the organisation,
formal structure, the tasks to be undertaken, the technology employed and methods of
carrying out work, the process of management and the external environment. The bottom
line is that sooner or later every organisation has to perform successfully if it is to survive.
Organisational performance and effectiveness is discussed in Chapter 20.
Figure 1.1
The organisational iceberg
Source: From Hellriegel, D., Slocum, J. W., Jr. and Woodman, R. W. Management, eighth edition, South-Western Publishing (1998), p. 6.
Copyright © 1999 South-Western, a part of Cengage Learning, Inc. Reproduced by the permission (www.cengage.com/permission).
The study of organisational behaviour embraces, therefore, an understanding of:
the nature and purpose of the organisation;
the human element and behaviour of people;
business strategy, organisational processes and the execution of work;
the process of management as an integrating and co-ordinating activity;
social responsibilities and business ethics;
the external environment of which the organisation is part; and
the need for organisation success and survival.
This provides us with a basic, but convenient, framework of analysis (see Figure 1.2).
Organisational Behaviour is one of the most complex and perhaps least understood academic
elements of modern general management, but since it concerns the behaviour of people within
organisations it is also one of the most central . . . its concern with individual and group patterns
of behaviour makes it an essential element in dealing with the complex behavioural issues
thrown up in the modern business world.9
Wilson, however, suggests that the meaning of the term organisational behaviour is far
from clear. She challenges what constitutes organisational behaviour and questions whether
we should be interested only in behaviour that happens within organisations. There is a
reciprocal relationship in what happens within and outside organisations. Wilson suggests
that we also look outside of what are normally thought of as organisations and how we
Figure 1.2
Organisational behaviour: a convenient framework of analysis
usually think of work. We can also gain insight into organisational life and behaviour by
looking at what happens in rest and play; considering emotion and feeling; considering the
context in which work is defined as men’s or women’s work; and looking at less organised
work, for example work on the fiddle and the meaning of work for the unemployed.10 These
suggestions arguably add an extra dimension to the meaning and understanding of organisational behaviour.
The variables outlined above provide parameters within which a number of interrelated
dimensions can be identified – the individual, the group, the organisation and the environment – which collectively influence behaviour in work organisations.
The individual
Organisations are made up of their individual members. The individual is a central feature
of organisational behaviour, whether acting in isolation or as part of a group, in response to
expectations of the organisation, or as a result of the influences of the external environment.
Where the needs of the individual and the demands of the organisation are incompatible,
this can result in frustration and conflict. It is the role of management to integrate the individual and the organisation and to provide a working environment that permits the satisfaction of individual needs as well as the attainment of organisational goals.
The group
Groups exist in all organisations and are essential to their working and performance. The
organisation comprises groups of people and almost everyone in an organisation will be
a member of one or more groups. Informal groups arise from the social needs of people
within the organisation. People in groups influence each other in many ways and groups
may develop their own hierarchies and leaders. Group pressures can have a major influence
over the behaviour and performance of individual members. An understanding of group
structure and behaviour complements knowledge of individual behaviour and adds a further
dimension to the study of organisational behaviour.
The organisation
Individuals and groups interact within the structure of the formal organisation. Structure
is created to establish relationships between individuals and groups, to provide order and
systems and to direct the efforts of the organisation into goal-seeking activities. It is through
the formal structure that people carry out their organisational activities to achieve aims and
objectives. Behaviour is influenced by patterns of structure, technology, styles of leadership
and systems of management through which organisational processes are planned, directed
and monitored. The focus of attention is on the impact of organisation structure and patterns of management on the behaviour and actions of people. McPhee refers to the growth
in the nature and importance of organisational structures and their essence, and for greater
emphasis on business-to-business (B2B) depth or group interviewing as part of an insight
into business and organisational behaviour.11
The environment
The organisation functions as part of the broader external environment of which it is a part.
The environment affects the organisation through, for example, internationalisation, technological and scientific development, economic activity, social and cultural influences and
governmental actions. The effects of the operation of the organisation within its environment are reflected in terms of the management of opportunities and risks and the regard for
corporate responsibility and ethical behaviour. The increasing rate of change in environmental factors has highlighted the need to study the total organisation and the processes by
which the organisation attempts to adapt to the external demands placed upon it. Increasing
globalisation means that organisations must respond to different market demands and
local requirements. ‘In globalisation, strategy and organisation are inextricably twined.’12
Globalisation impacts on organisational behaviour and has placed greater emphasis on processes within organisations rather than functions of the organisation. Globalisation and the
international context are discussed later in this chapter.
Contrasting but related approaches
These different dimensions provide contrasting but related approaches to the understanding
of human behaviour in organisations. They present a number of alternative pathways for
the study of the subject and level of analysis. It is possible, for example, to adopt a psychological approach with the main emphasis on the individuals of which the organisation
is comprised. Psychological aspects are important but by themselves provide too narrow
an approach for the understanding of management and organisational behaviour. Our main
concern is not with the complex detail of individual differences and attributes per se but with
the behaviour and management of people within an organisational setting.
It is also possible to adopt a sociological approach concerned with a broader emphasis
on human behaviour in society. Sociological aspects can be important. A number of sociology
writers seem set on the purpose of criticising traditional views of organisation and management. Many of the criticisms and limitations to which such writers refer are justified and help
promote healthy academic debate. Unfortunately, however, much of the argument tends to
be presented in the abstract and is lacking in constructive ideas on how, in practical terms,
action can be taken to improve organisational performance.
Critical reflection
‘A significant feature of organisational behaviour is the invariable difficulty in identifying a
single solution to a particular situation. The absence of one right answer not only makes
study of the subject complex and frustrating but also brings into question the value of
studying the subject at all.’
What are your views? Do you feel frustrated by the study of organisational behaviour?
Whatever the approach, the study of organisational behaviour cannot be undertaken entirely
in terms of a single discipline. It is necessary to provide a multidisciplinary, behavioural
science perspective (see Figure 1.3). Although there are areas of overlap among the various
social sciences, their sub-divisions and related disciplines such as economics and political
science, the study of behaviour can be viewed in terms of three main disciplines – psychology, sociology and anthropology. All three disciplines have made an important contribution to the field of organisational behaviour.
Psychologists are concerned, broadly speaking, with the study of human behaviour, with
traits of the individual and membership of small social groups. The main focus of attention is on the individual as a whole person, or what can be termed the ‘personality system’,
including, for example, perception, attitudes and motives.
Sociologists are more concerned with the study of social behaviour, relationships among
social groups and societies, and the maintenance of order. The main focus of attention is
on the analysis of social structures and positions in those structures – for example, the
relationship between the behaviour of leaders and followers.
Anthropologists are more concerned with the science of humankind and the study of
human behaviour as a whole. As far as organisational behaviour is concerned the main
Figure 1.3
Organisational behaviour: a multidisciplinary approach
focus of attention is on the cultural system, the beliefs, customs, ideas and values within
a group or society, and the comparison of behaviour among different cultures – for
example, the importance to Muslim women of wearing trousers to work. People learn to
depend on their culture to give them security and stability and they can suffer adverse
reactions to unfamiliar environments.
The contribution of relevant aspects of psychology, sociology and anthropology underpins the field of organisational behaviour. Behavioural science attempts to structure organisations in order to secure the optimum working environment. It is concerned with
reconciling the needs of the organisation for the contribution of maximum productivity,
with the needs of individuals and the realisation of their potential. In terms of the applications of behavioural science to the management of people, we need also to consider the
relevance and applications of philosophy, ethics and the law.
Organisations are complex social systems that can be defined and studied in a number of ways.
A significant approach to this broad perspective on the nature of organisations and organisational behaviour is provided by Morgan. Through the use of metaphors, Morgan identifies
eight different ways of viewing organisations – as machines, organisms, brains, cultures,
political systems, psychic prisons, flux and transformation, and instruments of domination.
According to Morgan, these contrasting metaphors aid the understanding of the complex
nature of organisational life and the critical evaluation of organisational phenomena.13
Machines. This suggests that organisations can be designed as if they are machines, with
orderly relations between clearly defined parts. Viewing organisations as machines can
provide the basis for efficient operation in a routine, reliable and predictable way. This
form of bureaucratic structure offers form, continuity and security. However, it may have
adverse consequences and limit the development of human capacities. Organisations
viewed as machines function better in a stable and protected environment.
Organisms. The organisation is seen as behaving like a living system. In the same way
that biological mechanisms adapt to changes in their environment, so organisations,
as open systems, adapt to the changing external environment. Organisations operating
within a turbulent and dynamic environment require an adaptable type of structure.
Brains. Viewing organisations as brains involves thinking about the organisation as
inventive and rational and in a manner that provides for flexibility and creative action.
The challenge is to create new forms of organisation capable of intelligent change and that
can disperse brain-like capacities.
Cultures. This sees organisations as complex systems made up of their own characteristic
sets of ideology, values, rituals and systems of belief and practice. Attention to specific
aspects of social development helps to account for variations among organisations.
Political systems. In the sense that ways must be found to create order and direct people,
organisations are intrinsically political. They are about authority, power, superior–
subordinate relationships and conflicting interests. Viewing organisations as political
systems helps in an understanding of day-to-day organisational life, the wheeling and
dealing, and pursuit of special interests.
Psychic prisons. This views organisations as psychic phenomena created and sustained
by conscious and unconscious processes. Organisations and their members are constrained by their shadows or ‘psychic prisons’ and become trapped by constructions of
reality. Their inherited or created mythical past places affect the representation of the
organisation to the outside world. Viewing organisations as psychic prisons provides
an understanding of the reality and illusions of organisational behaviour.
Flux and transformation. The universe is in a constant state of flux, embodying characteristics of both permanence and change. Organisations can be seen as in a state of flux
and transformation. In order to understand the nature and social life of organisations, it
is necessary to understand the sources and logic of transformation and change.
Instruments of domination. In this view organisations are associated with processes of
social domination, and individuals and groups imposing their will on others. A feature of
organisations is asymmetrical power relations that result in the pursuit of the goals of the
few through the efforts of the many. Organisations are best understood in terms of variations in the mode of social domination and control of their members.
A broader view of organisational behaviour
These contrasting metaphors offer an interesting perspective on how to view organisations. They provide a broader view of the dynamics of organisational behaviour and how to
manage and design organisations. However, Morgan points out that these metaphors are not
fixed categories and are not mutually exclusive. An organisation can be a mix of each and
predominantly a combination of two or three metaphors. Furthermore, these combinations
may change over a period of time.
A number of writers use metaphors to help describe organisations. For example, in discussing the role and logic of viewing the organisation in terms of metaphors, Drummond
raises questions such as what an organisation is like and the power of metaphors in shaping
our thinking, but also points out that all metaphors are partial and no metaphor can explain
fully a particular phenomenon.14
For most people, work in one form or another is clearly a major part of their lives, and many
people spend a large proportion of their time working. However, people differ in the manner
and extent of their involvement with, and concern for, work. From information collected
about the work situation, organisational participation and involvement with work colleagues, and life outside the organisation, Goldthorpe et al. identified three main types of
orientation to work: instrumental, bureaucratic and solidaristic.15
Individuals with an instrumental orientation define work not as a central life issue but in
terms of a means to an end. There is a calculative or economic involvement with work
and a clear distinction between work-related and non-work-related activities.
Individuals with a bureaucratic orientation define work as a central life issue. There is
a sense of obligation to the work of the organisation and a positive involvement in terms
of a career structure. There is a close link between work-related and non-work-related
Individuals with a solidaristic orientation define the work situation in terms of group
activities. There is an ego involvement with work groups rather than with the organisation
itself. Work is more than just a means to an end. Non-work activities are linked to work
Different work situations
According to Bunting, although some people in poorly-paid jobs requiring long hours do not
have any choice, for the majority there is a degree of choice in how hard they work. People
make their own choices. If they want to work hard, or if they wish to opt out and live the
good life, it is up to them.16 Consider, for example, differences among the baby-boomers
(typified by a search for security), Generation X (typified by after the slog the rewards), and
Generation Y (travel first, then a career). (This is discussed more fully in Chapter 3.) Some
people may well have a set motivation to work, whatever the nature of the work environment. However, different work situations may also influence the individual’s orientation to
work. For example, the lack of opportunities for teamwork and the satisfaction of social
expectations may result in an instrumental orientation to work and a primary concern for
economic interests such as pay and security. In other situations where there are greater
opportunities to satisfy social needs, membership of work groups may be very important
and individuals may have a more solidaristic orientation to work. This often appears to be
the case, for example, with people working in the hospitality industry.
According to Herman, the work ethic has been deeply challenged by two trends – the division of labour and the destruction of continuity in employment. Work has been fractured
in task and sub-divided into specialised sub-tasks or branches, creating new kinds of work
altogether. The division of labour has generated tens of thousands of discrete functions in the
workplace. A more recent trend is the destruction of continuity in employment, with many
employees likely to re-enter the job market multiple times. This discourages the development of bonds of loyalty or employees investing themselves in their work with the hope of
long-term employment.17
Sense of identity
Work can help fulfil a number of purposes including providing the individual with a sense
of identity. Many people see themselves primarily in terms of their career and what they do
at work. It defines who they are. Waller suggests that work inevitably plays a key role in shaping identity and least there you are challenging yourself, developing and learning.
In the knowledge economy, where responsibilities morph and working hours are flexible, the boundaries
between work and free time blur, and it’s hard for many of us to tell when we’re off-duty. It follows
that if people are getting absorbed by their work-life, they expect their job to help them to discover and
develop themselves. Identity can be linked to such basics as the satisfaction of a job well done – yet in
a modern economy, work is rarely actually ‘finished’.18
For some people who do not necessarily have any financial motivation, work appears to
provide a sense of purpose and a structure to their day. In some cases it is even explained as
a reason to get up in the morning.
According to de Botton our society is unique in allowing our choice of work to define who
we are so that the central question we ask of new acquaintances is not where they come from
or who their parents are, but rather what they do. De Botton suggests that we have to set the
cheerful tone of modern management that work is fun and the employer is a family into
The recession reveals that work is hard and that, if the employer is like a parent, then it is a rather
harsh and unforgiving sort . . . So one of the benefits of the crisis is that it enables us to lower our expectations as to what work can deliver. Some of the greatest existential questions disappear. Simply holding
down an ordinary job and surviving comes to seem like reward enough.19
Work/life balance
Popular newspaper articles often suggest that work is still a large component of what gives
meaning to people’s lives and give examples of lottery or pools winners staying in work and
often in their same old job. Other surveys and reports suggest that the workplace is no longer
a central feature of social activity. For a majority of people the main reason for work remains
the need for money to fulfil the necessities of life. However, much still appears to depend on
the extent of an individual’s social contacts and activities outside of the work situation. The
work/life balance is discussed more fully in Chapter 3.
International and cultural influences
National culture is also a significant influence on orientations to work. For example, Reeves
comments on the importance of conversation for effective organisational relationships but
how this is resisted in the British work culture.
The Protestant version of the work ethic prevails, implying heads-down work, focused agendas, punctuality, efficiency. In French and Spanish offices, it takes the first hour to kiss everyone, the second to
discuss local gossip and the third to pop out for a coffee and croissant. In Britain, these activities would
count as sexual harassment, time-wasting and absenteeism. Many firms have built cafés or break out
areas and then discovered people are too scared to use them for fear of looking work-shy.20
As another example, the author experienced for himself how in parts of Australia workrelated activities could often be undertaken comfortably in local coffee houses without
concern about ‘presenteeism’ or being seen as being away from the place of work. Australians
also enjoy a good work/life balance and have the option of extra holidays.21 This is in noticeable contrast to the almost obsessive work ethic throughout much of the USA that the author
also experienced frequently. (See also the discussion on the cultural environment later in
this chapter.)
The European Union’s research magazine reports on the attitude to work of different age
groups and the importance of wider environmental influences.
Irrespective of which (age) generation a person belongs to, their relationship with work also depends on
their path in life, social environment, personal experiences, choices – whether conscious or unconscious
– and the historical context in which they grew up.
The report refers to the example in Hungary where a team of workers might include a mix of
people who grew up under hard-line socialism, others under more lax communism and yet
others who have only known ‘freedom’.22
Critical reflection
‘An individual’s orientation to work and underlying work ethic is the strongest influence
on their motivation and organisational performance. Whatever the actions of
management this has only minimal effect.’
To what extent do you agree with this contention and to what extent is it true for you?
How would you explain your own orientation to work?
Whatever the individual’s orientations to work or cultural influences, it is through the
process of management that the efforts of members of the organisation are co-ordinated,
directed and guided towards the achievement of its goals. Management is the cornerstone of
organisational effectiveness (see Figure 1.4). It is the responsibility of management to manage. But organisations can achieve their aims and objectives only through the co-ordinated
efforts of their members. This involves the effective management of the people resource.
The starting point to supporting and promoting wellbeing in the workplace has to be good people management and effective work organisation. Good line management is the most important of the characteristics of a high-quality workplace that has high levels of commitment and low absence rates.23
It is important always to remember that it is people who are being managed and people
should be considered in human terms. Unlike physical resources, the people resource is not
owned by the organisation. People bring their own perceptions, feelings and attitudes
towards the organisation, systems and styles of management, their duties and responsibilities, and the conditions under which they are working. At the heart of successful management is the problem of integrating the individual and the organisation, and this requires an
understanding of both human personality and work organisations.24
Egan refers to the importance of the shadow side of the organisation: that is, those things
not found on organisation charts or in company manuals – the covert, and often undiscussed, activities of people which affect both the productivity and quality of the working
life of an organisation.25
Figure 1.4
Management as the cornerstone of organisational effectiveness
Human behaviour is capricious and scientific methods or principles of behaviour cannot
be applied with reliability. In his study of job satisfaction, Bassett comments:
There seem to be no universal generalizations about worker dissatisfaction that permit easy management policy solutions to absenteeism and turnover problems . . . There are almost never any exact
conditions of cause and effect in the realm of human behaviour.26
It is also widely observed that you cannot study the behaviour of people without changing it.
The people–organisation relationship
It could be argued that the majority of people come to work with the original attitude of
being eager to do a good job and desirous of performing well and to the best of their abilities. People generally respond in the manner in which they are treated. Where actual performance fails to match the ideal this is largely a result of how staff perceive they are treated
by management. Many problems in the people–organisation relationship arise not so much
from the decisions and actions of management as the manner in which such decisions
and actions are carried out. Often, it is not so much the intent but the manner of implementation that is the root cause of staff unrest and dissatisfaction. For example, staff may
agree (even if reluctantly) on the need to introduce new technology to retain the competitive efficiency of the organisation, but feel resentment about the lack of pre-planning, consultation, retraining programmes, participation in agreeing new working practices and wage
rates, and similar considerations arising from the manner of its introduction. (See also the
discussion in Chapter 16.)
Figure 1.5
A basic framework of study
Therefore, a heavy responsibility is placed on managers and the activity of management
– on the processes, systems and styles of management. Attention must be given to the work
environment and appropriate systems of motivation, job satisfaction and rewards. It is
important to remember that improvement in organisational performance will come about
only through the people who are the organisation.
Providing the right balance
People and organisations need each other. Management is an integral part of this relationship. It is essentially an integrating activity that permeates every facet of the organisation’s
operations and should serve to reconcile the needs of people at work with the requirements
of the organisation. Management should endeavour to create the right balance between the
interrelated elements that make up the total organisation and to weld these into coherent
patterns of activity best suited to the external environment in which the organisation is operating. Consideration must be given to developing an organisational climate in which people
work willingly and effectively.
When people are engaged and committed they are more likely to behave in the interests of the company
and they have less need to be controlled and measured. In essence, engaged people can be trusted to
behave in the interests of the company, in part because they perceived their interests to be the same as,
or aligned with, the interests of the company.27
The style of management adopted can be seen as a function of the manager’s attitudes
towards people and assumptions about human nature and behaviour (discussed in Chapter 12). It is important to bear in mind that the activity of management takes place within
the broader context of the organisational setting and subject to the organisational environment and culture. There are also variations in systems and styles of management and in the
choice of managerial behaviour. Figure 1.5 shows a basic five-stage framework of study. The
changing role of management is also discussed further in Chapters 11 and 20.
One significant aspect of organisational behaviour and the relationship between the individual and the process of management is the concept of the psychological contract. This is
not a written document but implies a series of mutual expectations and satisfaction of needs
arising from the people–organisation relationship. It involves a process of giving and receiving by the individual and by the organisation. The psychological contract covers a range
of expectations of rights and privileges, duties and obligations, which do not form part of a
formal agreement but still have an important influence on people’s behaviour. The psychological contract is an important factor in the socialisation of new members of staff to the
organisation. Early experiences of the people–organisation relationship have a major effect
on an individual’s perception of the organisation as a place to work and the quality of management, and can have a major influence on job satisfaction, attitude and levels of performance.
The nature and extent of individuals’ expectations vary widely, as do the ability and willingness of the organisation to meet them. It is difficult to list the range of implicit expectations
that individuals have; these expectations also change over time. They are separate from any
statutory requirements placed upon the organisation; they relate more to the idea of social
responsibility of management, discussed in Chapter 18. The organisation will also have
implicit expectations of its members. The organisational side of the psychological contract
places emphasis on expectations, requirements and constraints that may differ from, and
may conflict with, an individual’s expectations. Some possible examples of the individual’s
and the organisation’s expectations are given in Figure 1.6.
Figure 1.6
The psychological contract: possible examples of individual and
organisational expectations
Implications for organisational strategy
The Chartered Institute of Personnel and Development (CIPD) suggests that the psychological contract may have implications for organisational strategy in a number of areas, for
process fairness – people want to know their interests will be taken into account, treated
with respect and consulted about change;
communications – an effective two-way dialogue between employer and employee;
management style – adopting a more ‘bottom-up’ style and drawing on the strategic
knowledge of employees;
managing expectations – making clear what new recruits can expect and distinguishing
rhetoric from reality;
measuring employees’ attitudes – regular monitoring of employee attitudes and acting
on the results.28
Process of balancing
It is unlikely that all expectations of the individual or of the organisation will be met fully.
There is a continual process of balancing, and explicit and implicit bargaining. The nature of
these expectations is not defined formally and although the individual member and the
organisation may not be consciously aware of them, they still affect relationships between
them and have an influence on behaviour. Stalker suggests that successful companies are
those that have the ability to balance the unwritten needs of their employees with the
needs of the company. Such companies use a simple formula of Caring, Communicating,
Listening, Knowing, Rewarding.
Caring – demonstrating genuine concern for individuals working in the organisation;
Communicating – really talking about what the company is hoping to achieve;
Listening – hearing not only the words but also what lies behind the words;
Knowing – the individuals who work for you, their families, personal wishes, desires and
Rewarding – money is not always necessary; a genuine thank-you or public recognition
can raise morale.29
Employer–employee relationship
The significance of the psychological contract depends on the extent to which it is perceived
as fair by both the individual and the organisation, and will be respected by both sides.
Cartwright refers to mutuality as the basic principle of the psychological contract:
A psychological contract is not only measured in monetary value or in the exchange of goods or services,
it is in essence the exchange or sharing of beliefs and values, expectations and satisfactions. Mutuality
is the basic principle of the psychological contract and consensus or mutual understanding is the basis
of mutuality. Ideally therefore self-interest should be balanced with common interest in a ‘win–win’
The nature of the employer–employee relationship is clearly a central feature of the psychological contract. Emmott points out that good people-management practices are the basis
for a positive psychological contract and this means managers having to deal with the ‘soft
stuff’. Properly managed, the psychological contract delivers hard, bottom-line results and
improved business performance.
Managers at all levels can have an influence on employees’ perceptions of the psychological contract. It
is, however, the relationship between individual employees and their line manager that is likely to
have most influence in framing and managing employees’ expectations.31
News that Barclay would be off-shoring 1,800 jobs subjected the bank to intense scrutiny from
government, trade unions, shareholders, customers and, of course, employees. The bank
recognised it needed to do something to strengthen the ‘psychological contract’ it had with its
employees if it was to redeploy them elsewhere within the organisation.
Management Today 32
Changing nature of the psychological contract
The changing nature of organisations has placed increasing emphasis on the importance of
effective human resource management, including the importance of the psychological contract within the employment relationship. For example, Hiltrop suggests that the increasing
pressure for organisations to change has prompted growing disillusionment with the traditional psychological contract based on lifetime employment and steady promotion from
within. Companies must develop new ways to increase the loyalty and commitment of
employees. This includes attention to reward strategies based on recognition of contribution
rather than status or position; systematic training and development including the skills for
working in cross-functional teams; and the training of managers in counselling, coaching
and leadership skills.33
According to CIPD, changes currently affecting the workplace have persuaded people
to take the psychological contract seriously. These changes include more employees on
part-time and temporary contracts and more jobs outsourced; de-layering and ‘leanness’ of
organisations; more demanding customers and improved quality and service standards; the
increasing importance of human capital as a source of competitive advantage; and more
fluid organisation structures. The effect of these changes is that employees are increasingly
recognised as the key business drivers. The psychological contract offers a framework for
monitoring employee attitudes and priorities.34
A new moral contract
The changing nature of organisations and individuals at work has placed increasing pressures
on the awareness and importance of new psychological contracts. Ghoshal et al. suggest that
in a changing social context the law of masters and servants that underlies the old psychological contract is no longer acceptable to many people. Forces of global competition and
turbulent change make employment guarantees unfeasible and also enhance the need for
levels of trust and teamwork. The new management philosophy needs to be grounded in a
very different moral contract with people. Rather than being seen as a corporate asset from
which value can be appropriated, people are seen as a responsibility and a resource to be
added to. The new moral contract also demands much from employees, who need to abandon the stability of lifetime employment and embrace the concept of continuous learning
and personal development.35 However, Furnham and Taylor assert that despite the importance of the psychological contract, as many as two-thirds of employees believe their
employers ‘patently violated’ this understanding.36
Impact on employee relations
The Chartered Management Institute refers to the psychological contract as a subtle relationship composed of many factors and as being often considered a key factor in understanding
employment relations, as disappointed expectations may have a strong impact on employee
In the past this unspoken contract might have implied that employees could expect job security and
adequate rewards from their employer in exchange for hard work and loyalty. Today’s psychological
contract may be different, in line with a changed working environment that includes factors such as
increased rationalisation, technological changes, and management approaches such as outsourcing. The
new psychological contract may revolve more around an employer’s willingness to assist you in developing your skills in order to maintain your marketability.37
It is convenient, here, to consider two sets of observations on the nature of human behaviour and what may actually happen, in practice, in organisations: the Peter Principle and
Parkinson’s Law. Although these observations are presented in a satirical manner, they nevertheless make a serious and significant point about the management and functioning of
organisations and the actual nature and practice of organisational behaviour.
This is concerned with the study of occupational incompetence and the study of hierarchies.
The analysis of hundreds of cases of occupational incompetence led to the formulation of
the ‘Peter Principle’, which is:
In a hierarchy every employee tends to rise to their level of incompetence.38
Employees competent in their position are promoted and competence in each new position
qualifies for promotion to the next highest position until a position of incompetence is
reached. The principle is based on perceived incompetence at all levels of every hierarchy –
political, legal, educational and industrial – and ways in which employees move upwards
through a hierarchy and what happens to them after promotion.
Among the many examples quoted by Peter are those from the teaching occupation. A is
a competent and conforming college student who becomes a teacher following the textbook,
curriculum guide and timetable schedule, and who works well except when there is no rule
or precedent available. A never breaks a rule or disobeys an order but will not gain promotion because, although competent as a student, A has reached a level of incompetence as
a classroom teacher.
B, a competent student and inspiring teacher, although not good with paperwork, is
promoted to head of the science department because of success as a teacher. The head of
science is responsible for ordering all science supplies and keeping extensive records and B’s
incompetence becomes evident.
C, a competent student, teacher and head of department, is promoted to assistant principal and being intellectually competent is further promoted to principal. C is now required
to work directly with higher officials. By working so hard at running the school, however,
C misses important meetings with superiors and has no energy to become involved with
community organisations. C thus becomes regarded as an incompetent principal.
Means of promotion
Peter suggests two main means by which a person can affect their promotion rate, ‘Pull’ and
Pull is an employee’s relationship – by blood, marriage or acquaintance – with a person
above the employee in the hierarchy.
Push is sometimes manifested by an abnormal interest in study, vocational training and
In small hierarchies, Push may have a marginal effect in accelerating promotion; in
larger hierarchies the effect is minimal. Pull is, therefore, likely to be more effective than
Never stand when you can sit; never walk when you can ride; never Push when you can Pull.39
A major feature of Parkinson’s Law is that of the ‘rising pyramid’, that is, ‘Work expands so
as to fill the time available for its completion.’40 General recognition of this is illustrated in
the proverb ‘It is the busiest person who has time to spare.’ There is little, if any, relationship
between the quantity of work to be done and the number of staff doing it. Underlying this
general tendency are two almost axiomatic statements:
An official wants to multiply subordinates, not rivals.
Officials make work for each other.
Parkinson goes on to give the following example. If a civil servant, A, believes he is overworked, there are three possible remedies: (i) resignation; (ii) ask to halve the work by having it shared with a colleague, B; or (iii) seek the assistance of two subordinates, C and D.
The first two options are unlikely. Resignation would involve loss of pension rights, while
sharing work with a colleague on the same level would only bring in a rival for promotion.
So A would prefer the appointment of two junior members of staff, C and D. This would
increase A’s status. There must be at least two subordinates, so that by dividing work between
C and D, A will be the only person to understand the work of them both. Furthermore, each
subordinate is kept in order by fear of the other’s promotion.
When, in turn, C complains of overwork, A, with the agreement of C, will advise the
appointment of two assistants, E and F. However, as D’s position is much the same and to
avoid internal friction, two assistants, G and H, will also be recommended to help D. There
are now seven people, A, C, D, E, F, G, H, doing what one person did before, and A’s promotion is almost certain.
People making work for each other
With the seven people now employed, the second stage comes into operation. The seven
people make so much work for each other that they are all fully occupied and A is actually
working harder than ever. For example, an incoming document comes before each of them
in turn. E decides it is F’s concern; F places a draft reply for C, who makes drastic amendments before consulting with D, who asks G to action it. But then G goes on leave and hands
the file to H, who drafts a minute signed by D and returned to C, who revises the first draft
and puts the new version before A. What does A do? A could find many excuses for signing
C’s draft unread. However, being a conscientious person, and although beset with problems
created by subordinates both for A and for themselves, A reads through the draft carefully,
deletes the fussy paragraphs added by C and H and restores it to the format presented in the
first instance by F.
Among other features of organisational practice that Parkinson discusses are principles of
personnel selection; the nature of committees; personality screen; high finance – and the
‘Law of Triviality’, which means in a committee that the time spent on any agenda item will
be in inverse proportion to the sum involved; layout of the organisation’s administration
block; and ‘injelitis’ – the disease of induced inferiority.
Relevance of observations
Despite the light vein of Parkinson’s writing, the relevance of his observations can be gauged
from comments in the Introduction by HRH The Duke of Edinburgh.
The most important point about this book for serious students of management and administration is
that it illustrates the gulf that exists between the rational/intellectual approach to human organisation
and the frequent irrational facts of human nature . . . The law should be compulsory reading at all
business schools and for all management consultants. Management structures solve nothing if they do
not take the facts of human nature into proper consideration, and one of the most important facts is
that no one really likes having to make decisions. Consequently structures may generate a lot of activity but little or no useful work.41
I first read Parkinson’s Law when studying for Economics A-level. Many of the laws are just as
relevant today as they were then. They include: how to ‘manage’ a meeting, and how time spent
in meetings is inversely proportional to the importance of each issue – his example is a short discussion on a £10 million power plant followed by a lengthy debate over a £350 bicycle shed.
Ever been there? . . . Parkinson’s most famous law is that ‘work expands to fill the time available
– as we all make work for one another’. This is still true today.
Iain Herbertson, Managing Director of Manpower 42
Critical reflection
‘The performance of people at work is influenced by the idiosyncratic behaviour of
individuals and a complex combination of social and cultural factors. Tensions, conflicts
and politics are inevitable, as are informal structures of organisation and unofficial
working methods. Above all, therefore, effective management is about the human
aspects of the organisation.’
What is your opinion? How would you describe the situation in your own organisation?
We live in an organisational world. Organisations of one form or another are a necessary
part of our society and serve many important needs. The decisions and actions of management in organisations have an increasing impact on individuals, other organisations and the
community. It is important, therefore, to understand how organisations function and the
pervasive influences which they exercise over the behaviour and actions of people.
The power and influence of private and public organisations, the rapid spread of new
technology and the impact of various socio-economic and political factors have attracted
increasing attention to the concept of corporate responsibilities and business ethics (discussed in Chapter 18). Increasing attention is also being focused on the ethical behaviour
that underlies the decisions and actions of people at work.
The changing nature of organisations and individuals at work has placed growing pressure on the awareness and importance of new psychological contracts, discussed above.
Forces of global competition and turbulent change make employment guarantees unfeasible
and demand a new management philosophy based on trust and teamwork. People are seen
as a responsibility and a resource to be added to. Employees need to abandon the stability
of lifetime employment and embrace the concept of continuous learning and personal
It is frequently documented that increasing business competitiveness, globalisation, shifting labour markets, rapid technological progress, the move towards more customer-driven
markets, a 24/7 society and demands of work/life balance have led to a period of constant
change and the need for greater organisational flexibility. The combination of these influences
is transforming the way we live and work. And this clearly has significant implications for
organisational behaviour. The changing nature of work and the influence of technological innovation, work restructuring and job redesign are all helping to reshape the nature
of Britain’s employee relations including shopfloor attitudes among managers, unions and
workers.44 Controversy over protectionism, the alleged exclusive use of labour from other EU
states, and demands for ‘British jobs for British workers’ add to a volatile work environment.
As the number of baby-boomers (born between 1946 and 1963 and typified by a search
for security) decline and the proportion of Generation Y (born between 1980 and 1995 and
typified by travel first, then a career) increases this will have a further impact on the future
world of work.45 See also a fuller discussion in Chapter 3.
Increasing migration is the main source of population growth in the EU. At the same
time, Europe is entering a phase of rapid population ageing and shrinking workforce at a
moment when technological change is increasing and all Member States are confronted with
the challenges and opportunities of globalisation.46 Demographic ageing is also a main issue
driving the need for greater labour mobility and the importance of lifelong learning which
is discussed in Chapter 5.
New approaches to management and organisational behaviour
In discussing new approaches to management practices for the next decade, Muzyka suggests
Organisational behavior has moved from an emphasis on the structural aspects of functional and
cross-functional organisations to more flexible models, including enhanced consideration of short-term,
high performance teams.
New ideas of how to motivate and deploy people have developed. A new contract is evolving that
involves the exchange of value. Individuals need to be encouraged and permitted to achieve: to perform
to their highest potential, for their benefit and that of the employer. Organisations are encouraging staff
to craft more flexible, value-laden, and specific rules governing their relationships.47
Cloke and Goldsmith refer to the age of traditional management coming to an end and the
decline of hierarchical, bureaucratic, autocratic management. They contend that management is an idea whose time is up and organisations that do not recognise the need to share
power and responsibility with all their workers will lose them.48
In their discussion of the 21st-century organisation, Bouchikhi and Kimberly refer to the
customised workplace that represents a radical departure from commonly accepted management principles and techniques. They summarise the main differences between 19th-,
20th- and 21st-century management – see Table 1.1.49
Table 1.1
Contrasting the paradigms
19th century
20th century
21st century
Theory of personhood
Interchangeable muscle and
A subordinate with a hierarchy of
Autonomous and reflexive
Information and
The province of management
Management-dominated and
shared on a limited basis
Widely diffused
The purpose of work
Accumulation of wealth and social
Part of a strategic life plan
With the firm and/or with the
working class
With a social group and/or the firm
The disenfranchised self
Disruptive and to be avoided
Disruptive but tolerated and can be
settled through collective bargaining
A normal part of life
Division of labour
Managers decide, employees
Managers decide, employees
execute thoughtfully
Employees and managers
decide and execute
Concentrated at the top
Limited, functional sharing/
Diffused and shared
Source: Bouchikhi, H. and Kimberly, J. R., ‘The Customized Workplace’, in Chowdhury, S. (ed.) Management 21C, Financial Times Prentice Hall (2000), p. 215.
Reproduced with permission from Pearson Education Ltd.
One major challenge facing managers in the early 21st century arises from what many commentators have identified as an increasingly international or global business environment.
The following factors are frequently cited as potential explanatory factors underlying this
improvements in international communication facilities leading to an increased consciousness of differences in workplace attitudes and behaviour in other societies;
international competitive pressure – for example, the emergence of newly industrialised
and/or free-market nations (the Far East region and former communist bloc countries are
often viewed as examples of this phenomenon);
the spread of production methods and other business processes across nations and
international business activity, for example: overseas franchising or licensing agreements;
outsourcing of business units to other countries (call centres provide a topical example);
direct foreign investment and the activities of multinational corporations which, by
definition, operate outside national boundaries.
French points to large-scale labour migration as one important consequence of 21stcentury globalisation. He notes that the 52 victims of the bombings in London on 7 July
2005 included people of 13 different nationalities. The vast majority of these people were
travelling to and from work when they were killed. Many had, tragically, come to the UK to
improve their working lives.50 The multicultural make-up of workforces in cities like London
was, at any rate, entirely normal at that time. The implications of such labour ‘churn’ in terms
of managing people are explored more fully in the section on culture later in this chapter.
In broad terms, globalisation refers to organisations integrating, operating and competing in a worldwide economy. The organisations’ activities are more independent across the
world rather than confined nationally. Globalisation will also impact on the nature of social
responsibilities and business ethics, discussed in Chapter 18. With globalisation, strategy
and structure are inextricably linked. As organisations, and especially large business organisations, adopt a more global perspective this will have a significant effect on the broader
context of management and organisational behaviour.
There is no doubt that the world is moving towards a more global civilisation. Advances
in information and communications technology, greater cross-cultural awareness, increased
mobility of labour, and growing acceptance of the advantages of diversity have resulted in
greater globalisation. The economic recession and financial crisis of late 2008 has further
highlighted the significance and impact of globalisation. Not only have financial events in
the United States impacted upon Britain and much of Europe but they have also spilled over
to Japan and India. Furthermore, Asian countries with small open economies such as
Singapore and Malaysia which import most of their goods and services and are heavily
reliant on Western markets are pulled into downturn, and economic recovery is no longer in
their own hands. Major USA companies struggling at home are likely to attempt to find
economies in their Asian operations.
Boundaryless organisation
Francesco and Gold refer to the globalisation of the economy that has created new types of
structures such as the ‘boundaryless organization’ which breaks the traditional demarcations
of authority and task specialisation associated with bureaucracies and other structures.
‘Features of a boundaryless organization include a widespread use of project teams, interfunctional teams, networks, and similar structural mechanisms, thus reducing boundaries
that typically separate organizational functions and hierarchical levels.’ A key management
challenge is the socialisation and training of members of the organisation away from the
effects of the bureaucratic mentality. Although there is still some form of authority structure,
and task and political boundaries, such boundaries are flexible and unlike the rigid horizontal and vertical dimensions of traditional organisations.51
The future of globalisation
Globalisation has been subjected to much criticism, in part at least due to lack of clarity as
to its exact meaning and to the confusion about organisations that are very large-scale (such
as Walmart in the USA) but have only a small proportion of their operations on a global
basis. Globalisation has also become the subject of demonstrations and has been blamed for
escalating inequalities in the developing world and endangering regional cultures. There
appears to be a return to strong nationalistic tendencies in countries such as America and
France. Rugman refers to the illusion of the global company and maintains that there is no
trend towards globalisation but strong evidence of a hardening of triad blocs and regional
groups of the EU, USA and Japan.52 Saul dates the rise of globalisation from 1971 but contends that its heyday was in the mid 1990s and it is now in retreat.53
Child points out that globalisation is a complex phenomenon and the term is used in so
many different ways it is in danger of losing any useful purpose. Globalisation is a trend
rather than a condition that necessarily already exists, it is not spreading evenly across the
world and many unsubstantiated and sweeping claims have been made. ‘The trend towards
globalisation is a strong one, but it remains to be seen how far and how fast it will spread.
It has powerful opponents.’54 Schneider and Barsoux suggest that when firms have a sense of
capability and previous international experience, internationalisation is more likely to be
seen as a learning opportunity rather than as a threat.55
According to McLean, globalisation has ultimately and importantly altered the terms of
reference and resulted in a paradigm shift for the way organisations are managed.
It has altered the way we work, via, for example, sophisticated systems and procedures aimed at
streamlining and ‘internationalising’ business activities and practices. It has brought companies closer
together through opening up new markets and through technological innovations, such as e-business
and e-commerce via the World Wide Web. It has increased competition, the speed of innovation, the
ubiquity of change and environmental complexity and uncertainty.
McLean maintains that globalisation is here to stay – it won’t go away and if anything will
get worse. ‘We must face the realism that the world, and indeed organisations and the way
they are managed, will never be the same. We must encompass these changes and harness
the opportunities they present.’56
However, although national action may be informed by global thinking, an underlying
guideline for multinational organisations is to ‘think globally; act locally’. Consider the
area of strategic human resource management (HRM). To what extent do differences in, for
example, legislation, social security provisions, the philosophy of employment relations,
arrangements for collective bargaining, management practices, regulation of the employment
contract, the informal organisation, as well as communications over long distances and different time zones, demand attention to HRM at primarily a national level?
Globalisation and the EU
According to the European Commission magazine, globalisation is not a static phenomenon
and is, for example, acquiring more of an ‘Asian’ face through the emergence of China and
India as rapidly expanding economies. The impact of globalisation is often exaggerated
although the EU as a whole will gain even if some groups lose, but those net gains will not
be uniformly distributed across groups of individuals, regions and countries.
The challenge for policy makers is to devise policy responses, both at EU and Member State levels, to
ensure the effects of globalisation are, on balance, as positive as possible . . . Adjusting to globalisation
implies policy developments that will, in turn, have social impacts and create uncertainties that need
to be managed as social risks. While labour market policies are sure to be prominent and necessary,
they are not going to be sufficient, and a coherent and complementary strategy for social protection and
social inclusion remains vital.57
Globalisation offers great opportunities but also challenges. Technological progress is also
transforming the way we live and work. In the case of Europe, social policy continues to be
a priority. ‘Europe is changing, as is the world, and social policy needs to keep pace – to be
flexible and responsive to changing realities.’ One example is the proposal to strengthen and
expand the European Globalisation Adjustment Fund that helps workers who have lost their
jobs as a result of globalisation.58
Cultural environment
Whatever the extent of globalisation, there are clear implications for organisational behaviour in accommodating international dimensions of management and cultural differences.
The importance of people in business understanding cultural differences is illustrated by IBM
which publishes for members of staff a comprehensive guide to the main dimensions of culture and business, and an introduction to concepts, tips, resources and tools for building
cross-cultural competencies across national, organisational, team and interpersonal barriers.
Within the global civilisation there are of course many differences in cultural values
and attitudes. According to Dana, it is essential for people in business to understand cultural
differences, but this is not just a matter of noting different ways but rather rooting out the
reasons behind these differences. ‘Complex cultural environments require fluency not only
in words, but more importantly in understanding what is not said – and this takes time,
patience and dedication.’ For example, the Japanese believe in sharing and the concept of
harmony (wa) and will often ponder and think through responses as part of a conciliatory
relationship and to avoid conflict. Other cultures may find the periodic silence awkward and
a sign of mistrust.59
In America, there is a strong commitment to the organisation (the corporation) and work
and career are taken very seriously (as the author has experienced for himself ). Hard work
is accepted as part of the American way of life and good timekeeping is important. It is a
long-hours culture and generally there is little concern for the work/life balance. There is a
strong emphasis on political correctness and little banter or humour at work (again as the
author found out to his cost), especially not in formal meetings. Americans do not like selfdeprecation and find it strange that the British are prepared to laugh at themselves.60
In China there is an enormous bureaucracy and the hierarchy is an important indication
of authority. In the business world you may need to deal with several ascending levels of
management before reaching the senior manager. There can be an apparent lack of courtesy
– and rather than being taken as given, respect and trust have to be earned. There is a strong
superior–subordinate relationship, with staff often undertaking menial tasks for their boss.61
In Japan and Korea, where society tends to be male-dominated, in the business world
men are more likely to be taking the main role in setting agendas, communications and
One rationale for taking a cross-cultural approach to management lies in the potential
benefits to be gained in performance terms. Schneider and Barsoux, in advocating cultural
awareness of one’s own society, note:
Each country has its unique institutional and cultural characteristics, which can provide sources of competitive advantage at one point, only to become liabilities when the environment changes. Managers
therefore need to evaluate the extent to which national culture can interfere with their company’s efforts
to respond to strategic requirements, now and in the future.62
In addition to practically based benefits in considering our own ‘home’ culture, there
has been a long tradition of looking to other cultures for examples of ‘successful’ practice
which could be transplanted into work organisations in different societies. Different models
may be dominant at different times. Thompson and McHugh note: ‘In the post-war period the
giant US corporations transferred work organisation and managerial techniques across
capitalist countries.’63 However, in subsequent eras Scandinavian autonomous work group
arrangements and Japanese management techniques were examined by and, to some extent,
implemented in organisations across the world. Such a search for good practice in other
countries is, of course, ongoing, and an awareness of how other cultures organise work and
manage people is likely to be of continuing benefit in the future.
It is not only businesses that choose to operate in more than one country or import
foreign business and management techniques that are affected by cross-cultural concerns.
Tayeb reported United States Department of Labor statistics indicating that in the period
from 1985 to 2000, only 15 per cent of new entrants to the workforce in the USA were white
males.64 This highlights the importance of managing diversity in workforces within national
boundaries. The management of diversity is discussed in Chapter 4.
Managing people from different cultures
Another advantage of adopting a cross-cultural approach to the study of organisational behaviour, and to the management of people more generally, lies in the recognition of variations
in workplace attitudes and behaviour between individuals and groups in different cultural
contexts. Broeways and Price note that characteristics defining each cultural group can offer
international managers considerable insights in terms of co-operation with organisations
from new and different cultural backgrounds. Given that people brought up in diverse cultures frequently work together in the same workplace, we could go further in claiming that
all managers operating in domestically-based work settings should have such insights.65
If we accept this fundamental point then it follows that key topics within the subject area
of organisational behaviour may be influenced by national culture and that we should therefore re-evaluate models and concepts when applying them to other societies.
One leading writer in the field of cross-cultural studies, Trompenaars, commenting on his
own work, suggests: ‘It helped managers to structure their experiences and provided new
insights for them and their organisations into the real source of problems faced when managing across cultures or dealing with diversity.’66 In examining the centrally important topic
of motivation, Francesco and Gold inform their readers: ‘Managers must develop organizational systems that are flexible enough to take into account the meaning of work and the
relative value of rewards within the range of cultures where they operate.’67
A practical example of the impact of cultural diversity in the organisational behaviour area is
provided in the recollections of an international human resource manager cited in Schneider
and Barsoux: ‘Indonesians manage their culture by a group process, and everyone is linked
together as a team. Distributing money differently among the team did not go over all that
well; so we’ve come to the conclusion that pay for performance is not suitable for Indonesia.’68
It may be extremely useful therefore to examine academic frameworks and research findings
within the field of organisational behaviour to indicate the extent to which they are applicable worldwide or, alternatively, subject to meaningful variation in different cultural contexts.
Critical reflection
‘National culture is not only an explanation of human beliefs, values, behaviours and actions:
it is arguably the most significant feature underlying the study of organisational behaviour.’
To what extent do you support this contention? What examples can you give in support
of your view? What effect does national culture have in your own organisation?
While it can be valuable to apply organisational behaviour concepts to diverse cultural
settings, it should also be borne in mind that some universal theories and models may,
in reality, contain important culturally derived assumptions. When examining classical
frameworks for understanding organisation structure (discussed in Chapter 2), Schneider and
Barsoux point out: ‘Theories about how best to organise – Max Weber’s (German) bureaucracy, Henri Fayol’s (French) administrative model, and Frederick Taylor’s (American)
scientific management – all reflect societal concerns of the times as well as the cultural
background of the individuals.’69 That writers on work organisations may themselves be
influenced by their own cultural backgrounds when compiling their work is unsurprising:
however, equally it should not be ignored.
More significant still is the possibility that whole topics within organisational behaviour,
per se, may be underpinned by a particular culturally derived frame of reference. French, in
examining the topic of leadership from a cross-cultural perspective, notes that ‘there are
many other culturally specific views on the nature of management in work organizations’.70
Buelens et al. suggest that leadership has become a cult concept in America while the French
have no adequate word for the concept in their language. The same authors note that in
Scandinavian countries, leadership behaviour bears scant resemblance to what is described
in American management literature.71 This raises the possibility that meanings we may
assume to be taken for granted could be interpreted differently or not even perceived at all
in different parts of the world.
Culture as understanding
‘For our most basic common link is that we all inhabit this small planet, we all breathe the
same air, we all cherish our children’s future, and we are all mortal’ (John F. Kennedy,
10 June 1963). There are a number of very good reasons why we could usefully understand
cultural difference (and similarity) at work, based on new awareness contributing to our
own effectiveness and moreover to the accomplishment of organisational goals. It could also
be true to say that an appreciation of culture and its effects may be of intrinsic value. There
could therefore be advantages of cross-cultural awareness which include:
increased self-awareness;
sensitivity to difference;
questioning our own assumptions and knowledge;
lessening ignorance, prejudice and hatred.
However, it would be wrong to think that increased cross-cultural awareness or activity will
automatically bring about any of these outcomes.
Adler listed the following inbuilt dangers when multicultural teams operate in a business
mistrust – including stereotyping;
miscommunication with potential for reduced accuracy and resultant stress;
process difficulties, that is failure to agree when agreement is needed or even what constitutes agreement when arriving at decisions.
Adler goes on to examine research on the success of multicultural work teams and concludes
that the evidence suggests that they either perform much better or much worse than teams composed of one cultural group.72 There are clearly risks as well as benefits in working across
cultures. It is hoped that an appreciation of cross-cultural aspects of organisational behaviour
can help in this regard.
Brooks is one of several commentators who draw our attention to the interlinked nature
of culture. Figure 1.7 illustrates the interplay between relevant factors affecting any one
Figure 1.7
Factors affecting national culture
Source: From Brooks, I. Organisational Behaviour: Individuals, Groups and Organisation, third edition, Financial Times Prentice Hall (2006),
p. 272. Reproduced with permission from Pearson Education Ltd.
national culture.73 You may wish to consider how these factors have combined to shape your
own ‘home’ culture and that of one other country with which you are familiar.
Geert Hofstede is one of the most significant contributors to the body of knowledge on
culture and workplace difference. His work has largely resulted from a large-scale research
programme involving employees from the IBM Corporation, initially in 40 countries. In
focusing on one organisation Hofstede felt that the results could be more clearly linked to
national cultural difference. Arguing that culture is, in a memorable phrase, collective programming or software of the mind, Hofstede initially identified four dimensions of culture:
power distance, uncertainty avoidance, individualism and masculinity.74
Power distance is essentially used to categorise levels of inequality in organisations,
which Hofstede claims will depend upon management style, willingness of subordinates
to disagree with superiors, and the educational level and status accruing to particular
roles. Countries which displayed a high level of power distance included France, Spain,
Hong Kong and Iran. Countries as diverse as Germany, Italy, Australia and the USA
were characterised as low power distance societies. Britain also emerged as a low-powerdistance society according to Hofstede’s work.
Uncertainty avoidance refers to the extent to which members of a society feel threatened
by unusual situations. High uncertainty avoidance is said to be characteristic in France,
Spain, Germany and many of the Latin American societies. Low to medium uncertainty
avoidance was displayed in the Netherlands, the Scandinavian countries and Ireland.
In this case Britain is said to be ‘low to medium’ together with the USA, Canada and
Individualism describes the relatively individualistic or collectivist ethic evident in that
particular society. Thus, the USA, France and Spain display high individualism. This contrasts with Portugal, Hong Kong, India and Greece which are low-individualism societies.
Britain here is depicted as a high-individualism society.
Masculinity is the final category suggested by Hofstede. This refers to a continuum between
‘masculine’ characteristics, such as assertiveness and competitiveness, and ‘feminine’
traits, such as caring, a stress upon the quality of life and concern with the environment.
High-masculinity societies included the USA, Italy, Germany and Japan. More feminine
(low-masculinity) societies included the Netherlands and the Scandinavian countries. In
this case Britain was located within the high-masculinity group.
A fifth dimension of culture, long-term/short-term orientation, was originally labelled
Confucian work dynamism. This dimension developed from the work of Hofstede and Bond in
an attempt to locate Chinese cultural values as they impacted on the workplace.75 Countries
which scored highly on Confucian work dynamism or long-term orientation exhibited a
strong concern with time along a continuum and were therefore both past- and futureoriented, with a preoccupation with tradition but also a concern with the effect of actions
and policies on future generations.
Evaluation of Hofstede’s work
Extremely influential, the seminal work of Hofstede has been criticised from certain quarters.
In common with other writers in this area there is a focus on the national rather than the
regional level. The variations within certain countries, for example Spain, can be more or less
significant. Again in common with other contributors Hofstede’s classifications include
medium categories which may be difficult to operationalise, accurate though they may be.
Some may also find the masculinity/femininity dimension unconvincing and itself stereotypical. Other writers have questioned whether Hofstede’s findings remain current. Holden
summarises this view: ‘How many people have ever thought that many of Hofstede’s informants of three decades ago are now dead? Do their children and grandchildren really have the
same values?’76
French notes, however, that Hofstede was confident that the cultural differences he
identified would endure. Hofstede, writing in 2001, set out his clear view that differences
between national cultures would remain until at least 2100. One should note that Hofstede
was referring here to differences manifested in people’s values. There can be little doubt that
in other respects, for example consumer spending patterns and the prevalence of global
brands, societies have more and more come to resemble each other.77
Ultimately, readers can assess the value of his work in the light of their own experiences
and interpretations of the business world. Hofstede in his extensive research has attempted
to locate the essence of work-related differences across the world and to relate these to preferred management styles.
Another significant contributor to this area of study is Fons Trompenaars whose later work is
co-authored with Charles Hampden-Turner.78 Trompenaars’s original research spanned 15 years,
resulting in a database of 50,000 participants from 50 countries. It was supported by cases
and anecdotes from 900 cross-cultural training programmes. A questionnaire method comprised a significant part of the study which involved requiring participants to consider their
underlying norms, values and attitudes. The resultant framework identifies seven areas in
which cultural differences may affect aspects of organisational behaviour:
Relationships and rules. Here societies may be more or less universal, in which case there
is relative rigidity in respect of rule-based behaviour, or particular, in which case the
importance of relationships may lead to flexibility in the interpretation of situations.
Societies may be more oriented to the individual or collective. The collective may take
different forms: the corporation in Japan, the family in Italy or the Catholic Church in the
Republic of Ireland. There may be implications here for such matters as individual
responsibility or payment systems.
It may also be true that societies differ in the extent to which it is thought appropriate for
members to show emotion in public. Neutral societies favour the ‘stiff upper lip’, while
overt displays of feeling are more likely in emotional societies. Trompenaars cites a survey
in which 80 employees in each of various societies were asked whether they would think
it wrong to express upset openly at work. The numbers who thought it wrong were 80 in
Japan, 75 in Germany, 71 in the UK, 55 in Hong Kong, 40 in the USA and 29 in Italy.
In diffuse cultures, the whole person would be involved in a business relationship and it
would take time to build such relationships. In a specific culture, such as the USA, the
basic relationship would be limited to the contractual. This distinction clearly has implications for those seeking to develop new international links.
Achievement-based societies value recent success or an overall record of accomplishment.
In contrast, in societies relying more on ascription, status could be bestowed on you
through such factors as age, gender or educational record.
Trompenaars suggests that societies view time in different ways which may in turn
influence business activities. The American dream is the French nightmare. Americans
generally start from zero and what matters is their present performance and their plan
to ‘make it’ in the future. This is ‘nouveau riche’ for the French, who prefer the ‘ancien
pauvre’; they have an enormous sense of the past.
Finally it is suggested that there are differences with regard to attitudes to the environment. In Western societies, individuals are typically masters of their fate. In other parts of
the world, however, the world is more powerful than individuals.
Trompenaars’ work is based on lengthy academic and field research. It is potentially
useful in linking the dimensions of culture to aspects of organisational behaviour which are
of direct relevance, particularly to people approaching a new culture for the first time.
The high- and low-context cultures framework
This framework for understanding cultural difference has been formulated by Ed Hall; his
work is in part co-authored with Mildred Reed Hall.79 Hall conceptualises culture as comprising a series of ‘languages’, in particular:
language of time;
language of space;
language of things;
language of friendships;
language of agreements.
In this model of culture Hall suggests that these ‘languages’, which resemble shared
attitudes to the issues in question, are communicated in very different ways according to
whether a society is classified as ‘high’ or ‘low’ context.
The features of ‘high’ context societies, which incorporate Asian, African and Latin American
countries, include:
a high proportion of information is ‘uncoded’ and internalised by the individual;
indirect communication styles . . . words are less important;
shared group understandings;
importance attached to the past and tradition;
‘diffuse’ culture stressing importance of trust and personal relationships in business.
‘Low’ context societies, which include the USA, Australia, Britain and the Scandinavian
countries, exhibit contrasting features including:
a high proportion of communication is ‘coded’ and expressed;
direct communication styles . . . words are paramount;
past context is less important;
‘specific’ culture stressing importance of rules and contracts.
Other countries, for example France, Spain, Greece and several Middle Eastern societies, are
classified as ‘medium’ context.
To take one example as an illustration: American managers visiting China may find that
a business transaction in that country will take more time than at home. They may find it
difficult to interpret the true feelings of their Chinese host and may need to decode non-verbal
Concept map of cross-cultural organisational differences
Source: Copyright © 2008 The Virtual Learning Materials Workshop. Reproduced with permission.
Figure 1.8
communication and other signals. They may seek to negotiate a rules-based contract whereas
their Chinese counterpart may lay greater stress upon building a mutually beneficial reciprocal relationship. There is scope for potential miscommunication between the two cultures
and interesting differences in interpersonal perception. In so far as much of the management
literature canon originates from the Anglo-American context, there is again considerable
merit in adopting a cross-cultural perspective.
A concept map of some issues for discussion on cross-cultural organisational differences
is set out in Figure 1.8.
Koen distinguishes between etic perspectives on the topic of culture and alternative emic
viewpoints. Etic models (exemplified by Hofstede’s work) compare and categorise societies
based on externally-imposed dimensions – for example the degree of individualism displayed by members of a culture. In contrast, emic writing on this subject focuses on features
of individual cultures on their own terms, without recourse to comparison. The emic
approach allows for more in-depth study of any one culture.80 Fan, in an article very much
within the emic tradition, locates 71 features of Chinese society (there are of course many
more), which enables us to understand these features from the perspective of the individual
society. Interestingly, some important features identified by Fan cannot be linked to
Hofstede’s model.81
Fang argues that the work of Hofstede, Trompenaars and other comparative theorists is
itself intrinsically culture-bound in that the bipolar models they constructed reflected
Western academic traditions. In Chinese culture the concept of yin and yang presupposes
that any one entity, person or society contains opposite characteristics which can co-exist in
harmony. If we accept this logic, then a Chinese academic constructing a model of culture
would be far less likely to identify bipolar categories such as high or low power distance or
a preoccupation with rules or relationships: rather both elements would be combined within
a single culture.82
It is suggested, finally, that management of a multicultural workforce has become an
increasingly prevalent activity and so models of culture should enable managers to work
with diverse groups of people and where appropriate create effective teams. Models of culture which identify cultural difference may be a useful first step in this regard, but increasingly managers need to know how to create synergy in such groups in order to secure high
performance levels. Academic models of culture should increasingly address such practical
concerns in future.
There is evidence of a narrowing or even increasing elimination of cultural differences in
business. Grint sees both positive and negative consequences of aspects of globalisation.
While noting that ‘at last we are approaching an era when what is common between people
transcends that which is different; where we can choose our identity rather than have it
thrust upon us by accident of birth’, the same author goes on to suggest: ‘We are heading for
global convergence where national, ethnic and local cultures and identities are swamped by
the McDonaldization . . . and/or Microsoftization of the world.’83
There is an undoubted narrowing of cultural differences in work organisations and such
narrowing may apply to individual and group behaviour at work. Thompson and McHugh
note, ‘Russia is now experiencing rampant individualism and uncertainty following the collapse of the old solidaristic norms’, thus implying convergence of work values.84 For the most
part, however, it is argued here that growing similarity and harmonisation relate more often
to production, IT and quality systems which are more likely to converge due to best-practice
comparisons and universal computer standards. Human resource management is, contrastingly, less likely to converge due to national institutional frameworks and culturally derived
preferences. Recent significantly different responses to the need for greater workplace ‘flexibility’ in Britain and France illustrate this point. Above all, those aspects of organisational
behaviour which focus on individual differences, groups and managing people are the most
clearly affected by culture and it is argued strongly here that it is and is likely to remain essential to take a cross-cultural approach to the subject. Organisation culture is discussed in
Chapter 19.
As part of the Financial Times Mastering Management series, Wood, in his discussion of the
nature of organisational behaviour, suggests that in its concern for the way people behave in
an organisational context, organisational behaviour can be regarded as the key to the whole
area of management.
Is the study of behavior in organizations important? I think it is vital. What the social sciences,
humanities and the arts are to university education, OB is to business school education.
The more technical a manager’s training, the more important organizational behavior becomes.
It is arguably the one area that can carry the burden of bringing the collective wisdom of
human history into the decision-making calculus of developing managers. And this is no trivial
In the foreword to Cloke and Goldsmith’s thought-provoking book The End of Management, Bennis claims that a distinct and dramatic change is taking place in the philosophy
underlying organisational behaviour, calling forth a new concept of humanity.
This new concept is based on an expanded knowledge of our complex and shifting needs, replacing an
oversimplified, innocent, push-button idea of humanity. This philosophical shift calls for a new concept
of organizational values based on humanistic-democratic ideals, which replace the depersonalized,
mechanistic value system of bureaucracy. With it comes a new concept of power, based on collaboration and reason, replacing a model based on coercion and threat . . . The real push for these changes
stems from the need not only to humanize organizations but to use them as crucibles for personal growth
and self-realization.86
Critical reflection
‘The study of organisational behaviour is really an art that pretends it is a science and
produces some spurious research findings in a vain attempt to try to prove the point.’
How far do you agree with this statement? Do you think the study of organisational
behaviour is too subjective ever to be a science? What is the value in the study of
organisational behaviour?
■ Organisations play a major and continuing role in
the lives of us all, especially with the growth of largescale business organisations. It is important, therefore,
to understand how organisations function and the
pervasive influences they exercise over the behaviour
of people. Organisational behaviour is broadly concerned with the study of the behaviour of people
within an organisational setting. It is also necessary
to understand interrelationships with other variables
that together comprise the total organisation.
■ The behaviour of people in work organisations
can be viewed in terms of interrelated dimensions
concerning the individual, the group, the organisation
and the environment. The study of organisational
behaviour cannot be understood fully in terms of a
single discipline. It is necessary to provide a behavioural science approach drawing on selected aspects
of the three main disciplines of psychology, sociology
and anthropology together with related disciplines
and influences.
■ Organisations are complex social systems that can
be defined and studied in a number of ways. One
approach is to view organisations in terms of contrasting metaphors. Gauging the effectiveness or
success of an organisation is not an easy task, however,
although one central element is the importance of
achieving productivity through the effective management of people. People differ in the manner and
extent of their involvement with, and concern for,
work. Different situations influence the individual’s
orientation to work and work ethic. A major concern
for people today is balancing work and personal
■ It is through the process of management that efforts
of members of the organisation are co-ordinated,
directed and guided towards the achievement of
organisational objectives. It is essentially an integrating activity and concerned with arrangements for the
carrying out of organisational processes and the execution of work. How managers exercise the responsibility
for, and duties of, management is important. Attention should be focused on improving the people–
organisation relationship.
■ One particular aspect of the relationship between
the individual and the organisation is the concept
of the psychological contract. This is not a formal,
written document but implies a series of mutual
expectations and satisfaction of needs arising from
the people–organisation relationship. The nature of
expectations has an important influence on the
employment relationship and behaviour in work
organisations. Two important observations on the
nature of human behaviour are the Peter Principle
and Parkinson’s Law. The changing nature of organisations and individuals at work has placed increasing
focus on the awareness and importance of management based on a different moral contract with people.
■ A major challenge facing managers today arises
from an increasingly international or global business
environment. This highlights the need for a crosscultural approach to the study of organisational
behaviour and the management of people. In an increasingly global context, managers need to recognise and
understand the impact of national culture. However,
culture is a multifaceted concept and notoriously
difficult to pin down. But it has important repercussions for the effective management of people and the
study and understanding of workplace behaviour.
Organisational behaviour can be regarded as the key
to the whole of management.
1 Discuss critically what you believe are the main factors to bear in mind with, and particular difficulties
presented by, the study of organisational behaviour.
2 Suggest main headings under which factors influencing behaviour in work organisations can best be
identified. Where possible, give practical examples based on your experience.
3 Discuss how organisations may be viewed in terms of contrasting metaphors. How would you apply these
metaphors to an understanding of your own organisation?
4 Discuss critically the role of management as an integrating activity. Give your views on the responsibility of
management and the manner in which you believe this responsibility should be exercised.
5 Discuss with supporting examples the significance of the psychological contract. List (i) the personal
expectations you have of your own organisation and (ii) what you believe to be the expectations of the
6 Give your own views on the changing nature of the work organisation. Give examples from your own
7 Why is it increasingly important for managers to adopt an international approach? What do you see as the
future of globalisation?
8 Debate fully the importance of national culture to the study of management and organisational behaviour.
Where possible, give your own actual examples.
A melting pot for forging success
Paul Belche uses a culinary metaphor to explain how
he tries to coax the best qualities from the mix of
cultures at the steel plant he runs in western Germany,
close to the borders with France and Luxembourg.
‘If you mix the yellow part of an egg with mustard and
oil without being careful, you will produce something
unexciting. But, if you pay correct attention to the
details, you end up with the best mayonnaise,’ he
says. He is explaining his approach to managing
Dillinger Hütte, a global leader in specialist steels for
applications such as oil pipelines. Mr Belche’s tactics
for getting the best out of his employees provide
wider lessons for managers of diverse workforces.
The company aims to take advantage of the
different cultural characteristics of Saarland – the
German state where it is based that, over the
centuries, has switched between French and German
sovereignty. Of the 5,500 employees in Dillinger, about
10 per cent have French as their main language, and
the rest German. Mr Belche, a 56-year-old physicist,
is from Luxembourg. ‘The Germans are strong when
it comes to practical work. The French are good at
theory and we try to get the best of these two
characteristics,’ he says. Mr Belche poses a question:
‘Who do you think would be better at plant safety –
the German [speakers] or the French? You might think
it would be the Germans. But actually it’s the French –
they realise they are possibly behind in this field and
so they work at it. Sometimes weakness can be a
strength – as long as it’s recognised.’
His approach, he says, is to put teams of people
from the different cultures together and encourage
them to learn from each other. The factory follows the
French approach to dining, with a siren announcing
the end of the lunchtime break at 3pm, an hour later
than is normal at other German steelworks. ‘This is to
give us time for a decent lunch,’ says Mr Belche.
When it comes to sales and technology, he says, the
aim is to link the practical aspects of steelmaking and
its applications, which he considers more German,
and the theoretical, which he considers more French.
This mixing of the practical and theoretical must be
linked to a single aim: making good products that will
do a better job of solving customers’ problems, Mr
Belche says.
He sums up his philosophy: ‘The biggest costs are
the ones that the accountant will miss. They come
from the products that you never developed or the
prices [of specific types of steel] that you never
reached because you weren’t good enough at selling
Source: Geoff Kuchera/iStockphoto
Peter Marsh
This mixing of the practical and theoretical must be linked to
a single aim: making good products that will do a better job of
solving customers’ problems.
them.’ In the tough business of making money out of
steelmaking, it helps if companies can offer something
special. In the effort to make this happen, the mix of
cultures at Dillinger provides a soufflé of experiences,
Mr Belche believes, that gives it a decent chance of
success even in the current uncertain climate.
Source: Marsh, P. ‘A Melting Pot for Forging Success’, Financial
Times, 8 March 2009. Copyright © 2009 The Financial Times
Limited, reproduced with permission.
Discussion questions
1 Analyse the organisational behaviour elements of
this article using the multidisciplinary framework
illustrated in Figure 1.3. What evidence can you
find about factors relevant to each of the five
2 In the light of ideas put forward by Hofstede,
Trompenaars and Hall, what do you think are
the advantages of having a culturally diverse
workforce like this? What particular challenges
do you think it poses for managers?
Five figures are shown below.
You are required to:
1 Select the one that is different from all the others.
2 Discuss in small groups reasons for the individual selections and be prepared to justify your own decision.
3 See whether you can reach a consensus on a single group answer.
To what extent did members of the group understand the thought processes of others?
If you were persuaded to change your mind, on what basis was this decision made?
What conclusions do you draw from this exercise?
From your own organisational experience, provide for classroom discussion short descriptions (suitably
disguised if necessary) to illustrate the practical application of:
1 The Peter Principle; and
2 Parkinson’s Law.
Explain what you believe to be the practical relevance today of each of these sets of observations and the
effects on other members of staff.
Completing this exercise should help you to enhance the following skills:
Obtain a clearer picture of your own and other people’s work ethic.
Explore the importance of work to you and your fixed attitudes about work.
Recognise the significance of individuals’ orientations to work within an organisation.
You are required to start by asking yourself this question: is it a good thing to be a worker? Then think carefully
about your responses to the following questions.
Personal awareness and skills exercise – continued
How do you feel . . .
when you hear the word ‘work’?
as you get ready for work?
when you know the day is over?
about the work you’ve accomplished?
about someone who chooses not to work?
about taking time off?
when you hear the word ‘management’?
about taking control of your career?
Compare your responses with those of your colleagues. What conclusions do you draw about the work ethic?
Source: ‘So What’s Your Work Ethic?’ Professional Manager, May 2003, p. 38. Reproduced with permission from the Chartered
Management Institute; and Walmsley, C. J., Your Future Looks Bright, Preston Beach (2002), p. 98.
What do you see as the character traits of a person with a healthy work ethic?
To what extent do you agree with the contention that ‘we are employed for our skills but valued for our
What effect might different orientations to work have within an organisation and how might they all be
Virgin Atlantic and Ryanair
This case examines two organisations that have
many similarities as well as a number of significant
differences. The essential technology and systems
behind each organisation may be very similar, but the
nature and style of management and its consequent
impact on the way people working in these
organisations think, feel and behave has created very
different organisational cultures. So what are the
similarities, and what are the differences?
The most obvious similarity is that both Virgin
Atlantic and Ryanair operate in the UK passenger air
transport industry. Both are relatively recent creations
and might be seen as new entrants to the sector; Virgin’s
air transport business was founded by Richard Branson
in 198487 and Michael O’Leary took over in 1994 as
Chief Executive at Ryanair, a small Irish airline which
had originally been founded as Guinness Peat Aviation
in 1985.88 Both started life in competition with major
national flag-carrier airlines (British Airways and Aer
Lingus respectively) and grew to be major challengers
to these established companies. As they grew, their scale
of operations brought them into competition with a
much larger number and range of airlines operating
from the UK; Branson’s Virgin Atlantic competes with
some major American and other intercontinental
companies such as American Airlines and United
Airlines; O’Leary competes with the likes of Flybe and
easyJet in the short-haul market. Both Branson, who
was born in 1950, and O’Leary, who is ten years
younger, are individuals with strong and distinctive
personalities, who have a relentless appetite for media
presence and who make extensive use of themselves
in their frequent marketing communications. They are
ready to engage in advertising stunts, they readily
appear on the news media in relation to stories about
the industry, and their faces and personalities are
readily associated with their companies.
Charting different courses
There are, however, some major differences. Firstly, they
differ in their choice of markets. Virgin’s air transport
business originated in the long-haul, mainly
Source: Franka Bruns/AP/Press Association Images
Source: Michael Stephens/PA Archive/Press Association Images
Michael O’Leary (left) and Richard Branson (right) have both created very successful airline companies, but their organisational cultures and
values are very different from each other.
transatlantic market which might be highly profitable
but is also extremely competitive. As the business grew,
offshoots were founded as independent companies: for
instance, Virgin Blue in Australia, and Virgin Express,
which has its hub in Brussels and serves European
destinations outside the UK and does not compete
directly with Ryanair. Ryanair started as a short-haul
carrier and has remained so, focusing on European
destinations from a small number of airports in the
UK and Eire. Their competitive positioning is also
very different. Ryanair is well known as ‘The Low Cost
Airline’; the first thing that hits you in its publicity
material is the price89 and this is very clearly the core of
its business strategy. The ‘no frills’ approach means just
that; even the in-flight food is limited to sandwiches
and costs extra. Virgin, by contrast, attracts passengers
by offering a superior experience and is firmly
positioned at the quality end of the market. Publicity
material emphasises style and comfort, and there is
a range of in-flight extras which, even at the economy
end of the price range, includes in-flight food and
drinks and packs of ‘amenities’ such as flight socks,
eye shades and lip balm.
As was noted, both men love publicity stunts and
often use humour in their public communications.
Branson is usually smiling and in poses which indicate
fun and a desire to show close links with his staff and
popularity with employees, customers and the public in
general. O’Leary is much more likely to be acerbic and
critical, and uses what might euphemistically be called
‘colourful’ language in his public statements. He seems
to care little about public opinion of him as an
individual, and has been in trouble with the advertising
standards authorities in the UK and Eire on more than
one occasion. The ‘offensive’ adverts have upset people
from British Airways (who were accused of being
‘Expensive ba****ds’ in 1999), to the Catholic Church
(the ‘Fourth Secret of Fatima’ advert of 2000 featured
the pope)90 and even the newlyweds French President
Nicolas Sarkozy and Carla Bruni in 2008.91
The brand values are also very different; Virgin as
a collection of businesses does everything from running
trains to manufacturing contraceptives via luxury hotels
and financial services. All these enterprises are linked
by the single powerful central image of the founder
and the characteristic red livery. Ryanair does one thing
and one thing only, but in doing so sets an almost
buccaneering tone, readily taking on authorities such
as the European Union over competition policy and the
British Airports Authorities over their charging practices.
In July 2009 O’Leary announced a reduction in flights
from Stansted, citing the high charges levied by the
airport and blaming increased passenger taxes in the
UK for falling demand (characteristically direct, he
observed that ‘people have to pay £10 for the privilege
of getting on and off this rain-sodden and weatherbeaten island’).92 Branson has certainly had his conflicts
with British Airways, notably over the ‘dirty tricks’
affair of the early 1990s, but is not likely to challenge
governments. Virgin tries hard to build customer loyalty
and gain repeat business through brand-related service
values; Ryanair’s repeat business (and for some
customers the Ryanair experience is one which inspires
the thought ‘never again’) is based on price, not loyalty
to the brand. These differences have a significant effect
on the nature of employment relations and the
psychological contract between the two companies
and their employees.
Working for Richard and Michael
The brand image and the treatment of customers by
each company have a bearing on the nature of the
organisational relationship with staff, and vice versa.
Aspects of organisational behaviour therefore show
through in a variety of interconnected ways to create
consistent and very different cultures. At Virgin Atlantic,
cabin crew are there to be helpful and welcoming; they
are important projectors of the brand image and their
job is partly to encourage the all-important customer
loyalty which generates continuing profit. The
importance of staff as carriers of company values is
clearly reflected in the recruitment material and other
statements about the nature of work at Virgin Atlantic.
Virgin Atlantic brings together all manner of people in all
manner of roles, all playing a crucial role in the smooth
running of a very complex operation. But whoever you are
and wherever you join us, you’ll never stop thinking of
our customers and what we can do for them.
From frontline cabin crew to IT analysts, everyone here
plays a role in delivering the Virgin brand. That means
using initiative, taking responsibility for your actions and
being ready to support those around you at all times.
Similarly, you’ll play your part in maintaining the
friendly, unconventional professionalism that makes
Virgin Atlantic such a unique place of work.93
The recruitment process is lengthy and includes a group
interview which acts as a filter for further tests before
job offers are made. Training programmes for cabin
crew and other staff are run from a dedicated training
centre, and there is a wide range of benefits for full-time
staff including seven free flights a year, private pensions
and medical schemes and discounted goods and
services across the Virgin group.
At Ryanair, the cabin crew work for a supplier
organisation called Crewlink. You can discover whether
you qualify to apply for a job by answering a series of
eleven on-line questions. Successful applicants for cabin
crew posts are trained at one of Crewlink’s centres, and
are expected to pay an up-front charge of a2,000 for the
six-week course (or with a a550 deposit it can be offset
against the initial year’s salary at a total cost of a2,350).
Students are not paid to attend the course; successful
graduates get a three-year contract with Crewlink to
work on Ryanair flights on a shift work basis. Ryanair
crew are not expected to make overnight stops at its
destinations. Post-tax starting salary is listed as being
a1,200 per month; Crewlink suggests that after the
initial three years, and subject to satisfactory performance,
a permanent job with Ryanair itself might be available
at a salary of up to a30,000 per annum. Staff must be
flexible in terms of their work location across over
30 European centres, and Crewlink does not guarantee
work if individuals specify a preferred work location.94
By comparison with long-haul, a short-haul
operation involves very tight turnaround times and
Ryanair aims for 20 minutes. This creates a very
different pace and set of pressures on the workforce
compared with those at Virgin, which is likely to have
higher staffing levels and to give crew longer rest breaks
in the destination locations between flights. The nature
of customer relations, by contrast, might be more
demanding at Virgin than at Ryanair; staff and
customers are together for longer and the brand image
must be maintained.
Complaints and horror stories can be found about
work at both organisations; however, Ryanair is subject
to a more systematic and organised campaign of
criticism for its employment practices by trade union
organisations. In particular, the International Transport
Workers’ Federation95 has run a major campaign on its
website since 2004 called ‘Ryan-be-fair’, the purpose of
which is to pressurise the management at Ryanair into
accepting the role of trade unions in representing the
workforce. It collects comments from disgruntled crew
and former workers which give a flavour of the
operational stresses and organisational culture.
Both organisations have been successful; Ryanair has
turned in significant profits for several years in a sector
which is prone to disruption and is holding its own
despite the recession.96 Virgin also continues to go from
strength to strength commercially.97 But the cultures and
values which get them off the ground could hardly be
more different.
Your tasks
1 Using Morgan’s organisational metaphors, identify two which you think might be applied appropriately to
Virgin Atlantic, and two to Ryanair. How would you justify your choices?
2 Critically evaluate both organisations in terms of one or more of the descriptions of the psychological
contract given in the chapter.
3 Identify the different demands which might be made of managers to achieve organisational effectiveness in
each business (you could use Figure 1.4 as a framework). What are the implications for the role and
development of managers in each case?
Notes and references
1 See, for example, Robbins, S. P. and Judge, T. A.
Organizational Behavior, thirteenth edition, Pearson
Prentice Hall (2009).
2 A similar view is taken in Watson, T. J. Organising and
Managing Work: Organisational, Managerial and Strategic
Behaviour in Theory and Practice, Financial Times Prentice
Hall (2002).
3 See, for example, Billsberry, J. ‘There’s Nothing So Practical
as a Good Theory: How Can Theory Help Managers
Become More Effective?’, in Billsberry, J. (ed.) The Effective
Manager: Perspectives and Illustrations, Sage Publications
(1996), pp. 1–27; and Naylor, J. Management, second
edition, Financial Times Prentice Hall (2004), pp. 13–15.
4 Lee, R. A. ‘There Is Nothing so Useful as an Appropriate
Theory’, in Wilson, D. C. and Rosenfeld, R. H. Managing
Organisations: Text, Readings and Cases, McGraw-Hill
(1990), p. 31.
5 Patching, K. Management and Organisation Development,
Macmillan Business (1999), p. 11.
6 Drummond, H. Introduction to Organisational Behaviour,
Oxford University Press (2000).
7 Morgan, G. Creative Organisation Theory, Sage Publications
(1989), p. 26.
8 Hellriegel, D., Slocum, J. W. and Woodman, R. W.
Organizational Behavior, eighth edition, South-Western
Publishing (1998), p. 5.
9 ‘Introduction to Module 6, Organisational Behaviour’,
Financial Times Mastering Management, FT Pitman
Publishing (1997), p. 216.
10 Wilson, F. M. Organisational Behaviour and Work: A Critical
Introduction, second edition, Oxford University Press
(2004), pp. 1–2.
11 McPhee, N. ‘Gaining Insight on Business and
Organisational Behaviour: The Qualitative Dimension’,
International Journal of Market Research, vol. 44, Winter
2002, pp. 53–72.
12 Yip, G. S. ‘Global Strategy in the Twenty-First Century’,
in Crainer, S. and Dearlove, D. (eds) Financial Times
Handbook of Management, second edition, Financial
Times Prentice Hall (2001), p. 151.
13 Morgan, G. Creative Organisation Theory, Sage Publications
(1989), p. 26.
14 Drummond, H. Introduction to Organisational Behaviour,
Oxford University Press (2000).
15 Goldthorpe, J. H., Lockwood, D., Bechofer, F. and Platt, J.
The Affluent Worker, Cambridge University Press (1968).
16 Bunting, M. Willing Slaves, HarperCollins (2004).
17 Herman, S. W. ‘How Work Gains Meaning in Contractual
Time: A Narrative Model for Reconstructing the Work
Ethic’, Journal of Business Ethics, vol. 38, no. 1–2, June
2002, pp. 65–79.
18 Waller, D. ‘Are You What You Do?’, Management Today,
October 2008, pp. 42–6.
19 De Botton, A. ‘What’s Work Really For?’, Management
Today, April 2009, pp. 54–8. See also de Botton, A. The
Pleasures and Sorrows of Work, Hamish Hamilton (2009).
20 Reeves, R. ‘Reality Bites’, Management Today, March 2003,
p. 35.
21 Mann, S. ‘Balance in Favour of Aussies’, Professional
Manager, vol. 17, no. 5, September 2008, pp. 38–9.
22 ‘The meanings of work’, research*eu, The European Union’s
Research Magazine, no. 55, January 2008, pp. 27–8.
23 Willmott, B., in conversation with De Vita, E. ‘Best Fit’,
Management Today, September 2008, pp. 54–8.
24 See, for example, Argyris, C. Integrating the Individual and
the Organisation, John Wiley & Sons (1964).
25 Egan, G. ‘The Shadow Side’, Management Today, September
1993, pp. 33–8.
26 Bassett, G. ‘The Case Against Job Satisfaction’, Business
Horizons, vol. 37, no. 3, May–June 1994, pp. 62, 63.
27 Gratton, L. The Democratic Enterprise, Financial Times
Prentice Hall (2004), p. 208.
28 CIPD, Managing the Psychological Contract, Chartered
Institute of Personnel and Development (December 2004).
29 Stalker, K. ‘The Individual, the Organisation and the
Psychological Contract’, British Journal of Administrative
Management, July/August 2000, pp. 28, 34.
30 Cartwright, J. Cultural Transformation, Financial Times
Prentice Hall (1999), p. 39.
31 Emmott, M. ‘The Psychological Contract: Managers Do
Make a Difference’, Manager, The British Journal of
Administrative Management, September/October 2001, p. 15.
32 M.C.A. Awards, Management Today, April 2005, p. xix.
33 Hiltrop, J. M. ‘Managing the Changing Psychological
Contract’, Employee Relations, vol. 18, no. 1, 1996,
pp. 36–49.
34 CIPD, Managing the Psychological Contract, Chartered
Institute of Personnel and Development (December 2004).
35 Ghoshal, S., Bartlett, C. A. and Moran, P. ‘Value Creation:
The New Millennium Management Manifesto’, in
Chowdhury, S. (ed.) Management 21C, Financial Times
Prentice Hall (2000), pp. 121–40.
36 Furnham, A. and Taylor, J. The Dark Side of Behaviour at
Work, Palgrave Macmillan (2004).
37 ‘The Psychological Contract’, Checklist 161, Chartered
Management Institute, March 2007.
38 Peter, L. J. and Hull, R. The Peter Principle, Pan Books
(1970), p. 22.
39 Ibid., p. 56.
40 Parkinson, C. N. Parkinson’s Law, Penguin Modern Classics
(2002), p. 14.
41 HRH The Duke of Edinburgh, ‘Introduction’ to Parkinson,
C. N. Parkinson’s Law, Penguin Modern Classics (2002),
pp. 9–10.
42 Herbertson, I. ‘Books’, Management Today, May 2000, p. 4.
43 Ghoshal, S., Bartlett, C. A. and Moran, P. ‘Value Creation:
The New Millennium Management Manifesto’, in
Chowdhury, S. (ed.) Management 21C, Financial Times
Prentice Hall (2000), pp. 121–40.
44 Taylor, R. ‘The Future of Employment Relations’, Economic
and Social Research Council, September 2001, pp. 7–8.
45 Stern, S. ‘My Generation’, Management Today, March 2008,
pp. 40–6.
46 ‘Migration: A Challenge and an Opportunity’, Social Agenda,
the magazine of the European Commission, no. 17,
June 2008, p. 14.
47 Muzyka, D. ‘Thriving on the Chaos of the Future’, in
Pickford, J. (ed.) Financial Times Mastering Management 2.0,
Financial Times Prentice Hall (2001), p. 8.
48 Cloke, K. and Goldsmith, J. The End of Management and the
Rise of Organisational Democracy, Jossey-Bass (2002).
49 Bouchikhi, H. and Kimberly, J. R. ‘The Customized
Workplace’, in Chowdhury, S. (ed.) Management 21C,
Financial Times Prentice Hall (2000), pp. 207–19.
50 French, R. Cross-Cultural Management in Work Organisations,
CIPD (2007).
51 Francesco, A. M. and Gold, B. A. International
Organizational Behavior, second edition, Pearson Prentice
Hall (2005), p. 246.
52 Rugman, A. ‘The Illusion of the Global Company’, in
Pickford, J. (ed.) Financial Times Mastering Management 2.0,
Financial Times Prentice Hall (2001), pp. 129–33.
53 Saul, J. R. The Collapse of Globalism, Atlantic Books (2005).
54 Child, J. Organisation: Contemporary Principles and Practice,
Blackwell Publishing (2005), p. 30.
55 Schneider, S. C. and Barsoux, J. Managing Across Cultures,
second edition, Financial Times Prentice Hall (2003),
p. 142.
56 McLean, J. ‘Globalisation Is Here to Stay’, Manager, The
British Journal of Administrative Management, June/July
2006, p. 16.
57 Begg, I. Social Agenda, European Commission, issue 17,
June 2008, pp. 24–5.
58 Van der Pas, N. G. Social Agenda, European Commission,
issue 18, October 2008, p. 2.
59 Dana, L. ‘Culture is of the Essence in Asia’, in Pickford, J.
(ed.) Financial Times Mastering Management 2.0, Financial
Times Prentice Hall (2001), pp. 139–43.
60 See, for example, Fletcher, W. ‘The American Way’,
Management Today, August 2005, pp. 46–9.
61 See, for example, Slater, D. ‘When in China . . .’,
Management Today, May 2006, pp. 46–50.
62 Schneider, S. C. and Barsoux, J. Managing Across Cultures,
second edition, Financial Times Prentice Hall (2003),
p. 9.
63 Thompson, P. and McHugh, D. Work Organisations:
A Critical Introduction, third edition, Palgrave (2002),
p. 81.
64 Tayeb, M. The Management of a Multicultural Workforce,
John Wiley & Sons (1996).
65 Broeways, M. J. and Price, R. Understanding Cross-Cultural
Management, Financial Times Prentice Hall (2008).
66 Trompenaars, F. ‘Trans-Cultural Competence’, People
Management, 22 April 1999, p. 31.
67 Francesco, A. M. and Gold, B. A. International
Organizational Behavior, second edition, Pearson Prentice
Hall (2005), p. 140.
68 Schneider, S. C. and Barsoux, J. Managing Across Cultures,
second edition, Financial Times Prentice Hall (2003),
p. 167.
69 Ibid., p. 86.
70 French, R. Cross-Cultural Management in Work Organisations,
CIPD (2007), p. 106.
71 Buelens, M., van den Broek, H. and Vanderheyden, K.
Organisational Behaviour, third edition, McGraw-Hill
72 Adler, N. J. International Dimensions of Organisational
Behaviour, fourth edition, South-Western College
Publishing (2002).
73 Brooks, I. Organisational Behaviour: Individuals, Groups and
Organisation, third edition, Financial Times Prentice Hall
(2006), p. 272.
74 Hofstede, G. Culture’s Consequences: International Differences
in Work-Related Values, Sage Publications (1980).
75 Hofstede, G. and Bond, M. H. ‘The Confucius Connection:
From Cultural Roots to Economic Growth’, Organisational
Dynamics, Spring 1988, pp. 4–21.
76 Holden, N. J. Cross-Cultural Management: A Knowledge
Management Perspective, Financial Times Prentice Hall
(2002), p. 51.
77 French, R. Cross-Cultural Management in Work Organisations,
CIPD (2007).
78 Trompenaars, F. and Hampden-Turner, C. Riding the Waves
of Culture, second edition, Nicholas Brearley (1999).
79 Hall, E. T. and Hall, M. R. Understanding Cultural
Differences, Intercultural Press (1990).
80 Koen, C. Comparative International Management,
McGraw-Hill (2005).
81 Fan, Y. ‘A Classification of Chinese Culture’, Cross-Cultural
Management, vol. 7, no. 2, 2000, pp. 1–10.
82 Fang, T. ‘A Critique of Hofstede’s Fifth National Culture
Dimension’, International Journal of Cross-Cultural
Management, vol. 3, no. 3, 2003, pp. 337–68.
83 Grint, K. The Sociology of Work, second edition, Polity Press
(1998), p. 298.
84 Thompson, P. and McHugh, D. Work Organisations: A
Critical Introduction, third edition, Palgrave (2002), p. 74.
85 Wood, J. ‘Deep Roots and Far From a “Soft” Option’,
Financial Times Mastering Management, Financial Times
Pitman Publishing (1997), p. 217.
86 Bennis, W. ‘Foreword’, in Cloke, K. and Goldsmith, J. The
End of Management and the Rise of Organisational Democracy,
Jossey-Bass (2002), p. ix.
87 Virgin Atlantic website All About Us available at
88 Creaton, S. Ryanair: How a Small Irish Airline Conquered
Europe, Aurum (2004).
89 For instance at the Ryanair website, www.ryanair.com.
90 Creaton, S. Ryanair: How a Small Irish Airline Conquered
Europe, ch. 15.
91 BBC news website ‘Sarkozy Pair Win Ryanair Ad Case’,
news.bbc.co.uk, 5 February 2008.
92 Allen, K. ‘Ryanair Reduces Stansted Flights by 14%’,
Guardian, 22 July 2009, p. 24.
93 Virgin Atlantic website ‘Working for Us’, http://www.
94 Crewlink, www.crewlink.ie.
95 International Transport Workers’ Federation website,
96 Ryanair website, Investor Relations pages; Full Year Results
2 June 2009.
97 BBC news website ‘Profits Jump at Virgin Atlantic’,
news.bbc.co.uk, 26 May 2009.
Now that you have finished reading this chapter, visit MyManagementLab at
www.pearsoned.co.uk/mymanagementlab to find more learning resources
to help you make the most of your studies and get a better grade.
Organisational behaviour is a discursive subject and much has
been written about it. The study of organisations and management
has therefore to proceed on a broad front. It is the comparative
study of the different approaches that will yield benefits to the
manager. The study of organisations, their structure and
management is important for the manager. Identification of major
trends in management and organisational behaviour, and the work
of leading writers, provide a perspective on concepts and ideas
discussed in more detail in other chapters.
Learning outcomes
After completing this chapter you should be able to:
identify major trends in the development of organisational behaviour and
management thinking;
contrast main features of different approaches to organisation and
evaluate the relevance of these different approaches to the present-day
management of organisations;
explain the relationships between management theory and practice;
assess the value of the study of different approaches to organisation and
recognise the relationship between the development of theory, behaviour
in organisations and management practice;
establish a basis for consideration of aspects of organisational behaviour
discussed in subsequent chapters.
Critical reflection
‘It is often claimed that what leading writers say is an important part of the
study of management and organisational behaviour. Others say that all these
different ideas are little more than short-term fads and have little practical
What do you think? What role does management theory have in helping us
solve problems we face in our organisational lives today?
A central part of the study of organisation and management is the development of management thinking and what might be termed management theory. The application of theory
brings about change in actual behaviour. Managers reading the work of leading writers on
the subject might see in their ideas and conclusions a message about how they should
behave. This will influence their attitudes towards management practice.
The study of management theory is important for the following reasons:
It helps to view the interrelationships between the development of theory, behaviour in
organisations and management practice.
An understanding of the development of management thinking helps in understanding
principles underlying the process of management.
Knowledge of the history helps in understanding the nature of management and organisational behaviour and reasons for the attention given to main topic areas.
Many of the earlier ideas are of continuing importance to the manager and later ideas on
management tend to incorporate earlier ideas and conclusions.
Management theories are interpretive and evolve in line with changes in the organisational environment.
As McGregor puts it:
Every managerial act rests on assumptions, generalizations, and hypotheses – that is to say, on theory.
Our assumptions are frequently implicit, sometimes quite unconscious, often conflicting; nevertheless,
they determine our predictions that if we do a, b will occur. Theory and practice are inseparable.1
Miner makes the point that the more that is known about organisations and their methods
of operation, the better the chances of dealing effectively with them. Understanding may be
more advanced than prediction, but both provide the opportunity to influence or to manage
the future. Theory provides a sound basis for action.2 However, if action is to be effective,
the theory must be adequate and appropriate to the task and to improved organisational
performance. It must be a ‘good’ theory.
It is helpful, therefore, to trace major developments in management and organisational
behaviour and what has led to the concentration of attention on such topics as motivation,
groups, leadership, structure, and organisation development.3
Writing on organisation and management, in some form or another, can be traced back
thousands of years.4 Also, Shafritz makes an interesting observation about the contribution
of William Shakespeare (1564–1616):
While William Shakespeare’s contribution to literature and the development of the English language
have long been acknowledged and thoroughly documented, his contribution to the theory of management and administration have been all but ignored. This is a surprising oversight when you consider
that many of his plays deal with issues of personnel management and organizational behavior.5
However, the systematic development of management thinking is viewed, generally, as
dating from the end of the nineteenth century with the emergence of large industrial organisations and the ensuing problems associated with their structure and management.6 In order
to help identify main trends in the development of organisational behaviour and management theory, it is usual to categorise the work of writers into various ‘approaches’, based on
their views of organisations, their structure and management. Although a rather simplistic
process, it does provide a framework in which to help direct study and focus attention on
the progression of ideas concerned with improving organisational performance.
Figure 2.1
Main approaches to organisation, structure and management
A framework of analysis
There are, however, many ways of categorising these various approaches. For example, Skipton
attempts a classification of 11 main schools of management theory.7 Whatever form of categorisation is adopted, it is possible to identify a number of other approaches, or at least
sub-divisions of approaches, and cross-grouping among the various approaches. The choice
of a particular categorisation is therefore largely at the discretion of the observer.
The following analysis will revolve around a framework based on four main approaches,
shown in Figure 2.1:
classical – including scientific management and bureaucracy;
human relations – including neo-human relations;
Attention is also drawn to other ‘approaches’ or ideas, including:
social action;
See Figure 2.4 on page 63.
The classical writers thought of the organisation in terms of its purpose and formal structure.
They placed emphasis on the planning of work, the technical requirements of the organisation, principles of management, and the assumption of rational and logical behaviour. The
analysis of organisation in this manner is associated with work carried out initially in the
early part of the last century, by such writers as Taylor, Fayol, Urwick, Mooney and Reiley, and
Brech. Such writers were laying the foundation for a comprehensive theory of management.
A clear understanding of the purpose of an organisation is seen as essential to understanding how the organisation works and how its methods of working can be improved.
Identification of general objectives would lead to the clarification of purposes and responsibilities at all levels of the organisation and to the most effective structure. Attention is given
to the division of work, the clear definition of duties and responsibilities, and maintaining
specialisation and co-ordination. Emphasis is on a hierarchy of management and formal
organisational relationships.
Sets of principles
The classical writers (also variously known as the formal or scientific management writers –
although scientific management is really only a part of the classical approach) were concerned with improving the organisation structure as a means of increasing efficiency. They
emphasised the importance of principles for the design of a logical structure of organisation.
Their writings were in a normative style and they saw these principles as a set of ‘rules’ offering general solutions to common problems of organisation and management.
Most classical writers had their own set of principles but among the most publicised are
those of Fayol and Urwick (see Chapters 11 and 14). Fayol recognised there was no limit to
the principles of management but in his writing advocated 14.8 Urwick originally specified
eight principles, but these were revised to ten in his later writing.9
Mooney and Reiley set out a number of common principles which relate to all types of
organisations. They place particular attention on:
the principle of co-ordination – the need for people to act together with unity of action,
the exercise of authority and the need for discipline;
the scalar principle – the hierarchy of organisation, the grading of duties and the process
of delegation; and
the functional principle – specialisation and the distinction between different kinds of
Brech attempts to provide a practical approach to organisation structure based on tried
general principles as opposed to the concentration on specific cases or complex generalisations of little value to the practising manager. He sets out the various functions in the
organisation and the definition of formal organisational relationships.11 Although clearly a
strong supporter of the formal approach in some of his views such as, for example, on the
principle of span of control, Brech is less definite than other classical writers and recognises
a degree of flexibility according to the particular situation.
Brech does place great emphasis, however, on the need for written definition of responsibilities and the value of job descriptions as an aid to effective organisation and delegation.
This work builds on the ideas of earlier writers, such as Urwick, and therefore provides
a comprehensive view of the classical approach to organisation and management.
Evaluation of the classical approach
The classical writers have been criticised generally for not taking sufficient account of personality factors and for creating an organisation structure in which people can exercise only
limited control over their work environment. The idea of sets of principles to guide managerial action has also been subject to much criticism. For example, Simon writes:
Organisational design is not unlike architectural design. It involves creating large, complex systems
having multiple goals. It is illusory to suppose that good designs can be created by using the so-called
principles of classical organisation theory.12
Research studies have also expressed doubt about the effectiveness of these principles
when applied in practice.13 However, the classical approach prompted the start of a more
systematic view of management and attempted to provide some common principles applicable to all organisations. These principles are still of relevance in that they offer a useful
starting point in attempting to analyse the effectiveness of the design of organisation structure. The application of these principles must take full account of:
the particular situational variables of each individual organisation; and
the psychological and social factors relating to members of the organisation.
Major sub-groupings
Two major ‘sub-groupings’ of the classical approach are:
1 scientific management, and
2 bureaucracy.
Many of the classical writers were concerned with the improvement of management as a
means of increasing productivity. At this time emphasis was on the problem of obtaining
increased productivity from individual workers through the technical structuring of the work
organisation and the provision of monetary incentives as the motivator for higher levels
of output. A major contributor to this approach was F. W. Taylor (1856–1917), the ‘father’
of scientific management.14 Taylor believed that in the same way that there is a best machine
for each job, so there is a best working method by which people should undertake their
jobs. He considered that all work processes could be analysed into discrete tasks and that by
scientific method it was possible to find the ‘one best way’ to perform each task. Each job
was broken down into component parts, each part timed and the parts rearranged into the
most efficient method of working.
Principles to guide management
Taylor was a believer in the rational–economic needs concept of motivation. He believed
that if management acted on his ideas, work would become more satisfying and profitable
for all concerned. Workers would be motivated by obtaining the highest possible wages
through working in the most efficient and productive way. Taylor was concerned with finding more efficient methods and procedures for co-ordination and control of work. He set out
a number of principles to guide management. These principles are usually summarised as:
the development of a true science for each person’s work;
the scientific selection, training and development of the workers;
co-operation with the workers to ensure work is carried out in the prescribed way;
the division of work and responsibility between management and the workers.
In his famous studies at the Bethlehem Steel Corporation, Taylor, who was appointed
as a management consultant, applied his ideas on scientific management to the handling of
pig iron. A group of 75 men were loading an average of 121/2 tons per man per day. Taylor
selected a Dutch labourer, called Schmidt, whom he reported to be a ‘high-priced’ man with
a reputation for placing a high value on money, and a man of limited mental ability. By
following detailed instructions on when to pick up the pig iron and walk, and when to sit
and rest, and with no back talk, Schmidt increased his output to 471/2 tons per day. He maintained this level of output throughout the three years of the study. In return Schmidt received
a 60 per cent increase in wages compared with what was paid to the other men.
One by one other men were selected and trained to handle pig iron at the rate of 471/2
tons per day and in return they received 60 per cent more wages. Taylor drew attention to
the need for the scientific selection of the workers. When the other labourers in the group
were trained in the same method, only one in eight was physically capable of the effort of
loading 471/2 tons per day, although there was a noticeable increase in their level of output.
Reactions against scientific management
There were strong criticisms of, and reaction against, scientific management methods from
the workers who found the work boring and requiring little skill. Despite these criticisms Taylor
attempted to expand the implementation of his ideas in the Bethlehem Steel Corporation.
However, fears of mass redundancies persuaded the management to request Taylor to moderate his activities. Yet Taylor’s belief in his methods was so strong that he would not accept
management’s interference and eventually they dispensed with his services.
Scientific management was applied for a time in other countries with similar criticisms
and hostile reactions. The ideas of scientific management were also adopted in the American
Watertown Arsenal despite the lingering doubts of the controller. He was not convinced
about the benefits of paying bonuses based on methods which reduced time taken to complete a job; also the workers reacted unfavourably to time and motion studies and he was
fearful of a strike. The controller eventually gave way, however, and the scientific management approach was adopted – to be followed almost immediately by a strike of moulding
workers. The strike at Watertown Arsenal led to an investigation of Taylor’s methods by
a House of Representatives Committee which reported in 1912.
The conclusion of the committee was that scientific management did provide some useful
techniques and offered valuable organisational suggestions, but gave production managers
a dangerously high level of uncontrolled power. The studies at Watertown Arsenal were
resumed but the unions retained an underlying hostility towards scientific management. A
subsequent attitude survey among the workers revealed a broad level of resentment and hostility, by both union and non-union members, to scientific management methods. As a result
of this report the Senate banned Taylor’s methods of time study in defence establishments.
Taylorism as management control
There has also been considerable interest in ‘Taylorism’ as representing a system of management control over workers. Taylor placed emphasis on the content of a ‘fair day’s work’ and
on optimising the level of workers’ productivity. A major obstacle to this objective was
‘systematic soldiering’ and what Taylor saw as the deliberate attempt by workers to promote
their best interests and to keep employers ignorant of how fast work, especially piece-rate
work, could be carried out.
According to Braverman, scientific management starts from the capitalist point of view and
method of production, and the adaptation of labour to the needs of capital. Taylor’s work
was more concerned with the organisation of labour than with the development of technology. A distinctive feature of Taylor’s thought was the concept of management control.15
Braverman suggests Taylor’s conclusion was that workers should be controlled not only by
the giving of orders and maintenance of discipline but also by removing from them any decisions about the manner in which their work was to be carried out. By division of labour, and
by dictating precise stages and methods for every aspect of work performance, management
could gain control of the actual process of work. The rationalisation of production processes
and division of labour tends to result in the de-skilling of work and this may be a main
strategy of the employer.16
Cloke and Goldsmith also suggest that Taylor was the leading promoter of the idea that
managers should design and control the work process scientifically in order to guarantee
maximum efficiency. He believed in multiple layers of management to supervise the work
process and in rigid, detailed control of the workforce.
Taylor’s theories justified managerial control over the production process and removed decision making
from employees and from owners as well. The increasingly authoritative operational role of management diminished the direct involvement of owners in day-to-day decision making. Managers saw this
as an opportunity to solidify their power and adopted Taylor’s ideas wholesale. In the process, they
affirmed efficiency over collaboration, quantity over quality, and cost controls over customer service.17
Critical reflection
‘Despite the strong criticisms of scientic management, in the right circumstances the
underlying principles still have relevance and much to offer business organisations today.
It is just that many commentators appear reluctant to openly admit that this is the case.’
What are your views? Where could scientific management be applied for the best overall
While Taylor’s work is often criticised today it should be remembered that he was writing at
a time of industrial reorganisation and the emergence of large, complex organisations with
new forms of technology. Taylor’s main concern was with the efficiency of both workers and
management. He believed his methods of scientific management would lead to improved
management–labour relations and contribute to improved industrial efficiency and prosperity.
Taylor adopted an instrumental view of human behaviour together with the application
of standard procedures of work. Workers were regarded as rational, economic beings motivated directly by monetary incentives linked to the level of work output. Workers were viewed
as isolated individuals and more as units of production to be handled almost in the same
way as machines. Hence, scientific management is often referred to as a machine theory model.
Taylor’s work continues to evoke much comment and extreme points of view. For example,
Rose suggests:
It is difficult to discuss the ‘contribution’ of F. W. Taylor to the systematic study of industrial behaviour
in an even-tempered way. The sheer silliness from a modern perspective of many of his ideas, and
barbarities they led to when applied in industry, encourage ridicule and denunciation.18
The theme of inefficiency
Rose argues that Taylor’s diagnosis of the industrial situation was based on the simple theme
of inefficiency. Among his criticisms are that Taylor selected the best workers for his experiments and assumed that workers who were not good at one particular task would be best at
some other task. There is, however, no certainty of this in practice. Taylor regarded workers
from an engineering viewpoint and as machines, but the one best way of performing a task
is not always the best method for every worker.
The reduction of physical movement to find the one best way is not always beneficial and
some ‘wasteful’ movements are essential to the overall rhythm of work. Rose also argues that
the concept of a fair day’s pay for a fair day’s work is not purely a technical matter. It is also
a notion of social equity and not in keeping with a scientific approach. Drucker, however,
Frederick Winslow Taylor may prove a more useful prophet for our times than we yet recognize . . .
Taylor’s greatest impact may still be ahead . . . the under-developed and developing countries are now
reaching the stage where they need Taylor and ‘scientific management’ . . . But the need to study Taylor
anew and apply him may be the greatest in the developed countries.19
According to Drucker, the central theme of Taylor’s work was not inefficiency but the need
to substitute industrial warfare by industrial harmony. Taylor sought to do this through:
higher wages from increased output;
the removal of physical strain from doing work the wrong way;
development of the workers and the opportunity for them to undertake tasks they were
capable of doing; and
elimination of the ‘boss’ and the duty of management to help workers.
Drucker also suggests that Taylor’s idea of functional foremen can be related to what is
now known as matrix organisation (matrix organisation is discussed in Chapter 14). Support
for Drucker’s views appears to come from Locke who asserts that much of the criticism of
Taylor is based on a misunderstanding of the precepts and that many of his ideas are
accepted by present-day managers.20
Impetus to management thinking
Whatever the opinions on scientific management, Taylor and his disciples have left to
modern management the legacy of such practices as work study, organisation and methods,
payment by results, management by exception and production control. The development
of mass assembly line work (‘Fordism’), which was invented by Henry Ford in 1913 and
which dominated production methods in Western economies, can be seen to have many
common links with the ideas of scientific management.21 The concept of Six Sigma, which
is discussed in Chapter 20, can also be related to Taylor’s quest for ‘systematic management’. For example, in his book on the future of management, Hamel makes the following
One can imagine Taylor looking down from his well-ordered heaven and smiling fondly at the Six Sigma
acolytes who continue to spread his gospel. (His only surprise might be that 21st-century managers are
still obsessing over the same problems that occupied his inventive mind a hundred years earlier.)22
The principles of Taylor’s scientific approach to management appear still to have relevance today. We can see examples of Taylorism alive and well, and management practices
based on the philosophy of his ideas. As an example, Figure 2.2 shows a ‘Hanger Insertion
Figure 2.2
Hanger Insertion Programme: an example of scientific management
Hanger Insertion
The new programme involving the process of hanging merchandise on hangers efficiently and
The purposes of this new programme:
To assist the stores in better customer service – by having the merchandise ready to go on the
floor, saving space in the stockroom, and creating customer goodwill.
To increase the units per hour produced.
To perform the job duties as efficiently and effectively as possible.
Keep the necessary items needed in your range. All supplies should be within arm’s reach. For
example, place the trash bin next to you, have your hanger supply near you. You should not need
to take any steps.
For ANY prepack, Unpack merchandise in the prepack or unpack enough of the prepack in
the amount to be placed on the trolley, tearing the plastic off of the entire
Lay the merchandise out on the unpack table, and if applies, unfold each
piece, removing tissue, etc.
Insert the hangers and hang the entire group of merchandise at once.
When removing hangers from the merchandise, have the merchandise in a group on the unpack
table; remove these hangers working from the front to the back.
When inserting hangers, as a group, insert working from the back to the front of the group on the
unpack table. Hang pieces as a group.
If merchandise is bulky, Leave merchandise folded, remove all of the plastic at once,
insert hangers for merchandise unpacked, hang all pieces on the
trolley, then remove at the same time all excess plastic, clips, etc.
When possible, it is more efficient to remove all the plastic at once after the merchandise is hung.
When hanging pants, skirts, etc., slip the hanger over both sides of the piece of merchandise and
push metal clips down at the same time. This will alleviate additional steps.
When pants are in plastic and hangers have to be removed, hang them first, take pants off
hangers, lay on table, throw away plastic, insert hangers.
When having to button pants, skirts, etc., take the top of the button through the hole first. This
makes the process flow easier and more efficient.
Put your supply of hangers in the cover of a tote and place on the table next to you.
Programme’ for a large American department store. Large hotel organisations often make use
of standard recipes and performance standard manuals and it is common for housekeeping
staff to have a prescribed layout for each room, with training based on detailed procedures
and the one best way. Staff may be expected to clean a given number of rooms per shift with
financial incentives for additional rooms. The strict routine, uniformity, clearly specified
tasks, detailed checklists and close control in fast-food restaurants such as McDonald’s also
suggest close links with scientific management.
Whatever else Taylor did, at least he gave a major impetus to the development of management thinking and the later development of organisational behaviour. For example,
Crainer and Dearlove suggest that although Taylor’s theories are now largely outdated, they
still had a profound impact throughout the world and his mark can be seen on much of the
subsequent management literature.23 And Stern goes a stage further:
The ‘scientific management’ of Frederick Taylor . . . shaped the first coherent school of thought with
application to the industrialised world. He was our first professional guru and Taylorism – with its twin
goals of productivity and efficiency – still influences management thinking 100 years on.24
It is difficult to argue against the general line of Taylor’s principles but they are subject to
misuse. What is important is the context and manner in which such principles are put into
effect. There is arguably one best way technically to perform a job, particularly, for example,
with factory assembly line production. However, account needs to be taken of human
behaviour. People tend to have their preferred way of working and the need for variety and
more interesting or challenging tasks. Provided work is carried out safely and to a satisfactory standard and completed on time, to what extent should management insist on the ‘one
best way’?
It seems that Taylor did not so much ignore (as is often suggested) but was more unaware
of the complexity of human behaviour in organisations and the importance of the individual’s feelings and sentiments, group working, managerial behaviour and the work
environment. However, we now have greater knowledge about social effects within the work
organisation and about the value of money, incentives, motivation, and job satisfaction and
A form of structure to be found in many large-scale organisations is bureaucracy. Its importance in the development of organisation theory means that it is often regarded as a subdivision under the classical heading and studied as a separate approach to management and
the organisation of work. The ideas and principles of the classical writers were derived
mainly from practical experience. Writers on bureaucracy, however, tend to take a more
theoretical view.
Weber, a German sociologist, showed particular concern for what he called ‘bureaucratic
structures’, although his work in this area came almost as a side issue to his main study on
power and authority.25 He suggested that ‘the decisive reason for the advance of bureaucratic
organization has always been its purely technical superiority over any other form of organization’. Weber pointed out that the definition of tasks and responsibilities within the structure of management gave rise to a permanent administration and standardisation of work
procedures notwithstanding changes in the actual holders of office.
The term ‘bureaucracy’ has common connotations with criticism of red tape and rigidity,
though in the study of organisations and management it is important that the term is
seen not necessarily in a deprecative sense but as applying to certain structural features of
formal organisations. Weber analysed bureaucracies not empirically but as an ‘ideal type’
derived from the most characteristic bureaucratic features of all known organisations. He
saw the development of bureaucracies as a means of introducing order and rationality into
social life.
Main characteristics of bureaucracies
Weber did not actually define bureaucracy but did attempt to identify the main characteristics
of this type of organisation. He emphasised the importance of administration based on
expertise (rules of experts) and administration based on discipline (rules of officials).
The tasks of the organisation are allocated as official duties among the various positions.
There is an implied clear-cut division of labour and a high level of specialisation.
A hierarchical authority applies to the organisation of offices and positions.
Uniformity of decisions and actions is achieved through formally established systems of
rules and regulations. Together with a structure of authority, this enables the co-ordination
of various activities within the organisation.
An impersonal orientation is expected from officials in their dealings with clients and
other officials. This is designed to result in rational judgements by officials in the performance of their duties.
Employment by the organisation is based on technical qualifications and constitutes
a lifelong career for the officials.26
The four main features of bureaucracy are summarised by Stewart as specialisation, hierarchy
of authority, system of rules and impersonality.
Specialisation applies more to the job than to the person undertaking the job. This makes
for continuity because the job usually continues if the present job-holder leaves.
Hierarchy of authority makes for a sharp distinction between administrators and the
administered or between management and workers. Within the management ranks there
are clearly defined levels of authority. This detailed and precise stratification is particularly
marked in the armed forces and in the civil service.
System of rules aims to provide for an efficient and impersonal operation. The system of
rules is generally stable, although some rules may be changed or modified with time.
Knowledge of the rules is a requisite of holding a job in a bureaucracy.
Impersonality means that allocation of privileges and the exercise of authority should
not be arbitrary, but in accordance with the laid-down system of rules. In more highly
developed bureaucracies there tend to be carefully defined procedures for appealing
against certain types of decisions. Stewart sees the characteristic of impersonality as the
feature of bureaucracy which most distinguishes it from other types of organisations. A
bureaucracy should not only be impersonal but be seen to be impersonal.27
Weber’s concept of bureaucracy has a number of disadvantages and has been subject to
severe criticism.
The over-emphasis on rules and procedures, record keeping and paperwork may become
more important in its own right than as a means to an end.
Officials may develop a dependence upon bureaucratic status, symbols and rules.
Initiative may be stifled and when a situation is not covered by a complete set of rules or
procedures there may be a lack of flexibility or adaptation to changing circumstances.
Position and responsibilities in the organisation can lead to officious bureaucratic behaviour. There may also be a tendency to conceal administrative procedures from outsiders.
Impersonal relations can lead to stereotyped behaviour and a lack of responsiveness to
individual incidents or problems.
Restriction of psychological growth
One of the strongest critics of bureaucratic organisation, and the demands it makes on
the worker, is Argyris.28 He claims that bureaucracies restrict the psychological growth of the
individual and cause feelings of failure, frustration and conflict. Argyris suggests that the
organisational environment should provide a significant degree of individual responsibility
and self-control; commitment to the goals of the organisation; productiveness and work;
and an opportunity for individuals to apply their full abilities.
When these ideas are related to the main features of bureaucracy discussed above, such as
specialisation, hierarchy of authority, system of rules and impersonality, it is perhaps easy to
see the basis of Argyris’ criticism.
A similar criticism is made by Caulkin who refers to the impersonal structure of bureaucracy as constructed round the post rather than the person and the ease with which it can be
swung behind unsocial or even pathological ends.
The overemphasis on process rather than purpose, fragmented responsibilities and hierarchical control
means that it’s all too easy for individuals to neglect the larger purposes to which their small effort is
being put.29
The growth of bureaucracy has come about through the increasing size and complexity of
organisations and the associated demand for effective administration. The work of the classical writers has given emphasis to the careful design and planning of organisation structure
and the definition of individual duties and responsibilities. Effective organisation is based
on structure and delegation through different layers of the hierarchy. Greater specialisation
and the application of expertise and technical knowledge have highlighted the need for laiddown procedures.
Bureaucracy is founded on a formal, clearly defined and hierarchical structure. However,
with rapid changes in the external environment, de-layering of organisations, empowerment
and greater attention to meeting the needs of customers, there is an increasing need to organise for flexibility. Peters and Waterman found that excellent American companies achieved
quick action just because their organisations were fluid and had intensive networks of
informal and open communications.30 By contrast, the crisis IBM experienced in the 1980s/
1990s over the market for personal computers is explained at least in part by its top-heavy
corporate structure, cumbersome organisation and dinosaur-like bureaucracy.31
According to Cloke and Goldsmith, management and bureaucracy can be thought of as flip
sides of the same coin. The elements of bureaucracy generate organisational hierarchy and
management, while managers generate a need for bureaucracy.
Bureaucracies provide a safe haven where managers can hide from responsibility and avoid
being held accountable for errors of judgement or problems they created or failed to solve. In
return, managers are able to use bureaucratic rules to stifle self-management and compel
employees to follow their direction . . . Yet bureaucratic systems can be broken down and transformed into human-scale interactions. We have seen countless managers recreate themselves
as leaders and facilitators, employees reinvent themselves as responsible self-managing team
members, and bureaucracies transform into responsive, human-scale organizations. Alternatives
to organizational hierarchy are both practical and possible.32
Organisational solutions
As organisations face increasing global competitiveness and complex demands of the information and technological age, the need arises for alternative forms of corporate structure
and systems. Ridderstrale points out that in the past century the hallmark of a large company
was hierarchy, which rests on principles at odds with the new strategic requirements.
‘Bureaucracies allowed people with knowledge to control ignorant workers. Now, new structures are needed as knowledge spreads.’ Ridderstrale suggests four specific ways in which
high-performing organisations have responded to increasingly complex knowledge systems
by developing organisational solutions which depart from the traditional bureaucratic
more decentralised and flatter structures in order that quick decisions can be taken near
to where the critical knowledge resides. Flatter structures can be achieved by increasing
the span of control and reducing layers from the top or removing layers of middle
the use of more than a single structure in order that knowledge may be assembled across
the boundaries of a traditional organisation chart. If people have less permanent places
in the hierarchy they are more readily able to move across functional and geographical
converting companies into learning organisations and giving every employee the same
level of familiarity with personnel and capabilities. Successful companies develop a
detailed inventory of core competencies. In order fully to exploit current knowledge, managers need to know what the company knows;
the broader sharing of expertise and knowledge, which may be located in the periphery
where little formal authority resides. Managers need to share principles to ensure coordination and to encourage ‘lowest common denominators’ and the development of
‘tribal’ qualities through shared ownership and rewards, common norms, culture and
Public sector organisations
In the case of public sector organisations, in particular, there is a demand for uniformity of
treatment, regularity of procedures and public accountability for their operations. This leads
to adherence to specified rules and procedures and to the keeping of detailed records. In their
actual dealings with public sector organisations people often call for what amounts to
increased bureaucracy, even though they may not use that term. The demands for equal
treatment, for a standard set of regulations that apply to everyone, and that decisions should
not be left to the discretion of individual managers are in effect demands for bureaucracy.
Green argues that, although bureaucracies are becoming less and less the first-choice
format for organisational shape, there is still a place for bureaucracy in parts of most organisations and especially public sector organisations such as local authorities and universities.
The use and implementation of tried and tested rules and procedures help to ensure essential values and ethics, and that necessary functions are run on a consistent and fair basis.34
New forms of information technology such as electronic transactions processed from home
or public access terminals are likely to change processes of government service delivery,
administrative workloads and the nature of bureaucracy.35
Relevance today
By their very nature, bureaucracies are likely to attract criticism. For example, there appears
to be a particular dilemma for management in personal service industries. The underlying
characteristics of bureaucracy would seem to restrict personal service delivery which requires
a flexible approach, responsiveness to individual requirements and the need for initiative
and inventiveness.36 Much of this criticism is valid, but much also appears unfair.
Stewart suggests that more organisations today contain mainly or a considerable number
of professionals. Such organisations will still have bureaucratic features although there is
more reliance on professional discretion and self-regulation than on control through rules
and regulations.37 However, despite new forms of organisation which have emerged, many
writers suggest that bureaucracy is still relevant today as a major form of organisation
Critical reflection
‘Despite the frequent criticisms of bureaucratic structures, it is difficult to envisage how
large-scale organisations, especially within the public sector, could function effectively
without exhibiting at least some of the features of a bureaucracy. Demands for
alternative forms of structure are unrealistic.’
How would you attempt to justify the benefits of bureaucratic structures?
Sometimes Weber’s work is associated with the ideas of writers such as Karl Marx under the
sub-heading of the structuralism approach, which is a synthesis of the classical (or formal)
school and the human relations (or informal) school.39 A major line of thought was that the
earlier approaches were incomplete and lacked adequate theoretical assumptions and background. The structuralism approach provides a radical perspective of social and organisational behaviour.40 Greater attention should be given to the relationship between the formal
and informal aspects of the organisation, and the study of conflict between the needs of the
individual and the organisation, and between workers and management. (See also the discussion on conflict in Chapter 3.) Structuralism is sometimes associated as part of a broader
human relations approach, which is discussed below.
The main emphasis of the classical writers was on structure and the formal organisation, but
during the 1920s, the years of the Great Depression, greater attention began to be paid to the
social factors at work and to the behaviour of employees within an organisation – that is, to
human relations.
The Hawthorne experiments
The turning point in the development of the human relations movement (‘behavioural’ and
‘informal’ are alternative headings sometimes given to this approach) came with the famous
experiments at the Hawthorne plant of the Western Electric Company near Chicago, America
(1924–32) and the subsequent publication of the research findings.41 Among the people
who wrote about the Hawthorne experiments was Elton Mayo (1880–1949), who is often
quoted as having been a leader of the researchers. However, there appears to be some doubt
as to the extent to which Mayo was actually involved in conducting the experiments and his
exact contribution to the human relations movement.42
There were four main phases to the Hawthorne experiments:
the illumination experiments;
the relay assembly test room;
the interviewing programme;
the bank wiring observation room.
The illumination experiments
The original investigation was conducted on the lines of the classical approach and was concerned, in typical scientific management style, with the effects of the intensity of lighting
upon the workers’ productivity. The workers were divided into two groups, an experimental
group and a control group. The results of these tests were inconclusive as production in the
experimental group varied with no apparent relationship to the level of lighting, but actually
increased when conditions were made much worse. Production also increased in the control
group although the lighting remained unchanged. The level of production was influenced,
clearly, by factors other than changes in physical conditions of work. This prompted a series
of other experiments investigating factors of worker productivity.
The relay assembly test room
In the relay assembly test room the work was boring and repetitive. It involved assembling
telephone relays by putting together a number of small parts. Six women workers were
transferred from their normal departments to a separate area. The researchers selected two
assemblers who were friends with each other. They then chose three other assemblers and
a layout operator. The experiment was divided into 13 periods during which the workers
were subjected to a series of planned and controlled changes to their conditions of work,
such as hours of work, rest pauses and provision of refreshments. The general environmental
conditions of the test room were similar to those of the normal assembly line.
During the experiment the observer adopted a friendly manner, consulting the workers,
listening to their complaints and keeping them informed of the experiment. Following all
but one of the changes (when operators complained too many breaks made them lose their
work rhythm) there was a continuous increase in the level of production. The researchers
formed the conclusion that the extra attention given to the workers, and the apparent interest in them shown by management, were the main reasons for the higher productivity. This
has become famous as the ‘Hawthorne Effect’.
The interviewing programme
Another significant phase of the experiments was the interviewing programme. The lighting
experiment and the relay assembly test room drew attention to the form of supervision as
a contributory factor to the workers’ level of production. In an attempt to find out more
about the workers’ feelings towards their supervisors and their general conditions of work, a
large interviewing programme was introduced. More than 20,000 interviews were conducted
before the work was ended because of the depression.
Initially, the interviewers approached their task with a set of prepared questions, relating
mainly to how the workers felt about their jobs. However, this method produced only
limited information. The workers regarded a number of the questions as irrelevant; also they
wanted to talk about issues other than just supervision and immediate working conditions.
As a result, the style of interviewing was changed to become more non-directive and openended. There was no set list of questions and the workers were free to talk about any aspect
of their work. The interviewers set out to be friendly and sympathetic. They adopted an
impartial, non-judgemental approach and concentrated on listening.
Using this approach, the interviewers found out far more about the workers’ true feelings
and attitudes. They gained information not just about supervision and working conditions
but also about the company itself, management, work group relations and matters outside
of work such as family life and views on society in general. Many workers appeared to
welcome the opportunity to have someone to talk to about their feelings and problems and
to be able to ‘let off steam’ in a friendly atmosphere. The interviewing programme was
significant in giving an impetus to present-day human resource management and the use of
counselling interviews, and highlighting the need for management to listen to workers’ feelings and problems. Being a good listener is arguably even more important for managers in
today’s work organisations and it is a skill which needs to be encouraged and developed.43
The bank wiring observation room
Another experiment involved the observation of a group of 14 men working in the bank
wiring room. It was noted that the men formed their own informal organisation with subgroups or cliques, and with natural leaders emerging with the consent of the members. The
group developed its own pattern of informal social relations and ‘norms’ of what constituted
‘proper’ behaviour. Despite a financial incentive scheme where the workers could receive
more money the more work produced, the group decided on a level of output well below
the level they were capable of producing.
Group pressures on individual workers were stronger than financial incentives offered by
management. The group believed that if they increased their output, management would
raise the standard level of piece rates. The importance of group ‘norms’ and informal social
relations are discussed in Chapter 8.
The human relations approach has been subjected to severe criticism. The Hawthorne experiments have been criticised, for example, on methodology and on failure of the investigators
to take sufficient account of environmental factors – although much of this criticism is
with the value of hindsight. The human relations writers have been criticised generally for
the adoption of a management perspective, their ‘unitary frame of reference’ and their oversimplified theories.44
Other criticisms of the human relations approach are that it is insufficiently scientific and
that it takes too narrow a view. It ignores the role of the organisation itself in how society
Sex power differential
There are a number of interpretations of the results of the Hawthorne experiments, including the possible implications of the ‘sex power differential’ between the two groups. In the
relay assembly room where output increased, the group was all female, while in the bank
wiring room where output was restricted, the group was all male. The workers in the relay
assembly test room were all young unmarried women. All except one were living at home
with traditional families of immigrant background. In the work environment of the factory
the women had been subjected to frequent contact with male supervisors and therefore
‘the sex power hierarchies in the home and in the factory were congruent’. It is suggested,
therefore, that it was only to be expected that the women agreed readily to participate with
management in the relay assembly test room experiment.45
Importance of the Hawthorne experiments
Whatever the interpretation of the results of the Hawthorne experiments, they did generate
new ideas concerning the importance of work groups and leadership, communications,
output restrictions, motivation and job design. They placed emphasis on the importance of
personnel management and gave impetus to the work of the human relations writers. The
Hawthorne experiments undoubtedly marked a significant step forward in providing further
insight into human behaviour at work and the development of management thinking. The
Hawthorne experiments are regarded as one of the most important of all social science
investigations and are recognised as probably the single most important foundation of the
human relations approach to management and the development of organisational behaviour.
In a review of humane approaches to management, Crainer asserts: ‘The Hawthorne
Studies were important because they showed that views of how managers behaved were a
vital aspect of motivation and improved performance. Also, the research revealed the importance of informal work groups.’46
Humanisation of the work organisation
Whereas supporters of the classical approach sought to increase production by rationalisation
of the work organisation, the human relations movement has led to ideas on increasing
production by humanising the work organisation. The classical approach adopted more of a
managerial perspective, while the human relations approach strove for a greater understanding of people’s psychological and social needs at work as well as improving the process
of management. It is usually regarded as the first major approach to organisation and management to show concern for industrial sociology.
The human relations approach recognised the importance of the informal organisation
which will always be present within the formal structure. This informal organisation will
influence the motivation of employees who will view the organisation for which they work
through the values and attitudes of their colleagues. Their view of the organisation determines their approach to work and the extent of their motivation to work well or otherwise.
Human relations writers demonstrated that people go to work to satisfy a complexity of
needs and not simply for monetary reward. They emphasised the importance of the wider
social needs of individuals and gave recognition to the work organisation as a social organisation and the importance of the group, and group values and norms, in influencing individual behaviour at work. It has been commented that the classical school was concerned
about ‘organisations without people’ and the human relations school about ‘people without
Critical reflection
‘The human relations approach to organisations and management makes all the right
sounds with an emphasis on humane behaviour, considerate management and
recognition of the informal organisation. However, it is more about what people would
like to believe and lacks credibility and substance.’
To what extent do the criticisms and shortcomings of the human relations approach
detract from its potential benefits?
Certainly there were shortcomings in the human relations approach and assumptions which
evolved from such studies as the Hawthorne experiments were not necessarily supported by
empirical evidence. For example, the contention that a satisfied worker is a productive
worker was not always found to be valid. However, the results of the Hawthorne experiments
and the subsequent attention given to the social organisation and to theories of individual
motivation gave rise to the work of those writers in the 1950s and 1960s who adopted a
more psychological orientation. New ideas on management theory arose and a major focus
of concern was the personal adjustment of the individual within the work organisation and
the effects of group relationships and leadership styles. This group of writers is often (and
more correctly) categorised separately under the heading of ‘neo-human relations’. The
works of these writers are examined in more detail in Chapter 7 and Chapter 12 but are summarised broadly here.
The work of Maslow
A major impetus for the neo-human relations approach was the work of Maslow who, in
1943, put forward a theoretical framework of individual personality development and motivation based on a hierarchy of human needs.47 The hierarchy ranges through five levels from,
at the lowest level, physiological needs, through safety needs, love needs and esteem needs,
to the need for self-actualisation at the highest level. Individuals advance up the hierarchy
only as each lower-level need is satisfied. Although Maslow did not originally intend this
need hierarchy to be applied necessarily to the work situation it has, nevertheless, had a
significant impact on management approaches to motivation and the design of work organisation to meet individual needs. The work of Maslow provides a link with the earlier human
relations approach.
Some leading contributors
Among the best-known contributors to the neo-human relations approach are Herzberg and
McGregor. Herzberg isolated two different sets of factors affecting motivation and satisfaction
at work. One set of factors comprises those which, if absent, cause dissatisfaction. These are
‘hygiene’ or ‘maintenance’ factors which are concerned basically with job environment. However, to motivate workers to give of their best, proper attention must be given to a different
set of factors, the ‘motivators’ or ‘growth’ factors. These are concerned with job content.48
McGregor argued that the style of management adopted is a function of the manager’s
attitudes towards human nature and behaviour at work. He put forward two suppositions
called Theory X and Theory Y which are based on popular assumptions about work and
Other major contributors to the neo-human relations approach are Likert, whose work
includes research into different systems of management;50 McClelland, with ideas on achievement motivation;51 and Argyris, who considered the effects of the formal organisation on the
individual and psychological growth in the process of self-actualisation.52 Argyris’ major
contributions include his work on organisational learning and on effective leadership.53
The neo-human relations approach has generated a large amount of writing and research
not only from original propounders but also from others seeking to establish the validity, or
otherwise, of their ideas. This has led to continuing attention being given to such matters as
organisation structuring, group dynamics, job satisfaction, communication and participation, leadership styles and motivation. It has also led to greater attention to the importance
of interpersonal interactions, the causes of conflict and recognition of ‘employee relations’
More recently, attention has been focused on the analysis of organisations as ‘systems’
with a number of interrelated sub-systems. The classical approach emphasised the technical
requirements of the organisation and its needs – ‘organisations without people’; the human
relations approaches emphasised the psychological and social aspects, and the consideration
of human needs – ‘people without organisations’.
The systems approach attempts to reconcile these two earlier approaches and the work
of the formal and the informal writers. Attention is focused on the total work organisation
and the interrelationships of structure and behaviour, and the range of variables within the
organisation. This approach can be contrasted with a view of the organisation as separate
parts. The systems approach encourages managers to view the organisation both as a whole
and as part of a larger environment. The idea is that any part of an organisation’s activities
affects all other parts.
Systems theory
Systems theory is not new and has been used in the natural and physical sciences for a
number of years. One of the founders of this approach was the biologist Ludwig von Bertalanffy
who used the term ‘systems theory’ in an article published in 1951 and who is generally
credited with having developed the outline of General Systems Theory.54 The systems
approach to organisation has arisen, at least in part, therefore, from the work of biologists,
and Miller and Rice have likened the commercial and industrial organisation to the biological organism.55
Using a General Systems Theory (GST) approach, Boulding classified nine levels of systems
of increasing complexity according to the state of development and knowledge about each
level.56 Organisations are complex social systems and are more open to change than lowerlevel simple dynamic or cybernetic systems. Boulding felt there were large gaps in both
theoretical and empirical knowledge of the human level and the social organisations level of
systems, although some progress has now been made with recent theories of organisational
The business organisation as an open system
The business organisation is an open system. There is continual interaction with the broader
external environment of which it is part. The systems approach views the organisation within
its total environment and emphasises the importance of multiple channels of interaction.
Criticisms of earlier approaches to organisation are based in part on the attempt to study the
activities and problems of the organisation solely in terms of the internal environment. The
view of the organisation as an open system is examined in Chapter 3.
The systems approach views the organisation as a whole and involves the study of the organisation in terms of the relationship between technical and social variables within the system.
Changes in one part, technical or social, will affect other parts and thus the whole system.
Longwall coal-mining study
The idea of socio-technical systems arose from the work of Trist and others, of the Tavistock
Institute of Human Relations, in their study of the effects of changing technology in the coalmining industry in the 1940s.57 The increasing use of mechanisation and the introduction of
coal-cutters and mechanical conveyors enabled coal to be extracted on a ‘longwall’ method.
Shift working was introduced, with each shift specialising in one stage of the operation –
preparation, cutting or loading. However, the new method meant a change in the previous
system of working where a small, self-selecting group of miners worked together, as an independent team, on one part of the coalface – the ‘single place’ or ‘shortwall’ method.
Technological change had brought about changes in the social groupings of the miners.
It disrupted the integration of small groups and the psychological and sociological properties of the old method of working. There was a lack of co-operation between different shifts
and within each shift, an increase in absenteeism, scapegoating and signs of greater social
stress. The ‘longwall’ method was socially disruptive and did not prove as economically
efficient as it could have been with the new technology.
The researchers saw the need for a socio-technical approach in which an appropriate
social system could be developed in keeping with the new technical system. The result was
the ‘composite longwall’ method with more responsibility to the team as a whole and shifts
carrying out composite tasks, the reintroduction of multiskilled roles and a reduction in
specialisation. The composite method was psychologically and socially more rewarding and
economically more efficient than the ‘longwall’ method.
The socio-technical system
The concept of the organisation as a ‘socio-technical’ system directs attention to the transformation or conversion process itself, to the series of activities through which the organisation attempts to achieve its objectives. The socio-technical system is concerned with the
interactions between the psychological and social factors and the needs and demands of the
human part of the organisation, and its structural and technological requirements.
Recognition of the socio-technical approach is of particular importance today. People
must be considered as at least an equal priority along with investment in technology. For
example, Lane et al. point out that major technological change has brought about dramatic
changes in worker behaviour and requirements. It is people who unlock the benefits and
opportunities of information communication technology.58
Technology determinism
The concept of socio-technical systems provides a link between the systems approach and
a sub-division, sometimes adopted – the technology approach. Writers under the technology
heading attempt to restrict generalisations about organisations and management and
emphasise the effects of varying technologies on organisation structure, work groups and
individual performance and job satisfaction. This is in contrast with the socio-technical
approach which did not regard technology, per se, as a determinant of behaviour.
Under the heading of the technology approach could be included the work of such
writers as Walker and Guest (effects of the assembly line production method on employee
behaviour);59 Sayles (relationship between technology and the nature of work groups);60 and
Blauner (problems of ‘alienation’ in relation to different work technologies).61 Chapter 16
examines technology and organisations.
The classical approach suggested one best form of structure and placed emphasis on general
sets of principles while the human relations approach gave little attention at all to structure. In contrast the contingency approach showed renewed concern with the importance
of structure as a significant influence on organisational performance. The contingency
approach, which can be seen as an extension of the systems approach, highlights possible
means of differentiating among alternative forms of organisation structures and systems of
management. There is no one optimum state. For example, the structure of the organisation
and its ‘success’ are dependent, that is contingent upon, the nature of tasks with which it is
designed to deal and the nature of environmental influences.
The most appropriate structure and system of management is therefore dependent upon
the contingencies of the situation for each particular organisation. The contingency approach
implies that organisation theory should not seek to suggest one best way to structure or
manage organisations but should provide insights into the situational and contextual factors
which influence management decisions. Contingency models of organisation and management are discussed in Chapter 15.
A summary of management theory and some links with other chapters is set out in Figure 2.3.
The four-fold framework of classical, human relations, systems and contingency approaches
provides a helpful, although rather simplistic, categorisation. The study of organisations, their
structure and management is a broad field of inquiry. Depending on the views and preferences of the writer, other possible main approaches include decision-making and social action.
The systems approach involves the isolation of those functions most directly concerned with
the achievement of objectives and the identification of main decision areas or sub-systems.
Viewing the organisation as a system emphasises the need for good information and channels of communication in order to assist effective decision-making in the organisation.
Recognition of the need for decision-making and the attainment of goals draws attention to
a sub-division of the systems approach, or a separate category, that of the decision-making
(decision theory) approach. Here the focus of attention is on managerial decision-making
and how organisations process and use information in making decisions.
Successful management lies in responding to internal and external change. This involves
the clarification of objectives, the specification of problems and the search for and implementation of solutions. The organisation is seen as an information-processing network
with numerous decision points. An understanding of how decisions are made helps in
understanding behaviour in the organisation. Decision-making writers seek to explain the
mechanisms by which conflict is resolved and choices are made.
Concept map of management theory
Source: Copyright © 2008 The Virtual Learning Materials Workshop. Reproduced with permission.
Figure 2.3
Some leading writers
Leading writers on the decision-making approach include Barnard, Simon and Cyert and March.
The scope of the decision-making approach, however, is wide and it is possible to identify
contributions from engineers, mathematicians and operational research specialists in addition to the work of economists, psychologists and writers on management and organisation.
Barnard stressed the need for co-operative action in organisations. He believed that people’s
ability to communicate, and their commitment and contribution to the achievement of
a common purpose, were necessary for the existence of a co-operative system.62 These ideas
were developed further by Simon. He sees management as meaning decision-making and his
concern is with how decisions are made and how decision-making can be improved. Simon
is critical of the implication of man as completely rational and proposes a model of ‘administrative man’ who, unlike ‘economic man’, ‘satisfices’ rather than maximises. Administrative
decision-making is the achievement of satisfactory rather than optimal results in solving
Economic models of decision-making, based on the assumption of rational behaviour in
choosing from known alternatives in order to maximise objectives, can be contrasted with
behavioural models based not so much on maximisation of objectives as on short-term
expediency where a choice is made to avoid conflict and to stay within limiting constraints.
Managers are more concerned with avoiding uncertainties than with the prediction of
Social action represents a contribution from sociologists to the study of organisations. Social
action writers attempt to view the organisation from the standpoint of individual members
(actors) who will each have their own goals and interpretation of their work situation in
terms of the satisfaction sought and the meaning that work has for them. The goals of the
individual, and the means selected and actions taken to achieve these goals, are affected
by the individual’s perception of the situation. Social action looks to the individual’s own
definition of the situation as a basis for explaining behaviour. Conflict of interests is seen as
normal behaviour and part of organisational life.
According to Silverman, ‘The action approach . . . does not, in itself, provide a theory of
organisations. It is instead best understood as a method of analysing social relations within
organisations.’ 65
Criticisms of earlier approaches
A main thrust of social action is the criticism of earlier approaches to organisation and management and of what is claimed to be their failure to provide a satisfactory basis for the explanation or prediction of individual behaviour. For example, criticism is directed at approaches
which focused on the goals and needs of the organisation rather than on considerations of the
effectiveness of an organisation in meeting the needs of its individual members.
The human relations approaches have been criticised because of their focus on generalised
theories of good management, group psychology and the suggestion of needs common to
all individuals at work. The technology approach has been criticised for attributing feelings
of alienation to the nature of technology and the status of work groups rather than an
analysis which focused on concern for the individual’s expectations of, and reactions to,
work. The systems approach has been criticised for failure to examine the orientation of
individual members to the organisation, the different expectations people have of their work
or ways in which the environment influences expectations of work.
Unitary or pluralistic view
Important contributors to a social action approach include Goldthorpe (industrial attitudes
and behaviour patterns of manual workers)66 and Fox. In a research paper written for the
Royal Commission on Trade Unions and Employers’ Associations (the Donovan Report),
Fox suggests two major ways of perceiving an industrial organisation – a ‘unitary’ approach
and a ‘pluralistic’ approach.67
With the unitary approach the organisation is viewed as a team with a common source
of loyalty, one focus of effort and one accepted leader. The pluralistic approach views the
organisation as made up of competing sub-groups with their own loyalties, goals and leaders.
These competing sub-groups are almost certain to come into conflict. The unitary and pluralistic perspectives of the organisation are also referred to in Chapter 3 and Chapter 13.
Action theory
A theory of human behaviour from an ‘action approach’ is presented by Bowey.68 She suggests
that action theory, systems theory and contingency theory are not necessarily incompatible
approaches to the understanding of behaviour in organisations. It would be possible to take
the best parts of the different approaches and combine them into a theory that would model
empirical behaviour and also facilitate the analysis of large numbers of people in organisations. Bowey goes on to present such a theory as a particular form of an action theory approach.
According to Bowey, action theory is not capable of dealing with the analysis of the behaviour
of a large number of people in organisations. Her theory is based, therefore, on three essential
principles of action theory, augmented by four additional concepts taken from systems theory.
The three essential principles of action theory can be summarised as below:
Sociology is concerned not just with behaviour but with ‘meaningful action’.
Particular meanings persist through reaffirmation in actions.
Actions can also lead to changes in meanings.
Bowey suggests that these three principles apply mainly to explanations of individual, or
small-scale, behaviour. She gives four additional concepts, taken from systems theory, on
which analysis of large-scale behaviour can be based. These concepts are redefined in accordance with an action approach.
Role. This is needed for the analysis of behaviour in organisations. It explains the similar
action of different people in similar situations within the organisation and the expectations
held by other people.
Relationships. This is needed to explain the patterns of interaction among people and the
behaviours displayed towards one another.
Structure. The relationships among members of an organisation give rise to patterns
of action which can be identified as a ‘transitory social structure’. The social factors, and
non-social factors such as payment systems, methods of production and physical layout,
together form the behavioural structure.
Process. Human behaviour can be analysed in terms of processes, defined as ‘continuous
interdependent sequences of actions’. The concept of process is necessary to account for
the manner in which organisations exhibit changes in structure.
The three principles of action theory, together with the four additional concepts from
systems theory, provide an action approach to the analysis of behaviour in organisations.
Bowey goes on to illustrate her theory with case studies of five different types of organisations, all in the restaurant industry.
We can now see that within the broad four-fold classification of classical, human relations,
systems and contingency approaches it is possible to identify a number of other approaches
or at least sub-divisions of approaches, although there is no consensus on the categorisation
of these different approaches or on the identification of the various contributors to one
particular approach. So far we have established a possible nine-fold classification: classical
(including scientific management); bureaucracy; human relations; neo-human relations;
systems; technology; contingency; decision-making; and social action – and if structuralism
is included, we have a ten-fold classification. This classification could be extended still
further. For example, another more recent categorisation sometimes identified as a separate
approach is management science – with emphasis on quantitative analysis, mathematical
models, operational research and computer technology (see Figure 2.4).
Figure 2.4
An outline of developments of approaches to organisation and management
The work of contemporary writers discussed above together with the achievements of practitioners such as Alfred P. Sloan Jr (1875–1966, Chief Executive and Honorary Chairman of
General Motors) gave rise to the so-called ‘modern organisation’.69 With the development of
the information and technological age a more recent view of organisations and management
is the idea of postmodernism. In the 1990s, writers such as Clegg described the postmodern
organisation in terms of the influence of technological determinism, structural flexibility,
premised on niches, multiskilled jobs marked by a lack of demarcation, and more complex
employment relationships including subcontracting and networking.70
Postmodernism rejects a rational systems approach to our understanding of organisations and management and to accepted explanations of society and behaviour. Highly
flexible, free-flowing and fluid structures with the ability to change quickly to meet present
demands form the basis of the new organisation. For example, Watson suggests that the
modernism inherent in the systems-control approach to understanding work organisations
and their management is naïve and unrealistic. The possibility of any kind of complete
and coherent body of management knowledge has increasingly been brought into
To enable us to move toward a more realistic or pragmatically reasonable way of ‘framing’ work
organisation and its management, a shift has first to be made in our deeper assumptions about the
social world. These are the modernist assumptions which inevitably underpin the whole edifice of
work organisation and management thinking.71
By contrast, postmodernism places greater attention on the use of language and attempts
to portray a particular set of assumptions or versions of the ‘truth’. Watson defines postmodernism as:
A way of looking at the world that rejects attempts to build systematic (or ‘foundationalist’) explanations of history and society and which, instead, concentrates on the ways in which human beings
‘invent’ their words, especially through the use of language or ‘discourse’.72
A generalised sociological concept
The idea of postmodernism is, however, not easy to explain fully in clear and simple terms.
It is arguably more of a generalised sociological concept rather than a specific approach to
organisation and management. There is even some discussion of two connotations, and
theories or philosophies of the concept depending on whether the term is hyphenated or
not.73 Perhaps understandably, therefore, the concept of postmodernism appears to have
little interest or appeal to the practical manager.
Indeed Watson, for example, questions the value of labelling more flexible forms of
bureaucratic structure and culture as postmodern or post-bureaucratic and differentiating
these from the modernist bureaucratic organisation.
There is no postmodern or post-bureaucratic organisational form available to us that is essentially
different from the modernist bureaucratic organisation. We are indeed seeing different mixes of direct
and indirect management control attempts as the world changes. But the world was always changing.
Probably from the very beginning of industrialisation there has been a mixing of direct and indirect
controls with emphases in one direction and then the other being made at different times.74
Nevertheless, postmodernist organisation can arguably be seen as a healthy challenge
to more traditional approaches. It puts forward alternative interpretations of rationality,
credibility and ambiguity, and a thoughtful critical perspective on disorders in work organisations, and reminds us of the complexities in our understanding of management and
organisational behaviour.
Critical reflection
‘The idea of postmodernist organisation can be likened to the “Emperor’s new clothes”.
In reality it is too theoretical and too vague, and lacks any real adaptive value for the
practical manager.’
How would you attempt to challenge this assertion? What is your own opinion of
The different possible categorisations are not necessarily a bad thing; they illustrate the discursive and complex nature of management. The possible sub-divisions and cross-groupings
help illustrate the many factors relevant to the study and practice of management and
organisational behaviour. Discussion on the various categorisations of approaches and the
identification of individual writers within a particular approach can provide a useful insight
into the subject.
Positive advantages
Whatever form of categorisation is adopted, the division of writers on organisation and
management into various approaches offers a number of positive advantages.
It is helpful to students in the arrangement and study of their material.
It provides a setting in which to view the field of management and to consider the
contribution of individual writers.
It traces the major lines of argument developed by writers seeking to advise practising
managers on how they might improve performance.
It provides a framework in which the principles enunciated can be set and against which
comparisons with management practice can be made.
It helps in organisational analysis and in the identification of problem areas. For
example, is the problem one of structure, of human relations or of the socio-technical
It enables the manager to take from the different approaches those ideas which best
suit the particular requirements of the job. For example, in dealing with a problem of
structure, the ideas of the classical writers or of contingency theory might be adopted.
When there is a problem relating to human resource management, ideas from the human
relations movement might be of most value. If the problem is one of environmental
influence, insights from the systems approach might prove most helpful. For problems of
a more quantitative nature, ideas from the decision-making approach or from management science might be applicable.
Caveats to be noted
There are, however, a number of important caveats that should be noted.
The various approaches represent a progression of ideas, each building on from the
other and adding to it. Together they provide a pattern of complementary studies into the
development of management thinking. The different approaches are not in competition
with each other and no one approach should be viewed as if it were the only approach,
replacing or superseding earlier contributions. Many ideas of earlier writers are still of
relevance today and of continuing importance in modern management practice.
Any categorisation of individual writers into specific approaches is inevitably somewhat
arbitrary and not all writers can be neatly arranged in this manner. This is only to be
expected. Such writers are expounding their current thoughts and ideas in keeping with
the continual development of management theory and changes in management practice.
The comment made about some management writers that they are saying different things
at different times might therefore be taken more as a compliment than as a criticism.
Even when there is agreement on the nature of the contribution from different writers, the
actual division into varying approaches may take a number of forms. In other words, while
there might be acceptance of the need for a framework, there is no agreement on its shape.
Different authors have adopted different formats in which to set out the developments in
management thinking.
Some of the literature categorises management thinkers into divisions called ‘schools’.
The use of this term suggests a clarity of distinction between each division and a uniformity of beliefs within each division. This is perhaps an exaggeration. The distinction
between these so-called schools is not clear-cut and there is not necessarily a consistency
of thinking among the various contributors in each division. The term ‘approaches’ to
management is more indicative of the obscure lines between the different categorisations
and, paradoxically, it is the suggestion of vagueness that, arguably, makes it a more appropriate term to use.
Of course, management theories have often been the subject of discourse and criticism. Some
critics see organisational philosophies as management fads that will be replaced by new ones
as other theories are proposed. That may well be the case, but it is good for management
theories to evolve, because organisations change, the environment changes, and as a result,
management practices and techniques change . . . Theories provide us with valuable insights
into how we can be more understanding, influential and ultimately more successful in managing
organisations and the turbulent dynamic environments in which they operate . . . you of course,
may have a different view!
Jacqueline McLean75
The importance of cultural contexts
A major criticism of the attempt to define generalised models of management theory is the
assumption of national culture. In a review of management theory and practice, Heller
contrasts British and American thinking with methods employed by the Japanese. In the
1960s, Western managements showed a total lack of curiosity about competition from
Japan; British and European managers were still obsessed by the American example. The
Japanese built hugely on what they had borrowed from the USA. However, the Japanese also
practised and perfected what management scientists often only preached.76
Although British management has failed to live up to Japanese standards, professional
standards among managers in Britain have improved greatly over the past 25 years. The
potential of a widening Europe and the Japanese penchant for locating more plants in
Britain provide the best reasons for brighter prospects.
Schneider and Barsoux draw attention to how the different theories on how to organise all
reflect societal concerns of the times as well as the cultural backgrounds of the individuals.
Different approaches reflect different cultural assumptions regarding, for example, human
nature and the importance of task and relationships.77
Cheng, Sculli and Chan also question the universality of theories of management and
organisational behaviour on the grounds that they have not adequately addressed the factor
of culture. ‘Traditionally, the greatest aspiration of researchers is to discover objective, universalistic principles of behaviour. The tacit assumption behind this is that these principles
may be discovered without reference to cultural contexts.’ They conclude that while there
may be some universality to organisation structures, for example the need for some form of
hierarchy whatever its shape may be, different national cultures frequently give those structures different meanings.78
It might arguably be that the study of organisations, their structure and management is
moving towards a more scientific approach. Management science can assist managers in
the analysis of complex problems that are subject to quantitative constraints and in the
optimisation of decisions in such problems. It may also assist in the establishment of broad
It is obvious from even a cursory glance at the history of management science that science and technology are considered to be key instruments in solving workplace problems and in controlling workplaces
. . . While Taylorist scientific management may have its academic critics, management science is thriving. It is itself a large business, providing employment for management consultants whose sole concern
is solving workplace problems of other corporations.79
Balance between philosophy and science
Miner, however, suggests that although the degree of commitment to the scientific value
system is increasing, as yet there is insufficient research to move the field entirely into
science, completely divorced from philosophy. At present management theory is clearly in
the ‘schools’ phase. As discussed earlier, it is possible to argue over the use of the term
‘schools’. However, whatever terminology is used, and whatever the state of our knowledge,
the message from Miner is clear:
. . . schools of management thought are very much a reality, and the management student who approaches the field without at least a minimal understanding of them does so at some risk.80
Whatever the moves towards a more scientific approach, many operational problems
in organisations relate to the nature of human behaviour and the people–organisation
relationship and do not lend themselves to the application of a scientific answer. For example,
according to Handy:
If there were such a thing as Management Science, presumably there would be scientific laws and rules.
I was to be grievously disappointed. I read endless hypotheses that tried to explain why people and
organisations behaved the way they did but no proof . . . Managing a business, or any organisation, I
came to see was more practical art than applied science.81
Whatever the balance between philosophy and science, a knowledge and understanding
of management theory will help with the complexities of management in modern work
According to Crainer, management is active, not theoretical. But management is nothing
without ideas.
Ideas drive management as surely as the immediate problems which land on managers’ desks or which
arrive via their email. Decisions have to be based on ideas, as well as instinct. Without ideas managers
flit desperately from crisis to crisis. They cannot know where they are going, why they are doing something or what they will achieve, without the fuel of ideas.82
Crainer also suggests that as one idea after another fails to translate into sustainable practice, there is a growing disillusionment with the pedlars of managerial wisdom.
Yet, the desire for instant solutions which tackle all managerial problems in one fell swoop remains
strong . . . Amid the hard sell, the quick fixes and organisational placebos, it is true to say that there is
little that’s original. But, without gurus, managers would lose a rich source of inspiration, information
and controversy.83
Reporting on a 12-year study of the knowledge and use of management concepts in technical organisations, Flores and Utley suggest that a look back at the theories and principles
that have been taught in the past could give an indication of the success of any new approach
and help prepare today’s and tomorrow’s managers for the future.84 And Stern has this to say:
Management thinkers still have a lot to tell us. You don’t have to believe everything they say, but they
may at least offer stimulation; they might provoke senior managers into abandoning complacency and
trying to see problems in a new light.85
There is undoubtedly much scepticism about, and criticism of, management gurus. For
example, in a cynical and provocative feature in The Times, Billen suggests that the tide is
turning against the gurus and their gobbledegook.
In the past two decades, management theory, once rejected in Britain by both management and unions,
has been deliberately imposed on almost every aspect of commercial and public life . . . It would be
a brave new world without such gobbledegook in it but – to use a management theorist’s phrase –
an empowered one, too. Managers would be chosen not for their ability to bandy jargon with their
superiors but for their empathy, pragmatism, experience and decisiveness with their staff.86
Whatever the value of management theory, clearly no single approach to organisation and
management provides all the answers. It is the comparative study of different approaches
which will yield benefits to the manager. There is, of course, no shortage of new ideas on
organisational behaviour and management thinking. To what extent, however, do these
ideas lead to improved organisational performance? Ghoshal et al. suggest that:
There is much truth in the saying that every living practitioner is prisoner to the ideas of a dead
theorist. Immunized by their daily confrontation with the ‘real world’ corporate managers typically
exhibit a healthy distrust of theory that has, in general, served them well.87
There are no definitive or final solutions to the problems of organisations. The nature of
work organisations and the environment in which they operate is becoming increasingly
complex and subject to continual change. However, at least we do understand more about
the dynamics of management and organisational behaviour as a basis for the analysis of
human behaviour in organisations.88 Stern suggests that ‘Management is both science and
art, and the trick of it lies in separating the good ideas from the bad, knowing when to be
scientific and when to be artful.’89
There are, then, many aspects to management. There are no simple solutions, no one best
way to manage. However, the study of organisations, their structure and management is still
important for the manager and remains an indispensable part of the job.
Critical reflection
‘The historical study of different approaches to organisation and management and the
development of organisation theory have no practical relevance for today’s managers.
It is really no more than a luxury for students and the time could be spent better on the
study of more important topic areas.’
How would you present a counter argument?
■ The study of organisational behaviour has to proceed on a broad front. A central part of this study
is the development of management thinking and
what might be termed management theory. In order
to help identify main trends in the development of
organisational behaviour, it is usual to categorise the
work of leading writers into various ‘approaches’
based on their views of organisations, their structure
and management. This provides a simplistic framework on which to direct study and focus attention.
■ The classical writers placed emphasis on purpose
and structure, on the technical requirements of the
organisation, and on the assumption of rational and
logical behaviour. The human relations writers emphasised the importance of the informal organisation
and the psychological and social needs of people at
work. The systems approach focuses attention on
the interactions between technical and social variables. The organisation is seen in continual interaction with the external environment. Contingency
theory highlights possible means of differentiating
between alternative forms of structures and systems of
■ This four-fold categorisation provides a useful
starting point for the identification of main trends
in the development of management thinking. Within
this framework, however, it is possible to identify a
number of other approaches or sub-divisions of approaches. The decision-making approach emphasises
the need for good information and channels of communication. Social action writers attempt to view the
organisation from the position of individual members
who will each have their own interpretation of the
work situation in terms of the satisfaction sought and
the meaning that work has for them.
■ With the development of the information and
technological age the need arises for alternative forms
of corporate structure and systems. A more recent view
is the idea of postmodernism. This rejects a rational systems approach to our understanding of organisations
and management, and to accepted explanations of
society and behaviour. Postmodernism is arguably
more of a generalised sociological concept rather than
a specific approach to organisation and management.
Nevertheless, postmodernist organisation can arguably be seen as a healthy challenge to more traditional
approaches and reminds us of the complexities in our
understanding of management and organisational
■ Whatever form of categorisation is adopted, the division of writers on organisation and management into
various approaches offers a number of advantages. It
helps in organisational analysis and the identification
of problem areas. It enables the manager to take from
the different approaches those ideas that suit best the
particular requirements of the job. There are, however,
a number of caveats that should also be noted, including the significance of cultural contexts.
■ It might be that the study of organisations is
moving towards a more scientific value approach.
However, whatever the balance between philosophy
and science, a knowledge of management theory will
help with the complexities of management in modern
work organisations. There is much scepticism and
criticism of management gurus but the study of organisation theory is an indispensable part of the job.
Ideas are as important to management decisions as
is instinct. It is necessary to view the interrelationships
among the development of theory, behaviour in
organisations and management practice.
1 Assess critically the relevance of scientific management to present-day organisations. Illustrate your answer
with reference to your own organisation.
2 To what extent is there anything positive to be said for bureaucratic structures? Select a large-scale
organisation of your choice and suggest ways in which it displays characteristics of a bureaucracy.
3 What are the main conclusions that can be drawn from the Hawthorne experiments? Discuss critically the
relevance of these experiments for management and organisational behaviour today.
4 Summarise the main features of the neo-human relations approach to organisation and management. How
does it differ from other approaches?
5 Evaluate the application of the systems approach to the analysis of work organisations. Suggest an example
of a work situation in which the systems approach might be appropriate.
6 Contrast approaches to improving organisational performance based on attention to technical and structural
requirements with those based on concern for psychological and social factors.
7 Explain what is meant by a social action approach. Assess critically the practical relevance of ‘action theory’.
8 Identify, and outline briefly, major trends in management theory since the beginning of this century. Debate
critically the extent to which the ideas of management gurus have any practical relevance or benefits for
The story of the middleman
Stefan Stern
Reports of the death of middle management were
not merely exaggerated, they were wrong. Yes,
organisations have de-layered. Yes, the current
‘white-collar’ recession is having a big impact on the
middle tier of professionals within businesses. But
middle managers have not been abolished. They are
still here, hard at work.
That is one reason that the book The Truth About
Middle Managers by Paul Osterman is welcome. It
attempts to take a serious look at the reality of
middle management. The author has made a sincere
attempt to shed more light on this under-analysed
cadre of managers. Sincere but also, regrettably,
flawed. The author defines his terms clearly enough.
‘Senior management makes the decisions that set
the organisation’s course, whereas middle
management interprets and executes those
decisions,’ he writes. Based on his research,
Osterman tests some of the common assumptions
made about middle managers.
It is not true, he argues, that middle managers are
sinking into a pit of despair as their numbers fall and
job insecurity rises. In fact, in the US at any rate, there
are more managers than ever. They are ‘less secure,
but more in demand’. Nor is it true, Osterman asserts,
that middle managers are alienated from their work
and have little commitment to what they do. ‘Middle
managers are the glue that holds organisations
together,’ he writes.
Middle managers very much enjoy what they do and
have what I term a strong craft commitment to their
work. But it is also true they have lost their loyalty to
their firm. As organisations have divested themselves
of managerial levels, core managerial responsibilities
have been pushed down to middle management.
Middle managers are now the negotiators between
different interests and are making key decisions about
That is certainly true, as is his other observation,
In the past the nature of the firm was stable,
whereas today it is constantly being reshaped. The
continuous organisational turmoil that ensues creates
an environment that seems chaotic and out of control
from the perspective of middle management.
So why has he come up with some relatively sunny
A key part of the research for this book involved
in-depth interviews with 50 middle managers from
two separate organisations, a bank and a high-tech
company. But these interviews were conducted in
2004 and 2005. How were your prospects back then?
A lot better than today, we can assume. Second,
who were these managers? Osterman explains:
‘The middle managers were chosen randomly from
a list provided by the human resources staff in
each organisation.’ Did HR allow any malcontents,
whingers and otherwise less-than-upbeat people
to be interviewed? It seems unlikely. So we must be
sceptical – insecurity is real, not imagined, and
disillusionment is widespread. As one of his witnesses
said, even then, ‘I think if you asked people if they had
a choice today whether they’d take a job or take the
[redundancy] package, you’d get a fair number of
people whose hands would be raised for the package
– mine included.’
Source: Stern, S. ‘The Story of the Middleman’, Financial Times,
25 February 2009. Copyright © 2009 The Financial Times Limited,
reproduced with permission.
Discussion questions
1 This article describes some research into
management and organisational behaviour.
Explain which of the approaches to organisational
behaviour outlined in the chapter you think
Osterman takes, and why.
2 What does the article tell us about the problems
associated with researching organisational
behaviour? How can such problems be minimised
or avoided?
a Answer each question ‘mostly agree’ or ‘mostly disagree’. Assume that you are trying to learn something
about yourself. Do not assume that your answer will be shown to a prospective employer.
Mostly agree
Mostly disagree
1 I value stability in my job.
2 I like a predictable organisation.
3 The best job for me would be one in which the future is uncertain.
4 The army would be a nice place to work.
5 Rules, policies and procedures tend to frustrate me.
6 I would enjoy working for a company that employed 85,000 people
7 Being self-employed would involve more risk than I’m willing to take.
8 Before accepting a job, I would like to see an exact job description.
9 I would prefer a job as a freelance house painter to one as a clerk for
the Department of Motor Vehicles.
10 Seniority should be as important as performance in determining pay
increases and promotion.
11 It would give me a feeling of pride to work for the largest and most
successful company in its field.
12 Given a choice, I would prefer to make £30,000 per year as a
vice-president in a small company to £40,000 as a staff specialist in a
large company.
13 I would regard wearing an employee badge with a number on it as a
degrading experience.
14 Parking spaces in a company lot should be assigned on the basis of
job level.
15 If an accountant works for a large organisation, he or she cannot be a
true professional.
16 Before accepting a job (given a choice), I would want to make sure that
the company had a very fine programme of employee benefits.
17 A company will probably not be successful unless it establishes a clear
set of rules and procedures.
18 Regular working hours and holidays are more important to me than
finding thrills on the job.
19 You should respect people according to their rank.
20 Rules are meant to be broken.
Source: Adapted from DuBrin, A. J. Human Relations: A Job-Oriented Approach, Reston Publishing/Prentice Hall (1978), pp. 296–7.
Copyright © 1978. Reproduced with permission from Pearson Education Inc.
b You should then consider and discuss the further information supplied by your tutor.
Completing this exercise should help you to enhance the following skills:
Demonstrate your knowledge and understanding of scientific management techniques.
Write an objective set of instructions for undertaking a simple piece of work.
Using the example from Figure 2.2 as a model, you are required to develop a detailed programme using
scientific management techniques for any two of the following simple domestic tasks:
booking an airline ticket;
cooking a simple meal (for example spaghetti bolognese);
bathing a small child;
rearranging 100 CDs in some form of order, 10 to each shelf;
washing up after a small dinner party;
renewing your passport.
What are the potential upsides and downsides of removing operator discretion in this way?
Explain with supporting reasons those tasks or activities that you believe are particularly suited to a scientific
management approach.
How do you feel about carrying out routine tasks on an ongoing basis over which you are given little personal
Breaking the mould
The growth of the home personal computer (PC)
market is one of the most remarkable success stories of
the last quarter century. If you own a home PC or an
electronic notebook and you live in the United States,
then there is a one in three possibility that it arrived
on your doorstep packed in boxes labelled ‘Dell’. Whilst
Dell has a smaller proportion of the PC market outside
the USA (it is locked in close competition with its
nearest rival, Hewlett-Packard, which overtook Dell to
become the biggest seller of PCs in late 2008) there
remains a strong possibility that your new PC was
assembled in Limerick, Penang or Xiamen. Any of these
is a very long way from the bedroom of a campus
dormitory at the University of Texas at Austin, which is
where Michael Dell began to build and sell computers
directly to customers in 1984 before dropping out of
college to run his business full-time.
Source: Rex Features
Dell Computers: the world at your fingertips
Michael Dell transformed a business run from his bedroom at
university to one of the leading companies in the IT market.
In 1984, building a PC from components was still
a specialised activity, and while some people were able
to assemble their own equipment in order to save
money and get precisely what they wanted, the majority
of domestic customers bought ready-made products
from retailers. The distribution channel for the industry
usually contained five components: supplier (of
components, chips, software etc.), manufacturer,
distributor, retailer and customer. Michael Dell’s
idea was to sell direct, and at the same time allow
customers to have a PC partly tailored to their personal
requirements by choosing options from a list of
components and specifications which he would then
assemble to order. This move eliminated two of the five
elements of the distribution channel (the distributors
and the retailers) leaving only three players: the
suppliers, Dell and the customer.90
The opportunity to develop this new approach
into a successful business was made possible by the
coalescence of three trends: increased levels of
consumer confidence and knowledge about the product
itself; better and faster software which enabled first the
phone-based and then the internet-based ordering
system to run effectively; and finally technological and
manufacturing advances which enabled Dell to lower
the price of a PC to a level where it clearly became good
value for money. Whilst Dell supplied both business
and individual customers, it was in the home PC
market that the approach had particular success. Each
computer was assembled to order, with components
purchased from suppliers as they were required, so
Dell was able to identify and respond to customer
preferences and industry trends very quickly, and
without a significant amount of capital being tied up
in inventory or stock (the value of which would be
declining rapidly as new and better products emerged).
The system had the added advantage that customers
pre-paid for the goods, thus placing Dell on a firm
financial footing from the outset.
While this approach to the manufacture of consumer
goods is by no means unique (the ‘lean manufacturing’
approach is widely used in the car industry for example)
and other players in the IT market adopted it, Dell was
able to make it work more successfully than its
competitors. The basic business model transferred
readily to the internet, where the process of ‘mass
customisation’ can be managed even more effectively
on-line.91 Dell’s growth at the turn of the century took
it worldwide, and it was placed first in a ranking of the
‘Most Admired Companies’ by Fortune magazine in
February 2005.92 Dell has also won accolades for ethical
standards of corporate behaviour.
Not all plain sailing
The brand image which helped put Dell at the top of
Fortune’s list in 2005 depended very heavily on its
ability to pull together both its own efforts and those
of other organisations (i.e. component manufacturers,
transport and logistics organisations, delivery
companies etc.), often in far-flung regions of the world,
to put together a package which offered both reliability
and value for money for its customers. As we have seen,
its original strength was in its ability to cut out the
‘middle man’ and deliver that package quickly and
cheaply. But the IT business is both highly competitive
and a dizzyingly fast-moving environment; and in the
early years of the 21st century Dell had to rebalance
the content of its package. The area where the Dell
operation proved most vulnerable was that of customer
service and technical support. In the more traditional
world of retail outlets, customers were able to discuss
purchases and return faulty equipment or seek support
at a store. Such a network of customer support was
absent from the Dell model.
Initially Dell outsourced customer support (along
with delivery), but as expectations about after-sales
service rose, its call centre support lagged behind these
expectations resulting in some very public criticism,93
not least of which was in the form of a long-running
critical blog by dissatisfied customer and journalist
Jeff Jarvis.94 Dell brought its technical support centres
back in-house; two were based in Canada, but mostly
they were ‘offshored’ (but not ‘outsourced’) to the
Philippines, Malaysia and India, where Dell opened
new Business Centres in 2007.95 It also launched its
own blog96 as a means of capturing and responding to
customer complaints. In July 2006, Dell’s share price
dropped substantially after a profit warning was issued
following the decision to make a major investment in
customer support systems.97 The task then facing Dell’s
management was to persuade investors that the proposed
plan would result in a long-term improvement of the
company’s ability to stay ahead of the game and
ultimately deliver a good return on investment.
Why was this move necessary? To a large extent,
the very success of Dell at the cheaper end of the
market meant that similar low-cost operators ceased
to be a major competitive threat by the end of the
1990s. However, as home computers became big
business for more up-market companies and those
which had previously focused on business customers,
Dell found itself competing directly with the very
companies it had side-stepped in the 1990s: HewlettPackard, Lenovo (the Chinese company which bought
the IBM computer manufacturing arm in 2005) and
even Sony. These organisations were not only able to
provide high-quality, reliable products, but also had
much stronger customer service support. This revealed
a strategic weakness in Dell’s operation and forced it
to raise its game not only in terms of the computing
power it delivers, but also in terms of its after-sales
The soul of Dell
Dell is keen to balance business performance with
responsible operations; the overall general philosophy
is described by the company as ‘ The Soul of Dell’98 and
the Code of Conduct reflects its ambitions to
conduct business the Dell Way – the right way, which
is ‘Winning with Integrity’. Simply put, we want all
members of our team, along with our shareholders,
customers, suppliers and other stakeholders, to understand
that they can believe what we say and trust what we do.99
Feedback from the workforce as well as customers is
clearly critical to the success of Dell, and the workforce
is encouraged to get involved in the process through its
‘ Tell Dell’ system.
There is change happening all across Dell, creating a
revolution in how we interact and drive for business
results. Processes are changing, attitudes are shifting,
objectives are being aligned, careers are being enhanced
and people are listening. Closely. At the core of it is Tell
Dell. The Tell Dell survey program has been continually
refined over the past several years from being a good
informational instrument to its current use as a critical
analytic and diagnostic tool for making Dell a better place
to work and a stronger company. Part of the Winning
Culture philosophy is to engage directly with our
employees, the way we do with our customers. As
managers at Dell, it is critical that we support our
Winning Culture by working to deliver an unbeatable
employee experience each and every day.
Ro Parra and Joe Marengi, Senior Vice
Presidents of Americas.100
Talking to Hyderabad
This case study is being written on a Dell computer.
It was ordered from the front room of a terraced house
in the south of England at about 10pm one March
evening. Within minutes, I had an email from Sunita
at the Hyderabad Customer Experience Centre to say
she would be tracking my order to completion and
giving me updates on its progress. I could look at the
progress it was making by following events on the
website, which told me that the components were on
their way to Limerick, then that the PC had been
assembled, then that it had been dispatched to the
distribution hub where it was joined by the chosen
accessories. I could see when it crossed from Ireland to
the UK and when it had reached the local distribution
centre, and finally Sunita phoned me to announce the
delivery day and time about one week after the order
was placed.
She rang again to ensure that it had arrived and was
operating to my satisfaction. When I mentioned that
the cooling fan seemed rather noisy, she logged a call to
the technical support team (also in India) and I found
myself, phone in one hand, screwdriver in the other,
involved in what can only be described as the
postmodern experience of running a diagnostic test on
my PC, with Sunita’s colleague talking me through the
process of opening the operating unit, dismantling the
fan and checking the nature of the fault. As a result,
a local engineer was dispatched with a replacement
component. Within ten days the whole operation was
complete to both my and Sunita’s satisfaction, and we
said our farewells.
Your tasks
1 Analyse the organisational choices that Dell has made using two of the four main analytical models that are
presented in Figure 2.1. Which approach do you think is more appropriate and why?
2 What are the main organisational challenges which Dell faces in order to ‘conduct business the Dell Way?’
What are the implications for line managers and supervisors of creating a corporate culture based on the
Dell Way?
3 Dell is using technologically sophisticated methods to collect ‘soft’ data about its performance from both
customers (Direct2Dell) and staff (Tell Dell). Evaluate these initiatives, and discuss the value of such
information in relation to ‘hard’ data (such as sales figures, share price etc.) as a management tool.
4 Critically review the concept of postmodernism as a means of understanding the nature of highly diverse (in
terms of geography, technology, organisation, technical specialisation and culture) organisations such as Dell.
Notes and references
1 McGregor, D. The Human Side of Enterprise, Penguin
(1987), p. 6.
2 Miner, J. B. Theories of Organizational Behaviour, Dryden
Press (1980).
3 See, for example, Mullins, L. J. ‘Approaches to
Management’, Management Accounting, vol. 57,
no. 4, April 1979, pp. 15–18, and Mullins, L. J.
‘Some Further Approaches to Management Theory’,
Management Accounting, vol. 58, no. 3, March 1980,
pp. 30–3.
See, for example, George, C. S. The History of Management
Thought, second edition, Prentice Hall (1972).
Shafritz, J. M. Shakespeare on Management, Carol Publishing
Group (1992), p. xi.
For a review of management thinking see, for example,
Sheldrake, J. Management Theory: From Taylorism to
Japanization, International Thomson Business Press (1996).
See also Flores, G. N. and Utley, D. R. ‘Management Concepts
in Use – a 12-Year Perspective’, Engineering Management
Journal, vol. 12, no. 3, September 2000, pp. 11–17.
Skipton, M. D. ‘Management and the Organisation’,
Management Research News, vol. 5, no. 3, 1983, pp. 9–15.
Fayol, H. General and Industrial Management, Pitman
(1949). See also Gray, I. Henri Fayol’s General and Industrial
Management, Pitman (1988).
Urwick, L. Notes on the Theory of Organization, American
Management Association (1952).
Mooney, J. D. and Reiley, A. C. The Principles of
Organization, Harper and Bros (1939); revised by
Mooney, J. D., Harper & Row (1947).
Brech, E. F. L. Organisation: The Framework of Management,
second edition, Longman (1965).
Simon, H. A. Administrative Behaviour, third edition, Free
Press (1976), p. xxii.
Woodward, J. Industrial Organization: Theory and Practice,
second edition, Oxford University Press (1980).
Taylor, F. W. Scientific Management, Harper & Row (1947).
Comprises ‘Shop Management’ (1903), ‘Principles of
Scientific Management’ (1911) and Taylor’s testimony to
the House of Representatives’ Special Committee (1912).
Braverman, H. Labor and Monopoly Capital, Monthly Review
Press (1974).
For a study of employers’ labour relations policies, including
comments on the work of Braverman, see Gospel, H. F.
and Littler, C. R. (eds) Managerial Strategies and Industrial
Relations, Heinemann Educational Books (1983).
Cloke, K. and Goldsmith, J. The End of Management and the
Rise of Organizational Democracy, Jossey-Bass (2002), p. 27.
Rose, M. Industrial Behaviour, Penguin (1978), p. 31. See
also Rose, M. Industrial Behaviour, second edition, Penguin
(1988), ch. 2.
Drucker, P. F. ‘The Coming Rediscovery of Scientific
Management’, The Conference Board Record, vol. 13, June
1976, pp. 23–7; reprinted in Drucker, P. F. Towards the
Next Economics and Other Essays, Heinemann (1981).
Locke, E. A. ‘The Ideas of Frederick W. Taylor: An
Evaluation’, Academy of Management Review, vol. 7, no. 1,
January 1982, pp. 14–24.
For a discussion on ‘Fordism’, see, for example, Fincham,
R. and Rhodes, P. S. The Individual, Work and Organization,
second edition, Weidenfeld and Nicolson (1992).
Hamel, G. The Future of Management, Harvard Business
School Press (2007), p. 13.
Crainer, S. and Dearlove, D. Financial Times Handbook of
Management, second edition, Financial Times Prentice Hall
Stern, S. ‘Guru Guide’, Management Today, October 2001,
pp. 83–4.
Weber, M. The Theory of Social and Economic Organization,
Collier Macmillan (1964).
Blau, P. M. and Scott, W. R. Formal Organizations,
Routledge and Kegan Paul (1966).
27 Stewart, R. The Reality of Management, third edition,
Butterworth-Heinemann (1999).
28 Argyris, C. Integrating the Individual and the Organization,
John Wiley & Sons (1964).
29 Caulkin, S. ‘Faceless Corridors of Power’, Management
Today, January 1988, p. 65.
30 Peters, T. J. and Waterman, R. H. In Search of Excellence,
Harper & Row (1982).
31 Tibballs, G. Business Blunders, Robinson Publishing (1999).
32 Cloke, K. and Goldsmith, J. The End of Management and
the Rise of Organizational Democracy, Jossey-Bass (2002),
pp. 92–4.
33 Ridderstrale, J. ‘Business Moves Beyond Bureaucracy’, in
Pickford, J. (ed.) Financial Times Mastering Management 2.0,
Financial Times Prentice Hall (2001), pp. 217–20.
34 Green, J. ‘Is Bureaucracy Dead? Don’t Be So Sure’, Chartered
Secretary, January 1997, pp. 18–19.
35 See, for example, Waller, P. ‘Bureaucracy Takes New Form’,
Professional Manager, May 1998, p. 6.
36 See Mullins, L. J. Hospitality Management and Organisational
Behaviour, fourth edition, Longman (2001).
37 Stewart, R. The Reality of Management, third edition,
Butterworth-Heinemann (1999).
38 See, for example, Wilson, F. A. Organizational Behaviour:
A Critical Introduction, Oxford University Press (1999).
39 For example, see Etzioni, A. Modern Organizations, Prentice
Hall (1964), p. 41.
40 See, for example, Aktouf, O. ‘Management and Theories
of Organizations in the 1990s: Towards a Critical Radical
Humanism?’, Academy of Management Review, vol. 17,
no. 3, 1992, pp. 407–31.
41 There are many versions of the Hawthorne experiments.
Among the most thorough accounts is Roethlisberger, F. J.
and Dickson, W. J. Management and the Worker, Harvard
University Press (1939). See also Landsberger, H. A.
Hawthorne Revisited, Cornell University Press, Ithaca
42 See, for example, Rose, M. Industrial Behaviour, second
edition, Penguin (1988).
43 See, for example, Buggy, C. ‘Are You Really Listening?’,
Professional Manager, July 2000, pp. 20–2.
44 Silverman, D. The Theory of Organisations, Heinemann
45 Stead, B. A. Women in Management, Prentice Hall (1978),
p. 190.
46 Crainer, S. Key Management Ideas: Thinkers That Changed the
Management World, third edition, Financial Times Prentice
Hall (1998), p. 111.
47 Maslow, A. H. ‘A Theory of Human Motivation’,
Psychological Review, vol. 50, no. 4, July 1943, pp. 370–96.
48 Herzberg, F. W., Mausner, B. and Snyderman, B. B. The
Motivation to Work, second edition, Chapman and Hall
49 McGregor, D. The Human Side of Enterprise, Penguin
50 Likert, R. New Patterns of Management, McGraw-Hill
(1961). See also Likert, R. The Human Organization,
McGraw-Hill (1967); Likert, R. and Likert, J. G.
New Ways of Managing Conflict, McGraw-Hill (1976).
51 McClelland, D. C. Human Motivation, Cambridge
University Press (1988).
52 Argyris, C. Understanding Organizational Behavior, Tavistock
Publications (1960) and Integrating the Individual and the
Organization, Wiley (1964).
53 See, for example, Caulkin, S. ‘Chris Argyris’, Management
Today, October 1997, pp. 58–9.
54 Bertalanffy, L. von ‘Problems of General Systems Theory:
A New Approach to the Unity of Science’, Human Biology,
vol. 23, no. 4, December 1951, pp. 302–12.
55 Miller, E. J. and Rice, A. K. Systems of Organization,
Tavistock Publications (1967).
56 Boulding, K. ‘General Systems Theory – The Skeleton of
Science’, Management Science, vol. 2, no. 3, April 1956,
pp. 197–208.
57 Trist, E. L., Higgin, G. W., Murray, H. and Pollock, A. B.
Organizational Choice, Tavistock Publications (1963).
58 Lane, T., Snow, D. and Labrow, P. ‘Learning to Succeed
with ICT’, The British Journal of Administrative Management,
May/June 2000, pp. 14–15.
59 Walker, C. R. and Guest, R. H. The Man on the Assembly
Line, Harvard University Press (1952). See also Walker, C.
R., Guest, R. H. and Turner, A. N. The Foreman on the
Assembly Line, Harvard University Press (1956).
60 Sayles, L. R. Behaviour of Industrial Work Groups, Wiley
61 Blauner, R. Alienation and Freedom, University of Chicago
Press (1964).
62 Barnard, C. The Functions of the Executive, Oxford
University Press (1938).
63 Simon, H. A. The New Science of Management Decision,
revised edition, Prentice Hall (1977).
64 Cyert, R. M. and March, J. G. A Behavioural Theory of the
Firm, second edition, Blackwell (1992).
65 Silverman, D. The Theory of Organisations, Heinemann
(1970), p. 147.
66 Goldthorpe, J. H., Lockwood, D., Bechhofer, F. and
Platt, J. The Affluent Worker, Cambridge University Press
67 Fox, A. Industrial Sociology and Industrial Relations, HMSO
68 Bowey, A. M. The Sociology of Organisations, Hodder &
Stoughton (1976).
69 For further information see Crainer, S. Key Management
Ideas: Thinkers That Changed the Management World, third
edition, Financial Times Prentice Hall (1998).
70 Clegg, S. R. Modern Organizations: Organization Studies in
the Postmodern World, Sage (1990).
71 Watson, T. J. Organising and Managing Work, Financial
Times Prentice Hall (2002), p. 51.
72 Ibid., p. 50.
73 See, for example, Legge, K. Human Resource Management:
Rhetorics and Realities, Macmillan Business (1995).
74 Watson, T. J. Organising and Managing Work, Financial
Times Prentice Hall (2002), p. 254.
75 McLean, J. ‘Management Techniques and Theories’,
Manager, The British Journal of Administrative Management,
August/September 2005, p. 17.
76 Heller, R. ‘The Change Managers’, Management Today: 25th
Anniversary Issue, 1991, pp. 12–16.
77 Schneider, S. C. and Barsoux, J. Managing Across Cultures,
second edition, Financial Times Prentice Hall (2003).
78 Cheng, T., Sculli, D. and Chan, F. ‘Relationship
Dominance – Rethinking Management Theories from the
Perspective of Methodological Relationalism’, Journal of
Managerial Psychology, vol. 16, no. 2, 2001, pp. 97–105.
79 Bradley, H., Erickson, M., Stephenson, C. and Williams, S.
Myths at Work, Polity Press (2000), pp. 96–7.
80 Miner, J. B. Management Theory, Macmillan (1971), p. 145.
See also Miner, J. B. Theories of Organizational Behaviour,
Holt, Rinehart and Winston (1980), ch. 1.
81 Handy, C. Myself and Other More Important Matters,
William Heinemann (2006), p. 61.
82 Crainer, S. Key Management Ideas: Thinkers That Changed
the Management World, third edition, Financial Times
Prentice Hall (1998), p. xi.
83 Crainer, S. ‘The Rise of Guru Scepticism’, Management
Today, March 1997, pp. 48–52.
84 Flores, G. N. and Utley, D. R. ‘Management Concepts in
Use – a 12-year Perspective’, Engineering Management
Journal, vol. 12, no. 3, September 2000, pp. 11–17.
85 Stern, S. ‘Guru Guide’, Management Today, October 2001,
p. 87.
86 Billen, A. ‘Goodbye to Glib Gurus and Their
Gobbledegook’, The Times, 9 March 2009.
87 Ghoshal, S., Barlett, C. A. and Moran, P. ‘Value Creation:
The New Millennium Management Manifesto’, in
Chowdhury, S. (ed.) Management 21C, Financial Times
Prentice Hall (2000), p. 122.
88 See, for example, Klein, S. M. and Ritti, R. R.
Understanding Organizational Behavior, second edition,
Kent Publishing (1984), ch. 1.
89 Stern, S. ‘ The Next Big Thing’, Management Today,
April 2007, p. 50.
90 Kraemer, K. Dedrick, J. and Yamashiro, S. ‘Refining and
Extending the Business Model with Information
Technology: Dell Computer Corporation’, The Information
Society, vol. 16, 2000, pp. 5–21.
91 Visit any of the Dell direct order websites to see how this
operates; in the UK the address is www.dell.co.uk. The
corporate address with wider company information is at
92 Fortune, 22 February 2005.
93 Lee, L. ‘Dell: Facing Up to Past Mistakes’, Business Week
On-line, 19 June 2006, www.businessweek.com
(accessed 28 July 2009).
94 Jeff Jarvis’ blog is at www.buzzmachine.com.
95 Dell Corporate website, Community pages (accessed
28 July 2009).
96 Now called Direct2Dell and accessible via
97 Allison, K. and Nuttall, C. ‘Dell Shares Tumble After
Warning Over Sales’, FT on-line, 21 July 2006.
98 ‘The Soul of Dell’ can be found at the Dell website,
(accessed 28 July 2009).
99 Dell’s ‘Code of Conduct’, also at the Dell website
(accessed 28 July 2009).
100 ‘Tell Dell’ is described in the recruitment pages of the Dell
website (accessed 28 July 2009).
Now that you have finished reading this chapter, visit MyManagementLab at
www.pearsoned.co.uk/mymanagementlab to find more learning resources
to help you make the most of your studies and get a better grade.
Applications of organisational behaviour and the process of
management take place not in a vacuum but within the context
of a particular organisational setting and environment. The
organisation is a complex social system and is the sum of many
interrelated variables. It is important to understand the main
features which affect the structure, management and functioning
of the work organisation. The manager also needs to recognise
the role of the organisation within the broader social context and
in influencing the lives of its members.
Learning outcomes
After completing this chapter you should be able to:
explain the perspectives and basic components of an organisation;
distinguish alternative types and classifications of organisations;
examine the organisation in terms of an open systems model;
explain the nature and importance of the informal organisation;
review the sources and impact of organisational conflict;
explore the nature and impact of stress at work;
assess the importance of the work/life balance and the organisation
of the future.
Critical reflection
‘All organisations have their unique culture and working environment and no
two organisations are the same. Managers are concerned only with what
takes place in their own organisation so generalised models or theories of
organisation serve no useful purpose.’
How would you attempt to challenge this assertion?
Organisations in one form or another have always been an integral feature of human civilisation. Although the origins of modern organisations can be traced back thousands of years,
they evolve continually and the organisations of today are clearly very different. The beginning
of the 20th century with the emergence of large corporate entities, and the work of writers
such as Frederick Taylor on scientific management and Max Weber on bureaucracy, drew
attention to the importance of the work organisation.1
All organisations have some function to perform. They exist in order to achieve objectives
and to provide satisfaction for their members. Organisations enable objectives to be achieved
that could not be achieved by the efforts of individuals on their own. It must be remembered
that organisations are structures of people. Through co-operative action, members of an
organisation can provide a synergistic effect. Organisations are an integral part of society
involving both public and private sectors and including charities and the voluntary sector.
There are, then, many different types of organisations that are set up to serve a number of
purposes and to meet a variety of needs. Organisations come in all forms, shapes and sizes. Not
only are there many different types of organisations, there is some suggestion that cultural
differences in countries can reflect different conceptions of what actually is an organisation.2
Common factors in organisations
All organisations have their own individual character, culture and sense of identity and differ
in their attributes, processes and methods of working. However, despite the differences, there
are at least three common factors in any organisation:
It is the interaction of people in order to achieve objectives that forms the basis of
an organisation. Some form of structure is needed by which people’s interactions and efforts
are channelled and co-ordinated. We can add to these a fourth factor:
Some process of management is required by which the activities of the organisation, and
the efforts of its members, are directed and controlled towards the pursuit of objectives.
The actual effectiveness of the organisation will be dependent upon the quality of its
people, its objectives and structure, and the resources available to it. The interrelationship
of people, objectives and structure, together with the efficient use of available non-human
and human resources, will determine the success or failure of the organisation and the extent
of its effectiveness (see Figure 3.1).
Among the variety of approaches to organisation theory, Watson refers to one which
stresses three common aspects of organisational life:
the importance of the creative, critical and situation-defining characteristics of the individuals who make up the organisation;
the varieties of interests and goals among individuals and groups in the organisation,
and the emphasis on conflict and political behaviour; and
the interactions between the organisation and the general environment, and recognition
that organisations make their environment as much as it makes them.3
Differences in applications
Despite these common factors, the structure, management and functioning of these organisations will all vary because of differences in the nature and type of the organisation, their
Figure 3.1
Common factors in organisations
respective goals and objectives, and the behaviour of the people who work in them. Let us now
consider just two types of organisations towards the opposite ends of a possible continuum
– say a maximum security prison and a university largely concerned with academic research
– as a framework on which to focus attention. We can appreciate readily that although both
types of organisation will be concerned with the basic activities of organisation and management, their goals and objectives, actual procedures and methods of operation, structure,
systems and style of management, and orientation and behaviour of members will differ
considerably (see Figure 3.2).
The formal organisation can be distinguished from the informal organisation (which is discussed later in this chapter) – the difference between them is a feature of the degree to which
they are structured.
A formal organisation has been defined by Schein as:
the planned co-ordination of the activities of a number of people for the achievement of some common,
explicit purpose or goal, through division of labor and function, and through a hierarchy of authority
and responsibility.4
An organisation is a pattern of roles and a blueprint for their co-ordination. The object of
co-ordination is activities, not people. The formal organisation can exist independently of
the membership of particular individuals.
Figure 3.2
The nature of organisations
The formal organisation is:
deliberately planned and created;
concerned with the co-ordination of activities;
hierarchically structured with stated objectives; and
based on certain principles such as the specification of tasks, and defined relationships of
authority and responsibility.
An organisation chart may give a representation of the formal structure. Other examples of
the formal organisation are rules and regulations, policy manuals, standing orders and job
descriptions (see Figure 3.9 on p. 95).
The organisation as a coalition
The formal organisation can be seen as a coalition of individuals with a number of subcoalitions.5 Membership of the coalition will be dependent upon the type of organisation
but could include, for example, managers, administrators, workers, elected representatives,
appointed officials, volunteers, shareholders, suppliers, trade union officials, leaders of
interest groups, customers, clients, patrons, donors, specialists, consultants and representatives
of external agencies.
It is difficult to define specific, permanent boundaries for an organisational coalition. However, by focusing on participants over a given period, or participants concerned with particular decision-making processes, it is possible to identify the main members of a coalition.
Strategies adopted by particular sectional interests or sub-coalitions will sometimes be part
of the formal organisation structure – for instance, in the pursuit of manifest managerial
goals – and will sometimes be related to the informal structure – for example, heads of
department vying with each other for limited resources, or workers indulging in restrictive
Any organisation can be described, broadly, in terms of an operating component and an
administrative component.6
Figure 3.3
Five basic components of an organisation
The operating component comprises the people who actually undertake the work of
producing the products or providing the services.
The administrative component comprises managers and analysts and is concerned with
supervision and co-ordination.
Developing this description, we can analyse the work organisation in terms of five basic
components: the operational core, operational support, organisational support, top management and middle management (see Figure 3.3).
The operational core is concerned with direct performance of the technical or productive
operations and the carrying out of actual task activities of the organisation – for example,
people putting together parts on an assembly line, teaching in a classroom, treating a
patient, cooking meals in a hotel, serving in a bank or repairing a hole in the road.
Operational support is concerned indirectly with the technical or productive process but
closely related to the actual flow of operational work – for example, people working in
quality control, work study, progress planning, storekeeping, works maintenance or technical services.
Organisational support is concerned with provision of services for the whole organisation, including the operational core, but which are usually outside the actual flow of
operational work – for example, people working in human resources, medical services,
canteens, management accounting or office services.
Top management is concerned with broad objectives and policy, strategic decisions, the
work of the organisation as a whole and interactions with the external environment – for
example, managing directors, governors, management teams, chief executives, boards of
directors or council members.
Middle management is concerned with co-ordination and integration of activities and
providing links with operational support staff and organisational support staff, and
between the operational core and top management.
Organisations can, traditionally, be distinguished in terms of two generic groups:
private enterprise organisations; and
public sector organisations.
The distinction can be made on the basis of ownership and finance, and the profit motive.
Private enterprise organisations are owned and financed by individuals, partners, or share-
holders in a joint stock company, and are accountable to their owners or members. They
vary widely in nature and size, and the type and scope of goods and services provided. The
main aim is of a commercial nature such as profit, return on capital employed, market standing or sales level.
Public sector organisations are created by government and include, for example, municipal undertakings and central government departments, which do not have profit as their
goal. Municipal undertakings such as local authorities are ‘owned’ by the council tax payers
and ratepayers and financed by council taxes, rates, government grants, loans and charges
for certain services. Central government departments are ‘state owned’ and financed by funds
granted by parliament. Public sector organisations have political purposes and do not distribute profits. Any surplus of revenue over expenditure may be reallocated through improved
services or reduced charges. The main aim is a service to and the well-being of the community.
How well our public services are operating, how effectively they are meeting the needs of those
they serve, and how they are delivering those services are all questions that we need to ask. We
all need to be confident that public money, our money, is being well spent and is achieving the
results that we, the public, require.7
There are other public sector organisations whose aims involve both a commercial interest
and a service interest. Nationalised industries such as the postal service at present run as
public corporations with autonomy on day-to-day management and with a degree of commercial freedom but with ultimate government control in the national interest. These
public corporations are required to make efficient use of their resources by ensuring a given
minimum rate of return on their investments and to charge prices based on the actual cost
of supplying goods or services to certain groups of consumers. However, provision may also
be made for certain activities to be undertaken on social grounds as a service to the community even though these activities might be run at a financial loss.
The extent of the state ownership of public sector operations, or of their ‘privatisation’,
and the balance between commercial and social interests is determined by the government
of the day. In recent years there had been a vigorous policy of creating freedom from state
control and the transfer of business undertakings to private hands. However, the global economic recession and credit crunch of 2008 witnessed a dramatic return to increasing state
control of UK banks and building societies.
Not-for-profit organisations
The increasing scale of privatisation and the blurring of commercial interests and social
interests have led to an alternative classification of organisations:
those run for profit; and those clearly
Not-for-profit organisations include on the one hand charities, private societies and most
religious organisations, and on the other hand National Health Service hospitals, universities,
prisons, and most government and local authority departments. However, even in not-forprofit, public sector organisations there has been increased government pressure to ensure
cost-effectiveness, investment by private sector involvement, and efficiency and economy in
their operations.
The same blurring of distinctions can also be seen in the case of charities. For example,
Arnott points out that there is very little about 21st-century charities which is straightforward
and they exist in a highly complex context.
The old distinctions between private, public and not-for-profit sectors have been blurred as charities
have taken on an ever-increasing role in the delivery of public services. Tough competition for funds
and growing public scrutiny have led many charities to adopt practices once more commonly associated
with the commercial sector.8
The private–public interface
There have been increasing moves to encourage contracting-out of certain local authority
services and putting them to compulsory competitive tender (CCT), and a greater degree of
competition has also been introduced. The exposure to competition and demands for economical and high-quality service have prompted local authorities to replace administration
with business management.9 (Management in private enterprise and public sector organisations is discussed in Chapter 11.)
However, in spite of the fashion for applying private sector techniques in government, Sir
David Wright refers to the difficult issues which remain about the way government performs
and delivers its services. The challenge of management change has shifted to the public
sector with the call for improved delivery of public services. In the private sector there is the
bottom line of follow the money or achieve the sale or deal. But in government the link
between inputs and outcomes remains hard to establish and the challenge is aggravated by
the inability to focus activity on a small number of immediately realisable targets. As a function of the democratic process, government departments are responsible for a large number
of activities and are subject to political initiatives, both of which can leach valuable resources
and affect any assessment of how private sector techniques can be applied.10
In recent years increasing attention has been given to a particular form of organisation that
brings together aspects of both the private and public sectors – the social enterprise organisation. Such organisations are set up in response to social or environmental concerns and
have been highlighted by current economic difficulties. Although they function as companies, their main concern is with the community in general rather than with shareholder
value or specific public interest. Social enterprise organisations promote the well-being of
society but are not charities and they suggest elements of both capitalism and socialism.
Unlike not-for-profit organisations, social enterprise organisations may be said to have
a triple bottom line trading in goods and/or services with social, environmental and financial
objectives. However, as the name suggests they have a primary concern with a social purpose
and the creation of social value. This is their central and overriding concern and the generation of any financial surplus is for reinvestment, and to further their social and environmental goals. Social enterprises are very diverse and may take a number of different forms
including community enterprises, farmers’ markets, leisure trusts, provision of local services,
and job creation and training. In the public sector there are many examples of social enterprises in primary and community health and care services.11
A particular example of a social enterprise organisation is Grameen Bank, which provides
microcredit loans without collateral to rural villages in Bangladesh (see the Case Study at
the end of this chapter). Another example is Jamie Oliver’s project ‘Fifteen’, which offered
disadvantaged young people opportunities for a career in the restaurant industry (see the
Part 4 Case Study). Other well-known examples include the Eden Project, The Big Issue and
Café Direct. In Singapore there is a non-profit ‘Social Innovation Park’ that acts as a form of
incubator for start-up social enterprises including a dance centre that channels profits to
bursaries for low-income students, cooking and deportment lessons for plus-sized people,
and opportunities for individuals with untapped talents to showcase their original creations
or to perform a dance or song. Social entrepreneurs are driven by an inner motivation. A
common theme is empowering people and harnessing their skills and abilities. In Britain,
social enterprises feature regularly in the Sunday Times 100 Best Companies to Work For.
Measurement of social value
According to Brooks, definitions of social enterprise organisations contain one or more of the
following concepts. They
address social problems or needs that are unmet by private markets or governments
– social enterprises are private organisations dedicated to creating innovative solutions to
immediate social problems;
are motivated primarily by social benefits – social entrepreneurs are people with new
ideas who relentlessly address major problems in order to achieve a social mission; and
generally work with, not against, market forces – social entrepreneurs pay attention to
market signals without losing sight of their underlying mission and maintain a balance
between moral imperatives and the generation of revenue from trading.
A particular feature of social enterprise organisations is the question of how in the
broader business context they measure value and organisational effectiveness in terms of
their triple bottom line of social, environmental and financial targets. Drawing on work by
Kushner and Poole,12 Brooks refers to the measurement of effectiveness in social enterprise
organisations in terms of five dimensions:
satisfaction of all constituents including clients, donors, staff and volunteers;
identifying and acquiring adequacy of funding to meet its mission;
efficiency of operations and the effective use of resources;
successful attainment of the goals of the organisation; and
the ability to adapt to a dynamic environment and adapt to changing circumstances.13
Critical reflection
‘Despite the current popularity of new forms of social enterprise organisations,
attempting to maintain a triple bottom line of social, environmental and financial
objectives will detract from their long-term effectiveness. Successful organisations
concentrate on one central and overriding concern.’
Do you agree? What do you see as the future of social enterprise organisations?
Another major distinction is arguably between production and service organisations.
Compared with ‘production’ industries, services tend to display a number of characteristic
features, including the following:
The consumer is a participant in the service process. This requires particular attention to
the surroundings and characteristics of the service operations.
Table 3.1
Differences between products and services
The customer receives a tangible product in the
form of goods which can be seen and touched
The customer receives an intangible service
which may or may not satisfy
The goods remain with the customer
Services are consumed at the moment of delivery
The production and delivery of goods are
usually separated
Production, delivery and consumption of services
are often at the same time
Few producers deal with customers
Most producers deal with customers
The customer is rarely involved with production
The customer is often closely involved with
Goods can be serviced
Services have already been consumed and
cannot be serviced
Goods are subject to liability but the producer
has more opportunity to ameliorate the effect
on the customer and thus the financial penalty
Services which do not meet the requirements are
difficult to replace – the financial impact is
usually total
Goods can be purchased to store in inventory
to satisfy the customer’s needs
Services cannot be stored but must still be
available on customer demand
Goods can be transported to the point of sale
Some services are transportable (e.g. information
through communication lines) but most require
the transportation of the service provider
The quality of goods is relatively easy for
customers to evaluate
The quality of services is more dependent on
subjective perception and expectation
Goods are often technically complex – the
customer therefore feels more reliant on
the producer
Services appear less complex – the customer
therefore feels qualified to hassle the producer
Source: Macdonald, J. ‘Service Is Different’, The TQM Magazine, vol. 6, no. 1, 1994, p. 6. Copyright © Emerald Group Publishing Limited.
All rights reserved. Reproduced with permission.
Services cannot be stored, they are time-perishable and if they are not used they are likely
to be wasted. For example, the income lost from a hotel room unsold on one day is lost
for ever.
Unlike physical products, services are less tangible and more difficult to explain or communicate. Benefits derived from services tend to be associated with feelings and emotions.
In service operations, work activities are people-oriented and the characteristics of the
workforce are particularly important in determining organisational effectiveness.
Measurement of output is difficult and there is unlikely to be a single, important criterion
by which to measure effective performance.14
To what extent, then, are service industries any different from other industries? According
to Levitt, it is only in a matter of degree:
Purveyors of service, for their part, think that they and their problems are fundamentally different
from other businesses and their problems. They feel that service is people-intensive, while the rest of the
economy is capital-intensive. But these distinctions are largely spurious. There are no such things as
service industries. There are only industries whose service components are greater or less than those of
other industries. Everybody is in service.15
However, other writers, such as Macdonald, maintain that service organisations are different (see Table 3.1).16 ‘Product quality and service quality are the same inasmuch as they
apply to the results of different activities. There are, however, some fundamental differences
in the organisation of an operation to provide products and services. There are also intrinsic
differences between products and services.’17
In one of the earliest studies of formal organisations, Weber distinguished three types of
authority: traditional, charismatic and legal–rational.18 These types of authority are based
on the form of control regarded as legitimate by subordinates and their acceptance of the
power of superiors. The three types of authority relate to different types of organisations.
In traditional organisations, authority is legitimised by custom and a longstanding belief
in the natural right to rule, or is possessed by traditional (‘proper’) procedure. Examples
would be the authority of the pope, kings or queens or a paternalistic employer.
In charismatic organisations, authority is legitimised by belief in the personal qualities of
the leader; authority is based on the leader’s strength of personality and inspiration. Winston
Churchill might be quoted as an example. The practical need for some routine, for procedures and systems and for economic support means that if the movement is to continue
it must become organised. On the impending demise of the charismatic leader the movement might collapse unless a ‘legitimate’ heir is found. This process tends to transform a
charismatic organisation into either a traditional organisation or a bureaucratic organisation.
In bureaucratic organisations, authority is based on the acceptance of the law of formal
rules and procedures, and on impersonal principles. There is a legal–rational authority which
stems from hierarchical position in the organisation and not from personality. Examples
are the armed forces and the authority of government ministers or a college principal.
The concept of legal–rational authority is of most interest to us because most business
organisations, particularly large-scale ones, tend to be of the bureaucratic type of structure,
although there are variations in degree. Bureaucracy, as applying to certain structural features
of organisation, is the most dominant type of formal organisation.
In order to relate the study of management and organisational behaviour to one particular type
of organisation as distinct from another, it is necessary to group similar types of organisations
together. This enables generalisations to be made on the basis of certain characteristic features of organisations within a particular grouping. Organisations can be distinguished by, for
example, their nature and type, goods or services provided, size, aims and objectives, and the
people who are employed by or who work in them. Organisations can, therefore, be classified
in a number of ways and different writers have emphasised particular features of organisations.
Classification by major purpose
A common classification of organisations is by their major purpose. This leads to a distinction between, for example,
economic organisations – such as business firms;
public service organisations – such as government departments, local authorities and
social enterprise organisations – discussed earlier in this chapter;
protective organisations – such as the military, trade unions and police forces;
social or associative organisations – such as clubs and societies;
religious organisations – such as churches and monastries;
political organisations – such as political parties;
educational organisations – such as universities, colleges and training centres; and
voluntary organisations and charities – such as Citizens’ Advice Bureaux, RNLI and Oxfam.
Such a distinction, however, tends to lack refinement, and not all organisations fit simply
into one classification. Many universities combine business consultancy with teaching. Some
hospitals are concerned as much with training and/or research as with treatment of patients.
One could debate the main purpose of a prison: is it, for example, corrective, protective,
penal or educational? The main purpose of a trade union is seen, presumably, as protection
of the interests of its members through their wages and working conditions, but many trade
unions also have strong social, educational and political interests. Many organisations serve
more than one goal, but although they are multi-purpose organisations it is usually possible
to identify one predominant goal (or purpose) by which the organisation can be classified,
however crude this classification may be.
Prime beneficiary of the organisation
Blau and Scott propose a classification on the basis of the prime beneficiary.19 The people
involved in a relationship with any organisation are categorised into:
the members, or rank-and-file participants;
the owner or managers of the organisation;
the clients or, more generally, the ‘public-in-contact’ who are technically ‘outside’ the
organisation yet have regular direct contact with it; and
the public at large – that is, the members of the society in which the organisation operates.
Organisations are then classified on the basis of who benefits – that is, which of the four
categories is the prime beneficiary of its operations. Four types of organisation are identified
on this basis:
mutual-benefit associations, where the prime beneficiary is the membership, such as
political parties, trade unions and professional associations;
business concerns, where the owners are the prime beneficiaries, such as industrial and
other firms privately owned and operated for profit;
service organisations, where the client group is the main beneficiary, such as hospitals,
schools and welfare agencies; and
commonweal organisations, where the prime beneficiary is the public at large, such as
central government departments, the armed services and the police.
Problems associated with each type of organisation
It is emphasised that the prime beneficiary is not necessarily the only beneficiary. Each of
the various groups which make a contribution to an organisation does so only in return for
certain benefits received. Blau and Scott suggest that special problems are associated with
each type of organisation.
In mutual-benefit associations the main problem is that of providing for participation
and control by the membership and of maintaining internal democracy.
In business concerns the central problem is that of maximising operational efficiency in
a competitive environment.
In service organisations the problem is reconciling conflict between professional service
to clients and administrative procedures.
In commonweal organisations the important problem is ensuring democratic procedures by which they are held accountable to the public for their actions.
Primary activity of the organisation
It is not easy to find a comprehensive classification into which all organisations can be
simply and satisfactorily categorised; a degree of generalisation, assumption and qualification is required. An alternative form of classification is provided by Katz and Khan. Their
classification is based on ‘genotypic (first-order) factors’ and on ‘second-order factors’.20 In
terms of the genotypic function, which is the primary activity of the organisation as a subsystem within the larger society, there are four broad types of organisations:
productive or economic – concerned with the creation of wealth, the manufacture of
goods, and the provision of services for the public;
maintenance – for example, schools and churches, concerned with the socialisation of
people to fulfil roles in other organisations and in society;
adaptive – for example, research establishments, concerned with the pursuit of knowledge
and the development and testing of theory; and
managerial or political – for example, government departments, trade unions and
pressure groups. These are concerned with adjudication, co-ordination and control of
physical and human resources and other sub-systems.
Object-moulding or people-moulding
Organisations can, then, be described in terms of second-order factors. Among other things
these factors relate to structure; the system of intrinsic or extrinsic rewards to attract and
retain members and to achieve satisfactory performance from them; and the nature of the
throughput – the transformation or processing of objects or the moulding of people as the
end product of the organisation. A distinction can be made between object-moulding organisations, and people-moulding organisations.
Object-moulding organisations are concerned with physical or material objects as the
nature of work being carried out – for example, a manufacturing plant, a car plant or an oil
company. People-moulding organisations are concerned with human beings as the basis of
the nature of work being carried out – for example, a school or a leisure centre.
In people-moulding organisations a further distinction can be made between
people-processing organisations – for example, an employment agency or a social security
benefit office, and
people-changing organisations – for example, a mental hospital or an open prison.
We have seen that organisations differ in many important respects, but they also share common features. By adopting the systems view of organisations, we can identify principles
and prescriptions of organisation and management that apply to business organisations in
general. Differences in the application and operation of these principles and prescriptions
as between one business organisation and another is largely a matter only of degree and
emphasis. Organisations can be viewed as open systems which take inputs from the environment (outputs from other systems) and through a series of activities transform or convert these
inputs into outputs (inputs to other systems) to achieve some objective (see Figure 3.4).
In terms of this open systems model the business organisation, for example, takes in
resources such as people, finance, raw materials and information from its environment,
Figure 3.4
The open systems model of organisations
transforms or converts these and returns them to the environment in various forms of
outputs such as goods produced, services provided, completed processes or procedures in
order to achieve certain goals such as profit, market standing, level of sales or consumer
There are, of course, differences in the activities and methods of operation of the various
forms of business organisations. There will also be differences between business organisations of the same type – for example, in relation to their size and scale of activities. Using
this systems model, the same form of analysis can be applied to all types of organisations.
This provides a common point of reference and enables us to take a general approach to the
study of organisations, to analyse them and to derive general principles and prescriptions.21
An example of the open systems model applied to the environment systems division of a
major heating and ventilation company is given in Figure 3.5.
Figure 3.5
An example of the open systems model
The structure, management and functioning of an organisation are not only determined by
internal considerations and choices but are also influenced strongly by a range of volatile
external environmental factors. In order to be effective and maintain survival and growth,
the organisation must respond to the opportunities and challenges, and the risks and
limitations, presented by the external environment of which it is part. Changes in the environment will affect inputs, and changes in inputs will affect the transformation or conversion
process and hence the outputs. The open systems approach views the organisation within its
total environment and emphasises the importance of multiple channels of interaction.
The increasing rate of change in major environmental factors (technical, economic, social
and governmental) has highlighted the need to study the total organisation and to adopt
a systems approach. In addition to these major environmental factors, there is a multiplicity
of constantly changing environmental influences that affect the operation of an organisation
(see Figure 3.6). In order to understand the operations of organisations, and to improve
organisational performance, it is necessary to consider how they achieve an internal and
external balance and how they are able to adapt to changes in their environment and the
demands placed upon them.22
Consider, for example, how the management and operation of a large comprehensive
school might be affected by such external influences as government proposals for reform of
education, changing demographic trends, the general economic climate, advances in information technology, changing views of the role of education in society, greater diversity of
people in the catchment area, reports from Her Majesty’s Inspectors, increased health and
safety concerns, representations from employers’ associations and trade unions, parent
groups and equality campaigners.
PESTEL analysis
Organisational performance and effectiveness will be dependent upon the successful
management of the opportunities, challenges and risks presented by changes in the external
Figure 3.6
Environmental influences on the organisation
Figure 3.7
Checklist for a PESTEL analysis
Source: Lynch, R. Corporate Strategy, fourth edition, Financial Times Prentice Hall (2006), p. 84. Reprinted by permission of Pearson
Education Ltd.
environment. One popular technique for analysing the general environment is a PESTEL
analysis – that is, Political, Economic, Socio-cultural, Technological, Environmental and
Legal influences. As an example, Lynch presents the main issues that might be considered
when undertaking a PESTEL analysis (see Figure 3.7).23
External influences are almost infinite in number and variety and no study could hope to consider them all. For students of business and for managers alike, the requirement is to recognise
the complexity of the external environment and to pay greater attention to those influences
which appear the most pertinent and pressing for the organisation in question, rather than to
attempt to consider all possible contingencies.24
All organisations need clear aims and objectives that will determine the nature of inputs, the
series of activities to achieve outputs and the realisation of organisational goals. Feedback
about the performance of the system, and the effects of its operation on the environment,
are measured in terms of achieving the aims and objectives.
Basic principles of organisation and management apply in any series of activities in any
organisation. For example:
attention must be given to the design of a suitable structure;
the common elements of management – clarification of objectives, planning, organising,
directing and control – apply to a greater or lesser extent in all cases;
essential financial, legal, human resources and administrative functions must be carried
out in all types of organisation.
These common features make possible the application of general principles of management and organisational behaviour (including, for example, in both a prison or a university)
and the meaningful study of organisation theory. While general principles and prescriptions
apply to all organisations, differences in their aims and objectives, organisational goals and
environmental influences will result in differences in the input–conversion–output process
and in the series of activities involved in this process. The nature of inputs, the throughputs
and the form of the outputs will emphasise characteristic features of a particular organisation.
These features highlight alternative forms of structure, management, methods of operation
and behaviour of people employed by or working in different types of organisations.
Whatever the type or classification of organisations, the transformation or conversion of
inputs into outputs is a common feature. Within the organisation (system) as a whole, each
of the different transformation or conversion activities may themselves be viewed as separate organisational sub-systems with their own input–conversion–output process interrelated to, and interacting with, the other sub-systems.
The interrelationship and interdependence of the different parts of the system raise the
question of the identification of these sub-systems. What are the boundaries that distinguish
one sub-system from other sub-systems and from the system as a whole? In practice the
boundaries are drawn at the discretion of the observer and sub-systems are identified according to the area under study. These sub-systems may be identified, therefore, in a number of
ways, although there is a degree of similarity among the alternative models.
However these sub-systems are identified, it is the task of management to co-ordinate the
sub-systems and to ensure that the activities of the organisation as a whole are directed
towards the accomplishment of its goals and objectives. We can suggest, therefore, five
main interrelated sub-systems as a basis for the analysis of work organisations (see
Figure 3.8):
task – the goals and objectives of the organisation: the nature of inputs and outputs, and
the work activities to be carried out in the transformation or conversion process;
technology – the manner in which the tasks of the organisation are carried out and the
nature of work performance: the materials, systems and procedures, and equipment used
in the transformation or conversion process;
structure – patterns of organisation, lines of authority, formal relationships and channels
of communication among members: the division of work and co-ordination of tasks by
which the series of activities is carried out;
people – the nature of the members undertaking the series of activities: for example,
their attitudes, skills and attributes; needs and expectations; interpersonal relations and
Figure 3.8
Organisational sub-systems
patterns of behaviour; group functioning and behaviour; informal organisation and styles
of leadership;
management – co-ordination of task, technology, structure and people, and policies and
procedures for the execution of work: corporate strategy, direction of the activities of the
organisation as a whole and its interactions with the external environment.
A broader view of the organisation’s activities
The study of organisations as open systems serves to indicate both the common features
and the main distinguishing features between different types of organisations. It provides
a useful framework for the comparative study of organisations. The systems view of organisations enables managers to view their own organisation in perspective and to compare it in
meaningful terms with other types of organisations. Managers cannot afford to take a narrow,
blinkered view; they need to adopt a broader view and recognise the interrelationships
between various activities and the effects that their actions and decisions have on other
activities. The above framework of five main interrelated sub-systems – task, technology,
structure, people and management – provides a useful basis for the analysis of organisational
performance and effectiveness. Attention should be focused on the total work organisation and on the interrelationships between the range of variables which affect organisational
Critical reflection
‘The traditional analysis of an organisation is usually based upon the structure and
efficiency of individual departments. However, this leads to blinkered sectional interests
rather than to the interrelationships and co-ordination of sub-systems of the organisation
as an integrated whole.’
What do you see as the relevance of the traditional form of analysis?
The analysis of organisational effectiveness requires an understanding of relationships
within the organisation’s structure, the interrelated sub-systems and the nature of its external environment. Irrespective of the identification of sub-systems, the nature and scale of the
series of activities involved in converting inputs to outputs will differ from one organisation
to another in terms of the interrelationships between technology, structure, methods of
operation and the nature of environmental influences. ‘Contingency’ models of organisation
highlight these interrelationships and provide a further possible means of differentiation
between alternative forms of organisation and management.
The contingency approach takes the view that there is no one best, universal form of organisation. There is a large number of variables, or situational factors, that influence organisational
performance. Contingency models can be seen as an ‘if–then’ form of relationship. If certain
situational factors exist, then certain organisational and managerial variables are most
appropriate. Managers can utilise these models to compare the structure and functioning of
their own organisation. Contingency models are examined in Chapter 15.
So far we have been looking at the nature of formal organisations – that is, organisations
deliberately planned and structured to meet stated objectives. However, a major feature of
organisational life is that whatever the type or nature of an organisation or its formal structure,
an informal organisation will always be present (see Figure 3.9). The informal organisation
arises from the interaction of people working in the organisation, their psychological and social
needs, and the development of groups with their own relationships and norms of behaviour,
irrespective of those defined within the formal structure.
The informal organisation is flexible and loosely structured.
Relationships may be left undefined.
Membership is spontaneous with varying degrees of involvement.
Group relationships and norms of behaviour exist outside the official structure and the
informal organisation may, therefore, be in conflict with the aims of the formal organisation. A summary of differences between the formal and the informal organisation is given in
Table 3.2.
Figure 3.9
Formal and informal organisation
Source: Lysons, K. ‘Organisational Analysis’, supplement to Manager, The British Journal of Administrative Management, no. 18,
March/April 1997. Reproduced with permission of The Institute of Administrative Management.
Functions of the informal organisation
The informal organisation can serve a number of important functions.
It provides satisfaction of members’ social needs and a sense of personal identity and
It provides for additional channels of communication – for example, through the
‘grapevine’, information of importance to particular members is communicated quickly.
It provides a means of motivation – for example, through status, social interaction,
variety in routine or tedious jobs, and informal methods of work.
It provides a feeling of stability and security, and through informal ‘norms’ of behaviour
can exercise a form of control over members.
It provides a means of highlighting deficiencies or weaknesses in the formal organisation
– for example, areas of duties or responsibilities not covered in job descriptions, or outdated systems and procedures. The informal organisation may also be used when formal
methods would take too long, or not be appropriate, to deal with an unusual or unforeseen situation.
Buying a coffee machine and water cooler could be the most important investments a company
ever makes in its future. For it’s at these social hubs of office life that the real business often gets
done, as part of a casual chat or chance meeting.25
Table 3.2
Comparison of the formal and the informal organisation
Formal organisation
Informal organisation
1 Structure
A Origin
B Rationale
C Characteristics
2 Position terminology
3 Goals
Profitability or service to
Member satisfaction
4 Influence
A Base
B Type
C Flow
5 Control mechanisms
Threat of firing, demotion
Physical or social sanctions
Formal channels
Well-defined, follow formal
Poorly defined, cut across
regular channels
7 Charting the organisation
Organisation chart
8 Miscellaneous
A Individuals included
B Interpersonal relations
C Leadership role
D Basis for interaction
All individuals in work group
Prescribed by job description
Assigned by organisation
Functional duties or position
Only those ‘acceptable’
Arise spontaneously
Result of membership agreement
Personal characteristics, ethnic
background, status
6 Communication
A Channels
B Networks
C Speed
D Accuracy
E Basis for attachment
Source: Adapted from Gray, J. L. and Starke, F. A. Organizational Behavior: Concepts and Applications, fourth edition, Merrill Publishing
Company (1988), p. 432. Reproduced with permission from Pearson Education Inc.
The informal organisation, therefore, has an important influence on the morale, motivation, job satisfaction and performance of staff. It can provide members with greater opportunity to use their initiative and creativity in both personal and organisational development.
Covert and informal activities may also have economic consequences for the organisation
in terms of added values and/or costs that escape ordinary accounting procedures.26 The
importance and nature of groups, and reasons why people form into groups, both formal
and informal, are discussed in Chapter 8.
Most of us will understand what is commonly meant by organisational conflict and will be
aware of its existence and effects. Conflict can be related to power and politics. Yet conflict
is a term that can be defined and interpreted in a number of ways. For our purpose we can
see conflict as behaviour intended to obstruct the achievement of some other person’s goals.
Conflict is based on the incompatibility of goals and arises from opposing behaviours. It can
be viewed at the individual, group or organisation level. Ackroyd and Thompson use the term
‘organizational misbehaviour’ to refer to ‘anything you do at work which you are not supposed to’. Management establish boundaries that distinguish acceptable and non-acceptable
behaviour from employees. The actions of employees are then judged as falling one side or
the other of these boundaries.27
Common definitions of conflict tend to be associated with negative features and situations which give rise to inefficiency, ineffectiveness or dysfunctional consequences. The
traditional view of conflict is that it is bad for organisations. Conflict is perceived as disruptive
and unnatural and represents a form of deviant behaviour that should be controlled and
changed. Clearly, extreme cases of conflict in organisations can have very upsetting, or even
tragic, consequences for some people and have adverse effects on organisational performance.
Conflict situations can give rise to excessive emotional or physical stress.
It might be expected that a healthy organisational climate would be reflected by complete
harmony in working relationships and loyalty and common commitment to the goals and
objectives of the organisation. This view of work organisations as ‘happy families’ is perhaps
a worthwhile and creditable ideal and as such appears to be implied by a number of management writers. (See also the discussion in Chapter 13.)
Drucker, for example makes the following point:
Any business enterprise must build a true team and weld individual efforts into a common effort. Each
member of the enterprise contributes something different, but they must all contribute towards a common goal. Their efforts must all pull in the same direction, and their contributions must fit together to
produce a whole – without gaps, without friction, without unnecessary duplication of effort . . . The
manager must know and understand what the business goals demand of him in terms of performance,
and his superior must know what contribution to demand and expect of him – and must judge him
accordingly. If these requirements are not met, managers are misdirected. Their efforts are wasted.
Instead of teamwork, there is friction, frustration and conflict.28
The unitary perspective
Such traditional views appear to imply a unitary perspective of the organisation. The
natural state of the organisation is viewed as an integrated, co-operative and harmonious
whole. Everyone is working together in support of the leader and striving to meet a common
goal. There is an image of the organisation as a team with a common source of loyalty and
one focus of effort. This is a view that appears to be held strongly by British managers who
frequently appeal for a team spirit amongst employees.29 Conflict is consequently seen
as undesirable and a dysfunctional outcome that can be explained, for example, by poor
communication, personality clashes or the work of agitators. Trade unions are seen as an
unnecessary evil and restrictive practices as outmoded and caused by trouble-makers.
The pluralistic perspective
But if one accepts the views of, for example, the social action writers and the idea of a pluralistic perspective to work organisations, although it is acknowledged that co-operation and
harmony can exist, conflict is seen as an inherent feature of organisations and induced, in
part, by the very structure of the organisation. The organisation is made up of powerful and
competing sub-groups with their own legitimate loyalties, objectives and leaders. Conflict is
not necessarily a bad thing but can be an agent for evolution and internal and external
change. The pluralistic manager is more likely to accept that conflict in organisations requires
careful handling and attempt to reconcile rival interests.
The radical perspective
The radical perspective is associated with the ideas of writers such as Karl Marx and the
structuralist approach to organisations and management discussed in Chapter 2.30 It
challenges the traditional view of conflict in society and sees organisations in terms of disparity in power and control between owners and workers. Conflict is an inherent feature of
the unequal nature of organisational life and a means of bringing about change.31 Collective
bargaining is not seen as particularly helpful in a system stacked against the workers. Conflict
is a natural part of the class struggle. The design of organisation structure, management
systems and the choice of technology all form part of the struggle for power and control
within the work organisation.
According to the radical approach, the design of organisation structure, management
systems and the choice and use of technology all form part of the struggle for power and
control within the work organisation. Greater attention should be given to relationships
between the formal and informal aspects of the organisation and the study of conflict
between the needs of the individual and those of the organisation, and between workers and
Broader interpretation of conflict
A more recent view of conflict is the interactionist perspective, which believes that conflict is
a positive force and necessary for effective performance. This approach encourages a minimum
level of conflict within the group in order to encourage self-criticism, change and innovation,
and to help prevent apathy or too great a tolerance for harmony and the status quo.32
Conflict per se is not necessarily good or bad but an inevitable feature of organisational
life and should be judged in terms of its effects on performance. Even if organisations have
taken great care to try to avoid conflict, it will still occur. Conflict will continue to emerge
despite management attempts to suppress it.
The current view appears to recognise that conflict can be interpreted more broadly than in
the traditional view. Townsend sees conflict as a sign of a healthy organisation – up to a point.
A good manager doesn’t try to eliminate conflict; he tries to keep it from wasting the energies of his
people . . . If you’re the boss and your people fight you openly when they think you’re wrong – that’s
healthy. If your people fight each other openly in your presence for what they believe in – that’s healthy.
But keep all the conflict eyeball to eyeball.33
Conflict is not necessarily a bad thing, however. It can be seen as a ‘constructive’ force and
in certain circumstances it can be welcomed or even encouraged. For example, it can be
seen as an aid to incremental improvement in organisation design and functioning, and to
the decision-making process. Conflict can be an agent for evolution, and for internal and
external change. Properly identified and handled, it can help to minimise the destructive
influences of the win–lose situation.
From a survey of practising managers, who reported that they spend approximately 20 per
cent of their time dealing with conflict situations, Schmidt records a number of both positive
and negative outcomes of conflict.34 Positive outcomes include:
better ideas produced;
people forced to search for new approaches;
long-standing problems brought to the surface and resolved;
clarification of individual views;
stimulation of interest and creativity;
a chance for people to test their capacities.
Negative outcomes include:
some people feeling defeated and demeaned;
an increase in the distance between people;
development of a climate of mistrust and suspicion;
individuals and groups concentrating on their own narrow interests;
development of resistance rather than teamwork;
an increase in employee turnover.
Critical reflection
‘Conflict should be accepted as a reality of management and organisational behaviour,
and properly managed can be an energising and vitalising force within groups and the
organisation. Managers should therefore be encouraged to invoke constructive conflict.’
To what extent do you think the negative aspects of conflict arguably outweigh the
potential benefits?
Conflict and ‘difficult people’
The idea of conflict as inevitable is discussed by Irvine, who suggests that if you ask a group
of managers about the nature and level of conflict they experience, the majority will tell
you honestly that apart from the odd minor tiff, there is not much conflict about. There are,
however, ‘difficult people’.
Perhaps our reluctance to identify, and then directly address, conflict within organisations is based upon
the widely held belief that conflict is inevitable, negative and unmanageable. There is a tendency to
see conflict as a result of one person’s personality. Conflict may be inevitable, but how dramatically
situations could be changed if we could also view it as positive and manageable! What if we think
of these situations as raising questions of difference? What if we were to make a shift away from
blaming individuals and their personalities, recognizing instead that it is through normal human
interaction that outward expressions of difference are produced?35
According to Mannering, conflicts, misunderstandings and personality clashes are usually
at the root of the problem when employees become unhappy at work. There is an erosion of
our social framework, and the work environment has become more competitive with pressure to have the best jobs and gadgets. People are placed into teams with people they would
possibly never choose to associate with. Mannering suggests that people can be ‘difficult’ for
a number of reasons but it is important not to concentrate on the negative points. Negativity
is the most difficult behaviour to overcome or change as it constantly undermines what the
team is trying to achieve. In order to help defuse conflict, it is important to draw a fine line
between firm management and aggressive behaviour. Humour may help defuse a situation
but it is more important to stay calm and professional. Improved communications and
relationships may help but if someone is determined not to co-operate, then there will be
conflict. Mannering makes the point that although you cannot please everyone all the time,
avoidance is not an option for dealing with difficult people. Managers must develop solid
coping mechanisms and do their best in the particular situation.36
Much has been written about the implications of conflict as a social process. Whilst recognising the importance of this debate, it is not the intention here to enter into a detailed discussion of the ideologies of conflict. The important point is not so much the extent to which
it is possible to create a totally harmonious working environment, or whether competing
sub-groups and conflict are seen as inevitable consequences of organisation structure, but
how conflict when found to exist is handled and managed.
There are many potential sources of organisational conflict. The main ones can be
summarised as follows:
Differences in perception. We all see things in different ways and have our own set of
values, beliefs and opinions. We all have our own, unique picture or image of how we see
the ‘real’ world. Differences in perception result in different people attaching different
meanings to the same stimuli. The underlying issue may have nothing specifically to do
with work but as perceptions become a person’s reality, value judgements can be a potential major source of conflict. (The importance of perception is discussed in Chapter 6.)
Limited resources. Most organisational resources are limited and individuals and groups
have to fight for their share; for example, at the time of the allocation of the next year’s
budget or when cutbacks have to be made. The greater the limitation of resources, then
usually the greater the potential for conflict. In an organisation with reducing profits or
revenues, the potential for conflict is likely to be intensified.
Departmentalisation and specialisation. Most work organisations are divided into
departments with specialised functions. Because of familiarity with the manner in which
they undertake their activities, managers tend to turn inwards and to concentrate on the
achievement of their own particular goals. When departments need to co-operate, this is
a frequent source of conflict. Differing goals and internal environments of departments
are also a potential source of conflict. In Woodward’s study of management organisation
of firms in this country she comments on the bad relationships between accountants and
other managers. One reason for this hostility was the bringing together of two quite separate financial functions. People concerned with works accounting tended to assume
responsibility for end-results that was not properly theirs; they saw their role as a controlling and sanctioning one rather than as a servicing and supportive one. Line managers
resented this attitude and retaliated by becoming aggressive and obstructive.37
The nature of work activities. Where the task of one person is dependent upon the work
of others there is potential for conflict: an example would be if a worker is expected to
complete the assembly of a given number of components in a week but the person
forwarding the part-assembled components does not supply a sufficient number on time.
If reward and punishment systems are perceived to be based on keeping up with performance levels, then the potential for conflict is even greater. If the work of a department is
dependent upon the output of another department, a similar situation could arise, especially if this situation is coupled with limited resources: for example, where the activities
of a department in which the budget has been reduced below what is believed necessary
to run the department efficiently are interdependent with those of another department
which appears to have received a more generous budget allocation.
Role conflict. A role is the expected pattern of behaviours associated with members
occupying a particular position within the structure of the organisation. In practice, the
manner in which people actually behave may not be consistent with their expected
pattern of behaviour. Problems of role incompatibility and role ambiguity arise from
inadequate or inappropriate role definition and can be a significant source of conflict.
(Role conflict is discussed in Chapter 8.)
Inequitable treatment. A person’s perception of unjust treatment, for example in the
operation of personnel policies and practices or in reward and punishment systems, can
lead to tension and conflict. For example, according to the equity theory of motivation the
perception of inequity will motivate a person to take action to restore equity, including
changes to inputs or outputs, or through acting on others.
Violation of territory. People tend to become attached to their own ‘territory’ within
work organisations: for example, to their own area of work, or kinds of clients to be dealt
with, or to their own room, chair or parking space. Jealousy may arise over other people’s
territory – for example, size of room, company car, allocation of an assistant or other
perks – through access to information or through membership of groups.38 A stranger
walking into a place of work can create an immediate feeling of suspicion or even resentment because people do not usually like ‘their’ territory entered by someone they do not
know and whose motives are probably unclear to them.
Ownership of territory may be conferred formally, for example by organisation charts,
job descriptions or management decisions; it may be established through procedures,
for example circulation lists or membership of committees; or it may arise informally, for
example through group norms, tradition or perceived status symbols. The place where
people choose to meet can have a significant symbolic value. For example, if a subordinate is summoned to a meeting in a manager’s office this might be taken to mean that the
manager is signalling higher status. If the manager chooses to meet at the subordinate’s
place of work, or on neutral territory, this may be a signal that the manager wishes to meet
the subordinate as an equal. If a person’s territory is violated this can lead to the possibility
of retaliation and conflict.
Environmental change. Changes in an organisation’s external environment, such as shifts
in demand, increased competition, government intervention, new technology or changing social values, can cause major areas of conflict. For example, a fall in demand for, or
government financial restrictions on, enrolments for a certain discipline in higher education can result in conflict over the allocation of resources. If the department concerned is
a large and important one and led by a powerful head, there could be even greater potential for conflict.
There are many other potential sources of organisational conflict, including:
individual – such as attitudes, personality characteristics or particular personal needs, illness or stress;
group – such as group skills, the informal organisation and group norms;
organisation – such as communications, authority structure, leadership style, managerial
the age gap – Hart discusses how relationships between older employees and younger
managers, where experience is on one side and power on the other, can lead to conflict:
The problem for the inexperienced manager in conflict with an older employee is that it is all too
easy to label someone ‘difficult’ rather than intelligently trying to explore the reasons behind their
behaviour. If steps are not taken to improve the relationship both manager and employee can end
up feeling threatened and undermined.39
Although a certain amount of organisational conflict may be seen as inevitable, there are a
number of ways in which management can attempt to avoid the harmful effects of conflict.
Many of these ideas will be discussed in later chapters. The strategies adopted will vary
according to the nature and sources of conflict outlined above. Bear in mind that managing
conflict takes time and effort but attempting to establish a climate of mutual trust, consideration and respect is worthwhile.
Clarification of goals and objectives. The clarification and continual refinement of goals
and objectives, role definitions and performance standards will help to avoid misunderstandings and conflict. Focusing attention on superordinate goals that are shared by the
parties in conflict may help to defuse hostility and lead to more co-operative behaviour.
Resource distribution. Although it may not always be possible for managers to increase
their allocated share of resources, they may be able to use imagination and initiative to
help overcome conflict situations – for example, making a special case to higher management; greater flexibility to transfer funds between budget headings; delaying staff appointments in one area to provide more money for another area.
Concept map of conflict management
Source: Copyright © 2008 The Virtual Learning Materials Workshop. Reproduced with permission.
Figure 3.10
Human resource management policies and procedures. Careful and detailed attention
to just and equitable HRM policies and procedures may help to reduce areas of conflict
(see the section on the equity theory of motivation in Chapter 7). Examples are job analysis; systems of reward and punishment; appeals, grievance and disciplinary procedures;
arbitration and mediation; recognition of trade unions and their officials; training managers in coaching and negotiation skills.
Non-monetary rewards. Where financial resources are limited, it may be possible to pay
greater attention to non-monetary rewards. Examples are job design; more interesting,
challenging or responsible work; increased delegation or empowerment; improved equipment; flexible working hours; attendance at courses or conferences; unofficial perks; or
more relaxed working conditions.
Development of interpersonal/group process skills. This may help engender a better
understanding of one’s own behaviour, the other person’s point of view, communication
processes and problem-solving. It may also assist people to work through conflict situations in a constructive manner. Where possible one should encourage addressing disputes
early on a one-to-one basis.
Group activities. Attention to the composition of groups and to factors that affect group
cohesiveness may reduce dysfunctional conflict. Overlapping group membership with
a ‘linking-pin’ process, and the careful selection of project teams or task forces for problems
affecting more than one group, may also be beneficial.
Leadership and management. A more participative and supportive style of leadership
and managerial behaviour is likely to assist in conflict management – for example, showing an attitude of respect and trust; encouraging personal self-development; creating a
work environment in which staff can work co-operatively. An open-door policy and identifying potential causes of disputes may help avoid conflict.
Organisational processes. Conflict situations may be reduced by attention to such features as the nature of the authority structure; work organisation; patterns of communication and sharing of information; democratic functioning of the organisation; unnecessary
adherence to bureaucratic procedures and official rules and regulations.
Socio-technical approach. Viewing the organisation as a socio-technical system, in which
psychological and social factors are developed in keeping with structural and technical
requirements, will help in reducing dysfunctional conflict.
A summary of conflict management is given in the concept map in Figure 3.10.
In addition to organisational conflict, a major and related influence on the work/life balance,
discussed later in this chapter, is the extent to which employees suffer from organisational
stress. Stress is a complex and dynamic concept. It is a possible source of tension and frustration, and can arise through a number of interrelated influences on behaviour, including the
individual, group, organisational and environmental factors discussed in Chapter 1.
The Health and Safety Executive (HSE) defines stress as: ‘The adverse reaction people have
to excess pressure or other types of demands placed on them. There is clear distinction
between pressure which can create a “buzz” and be a motivating factor and stress, which can
occur when this pressure becomes excessive.’40
However, York contends that despite all the business-speak, people get seriously vague
when it comes to definitions and raises the question: what is stress? Is it a new name for an
old-fashioned condition such as unhappiness or overwork, or is it peculiar to our uniquely
pressured times? York suggests there is something in the idea that stress isn’t just about hard
work or unhappiness, but about conflict, confusion and frustration. It’s about the anxiety
generated by multi-tasking and balancing priorities, meeting contradictory demands, about
knowing where to start and papering over the cracks when you want to do too much.41
The effects of stress
An increasing number of surveys report perceived or actual increases in levels of stress and
contend that stress at work is one of the biggest problems in European companies and one
of the major adverse influences on the quality of working life and work performance. There
have also been a number of highly publicised reports of successful legal claims based on the
effects of stress.
Research by organisations such as the Health and Safety Executive have identified stress,
anxiety and depression as among the most commonly reported illnesses, and wider research
has also indicated that stress, brought about through work intensification and conflicts
between home and work, is related to the risks of disease and ill-health.42
A study by van Zyl and Lazenby found that South African managers in affirmative
action positions are functioning in a stressful environment that can give rise to unethical
acts. Results indicated that high stress correlates substantially with claiming credit for a
subordinate’s work, failing to report a co-worker’s violation of company policy, offering
potential clients fully paid holidays and purchasing shares upon hearing privileged company
The results of unrelieved stress on the individual and on business are worrying. The result may
be higher accident rates, sickness absence, inefficiency, damaged relationships with clients and
colleagues, high staff turnover, early retirement on medical grounds, and even premature death
. . . The cost of stress is huge. It is devastating to the individual and damaging to the business
at a time when the need to control business costs and ensure an effective and healthy workforce
is greater than ever. It is in everyone’s interest to tackle the taboo on talking about emotional
problems because it is this which inhibits individuals from seeking help.
Simon Armson, Chief Executive, The Samaritans44
Understandably, however, there is also a level of scepticism about the amount of emphasis
placed on stress, and a number of press and other articles feature the ‘myth’ of work stress.
For example, an interesting report from the Institute for Social and Economic Research suggests that claims of workplace pressure may be misplaced. Levels of job satisfaction and
mental distress vary systematically according to the day of the week on which respondents
are interviewed. Stress appears to disappear on Friday and Saturday. When genuine dissatisfaction was found, it tended to be because employees were working too few or too many
hours. However, the main cause of stress was money difficulties, caused by unemployment
or debt. The research casts a question mark over the generous compensation regularly
handed out by the courts to employees claiming they suffer from stress.45 Randall comments
that ‘Whichever lawyer first hit on the idea of promoting stress as either a reason for not
going to work or a way to make others cough up could hardly have done more damage to
Britain’s work ethic than if he or she had arranged a quintupling of dole payments.’46
A certain amount of stress may not necessarily be seen as a bad thing and may arguably
even help promote a higher level of intensity and motivation to get work done. It is important to bear in mind, however, that stress can potentially be very harmful. But what is the
distinction between pressure and stress? ‘Pressure’ can be seen as a positive factor that may
be harnessed to help people respond to a challenge and function more effectively. ‘Stress’
may be regarded as a continuous negative response arising from extreme pressure or other
demands and the individual’s inability to cope.
Personal performance may improve with pressure, up to a certain point. Beyond that point, continuous
pressure leads to a fall in performance as the person is no longer able to cope. Signs of this are fatigue,
poor judgement and bad decision making. In turn, this can lead to serious business problems.47
So, to what extent is stress a negative or positive influence on employee behaviour? Stress
is a very personal experience, as is the response of each individual to it and their beliefs
about how best to cope with the causes and effects. Orpen questions the prevalent view
among managers in Britain that seems to be that stress at work is something to be avoided
at all costs. Just as there are circumstances when individuals may have too much stress, there
are also circumstances when individuals may have too little stress for effective performance.48 This view also appears to be supported by Gwyther, who points out that although
stress appears to have become public health enemy number one and is viewed as the culprit
of myriad complaints, the term is bandied about far too readily and there is a need to stand
back and attempt to get things into some sort of perspective. A measure of stress is natural.
A degree of stress at work is no unhealthy thing and without it nothing would ever get
However, it is important to bear in mind that although management may believe that
a moderate level of stress can be a spur to increased work performance, employees are
unlikely to perceive this in the same way and dispute what is regarded as an acceptable
level of stress or excessive pressure. As ACAS point out, whilst some amount of stress can
be useful as a spur to motivation the key phrase in the HSE definition is ‘adverse reaction’.
This can include physical symptoms such as headaches, stomach problems and muscle
tension, and mental symptoms such as anxiety and depression. These reactions can be
extremely debilitating and result in reduced productivity, absenteeism and poor morale in
the workplace.50
Whatever the effects, it is generally acknowledged that stress is potentially part of everyday
working life. It occurs for a variety of reasons, including individual differences and types
of personality; occupation and actual nature of the job, whether working in the private or
public sector; and organisational conflict (discussed earlier in this chapter).
Other sources of stress at work include the following:
Restructuring of organisations and reductions in staffing levels resulting from demands
for improved business competitiveness and lower operating costs. This has placed greater
pressures on remaining staff and resulted in a growing number of work-related health
problems, work stress and a less efficient workforce.
The long-hours culture, increased workloads and work intensification, together with
unreasonable deadlines.
Excessive rules and regulations, and greater bureaucratic burdens especially among professional groups.
Developments in information and communications technology (ICT) that mean staff are
far more constantly and easily contactable and expected to deliver everything faster. This
can lead to greater pressure on individuals, a reluctance to switch off and a blurring
between work and home life.
Organisational changes such as redundancies and the loss of key members of staff that
place extra demands on managers.
Interpersonal relationships at work, especially with immediate superiors; poor communications; office politics.
Lack of delegation and autonomy over control of work. Research into managers in various types of organisation in Western Australia showed that delegation of responsibility
to middle managers required great skill, which was too seldom present. Replies from
532 managers in 36 organisations indicated a clear correlation between lack of autonomy
and stress at work. Stress was often caused by the hierarchical structure of the organisation
not permitting sufficient autonomy. As a result, projects were frequently delayed and also
managers’ authority within their departments was undermined.51
Organisation structure and role relationships. Lack of clarity about expected patterns of
behaviour, or role conflict, is a potential source of stress (discussed in Chapter 8). In the
case of customer service, Jamison suggests that if there is a conflict between the requirements of a customer and the requirements of the organisation, this will induce unhelpful
behaviour as a result of stress.52
Cultural differences
To what extent do causes of stress vary according to different cultures? There is some evidence
to suggest that the incidence of stress does not vary noticeably among different cultures. For
example Type A personalities (discussed in Chapter 4) exhibit similar levels of stress across
the United Kingdom, Hungary, Italy, Israel and the United States.53 Another study of a diverse
set of countries across the Anglo world, China and Latin America suggests that stress caused
by long work hours can be mitigated by a strong social support network such as families or
There are a number of measures by which individuals and organisations can attempt to
reduce the causes and harmful effects of stress. There are also many suggested techniques to
help individuals bring stress under control – for example, changing one’s viewpoint, identifying causes of distress, effective time management (discussed in Chapter 12), expanding
one’s social network, laughing and telling jokes, relaxation training, working on stress reduction and appreciating that some stress can be useful. However, there are not always easy
remedies for stress and much depends upon the personality of the individual. Techniques
such as relaxation therapy may help some people, although not others, but still tend to
address the symptoms rather than the cause.
As Vine and Williamson point out, stress-inducing hazards are hard to pin down, much less
eliminate. It is important to know how people feel about the things that cause them stress
as well as which ‘stressors’ are most common in a particular industry and occupation.
Human resource policy should include several stress management building blocks within
the organisation structure including management education, employee education, counselling and support, critical incident briefing, and good sound management.55
Organisations also need to give greater attention to training, support and counselling and
to the work organisation and job design.
Effective communications and conversation
Effective two-way communications at all levels of the organisation are clearly important
in helping to reduce or overcome the level of stress. Staff should feel able to express their
true feelings openly and know they will be listened to. However, in addition to good
communications, Reeves refers to the importance of conversation for maintaining relationships and suggests a case for a conversation culture. The ability to hold good-quality conversations is becoming a core organisational and individual skill. Unlike communication,
conversations are intrinsically creative and roam freely across personal issues, corporate
gossip and work projects. ‘Conversations are a defence against stress and other mental health
problems. People with good social relationships at work are much less likely to be stressed
or anxious.’56
A growing number of organisations are introducing an email-free day to encourage staff
to use the telephone or walk across the corridor to talk more with one another.
Reducing uncertainty
Informing members of staff in the first place about what is happening especially at times of
major change, involving them proactively in the change process, and allowing people to feel
in control and exercise their own discretion reduces uncertainty and can help minimise the
potential for stress.
Supportive work environment
Managers can do much to create a psychologically supportive and healthy work environment
(see Chapter 12). Treating people with consideration, respect and trust, giving full recognition and credit, getting to know members of staff as individuals, and placing emphasis on
end results can all help to reduce stress. Managers should attempt to be role models and
through their language and body language indicate to others that they are dealing effectively
with their own work pressures.
HSE’s stress management standards
As part of its ‘Fit for Work, Fit for Life, Fit for Tomorrow’ strategic programme, the HSE is
working with businesses on health issues, including work-related stress, to enable them to
be managed more effectively in the workplace. With input from a range of businesses, professional bodies and trade unions, the HSE has developed a new approach to tackle this
problem. The Management Standards for Work-related Stress encourage employers and
employees to work in partnership to adopt agreed standards of good management practice
to prevent stress at an organisational level.
The adoption of the Management Standards is a key element in bringing about reductions
in worker ill-health absence. The Standards provide a framework that allows an assessment
to be made about the degree of exposure to six key areas of work design – demands, control,
support, relationships, role, and change – that, if not properly managed, are associated
with poor health and well-being, lower productivity and increased sickness absence (see
Figure 3.11).
The HSE has also negotiated a written protocol with ACAS to enable the HSE Stress
Partners to call on the expertise of a team of ACAS advisers as required. In return, the
participating organisations are expected to provide data to help the HSE further refine the
Standards and encourage wider implementation of the Standards.57
Use of kaizen principles
Another interesting approach to reducing stress is through the use of the Japanese kaizen
principles (see also Chapter 20). According to Scotchmer, applying the kaizen 5S method
translated into English as sort, straighten, shine, standardise and sustain can help increase
efficiency and productivity, raise morale and lower an individual’s stress levels. ‘The busier
you are the tidier your desk should be; that is if you wish to get ahead and deliver more with
less stress.’58
European Union agreement on stress
The European Commission magazine reports that within the EU, work-related stress can be
approached on different levels – individual worker, work organisation, national and EU
level. Aside from the legal obligations, stress is a problem for the individual, their work
organisation and society, and work-related stress problems are increasing. The European
social partners have negotiated a framework agreement to identify and manage problems
related to work stress. The agreement identifies anti-stress measures dealing primarily with
management and communications; ensuring adequate management support for individuals
Figure 3.11
The HSE Management Standards for work-related stress
Source: Health and Safety Executive Tackling Stress: The Management Standards Approach, publication no. indg406, July (2005). © Crown Copyright 2005. Crown
copyright material is reproduced under terms of the Click-Use Licence.
and teams; matching responsibility and control over work; improving work organisation
and processes, working conditions and environment.
Critical reflection
‘People may be busy and under pressure, but stress is far too much an over-used word.
Stress has become something of a fashion and many people appear to compete for who
is most stressed. The biggest danger is that the more people talk about stress, the more
likely they will really become stressed.’
What are your views? Do you feel under stress?
We have looked at the importance, nature and some main features of organisations as an
integral feature of human civilisation. But what role do, or should, organisations play in the
lives of their staff or with broader concerns for the work/life balance? And how much also
depends upon the individual’s orientations to work (discussed in Chapter 1)?
Meaning in people’s lives
Popular press articles often suggest that work is still a large component of what gives
meaning to people’s lives and give examples of big lottery or pools winners staying in work
and often in their same, even apparently routine, jobs. Other surveys and reports continue
to suggest that the workplace is no longer a central feature of social activity. For a majority
of people the main reason for work remains the need for money to fulfil the necessities of
life. However, much still appears to depend on the extent of an individual’s social contacts
and activities outside of the work situation.
A survey from Roffey Park Management Research and Training Institute found that the
vast majority of managers are looking for a greater sense of meaning in their working lives.59
A study from the Department of Trade and Industry draws attention to the fact that the workplace has altered dramatically and old methods are no longer appropriate as employers
accept that their most valuable asset is their workforce.
Employers worldwide are recognising of their own accord that it makes good business sense to provide
opportunities for their workforce to achieve a better work–life balance – with a pay back of increased
morale, better effectiveness and productivity, and the ability to embrace change.60
The results also show there is no one standard work/life balance policy that will suit every
business. Arguably there is no such thing as work/life balance but different work/life
balances with different parts of the jigsaw taking on greater importance at different times
in our working lives.61 Summers and Nowicki suggest that the more secure the organisation
and the less competitive the environment, the more latitude the manager has to encourage
employees to lead balanced lives.62
In contrast, however, Armitage maintains that the image presented by the media is one
where work is so attractive that it surpasses the Protestant ethic of being good for the soul
and becomes something we must all do for the good of our well-being. Armitage questions
whether it is time to re-assess what we do and whether we get satisfaction from it. Although
we may not have unlimited control over what we do, we have to make a greater effort to
balance the amount of time and effort we put into our work and our personal lives. ‘Once
work begins to take over one’s life to the exclusion of all other interests, that is the time to
call a halt. If not, then we run the very real risk of not only becoming a workaholic, but
also of endangering personal relationships and friendships and maybe even suffering the
longer-term effects of ill health.’63
Work–life balance is an issue of growing concern within the UK. The declining influence of trade
unions in regulating the employment relationship, job insecurity, the extension of operating and
opening hours, and the impact of new forms of information and communications technology on
work are just some of the factors that have made it increasingly difficult for workers to balance
their work and their personal lives.
European Industrial Relations Review 64
Comparison with Australia
A survey by the Australian Institute of Management in the state of Victoria (roughly the
same size as the British Isles) into job satisfaction, working hours, the impact of change and
sense of heath and well-being found that top level managers are focusing more than ever on
getting the work/life balance right in their organisation. Compared with UK managers,
Australian managers were more likely to report that their organisation had work/life balance
programmes in place. They have a greater option of extra leave/holiday and enjoy a better
work/life balance.65
Ethical considerations
It is not easy to determine the extent to which attention to the quality of working life
and the work/life balance is based on the exercise of a genuine social responsibility and
a moral or ethical motivation (discussed in Chapter 18) or based primarily on the pursuit of
economic efficiency and motivated through good business practice and enlightened selfinterest. But to what extent should the work/life balance form part of the ethical concern or
underlying values of an organisation? Opinions appear to be divided. For example, Sternberg,
whilst recognising the importance of treating employees ethically, does not support the
belief that a business should be run for the benefit of its employees or should by action or
by omission encourage employees to have inappropriate expectations of the business.
Despite widespread notions to the contrary, it is not the role of business to give meaning to the lives of
its employees or to provide social welfare or full employment; business is not a substitute for family or
community, the church or the state.66
Meanwhile, Browning suggests that a meaningful work community is one that concentrates on the overlap between individual values and aspirations, the organisation’s values,
and the wider concerns and expectations of modern society. Employees are looking for more
meaning at work. Bringing them closer into the organisation and giving them responsibility
for its vision and values is the key.
We are increasingly looking forward for the workplace to provide us with the meaning that we once expected
from the more traditional sources in our lives, such as community, religion and family. For companies
this means balancing commercial goals with the aims of employees, and it is not simply about culture.67
ACAS draws attention to the reinforcing nature of its mission to improve both organisations and working life. These objectives are not mutually exclusive.
Unless improving working life is taken into account, employers will not get the motivation, commitment
and loyalty that are increasingly needed for success. Unless there is an improvement in performance,
employers will not have the wherewithal to bring about a sustained improvement in working lives –
improving performance is the most practical way of improving working life.68
Is work/life balance still an issue?
Many staff still have specific places of work and agreed times in which to undertake their
duties. However, technology and the internet allow for greater flexibility in work schedules.
So-called knowledge workers, who work from home on computers, with greater control
over their roles and work times, arguably have improved motivation and productivity. But,
in a thought-provoking article, Reeves questions the extent to which progress has been made
in establishing a healthy equilibrium between our working day and personal time and
if work/life balance is still an issue or already past its sell-by date. The phrase has been
contested for the presumption that life is better than work and that the two are separable in
a clear-cut way that allows a calculation of ‘balance’ between them.
Continuing concern with the issue cannot be explained simply with reference to working
hours. Work/life balance is moving towards a concern with flexibility and parenting. It taps
into a desire for greater autonomy at work, a shift in gender roles within the family, the
possibilities of technology and an intensification of working life. According to the Work
Foundation, two-thirds of companies are now offering flexible work options although the
pace of change in organisations granting more freedom over working time is extremely slow.
Concerns about work/life balance also reflect a growing sense of stress, tiredness and a lack
of time. The conclusion from Reeves is:
It would be a shame if work/life balance faded away into the dustbin of business jargon. Underneath
its banal-sounding aspirations are some deep-seated, radical challenges to organisations and to individuals. If work/life balance means anything of value at all, it is a clarion call for a better quality of
life, for better parenting and, above all, for greater personal autonomy. It seems to me that work/life
balance is either a crusade for human freedom or it is nothing.69
Work/life balance and public policy
The European Commission, however, still stresses the importance of helping people to
improve their work/life balance, and continues to unveil a series of packages to update existing EU legislation. The Commission also draws attention to the interactions between
work/life balance and public policy.
While the choices that people make when combining the professional, private and family aspects of their
lives are primarily personal, the way in which they balance these competing demands has direct consequences for public policy. It influences, for example, the number of children people choose to have,
or if they decide to work or not. At the same time, public policy itself influences these choices: the
existence of public provision of care for children and other dependents, for instance, or legal rights to
family related leave.70
We have looked at the nature and type of organisations and their components. It is, however, important to remember that organisations are living organisms and evolving constantly. The changing nature of work organisations and the social context has led to a climate
of constant change and the need for greater organisational flexibility. Managers need to be
aware of new psychological contracts and to adopt alternative styles of management.
As Chowdhury points out, ‘The organization of the 21st century will be characterized by
unprecedented complexity and will require a different breed of leader.’71 Ulrich also suggests
that with the changing and dynamic contextual factors,
The essence of organizations has shifted and will continue to shift from focusing on structure to capability. Capability represents what the organization is able to do and how it does it rather than the more
visible picture of who reports to whom and which rules govern work . . . Organizations will operate in
the future to identify and nurture a handful of critical capabilities.72
The importance of people in the organisation
Lynda Gratton emphasises the importance of putting people at the heart of corporate
purpose. We are part of organisations stamped by technology that has created the patents,
ideas and innovations that brought success. However, while this past has been essential to
our success, it will not bring sustainable competitive advantage for the future unless we build
the potential of people and human capital in our organisations. This requires a new agenda,
a new set of challenges for leaders and a redefined set of managerial capabilities that includes
an understanding of the reality of the organisation.
Gratton suggests that you should build a model for your organisation around what causes
high levels of trust and inspiration and to consider the organisation against these key influences:
Do people understand the context in which they operate and the competitive threats and
challenges the business faces?
Are employees confident about the ability of the organisation to adapt?
Are they involved in decisions about themselves and the organisation?
It is also important to understand the complexity of the organisation and the changes
necessary to move from the present to the future.73
Cloke and Goldsmith refer to the rise of organisational democracy. There is a demand for
alternative organisational practices, and a far-reaching transformation has already begun,
based on the idea that management as a system fails to open the heart or free the spirit.
The age of management is coming to an end and the real push for the future is for more
authentic human relationships and the humanisation of organisations as crucibles for
personal growth and development.74
The future world of work and the ‘Y’ factor
Management Today commissioned a survey from FreshMinds looking at the future world of work
and the contrasting attitudes and perspectives of three different generations and age groups:
the confident, footloose wire-free Generation Y (born between 1980 and 1995 and
typified by travel first, then a career);
the mellow baby-boomers (born between 1946 and 1963 and typified by a search for
security); and
the pig-in-the-middle Generation X (born between 1964 and 1980 and typified by after
the slog, the rewards).
From the on-line survey of 1,000 people, supplemented by three extensive focus-group sessions, emerges ‘a complex picture of a workforce in a state of flux, struggling to come to
terms with the changed realities of today.’ This new world of work is termed ‘Work 2.0’.
As the number of baby-boomers declines and the proportion of Generation Y increases
this will have an impact on the work environment. Generation X have another three decades
at work but this is a different world of work from the one they entered 15 or so years ago
and there is less confidence and few guarantees about their financial future. By contrast,
Generation Y will have fewer problems in adapting to the changed realities of the 21st
century. Encouraging the three different age groups to work happily as a team will require
imagination on all sides and competent management. For example the influence of the war
on the baby-boomers and the search for security is not something understood readily by
Generations X or Y. The message from Alistair Leathwood, managing director of FreshMinds
Talent, is that the rules of engagement at work have changed. ‘Work 2.0 signals a new social
contract between employers and employees – one premised upon short-term commitment,
flexibility and, most importantly, one where the employee’s loyalty to their employer is not
expected to be any greater than what little the employer provides to its staff.’75
Critical reflection
‘Management models are a crude representation of our organisational existence that
only serve to dull our awareness of the richness of our environment and prevent us from
finding new ways of looking at the world of organisations and work.’
How would you argue against this statement?
■ The application of organisational behaviour and
process of management take place not in a vacuum
but within the context of an organisational setting.
There are many different types of organisations set up
to serve different purposes and needs, and they come
in all forms, shapes and sizes. However, there are
at least three common factors in any organisation –
people, objectives and structure – to which can be
added a fourth factor – management. The qualities of
these factors determine organisational effectiveness.
■ Organisations can, traditionally, be distinguished
in terms of two generic groups: private enterprise and
public sector. The increasing rate of privatisation has
led, however, to a blurring of commercial interests
and service to the community. In recent years greater
attention has been given to social enterprise organisations. Another major distinction is arguably between
production and service organisations. In order to relate
the study of management and organisational behaviour to one particular type of organisation as distinct
from another, it is necessary to group similar types of
organisations together.
■ Organisations differ in many important respects
but they also share common features. Business organisations can be viewed as open systems in continual
interaction with the external environment of which
they are part. The open systems model enables the
comparative study and analysis of work organisations.
Within the organisation as a whole there are a number
of sub-systems interrelating and interacting with each
other. These sub-systems can be identified as task,
technology, structure, people, and management.
■ Whatever the type or nature of an organisation or
its formal structure, an informal organisation will
always be present and arises from the interactions of
people, their psychological and social needs and the
development of groups with their own relationships
and norms of behaviour. The informal organisation
serves a number of important functions and has
an influence on the morale, motivation, job satisfaction
and performance of staff.
■ It might be expected that a healthy organisational
climate would be reflected by complete harmony in
working relationships, but conflict is a reality of
management and organisational behaviour. There are
contrasting views of conflict and it can be seen to have
both positive and negative outcomes. The important
point is how conflict is handled and managed.
Managers need to adopt appropriate strategies for
dealing with the harmful effects of conflict.
■ There appears little doubt that stress at work is a
major concern and a potential source of mental and
physical ill-health. However, a certain amount of
pressure may arguably help promote a higher level
of performance. There are a number of measures to
help reduce the harmful effects of stress. Increasing
attention is focused on the role organisations play in
the lives of staff and with broader concerns for the
work/life balance and for meaning in people’s lives.
Organisations of the future need to be aware of the
importance of people and of new social contracts
between employers and employees.
1 How would you define an organisation and why do organisations exist? What are the common factors in any
2 Contrast various organisations, including your own, in terms of classifications based on (i) prime beneficiary,
and (ii) primary activity.
3 Discuss critically the extent to which differences among various organisations limit the value of the study of
management and organisational behaviour.
4 Assess critically the practical value to both the student and the manager of adopting an open systems view
of organisational analysis.
5 Distinguish between the formal and the informal organisation and explain their main characteristics. What
functions are served by the informal organisation?
6 To what extent do you accept the view that conflict is an inevitable feature of management and
organisational behaviour?
7 Why do you think increasing attention is being given to the work/life debate? Is this attention justified? As
a senior manager, what steps would you take to help improve the quality of working life for staff?
8 Give your own critical views on how you see the organisation of the future and the humanisation of organisations.
Watch out for an epidemic of petty fraud
The economist J. K. Galbraith asserted that fraud rose
in a bull market and shrank in a slump. The discovery
of Bernard Madoff’s Ponzi scheme suggests Galbraith
may be right about large-scale embezzlement, but my
experience is the opposite when it comes to petty
larceny. I suspect industry is enduring an epidemic
of crime right now, as integrity becomes a casualty of
the recession.
At one of our restaurant companies, we have
suffered a disturbing rise in insurance claims. This
is not because we are careless: we take health and
safety seriously. Several of these actions relate to
apparent falls by suppliers’ workers, for example. The
curious thing is that in more than one case the victim
appears to have waited more than 15 months before
notifying us of the injury. After talking to other
operators, it seems the hospitality trade is suffering
a plague of legal letters from claimants looking for free
money. No doubt some are genuine; but others are
trying it on, I am sure, because they are feeling the
pinch, and think negligence claims are easy money.
Last year, the Association of British Insurers
reported a 17 per cent rise in fraudulent insurance
claims. I fear the increase this year will be even
greater. Unfortunately, insurers often settle small
claims even if they are doubtful, simply to save legal
fees and administrative bother. But this policy of
expediency only encourages others to try the same
con. Similarly, at another retail business we have had
trouble with several thefts of large sums of cash from
branches this year, all carried out by insiders.
It is very depressing to have to deal with employee
dishonesty. One feels a despairing sense of betrayal,
especially if senior staff are involved, and too often
all that happens to the perpetrators is that they lose
their job. As with all such lawless behaviour, these
incidents can destroy trust in the workplace, and lead
to unhealthy suspicion between owners and staff.
The answer is to have excellent systems and thorough
checks and balances. But no method of prevention is
perfect, and crooks are ingenious at inventing ways
round what appears to be foolproof security.
In Britain at least, fiddling expenses will never be
seen in the same forgiving light after the recent month
of political exposés in Westminster. In the wake of
the parliamentary scandal, now is the perfect time for
organisations to review their staff expense account
Source: Nicholas Belton/iStockphoto
Luke Johnson
Does fraud rise in a bull market and shrink in a slump – or has
integrity become a casualty of the recession?
procedures and stop all abuse in its tracks. Those who
cheat on their expenses will find it harder to rationalise
their corruption.
I suppose the motivation behind the spike in fraud
is obvious. Normally trustworthy people are desperate
because they have been living beyond their means,
and their income has fallen with the economy. The
heightened threat of wrongdoing means business
as normal is harder than ever. Vigilance and
a proportionate response are required of leaders.
Perhaps the most important thing is to avoid slipping
into a sense of paranoia, and hope that the vast
majority of people are honest, whatever the
Source: Johnson, L. ‘Watch Out for an Epidemic of Petty Fraud’,
Financial Times, 2 June 2009.
Discussion questions
1 Using the checklist for a PESTEL analysis in
Figure 3.7 explain the influences which the author
believes to be affecting the behaviour of
customers and employees.
2 How can managers guard against fraud
committed by both customers and staff?
3 What impact do you think both the fraud, and the
preventive measures you suggest, are likely to
have on levels of organisational conflict and work
related stress? Explain your views.
Undoubtedly you have had recent experiences with numerous organisations. Ten to fifteen minutes of reflective
thinking should result in a fairly large list of organisations. Don’t be misled by thinking that only large
organisations, such as your college or General Motors, are relevant for consideration. How about the clinic with
the doctor(s), nurse(s) and secretary/bookkeeper? Or the corner garage or service station? The local tavern,
McDonald’s and the neighbourhood theatre are all organisations. You should not have any difficulty in listing
a number of organisations with which you have had recent contact.
The second part of the exercise, however, gets tougher. You are asked to describe several of the key
characteristics of the organisations that you have listed. One of the major issues in studying and describing
organisations is deciding what characteristics or factors are important. Some of the more common
characteristics considered in the analysis of organisations are:
1 size (small to very large);
2 degree of formality (informal to highly structured);
3 degree of complexity (simple to complex);
4 nature of goals (what the organisation is trying to accomplish);
5 major activities (what tasks are performed);
6 types of people involved (age, skills, educational background, etc.);
7 location of activities (number of units and their geographic location).
You should be able to develop a list of characteristics that you think is relevant for each of your organisations.
Now to the third, final and most difficult task. Think about what is involved in the management of these
organisations. For example, what kinds of functions do their managers perform? How does one learn the skills
necessary to be an effective manager? Would you want to be a manager in any of these organisations?
In effect, in this exercise you are asked to think specifically about organisations you have been associated with
recently, develop your own conceptual model for looking at their characteristics, and think more specifically about
the managerial functions in each of them. You probably already know a great deal more about organisations and
their management than you think. This exercise should be useful in getting your thoughts together.
Step 1
Prior to class, list up to ten organisations (e.g. work, living group, club) in which you have been involved or with
which you have had recent contact.
Step 2
Enter five organisations from your list on the form ‘Profile of Organisations’ (below).
a List the organisations.
b Briefly outline the characteristics that you consider most significant.
c Describe the managerial functions in each of these organisations.
Step 3
During the class period, meet in groups of five or six to discuss your list of organisations, the characteristics you
consider important and your descriptions of their management. Look for significant similarities and differences
across organisations.
Step 4
Basing your selections on this group discussion, develop a list entitled ‘What we would like to know about
organisations and their management’. Be prepared to write this list on the board and to share your list with other
groups in the class.
Assignment 1 – continued
Key characteristics
Managerial functions
Source: Kast, F. E. and Rosenzweig, J. E. ‘Our Organizational Society: Your Association with Organizations’, in Experimental Exercises
and Cases in Management, McGraw-Hill (1976), pp. 13–15. Reproduced with permission from the McGraw-Hill Companies.
Think of your own college or any organisation with which you are familiar and prepare a descriptive account to
your colleagues on:
its history, reputation and management structure;
the unusual, strange, interesting or ‘quirky’ features of, and people in, the organisation; and
how things actually happen and how work is really undertaken in practice.
Completing this exercise should help you to enhance the following skills:
Demonstrate your ability to undertake a strategic analysis of an organisation.
Identify key features that are likely to require urgent management action.
You are required to set out a detailed PESTEL (political, economic, socio-cultural, technological, environmental,
legal) analysis of your college department or faculty, or any other organisation with which you are familiar.
What is the impact of environmental influences on the organisation and what are the major opportunities and
threats that you identified from your analysis?
Comment critically on the objectivity of your analysis, and on what limitations or restrictions you encountered.
The issue of third world poverty is one which is rarely
far from Western headlines, sometimes as the result of
a particular humanitarian crisis or natural disaster, but
often in association with debates about the effects of
globalisation, and in particular the impact of global
business activities on individuals and communities in
poor countries. It is an issue which inspires heated
argument, as well as demands for money, or action, or
both. A comparison between the agendas of Live Aid
and Live 8, for example, show a shift from demands
for charity (in Sir Bob Geldof ’s famously exasperated
plea to ‘Give us your f***ing money!’ at Live Aid) to
concern about the trading position of third world
countries in a global context; hence the lobbying of
the G8 leaders at the 2009 summit to maintain levels
of aid to poorer countries despite the global recession.
Discussion of the topic often tends to focus on the
behaviour of specific business organisations and
the ‘ethical’ status of their activities in poorer parts of
the world. Some participants in the debate question
whether business can ever truly be ‘ethical’ because its
very existence depends upon acts of exploitation. So can
business ever really help improve the condition of poor
people in developing countries?
When considering such issues, it is important to
remember that poverty is not the same thing as
helplessness. The development of the Grameen Bank,
a Bangladeshi banking business, illustrates one way in
which ingenuity coupled with enterprise can present
an alternative to charity and government aid as a route
out of poverty.
Why banks are important to the poor
The development of any successful enterprise relies not
only on the ingenuity, creativity and hard work of the
individual entrepreneur, but also on a number of social
and economic preconditions, including such things as
property rights and the ability to amass or borrow
capital for investment in equipment and materials.76
Borrowing power amongst the poor is very limited, as
they are unlikely to be able to provide adequate security
for loans from a commercial lending institution such as
a bank. Without the ability to purchase the tools of
their trade or raw materials, many individual workers
remain dependent upon friends, family, moneylenders
or employers to loan them what they need, often at
extortionate rates and at the risk of physical violence
if repayments are not made on time. Poor workers are
therefore generally unable to amass sufficient funds to
Source: AP Photo/H.O./Press Association Images
Grameen Bank: a case of applied business ethics
Mohammed Yunus and the Grameen Bank he founded won the 2006
Nobel Peace Prize.
become independent economic operators. This situation
of dependency upon an employer or other intermediary
for both paid work and the means to do the work is
often described as ‘debt bondage’ or ‘debt peonage’.
The effect of such structures is often to ensure that the
poorest in society remain unable, by their own efforts,
to break free from a form of servitude which stifles
more general economic growth.
Mohammed Yunus and the Grameen Bank
Traditional banks developed from places where rich
people were able to deposit their money safely, into
commercial institutions where customers’ money is
used to make loans to other customers. In the earlier
stages of their development they competed for the
business of large customers such as companies and
wealthy individuals since these were low-risk borrowers
and provided high growth prospects. Until the
standardisation and automation of many banking
operations, most working-class people in developed
economies did not have ready access to banking
services. For poor people in developing countries,
access to commercial banking services, including
loans, remains a remote prospect indeed.
Mohammed Yunus is a Bangladeshi economist who,
after studying and working in the United States,
returned home to become an economics professor at
the University of Chittagong. He became familiar with
the problems of poor local people, mainly women, in
his lunchtime strolls around the city of Dhaka, and
realised that many of the people he met would be
greatly helped by the injections of very small amounts
of capital, as little as US$1–2. He developed the idea of
a specific type of what is usually termed ‘microcredit’,
and in 1976, using $26 of his own money, began to
make very small loans to poor local women so that they
could invest in animals or other materials which would
enable them to make money. Such tiny loans were out
of the question for standard commercial banks because
of the high administrative costs relative to the
investment, the lack of loan security and impossibility
of proper credit referencing. Thus he invented a new
type of organisation: a low-cost, local operation which
runs from the homes and community centres of the
village (grameen literally means village). The loans are
unsecured, so rely on local knowledge and trust; and
they need to be very precisely targeted. Both the
investors and the creditors of grameen banks know
each other, and members meet regularly to monitor the
progress of business including loan repayments. Social
capital is the mainstay of the banks, and borrowers are
highly involved in loan decisions and the general
operation of the banks. This social nexus leads to a very
unusual feature of the banks, which is their policy of
making loans only to the very poor, and, in the vast
majority of cases, to women, who are generally more
trustworthy in their handling of money than men.
Yunus believes that this type of credit can lead to
significant change in the status of poor individuals,
and can help provide a route out of extreme poverty
without reliance on external sources of money.
Grameencredit is based on the premise that the poor have
skills which remain unutilised or under-utilised. It is
definitely not the lack of skills which make poor people
poor. Grameen believes that the poverty is not created by
the poor, it is created by the institutions and policies
which surround them. In order to eliminate poverty all we
need to do is to make appropriate changes in the
institutions and policies, and/or create new ones.
Grameen believes that charity is not an answer to poverty.
It only helps poverty to continue. It creates dependency
and takes away [the] individual’s initiative to break
through the wall of poverty. Unleashing of energy and
creativity in each human being is the answer to poverty.77
The system proved highly successful; the 2008
annual report recorded over 7.6 million members and
6.2 million active borrowers with just under 97 per cent
of these being women.78 Yunus himself was awarded
a Nobel Peace Prize for his anti-poverty work in 2006.
Iqbal Quadir and Grameen Phone
The grameen business model, small-scale, local and
trust-based with a focus on helping the poorest members
of a community, was also behind the development of
a number of offshoot enterprises, which now make up
the Grameen family. One significant one, Grameen
Phone, involves local village women setting themselves
up as ‘telephone ladies’ by enabling them to purchase
a mobile phone with a Grameen Bank loan, and then
renting it out for local use.
Iqbal Quadir’s idea for this communication business
was directly inspired by the principles behind Grameen
Bank, and indeed the bank network also provides part
of the infrastructure, as the local bank offices often
provide the base for the GSM towers needed to make
the network operate. From its inception in 1997, this
initiative has brought communication technology to
rural areas which are otherwise largely isolated; villagers
can now make contact not only with friends and
relatives, but also with hospitals and other services.
It can also improve the market position of grameen
phone customers who are engaged in other sorts of work.
An example is described by Roland Buerk, in a
BBC report on one of the grameen ‘telephone ladies’,
Roshinara Begum in the Bangladeshi village of
Kalimajani. One of her customers is a local fish farmer,
Mohammed Abul Hashem, who uses the phone service
to order food and supplies from the capital. He is quoted
as explaining that ‘If the phone wasn’t here then I’d
have to travel to Dhaka. It’s a very long and unpleasant
journey. Now I can use the phone I am saving time and
it makes my business more competitive.’79
Similarly, farmers are able to compare seed prices,
rather than relying on a single company representative
who happens to be in their area, when deciding what to
buy and from whom; this gives them some economic
muscle in the market. Grameen Phone is far from being
a charitable activity relying on benevolence; its spread
has only been possible because it entered into
a profitable partnership with the Norwegian telecoms
company Telenor, which owns 62 per cent of the
business and provides both the technical knowledge
and the equipment to run the network successfully. In
2004 Grameen Phone numbered 95,000 phone ladies
operating in 50,000 villages, each making, on average,
$700 a year, with the Bangladeshi government
benefiting to the tune of $200 million in taxes.
As Quadir has observed,
Governments don’t always need to support the poor.
The poor can support the government. Poor people aren’t
a recipient – they’re a resource. It’s not too expensive to
provide services to the poor – the involvement of the poor
reduces the cost of services. Poor people are eager learners
because they don’t have the luxury of not learning.80
The Grameen Bank and the associated Grameen
Trust continue to develop their range of business
support activities to suit local circumstances. Most
recently, the Grameen CellBazaar uses 3G mobile
technology to connect otherwise isolated traders in
‘unwired’ rural communities with other buyers and
sellers in a form of virtual market.81 In a time of
recession, access to information and opportunities
may be all the more important for the world’s poor.
Your tasks
1 How would you classify an organisation such as the Grameen Bank? Which of the approaches (classification
by purpose, by prime beneficiary, by primary activity) do you think provides the most accurate description of
the Grameen Bank, and why?
2 How far can the concepts of the ‘formal’ and the ‘informal’ organisation apply to this case?
3 Two of the significant features of the Grameen Bank are its focus on helping individuals to achieve
independence, and its strong preference for loans to women. What problems might this cause, and what
risks do they take, in the communities and societies (mainly Islamic) where they operate? Can their continued
operation be ethically justified if they create serious social disruption?
4 Find out what you can about ‘debt bondage’ or ‘debt peonage’. Contrast this system of work organisation
with the way in which a Western multinational organisation (such as a manufacturing organisation or
a traditional bank) operates in a developing country. Critically evaluate each system of work organisation in
ethical terms.
Notes and references
1 For an account of developments in organisations, see
Peters, G. ‘Creating the Modern Organization’, in Crainer,
S. and Dearlove, D. (eds) Financial Times Handbook of
Management, second edition, Financial Times Prentice Hall
(2001), pp. 24–45.
2 Schneider, S. C. and Barsoux, J. Managing Across Cultures,
second edition, Financial Times Prentice Hall (2003).
3 Watson, T. J. Management Organisation and Employment
Strategy, Routledge and Kegan Paul (1986).
4 Schein, E. H. Organizational Psychology, third edition,
Prentice Hall (1988), p. 15.
5 Cyert, R. M. and March, J. G. A Behavioral Theory of the
Firm, second edition, Blackwell (1992).
6 Mintzberg, H. The Structuring of Organizations, Prentice Hall
7 Coffey, R. ‘The Service Principle’, Chartered Secretary,
March 2005, p. 26.
8 Arnott, J. ‘Cause and Ethics’, Chartered Secretary,
December 2002, pp. 22–4.
9 See, for example, Dodds, O. ‘Implications of Change for
Local Government Managers’, Professional Manager,
November 1995, pp. 15–17.
10 Wright, Sir David ‘In My Opinion’, Management Today,
March 2003, p. 14.
11 See, for example, ‘Social Enterprises as a New Type of
Employer’, Employment Relations Matters, ACAS, issue 11,
June 2008, pp. 3–5.
12 Kushner, R. J. and Poole, P. P. ‘Exploring StructureEffectiveness Relationships in Nonprofit Arts
Organizations’, Nonprofit Management and Leadership,
vol. 7, no. 2 (1996), pp. 119–36.
13 Brooks, A. C. Social Entrepreneurship: A Modern Approach to
Social Venture Creation, Pearson Prentice Hall (2009).
14 Fitzsimmons, J. A. and Sullivan, R. S. Service Operations
Management, McGraw-Hill (1982).
15 Levitt, T. ‘Production-Line Approach to Service’, Harvard
Business Review, September–October 1972, p. 41.
16 For a discussion on the nature of service industries, see, for
example, Mullins, L. J. Hospitality Management and
Organisational Behaviour, fourth edition, Longman (2001).
17 Macdonald, J. ‘Service Is Different’, The TQM Magazine,
vol. 6, no. 1, 1994, p. 5.
18 Weber, M. The Theory of Social and Economic Organization,
Collier Macmillan (1964).
19 Blau, P. M. and Scott, W. R. Formal Organizations,
Routledge and Kegan Paul (1966).
20 Katz, D. and Khan, R. L. The Social Psychology of
Organizations, second edition, Wiley (1978).
21 See, for example, Mullins, L. J. ‘The Hotel and the Open
Systems Model of Organisational Analysis’, The Services
Industry Journal, vol. 13, no. 1, January 1993, pp. 1–16.
22 For a more detailed discussion of environmental
influences, see, for example, Worthington, I. and Britton,
C. The Business Environment, fifth edition, Financial Times
Prentice Hall (2006).
23 Lynch, R. Corporate Strategy, fourth edition, Financial Times
Prentice Hall (2006).
24 Worthington, I. and Britton, C. The Business Environment,
fifth edition, Financial Times Prentice Hall (2006), p. 13.
25 Law, S. ‘Beyond the Water Cooler’, Professional Manager,
January 2005, p. 26.
26 Egan, G. ‘The Shadow Side’, Management Today, September
1993, pp. 33–8.
27 Ackroyd, S. and Thompson, P. Organizational Misbehaviour,
Sage Publications (1999).
28 Drucker, P. F. The Practice of Management, Heinemann
Professional (1989), p. 119.
29 Poole, M. R., Gould-Williams, J. and Mendes, P. ‘British
Managers’ Attitudes and Behaviour in Industrial Relations:
A Twenty Year Study’, British Journal of Industrial Relations,
vol. 43, no. 1, 2005, pp. 117–34.
30 For an account of the Marxist critique, see, for example,
Johnston, R. ‘Hidden Capital’, in Barry, J., Chandler, J.,
Clark, H., Johnston, R. and Needle, D. (eds) Organization
and Management: A Critical Text, International Thomson
Business Press (2000), pp. 16–35.
31 Salaman, G. Class and Corporation, Fontana (1981).
32 See, for example, Robbins, S. P. Organizational Behavior:
Concepts, Controversies, Applications, eighth edition, Prentice
Hall (1998).
33 Townsend, R. Further Up the Organisation, Coronet Books
(1985), p. 39.
34 Schmidt, W. H. ‘Conflict: A Powerful Process for
(Good or Bad) Change’, Management Review, issue 63,
December 1974, pp. 4–10.
35 Irvine, L. ‘Conflicts of Interest’, The British Journal of
Administrative Management, March/April 1998, pp. 8–10.
36 Mannering, K. ‘Working with “Prickly” People’, Professional
Manager, vol. 19, no. 1, January 2009, pp. 32–4.
37 Woodward, J. Industrial Organization: Theory and Practice,
second edition, Oxford University Press (1980), p. 113.
38 See, for example, James, J. Body Talk at Work, Judy Piatkus
Limited (2001).
39 Hart, J. ‘Mind the Gap’, Professional Manager,
November 2002, pp. 22–3.
40 Health and Safety Executive ‘Tackling Stress: The
Management Standards Approach’, July 2005.
41 York, P. ‘Getting a Grip on Stress’, Management Today,
October 2001, p. 105.
42 ‘Work-Life Balance: Evidence from Across the UK’,
European Industrial Relations Review, issue 380,
September 2005.
43 Van Zyl, E. and Lazenby, K. ‘The Relation between Ethical
Behaviour and Work Stress amongst a Group of Managers
Working in Affirmative Action Positions’, Journal of Business
Ethics, vol. 40, no. 2, October 2002, pp. 111–19.
44 Armson, S. ‘Putting Stress on the Bottom Line’,
Management Today, September 1997, p. 5.
45 Taylor, M. ‘Tell Me Why I Don’t Like Mondays’, Working
Paper of the Institute for Social and Economic Research,
October 2002.
46 Randall, J. ‘Home Truths’, Management Today, June 2001,
p. 31.
47 Engineering Employers’ Federation ‘Managing Stress at
Work’, EEF (2001).
48 Orpen, C. ‘Want The Best? Get Stressed!’ Chartered
Secretary, August 1996, pp. 18–20.
49 Gwyther, M. ‘Stressed for Success’, Management Today,
January 1999, pp. 22–6.
50 ACAS News, issue 11, Spring 2008.
51 Hall, K. and Savery, L. K. ‘Stress Management’, Management
Decision, vol. 25, no. 6, 1987, pp. 29–35.
52 Jamison, C. ‘Top 10 Myths of Customer Service’, The British
Journal of Administrative Management, July/August 1999,
pp. 19–21.
53 Liu, C., Spector P. E., and Shi, L. ‘Cross-National Job Stress:
A Quantitative and Qualitative Study’, Journal of
Organisational Behavior, February 2007, pp. 209–39.
54 Spector, P. E. ‘A Cross-National Comparative Study of
Work-Family Stressors, Working Hours and Well-Being:
China and Latin America versus the Anglo World’,
Personnel Psychology, Spring 2004, pp. 119–42.
55 Vine, P. and Williamson, J. ‘Run Down, Stressed Out’,
The British Journal of Administrative Management,
January/February 1998, pp. 14–17.
56 Reeves, R. ‘Reality Bites’, Management Today, March 2003,
p. 35.
57 Information kindly provided by HSE Press Office,
January 2006.
58 Scotchmer, A. ‘A Place For Everything and Everything in Its
Place’, Professional Manager, vol. 16, no. 1, January 2007,
pp. 30–1.
59 Hoar, R. ‘Work with Meaning’, Management Today, May
2004, pp. 45–53.
60 ‘Work–Life Balance: The Business Case’, Department of
Trade and Industry, September 2001, p. 3.
61 Rice, M. ‘Balancing Acts’, Management Today,
September 2002, pp. 52–9.
62 Summers, J. and Nowicki, M. ‘Achievement and Balance:
What Do Managers Really Want?’, Healthcare Financial
Management, vol. 56, no. 3, March 2003, pp. 80–4.
63 Armitage, K. ‘Can We Really Achieve a Life/Work Balance?’,
The British Journal of Administrative Management,
July/August 2001, pp. 14–15.
64 ‘Work–Life Balance: Evidence from Across the UK’,
European Industrial Relations Review, issue 380,
September 2005, p. 27.
65 Mann, S. ‘Balance in Favour of Aussies’, Professional
Manager, vol. 17, no. 5, September 2008, pp. 38–9.
66 Sternberg, E. Just Business: Business Ethics in Action, second
edition, Oxford University Press (2000), pp. 124–5.
67 Browning, G. ‘The Search for Meaning’, People Management,
29 December 2005.
68 ‘Improving the World of Work’, ACAS, August 2005, p. 16.
69 Reeves, R. ‘Still Juggling After All These Years’, Management
Today, June 2007, pp. 36–43.
70 ‘Juggling Act: How the EU is Helping People Improve Their
Work-Life Balance’, Social Agenda, European Commission,
issue 19, December 2008, pp. 15–20.
71 Chowdhury, S. (ed.) Management 21C, Financial Times
Prentice Hall (2000), p. 205.
72 Ulrich, D. ‘Context, Capability and Response’, in
Chowdhury, S. (ed.) Management 21C, Financial Times
Prentice Hall (2000), p. 240.
73 Gratton, L. Living Strategy: Putting People at the Heart of
Corporate Purpose, Financial Times Prentice Hall (2000).
74 Cloke, K. and Goldsmith, J. The End of Management and the
Rise of Organizational Democracy, Jossey-Bass (2002).
75 Stern, S. ‘My Generation’, Management Today, March 2008,
pp. 40–6.
76 De Soto, H. The Mystery of Capital, Black Swan (2001).
77 Yunus, M. ‘What Is Microcredit?’ www.grameen-info.org,
2006 (accessed 28 July 2009).
78 Grameen Bank ‘Performance Indicators and Ratio
Analysis’, www.grameen-info.org (accessed 28 July 2009).
79 Buerk, R. ‘Telephone Ladies Connect Bangladesh’, BBC
news website, http://news.bbc.co.uk, 26 November 2005
(accessed 28 July 2009).
80 Iqbal Quadir at PUSH conference 2005: ‘People
United to Serve Humanity’ reported at http://
(accessed 28 July 2009).
81 CellBazaar is described on the Grameen Phone website at
http://www.grameenphone.com (accessed 28 July 2009).
Now that you have finished reading this chapter, visit MyManagementLab at
www.pearsoned.co.uk/mymanagementlab to find more learning resources
to help you make the most of your studies and get a better grade.
Below you will find the title and abstract of a recent article in an academic journal which explores a topic relevant
to the chapters in Part 1.
Bakker, A. and Schaufeli, W. ‘Positive Organizational Behavior: Engaged Employees in
Flourishing Organizations’, Journal of Organizational Behavior, vol. 29, no. 2, 2008, pp. 147–54.
This editorial introduces a special issue of the Journal of Organizational Behavior on positive organizational behavior (POB). POB emphasizes the need for more focused theory building, research,
and effective application of positive traits, states, and behaviors of employees in organizations. We
argue that in order to make a substantive contribution to organizational science, POB will need
to show the added value of the positive over and above the negative. In addition, the emerging
concept of employee engagement is briefly introduced. The papers in the special issue describe
exciting positive organizational behavior studies that each tap into an interesting direction in which
POB research might go.
This article introduces the content of a special edition
of the Journal of Organizational Behavior which
attempts to highlight the importance of research into
the positive aspects of organisational behaviour. It is
critical of the tendency in some academic circles to
focus on the negative impact of work on people – the
‘4Ds’ approach (concentrating on damage, disease,
disorder and dysfunction) and how organisations can
minimise these negatives. They claim that in some
disciplines, such as psychology, studies of the
negative side of organisational behaviour outnumber
studies of positive organisational behaviour (POB) by
as much as fourteen to one.
The editorial calls for a focus on positive
psychological conditions and human strengths
(creativity, engagement, self-efficacy, resilience etc.)
and aspects of organisational behaviour that
contribute to peak performance: a movement they
call ‘positive organizational scholarship’ (POS). They
illustrate the value of POS with examples of studies
that have helped managers to understand the way in
which both people and their organisations have
benefited from positive psychological states and
behaviours. In advocating the need for a greater
proportion of POS they refer to the importance
which is currently accorded to the ideas of employee
engagement, motivation and organisational
The article might prompt you to consider the
following questions.
How far do you agree with the premise that studies
of organisational behaviour tend to focus on
negative aspects of the experience of work and
thereby lead to an approach to management and
organisational behaviour that could be described as
‘damage limitation’?
Why do you think so much academic research
seems to have concentrated on the ‘4Ds’?
What would be different about research that
belongs to the POS movement? Which approach
do you think you would adopt if you were
researching an organisational behaviour topic,
and why?
Cadbury: organisation, culture and
It is usual to consider organisations and organisational
behaviour against a background of various contextual
factors; the PESTEL analysis described in Chapter 3 is
one tool for both analysing the current situation of
an organisation, and planning its future development.
Political, economic, social and other influences, and
predictions about changes in these influential areas, are
clearly of great importance to the planning process.
Plans are by definition future-oriented; their success
or failure can only be judged after the event, and
sometimes their true outcome is not easy to determine
for some time. This means that many of the judgements
and insights into organisational activity are actually
historical; we often have to look to the past in order to
understand where organisations are today. History can
have a major impact on the decisions and activities
which take place within organisations, and we
sometimes need to look to an organisation’s past to
understand much of what is going on at present, and
what might be possible for the future. This case shows
something of the changing nature of one famous
organisation over its history, and as such offers some
insight into the complex interplay of contextual factors,
including time, which shapes an organisation’s culture
and behaviour.
‘The past is another country; they do things
differently there.’ 1
Today, it would be quite difficult to see an employer
who purposely segregates men and women into
different areas of work and routinely dismisses women
when they marry as particularly enlightened. In the
past these have been standard practices at Cadbury;
nevertheless when it was founded in the early 19th
century the Cadbury chocolate manufacturing company
was one of the most enlightened employers of the age,
and it has continued to be committed to good practice
and high ethical standards of behaviour throughout its
history. The contextual background to the foundation of
this company has enormous significance for its present
form, and other stages in its development often appear
to be a microcosm of larger-scale political, economic,
social, and other developments.
The official history of the company 2 dates its origins
to 1824 and the opening of a tea and coffee shop in
Birmingham by John Cadbury which sold, among other
things, hand-made cocoa and drinking chocolate. The
popularity of these drinks led to his renting a small
Source: Fox Photos/Hulton Archive/Getty Images
These women working in the Cadbury’s factory in 1932 would have
enjoyed the enlightened attitude of their employer, but like many
female workers of their day, would have been dismissed on marriage.
factory nearby in 1831 for the manufacture of an
increasing range of cocoas and chocolate drinks; and it
is from this time that we can date the foundation of the
business that is recognised worldwide today. There are
a number of important historical influences already at
play in this foundation story. The Cadbury family were
Quakers, that is, members of a non-conformist religious
group with strong beliefs about issues such as social
justice and the alleviation of poverty, and one which
was often associated with the Temperance movement.3
Their religious belief had two significant effects. Firstly,
non-conformist religions (including Catholicism) were
viewed with enormous suspicion by the political
establishment of the 18th and early 19th centuries.
This meant that Quakers and others were barred from
English universities, something which closed off many
career paths in more traditional areas such as the law.
The Test and Corporations Acts, until their repeal in
1828, effectively barred Catholics and many other nonconformist groups from both the military and public
office (including parliament) by requiring all who took
such office to swear an oath of allegiance to the Crown
and to take communion according to the rites of the
established Church of England. With traditional career
paths blocked, many Quakers sought other outlets
for their talents and religious aspirations, and the
foundation of a business was one route which was not
officially barred. Many prominent Victorian businesses
had Quaker or non-conformist origins, including Lloyds
Bank, Clarks shoes, Huntley & Palmers biscuits and
Boots chemists.
Another aspect of Quaker religious belief which
shaped the nature of their activities was that relating
to temperance. John Cadbury was one of the founders
of the Birmingham Auxiliary Temperance Society.
Drinking chocolate was viewed as a morally respectable
alternative to the consumption of beer and spirits, and
a very significant number of chocolate and other
confectionery manufacturers were Quakers. In Britain
the families of Cadbury, Fry, Terry and Rowntree all
founded chocolate companies during the 19th century;
Cadbury and Fry merged in 1918. In many cases,
the manufacturing aspects of the business gave
opportunities for further good works and philanthropic
activity as encouraged by Quaker beliefs, and in many
of the cases cited above, this included a powerful
dedication to the welfare and education of
the workforce.
The original Cadbury factory soon proved too small
for the business, and during the 19th century the
manufacturing process moved first to larger town centre
premises in Bridge Street, but finally in 1879 to newly
acquired and purpose built premises on a 14-acre site
near the river Bourn. By then, John’s two sons Richard
and George were in command of the business, and the
Quaker traditions of enlightened employment were
firmly established. The new site was in fact part of an
overall plan to extend the social welfare associated with
the business, and it would provide a healthy, country
location for the new factory. The building project was
closely overseen by the brothers, and in a tradition
which was to continue until the 1970s, the workmen
who worked on site were directly employed by the
company. This was unusual: most such construction
projects of the time would be subcontracted.
Bournbrook, the name of two properties near the site,
was originally proposed as that of the factory, but the
name was changed to Bournville in what we would
today recognise as a branding decision to give the
company a French-sounding name; French chocolate
had a reputation for superior quality. George Cadbury
initiated the project to build a ‘model village’ nearby in
1895 when he bought 120 acres near the works and
began to build houses in line with the ideals of the
embryonic Garden City movement.4 This meant
avoiding the cramped ‘back-to-back’ style of building
common in cities, and Bournville Village was laid out
with cottages set in gardens and in small groups. While
cottages were initially sold on a 999-year lease to some
of the ‘honest, sober, thrifty workmen’ of the company,
it appeared that this led to some profiteering, and so
the majority of the later cottages were rented, and the
Bournville Village Trust was established to govern the
project. This effectively separated the village from the
actual business, and although the family remained
involved with the Trust, it was not a tied housing
system (a common form of employer-owned housing at
the time) and not all tenants were Cadbury employees.
Nor were all employees housed there; a very large
number of the single women who worked in the factory
would not have been able to afford to rent cottages.5
By 1900 a fairly major development had taken place
extending to 330 acres and over 300 cottages; plans for
further building included a swimming baths for girls.
The Trust and the estate follows very clearly in the
tradition of its founder; its present mission statement
promises to
promote social housing of good quality which
enhances the environment;
manage all their housing and estates to the highest
standards for all residents;
encourage residents to share in decisions affecting
their communities.6
The Trust owns over 7,000 properties, and has also
developed specific housing schemes for people with
a variety of special needs.
Sex and chocolate
As was mentioned above, the Quaker attitude to
enlightened employment had a number of facets which
would not be seen as such today. It is important to view
the developing relationship between the company and
its employees in a historical context. However, it is also
important to consider such developments in the more
enduring context of ‘Cadburyism’; the company’s
approach is not wholly determined by history or
technology but by founding principles of welfare and
philanthropy. There are many potential examples to
choose from, but for the purposes of this case two will
be used as illustration. Firstly, the approach to the
employment of women; and secondly the post-1969
change to company culture in relation to both
professional and craft workers.
The company approach to the employment of women
over its 180-year history clearly reflects a number of
significant social and economic changes which have
affected women in British society. The food industry
generally and Cadbury in particular have always tended
to employ quite large numbers of women workers,
and there is a pattern of gender segregation clearly
identifiable across the sector. This takes two related
forms: a differentiated employment contract and terms,
and segregation in terms of the work itself. The most
obvious form of the differentiated employment contract
was the common practice of dismissing women on
marriage. This was not exclusively a Cadbury or even
Quaker practice, although Quaker beliefs about the
importance of family and the woman’s role as wife and
mother would have been in accordance with the idea
that married women should not work. Marriage bars
were normal practice for many employers until after
the Second World War in areas that included state
employment such as teaching and the civil service,
which ended its bar in 1946. It is important to note
that this was not an exclusively managerial view; trade
unions generally both supported marriage bars and
were opposed to the employment of women in areas
where they might be seen as depressing male wages
or taking men’s jobs. The notion of the ‘family wage’
(higher wages for men because of their role in
supporting a family) was commonly supported by
employers and unions alike until the Equal Pay Act
of 19707 started to make inroads into the practice.
Cadburyism might not have permitted women to
work beyond marriage, but it was opposed to ‘sweated’
labour, and since many of those engaged in this type of
work would have been married women and children,
there is a philanthropic rationale behind the rule.
Changes to these terms of employment began in the
1940s when labour shortages led to the loosening of
the restriction on married women’s employment at
Cadbury; but there is some evidence that one effect
of the employment of women was to prevent
technological development. The relative cheapness
of women workers acted as a disincentive for the
company to invest too heavily in the mechanisation or
automation of processes, particularly in the wrapping
and packing areas of work. It was partly because of
labour shortages in the 1960s and 1970s, and the
increased costs of female labour (which came in the
wake of the Equal Pay and Sex Discrimination Acts),
that Cadbury embarked on a major mechanisation
process in the packing and wrapping areas of work;
the possibility became reality partly because the social
and political context of women’s employment had
The second and related aspect of Cadbury’s approach
to women workers was that of work segregation. Again,
as was common in many industries and the food
industry in particular, the type of work carried out by
men and women was very different. Men tended to be
concentrated in the capital-intensive aspects of
production: machine minding, mixing the products,
checking the quality of ingredients and processes (the
‘wet’ work in chocolate-manufacturing terms). Women
were more commonly found in the labour-intensive
processes, where manual dexterity was important and
work was repetitive; in other words the wrapping and
packaging (or ‘dry’) work. Sex segregation was, in the
early days of Cadbury, seen as morally important (not
just factories but schools, hospitals and workhouses
were also sex-segregated in the 19th century). In overall
terms, the separate contractual arrangements and the
technical segregation severely curtailed the career
prospects for women at Cadbury as elsewhere. It also
affected policies on welfare. The Sick Pay scheme of
1902 established that maximum benefits would be
12 shillings a week for men and 9 shillings for girls;
and when, in 1906, Cadbury created a pension fund,
it was a Men’s Pension Fund. Certainly this was
an enlightened move (at least as far as the men were
concerned) and yet part of the rationale was to avoid
the continuing employment of workers whose efficiency
was waning due to age – very much the ‘business case’.
At around the same time, the company board
received a report on ‘Slow and Inefficient Girls’ which
showed an attempt to balance concerns of welfare and
profitability. Its recommendations included:
That only girls living in their own homes are engaged
. . . those who live in lodgings . . . as a rule are not as
efficient as those from home . . .
■ That no girl over 20 should be engaged
■ That we should have as stringent a medical
examination as possible and instruct the doctor to
reject those he has the slightest doubt about
■ As to those girls working here who are chronic
invalids, as they give a good deal of work to the nurses
[who monitored the sick pay scheme] and certainly do
not pay us to keep on. . . .
I would request [the Board’s] kind consideration how
far they wish this obtained, even at the risk of inflicting
hardship on some of those who are at present working
for us.8
The Cadbury apprenticeship scheme had, for many
years, provided technical training for boys and young
men; and in 1921 girls too got their own Training
Department, with instructors and variable speed
dummy equipment to help with the training process,
‘so that a girl, employed upon even the simplest task,
might be taught, from the beginning, to do it in the
best possible way.’9
Today, of course, Cadbury has a strong commitment
to workforce diversity, and this includes selection,
training and development and promotion opportunities
based on talent and an inclusive approach to difference
throughout its worldwide operation, which contributes
to its status as one of the UK’s most admired
companies. It now reckons to employ women in 33 per
cent of its management roles.10 The notion of what
constitutes good and ethical employment practice may
have changed, but Cadbury’s commitment to such
standards has not.
Cadbury Schweppes: the remoulding of a company
The second area for exploration is that relating to the
company’s approach to the employment of engineers
and craft workers, and the substantial shift in approach
which occurred in this area during the period after the
merger with Schweppes in 1969.
The company attitude to the employment of craft
and professional workers was consistent with its idea
of enlightened ownership from the start. Tradesmen
and engineers involved in the design, building and
operation of manufacturing machinery were directly
employed by Cadbury, and mostly worked from
premises concentrated in an area of the Bournville site
nicknamed ‘Trade Street’. Initiatives to design and build
new equipment were referred to the engineering
division who designed, installed, tested and maintained
it in the various production sites. Agreements with
the local craft and trade unions prevented the use of
contracted workers or the ‘outsourcing’ of any design,
development and engineering work. The Cadbury
family had always been sympathetic to the idea of trade
and craft unions, and whilst they supported their
employees’ rights to join unions, they also pursued
a policy of ‘insulation’11 by which they attempted to
ensure two key things: firstly, that union membership
was always voluntary (in other words they did not
operate a ‘closed shop’ by which all workers were
required also to be members of a recognised trade
union); and secondly, that union disputes which
originated in other companies did not spill over into
Cadbury (in other words they wished to avoid being
caught up in other people’s disputes in what is usually
termed ‘secondary action’). These approaches held good
for the company throughout most of the 20th century,
until the 1960s when unions began to exercise more
muscle. The impact of the restriction on outsourcing
engineering work and the increasing problems caused
by worsening relations with the company’s trade unions
(as was the case more widely in the 1960s as the result
of a series of prices and incomes policies introduced
by both Labour and Conservative governments, in an
attempt to combat inflation) began to hamper the firm’s
growth. Cadbury was simply unable to make substantial
capital investment in new equipment which would
speed up production processes, or to design new
equipment which would make new products, because
there was a limit to what ‘Trade Street’ could provide.
Similarly the unions acted to limit what the workforce
could be persuaded to do in terms of job flexibility and
working hours, for instance shift work patterns which
would permit continuous production.
The merger with Schweppes was both a symptom
and a cause of radical change. It came about because of
the increasingly competitive and globalising market for
chocolate and other confectionery products. The merger
provided both sides of the new company with access to
a wider variety of markets throughout the world, and
the product ranges were complementary. But in order to
continue to compete, the company had to control prices,
develop and bring to market new products. This in turn
necessitated a radical shift in the way the company was
managed. In the months after the merger, there was
a major company reorganisation, and Cadbury issued
its first redundancy notices since the 1930s, including
managerial ones. This was the first shock. When Adrian
Cadbury took over as chairman of the merged company
in 1974 the next phase of ‘Operation Profitability’ was
initiated. From the mid-1970s onwards, there was
a deliberate change to the way in which the company’s
work was organised; ‘Trade Street’ was broken up and
engineers were moved closer to the various production
sites (two at Bournville, one at Somerdale near Bristol
where Fry’s had been based, and a new facility at Chirk)
and made responsible to the production managers;
indeed many gradually became managers. Career
structures had to change to accommodate this, as
a career within the engineering ‘division’ was no longer
feasible. At the same time, the need for a major capital
investment programme necessitated the use of external
companies, and after a long and difficult period of
negotiation an agreement in 1981 between the
engineering unions and the company exchanged
a ‘no redundancy’ policy for the ability to subcontract.
The 700 engineers on the payroll in 1981 shrank
to 187 by 1983 and were being replaced by
At the same time, workforce flexibility agreements
were thrashed out on the production line, and job
demarcation was gradually eroded. The whole company
had to become more ‘entrepreneurial’ to survive and
grow; this meant a firmer focus on the primacy of
production, and the role of everyone (including
accountants, who were also devolved to support
production managers in the same way as the engineers)
in creating a more competitive business. This might be
deemed a more ‘managerial’ approach and one which
clearly marked a break with many aspects of traditional
‘Cadburyism’; in 2007 the company was even criticised
for breaking with the Quaker tradition by the Bishop
of Bath and Wells for a decision to close its plant
in Keynsham with the loss of 500 jobs.13 It is also
evident that much of what was happening was
facilitated by the election of the 1979 Thatcher
government, which supported, through legislation,
the ‘right to manage’ and the reduction of trade union
power within the British economy. Indeed, the Thatcher
legislation included bans both on closed shops and
on secondary strike action, features which were, as we
have noted, very familiar within Cadbury’s industrial
relations philosophy from the earliest days of the
In 2007 Cadbury Schweppes changed again; the
company decided that despite its successes in the 1980s
and 1990s the two halves of the business were not
reaping the benefits of synergy, and the decision was
taken that Cadbury would sell the soft drinks arm of
the business represented by Schweppes. Cadbury has
returned to its roots. It remains a business founded
on and wedded to good employment practice, social
welfare and philanthropy. But the nature of these values
has changed. Social welfare in developing countries is
now likely to be as much a concern for Cadbury as in
the UK. It supports water projects in Ghana where much
of its raw cocoa is produced through the Cadbury
Cocoa Partnership, and in the UK projects are funded
through the Cadbury Foundation. It still runs the
graduate management training scheme which it
initiated in 1935 (and which is now, of course, open to
women). It continues to demonstrate high standards of
business integrity, and such is the company and family
reputation that Sir Adrian Cadbury was appointed to
chair a committee which authored the 1992 report on
the Financial Aspects of Corporate Governance for the
London Stock Exchange.
End of an Era?
On 19 January 2010 Cadbury made front page news in
Britain when the Board recommended a controversial
takeover bid from American food giant Kraft; indeed the
news was serious enough to prompt a warning comment
from the Prime Minister. The significance of the
company’s culture was recognised by Irene Rosenfeld,
chairman and chief executive of Kraft, who insisted that:
‘We have great respect for Cadbury’s brands, heritage and
people. We believe they will thrive as part of Kraft Foods.’14
Roger Carr, chairman of Cadbury, also felt it necessary
to suggest that Kraft had made a commitment to the
company’s heritage and values. As the company enters
a new decade, it is clear that the Cadbury story is far
from over.
Your tasks
Critically review Cadbury’s approach to the welfare of its workers in the first century of its existence. What
were the main features of its approach, and how many would be appropriate today? What different features
would an ‘enlightened’ employer include in the early 21st century?
Analyse Cadbury’s 19th- and early-20th-century organisational culture in terms of the framework provided by
Brooks in Figure 1.7. To what extent can the past in Britain be considered in the same way as we might
consider a different national culture?
Critically review the changes to Cadbury’s culture and structure after 1969 using a socio-technical systems
approach. What key differences can you identify between the pre- and post-merger organisation?
Using the PESTEL framework (see Figure 3.7), identify significant contextual issues for Cadbury’s future
under each heading. Suggest how the organisation might plan to address some of these issues. To what
extent does the analytical framework help to provide an integrated plan?
Bearing in mind the origins and history of Cadbury, how do you think the company’s culture might be
affected by a significant change of ownership?
Notes and references
1 Hartley, L. P. The Go-Between, Hamilton (1953).
2 Williams, I. The Firm of Cadbury 1831–1931, Constable and Co. (1931). This is the official centenary publication about the firm’s
origins and first hundred years of trading.
3 The Temperance Society aimed to encourage people to give up alcoholic drink, which was seen as a major destructive influence on
moral and social behaviour.
4 Cadbury website: www.cadbury.co.uk. The ‘Cadbury and Chocolate’ part of the website gives some information about the early history
of the company.
5 Smith, C., Child, J. and Rowlinson, M. Reshaping Work: The Cadbury Experience, Cambridge University Press (1990).
6 Cadbury website, http://www.cadbury.co.uk/cadburyandchocolate/ourstory/philan/Pages/bvttoday.aspx (accessed 3 August 2009).
7 Largely thanks to the determination of Barbara Castle, then Secretary of State for Employment.
8 Smith, C., Child, J. and Rowlinson, M. Reshaping Work: The Cadbury Experience, Cambridge University Press (1990), pp. 62–3.
9 Williams, I. The Firm of Cadbury 1831–1931, Constable and Co. (1931), p. 176.
10 See the Society and Environment sections of the Cadbury Schweppes website, www.cadburyschweppes.com.
11 Smith, Child and Rowlinson op. cit., pp. 65–7.
12 Smith, Child and Rowlinson op. cit., pp. 170–1.
13 ‘Bishop Joins Protest Over Cadbury’ BBC News website, 10 December 2007, http://news.bbc.co.uk/1/hi/england/7136908.stm
(accessed 3 August 2009).
14 Lindsay, R. and King, I. ‘Gordon Brown Warns America’s Kraft Over Cadbury Job Cuts’, The Times, 19 January 2010.
Part 2
Individual Differences and Diversity
The Nature of Learning
Perception and Communication
Work Motivation and Job Satisfaction
Motivation and the Individual
Visit www.pearsoned.co.uk/mymanagementlab to access the online
video case study that complements Part 2: The Individual. This video
offers varied views about what may motivate individuals and teams
CASE STUDY within different organisations with interviews featuring Steve Langan,
Managing Director of Hiscox UK, the insurance company; Andrea
Wareham, Director of People at the Pret A Manger food chain; and
Captain James Greaves, platoon commander at the Sandhurst Royal
Military Academy.
Individual differences can foster creativity, enjoyment and
satisfaction at work but can also be the root of conflict and
frustration. Our unique bundle of different attributes and
characteristics shapes our values and what we plan to give and
what we expect to receive from working. People are not
homogeneous, and individual differences are the basis of diversity.
Effective managers need to steer a course that matches the
needs and expectations of the individual with the requirements of
the organisation.
Learning outcomes
After completing this chapter you should be able to:
focus on valuing individual differences and factors affecting behaviour and
apply key issues of personality studies to the work organisation;
explain the nature of ability and emotional intelligence;
detail the nature and significance of attitudes to the workplace;
assess the value of psychometric tests and assessments;
explore the nature and importance of diversity management;
identify dimensions of diversity and evaluate the business case for
Critical reflection
‘Organisations can achieve nothing without the efforts of their individual
members. Whatever the nature of an organisation’s products or services,
relationships at work and interactions among its members are at least
equally important.’
To what extent do you agree that success at managing individual differences
is the real key to organisational effectiveness?
As mentioned in Chapter 1, organisations are made up of their individual members. The
individual is a central feature of organisational behaviour, whether acting in isolation or as
part of a group, in response to expectations of the organisation, or as a result of the influences
of the external environment. Where the needs of the individual and the demands of the
organisation are incompatible, this can result in frustration and conflict. It is the task of
management to integrate the individual and the organisation and to provide a working
environment that permits the satisfaction of individual needs as well as the attainment of
organisational goals.
Managing relationships at work has always been a key skill, but the speed at which
organisations and the external environment are undergoing change places increasing
pressure on individuals at work. The effective management of people requires not only
an understanding of the individual employees but also recognition of the culture of the
organisation. What is expected and accepted in one organisation may not be the same in
another. For instance, creativity and individuality may be encouraged in one business but
undermined by bureaucracy in another.
A discussion of individual behaviour in organisations is therefore riddled with complexity
and contradictions. Managers are required to be competent at selecting the individuals who
will be valuable to the organisation. They need to be observant about the individuals who
are performing well and have the potential to develop within the organisation. They also
need to be able to value individual difference and be sensitive to contrasting needs. Finally
managers need to know themselves and understand their uniqueness and the impact their
personality has on others.
Individual differences and change
Sensitivity to individual needs and differences, especially in terms of their resilience, becomes
particularly significant when organisations embark on change initiatives. Even when the
change appears to be relatively straightforward, the reality is likely to be messy and complex.
When organisations are working through change and when change appears to be externally
imposed, the management of people takes on a different dimension in terms of the sensitivity
required. In this situation there is an implicit requirement of changes in attitudes and beliefs.
Such changes may lead to new mindsets, new attitudes and new perceptions that enable
people to cope and adjust to the different world. At these times effective management is vital;
managers will be expected to understand the strains that their employees feel during times
of change, but at the same time be able to deal with their own stress levels.
Our sense of self is shaped by our inherited characteristics and by influences in our social
environment. The process of growing up – such as the impact of our early family life and the
country in which we live – has a significant part to play in our identity. Most social scientists
would agree that both inherited and environmental factors are important in our development,
and it is the way in which these factors interact which is the key to our adult personality.
However, scientists differ with regard to the weight they place on these factors – some believing
that our personality is heavily influenced by our inherited characteristics and will never
change, others believing the reverse.
But first, what are the differences among individuals? These include:
ethnic origin
early family experiences
social and cultural factors
national culture
personality traits and types
intelligence and abilities
Some of these characteristics are shared with others, for example individuals who are from
the same ethnic group or who have the same ability levels or who share similar physical
attributes such as short-sightedness. But our uniqueness stems from the dynamic ways in
which these inherited and environmental factors combine and interact. The ways in which
it is possible to differentiate between individuals include an understanding of personality,
the heart of individual differences and the importance and functions of attitudes. This is
explored in this chapter. An understanding of the ways in which people learn is fundamental
to an appreciation of individual differences and is considered in Chapter 5. The process
of perception and communications is examined in Chapter 6. All contribute to a greater
understanding of self and others.
Personality may be viewed as consisting of stable characteristics that explain why a person
behaves in a particular way. So, for instance, independence, conscientiousness, agreeableness
and self-control would be examples of these personality characteristics. However, it is only
when we see/hear/observe a person that we can gain an understanding of their personality.
For example, a person who is independent may show that characteristic by displaying
a strong sense of self-sufficiency. We would expect him or her to take the initiative and not to
depend on other people. Furthermore, if the characteristic is ‘stable’ we can rely on this being
a consistent part of the person’s behaviour. We would be surprised if the person one day
demonstrated autonomy and initiative and the next withdrew and delayed any decisions.
We anticipate that individuals are generally consistent in the way in which they respond
to situations.
There are times when we might be surprised by somebody’s behaviour and we may feel
they are ‘acting out of character’. Of course this would be known only if we had an understanding of their ‘typical behaviour’ in the first place. Individuals may exaggerate or suppress
certain personality traits, for example if they are under stress or influenced by drink/drugs. It
is self-evident that managers need to learn the art of ‘reading’ people’s behaviour in order to
manage relationships effectively.
Broadly speaking, personality studies can be divided into two main approaches, labelled as
nomothetic and idiographic.
The nomothetic approach is a measurable and specific perspective that looks at the
identification of traits and personality as a collection of characteristics. These characteristics are
ones that can be described, identified and measured and therefore can be subjected to observation and tests. This perspective is especially helpful for managers when they are involved
in the selection, training and development of individuals. Nomothetic approaches tend to
view environmental and social influences as minimal and view personality as consistent,
largely inherited and resistant to change. Although they would not diminish the difficulties that
measuring personality brings, nomothetic approaches would claim that it is possible to measure
and predict the ways in which personality types would behave given certain circumstances.
Nomothetic researchers closely align themselves to studies that are ‘scientific’ in a positivistic
sense. (The term positivism refers to the branch of science that is exclusively based on the
objective collection of observable data – data that are beyond question.) Such an approach
transfers methods used in natural sciences to the social world. Some psychologists are
interested in describing and measuring characteristics and comparing individuals’ scores.
Does this person exhibit more or less than ‘average’ of this particular trait? Being able to predict
behaviour is a major aim and outcome of this approach.
The idiographic approach is a holistic and dynamic perspective which insists that
managers take into account a ‘whole’ understanding of the individual at work. This may
also require going beyond the study of pure psychology to an understanding of the societal
context in which the person lives. These are called idiographic approaches and are particularly pertinent in understanding motivation, career development and team relationships.
Idiographic approaches are concerned with understanding the uniqueness of individuals
and the development of the self-concept. They regard personality development as a process
that is open to change. They regard individuals as responding to the environment and
people around them and see the dynamics of the interactions as playing a critical part in
shaping personality. The measurement of traits is seen as largely inappropriate in that
one person’s responses may not be comparable to another’s. They suggest that personality
assessment is not a valid method of understanding the unique ways in which a person
understands and responds to the world. The depth and richness of a person’s personality
cannot be revealed in superficial paper-and-pencil questionnaires. Furthermore, the categories defined by psychologists are too narrow in scope and depth.
Theory and the world of work
The application of theory to the world of work is not always easy and some find the process
confusing when theory does not match with their experiences. Psychological investigations
emphasise the complexity and variety of individual behaviour and insist that simple answers
and explanations are generally inadequate. The study of personality provides an excellent
example of some of the complexities involved in applying psychological theory in practice.
Consider two individuals who share similar characteristics. They are both 24 years old
and have lived in the same area; both have a first-class honours degree in pharmacy and they
have identical personality assessment profiles. However, we would still predict differences
with regard to their attitude and performance in the workplace. In addition, differences
would be predicted in the ways they interact with others. If one of the pharmacists was
male and/or African, a further set of assumptions might be made. It is not only the features
themselves which identify individuals as being different, it is also their interaction which
leads to a unique pattern of behaviour. The complexities of the process pose a number of
questions that interest psychologists and evoke different responses (see Tables 4.1 and 4.2).
Figure 4.1 identifies the links between the dynamics of personality and life’s experiences.
Table 4.1
The role of early experiences – what is its impact?
Environment is significant
Inherited characteristics are significant
Approach taken by idiographic approaches
Approach taken by nomothetic theorists
The personalities of the two pharmacists described above are the
culmination of experiences. Their personalities have been shaped by
the people around them from their very earliest years. Early family life
– the relationship between family members, the size of the family,
the rewards and punishments exercised by parents – would have
had an influence on the type of person each is now. In other words,
the environment and early learning experiences have significantly
contributed to their personality development.
The pharmacists inherited a genetic make-up
which would remain core and would be
resistant to change. Early experiences, while
they may shape the person to a certain extent,
do not alter the inherited make-up. Intelligence,
physical appearances, physiological reactions
are ‘wired’ in from birth – the ‘core’ of
the individual is a ‘given’.
Table 4.2
Is it possible to ‘measure’ an individual’s personality?
No, personality is unique
Yes, there are identifiable traits
Approach taken by idiographic approaches
Approach taken by nomothetic theorists
Idiographic approaches do not believe it is possible to put
personal characteristics to the test. Our very uniqueness
makes comparisons difficult, if not impossible. Is it
appropriate to consider the ‘strength’ of a trait? Our
pharmacists may not always reveal their true ‘self’ – at
times circumstances may force them to ‘mask’ their
preferred ways of behaving. Our pharmacists may not
reliably report on their own behaviour or there may be a real
difference between what they say and what others see.
Critics of questionnaires believe answering ‘set’ questions
is ‘forcing’ responses to questions that may not be relevant.
Instead it may be more appropriate to use open-ended
techniques. This ensures that individuals use their own
definitions and allows for greater understanding about their
motivations and causes of behaviour.
Identifying an individual’s personality typically refers to
distinguishing traits or types. Personality traits are usually
identified by what people do, the behaviour they exhibit,
e.g. sociable. Psychologists have designed questionnaires
which ask people to respond to a series of questions.
They assert that asking a person to report on the way
they feel or behave is a legitimate way of assessing
personality. These self-reporting questionnaires would
then be subject to quantitative methods. It is therefore
possible to quantify the strength of a person’s trait and
to enable comparisons to be made with others. Such
information then becomes a basis for prediction. For
example, if a person has a high score on extraversion,
it would be possible to predict the way in which the
individual might behave in a given situation.
Figure 4.1
To what extent does our personality remain constant?
Uniqueness and similarities
Tables 4.1 and 4.2 focus on two major issues of prime importance in the study of personality.
First, is personality a constant throughout our lifetime, which remains resistant to change and
circumstances? Second, to what extent can we measure and compare individuals on the basis
of their personality? This second question assumes that it is possible to distinguish personality
characteristics in the first place. Trying to make sense of the nature of personality has resulted
in a prolific number of theories, with some psychologists focusing solely on the unique makeup of individuals, others drawing comparisons between individuals or looking for broad
similarities in aspirations and goals. Table 4.3 charts these differences as series of ‘levels’.
In a work context we tend to be more interested in understanding ‘what’ an individual’s
personality is rather than why it is as it is. Furthermore, it is important to understand how
various personality characteristics relate to performance at work. The nomothetic approach
explores the ‘what’ of personality and the idiographic approach enriches our understanding
of ‘why’.
Table 4.3
Different levels of personality research
Psychologists’ research interests
Universal human features
Common human aspirations
Some shared features – gender; ability
Identification, measurements, comparison (nomothetic)
Unique combination of features
‘Self’ – unique interaction with the world (idiographic)
The big five
The identification of personality traits has been a dominant subject of research in the UK and
the USA. There is now a body of evidence which suggests that five dimensions capture distinct
differences between people. These clusters of traits (not personality types) are known as the
Big Five2 and sometimes expressed in the acronym OCEAN:
The big five form the basis of standard personality questionnaires that determine positive
or negative scores for each dimension. Results from a wide number of studies have
shown that these factors can be identified as being significant in measuring the variation
between people.3 Of these, conscientiousness has the highest positive link with high
levels of job knowledge and performance across a range of occupations.4 However, some
researchers are critical of the descriptors used.5 Bentall suggests they are ‘tainted by the
investigators’ values’ and continues: ‘I suspect that most people will have a pretty clear idea
of where they would like to find themselves on the dimensions of neuroticism, extraversion, openness, agreeableness and conscientiousness.’ He questions the ethical and political
nature of the scales.6 The relationship between personality and work performance is also
questioned by Robertson who suggests that the only two of the five dimensions linked
consistently with high levels of performance are conscientiousness and emotional stability.7
Despite these reservations, the strength and value of the Big Five model has been extolled
in a review by Lord and Rust. They conclude that:
Indeed, the five factor model has become the linchpin that holds personality assessment together,
at least within the work context. Without it, how would we generalize with confidence from the
validity of one work-based instrument to that of another? Furthermore, the model links the
study of assessment instruments within the HR field to research in personality and related areas
carried out within clinical and mainstream psychology fields in which the Big Five have also
become dominant.8
Figure 4.2
Eysenck’s personality dimensions
Hans Eysenck believed that personality was largely inherited and that we are born with differing
physiological tendencies. He identified two major individual differences – see Figure 4.2.
Eysenck’s approach was influenced by the positivistic tradition with his research findings
grounded in robust research. His aim was to produce objective evidence of personality
differences using large samples of the population.9 The two dimensions define four distinct
personality types:
stable extraverts (sanguine) with traits such as being talkative, responsive, easygoing,
lively, carefree;
unstable extraverts (choleric) with traits such as being impulsive, changeable, excitable,
stable introverts (phlegmatic) with traits such as being calm, even-tempered, peaceful,
unstable introverts (melancholic) with traits such as being anxious, moody, reserved,
Individuals in Eysenck’s theory could, therefore, be one of four main personality types.
The type would lead to a predisposition of traits that would, itself, lead to the likelihood of
certain behaviours. For instance, a person typed as an extravert would predictably talk over
things with someone to help them think it through, while an introvert would prefer to mull
it over before talking about the issue. Eysenck developed an instrument to measure personality type called EPQ (Eysenck’s Personality Questionnaire).
Supporting research evidence
Although Eysenck’s theory appears simplistic, it has an impressive amount of supporting
research evidence. His approach has immediate appeal to managers in organisations who are
concerned with predicting the future behaviour of their employees, either for selection or
promotion. Given the evidence that personality is a useful predictor of behaviour, it is not
surprising that the use of psychometric tests has grown substantially over the past decade
and that the majority of large companies use occupational tests.10 (Further information
about testing is given later in this chapter.)
Cattell’s work resembles Eysenck’s in the methods used to study personality. He used
quantitative, objective techniques in order to analyse his data and followed traditional
scientific procedures in order to understand the basic dimensions of personality.11 He
identified two main types of personality traits:
surface traits – that seem to cluster together consistently and are observable in behaviour
such as assertiveness;
source traits – such as self-discipline that can only be inferred and seem to underlie and
determine the traits which are likely to ‘surface’ into behaviour.
Unlike Eysenck, Cattell did not ‘type’ individuals but used ‘traits’ as his main personality
descriptor. They also differed with regard to the determinants of personality: Eysenck viewed
the inherited physiological basis as the main determinant, whereas Cattell was more interested
in taking social factors into account when understanding an individual’s personality. Both
theorists have contributed to a lively debate about personality structure and its measurement
and in doing so have advanced the selection techniques available to managers.12
Idiographic approaches emphasise the development of the individual and of individuals’
views of themselves – their self-concept. Supporters of idiographic approaches are critical of
the nomothetic approach that attempts to categorise individuals on the basis of group data.
They argue that the techniques used to collate the group data are questionable and the
outcome inappropriate to an understanding of personality. For the idiographic researchers,
personality is expressed through the experiences and development of the individual. It
cannot be understood outside a social context and has to be studied in the light of individuals’ own perceptions of their world.
Idiographic researchers would always take into account the social circumstances of the
person and in particular the relationships with others, family life and social conditions. In
early childhood strong personal relationships and unconditional love are essential for later
fulfilment and psychological growth. Carl Rogers’ theory claims that personality is embedded
within personal relationships. The process of becoming an adult requires the ability to give
and receive unconditional regard – the warmth and respect for the person, who they are,
regardless of how they behave.13 The phrase ‘the looking-glass self’ was first discussed by
Cooley – by this he meant that we come to know ourselves through our relationship with
others and their reactions to us.14
Gurus in idiographic approaches
Erik Erikson’s theory is a good example of the idiographic approach. He viewed personality
development as continuing throughout life. He was interested in the effect of experiences
on the development of the self-concept and how different individuals resolved personal
conflicts.15 He recognised the importance of early childhood in establishing certain basic
concepts of trust, autonomy and initiative, but also claimed that all stages of life produce
different tensions and conflicts.
For Erikson, there are eight distinct stages of life, each of which produces different tensions
and conflicts that have to be resolved (see Table 4.4). Successful resolution of these conflicts
produces a healthy personality, whereas difficulties in earlier stages may produce problems
later on. Erikson’s theory not only makes considerable sense in terms of face validity (i.e. the
Table 4.4
Erikson’s eight stages of personality development
Role confusion
1st year
2–3 years
4–5 years
6–11 years
12–18 years
Young adult
Middle age
Old age
Source: Adapted from Erikson, E. H. Identity and the Life Cycle, Norton (1980), worksheet table appendix. Copyright © 1980 by
W. W. Norton & Company, Inc. Copyright © 1959 by International Universities Press, Inc. Reproduced with permission from W. W. Norton &
Company Inc.
‘it feels right’ factor), it also links with other research indicating that managers’ motivations
and goals change with age (see Hunt, who identified nine different career/life stages).16
Some researchers do not fit easily into either of the two broad approaches of nomothetic or
idiographic and have their own theories and models of personality development, for example
the work of Carl Jung and the cognitive approach of George Kelly.
Carl Jung’s theory is of particular significance in that it bridges the psychoanalytic approach
(of writers such as Sigmund Freud) with modern approaches of personality test design. His
theory identifies life energy as concerned with hopes and goals of the future and not just of
the past. Jung describes three levels of personality:
a conscious level (daily reality);
an unconscious level (contains our unique complexes);
a collective unconscious level (store of universal and evolutionary experiences).
Jung identified four universal aspects of everyone’s personality that he referred to as
archetypes; for example he claimed we all strive for self-actualisation; have a darker self; have
both masculine and feminine qualities; and have a persona – a role we can play.17
The Myers–Briggs Type Indicator ® (MBTI® )
Jung is probably best known for his constructs that form the foundation for the MBTI personality indicator. The Myers–Briggs Type Indicator (MBTI) assessment tool was designed by
Isabel Briggs Myers and Katherine Briggs who applied the rigours of systematic testing to Jung’s
personality functions and attitudes.18 Jung identified differences between individuals in terms
of their libidinal energy that could flow outwards to the external world (extravert) or inwards
to their inner world (introvert). Personality differences would also be manifest through differing cognitive functions of thinking, feeling, sensation and intuition. The Myers–Briggs
assessment added a further dimension of style of living. The personality types are shown in
Figure 4.3.
The MBTI tool has promoted considerable research interest, particularly with regard to the
correlation between personality type, occupations and management style – see Table 4.5. The
Myers–Briggs assessment asserts that people tend to be attracted to and have the most satisfaction in work that allows them to express and use their psychological type preferences. Such a
match enables them to handle their tasks more effectively and generates more energy. Confidence is a likely outcome of this process. The Myers–Briggs instrument is an affirmatory tool
and knowledge gained through using the MBTI assessment can lead to recognition and respect
for differences between people and appreciation for the value such differences bring.19
Table 4.5
Leadership types and the Myers–Briggs types
Salt of the earth
Behind-the-scenes leader
Oracle for people
Designer of the future
Walking encyclopedia
Gentle spirit
Values crusader
Blueprinter of ideas
Everyone’s friend
Spark of energy
Classic entrepreneur
Take-charge leader
Servant leader
Values spokesperson
Grand scale organiser
Quick, ingenious, stimulating, alert and
outspoken. Resourceful in solving new
and challenging problems. Adept at
generating conceptual possibilities and
then analysing them strategically. Good
at reading other people. Bored by
routine, will seldom do the same thing
the same way, apt to turn to one new
interest after another.
Frank, decisive, assume leadership
readily. Quickly see illogical and inefficient
procedures and policies, develop and
implement comprehensive systems to
solve organisational problems. Enjoy
long-term planning and goal setting.
Usually well informed, well read, enjoy
expanding their knowledge and passing
it on to others. Forceful in presenting
their ideas.
Warmly enthusiastic and imaginative. See
life as full of possibilities. Make connections
between events and information very
quickly, and confidently proceed based
on the patterns they see. Want a lot of
affirmation from others, and readily give
appreciation and support. Spontaneous
and flexible, often rely on their ability to
improvise and their verbal fluency.
Warm, empathetic, responsive and
responsible. Highly attuned to the
emotions, needs and motivations of
others. Find potential in everyone, want to
help others fulfil their potential. May act
as catalysts for individual and group
growth. Loyal, responsive to praise and
criticism. Sociable, facilitate others in a
group, and provide inspiring leadership.
Outgoing, friendly and accepting.
Exuberant lovers of life, people and
material comforts. Enjoy working with
others to make things happen. Bring
common sense and a realistic approach
to their work, and make work fun. Flexible
and spontaneous, adapt readily to new
people and environments. Learn best by
trying a new skill with other people.
Warm-hearted, conscientious and
cooperative. Want harmony in their
environment, work with determination to
establish it. Like to work with others to
complete tasks accurately and on time.
Loyal, follow through even in small
matters. Notice what others need in their
day-to-day lives and try to provide it.
Want to be appreciated for who they are
and for what they contribute.
Flexible and tolerant, they take a
pragmatic approach focused on immediate
results. Theories and conceptual
explanations bore them – they want to act
energetically to solve the problem. Focus
on the here-and-now, spontaneous, enjoy
each moment that they can be active with
others. Enjoy material comforts and style.
Learn best through doing.
Practical, realistic, matter-of-fact. Decisive,
quickly move to implement decisions.
Organise projects and people to get things
done, focus on getting results in the most
efficient way possible. Take care of routine
details. Have a clear set of logical
standards, systematically follow them
and want others to also. Forceful in
implementing their plans.
Source: Modified and reproduced by special permission of the publisher, CPP, Inc., Mountain View, CA 94043 from the Introduction to Type®, Sixth Edition booklet by Isabel Briggs Myers, revised by Linda K. Kirby and
Katharine D. Myers. Copyright © 1998 by Peter B. Myers and Katharine D. Myers, All rights reserved. Further reproduction is prohibited without the publisher’s written consent. Introduction to Type® is a registered
trademark of the MBTI Trust, Inc. in the United States and other countries.
Seek to develop logical explanations for
everything that interests them. Theoretical
and abstract, interested more in ideas
than in social interaction. Quiet, contained,
flexible and adaptable. Have unusual
ability to focus in depth to solve problems
in their area of interest. Sceptical,
sometimes critical, always analytical.
Idealistic, loyal to their values and to
people who are important to them. Want
an external life that is congruent with their
values. Curious, quick to see possibilities,
can be catalysts for implementing ideas.
Seek to understand people and to help
them fulfil their potential. Adaptable, flexible
and accepting unless a value is threatened.
Quiet, friendly, sensitive and kind. Enjoy the
present moment, what’s going on around
them. Like to have their own space and to
work within their own time frame. Loyal
and commited to their values and to
people who are important to them. Dislike
disagreements and conflicts, do not force
their opinions or values on others.
Tolerant and flexible, quiet observers until
a problem appears, then act quickly to
find workable solutions. Analyse what
makes things work and readily get through
large amounts of data to isolate the core
of practical problems. Interested in cause
and effect, organise facts using logical
principles, value efficiency.
Have original minds and great drive for
implementing their ideas and achieving
their goals. Quickly see patterns in
external events and develop long-range
explanatory perspectives. When
committed, organise a job and carry it
through. Sceptical and independent, have
high standards of competence and
performance – for themselves and others.
Intuitive types
Seek meaning and connection in ideas,
relationships and material possessions.
Want to understand what motivates
people and are insightful about others.
Conscientious and committed to their firm
values. Develop a clear vision about how
best to serve the common good.
Organised and decisive in implementing
their vision.
Quiet, friendly, responsible, and
conscientious. Commited and steady in
meeting their obligations. Thorough,
painstaking and accurate. Loyal,
considerate, notice and remember
specifics about people who are important
to them, concerned with how others feel.
Strive to create an orderly and harmonious
environment at work and at home.
Sensing types
The Myers–Briggs Type Indicator ® (MBTI® ) assessment tool showing characteristics frequently associated with
particular personality types
Quiet, serious, earn success by
thoroughness and dependability. Practical,
matter-of-fact, realistic and responsible.
Decide logically what should be done and
work towards it steadily, regardless of
distractions. Take pleasure in making
everything orderly and organised – their
work, their home, their life. Value traditions
and loyalty.
Figure 4.3
Critical reflection
‘The MBTI assessment tool has been in and out of fashion over the years and there is
constant debate about its continuing relevance and usefulness.’
What value do you believe the MBTI assessment has as a tool for measuring people’s
personality type? Can you give a specific example of where it might be used with
Kelly’s personal construct theory
Kelly’s theory of personal constructs does not just consider personality development; it
considers the whole person in terms of their perceptions, attitudes and goals. For Kelly,
personality is the individual’s way of construing and experimenting with their world. Kelly
was critical of separating the study of personality apart from the ‘whole’ person:
The castrating effect of separating personality off as a mini-psychology in its own right is perhaps best
seen in the curiously named study of ‘individual differences’, which in fact turns out to be the study of
group sameness. As a result we have focused on the establishment of general dimensions, at some point
along which all individuals can be placed, rather than on a study of the dimensions which each
individual develops in order to organise his own world.20
For Kelly it was critical to take data from one individual person (idiography) and to
employ a technique that could cope with the qualitative nature of the data to be collected.
He developed the Repertory Grid that was able to measure an individual’s construct of the
world. Kelly was thus able to employ a clear and valid measure within an idiographic
approach. This was an important advance in idiographic techniques and the repertory
technique has become increasingly important as a research tool. It enables the person to
use their own constructions of the world but in such a way that they are comparable and
Recruitment and selection
It would be rare for organisations not to take the personality of a candidate into consideration at a selection interview. For some organisations, personality is a major criterion for
selection or rejection. The hospitality industry, for example, is replete with research studies
demonstrating the potency of personality.21 So, how do organisations assess a candidate’s
The interview remains the most usual method of selection, but there is an increasing use
of objective psychometric measures. Such growth in psychometric testing is significant and
a number of studies have demonstrated its growing popularity.22 Concern has been
expressed about the use and misuse of psychological instruments and there is a continuing
debate within psychological circles with regard to the validity of these measures23 – that is,
do they actually measure what they claim to measure? Testing is discussed in detail later in
this chapter. There are controversies and sensitivities surrounding the use of any psychological test, but tests of typical performance are especially problematic in certain circumstances.
As Anastasi has stated:
The construction and use of personality inventories are beset with special difficulties over and
above common problems encountered in all psychological testing. The question of faking and
malingering is far more acute in personality measurement than in aptitude testing.24
Critics have accused consultants and practitioners of inappropriate use of personality
assessments and claim low validity between non-work-related personality assessments and
work performance.25 Goss suggests that the use of personality assessments not only is
an infringement of the individual’s privacy but also leads to unfortunate organisational consequences, with ‘cloning’ as an outcome. Such techniques can be perceived as a form of social
engineering and an insidious form of organisational control.26 Aware of these problems,
the British Psychological Society has produced guidelines and codes of practice for users of
psychometric tests. Furthermore, evidence is emerging to show that where personality
questionnaires have been specifically designed and related to work characteristics, prediction
and validity scores are much higher.27
Personal development and teamworking
Personality questionnaires can be particularly valuable if individuals complete them for their
personal development or if they are used within team-building and development programmes. Here, they can initiate discussion about individual differences, the importance
of diversity in teamworking and the strengths that each personality type can bring to the
working situation. The notion of judgement is therefore out of the equation. Personality
questionnaires can thus be a valuable diagnostic tool at the start of a coaching session or as
a preliminary to a team-building process – an audit of strengths and weaknesses. At these
times a discussion can be held to look at a balanced team with complementary personalities, skills and abilities. This could be followed by group training exercises designed to
develop strengths and balance the weaknesses of the team. An effective team at work should
be aware of the division of their strengths and weaknesses.
None of us is perfect; but a group of people, whose strengths and talents complement each
other, can be.28
Personality and social expectations
Although personality may be a powerful determinant of a manager’s effectiveness, account
must also be taken of the social rules and expectations within the workplace. People learn
the behaviour that is expected of them and may mask their true preferences. For instance,
an introverted academic lecturer may prefer to be reflective and have time to think but will
be required to ‘perform’ in front of 200 undergraduate students and be expected to respond
immediately to questions. We can respond in ways that are not ‘true to type’ and we may be
required to take on roles at work that may run counter to our preferences. We have to learn
coping strategies and adaptive skills, but for some people stress may result. Furthermore, different temperaments may be rewarded at different times depending on whether they are
going through a period of growth or retrenchment. Whereas a manager may be recognised
for exciting promotional activity and product development in one situation, other personality characteristics may be needed if there is a period of slow-down and attention to detail
and costs. Gray contends that researchers will never to able to solve and develop accurate,
valid and reliable performance measures. ‘Many jobs or critical aspects of them, cannot be
quantified. Performance measures are often justifiably subjective, vague and contradictory.’29
Until recently workplaces were seen as rational, logical places where emotions were excluded
or seen in a negative light. Hochschild’s30 research describes the way in which some jobs
require a display of certain emotions, especially those in the service industries, where customer care is inextricably linked with making people feel good. Such work has been labelled
Table 4.6
A sequence of work emotions, thought and behaviour
Jane is asked to carry out a difficult project, usually given only to more experienced colleagues.
She feels valued, flattered and trusted – also a little worried.
While working hard on the project her emotions range from excitement and elation to fear and
She completes the task well and feels proud and relieved.
Jane tells her boss and shows her completed work.
Boss gives no thanks or praise and picks out a trivial error.
Jane then feels resentful and angry and thinks that she will never again ‘put herself out’ for her
boss. Also feels exploited.
Thinks about looking for another job.
Doesn’t volunteer to do additional tasks any more.
Starts to feel sad and disappointed.
Updates her CV and regularly starts looking at job advertisements.
Source: Briner, R. ‘Feeling and Smiling’, The Psychologist, vol. 12, no. 1, January 1999, pp. 16–19. Reproduced with permission from
the British Psychological Society.
as emotional labour and distinguishes between surface acting – displaying emotion without
experiencing it – and deep acting – involving thinking, visualising to induce the emotion
in the situation. Briner challenges psychologists to broaden research to throw light on the
complexities of emotions in the workplace. He notes that organisations specify the emotions
they would like their employees to feel in the mission statements and in more subtle ways
in terms of the rewards and career enhancements people receive when they display appropriate emotions. However, he suggests that little is known about the incidence of emotion
at work and the part it plays in work behaviours. The illustration shown in Table 4.6,
although simplistic, plots a possible sequence of events and the power of rewards (or not)
and psychological well-being (or not).
Stress at work
The significance of stress at work has been discussed in Chapter 3. Personality is a contributing factor in the understanding of stress. Stress is a complex topic. It is individually
defined and is intrinsically tied into an individual’s perceptual system. Everyone has a range
of comfort within which they can feel steady and safe. Stress occurs when the individual feels
that they are working outside of that comfort zone. Individuals will differ when they feel
discomfort. The effects of stress will differ too; for some, the incidence of stress may energise
and activate but for others it may immobilise.
The costs of stress at individual, organisational and national levels are well known. Cooper
has indicated the high incidence of stress throughout organisations, irrespective of seniority.
He suggests that every job has its own stress fingerprint.31 Stress is a term that is commonly
used and misused; some individuals may say that they are ‘stressed out’ at the slightest
amount of pressure and tension. It also contains a perverse sense of status; for instance,
a librarian complained bitterly that her role was regarded as having low stress, implying that
jobs given a ‘high stress’ position also ranked high in prestige.
Two polar sets of behaviour that link with personality and health have been identified by
medical students Friedman and Rosenman, who identified recurring patterns of personality in
patients suffering from premature heart disease.32 Individuals with a Type A personality are
excessively competitive and thrive on hard work and long hours. They work under moderate
to high levels of stress and exhibit characteristics such as:
a high need for achievement;
extreme competitiveness;
impatience with obstacles to the completion of tasks;
a tendency to move and speak rapidly;
an aversion to idleness;
restlessness and urgency about time.
Individuals with a Type B personality are considered to exhibit the opposite characteristics from Type A. They may still have high levels of drive and ambition but are more relaxed,
work at a steady pace and do not exhibit a sense of time urgency.
According to Friedman and Rosenman, Type A personalities are far more vulnerable to
heart attacks than Type B personalities. Individuals who have a personality classified as Type A
are more likely to suffer from heart disease under severe stress than individuals with a Type B
personality.33 Research also supports the link between stress and Type A personality.34
Type A people and team performance
Gratton reports on what happens when Type A people, for whom time urgency is crucial, get
to work together with less time-urgent people. Type A people are likely to pay a great deal of
attention to the passage of time, constantly check the time remaining and see time as their
enemy. Typically they will be very efficient in their use of time, and will use deadlines to
prioritise tasks and increase their work pace. Type A people have the potential to keep things
moving and active but can have a detrimental impact.35 A study by Waller et al.36 found that
where teams were responsible for completing creative tasks, Type A time-urgent people
tended to impose strict, linear schedules on members and this reduced the innovative
performance of the team.
Critical reflection
‘Whatever the skills, experience or qualifications of an individual, personality is arguably
the most important criterion at selection interview and in their subsequent relationships
with other people at work.’
What do you think? How large a part does personality play in influencing a person’s
aptitude for a job?
Individuals vary with regard to their mental abilities and the extent to which they apply them
at work, and different occupations require different skills, competencies and abilities. The
‘happy’ scenario is one where a match occurs between the individual’s abilities and their
occupation, but reality suggests that this is not always the case. The extremes include
employees bored rigid with a simple task who become careless and make a succession of
mistakes, and the employees who have been promoted beyond their capability. The result
could be stress either for the individuals unable to cope or for their colleagues who are picking up the debris left behind.
In a similar vein to the studies of personality, different schools of thought have emerged
with regard to the study of abilities. Similar debates to the ones that surround the study of
personality have also swirled around the research on intelligence.
Is intelligence inherited? Is it constant throughout life? Is it dependent upon our life’s
experiences, our culture, our education, etc.?
What is the nature of intelligence? Can it be measured and how?
Is intelligence inherited?
The nativists believe that intelligence is mostly inherited (nature), while the empiricists
believe that our environment shapes our behaviour and mental abilities (nurture). Howe37
summarises recent convincing evidence to lend support to the empiricists. He cites evidence
from early intervention programmes such as Head Start initiatives to show that intervention can have an impact on IQ. He concludes: ‘The empirical findings provide no support
for the pessimistic conclusion that low intelligence and the problems associated with it are
inevitable and unalterable.’
The political implications of research into the nature of intelligence are striking. Some of
the earliest theories influenced the educational philosophy of England and Wales, including
how children were selected for different types of secondary education and the kind of help
that should be given to children with special needs.
The nature of intelligence
Arguments have raged within psychologists’ circles as to the nature of intelligence. Is it
dependent on a general overall factor that will have an overarching effect on specific activities? Or are specific activities independent of each other? In other words, if a child shows a
high level of ability at mathematics, is this dependent on an overall high general ability?
General ability can be seen as a kind of powerhouse that releases some of its energy into
the child’s ability at mathematics. (For other children it may act as a limiting factor.)
Spearman38 proposed a two-factor theory of intelligence and suggested that every intellectual
task involves a level of mental agility – a general factor (g) – plus specific abilities (s). This
idea, developed by Vernon,39 resulted in a model that placed abilities in a hierarchy (see
Figure 4.4). Abilities at the lower end of the hierarchy are more likely to correlate, hence if a
child has a good vocabulary, they are more likely to have abilities in reading and comprehension too.
Thurstone40 claimed seven primary mental abilities that can be separately measured
resulting in a profile of scores:
spatial ability
perceptual speed
Figure 4.4
A hierarchy of abilities
Source: Adapted from Vernon, P. E. The Structure of Human Abilities, Methuen and Co. (1950). Reproduced with permission from Taylor
and Francis.
numerical reasoning
verbal reasoning
verbal fluency
inductive reasoning.
Intelligence – one or many?
Guilford 41 criticised theories that aimed to simplify intelligence into a small number of
factors. He devised a model that identified 120 different abilities (see Figure 4.5) and suggested that intellectual ability requires individuals to think in one of three dimensions:
Content. What must the individual think about (for example, meaning of words or
Operation. What kind of thinking is the individual required to do (for example, recognising items, solving a problem, evaluating an outcome)?
Product. What kind of outcome or answer is required (for example, classifying or reordering items)?
Guilford also expressed concern about the convergent nature of tests that required a
single solution or answer. He suggested that tests should also be looking at an individual’s
ability to produce divergent answers.
Multiple intelligences
Gardner 42 felt that intelligent behaviour that could be observed in everyday life was excluded
from these earlier studies. He believed that the simplification of intelligence in terms of an
Figure 4.5
Guilford’s structure of the intellect model
Source: From Guilford, J. P. ‘Three Faces of Intellect’, American Psychologist, vol. 14, pp. 469–79. Reproduced with permission from APA.
IQ measure was unrealistic and failed to take into account the full range of intelligent activity. He suggested there was a multiple of intelligences and categorised them into six varieties
(all of which could be further divided):
Spatial capacity
Personal intelligences
Akin to the factors described in earlier theories
Ability shown by artists and architects
Abilities of a physical nature
Abilities of musicianship
Interpersonal – skills with other people
Intrapersonal – knowing oneself
A development of some of Gardner’s ideas was made by Goleman who in 1955 published his
ground-breaking work on EI (or EQ, for Emotional Quotient). Goleman agreed that the classical view of intelligence was too narrow. He felt that the emotional qualities of individuals
should be considered. These, he felt, played a vital role in the application of intelligence in
everyday life. He identified the key characteristics as:
abilities such as being able to motivate oneself and persist in the face of frustrations; to control impulse
and delay gratification; to regulate one’s moods and keep distress from swamping the ability to think;
to empathise and to hope.43
Emotional intelligence is the sum of a range of interpersonal skills that form the public
persona. EI has received considerable attention over the last few years as the concept has
been identified as a key aspect of managing people effectively. Goleman argues for a more
empathetic style of management and suggests that EI predicts top performance and accounts
for more than 85 per cent of outstanding performance in top leaders.44 The Hay Group,
working with Goleman, have identified 18 specific competencies that make up the four components of emotional intelligence and have produced an inventory designed to measure
emotional competence (see Figure 4.6). The Emotional Competence Inventory defines EI as
‘The capacity for recognising our own feelings and those of others, for motivating ourselves
and for managing emotions within ourselves and with others.’45
Figure 4.6
Emotional Intelligence Competence Model
Source: Hay Group. Copyright © 1999 Hay Group Limited. All rights reserved. Reproduced with permission.
Significance of emotional intelligence
Recognising and understanding the implications of emotions and being able accurately to
self-assess one’s inner resources, abilities and limits are key to becoming an emotionally
intelligent leader. Being able to read emotional currents is an important skill for managers
to develop and employ. It requires them to know and understand the individuals within
their teams and the way in which the individuals relate and interact.
Recent research from the Chartered Management Institute identifies EI as one of the key
skills managers and leaders will need in the coming decade.46 According to Landale it should
really be no surprise to find EQ so much in demand.
After all, we work in structures which are much flatter than ever. We have to be much faster on our
feet with both colleagues and clients and, whatever the team structure, there is increasing proximity for
us to build the relationships we need – fast. In this context EQ is the glue that holds people and teams
Developing EI
Landale refers to the importance of empathy in EI which both involves how a person selfmanages and addresses how to engage with the emotions of others, and suggests a six-step
process for developing EI.
Know what you feel.
Know why you feel it.
Acknowledge the emotion and know how to manage it.
Know how to motivate yourself and make yourself feel better.
Recognise the emotions of other people and develop empathy.
Express your feelings appropriately and manage relationships.
There seems little doubt that managers and leaders who have trained up in EQ have far more initiative in dealing with organizational life than those who don’t. Stress will always exist at work, but EQ
gives people the tools and ways of thinking to manage it to their advantage.48
A number of steps in raising emotional intelligence are also suggested by Garrett, including ensuring staff are managing their interpersonal relationships before a problem arises,
focusing first on leaders and creating an EQ culture for the organisation about itself and the
companies it deals with.49 According to Dann, becoming highly self-aware allows an individual to recognise inner and outer conflict and develop more proactive self-management.
Developing greater social awareness allows the fostering of productive relations and a greater
degree of engagement between employees and management. A manager with a high EQ
benefits both the organisation and the individual.50
There are no limits to the attitudes people hold. Attitudes are learned throughout life and are
embodied within our socialisation process. Some attitudes (such as religious beliefs) may be
central to us – a core construct – and may be highly resistant to any change, whereas other,
more peripheral attitudes may change with new information or personal experiences.
Specific events, particularly traumatic ones such as redundancy, may have a dramatic effect
on our attitudes.
So what are attitudes and how can they be distinguished from beliefs and values?
Attitudes can be defined as providing a state of ‘readiness’ or tendency to respond in a
particular way.51 Beliefs are concerned with what is known about the world; they centre on
what ‘is’, on reality as it is understood. Values are concerned with what ‘should’ be and what
is desirable.
Gross suggests that ‘to convert a belief into an attitude, a “value” ingredient is needed
which, by definition, is to do with an individual’s sense of what is desirable, good, valuable,
worthwhile and so on’. Gross has suggested that whereas ‘adults may have thousands of
beliefs, they may have only hundreds of attitudes and a few dozen values’.52 Hofstede defines
values as a ‘broad tendency to prefer certain states of affairs over others’.53
The functions of attitudes
Katz has suggested that attitudes and motives are interlinked and, depending on an individual’s motives, attitudes can serve four main functions:
Knowledge. One of the major functions is to provide a basis for the interpretation and
classification of new information. Attitudes provide a knowledge base and a framework
within which new information can be placed.
Expressive. Attitudes become a means of expression. They enable individuals to indicate
to others the values that they hold and thus to express their self-concept and adopt or
internalise the values of a group.
Instrumental. Held attitudes maximise rewards and minimise sanctions. Hence, attitudes
towards other people (or objects) might be held because of past positive (or negative)
experiences. Behaviour or knowledge that has resulted in the satisfaction of needs is thus
more likely to result in a favourable attitude.
Ego-defensive. Attitudes may be held in order to protect the ego from an undesirable
truth or reality.54
Prediction of behaviour
Is it possible to predict behaviour if we know an individual’s attitude? Research suggests the
answer is ‘no’ – what we say and what we do may be very different. Such evidence indicates
that attitudes can be revealed not only in behaviour but also by the individual’s thoughts
(although these may not be revealed in public) and by feelings, the strength of which
demonstrates the extent to which the attitude is a core or peripheral construct.
A classic study by La Piere illustrates this point. Visiting American hotels and restaurants
with a Chinese couple, La Piere found no sign of prejudiced attitudes in the face-to-face
situation, but there were marked racist attitudes in the follow-up attitude survey. He found
complete contradictions between public and private attitudes.55
These findings have important implications for the study of attitudes and reveal two
important issues for the psychologist and manager.
1 Attitudes cannot be seen; they can only be inferred.
Given that the attitudes employees hold are important for morale and the effectiveness of
organisations, it is important that there is confidence in the measurement techniques used
to assess the strength of attitudes. As attitudes are inferred, heavy reliance is placed therefore
on the accuracy of assessment. Although there are a number of techniques that could be
used to measure attitudes, the two most common are direct observation and self-reporting
All of us observe others and assess attitudes on the basis of communication style (both
verbal and non-verbal) and behaviour. This is an example of an informal approach – unsystematic, spontaneous and based on our understanding of social cues. We may be wrong
in our judgement. Students who turn up late for classes, slouch on their seat and do not ask
questions may still hold very positive attitudes towards the subject. Managers may also be
erroneous in their assumptions and beliefs about their colleagues (both subordinates and
superiors). Their beliefs may never have been tested out – merely assumed to be correct.
Serious mistakes can be made when dealing with people across different cultures. For
instance, eye contact in Western countries is normally associated with confidence, politeness
and attentiveness, but in some African countries it may be seen as rude and disrespectful.
Bulgarians nod when they mean ‘no’ and shake their heads when they mean ‘yes’, while the
Greeks nod upwards or raise their eyebrows for ‘no’ and shake the head side to side or tilt it
to say ‘yes’. A lack of ‘cultural literacy’ can lead to incorrect assumptions, poor relationships
and a failure to make useful business connections.56
Organisations that assess their employees’ attitudes by using attitude questionnaires (selfreporting techniques) are attempting systematically to gauge and measure these assumptions. Attitude questionnaires are time-consuming to design and administer. The questions
asked, their relevance, style and length are all important variables in the validity of the questionnaire. So, too, is the honest completion of questionnaires. Making public people’s
private attitudes may also have its dangers as expectations of change may be envisaged. If these
do not occur, disappointment and low morale may be the result.57 (See also the discussion
on the Johari window in Chapter 9.)
2 Attitudes are often shared within organisations and as such are embodied in the
culture of organisations.
Classic research has shown the influence of the wider community in the formation of orientations towards work. Differences in class/orientation may elicit a range of loyalties and
possibly produce opposing perceptions of commitment, loyalty and co-operation. Attitudes
are not just individually formed but arise out of interaction with others. They are often
‘locked-in’, often regarded as obvious, mere common sense, and are so much taken for
granted that they may be overlooked. Sharing the belief system of others also has affective
outcomes. If people feel that they belong and are included, it enables them to feel good
about working in an organisation. If, however, people do not feel part of the organisation –
if they feel that they do not share the dominant attitudes and beliefs – negative emotional
consequences are likely to result.
Researchers of organisational culture suggest that it is the shared perceptions of daily practices that are at the core of organisational cultures.58 ‘The reality of everyday life is taken for
granted as reality.’59 (Organisational culture is explored in more detail in Chapter 19.)
Implications of the unquestioning nature of the ‘reality’ of what can or cannot be done can
lead to individuals becoming ‘culturally blinkered’. Insitutionalised attitudes result. Major
problems arise when these attitudes are formed on the basis of stereotypes and prejudice, as
was evidenced in the Stephen Lawrence Inquiry into the murder of a black teenager stabbed
to death in London in April 1993:
Unwitting racism can arise because of lack of understanding, ignorance or mistaken beliefs. It can arise
from well intentioned but patronising words or actions. It can arise from unfamiliarity with the
behaviour or cultural traditions of people or families from minority ethnic communities. It can arise
from racist stereotyping of black people as potential criminals or troublemakers. Often this arises out of
uncritical self-understanding born out of an inflexible police ethos of the ‘traditional’ way of doing
things. Furthermore such attitudes can thrive in a tightly knit community, so that there can be a
collective failure to detect and to outlaw this breed of racism. The police canteen can too easily be its
breeding ground.60
Attitudes are not just created within organisations. Attitudes inherent within wider society are reinforced or reshaped by the organisation.
Employee attitude surveys
Attitude surveys or questionnaires are used by many organisations as a way of attempting to
gauge the attitudinal climate of the organisation and monitor the views of members of staff.
The Chartered Management Institute defines an employee attitude survey as:
A planned procedure which enables an organisation to obtain the opinions of its employees on a particular issue or on the organisation itself, so as to take account of them in the planning process or make
changes beneficial to the organisation and individuals alike.
Table 4.7
An example of an attitude questionnaire
Please tick one box that most closely represents how you feel
about each statement
Strongly disagree
Strongly agree
I believe in what OrgCo is trying to achieve
I enjoy discussing OrgCo with people who do not work here
I know how my job contributes to OrgCo’s aims and objectives
Good and bad news about what is happening at OrgCo is
communicated regularly
My values and those of the organisation are very similar
Right now, staying with OrgCo is a matter of necessity as much as desire
I am constantly interrupted in my work
I enjoy my job
I am encouraged to seek out new training opportunities
My manager discusses with me ways in which I can improve my
work performance
OrgCo is serious about removing barriers to ensure equality of opportunity
Staff at OrgCo regularly help and support each other at work
I lack direction from my manager
When things do not go well in our team/department we learn from
the experience
Communication within my team is positive and effective
Taking everything into account I have a high level of job satisfaction
with my team
Surveys can encourage employee involvement, allow management to be more aware of
employees’ opinions, and provide effective communications or a sounding board. However,
surveys require significant time and costs to administer and evaluate, and may generate suspicion from staff about ‘hidden agendas’ of the survey. The frequency should be no more
than every 18 months and it is important to report results of the survey and plans of action
to all employees.61
The usual method of measurement is by adopting a five-point ‘Likert scale’ (as in the
example shown in Table 4.7) that reflects the comparative strength of the attitude.62
The permanency of attitudes clearly has implications for attitudinal change. At the beginning
of the previous section it was pointed out that whereas peripheral attitudes may easily
change with new information or experiences, central attitudes tied into other cognitive systems may be much more difficult to shift.
Theories on attitude change stress the importance of balance and consistency in our
psyche. Heider, for example, suggests that not only would we find it uncomfortable to hold
two conflicting attitudes, but to do so would motivate us to change one of the attitudes in
order to reach a balanced state.63
Cognitive dissonance is the term given to the discomfort felt when we act in a way that
is inconsistent with our true beliefs. It suggests that we are motivated to reduce its impact.64
The process of attitude change is dependent on a number of key factors, the most important being:
why an attitude is held in the first place;
why it should change;
what the benefits are and to whom;
what the outcomes are if it does not change.
Considerable research has demonstrated the importance of the following variables in a
programme of attitude change:
the persuader’s characteristics;
presentation of issues;
audience characteristics;
group influences;
outcome of attitude change (reward or punishment).
The last decade has produced tumultuous change for employees and their managers. It
would be rare indeed to find an organisation that has not experienced some degree of change
in structure, product, processes, philosophy, culture or ownership. The way in which these
changes are implemented can have a dramatic impact on the attitudes of staff.
Critical reflection
‘Changing people’s behaviour is comparatively easy but changes to personality or
attitudes are far more difficult. And a change in behaviour does not necessarily mean
a change in personality or attitudes.’
So should we simply concentrate on how to change behaviour and ignore the study of
personality and attitudes?
Much has been written about the value of selection tests and questionnaires and they are
subject to a number of criticisms. It should be noted that the word ‘test’ is often taken to refer
to measures of intelligence, achievement and developed abilities, and aptitude for particular
tasks. Measures of interests, social attitudes, emotional stability or traits of personality are
usually referred to as questionnaires or profiles, or similar. Answers are regarded as common
or uncommon, typical or untypical, rather than right or wrong, good or bad. The word ‘test’
is therefore usually avoided in such measures, as in, for example, the Cattell 16PF
The early tests of intelligence have evolved into a large psychological business. Most
people will have taken a psychometric test of one kind or another by the time they are an adult
in employment. Tests may be administered at school or college, or as part of the selection
assessment process at work. The use of tests is widespread and growing. They are perceived
to be useful as an objective discriminating tool, but they are not without controversies and
Tests are divided broadly by the British Psychological Society into the following:
1 Tests of typical performance. These assess an individual’s typical responses to given
situations. Answers are not right or wrong but identify choices, preferences and strength
of feelings. Personality assessments and interest inventories are examples of such tests.
2 Tests of maximum performance. These assess an individual’s ability to perform effectively under standard conditions. Performance on these tests, which include ability and
aptitude tests, can be judged as right or wrong. Ability tests come in many different forms
and may test a general intellectual functioning or a specific ability (such as verbal
reasoning, numerical reasoning, etc.).
Alice Heim (cited in Anastasia) developed a series of general ability tests – AH series –
which is widely used to assess general ability. These test three key areas: verbal, numerical
and diagrammatical reasoning. For example, an individual would be asked questions
similar to the following:
Which one of the five words on the right bears a similar relation to each of the two words on
the left?
Modern Occupational Skills Tests are an example of specific ability tests and measure
a range of clerical and administrative skills: verbal checking, technical checking, numerical
estimation, etc. They claim to be an aid in the selection of administrative staff. Their tests are
short and can be used singly or together as a battery of tests. The individual would be asked
questions similar to the following:
The two figures on the left have a feature in common. One, and one only, of the figures on the
right lacks this feature. Which is it?
Some tests are designed to be given individually whereas others are suitable for administering within a group situation. However, there are certain minimum features and standards
of conditions that distinguish psychological tests from other forms of informal assessments;
tests are essentially ‘an objective and standardised measure of a sample of behaviour’.65
Features of psychometric tests
Psychometric tests have certain standard features:
1 Tests will comprise a standard task or a set of questions with a standard means of obtaining the score.
2 A technical manual will explain what the test is measuring, how it was constructed, and
the procedures for administering, scoring and interpreting the test.
3 Details of the test’s validity (whether the test measures what it claims to measure) and
reliability (the test’s ability to measure consistently) will also be shown in the manual
along with the inferences that can be drawn from the data.
For a test to be considered as a psychological instrument it must be objective, standardised, reliable, valid and discriminating (but not discriminatory). The selection and choice of
the test should be based on a number of other key features such as its acceptability, practicality, time, costs and perceived and actual added value.
Personality questionnaires
The practical value of personality ‘tests’ has long been subject to much debate. According, for
example, to Barrett:
A dismal history has been recorded by personality tests. There have been a few scattered successes with
some modern techniques, but on the whole the typical personality questionnaire, test, or inventory has
not proved to be useful. In many of them, the ‘right’ answers (which exist despite the naive disclaimer
that there are no right answers) are so obvious that everyone comes out a model of healthy adjustment.
But even if all applicants were to answer each question with complete candor, the value of their answers
for predicting success would still be in doubt because the complexities of human personality are as yet
poorly understood.66
The use and limitations of tests
All tests have limitations. Tests can sample behaviour only at one particular moment in time.
The information they provide is dependent upon good testing practice and will only add
evidence to the decision-making process. Tests will not provide the answer. Some individuals
are very nervous and may not perform at their best and indeed some may feel indignant that
they are obliged to take a test at all.
Great skill is required, therefore, in the administering of tests or questionnaires and in the
interpretation of results. This would probably entail the services of a consultant psychologist,
trained to the British Psychological Society (BPS) standard. A suitable physical environment
is also important. The possible reaction of candidates must be considered. Some might find
any form of ‘test’ something of an ordeal or regard it as an unpleasantness. A major concern
with the majority of tests is the doubts about validity and lack of statistically proven reliability.
Despite the continuing debate about their value, it does appear that an increasing number
of organisations are using psychometric measures (to measure characteristics such as
personality and ability) as part of their recruitment and selection procedures. However, a major
consideration in the controversy about the use of psychometric tests is how to avoid any
cultural bias. There are still widespread doubts and criticisms about the use and value of
personality tests, and continuing debate about their value in predicting performance at work.67
Even when psychometric tests are used, they should not be used in isolation but as
part of a comprehensive selection process and applied in appropriate circumstances to
supplement the interview, never as a substitute for it. It is also important to ensure adequate feedback to candidates in the process.
The reasons for using psychological tests may be summarised as follows:
1 They make decisions about people
– more systematic
– more precise.
2 They predict future performance and reduce uncertainty.
3 They provide more accurate descriptions of people and their behaviour. Precise definitions and measured variables lead to further studies and improve understanding of the
relationship between tests and performance. But:
– tests should be seen as an additional source of information only;
– tests may be expensive and time-consuming;
– without proper professional practice, they can be misused and results abused;
– they may be seen as an intrusion;
– they may be regarded as inappropriate;
– practice may have an effect on test results.
The concept of diversity
An integral and essential feature of individual differences is the concept of diversity. We have
seen from the discussion above that people are not homogeneous. Diversity focuses on the
multiplicity of differences among people – on the variety of people as heterogeneous groupings. Individual differences are the basis of diversity.
For Kandola and Fullerton, diversity is defined as follows:
The basic concept of managing diversity accepts that the workforce consists of a diverse population of
people. The diversity consists of visible and non-visible differences which will include sex, age, background, race, disability, personality and workstyle. It is founded on the premise that harnessing these
differences will create a productive environment in which everybody feels valued, where their talents
are being fully utilised, and in which organisational goals are met.68
Individual differences and diversity have long been recognised as important for effective
team performance but in recent years greater attention has been given to the management of
diversity. Reasons for this include:
demographic changes in the workforce;
wider customer base;
equal employment opportunities legislation;
a shortage of higher-level skills;
programmes of affirmative action and positive discrimination;
increasing number of women and part-time workers entering the workforce;
changing social attitudes;
a more global environment and increasing internationalisation.
However, valuing differences is easier said than done. It means relating and working with
people who hold different perspectives and views, bringing different qualities to the workplace, having different aspirations and having different customs and traditions. Differences
are challenging; they question people’s views, perceptions and attitudes and require individuals to see things from a different frame of reference. Managing diversity does not mean
that managers champion their own values and try to shift other people’s values to conform
and match their own!
The Chartered Management Institute provides the following description of diversity:
The concept of diversity encompasses any sort of difference between individuals. These could be differences in ethnic origin, age, gender, disability, family status, education, social or cultural background,
personality or attitudes – in fact, anything which may affect workplace relationships and achievements.
The management of diversity involves the implementation of strategies through which a network of
varied individuals are integrated into a dynamic workforce.69
In addition to the above it is possible to identify a number of ‘secondary’ learned characteristics that a person acquires and modifies throughout life and over which the individual
has relatively more influence. These include:
religious beliefs
sexual orientation
work experience
personal style
geographical location.
Devolution and regionalisation
Alterations to the identity that individuals hold have also been apparent over the last decade.
Devolution and regionalisation have increased and paradoxically so too has the trend
towards greater integration into multinational groupings (in terms of both company mergers
and political agendas). A complex range of possible identities and affiliations results.
Consider a Scottish national living in the United States, working for a Japanese company
and directing European markets: such a manager will have a diverse set of allegiances which
may in turn affect motivation and morale. The growth of the portfolio worker and contract
worker may result in an employment relationship that is short-term, instrumental and driven
by outcomes and performance. Loyalty to the organisation and commitment to mission
statements do not enter into such a partnership. The rise of consumerism in and out of
the workplace has led to greater understanding and expectations of ‘rights’ and redress of
perceived injustice. It is not only morally and socially acceptable to treat all people fairly in
the workplace; legislation insists that managers do so.
From equal opportunities to managing diversity
Equal opportunities relates to legislation intended to outlaw discrimination. The government is committed to protect individuals at work against discrimination in employment on
the basis of gender, disability, race, religion, sexual orientation or age. Encouraging a diverse
workforce is high on the government’s agenda and the reluctant employer is having their
hand forced by statutory obligations. Although diversity in the workplace relates to treating
everyone equally, it complements and further develops initiatives on equal opportunities.
Future demographic patterns present new challenges for managers.
Diversity management goes beyond what is required by legislation designed to promote equal opportunities and prevent discrimination. It comprises an approach which recognises and values differences and
aims to make positive use of the unique talents and perspectives within the workforce. The focus is on
individuals rather than minority groups.70
Among those who believe that equal opportunities policies and training, though important, are not by themselves enough to secure the positive value of individual contributions is
Guirdham. Only where an organisation has fully embraced diversity, trained its staff accordingly and inculcated its principles in every way will the barriers to good work communications between subgroups be lowered.
Some organisations ‘champion’ diversity, valuing the positive contribution that diverse individuals
can bring, others tolerate it, merely following equal opportunities precepts, and others again treat
it as a problem. These different policies and practices significantly affect the climate in which men
and women, people of different ethnicities and so on conduct their work-based interactions.71
All these changes amount to a picture in which the white, Protestant male will no longer
dominate. Instead, we can anticipate a complex pattern where, ideally, individual differences
will be valued and celebrated and, at the very least, equal opportunities practice will be
observed. Personal qualities and characteristics that may have been downgraded, ignored or
regarded as nuisance factors will be perceived as adding value. In the longer term, an effective
policy on diversity should arguably eliminate the need for affirmative action or positive
As businesses become increasingly global it is even more important for managers to have a
sound understanding of diverse countries and workforces. According to ACAS, the business
case for diversity – that a more diverse employee base will attract a more diverse customer
base and increase sales, improve performance etc. – is a well-argued one.72
Organisations that embrace difference and diversity as opposed to those which are merely
compliant will, it is claimed, succeed in a fiercely competitive climate. For example, as
J. M. Barry Gibson, (then) Chief Executive of Littlewoods, has stated:
The fact is that if we effectively exclude women, ethnic minorities and disabled people we are fishing
in a smaller pool for the best possible talent. As a service organisation, we ought to reflect the style, taste
and opinions of our consumers, who of course represent sexes, all colours and creeds, all ages and disabilities. The main point is that cultural diversity will strengthen the quality of the company and will
make us much more outward-looking.73
A joint report from the CBI and TUC, supported by the Equality and Human Rights
Commission, suggests that promoting diversity in the workplace and employing people
solely on the basis of their ability can bring many real business benefits. These include:
increasing employee satisfaction, which helps attract new staff and retain those already
there, reduces recruitment costs, and can increase productivity;
understanding better how the company’s diverse customers think and what drives their
spending habits, or how they access markets they have not previously been able to tap
into so effectively;
finding enough workers to fill skills gaps in areas with tight labour markets, where there
are not enough ‘obvious candidates’ for the vacancies they have.
The report also makes clear that diversity can be improved through positive action – such
as encouraging applications from types of people who have not in the past applied for
jobs, additional training, providing support networks or adapting work practices – but not
positive discrimination.74
Embracing individual differences
As part of the creative process within organisations, Hill refers to the need to embrace
individual differences while pursuing collective identity and goals.
The creative process demands a mix of diverse individuals. For the collective to benefit from this
diversity by drawing on each individual’s talents there needs to be a process that allows for varied
perspectives, priorities and styles. The only way these voices can be expressed and heard is to treat
people fairly, which means to treat people differently . . . If member diversity is to be acknowledged and
differences of opinion encouraged, the collective must develop a culture of trust in which members will
want to support one another.75
Positive and negative propositions
A report from the Chartered Institute of Personnel and Development refers to a central
theme of diversity as ‘valuing everyone as individuals’ and suggests there is an increasing
volume of evidence of a convincing link between valuing people and value creation in
business. Diversity programmes require cultural and organisational changes that are difficult
to manage. However, the benefits of a diverse workforce include customer focus, innovation,
creativity and learning, business process improvement and the financial bottom line.
There is no denying the mounting empirical and anecdotal evidence that good diversity management
can lead to improved business performance where the business contexts and market conditions are taken
into account appropriately. Conversely, poorly developed and poorly matched diversity practice can be
detrimental to business, creating without gain, raising expectations without delivery, and increasing
cost without benefit.76
The report introduces the idea of measuring diversity and suggests the adoption of a
balanced scorecard approach to integrate diversity into business strategy and operational
activities. The scorecard puts forward eight propositions that take into account both the
positive and negative forces of diversity.
Positive forces of diversity are those that:
promote cost-effective employment relations;
enhance customer relations;
enhance creativity, flexibility and innovation;
promote sustainable development and business advantage.
Negative forces of diversity are:
diminishing cultural relatedness;
the need for financial support to support flexibility;
the jeopardising of workplace harmony;
possible conflict between organisational slack and tight fit.
Diversity and management recruitment
The Institute for Employment Studies, in conjunction with the Chartered Management
Institute, emphasises the importance of diversity as a strategic priority for retaining and
developing key people in an organisation. They draw attention to the different career
ambitions of managers from under-represented groups and state that, if organisations want
management talent at the top, recruitment approaches must recognise that managers from
different ethnic groups are attracted by different benefits. For example, compared with
other ethnic groups, black managers were more likely to cite good progression opportunities; Asian managers more likely to cite working for a good employer; managers from mixed
background to cite challenging work; white managers and black managers more likely to
mention better work/life balance.77
Diversity action plans
Management of diversity requires an effective action checklist and plan. As an example,
The Office for National Statistics (ONS) has produced a comprehensive and detailed
Equality Scheme 2008–2011 which includes reference to ONS as an employer; equality
impact assessments; and governance, monitoring, reporting and reviewing. This is shown
as Figure 4.7.
Figure 4.7
ONS Equality Scheme
‘ONS is committed to valuing diversity and promoting equality in the way it does business as a
statistics office and as an employer. We aspire to demonstrating best practice in the way we do
this beyond merely meeting our statutory equality duties.
As an employer, our vision is that ONS will be regarded as an employer of choice and will be
recognised as a great place to work and thrive for all, regardless of age, disability, gender and
gender identity, ethnicity, religion, sexual identity and work-life balance needs. At the same time,
we believe equality and diversity are everyone’s business regardless of background.
While progress has been made, in particular through the valuable contributions made by ONS’s
diversity networks and champions, this scheme recognises that there is more to be done to build
a culture and environment in which all members of our workforce recognise that diversity is
Key points of the Equality Scheme include:
This equality scheme is both a description of how ONS plans to meet its statutory equality
duties as a public authority and a commitment to achieving best practice in promoting equality
and eliminating discrimination and harassment
It is a single comprehensive scheme with the intention of promoting equality in its widest sense,
in relation to age, disability, ethnicity, gender and gender identity, religion/belief, sexual identity
and work/life balance
Promoting equality is core to the expectations ONS staff should have of ONS as an employer,
and in the expectations ONS has of its workforce
Detailed equality and diversity action plans, outcomes and outputs are set out for each of the
following areas.
Diversity Governance and Measurement
ONS Public Functions
Gender Equality
Sexual Orientation
2. ONS as an Employer
4. Race Equality
6. Disability Equality
8. Religion or Belief
10. Work/life Balance
Source: Office for National Statistics. Crown Copyright material is reproduced under terms of the Click-Use Licence.
Concept map of diversity at work
Source: Copyright © 2008 The Virtual Learning Materials Workshop. Reproduced with permission.
Figure 4.8
Diversity works
Our Diversity Initiatives at Hilton Hotels Corporation are designed to produce quantifiable and
qualitative results which go beyond just establishing and maintaining a diverse workforce. We
have incorporated diversity principles into all aspects of our business operations: employment,
training and mentoring, marketing, community support, and management performance measurements.
While successful diversity programming can result in receiving awards, plaques and trophies
(which look nice on our walls), at Hilton we’re concerned with much more than an accumulation
of hardware. Our achievements in diversity programming, and the priority we place on it, go to
the very heart, soul and spirit of our organization . . . who we are, and what we stand for.
Yes, we welcome and appreciate acknowledgements of our diversity accomplishments; and
we’ll find room for more plaques and trophies recognizing our good work. But far beyond the
pride that goes with such recognition is our commitment to the belief that our Diversity Initiatives
enhance our competitiveness and strengthen the business value of our corporation; for those
reasons, we take pride in the fact that, at Hilton Hotels Corporation . . . ‘diversity works’.
Stephen F. Bollenbach, President and CEO78
A summary of diversity at work is set out in the concept map in Figure 4.8.
Critical reflection
‘Despite all the rhetoric and claimed advantages of diversity, it is still more about the
benefits to business rather than moral or social concerns. In any case, in reality it is little
more than another form of political correctness and viewed with scepticism by the
majority of the ordinary workforce.’
How would you respond to such a claim?
More than ever, effective organisational performance demands an understanding of, and
response to, diversity. This necessitates a work climate that respects individual differences and
treats all members of staff with dignity and mutual respect. Diversity training will not be
effective unless there is active support from the top and it is recognised as a company-wide
initiative and part of the core value of the organisation.
Organisations need to manage diversity in a manner that benefits the well-being of all
members of staff. Training should involve:
increasing the awareness and value of diversity;
education in understanding the culture and values of members of a diverse workforce;
the ability to communicate effectively with all members of staff – and also customers and
developing the skills of effective diversity management;
addressing biases, prejudices and stereotypes.
Business in the Community (BITC) is one of the agencies that help businesses to embrace
a culture of inclusiveness by helping them to look at the competitive case for diversity.
Current activities focus on labour market discrimination, religious beliefs, sexual orientation, and general diversity and equality.79 As another example, ACAS draws attention to
managing disability and to the importance of line managers’ contribution to organisational
culture and managing performance. Training managers in effective people management
skills and developing a culture of inclusion are crucial.80 Attention to top management is
also required. Arkin suggests that in company headquarters the chances are that the people
will be overwhelmingly white, male, able-bodied and of a certain age. There is little joinedup thinking between activities under the diversity agenda and the nurturing of top talent.81
The effective management of diversity will also entail a review of organisational processes
and the execution of work. For example, not everyone
shares the same work ethic or seeks the same goals and objectives;
responds in the same way to working in a bureaucratic structure;
works better in a self-managed group or with a more participative style of management;
will fit the same psychometric profile;
is motivated in the same way; or
reacts the same way to different forms of control.
Diversity management requires time and effort and may well have a high financial cost.
There is a general feeling that badly managed initiatives do more harm than good. Managing
diversity requires a company-wide philosophy and commitment, a change to organisational
culture and supportive systems of management and training.
Diversity and stereotyping
Diversity also challenges many traditional stereotypes (discussed in Chapter 6). Stereotyping
infers that people within a particular perceived category are assumed to share the same traits
or characteristics. Stereotypes are a means of making simplified judgements of other people
instead of coping with a range of individual stimuli. Stereotyping attributes to all individuals
the characteristics or tendencies of the categorisation as a whole. An important feature of
managing diversity is an awareness of, and training in, overcoming inaccurate stereotyped
perceptions and attributions. A greater understanding of cultural differences in non-verbal
communications and body language will help improve interpersonal relationships.
There have been instances in my life, both at home and at work, when people have felt I’m a
little crazy because I am pushy, outspoken, energetic, competitive, enthusiastic, driven and
strong. Crazy, because that’s not what’s expected of an Asian woman. Crazy because it’s not
what the majority of people are like. And crazy, because they think they know me better than I
know myself.
Saira Khan – star of The Apprentice television series82
Managers’ attitudes, values and beliefs
If they are to be successful in managing diversity, managers need to have greater reserves of
emotional intelligence (discussed earlier in this chapter). In turn this suggests that managers
need to have an awareness of, and be able to get in touch with, their own attitudes, values
and beliefs – what they are and where they come from. Clements and Jones recognise that the
process can be uncomfortable:
A model of good diversity training will recognize that when people engage in an exploration of their
attitudes, values, beliefs and prejudices, this may be an uncomfortable process. Some will find out things
about themselves that will cause them emotional pain, and often the tension in learners will relate to
how they should respond.83
An increasing number of public and private organisations appear to recognise the business
case for diversity. The government department for Business, Enterprise and Regulatory
Reform (BERR), created on the disbanding of the Department of Trade and Industry, is
among top public sector performers. In the private sector, Lloyds TSB has been praised for
its approach.
BERR diversity statement
‘Promoting Equality, Valuing Diversity’
The BERR Operating Committee and Management Board agreed the Department’s revised
diversity strategy in September 2008. This is the second diversity strategy and builds on the
success of the earlier 2006–8 strategy. The 2008–11 strategy reflects the cross-government
diversity and equality priorities set by the Cabinet Office and aims to tackle those issues
identified as key by staff and stakeholders.
Proposed actions are based on a number of key themes and pressure points for the
Department that needed to be addressed in relation to:
representation of women, ethnic minorities and disabled staff in senior levels
changing behaviour to create an inclusive culture
building on strong leadership and accountability for diversity
talent management – bringing in and bringing on people from different backgrounds
mainstreaming diversity and equality considerations in management, operations and in
policy development.84
Lloyds TSB diversity programme
Lloyds TSB provides strong organisational commitment to diversity. The Board and Group
Executive Committee agree the diversity programme and also oversee its delivery. This,
coupled with a clear plan of action, has enabled Lloyds TSB to achieve a considerable
improvement in performance.
Lloyds TSB participates in benchmarking exercises run by national campaigns covering the
main diversity strands. The benchmarks independently assess performance, track progress
over time and also compare performance against other organisations. This kind of external
evaluation is extremely important and helps Lloyds TSB to maintain momentum and continue
to strive to retain their leading edge status.
Lloyds TSB is currently ranked the number one organisation in the UK for gender, race,
disability and sexual orientation equality. Its policies and practices are recognised as amongst
the best and the strategy is underpinned by focus on these key actions:
1 Diversity metrics – all aspects of the workforce are monitored, analysed and reported on
by diversity demographic. Progress is measured against aspirational goals and diversity
interventions in place are measured for effectiveness using key performance indicators.
2 Employee research – extensive quantitative and qualitative research is carried out with
staff to ensure that strategies put in place address their specific needs. In addition,
ongoing consultation with employees provides feedback on how well the strategy is
3 Training and development – training is available for all staff to raise awareness of
diversity issues and to give them the tools to manage difference. Development workshops
for specific groups are also available, which inspire and motivate attendees to take control
of their personal and career development.
4 Top level commitment – as well as agreeing and committing to the delivery of the
diversity programme the Group Executive Committee and the Board monitor progress and
require regular updates. In addition, Lloyds TSB Executives demonstrate their commitment
to valuing diversity by communicating key messages to all staff about the strategy;
progress, challenges and successes.85
Source: Lloyds TSB Equality and Diversity Team.
Managing diversity well potentially benefits an organisation in the areas of social responsibility,
cost, resource acquisition, marketing, creativity, problem solving and organisational flexibility. To
gain these benefits, however, the organisation must create a climate that values diversity and
where each employee has an equal chance to contribute and succeed.
A. M. Francesco and B. A. Gold International Organisational Behavior 86
Despite the potential benefits from managing diversity, there are a number of criticisms and
perceived limitations. According to ACAS, to date an understanding of diversity and its
implementation remains the domain of larger organisations with an HR department. A large
proportion of smaller organisations tend to focus on how to treat employees fairly within
the law.87 There are concerns over increasing legislation and government initiatives aimed at
‘forcing’ further advancements in equal opportunities. There is a general feeling that badly
managed initiatives do more harm than good.
Whilst acknowledging that the positive management of diversity aims to promote an
inclusive culture in which individuals are valued and respected, the Chartered Management
Institute points out that diversity management should not be mistaken for equal opportunities or be merely a question of legal compliance. Managers should avoid handling diversity
issues insensitively; invading employees’ privacy; failure to consult and gain commitment
throughout the organisation; or falling into an ‘us’ and ‘them’ mentality.88
Individuality and groups
Social interaction is a natural feature of human behaviour and group working is a major feature of organisational life. Strong and cohesive groups can have beneficial effects for the
organisation but there are potential disadvantages. There is arguably a potential conflict with
workforce diversity because of the need to consider staff both as individuals and also as
members of a group. The greater the compatibility of its members and the more homogeneous the group, the greater the danger of the group developing its own subculture.
Members may display a critical attitude towards people outside the group or members of
other groups. Encouraging individuality and at the same time expecting group co-operation
and teamwork are potential triggers for tension.
Concern for moral and social issues
A major concern with the increasing attention to diversity is that too much attention is given
to the advantages for business rather than to broader moral or social issues and the ethical
arguments for equality of treatment.
In arguing the case for combining heterogeneity and homogeneity, Nordström and
Ridderstråle suggest that although quite often people talk favourably about diversity since it
supposedly promotes a better atmosphere and equality, the typical manager is persuaded to
change the mix of people at the company for economic reasons. ‘The competitive reality is
that organisations that are bogged down in issues of race, gender, age, sexual preferences,
look and so on, will slip deeper down in the mire.’89
Kirton and Greene believe that the ‘business case’ should be broadened to include wider
issues of social justice and social responsibility.90 Liff and Cameron argue that organisational
culture needs to shift radically to win the ‘hearts and minds rather than just achieve reluctant
compliance’. In their article, which uses women as their illustration, they assert that there
are real dangers in conventional equality measures. Focusing on women as having special
problems requiring special treatment results in resentment and defensive attitudes from
managers. They believe that one of the first essential stages to enact change is to consider the
organisational culture and the way in which it could move to an equality culture.91
However, Lucas points out that:
One of the key messages the experts want to get across is that paying attention to diversity isn’t just
a moral obligation, it’s a business imperative. Workers in organisations where diversity is valued
generally feel more engaged with their employer and are more likely to stay on board. The organisation
will build a reputation as an ‘enlightened’ employer, and will be able to attract the best people at a
time when talent is at a premium. The business can also draw on the expertise of its diverse workforce
to create new and improved products and services which will help them get ahead in competitive,
global markets.92
One of the most significant and important aspects of managing diversity is that of gender
equality, and the participation of men and women in the workforce.93 One of our initial
perceptions and classifications of another individual is usually the identification of their
How does this perception affect our behaviour?
What difference does it make if our work group is predominantly male or female?
Do women and men have different experiences at work?
If organisations are rational and neutral institutions – why should gender make a
Does it matter that many classic theories have been based on research carried out on men,
by male researchers?
What has been the influence of diversity policies on work behaviour and on the position
of women in organisations?
Emotions, politics and gender
Emotions and politics surround the issue of gender. Alvesson and Due Billing suggest that
some people may be over-sensitive to gender and interpret any negative comment as if it is
symbolic of an act of discrimination. Likewise under-sensitivity may also occur and organisations may remain gender blind to everyday instances of bias and distortion. Although not
easy, achieving the right balance (neither overwhelming nor rejecting the pervasiveness of
gender) is an important skill in managing men and women at work.94
Contradictions and confusion
Gender research is replete with contradictions and confusions. Although there is a body of
evidence to confirm the position, status and (lack of ) power of women in organisations –
aspects that can be measured and quantified – such clarity is blurred when it comes to understanding the subjective and qualitative aspects of working life. It is not helpful to view all
men or all women as homogeneous groups. There may be as many differences within each
gender as between the two genders. Social class, race and age will affect attitudes, beliefs
and values and may impinge upon different understandings of gender. Although earlier
organisational research could be criticised as having been conducted by men largely investigating male behaviour, so too much of the research on women has been dominated by white
middle-class women assuming their values are those that should be upheld.
Perhaps the most positive approach to take is for an organisation to acknowledge the
changing working pattern of all employees and to consider the best working practices for
managing a diverse workforce as a whole. This should not be done mechanically but by
analysis of the organisation and its workforce. Organisations need to analyse, consciously
debate and question their unwritten assumptions and expectations in order to reveal
prejudices inherent in the culture of their organisations. Analysis of the way in which culture
is expressed in all its trivial detail would lead to an understanding of perceptions and
attitudes. Until a full analysis is completed it remains doubtful whether more egalitarian
practices will develop.
IBM – united by diversity
When IBM decided men and women should be paid equally for doing the same job, and should
have equal responsibilities and career opportunities, it made headline news. Not surprisingly – it
was in 1935. This early recognition of the importance of an inclusive workplace laid the foundation for today’s focus on diversity, where every employee is encouraged to perform at their best,
and where different opinions are both welcomed and appreciated.
IBM Corporation95
Critical reflection
‘We know that every person is an individual in their own right, but many theories and
models of organisational behaviour still appear to apply to people in general. Rather than
looking at similarities among people, we should be more concerned with the study of
differences among individuals.’
What are your views? What do you believe is the value of theories or models of
organisational behaviour?
■ Organisations are made up of their individual
members and the individual is a central feature of
organisational behaviour. A distinguishing factor of
successful managers is the recognition of individual
differences and their ability to bring out the best in the
people who work with and report to them. A discussion
of individual behaviour is riddled with complexity and
contradictions. Managing relationships well depends
on an understanding and awareness of members of
staff and of their talents, abilities, interests and motives.
■ A significant difference among individuals is in
terms of their personality – those stable characteristics
that explain why a person behaves in a particular way.
Differences between individuals can be the source
of problems and conflict. Personality clashes may occur;
differences of attitudes and values may lead to polarisation and discrimination. Although psychologists
do not agree in terms of the relative importance of
certain factors, there is much to be gained from both
nomothetic and idiographic approaches.
■ Personality is a major consideration for recruitment
selection or rejection. The identification of personality
traits has been a dominant subject of research. There
is now a body of evidence that suggests five main
dimensions: openness/closed-mindedness, conscientiousness, extraversion/introversion, agreeableness
and neuroticism/stability (OCEAN). Account must
also be taken of social rules and expectations within
the workplace. Two polar sets of characteristics linked
with work behaviour, health and stress are Type A and
Type B personalities.
■ Individuals vary with regard to their mental abilities
and application. Different occupations require different
skills, competencies and abilities. Arguments rage over
the nature of intelligence; whether it is dependent on
a general overall factor or specific independent activites,
and the extent to which it is inherited. Emotional intelligence (or EQ) is the sum of a range of interpersonal
skills that form the public persona and has received
considerable attention over the last few years. However,
tests are not a panacea and can, if used inappropriately,
lead to a sense of false security.
■ There are no limits to the attitudes people hold.
Attitudes and motives are interlinked and serve a
number of important functions. Assessment of
attitudes is vital in selecting potential employees and
future managers. Given the difficulties of attitude
measurement and doubts associated with predicting
behaviour, such assessment is fraught with problems.
Attitudes can take on a permanency that is maintained
by the culture of the organisation and thus be very
resistant to change. Psychometric tests and questionnaires may help to identify individual characteristics
but they are subject to limitations.
■ An understanding of diversity, which complements
and further develops initiatives on equal opportunities,
demands a work climate that respects individual
differences and treats all members of staff with dignity
and mutual respect. Diversity challenges many traditional stereotypes and one particular aspect is the management of gender equality. An increasing number of
organisations appear to recognise the business case for
diversity as part of the inclusive and creative process
but there a number of potential criticisms including
concern for moral and social issues.
1 What do you see as the main issues relating to the effective management of individuals at work?
2 Discuss the major ways in which individual differences are demonstrated at work.
3 You are required to interview one person from your work or study group to produce an assessment of their
personality. What questions will you ask and how accurate do you feel your assessment will be?
4 Why are attitudes difficult to measure and change? Design a simple questionnaire to administer to your
colleagues on attitudes towards stress at work.
5 To what extent do you see a clear differentiation between equal opportunities and the effective management
of diversity?
6 How would you plan and implement a training programme intended to overcome inaccurate stereotyped
perceptions and attributes?
7 Discuss critically the contention that too much attention is given to the advantages for business from the
management of diversity rather than to broader moral or social issues.
8 Prepare a discussion document on your experiences of organisational behaviour and gender equality at work.
The Apprentice, week nine
Michael Ball
Week nine of The Apprentice, broadcast by the BBC
on 20 May, saw Ben ‘I’ve got a scholarship to
Sandhurst’ Clarke finally dismissed from the show.
The decision came as quite a shock to the other
contestants and probably most viewers. Why did Sir
Alan Sugar fire Clarke? He was no more culpable than
his teammates for the loss in the latest task. Maybe
Sugar was taking into account Clarke’s previous
behaviour on the show. Was he too arrogant? He took
the art of self-acclaim to a new high. Maybe it was
because of Clarke’s habit of aggressively blaming
everybody else in the boardroom for the things that
had gone wrong. Or was it because of his annoying
habit of shouting ‘Can I just finish’?
Strangely, it appears these were not factors in
Sugar’s decision. At 22, Clarke was the youngest of
the show’s candidates. Maybe Sir Alan Sugar
considered he was too young. Certainly, in his exit
interviews, Clarke seemed to put his dismissal down
to being ‘too young’ and ‘too inexperienced’. Having
chosen to try and gain employment via a reality TV
show, Clarke does not have the benefit of protection
against the potentially discriminatory reason for his
exit. In the real employment world the number of age
discrimination cases is taking off. The employment
tribunal statistics for the period April 2007 to March
2008 show 2‚949 age discrimination claims compared
with only 972 in 2006/2007, a three-fold increase, and
the number of claims has continued to rise.
Being inexperienced, rather than too young, can
legitimately mean candidates will be out of their depth
in a new position. However, employers should take
care when setting out their reasons for selection. It is
not just older workers that can claim protection under
Management in the news – continued
the age discrimination laws – younger workers are
also protected and any employer who turns down
candidates just because of their age could find itself in
trouble. A recent tribunal decision shows the risks that
employers face. In Thomas v Eight Members Club and
Killip (ET/2202603/2007), a 19-year-old was rejected
after a four-month probationary period. The employer
alleged that the decision was based not on her age
but on the fact that she had made mistakes during the
probation period; but the tribunal found evidence
suggesting the employer had considered there might
not have been a problem if she had been a few years
older. It concluded that the club had discriminated
against the employee and awarded her £1,500 for
injury to feelings.
This highlights the danger of employers making
assumptions about experience, age and capability.
Employers may want candidates to have a defined
number of years’ experience but this type of
specification will rule out candidates from certain age
groups and may be challenged. An employer may
state that at least five years’ experience is required.
But would three years’ experience of an exceptional
nature with a market-leading competitor be sufficient
to give the candidate the ability to do the job?
Employers should establish from the outset what
specifications are justified to guard against challenges
to the process. The only way to do this is to analyse
the person and job specification. Identifying the key
talents required for the job, rather than the years of
experience it needs, will draw the focus away from
issues of age discrimination and stereotypical
Source: Ball, M. ‘The Apprentice, Week Nine’, People
Management Online, 27 May 2009. Reproduced by permission of
People Management magazine (www.peoplemanagement.co.uk)
and the author.
Discussion questions
1 What does the article tell us about the relative
importance of personality, ability and experience
in the selection process?
2 Explain which of the three you think is the best
predictor of job performance, and why.
3 Critically review the likely impact which age
discrimination legislation and the increasing
number of tribunal cases might have on
managerial attitudes to workplace diversity more
1 On your own, read the publisher’s notice from the Seattle Times, USA, 27 March 2007.
2 What is your immediate, personal reaction to the notice?
3 Form into small groups with your colleagues and compare your more considered reactions including different
cultural approaches and interpretation of the Fair Housing Act by the Seattle Times. What conclusions do you
4 To what extent do you think such a notice would be appropriate in the UK and/or any other country?
Recent amendment of the Federal Fair
Housing Act suggests that we caution
advertisers against real estate
advertising that may be interpreted as
discriminatory. The Fair Housing Act
makes it illegal to advertise any
preference, limitation, or otherwise
encourage discrimination because of
race, color, religion, sex, national origin,
handicap, or familial status. Also, local
laws forbidding discrimination in real
estate ads not only repeat the federal
categories but add prohibitions against
discrimination based on age, parental
status, sexual orientation, political
ideology, or a renter’s qualification for
rent subsidy support.
To avoid both civil and criminal
liability, obvious words should be
avoided that connote any of the
forbidden categories. Other words not
so obvious have been interpreted
liberally by the courts to violate the
The Seattle Times Co. makes a
substantial good faith effort to help
advertisers reduce their risk of liability.
For example, the following terms may,
in the context of an ad, be considered
in violation of federal, state or local laws
and, if so, would be unacceptable in
real estate advertising in either The
Seattle Times or the Post-intelligencer.
No Children
One Person
Sex (may be OK in advertising for
Two People
Executive (such as ‘large executive
Handicap (‘not suitable for’)
Membership Approval
Mentally Ill
Religious Landmark (near St. Mark’s)
Older Persons*
Senior Citizens*
Physically Fit Person (ideal for)
Private (private community – no;
private drive – OK)
Senior Discount*
This list is by no means complete.
If you have any questions about our
policy on this matter, please contact us
at the Seattle Times.
*Housing for the elderly may be
exempt from the Fair Housing Act, if
specific criteria have been met. A letter
from the advertiser stating that the
requirements of the Federal Fair
Housing Act have been met in one of
the following ways must be on file prior
to publication.
The dwelling or housing community
must either (1) be designed and
operated to assist elderly persons under
a state or federal program, (2) be
occupied solely by persons 62 years
of age or older, or (3) have at least
80 percent of its occupied units
occupied by at least one person
55 years of age or older per unit AND
have significant facilities and services
designed to meet the physical and
social needs of older persons.
Retirement communities would
qualify as housing for older persons
exempt from the Fair Housing Act.
Source: Seattle Times, 27 March 2007.
Completing this exercise should help you to enhance the following skills:
Explore the meaning, dimensions and impact of diversity.
Develop greater empathy towards other people.
Reflect on your attitudes and behaviours towards individual differences.
For each of the following ten statements you are required to indicate honestly and fully the extent to which you:
1 Believe in managing diversity for moral and social reasons.
2 Are happy mixing with people from different cultures.
3 Resist stereotyping or profiling individuals into general categories of people.
4 Show patience and understanding when dealing with people whose English language is limited.
5 Accept that positive discrimination can sometimes be fully justified.
6 View diversity as distinctly different from political correctness.
7 Enjoy learning about different cultures and values.
8 Believe that diversity enriches the working lives of all employees.
9 Feel comfortable working closely with a colleague who has a different sexual orientation.
10 Are prepared to take orders from someone much younger or much older than yourself, or from the opposite
After completing the questionnaire, pair with a colleague – where possible with a different ethnicity, culture,
gender or age group – and compare and discuss critically both sets of responses.
What does this exercise say about your awareness of, and adaptability, to diversity?
To what extent were you surprised by the responses or comments from your colleague?
What conclusions have you drawn from this exercise?
B&Q is the UK’s largest home improvement chain of
stores, selling materials and equipment for the home
and domestic gardening market. The founders, Richard
Block and David Quayle, opened their first store in
Southampton in 1969, then in 1980 the company
was acquired by FW Woolworth and in 1982 it became
part of Paternoster the former name for the Kingfisher
Group, which is currently Europe’s leading home
improvement retail group. In addition to B&Q in the
UK and Ireland, Kingfisher also owns Brico Depot with
stores in France, Spain and Poland, Castorama with
stores in France, Poland and Russia, Screwfix in the UK,
Koctas in Turkey and B&Q China. It also has a 21%
stake in Hornbach, Germany’s leading DIY warehouse
retailer. B&Q UK’s headquarters remain in Hampshire.
In 1996, the Kingfisher group opened a B&Q store
in Taiwan and in 1999 it moved into mainland China;
the outlet opened in Shanghai on the eighth day of
the eighth month (a lucky day according to Chinese
tradition) of 2001 was the largest B&Q store in the
world. The Kingfisher group now runs 48 Chinese
stores, including one of the world’s largest, B&Q
Beijing, which also sells furniture and furnishing
materials. The nature of the Chinese property market
has also made it viable for the company to offer a
fitting and decorating service for customers moving into
newly built apartments, thereby expanding its business
opportunities through a strategy of vertical integration.96
In 2009 B&Q employed around 34,000 people
nationwide in 330 stores across the UK. Despite being
affected by the drop in the housing market during
2007–9, the organisation is currently planning to
double its profits by 2012. It proposes to do this by
re-focussing on its core values, which place a strong
emphasis on its people.97
B&Q and the ‘demographic time bomb’
For some decades, population statistics have shown
that the UK population is ageing, and the impact of this
so-called ‘demographic time bomb’ began to generate
particular concerns during the late 1980s. Some
businesses, like B&Q, took a critical look at their current
employment practices as a result of predicted shortages
in certain parts of the labour market, and the
consequent fear of intensified competition between
employers for younger workers. This was particularly
important for a growing company like B&Q, which
might find its expansion plans would be seriously
harmed by labour shortages. In 1989, therefore, B&Q
Source: Courtesy of B&Q plc
B&Q: the business case for diversity
Is diversity in the workplace simply political correctness? B&Q
recognised the value of diversity after a new store staffed by over-50s
outperformed its other stores.
management reviewed its workforce, and noted that not
only did it have a predominantly young age profile
(the majority of staff were aged 16–26), but staff turnover
costs were particularly high in the 18-to-20-year-old
category. They also noted positive customer feedback
about their older staff, who appeared to deliver better
customer service, partly because of their own knowledge
of DIY.
The company management decided to tackle the
problem by challenging widely held views about
the disadvantages and problems of employing older
workers. Initially, the B&Q Board expressed some
concerns about the proposal to target older people in
the labour market and were naturally cautious about
unproven claims of their effectiveness. ‘In 1990 it
seemed to make good common sense to employ older
people but a number of stereotypes and issues were
raised. Answers were needed to explode these myths.’98
The concerns and myths about older workers
reflected findings in other studies on the subject such
as that reported in 1993 to the Institute of Personnel
Management (now the CIPD).99 These included both
positive and negative features: for instance, older
workers were seen as more reliable, loyal, conscientious
and hard-working than younger ones; at the same time
they were viewed as less adaptable, especially to new
technology, as well as being less able and less motivated
to learn or be trained. Other studies have shown that
stereotypical views about older workers tend to cluster
under general headings of poor performance (including
those related to assumptions about age-related physical
impairment), absenteeism and turnover.100 There were
also concerns about the relationship between younger
and older workers, and particularly those between
young managers and older staff members.
B&Q managers decided that it would be important
to collect some hard evidence if they were to gain the
backing of the business owners. In 1989 they opened
a new store in Macclesfield, staffed wholly by workers
over 50. The experiment was monitored by a research
team from Warwick University, who carried out a study
to benchmark the Macclesfield store’s performance
against a selection of four similar stores during its first
year of operation. The results were significant: the
Warwick team reported that the Macclesfield store had
higher profits, substantially reduced staff turnover, over
a third less absenteeism and almost two-thirds less
‘shrinkage’ (loss to stock as the result of damage or
pilfering by staff and customers).101 Many of the Board’s
concerns had clearly been put to rest; the business case
for diversifying the workforce had been supported by
the evidence. B&Q therefore began to adopt a positive
approach towards the recruitment and employment of
an age-diverse workforce. This was more than ten years
before legislation on the subject came into operation in
the UK. Further research in 1995 confirmed the initial
results, leading the company to reaffirm its initial
commitment to increasing the age diversity of its
workforce. There were clear indications that the policy is
about good business in all senses of the word. In 2000
the company became one of the founding members of
the Employers Forum on Age (EFA),102 an independent
group of over 200 UK employers that sets out to
campaign for and support the cause of employing an
age-diverse workforce.
Diversity at B&Q: the growing agenda
Having been successful with its approach to employing
the over-50s, B&Q also recognises the value of a broader
approach to diversity. The company website includes
substantial information about its current approach to
social responsibility, including respect for the diversity
of people.
We believe that a diverse workforce creates a mix of
talents that makes us a successful business. We want
B&Q to be a ‘great place to work and shop’. It is
our policy to implement procedures to eliminate
discrimination and promote equality of opportunity
in employment so that age, gender, colour, ethnic or
national origin, culture, religion, disability, marital
status, political affiliation or sexual orientation are not
barriers for anybody who wants to work and shop at
The B&Q board takes an active interest in the
diversity strategy and B&Q employs an Engagement
and Diversity Advisor to lead the programme for the
company. The strategy includes a strong commitment
to cultural diversity, and to people with disabilities. The
company reflects all this in its advertising and publicity
material as well as its personnel and management
policies, thus making diversity an important part of
the business’s brand values and public image.
The disability policy was formulated in 1998,
and, like the age policy, it links the importance of
understanding and integrating disability issues into the
business strategy. The twin goals are to remove barriers
that make working and shopping at B&Q difficult for
disabled people. Similarly, the cultural diversity strategy
at B&Q goes beyond simple compliance measures to
ensure that the company does not breach the law. In
2001 the company discovered that over 1,000 of its staff
were bilingual, and that between them they spoke over
60 languages other than English, including British Sign
Language. Employees are actively encouraged to use
languages other than English where this can help to
understand and respond to customer needs, and many
wear language badges to indicate this. The company
produces a cultural diversity information pack for use in
stores, together with a calendar of religious and cultural
festivals which not only helps staff to understand
customers but assists managers with work scheduling.
What next for B&Q?
The economic downturn and the particular problems
in the UK housing market during 2007–9 have clearly
had a major impact on the home improvement sector
generally. However, B&Q CEO remains upbeat about
the company’s strategic plan to double its profits by
2012.104 The key to B&Qs strategy is its people; real
staff featured heavily in the spring 2009 television
advertising campaign and the company is refining
and enhancing its communication strategy with a
bi-monthly employee magazine, regular short films to
communicate the business progress to store staff and
the CEO’s blog. It is investing in training through five
in-house ‘academies’ which aim to ensure all staff have
both knowledge and confidence about all key areas of
business, from practical DIY skills to understanding
finance. And since the company has recently won a
prestigious international Gallup Great Workplace Award
for the third year running, this investment may just
deliver the goods.105
Your tasks
1 Why did B&Q adopt its present approach to diversity? How far do you agree or disagree with these reasons
for its action, and why?
2 Review B&Q’s approach in the light of theories about personality. Which of the theoretical approaches do you
think might best explain the company’s approach to its staff and customers?
3 How might the B&Q approach to diversity encourage individuals (both staff and customers) to contribute to
the organisation’s performance?
4 B&Q operates in a very specific sector: retail home improvement building and gardening materials and
equipment. Would its approach to diversity translate to other types of organisation, for example an on-line
or telephone retail insurance company (for example selling motor, travel or home insurance), a car maker,
or a state-run school or hospital?
Notes and references
1 We wish gratefully to acknowledge Linda Carter, the
original author of this chapter and the joint author in the
eighth edition of this text.
2 McCrae, R. R. and Costa, P. T. ‘More Reasons to Adopt the
Five-Factor Model’, American Psychologist, vol. 44, no. 2,
1989, pp. 451–2.
3 Bayne, R. ‘The Big Five versus the Myers-Briggs’, The
Psychologist, January 1994, pp. 14–17.
4 Barrick, M. R. and Mount, M. K. ‘The Big Five Personality
Dimensions and Job Performance: A Meta-Analysis’,
Personnel Psychology, Spring 1991, pp. 1–26.
5 Mount, M. K., Barrick, M. R. and Strauss, J. P. ‘Validity of
Observer Ratings of the Big Five Personality Factors’,
Journal of Applied Psychology, April 1994, p. 272.
6 Bentall, R. P. ‘Personality Traits May Be Alive, They May
Even Be Well, But Are They Really Useful?’, The Psychologist,
July 1993, p. 307.
7 Robertson, I. ‘Undue Diligence’, People Management,
no. 22, November 2001, pp. 42–3.
8 Lord, W. and Rust, J. ‘The Big Five Revisited: Where Are We
Now? A Brief Review of the Relevance of the Big Five for
Occupational Assessment’, Selection and Development
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9 Eysenck, H. J. Eysenck on Extraversion, Crosby Lockwood
Staples (1973).
10 Mabey, B. ‘The Majority of Large Companies Use
Occupational Tests’, Guidance and Assessment Review, vol. 5,
no. 3, 1989.
11 Personality tests have been debated by: Bartram, D.
‘Addressing the Abuse of Personality Tests’, Personnel
Management, April 1991, pp. 34–9; and Fletcher, C.
‘Personality Tests: The Great Debate’, Personnel
Management, September 1991, pp. 38–42.
12 Howarth, E. ‘A Source of Independent Variation:
Convergence and Divergence in the Work of Cattell and
Eysenck’, in Dreger, R. M. (ed.) Multivariate Personality
Research, Claiton (1972).
13 Rogers, C. A Way of Being, Houghton Mifflin (1980).
14 Cooley, C. ‘The Social Self ’, in Parsons, T., Shils, E.,
Naegele, K. D. and Pitts, J. R. (eds) Theories of Society,
The Free Press, New York (1965).
15 Erikson, E. H. Identity and the Life Cycle, Norton (1980).
16 Hunt, J. W. Managing People at Work: A Manager’s Guide to
Behaviour in Organisations, third edition, McGraw-Hill
17 Jung, C. G. Analytical Psychology: Its Theory and Practice,
Routledge and Kegan Paul (1968). See also Jacobi, J.
Psychology of C. G. Jung, seventh edition, Routledge and
Kegan Paul (1968).
18 Myers, I. B. Introduction to Type, sixth edition, Consulting
Psychologists Press (1998); and Myers, K. D. and
Kirby, L. K. Introduction to Type Dynamics and Development,
second edition, Consulting Psychologists Press (2000).
19 Hirsh, S. K. and Kise, J. Introduction to Type and Coaching:
A Dynamic Guide for Individual Development, Consulting
Psychologists Press (1994).
20 Kelly’s theory as described by Bannister, D. and Fansella,
F., in Inquiring Mind: The Theory of Personal Constructs,
Penguin (1971), pp. 50–1.
21 Stone, G. ‘Personality and Effective Hospitality
Management’, paper presented at the International
Association of Hotel Management Schools Symposium,
Leeds Polytechnic, Autumn 1988; and Worsfold, P. A.
‘Personality Profile of the Hotel Manager’, International
Journal of Hospitality Management, vol. 8, no. 1, 1989,
pp. 55–62.
22 Bartram, D. ‘Addressing the Abuse of Psychological Tests’,
Personnel Management, April 1991, pp. 34–9; Newell, S.
and Shackleton, V. ‘Management Selection: A Comparative
Survey of Methods Used in Top British and French
Companies’, Journal of Occupational Psychology, vol. 64,
1991, p. 23.
23 Kline, P. ‘The Big Five and Beyond’, conference paper
given at the British Psychological Society Occupational
Psychology Conference, University of Warwick, January
24 Anastasi, A. Psychological Testing, Macmillan (1988),
p. 560.
25 Blinkhorn, S. and Johnson, C. ‘The Insignificance of
Personality Testing’, Nature, 348, 1990, pp. 671–2.
26 Goss, D. Principles of Human Resource Management,
Routledge (1994).
27 Gibbons, P., Baron, H., Nyfield, G. and Robertson, I.
‘The Managerial Performance and Competences’,
conference paper given at the British Psychological
Society Occupational Psychology Conference, University
of Warwick, January 1995.
Platt, S. with Piepe, R. and Smythe, J. ‘Teams’: A Game to
Develop Group Skills, Gower (1988).
Gray, M. J. ‘Personality and Performance’, Selection and
Development Review, vol. 19, no. 1, February 2003, p. 4.
Hochschild, A. R. The Managed Heart: Commercialization of
Human Feeling, University of California Press (1983).
Cooper, C. ‘Papering Over the Cracks: Individual Strategies
or Organizational Intervention in Dealing with Stress at
Work’, conference paper given at the British Psychological
Society Occupational Psychology conference, University of
Warwick, January 1995.
Friedman, M. and Rosenman, R. Type A Behavior and Your
Heart, Knopf (1974).
Rosenmann, R., Friedman, F. and Straus, R. ‘A Predictive
Study of CHD’, Journal of the American Medical Association,
vol. 89, 1964, pp. 15–22; and Warr, P. and Wall, T. Work
and Well Being, Penguin (1975).
See, for example, Jex, S. M., Adams, G. A., Elacqua, T. C.
and Bachrach, D. G. ‘Type “A” as a Moderator of Stressors
and Job Complexity: A Comparison of Achievement
Strivings and Impatience-Irritability’, Journal of Applied
Psychology, vol. 32, no. 5, 2002, pp. 977–96.
Gratton, L., Hot Spots, Financial Times Prentice Hall
Ibid., p. 83.
Howe, M. J. A. ‘Can IQ Change?’, The Psychologist, February
1998, pp. 69–72.
Spearman, C. The Abilities of Man, Macmillan (1927).
Vernon, P. E. The Structure of Human Abilities, Methuen and
Co. (1950).
Thurstone, L. L. ‘Primary Mental Abilities’, Psychometric
Monographs, no. 1, 1938.
Guilford, J. P. ‘Three Faces of Intellect’, American
Psychologist, vol. 14, pp. 469–79.
Gardner, H. Frames of Mind, second edition, Fontana
Goleman, D. Emotional Intelligence, Bloomsbury (1996),
p. 34.
Goleman, D. Working with Emotional Intelligence, Bantam
Books, New York (1998).
Boyatzis, R., Goleman, D. and Hay/McBer, Emotional
Competence Inventory Feedback Report, Hay Group (1999).
‘Management Futures: The World in 2018’, Chartered
Management Institute, March 2008.
Landale, A. ‘Must Have EQ’, Manager: The British Journal
of Administrative Management, February/March 2007,
pp. 24–5.
Garrett, A. ‘Crash Course in Raising Emotional
Intelligence’, Management Today, August 2005, p. 16.
Dann, J. ‘Managing Your Emotions’, Professional Manager,
vol. 17, no. 4, July 2008, pp. 32–4.
Ribeaux, P. and Poppleton, S. E. Psychology and Work,
Macmillan (1978).
Gross, R. D. Psychology: The Science of Mind and Behaviour,
Edward Arnold (1987).
Hofstede, G. Culture’s Consequences: International Differences
in Work-Related Values, Sage (1980).
Katz, D. ‘The Functional Approach to the Study of
Attitudes’, Public Opinion Quarterly, issue 21, 1960,
pp. 163–204.
55 La Piere, R. T. ‘Attitudes versus Action’, Social Forces,
issue 13, 1934, pp. 230–7.
56 Gidoomal, R., Mahtani, D. and Porter, D. The British and
How to Deal With Them, Middlesex University Press (2001).
57 Sykes, A. J. M. ‘The Effect of a Supervisory Training Course
in Changing Supervisors’ Perceptions and Expectations
of the Role of Management’, Human Relations, 15, 1962,
pp. 227–43.
58 Hofstede, G., Nevijan, B., Dhayu, D. D. and Sanders, G.
‘Measuring Organisational Cultures: A Qualitative and
Quantitative Study across 20 Cases’, Administrative Science
Quarterly, vol. 35, 1990, pp. 286–316.
59 Berger, P. L. and Luckmann, T. The Social Construction of
Reality, Penguin (1966), p. 37.
60 MacPherson, Sir William The Stephen Lawrence Inquiry,
The Stationery Office, February 1999, Section 6.17.
61 ‘Undertaking Employee Attitude Surveys’ Checklist 078,
Chartered Management Institute, February 2007.
62 Likert, R. ‘A Technique for the Measurement of Attitudes’,
Archives of Psychology, vol. 22, no. 1, 1932, pp. 1–55.
63 Heider, F. ‘Attitudes and Cognitive Organization’, Journal
of Psychology, vol. 21, 1946, pp. 107–12.
64 Festinger, L. A. A Theory of Cognitive Dissonance, Row,
Peterson and Co. (1957); reissued by Stanford University
Press and Tavistock Publications (1962).
65 Anastasia, A. Psychological Testing, Macmillan Publishing
(1988), p. 23.
66 Barrett, R. S. ‘Guide to Using Psychological Tests’, in
Fleishman, E. A. (ed.) Studies in Personnel and Industrial
Psychology, revised edition, Dorsey Press (1967), p. 58.
67 See, for example, Furnham, A. The Psychology of Behaviour
at Work, Psychology Press (1997); and Wilson, C. ‘Tough
Choices’, Manager: The British Journal of Administrative
Management, May/June 1999, pp. 10–12.
68 Kandola, R. and Fullerton, J. Managing the Mosaic Diversity
in Action, IPD (1994), p. 19.
69 ‘Implementing a Diversity Management Programme’
Checklist 152, Chartered Management Institute, January
70 Ibid.
71 Guirdham, M. Interactive Behaviour at Work, third edition,
Financial Times Prentice Hall (2002), p. 67.
72 ‘Back to Basics: Acas’ Experience of Equality and Diversity
in the Workplace’, ACAS Policy Discussion Paper no. 5,
November 2006.
73 ‘Littlewoods: Increasing Diversity, Increasing Profits’, Equal
Opportunities Review, no. 81, September/October 1998,
pp. 20–7.
74 ‘Talent not Tokenism: The Business Benefits of Workforce
Diversity’, CBI and TUC, June 2008.
75 Hill, L. A. ‘Leadership as Collective Genius’, in Chowdhury,
S. (ed.) Management 21C, Financial Times Prentice Hall
(2000), p. 53.
76 ‘Managing Diversity: Linking Theory and Practice to
Business Performance’, CIPD, May 2005.
77 ‘Management Recruitment: Understanding Routes to
Greater Diversity’, Chartered Management Institute,
June 2008.
78 From http://hiltonworldwide.hilton.com (accessed
1 March 2006).
79 Information on BITC can be found at
80 ACAS ‘Managing Diversity’, Employment Relations Matters,
issue 3, Spring 2005.
81 Arkin, A. ‘Hidden Talents’ People Management, vol. 11,
no. 14, 14 July 2005, p. 26.
82 Khan, S. P.U.S.H. for Success, Vermilion (2006), p. 230.
83 Clements, P. and Jones, J. The Diversity Training Handbook,
Kogan Page (2002), p. 45.
84 www.berr.gov.uk (accessed 3 March 2009).
85 Information kindly provided by Lloyds TSB Equality and
Diversity Team.
86 Francesco, A. M. and Gold, B. A. International
Organizational Behavior, Prentice Hall (1998), p. 236.
87 ‘Back to Basics: Acas Experience of Equality and Diversity
in the Workplace’, ACAS Policy Discussion Paper no. 5,
November 2006.
88 ‘Implementing a Diversity Management Programme’
Checklist 152, Chartered Management Institute, January
89 Nordström, K. and Ridderstråle, J., ‘Funky Inc.,’ in Crainer,
S. and Dearlove, D. (eds), Financial Times Handbook of
Management, second edition, Financial Times Prentice
Hall (2001), p. 63.
90 Kirton, G. and Greene, A.-M. The Dynamics of Managing
Diversity, Butterworth Heinemann (2000).
91 Liff, S. and Cameron, I. ‘Changing Equality Cultures
to Move Beyond Women’s Problems’, Gender, Work
and Organization, vol. 4, no. 1, January 1997, pp. 35–46.
92 Lucas, E. ‘Making Inclusivity a Reality’, Professional
Manager, vol. 16, no. 4, July 2007, pp. 32–5.
93 See, for example, ‘What’s Keeping Women out of the Top
Jobs?’, Social Agenda, The European Commission, no. 16,
February 2008, pp. 7–10.
94 Alvesson, M. and Due Billing, Y. Understanding Gender and
Organization, Sage (1997).
95 IBM in the UK 2005, IBM Corporation, 2005, p. 41.
96 From the B&Q website: www.diy.com/diy/jsp/
97 Talk at Portsmouth University Business School by CEO
Euan Sutherland, 9 July 2009.
98 B&Q ‘Is Age a Barrier to Employment? Equality +
Diversity: Achieving a Balanced Workforce’, http://www.
pdfs/age_policy.pdf (accessed 28 July 2009).
99 Warr, P. and Pennington, J. Views about Age Discrimination
and Older Workers, Institute of Personnel Management
100 Stoney, C. and Roberts, M. ‘The Case for the Older
Worker at Tesco: An Examination of Attitudes,
Assumptions and Attributes’, Carleton University
School of Public Policy and Administration Working
Paper no. 53, 2003.
101 B&Q op. cit.
102 The Employers Forum on Age can be found at
103 B&Q Statement of Social Responsibility, www.diy.com
(accessed 28 July 2009).
104 Talk at Portsmouth University Business School by CEO
Euan Sutherland, 9 July 2009.
105 Gallup Great Workplace Award, http://www.gallup.com/
consulting/ (accessed 28 July 2009).
Now that you have finished reading this chapter, visit MyManagementLab at
www.pearsoned.co.uk/mymanagementlab to find more learning resources
to help you make the most of your studies and get a better grade.
Learning is part of the human condition and is a familiar process
to us all. Managers need to be aware of ways in which people
learn and must continually develop their own skills to cope with
the changing and growing demands of the marketplace. To be
effective, leaders need to be able to manage the complexity and
paradoxes implicit in organisational life. They need to develop
their personal awareness of who they are and the values they
hold, and how they align their personal development aspirations
with the goals of the organisation.
Learning outcomes
After completing this chapter you should be able to:
explain the significance of learning in organisational behaviour;
develop understanding about individual differences and how people learn;
detail different theories and studies about learning;
assess the importance of learning styles;
review knowledge management and its impact on learning;
assess the significance of creativity in the learning process;
explain the facilitation of learning and applications of learning theory.
Critical reflection
‘The way in which students are assessed is outdated. Less attention should
be given to the examination of subject knowledge and more to a stronger
focus on personal development, the learning of life skills, the use of
technology and the ability to adapt to change.’
What form of assessment would you recommend?
Learning means change, but change of a relatively permanent kind. A common definition of
learning is: ‘a relatively permanent change in behaviour, or potential behaviour, that results
from experience’.2 Individuals may behave differently because of maturation or short-term
factors such as tiredness or alcohol. These temporary changes are of a different nature to
those associated with the process of learning that results in knowledge or a change in
Imagine for example these scenarios:
a student attending an action learning set;
a manager completing a learning portfolio;
a nurse measuring blood pressure for the first time;
a trainee watching a manager deal with an irate customer;
a child attempting to beat a score playing a computer game.
These scenarios all share the common feature that learning has taken or is about to take
place. They demonstrate that a discussion of learning involves not only knowledge and skills
but also attitudes and social behaviour. Learning implies a different internal state which
may result in new behaviours and actions (for example, a new skill such as taking blood
pressure) or new understanding and knowledge (for example, a new subject area such as
finance). Sometimes behaviour and knowledge coincide (for example, learning a language,
becoming IT literate); at other times people will learn to act in certain ways without an
underlying understanding of the reasons why (for example, driving a car without an understanding of mechanics). Learning can be a deliberate and formal process or an unintentional
outcome of natural progression.
The significance of learning
Learning inevitably involves an examination of how change takes place. Current organisational literature provides advice for organisations in coping with turbulence and change and
the role of learning is central to these discussions. An understanding of how people learn
provides insight into vital aspects of our humanity – the process of growth, development and
deterioration. Learning is a highly significant area for psychologists to study and has been
of continual interest in the development of psychology as a science. It provides a series of
challenges in the selection of suitable methods and techniques for studying such a complex
process. Learning is a function of the inner workings of our mind and its invisibility has
created a number of methodological difficulties. Individuals differ in their learning capabilities, their style and their creative responses. This chapter will also consider the ways in
which learning theories can be applied to the management of individuals at work.
Lifelong learning
Both change and learning are natural processes that continue throughout life. Learning takes
place in a variety of ways and a range of situations. For example, The University of industry
(Ufi) manages learndirect, a teaching organisation that uses technology to provide highquality learning to people over the age of 16. Courses are designed in small sections to be
completed at a time, pace and place to suit the individual, and can be accessed anywhere
there is broadband connection. Globalisation and technological advances have heightened
the pace of change including the relative importance of different occupations and skills, and
transform the way we live and work.
Individual learning is a lifelong process that is essential if people are able to cope with
the changing nature of work organisations. Payne and Whittaker, for example, stress the
importance of skills for the future and lifelong learning.
Lifelong learning will be the only way to keep abreast of the pace of change in a technological age,
requiring flexible labour markets that operate in an increasingly global economy. Lifetime careers will
become a rarity in the future, and the way that people are able to deal with this is by reskilling through
lifelong learning. Business can only be competitive with a highly skilled, highly educated workforce.
Lifelong learning and self-development will increase an individual’s employment prospects and provide
business with the skills it needs.3
Schneider and Barsoux suggest that organisations with previous international experience
are more likely to see internationalisation strategy as an ‘opportunity’ rather than as a ‘threat’
and as an opportunity for learning. Experience of cultural differences may also promote
learning: ‘the greater the cultural distance, the greater the perceived need to learn, and the
greater the potential learning effect’.4
Learning as a formal process
When individuals consciously ‘learn’ and ‘study’, assessments take place to test the level and
depth of their understanding and skills. Such ‘formal’ learning situations will test, grade
and award qualifications on the basis of whether the individual has reached an agreed and
measurable standard. Tests will frequently be based on ‘what’ the individual has learned and
not on the ‘why’ or ‘how’ a person has learned. Testing ‘what’ has been learned is ingrained in
our society and largely accounts for the ways in which individuals are compared and judged.
Learning and the social world
But much of what we learn takes place without any necessary deliberations or any assessments. Learning can be seen to be a continuous and automatic process, often taking place in
a social context. The spontaneous nature of learning can be observed in young children’s
play as they imitate and model their behaviour and attitudes on the people around them.
Learning has an active and dynamic nature. As active participants, we engage and relate to
the people around us. It is a function central to our very humanity. We know that animals
can learn, but the complexities of human learning have no parallel in the animal world.
Learning would also seem to be irrepressible for some individuals despite their horrific
circumstances. (Read, for example, Jean-Dominique Bauby’s moving account of him relearning to communicate with the outside world after suffering a massive stroke – The Diving
Bell and the Butterfly, Fourth Estate, 1997.) Our ability to learn will be affected by both our
innate potential and our social experiences. We are not just vessels to be filled with knowledge; we are active participants who interact and relate to the world around us.
Learning, therefore, links the individual to the social world and is both a personal and a
social experience. Often learning is an event that is shared with others. The process may be
a deliberate sharing of information or guiding behaviour – as, for example, in the parent–child
relationship when parents are attempting to socialise the child into acceptable ways of
behaving or in organisations where employees are taught opening phrases when answering
the telephone. At other times it is the actual sharing of the learning experience – going
through the same learning process – which makes the process challenging and valuable. It is
through the support of others that individuals can find both strength and rewards.
Learning occurs in many ways; information or skills may be imparted quite explicitly and
at the same time the values and attitudes of the trainer will also be implicitly communicated.
Learning is a rich experience. At times we may be learning ‘incidentally’ as we acquire,
process and remember information automatically. (Playing games like ‘Who wants to be a
millionaire?’ illustrates the extent of our incidental learning.) It is surprising to observe that
in some organisations learning is still left to chance. The individual employee is expected to
‘pick up’ behaviour, attitudes and skills.
When learning is work it is ineffective – look at all the executives ‘forced’ to go on training courses. The
learning that sticks has a joy of discovery, playfulness. Many executives have been to brainstorming
seminars where an atmosphere of deliberate playfulness often stimulates high levels of executive learning
for an hour or so. Corporations of the future are going to need to find ways to extend that hour to cover
the entire working day.5
Figure 5.1
Factors influencing the learning process
Learning and emotions
Learning implies that an individual has experienced ‘something’, has stored that experience
and is able to refer to and/or use it at a later time. Learning and memory are inextricably
linked. There are many factors that influence both the rate and enjoyment of learning (see
Figure 5.1). The rewards and punishments levelled at us in the past will affect our motivation and attitudes towards learning in the present and the future. Expectations of others and
the climate that surrounds us will determine our readiness to learn.
Feelings generated by the process of learning are very powerful and tend to be pleasurable.
A sense of achievement that often accompanies the completion of a learning process can lead
to an enhancement of an individual’s self-worth and esteem. However, learning can also be
an uncomfortable experience; it can ‘shake an individual’s comfort zones’; it can provide
new and alarming perceptions and can be disruptive and anxiety-provoking. An illustration
of this has been noted by trainers in diversity who need to challenge individuals’ attitudes
and perceptions when there is evidence of prejudice: ‘learning to learn about diversity can
be, and may even have to be, a painful process. It is not a comfortable experience to learn
that we have prejudices we need to deal with. It is not comfortable to find that our own view
of the world is just one of many and those other views are equally valid.’6
A declaration on learning
Eight distinguished scholars on learning in organisations launched a declaration summarising their collective thoughts on the nature of learning, its benefits and what should be done
about learning.7 They singled out learning as a key process for individuals, organisations and
for society as a whole for the 21st century. They believe that it is too easy to take learning for
granted and treat it as an automatic part of the human condition. They claim that individuals
Table 5.1
A declaration on learning: John Burgoyne, Ian Cunningham, Bob Garratt, Peter Honey,
Andrew Mayo, Alan Mumford, Michael Pearn, Mike Pedler
Learning: the central issue for the 21st century
The benefits
Learning is the most powerful, engaging, rewarding and
enjoyable aspect of our personal and collective experience.
The ability to learn about learning and become masters of
the learning process is the critical issue for the next century.
The following benefits assume that the learning in
question has both morally acceptable intent and outcome:
Our understanding of learning has generally been restricted
to formal teaching and training. It is often seen as unrelated
to daily life and work. Systems of accreditation are
sometimes used as a way of unfairly discriminating
between individuals and are often felt to be irrelevant to
real needs. The biggest missed opportunity for policymakers and leaders is the failure to capitalise on the
collective learning ability of people.
Organisational leaders need to harness relevant knowledge
and experience so that the organisation as a whole and
the people who comprise it can learn more effectively.
The same principle applies at community, national and
international levels. Every person, team and organisation
both survives and progresses through the ability to
internalise and act upon this fundamental truth.
This declaration does not contain all there is to say on the
subject of learning. It does, however, reflect the thinking of
the eight signatories. The declaration is designed to
stimulate and encourage dialogue.
For individuals
■ Learning is the key to developing a person’s potential
■ Learning to learn is the key to effective learning
■ Learning enables the individual to meet the demands
of change
■ The capacity to learn is an asset that never becomes
■ Embracing learning helps the individual to acknowledge
that learning is more than formal education and training
For organisations
■ Learning increases everyone’s capacity to contribute to
the success of organisations
■ Learning enables the organisation to be more effective
in meeting its goals
■ Learning emancipates the organisation through
clarification of purpose, vision, values and behaviour
■ A focus on learning, planned and unplanned, formal
and informal, produces a wider range of solutions to
organisational issues
■ Learning helps to achieve a better balance between
long-term organisational effectiveness and short-term
organisational efficiency
For society
Society survives and thrives through learning
■ A focus on capturing and sharing learning contributes
to a more cohesive society
■ Individual and collective learning reinforces the
informed, conscious and discriminating choices that
underpin democracy
■ Learning helps to enhance the capacity of individuals to
create a more fulfilled society
Source: Burgoyne, J., et al. ‘The Debate Starts Here’, in People Management in Perspective: A Collection of Key Articles Published in the Last Year on Training and
Development, IPD, April 1999, pp. 16–17. Reproduced with permission from Chartered Institute of Personnel and Development (CIPD).
frequently do not organise or plan their learning and they leave the evaluation of learning
to chance. Typically individuals fail to check what exactly they can do better or differently as
a result of the learning experience. Two parts of the declaration are shown in Table 5.1.
If learning can result in the benefits outlined by Burgoyne et al. in Table 5.1, how do organisations achieve these outcomes? Clearly it is in the organisation’s best interest to ensure it
utilises the knowledge and skills of all its employees and yet in a report published by the
Economic and Social Research Council (ESRC) the researchers found that formal education
and training provided only a small part of what is learned at work.8 Most learning arose out
of the ‘natural demands’ of work – solving problems, interacting with colleagues, clients, etc.
– and was described as learning achieved through experience. This experiential learning was
given very little recognition or appreciation and led the researchers to note that
comparatively little attention is given to supporting the learning of subordinates, allocating and organising work and creating a climate which facilitates informal learning.9
Further evidence of the impact of the general work climate was found by researchers looking at the changing nature of public sector work. The project noted the range of innovative
initiatives in the workplace but also highlighted the positive contribution that can be made
by supervisors and managers.
Their perception of staff’s willingness to learn and need to learn may be influenced by factors such as
age, gender or the likelihood of career development. It is these line managers who control the immediate work environment and who control the flow of information about learning opportunities. They hold
the key to release from work, but also their encouragement or failure to encourage can contribute to
staff’s motivation to learn.10
It becomes difficult, therefore, to separate how learning occurs without taking some account
of the relationship between employee and manager and the general climate of the organisation (discussed in Chapter 19). In the past, organisations may have relied largely on the
stability of the organisation’s structure for knowledge transmission. Managers would tend to
know who to go to for advice and would seek out the older and experienced employees who
held the ‘know-how’. This knowledge and wisdom, accumulated over years of work, was a
precious store of information. However, such a store was rarely formalised or articulated and
would be communicated only on an informal basis. Such ‘tacit knowledge’11 would be communicated to the next generation of employees and was an important part of the organisation’s culture and socialisation process. Older employees were useful as a source of
knowledge and guidance for younger ones. Many held the role of an informal mentor and
were much appreciated by their younger subordinates.
Practices such as downsizing and outsourcing have had a major effect on this layer of
experienced employees. Not only are relationships disrupted by the restructuring of the
business, but also there is the potential for the complete destruction of this powerful and
important reservoir of knowledge and understanding.
Critical reflection
‘The world of computer games is now advancing fast in the new digital culture. They
help stimulate literacy, improve problem solving and develop hand-to-eye co-ordination.
Individuals can connect across different continents and in different time zones.’
Do you agree that the future of learning is clearly playful? Should the use of computer
games for students be encouraged?
Early classic studies of learning offer explanations for simple learning situations. The principles arising from these laboratory experiments remain applicable to an understanding of
organisational behaviour. The effects of rewards and punishment (the ways in which behaviour
can be shaped and modified) have considerable relevance in understanding the motivation
of individuals and the culture of organisations. These are called behaviourist theories.
Dissatisfaction with the earliest theories led researchers to consider more complex
learning situations. ‘Cognitive theories’ have particular application to an understanding of
individual differences in learning situations. They offer models that explain the process of
learning and take into account different preferences and styles.
Theories of learning have their roots in the history of psychology and some of the earliest
experimental psychologists focused their attention on animal learning and were keen to
develop laws of learning. They were interested only in behaviour that could be objectively
measured and they designed experiments that maximised key scientific conditions: control,
reliability and validity. A school of psychology called behaviourism developed out of these
early research studies. As the name suggests, researchers were interested in the study of
behaviour and those actions that could be observed, measured and controlled. Ideas and
thoughts in people’s minds were considered inaccessible to objective, scientific measurement
and were therefore excluded from study.
Exercise and association
J. B. Watson developed the law of exercise and association. This refers to the process
that occurs when two responses are connected and repeatedly exercised. Watson was
particularly interested in the study of fixed habits and routines.12 In organisational life
we can see evidence of this in the habits and routines at work. These behaviours can
become ‘locked-in’, believed to be ‘the only way’ of completing certain tasks – a part of
cultural life; it is as if they are fixed into beds of concrete. Speech is a further illustration
of our routine habits. The predictability of a greeting provides acknowledgement of our
existence – when people say ‘How are you?’ they do not expect to be given a rundown of
your medical history. The rhetorical question is really saying, ‘Hello – I see, acknowledge and
recognise you.’
Classical conditioning
Pavlov,13 working in Russia, developed a theory called classical conditioning. His laboratory
experiments demonstrated how instinctive reflexes, such as salivation, could be ‘conditioned’
to respond to a new situation and a new stimulus (see Figure 5.2). Pavlov, through his repeated
experimental studies, showed the power and strength of association. How can we relate
these experiments on dogs to behaviour at work? There are times when our body responds
more quickly than our mind. We may have an initial panic reaction to a situation without
necessarily realising why. Physiological reactions may be appropriate in times of stressful
situations – our body may be in a state of readiness to run (fight or flight reaction).14
At other times our reactions may be ‘conditioned’ because of previous associations of
pain, guilt or fear. Smells and sounds are particularly evocative and may release physiological reactions akin to the Pavlovian experiments. Thus sitting in a waiting room at the
dentist’s and hearing the sound of the drill may invoke an increase in our blood pressure or
heart rate – nothing to do with any actual pain we may be experiencing. Returning to school
for a parents’ evening may invoke feelings of ‘dread’ or ‘pleasure’ depending on our own
childhood experiences of school and its associations. Training for some occupations
may depend upon learned associations and automatic reactions, an example being initial
military training. If fire drills are to be successful, immediate reaction to the bell or siren is
The outcomes of learning
Thorndike’s work drew attention to the outcomes of learning – the Law of Effect.15 He
watched animals in new situations and noted how they learned to adapt successfully to
the environment. He noted that in his experiments there were no flashes of insight
shown but learning would occur by trial and error. Over time these correct responses were
‘stamped in’. If an action was successful and led to a reward, the behaviour was more likely
to be repeated.
Figure 5.2
Classical conditioning
Skinner advanced the ideas of Thorndike and produced a thesis of operant conditioning.16
Skinner’s experiments on animals showed the effects of reward and punishment on animal
learning. Unlike classical conditioning, learning was rewarded after the response had
occurred. He proved that a response would be learned when the animal associated the
behavioural response with a reward (or reinforcement) and could be broken with punishment (see Figure 5.3).
Once the rat had learned that pressing the lever equalled the onset of food, the rat
responded to the lever consistently. The rat had been ‘conditioned’ to act in a particular
kind of way. Sometimes the rat learned superfluous actions, such as turning round before
pressing the lever, and these actions too would be repeated. Skinner called these responses
‘superstitious’ as the animal had acted as though such behaviour had produced the reward.
Skinner experimented with the reinforcement process:
What would happen if the animal was not rewarded in each trial?
What effect would partial reinforcement have on the rate of learning?
He found that partial reinforcement strengthened the stimulus–response bond and the
behaviour was more resistant to extinction. The reward seemed to hold even greater
importance when it was given intermittently.
Negative reinforcement was also shown to be powerful. These experiments demonstrated
the importance of the stimulus–response bond, but the reward was the prevention of
Figure 5.3
Operant conditioning
something painful or nasty occurring. The rat learned to associate the stimulus (perhaps a
light) with something nasty happening (perhaps an electric shock) and to run (response) to
prevent the painful situation. Not being shocked is the reward in such experiments. Thus
the rat was conditioned to respond to a stimulus and the S–R bond was formed. Negative
reinforcement is not punishment. Punishment is trying to break the S–R bond. For instance,
if the animal pressed the lever and received an electric shock it would quickly learn not to
press the lever and the S–R bond would be broken.
Applications of operant conditioning
Skinner and his researchers extensively applied operant conditioning theory to many experimental situations. He demonstrated the power and control of his simple learning principles:
the identification of a stimulus and a reward following a successful response. He was able
to train animals to perform complex acts by a process known as ‘shaping’. Behaviour is shaped
through a series of small but successive steps, with rewards given for those responses which
approximate the desired end result. The behaviour is gradually brought closer to this final
objective. Skinner showed much interest in applying his learning principles to complex,
practical situations. There is no doubt that the technique of shaping (modifying and
controlling behaviour) and the identification of the stimulus–response bond can be applied
to work situations. Illustrations of the power of rewards can be seen in almost any work
organisation: bonuses, prizes for reaching sales targets, ‘employee of the month’ awards, etc.
Intermittent reinforcement is another useful outcome of Skinner’s research. If an
employee always receives a reward, does its value diminish? Skinner’s research would say
‘yes’. There is an interesting parallel with this concept in Transactional Analysis whereby too
many positive verbal comments (called strokes) are described as ‘marshmallow throwing’.17
(Transactional analysis is discussed in Chapter 6.)
Operant conditioning in work situations
The most difficult problem with the application of operant conditioning is in its definitions.
Skinner was dealing with ‘hungry’ animals; they had a clear drive to eat and therefore a plate
of food was, no doubt, a reward. It is far more complex when we consider rewards for people.
We may all have our own definitions of a ‘reward’. Although money might be a suitable
reward for some employees, others may prefer to have ‘time out’ or a symbolic gesture of
the work they have achieved. So having a photograph on public display may be a proud
and rewarding moment for some but other employees may be acutely embarrassed.
How organisations reward their employees makes a statement about what they value. How
different pay practices affect organisational and individual performance is a critical aspect of
reward management.18
The same principle applies to people’s perception of punishment. Inappropriate behaviour
at work can be punished directly by withholding rewards or by initiating the company’s disciplinary procedure. Some managerial actions may be perceived as punishment, for example
being sent on a training course, not being sent on an international assignment, etc. Whether
the punishment is real or perceived, it is likely to cause feelings of resentment in the mind
of the employee. Hence, punishment results in negative psychological outcomes. Although
the employee may comply with requirements, it is likely that resentment will lead to anger
and/or apathy and psychological revenge. It is not surprising therefore that organisations
should prefer to use reward management as a means of positively controlling behaviour.
Comparing Skinner’s animal experiments to situations at work illustrates the limitations of
the early operant conditioning studies. Skinner identified the basic concepts but the reality
of organisational life adds layers of psychological complexity.
Some organisations endeavour to exercise tight control over their employees’ language and
behaviour. Training new employees is a form of ‘shaping’ behaviour in line with the written
training objectives. As employees demonstrate their responses, they may be rewarded with
a tick in the training box or a ‘badge’ that they wear on their clothing. Learning occurs
incrementally, with the task divided into sub-goals, each with its own reward. Sometimes
shaping can occur in training centres where peer assessment can add further power to the
modification process.
Many schools use a form of behaviour modification, particularly in the earliest years.
Some secondary schools have also used creative ways to bring truanting pupils back into the
classroom. Rather than punish pupils, their methods are to tempt them back into school
with rewards for attendance. Psychiatric hospitals also use shaping techniques to encourage
patients to behave in appropriate ways. They use ‘tokens’ to reward patients and these tokens
can then be exchanged for privileges. No doubt we can all think of our own examples of
operant conditioning. Being rewarded for certain behaviours has led us to repeat them so
they become ingrained in our repertoire. Habits and routines become set and difficult to
change and we act automatically; ‘we are conditioned’. We may also have picked up
superfluous or superstitious acts along the way – for example wearing only one particular
‘lucky’ scarf to football matches! Organisations may effectively control our behaviour
because we desire the reward (or reinforcement in Skinner’s terms) or we may view the
‘reward’ as compensation for our time and effort. See also the discussion on organisational
behaviour modification in Chapter 7.
Supporters of the behavioural school appear to have neglected the influence of broader
social interactions. Social learning theory is based on the premise that people learn by
observing and interacting with others and through imitation.19 People learn by watching
others. The term ‘modelling’ was coined by Miller and Dollard20 to explain learning by imitating others and ‘role models’ as a label for those individuals who are held up as examples
of good practice. So, the trainee watching how a car is repaired or the trainee chef learning
how to prepare a soufflé will imitate the actions of their role model. Interpersonal skills can
also be learned by observation and new recruits, by watching others, will ‘pick up’ the habits
and techniques of those around them.
Miller and Dollard’s research brought attention to cognitive functions of thinking, perception, attention and memory in addition to behavioural responses. So, for instance, a
trainee watching a supervisor deal with a customer complaint would need to attend to the
customer’s emotions, note the reaction of the supervisor and learn how the ‘lessons’ of this
interaction could be applied to another situation. This process relies on complex cognitive
processes including attention, recall and understanding. Individual intelligence and judgement will play a part in the trainee’s decision to repeat the behaviour – they may decide that
the way in which the supervisor dealt with a customer complaint is an illustration of how
they would not behave. Such decisions rely on an individual’s intellect and thinking skills
and the extent to which the consequences are ‘fair’.
Focusing only on behaviour is useful but limited and cannot explain all forms of learning.
The understanding and application of basic factual knowledge can arguably be learned
through operant conditioning, for example computer-based training for call centre staff.21
However, more advanced levels of learning require more active brain processes. The inner
mind has particular relevance to understanding how, what and why people learn.
Personality, perceptions, motivations and attitudes will all play their part in helping or
hindering the learning process. Gallwey, in his ‘inner game’ books, discusses the impact that
the inner world of ego personalities has on performance:
Once I became aware of Self 1, it grew increasingly obvious that this judgmental little voice barking
away like a drill sergeant inside my head was not the best thing for my tennis game. Self 1 was more
of a hindrance than the great help he wanted me to think he was. Thereafter I began looking for ways
to decrease the interference of Self 1 and to see what happened if I trusted the potential of Self 2.22
Account of cognitive factors
Behaviourism cannot easily explain the natural curiosity that humans have, the great desire
to learn, to make sense of their environment and to feel competent in activities. Neither can
it explain the extent of incidental learning that takes place. Observing changes in behaviour
is only part of the learning process. To understand how and why people learn, attention
must be given to myriad individual factors including plans, ambitions and goals.
Research conducted in the last century highlighted the fact that the process of learning was
more complex than simple stimulus–response associations. Kohler demonstrated the use of
insight in animals solving problems.23 Tolman showed that rats were capable of learning
an image of the maze (a cognitive map) that they would use at a later time.24 It was a Swiss
psychologist, Piaget,25 who demonstrated that the simple behaviourist school could not
explain learning observed in children’s development. He identified four major stages of
intellectual growth, which could be observed in all children. Piaget’s theory offers a tight
coherent perspective of the maturation of intellectual thought and development. His studies
introduced the notion of the cyclical nature of learning and the ways in which children and
adults adjust and accommodate to their environment.
For many cognitive theorists learning is viewed as a sequence, a sequence which processes
information in three distinct stages:
an active perception stage which gives attention to stimuli from the environment;
a second mentally active stage which makes sense of the information;
finally, a restructuring and storage phase.
Although it is beyond the scope of this book to consider the relationship between
thinking and learning, some researchers have shed light on the mental constructs that may
form. Glaser,26 for instance, has described these as ‘scaffolds’. This metaphor suggests that
the framework is capable of development and would be built in an individual way. It also
suggests strength and support. The different ways in which individuals learn may in part be
due to their ‘scaffold’ as well as other personal qualities.
Learning styles indicate various approaches to, or methods of, learning and the ways in
which people learn. This approach recognises that individuals have their own learning
style and strategy. This influences how people prefer to learn. Some cognitive theorists
have emphasised the cyclical nature of learning and its active nature. Davis27 claims that
‘experiential learning is an integration and alteration of thinking and doing’. Although there
are a number of models of learning style two of the best known and useful are that of David
Kolb and that of Honey and Mumford.
The Kolb learning cycle
Kolb’s learning cycle (see Figure 5.4) is typical of this approach and is the one that is most
frequently used in the management literature.28 It provides useful insights into the nature of
It demonstrates that there is no end to learning but only another turn of the cycle.
Learners are not passive recipients but need actively to explore and test the environment.
It identifies the importance of reflection and internalisation.
It is a useful way of identifying problems in the learning process.
The approach emphasises the importance of the synthesis between an individual’s
behaviour and the evaluation of their actions. Reflection of what has been learned in order
to experiment with new situations and to become aware of new possibilities is a vital part of
the learning process. This is the very essence of action learning; going though the cycle that
learners are exposed to applying, reflecting and testing out their learning. This encourages
individuals in habits compatible with the notion of lifelong learning. It is therefore no
surprise that Kolb addresses his ideas to managers and suggests that experiential learning will
enable managers to cope with change and complexity. He has suggested that
Figure 5.4
Kolb’s learning cycle
A key function of strategic management development . . . is to provide managers with access to knowledge
and relationship networks that can help them become life-long learners and cope with the issues on their
continually changing agendas.29
Kolb and his colleagues suggest that partnerships between education and industry should
create feedback loops which enable interactions between ideas and action – certainly ideas
which fit well into a learning organisation framework and into the new concept of knowledge
management considered later in this chapter.
Thinking performers
There are other important links that can be made from this model of learning to organisational
behaviour. Of late there have been exhortations for organisations to develop employees as
‘thinking performers’, thus emphasising the important relationship between thinking and
action. Focus on thinking has been at the core of work completed by Nancy Kline. By
mastering what Kline calls a Thinking Environment, people are able to enrich their lives and
their relationships. She argues that organisations are able to produce better ideas in less
time with better business outcomes. She describes a Thinking Environment as having the
following ten components:
attention – listening with respect, interest and fascination;
incisive questions – removing assumptions that limit ideas;
equality – treating each other as thinking peers and giving equal turns and attention.
Keeping agreements and boundaries;
appreciation – practising a five-to-one ratio of appreciation to criticism;
ease – offering freedom from rush or urgency;
encouragement – moving beyond competition;
feelings – allowing sufficient emotional release to restore thinking;
information – providing a full and accurate picture of reality;
place – creating a physical environment that says back to people, ‘You matter’;
diversity – adding quality because of the differences between us.30
Kline believes that employees need to relearn how to think for themselves in an environment
which genuinely listens and gives people time to say what they think. As a consequence she
argues that more productive meetings and stronger relationships result.
The importance of reflection
The importance of reflection in aiding the learning process is also demanding attention.
Portfolio assessments are becoming more commonplace, both in terms of qualifications
and for showing evidence of continuing professional development. At such time individuals
are asked to ‘reflect’ upon their learning experiences. What have they learned? What are they
going to learn next? The reflective process demands they place themselves centre stage and it
reinforces the circular process of learning. It does not see learning as an end result, as some
kind of ‘product’, but as an ongoing process that never finishes. Becoming a reflective practitioner is seen as essential for managing change and ‘of paramount importance for learning
and growth’.31 But reflection is not easy as it insists that individuals challenge their mindsets
and see situations in new ways. It leads to individuals redefining their current perspective to
develop new ways of thinking and behaving. One of the ways in which this process can be
enhanced is through action learning sets.
Action learning sets
Action learning is explicitly focused on action and promoting change. Coghlan and Brannick 32
note that ‘the purpose of (action) research and discourse is not just to describe, understand
and explain the world but also to change it’ by the effort of data gathering, discussion, action
planning, action, reflection and review. Action learning sets comprise a small group of five
to six people, all of whom wish to develop themselves through tackling a live issue. The set
will provide an opportunity for each individual to report in turn on their actions and reflect
on the progress they have made. Set members will help the presenter to clarify and decide
on next actions by asking challenging questions and creating a supportive climate.
Benefits of action learning have been identified by Weinstein as:
resolving real business problems;
improving social processes;
empowering people;
improving leadership qualities;
improving coping with change.
But in addition to these organisational benefits, participants report valuable learning that
they did not anticipate at the outset. Weinstein comments: ‘This unanticipated learning
was often a shift away from the learning focused on skills, behaviours and knowledge into
learning based around values, beliefs and awareness.’33 Helping others, listening, and using
the spaces to think and reflect are all identified as important learning moments.
The action research can be portrayed as a spiral of learning and action (see Figure 5.5).34
Honey and Mumford styles of learning
When applying the learning cycle to the study of individual differences, Kolb demonstrated
that individuals may have a preference for one of the key stages and therein lies their
learning style. His work, developed by Honey and Mumford,35 has been applied to managerial behaviour. Kolb identified four different styles of learning:
accommodative – strong preference for concrete experiences and active experimentation
divergent – preference for concrete experiences, but to reflect on these from different
assimilative – prefers to swing between reflection and conceptualisation and will use
inductive reasoning to develop new theory;
convergent – prefers to apply ideas, will take an idea and test it out in practice.
Honey and Mumford simplified Kolb’s learning cycle and refined his learning style
questionnaire. They also identify four learning styles and associated pattern of behaviour.36
Figure 5.5
Action research spiral
Source: From Thornhill, A., Lewis, P., Millmore, M. and Saunders, M. Managing Change: A Human Resource Strategy Approach, Financial Times Prentice Hall (2000),
p. 289. Reproduced with permission from Pearson Education Ltd.
Activists – What’s new? I’m game for anything.
Activists are enthusiastic, flexible and open-minded. They like the challenge of new experiences, but can become bored with long-term routine procedures. Activists enjoy the here
and now. They tend to think first and consider consequences later.
Reflectors – I’d like time to think about this.
Reflectors are cautious and slow to reach conclusions. They stand back and observe and
like to think things through carefully. By collection and analysis they maintain a big
picture perspective. At discussions and meetings, activists prefer to adopt a low profile and
take a back seat.
Theorists – How does this relate to that?
Theorists are logical and disciplined, and value rationality and objectivity. They assimilate
disparate facts in order to understand coherent theories. Theorists tend to be perfectionists and reject subjectivity, lateral thinking or flippancy.
Pragmatists – How can I apply this in practice?
Pragmatists like to experiment and seek and try new ideas or theories. They enjoy challenges and problem-solving. Pragmatists are practical, down-to-earth, quick to make
decisions and quickly bored with long-term discussions.
The researchers claim that an understanding of one’s learning style will enhance learning
effectiveness, whether as a trainee or as a tutor. Although all styles are necessary, individuals
tend to be more comfortable with and focus on one particular style. An integrated and effective learner will be equipped to manage all four styles even though they may have a preference for one. Knowing your learning style may help avoid repeated mistakes by attempting
activities to enhance alternative styles. For example, if you tend to ‘jump in at the deep end’,
consider spending time reflecting on experiences before taking action.
Other studies
Other studies have also shown links between personality and learning and have found, for
example, that introverts and extraverts differ with respect to punishment and reward.
Whereas introverts are more likely to be affected by punishment than extraverts, extraverts’
performance is enhanced by reward.37 They also differ with respect to their retention of
short- and long-term material; extraverts tend to have a better performance at short-term
intervals whereas the reverse is true for introverts.
Studies using the Myers–Briggs Type Indicator also reveal differences in learning preferences for the 16 personality types. Such differences indicate that introverts work best if they
can think before participating or ask questions before completing tasks or exercises, whereas
extraverts work best if they can interact in a small group and/or talk the lesson over with
other individuals. However, some of the interesting research has been completed on the
interaction between trainer and trainee. Thus, an extraverted trainer who is also high on
‘sensing’ (see Chapter 4 for description of the different MBTI categories) may positively evaluate students who are active, energetic and practical, but may overlook the thoughtful introspective and conceptual students.38 Such studies highlight the necessity for trainers not only
to be sensitive to the personality needs of the group of trainees but also to be aware of the
impact their own personality has on the learning experience.
Mayo and Lank suggests that organisations need to recognise the simple fact that different
people learn in different ways and should take the following actions:
give people the opportunity to discover their most natural learning style;
offer learning opportunities that suit people with different learning styles;
recognise the need to complete the full learning cycle;
help people to translate the learning cycle into an upwards continuous spiral of learning.39
Complex models of learning
Given the complexity of learning, how can managers make the best sense of the theories,
concepts and frameworks? Models of learning such as that shown in Figure 5.6 are inevitably
complex. However, the model might stimulate questions and could help in the preparation
and design of learning programmes. For example has sufficient consideration been given to
the abilities of employees, learning styles, and the methods to be used?
A summary of how people learn is given in the concept map in Figure 5.7.
Figure 5.6
A cognitive model of learning
Source: From Atkins, M. J., Beattie, J. and Dockrell, W. B. Assessment Issues in Higher Education, Department of Employment (October 1993) p. 51.
© Crown Copyright 1993. Crown copyright material is reproduced under terms of the Click-Use Licence.
Critical reflection
‘Learning is an instinctive process and people will only learn if they want to.
Psychological studies of how people learn and learning styles have only limited
relevance in the classroom and even less practical applications to the work situation.’
How would you present a counter argument?
An increasingly important aspect of organisational performance is the idea of knowledge
management. This is usually defined in terms of a range of practices or processes to identify,
create, distribute and share knowledge throughout the organisation.40 Knowledge management can therefore be linked to organisational learning, which is discussed in Chapter 20.
Many organisations are beginning to identify and formalise the significance of knowledge
and in some instances are creating universities at work. Motorola University, for instance, is
using learning programmes to drive critical business issues and is attempting constantly to
align training with the needs of the business. It sees learning as a key integrated component
of Motorola’s culture.41
Unipart is another example of an organisation which has really driven the notion that
learning should be embedded within the workplace. It has set up a university, complete with
a learning centre and development programmes. The university also has the structure and
support necessary for such a company-wide approach.42 Another interesting example is that
of McDonald’s who recently have won government approval to become an examination
board. The company aim to pilot a ‘basic shift manager’ course equal to a GCSE or A-level.
Distinct advantages are identified for those companies which are able to make effective
use of their intellectual assets. The following quotation typifies the message:
Concept map of how people learn
Source: Copyright © 2008 The Virtual Learning Materials Workshop. Reproduced with permission.
Figure 5.7
The good news is that given reflection, focus and an appropriate and tailored combination of change
and support elements, effective knowledge management can enable corporate renewal, learning and
transformation to occur. Substantially more value can be created for various stakeholders.43
New forms of knowledge
This line of argument is supported by Nonaka,44 who argues that competitive advantage is
founded in the ability of companies to create new forms of knowledge and translate this
knowledge into innovative action. He says that ‘the one sure source of lasting competitive
advantage is knowledge’ and describes the different kinds of knowledge that exist in
organisations and the ways in which knowledge can be translated into action. Nonaka calls
knowledge that is easily communicated, quantified and systematic explicit knowledge – the
kind of information required for an IT system or a new product. Tacit knowledge, however,
is more akin to the wisdom described earlier – inarticulate, understood but rarely described.
Although more problematic, because it is not so easily disseminated, tacit knowledge is
arguably as important as explicit knowledge. Those companies able to use both kinds of
knowledge will make the creative breakthroughs, according to Nonaka.
He suggests that the knowledge-creating companies systematically ensure that the tacit
and explicit feed into each other in a spiral of knowledge. Tacit knowledge is converted into
explicit knowledge by articulation and that explicit knowledge is used within an individual’s
cognitive understanding by a process of internalisation. It perhaps is no surprise that
‘knowledge management’ has been the subject of hype in the management literature and has
been extolled as the route to the Holy Grail of competitive advantage. Jeffrey Tan argues that
managing knowledge is now the issue for business in the 21st century. He suggests that
A successful company is a knowledge-creating company: that is one which is able consistently to produce new knowledge, to disseminate it throughout the company and to embody it into new products or
services quickly.45
The importance of knowledge management
Santosus and Surmacz46 suggest that a ‘creative approach to knowledge management (KM) can
result in improved efficiency, higher productivity and increased revenues in practically any
business function’.
A substantial number of benefits have been identified by researchers of KM that no
doubt has contributed to the surge of interest. Kerr 47 identifies seven reasons why KM is an
important area:
business pressure on innovation;
inter-organisational enterprises (e.g. mergers, takeovers, etc.);
networked organisations and the need to co-ordinate geographically dispersed groups;
increasingly complex products and services with a significant knowledge component;
hyper-competitive marketplace (decreasing life cycles and time to market);
digitisation of business environments and IT revolution;
concerns about the loss of knowledge due to increasing staff mobility, staff attrition and
One of the key tricks therefore is for organisations to know how to share knowledge and to
learn from the experiences of others. Various interests and routes have drawn different
organisations to knowledge management; diversity in actual practices is broad. A holistic
approach towards KM research is taken in the aerospace industry. Kerr explains that it is
necessary to complement social with technological solutions for managing knowledge in the
engineering design process – not only the know-why (design rationale and reasoning – best
practice) but the know-who (mapping expertise and skills) and know-how (promoting
communities of practice for learning in a dynamic context).
Facilitating knowledge management
Key enablers facilitating KM practices include expert systems, knowledge bases and help desk
tools as well as content management systems, wikis, blogs and other technologies. Growth
will continue as more collaborative IT applications become available. McElroy 48 suggests
that KM needs a second generation, one that focuses on knowledge creation. He points
out that knowledge sharing alone does not lead to innovative thinking, instead a more
fluid proactive approach is required which allows people to share, analyse and revise ideas.
Collaborative software solutions allowing messaging, forums, etc., are more akin to addressing knowledge required for the future.
In a review of how technology is changing learning the British Educational Communications
and Technology Agency (Becta) argues that ‘we are moving from being consumers of media
to becoming creators and producers’.49 Illustrations such as war blogs by Iraqi citizens and
mobile phone films of the London bombs indicate that people have seized the opportunity
of becoming digital producers. Mobile learning can generate intense benefits, from podcasting to satellite-based systems, especially in terms of access in contexts not easy to reach.
Learning can be enhanced by allowing devices to come together and communicate among
themselves – Bluetooth and ZigBee are two examples of this.
The power of this connectivity allows people to create and explore new environments. So
it is possible, for example, to create in a classroom an environment down to the sights, sounds
and smells, with handheld computers, headphones and special sensors. Human–computer
interaction is becoming increasingly sophisticated, with multimodal interaction – where
computers respond to human sense, mood and voice tones – from using pressure pads
and sensors.
As enabling technologies become ever more sophisticated, our dependency on technology
increases and our expectations grow. Referring to the attack on the twin towers (11 September
2001), Peters illustrates forcefully the necessity for effective, fast connectedness:
The FBI, the CIA, a kiloton of tanks and an ocean of aircraft carriers and nuclear subs were no match
for passionate focus, coordinated communication and a few box cutters. The terrorists conceived the
ultimate ‘virtual organisation’ – fast, wily, flexible, determined. And then, despite numerous slip-ups,
said terrorists use satellite phones and encrypted email, US gatekeepers stand armed against them with
pencils and paperwork, and archaic computer systems that don’t talk to each other.50
Intelligent networking is producing exciting visions of the future where ‘smart objects’
are networked and will be able to process data and communicate with other objects. It is
speculated that in the future ‘we’ll have vehicles filling up with not only gasoline but
also new data. . . . stop at the gas station and your car will automatically log on to the local
server via a WLAN or similar system. Vehicles will network with one another and exchange
information on traffic conditions and potential hazards’.51
There is an increasing use of technology as a means of enhancing the learning situation.
E-learning (electronic learning) is a means of instruction by the use of information and
communications technology (ICT). According to the Joint Information Systems Committee
(JISC) e-learning is:
Learning facilitated as supported through the use of information and communications technology. It
can cover a spectrum of activities from the use of technology to support learning as part of a ‘blended’
approach (a combination of traditional and e-learning approaches), to learning that is delivered
entirely online. Whatever the technology, however, learning is a vital element.52
Predicting how future technology might impact upon learning and learners was the focus
of attention by a panel of experts and strategists in 2004. The Edinburgh Scenarios53 as they
are now known, were an outcome of the world summit organised by eLearn International in
February 2004 where delegates considered what e-learning might be like in ten years’ time.
They used the techniques of scenario planning to explore the key uncertainties of the future
and how the future might impact upon us all. The panel of experts identified the two most
uncertain and most important issues facing e-learning – these became the two axes. They
then considered the kinds of pictures that could occur given these potentially challenging yet
plausible possibilities. The four scenarios are described in Table 5.2.
E-learning can be used in a variety of contexts with varying amounts of personal interaction. For example, with some university courses the majority of study is undertaken on-line
with minimal attendance at campus or face-to-face tuition. However, in business organisations, technological and culture barriers appear to hinder the widespread uptake of on-line
People and management attitudes are probably the biggest barrier to using online technology to support
delivery of structured learning programmes and courses. Employees reported that it is difficult finding
time to take the programmes and lacking motivation to complete programmes is seen as a significant
barrier. Unfortunately, management support and active encouragement of employers to participate in
online learning is often missing.54
E-learning is also discussed in Chapter 13.
Table 5.2
The Edinburgh scenarios
Technology empowers people
The dominant
are established
This is a world where
technology advances create the
potential to access all kinds of
information and new learning
opportunities. Power is
centralised within established
institutions, so access and use
are governed mostly by large
corporations, governments
and global universities.
This is an increasingly
connected world where we see
powerful, effective advances in
technology, where individuals
are able to work and learn
together in new ways.
Power shifts away from large
organisations and, as a result,
new ideas come from various
unlikely sources.
This is a world where the
confusion, fear and complexity
of technology result in a loss of
trust in the integrity of online
This is a world where people
are frustrated by new
technology yet find new ways
to challenge authority and gain
greater influence over many
aspects of their lives, including
Powerful established
institutions return to the
more ‘traditional’ values and
methods of teaching and
learning, seeking low-risk
predictability in a turbulent
The dominant
are selforganising
and emergent
This results in a world where
the focus of attention moves
away from technology and big
institutions towards issues of
local importance.
Technology frustrates people
Making use of knowledge
Web technology has changed the way in which people communicate and their expectations
of the scope, nature and type of knowledge and information. As Cohen has said:
Information no longer filters from the top down; it branches out into every imaginable direction and it
flows away from the information creators and towards information users. Employees can now access
information that was once only available to a few key people.55
Networked companies are able to form linkages with partners and to have transparency
about processes which would not have been conceivable a decade ago. Changes in the way
knowledge is shared often comes hand in hand with other changes in the organisation. In
the Royal Mail, traditional functional line structures were replaced with a spider’s web
design.56 This had the impact of breaking down barriers between groups and allowing
new lateral relationships to be formed. A knowledge infrastructure was developed to enable
project information and learning to be captured. However, of key importance to the success
of this and other knowledge management projects is the willingness of individual employees
to participate and share their experiences. As organisations become more and more dependent
on each other, the need for effective procedure becomes evident and with that the potential
problematic issues of sharing of responsibility, accountability and trust. The different process
and ways of working can bring their own stresses and problems. A full discussion of the
impact of technology on organisations is included in Chapter 16.
Although much recent management literature commends and encourages organisations to
become learning organisations57 and extols the benefits to be found in viewing knowledge
as an essential business asset, the work of ‘managing knowledge’ is not without its difficulties. The truism that knowledge is power means that those people within the organisation
who wish to retain their power and control may feel very disconcerted.58 Some writers have
produced kits to help organisations manage their information59 and offer advice. Others like
Harrison are sceptical about the ease with which knowledge can be managed:
knowledge develops in different ways in individuals and in organisations according to processes and
variables that are only imperfectly understood . . . No consensus has been reached on how knowledge
does in fact form, grow and change; or on the exact nature of the process linking data, information and
knowledge, or on the relationship between individual, group and collective learning and how it can or
does affect the knowledge base of an organisation, its competitive capability, its performance or its
The following challenges have been identified in knowledge management (KM) initiatives
to achieve business benefits:61
Getting employees on board – ignoring the people and cultural issues of KM and not
recognising the importance of tacit knowledge is a significant challenge.
Allowing technology to dictate KM – while technology supports KM it should not be the
starting point. Critical questions about what, who and why need to be asked before the
how is put into place.
Not having a specific goal – there must be an underlying business goal otherwise KM is
a pointless process.
KM is not static – instead it is a constantly changing and evolving process as knowledge
has to be updated and stay abreast of current isssues.
Not all information is knowledge – quantity of knowledge does not equal quality and
information overload is to be avoided in organisations.
Malhotra62 also sees challenges for knowledge management systems in ensuring that the
processes are aligned with external knowledge creation models. He suggests that the enablers
of KM systems may in the long term become constraints in adapting and evolving systems
for, and to, the business environment.
Different organisation sectors will have their own particular knowledge problems to deal
with and harvest. What constitutes intellectual property rights is a thorny issue which universities are trying to resolve as their ‘knowledge’ is being sought by commercial and industrial
partners. The outsourcing of research and development into universities is welcomed by many,
but there are problems to be overcome, not least in terms of cultural conflict and ownership
of ideas. Whereas academics would wish to publish their research, industry would wish to
maintain secrecy. Lack of awareness as to the value of ‘knowledge equity relative to finance
equity’ is a further difficulty, as is the ownership and protection of intellectual property. McBrierty
and Kinsella present ways in which some of the problems can be resolved and advance the
many benefits that collaboration between university and industry can bring to both parties.63
People as human assets
The term ‘knowledge management’ strikes a harmonious chord with the view of people as
human assets in an organisation. It captures the essence of people’s experience and wisdom
and declares that companies need to use the knowledge available to them. For Harrison,
communicating a coherent vision is a major principle for managing knowledge productively.
She believes that frequent dialogue and a culture that allows challenge and innovation are
crucial principles for benefits to occur.64 Mayo65 suggested that five processes are necessary for
an effective knowledge management system:
managing the generation of new knowledge through learning;
capturing knowledge and experience;
sharing, collaborating and communicating;
organising information for easy access;
using and building on what is known.
The success of many of these processes would depend on the culture of the organisation and
its priority in sharing learning and knowledge. Many of the ideas and concepts now being
used in the term ‘knowledge management’ have their roots in the learning organisation.
Critical reflection
‘University courses should be designed less at the behest of academics and more to
take account of the learning necessary to satisfy the demands of the workplace for
innovative action.’
What are your views? What do you think should be included in your course of study?
The importance of creativity as a management ability has been creeping onto the management education agenda over the past decade, lending a so-called soft edge to the business
literature. Morgan prophesied that six new competencies would be required by managers to
lead their organisations into the next millennium, including the ability to be innovative and
initiate change.66 Other research indicates that the reality of what managers actually do is
unlike the conventional wisdom of what they are supposed to do; in fact, managers are
already engaging in activities which are, if not creative, certainly intuitive.67
For organisations to be innovative, creative solutions are required. Such a statement is in
total harmony with the research on learning organisations. West could be speaking about
learning organisations when he says:
Organisations and teams which practise reflexivity and are prepared to continually challenge and
re-define their organisational roles, goals and paradigms, via processes of innovation, develop a more
comprehensive and penetrating intellectual representation of their role. They better anticipate and
manage problems, and they deal with conflict as a valuable process asset within the organisation,
encouraging effectiveness, growth and development. The most reflexive organisations are those within
which there is a maelstrom of activity, debate, argument, innovation and a real sense of involvement
of all employees.68
What is creativity?
Creativity is the application of imaginative thought which results in innovative solutions to
many problems.69
Imaginative thought may lead to new ways of seeing things that may be novel for the
person or completely novel in time. Boden distinguishes such novel ideas as either P-creative
(novel to the person) or H-creative (fundamentally novel to the whole of human history).70
An air of mystique surrounds the study of creativity, as if the flash of insight or inspiration
indicates some special powers or gift. However, Boden71 suggests that
creativity draws crucially on our ordinary abilities. Noticing, remembering, seeing, speaking, hearing,
understanding language and recognising analogies; all these talents of Everyman are important.
The fascination for Boden is understanding these everyday cognitive functionings. Given
the notion that all individuals have a capacity for creativity, why is it that some generate
more ideas than others? Henry identified a number of traits found in creative individuals:
tolerance for ambiguity, sensitivity, independent thinking, imagination and a reasonable
level of intelligence.72 Goodman suggests that:
Actively creative people have a talent for getting to the heart of a problem. They are not confused by
detail and by the need to invoke standard approaches.73
There is a consensus in the literature that suggests such individuals have a desire for
originality, non-conformity and the opportunity to experiment and express new ideas. A difference can also be drawn between those people who are productive in terms of the number
of ideas they can create and those individuals who have entrepreneurial capabilities and are
able to bring the ideas to the marketplace.
Stages of creative process
Four stages have emerged in the creative thinking process.74
1 Preparation stage – conscious attempt to understand and absorb information.
2 Incubation stage – conscious mind is focused elsewhere but below the level of consciousness the ideas are being continually combined.
3 Illumination – solution appears suddenly – flash of insight.
4 Verification – solution is tested in a conscious and deliberate way.
Understanding these stages of creativity is acknowledged by many psychologists as being
an essential start to understanding and appreciating one’s own creativity. West75 reveals that
managers lack confidence in their ability to be creative and organisations may set up a vast
number of potential inhibitors. It is therefore understandable that creativity is suppressed
and devalued. Learning to be creative is encouraged by many writers through exercises and
activities designed to stretch the imagination in wild and novel ways – often referred to as
‘thinking outside the box’. (See the discussion on brainstorming in Chapter 9).
Blocks to creativity
Goodman76 suggests six common blocks to personal creativity:
Perceptual – habitual responses, stereotyping and reliance on past instructions and
Emotional – fear, anxiety about looking foolish in front of others or making errors.
Process – lack of technique or skills in process; a quick grasp at a solution.
Communication – style, method or skills unsuitable for dealing with problems.
Environmental – facilities, stress factors, mindsets of others which inhibit responses.
Cultural – culture and attitudes not facilitative; too risky and open-ended.
A distinction can be made in Goodman’s list between the first four features that are
aspects of the individual’s psyche and repertoire of skills and the last two that are functions
of the culture of the organisation. Unless there is a culture of creativity and interest in reconstruction, it is more likely that individuals will use their creativity and resourcefulness
outside the organisation or against the organisation rather than for the organisation.
These blocks to creativity could also be generalised to many learning situations and not
just those that require a creative response. Students embarking on a new educational course,
particularly if they have had a break from studies, will frequently report concerns that could
be categorised under the six headings. In addition, many will note that the relationships
outside the academic environment are important too; the change process has an impact not
only on the student but frequently on the family and partnerships too.
Creating a culture of creativity
Strategic management writers are now suggesting that managers will be required to go
beyond rational/logical thinking and use their senses of feeling, creativity and intuition to
create businesses for the future. The Creative Model (CM) of management is
built on the philosophical assumption that the real world which surrounds the organisation is a dynamic
construct enacted by the members of the organisation over time . . . they will require a diverse group of
senior managers able to perceive the world differently, yet able to participate in a process that transcends
these different views to enact a complex organisational reality.77
Such a view suggests that personality, sensitivity, creativity and communication skills are
going to be the requirements of managers in the next millennium. It also requires managers
to be proactive in their search for root causes to problems and be imaginative in solving
them. Argyris78 usefully distinguished between single-loop and double-loop learning in
organisational strategy and change. Single-loop learning concentrates on the symptoms
of problems whereas double-loop learning tries to seek out the deep causes. Differences
exist in terms of strategies used to solve problems. Whereas the devices used to tackle
surface issues typically involve tightening control, double-loop strategies require a questioning approach. Such investigations may lead to a challenge of the status quo and for
Argyris this open inquiry is a way forward for solving business problems. This inquiring
attitude is in line with work on learning organisations and the philosophy of the Creative
Management school.
Arts and creativity
There is a growing interest in drawing the arts and creativity into management programmes.
Although innovation is seen as essential for organisations, engaging with creativity and
developing creativity is often put on the back burner. At ?What If!79 they believe that organisations need to ‘navigate’ between the traditional business world of analysis and the world
of creativity to generate innovation. Without this they suggest that business growth is compromised, personal growth is undermined and feelings of fulfilment are reduced. Interest in
developing creativity has blossomed in a range of alternative development offerings from
preparing stage productions and developing music projects to story-telling and poetrywriting workshops. It is claimed that such activities provide:
rich learning about the creative process and ways in which creativity can be nurtured or
ways to develop ‘soft skills’ alongside ‘hard skills’;
powerful metaphors to facilitate organisational analysis;
multi-sensory and right-brain approaches that balance left-brain thinking, different learning styles and experiential learning.80
Creativity and context
Rickards, Runco and Moger see creativity as a complex and compelling area of study that is as
difficult to define as it is to achieve. In a thought-provoking series of contemporary articles,
they explore how creativity can be better understood and used in a range of contexts including innovation and entrepreneurship, environmental influences, knowledge management,
personal creativity and structured interventions. Rickards et al. refer to creativity occurring
within particular contexts, two of the most important being cultural and organisational.
These do not act merely as influences and determinants, however, but instead are also
influenced by creativity. ‘It is simplistic to think that contexts are always the influence and
creative thinking the result. Instead, an interplay implies that environments act on and are
influenced by creative people and their efforts.’81
Critical reflection
‘Despite claims that coaching can do so much for the person, in reality it is all about
improving performance and productivity. The primary beneficiary is always the
organisation and little attention is given to enhancing indiviual relationships and quality
of working life.’
To what extent can you argue convincingly against this assertion?
Organisations need to offer development opportunities which simultaneously challenge and
support and they need effective systems and processes that enable people to harness their
potential. This requires creativity and courage to engage and motivate people emotionally to
operate at their limits. So, how are managers to learn and acquire the skills that are necessary
for them to be effective managers? Two current methods of management development that
are being advocated are mentoring and coaching. One of the joys of managing others is to
know that you have helped others develop and grow. Managers have always been informal
mentors and coaches – some relishing this role with the required portfolio of skills, some
being more hesitant and others having a negative influence and acting as a ‘block’ rather than
a steer to their subordinates.
Recent literature is drawing attention to the skills required to be an effective mentor and
coach and research on this topic is to be welcomed. Certainly the concepts fit in well with
the idea of a ‘learning organisation’ and they fit comfortably with principles of learning
which extol the virtues of action learning and self-development. The concepts are based on
the assumption that the trainee recognises their training needs and has the desire to be
a willing and active participant in the process. As Clutterbuck and Wynne suggest:
Mentoring and coaching . . . represent an increasing trend towards helping the individual take
charge of his or her learning: the primary driver of the acquisition of knowledge and skill becomes
the employee; the coach or mentor is available to give guidance, insight and encouragement in the
learning process.82
Coaching and mentoring
There is confusion and differences of opinion among individuals within organisations about
the interpretation of these two concepts. ‘Coaching’ is a supportive relationship aimed at
creating understanding, direction and action. It is both facilitative and challenging. A coach
does not ‘fix’ someone or solve their problems or assume an ‘expert’s’ position; rather they
try to draw out the wisdom from within. The relationship involved in ‘mentoring’ is equally
supportive and challenging, but the mentor is typically an expert in an area or is a leader
within an organisation. They are able to offer advice, guidance and support. A mentor may
choose to use coaching techniques within the mentoring relationship. Rapport is essential
for either relationship to work effectively.
According to Clutterbuck:
the basic difference is that coaching is always about performance; mentoring is more holistic, about the
whole individual. Both are techniques for developing people but in practice, mentoring tends to be
a longer relationship.83
Somers distinguishes mentoring from coaching in terms of ‘which way the wisdom flows’,
and mentoring as input, coaching as extraction.
Coaching is a process of extracting wisdom from a person being coached, making them more aware of
their own learning and experience – making it apparent to them. If I am mentoring someone, I am saying if you want my advice this is what you should do. If I am coaching a person I am saying well you
tell me what you think. Reflect on that, what did you notice, what can you learn from the experience?84
The benefits of coaching
Coaching has also caught the attention of critics who charge it as an ‘unregulated, unstructured and (potentially) unethical process’ unless the process is evidence-based.85 Chapman86
urges psychologists to test empirically the contribution that coaching can make in performance and behaviour.
Despite such criticisms, the potential benefits of an organisation developing a coaching
culture seem to be well recognised. According to Woodruffe, for example, there is no doubt
that coaching is already recognised as a major resource for business.
Business coaching is focused on business, and in particular on how individuals can be helped to perform better at the organisations that employ them.
Because coaching is essentially a psychological intervention, it’s easy to assume that the benefits it
yields will themselves be psychological and relatively intangible. But this is not the case at all. There is
abundant evidence that coaching can be a highly effective process at a commercial level.
Benefits to organisations that provide coaching include improved operational efficiency
and employee productivity, development of soft skills, improved employee morale and
motivation, better career progression and succession planning, and creating a culture that
promotes loyalty.87
Coaching is used to help a person move forward. It is about change and focuses on
results. It is therefore no surprise that many organisations are turning to coaching. Julie
Starr88 asserts that coaches work from a set of common principles:
Maintain a commitment to support the individual.
Build the coaching relationship on truth, openness and trust.
The coachee is responsible for the results they are generating.
The coachee is capable of much better results than they are currently generating.
Focus on what the coachee thinks and experiences.
Coachees can generate perfect solutions.
The conversation is based on equality.
Listening is an essential skill and Starr describes different levels of listening, from cosmetic
(it looks as if I am listening, but actually I am someplace else) to deep (more focused on you
than me – getting a sense of who you are). Asking questions, giving supportive feedback
and using intuition are all part of the coach’s tool kit. Most coaches use a framework for the
session. A common model is the GROW model:89
Goals – What does the coachee want to achieve? How do they want to feel afterwards?
Reality – What is the scenario? What is the context? What are the problems? How have
they been handled?
Options – What are the possible actions? Which are the most attractive? What has worked
in the past?
Wrap-up – What actions are needed? What does success look like? What if things get in
the way?
It is easy for managers to slip into habitual ways of thinking and behaving. Some problems take the person relentlessly around the same cycle of thoughts. Powerful questions can
stop the circle and help the person to move forward. Coaching can be a helpful mechanism
to engage in change. Grant and Greene conclude:
Coaching teaches us to monitor our progress and change direction when necessary. As we reach
milestones on the way we need to take time to celebrate our successes. The key to it all is action,
continuous and deliberate action.90
Mentoring requires a set of skills that includes the role of a coach. Clutterbuck and Wynne91
define four roles – counsellor, networker, facilitator and coach – and say that ‘at its simplest
the mentor is there to help the mentee to learn’. However, research into mentoring illustrates
that organisations need to be fully committed to the idea and ensure that the individuals are
fully prepared for the programme to prevent the onset of problems. Benefits to be gained are
obvious and include managerial effectiveness, communication improvements, the promotion of equal opportunities and self-learning.
There are three fundamental features of effective study skills:
good organisation;
active planned sessions; and
psychological preparation.
Material is more easily learned when it is associated and organised in as many ways as
possible. In addition to your written and organised notes, use other senses such as the visual
sense (draw maps, plans and posters) and the auditory sense (make and play back revision
cassette tapes). Using resources effectively (time, library, tutors) is self-evident and essential,
but frequently forgotten.
Learning is enhanced when you distribute your working sessions and avoid cramming.
It is sensible to allow reasonable time breaks and recall sessions. Being constantly active
in your learning – that is, ensuring that you understand the material and that you are not
passively rewriting notes without thinking them through – is also critical. Constantly testing
your knowledge and reviewing material are also good practice. Setting targets and goals is
important for readiness to learn and cutting down procrastination time. Setting your own
psychological contract, by aiming to achieve a goal, being clear about what you are planning
to learn and then rewarding yourself when you have reached the target has also proved
successful. The environment also promotes this readiness to learn and sitting in the same
room or at the same desk can encourage a positive learning attitude. Being positive, getting
rid of anxiety and emotional factors may be the most difficult but is probably the most
important part of this preparation process.92
The list below is not exhaustive but identifies some of the major areas where it is possible to
apply the theories of learning.
■ Learning what to ‘do’ (for example, skills and knowledge).
■ Learning how to ‘be’ (role behaviour).
■ Learning the ropes (socialisation process and culture) and the social rules (norms and
Development of others
■ Personal development – training others and developing their potential (including skills
of mentoring, assessing, advising and coaching).
■ Development of planned learning events.
Development of learning culture
■ Policy development – developing policies for ‘learning organisations’; coping with
changes and development; enabling ‘loose’, creative and lateral thinking.
Critical reflection
‘Without learning, individuals will not be able to cope with change and organisations will
not survive. Whatever the required skills or knowledge of an individual, the motivation
and ability to learn is arguably of even greater importance.’
What do you think? What does learning mean to you and how do you learn best?
■ Learning is a feature of all human activity and provides insights into our humanity. It defines levels of
growth – in individuals, in organisations and in society.
It involves an examination of how change takes place.
Individual learning occurs at many levels and in many
ways, and is a lifelong experience. As society changes
and as technology ever more impacts upon our life
in profound ways, so we have constantly to learn and
develop. Learning is an active, dynamic concept and
links the individual to the social world.
■ There have been a number of theories and studies
into how people learn. The early classic studies offer
explanations for simple learning situations. The
behavioural school were interested in the study of
behaviour and those actions that could be observed,
measured and controlled. Major contributors included
Watson and the law of exercise and association; Pavlov
and classical conditioning; and Skinner and operant
conditioning. Social learning theory draws attention
to the influence of broader social interactions.
■ Learning styles indicate various approaches to, or
methods of, learning and ways in which people learn.
This approach recognises that individuals have their
own learning style and strategy. Two major models of
learning styles are the Kolb learning cycle and the
Honey and Mumford styles of learning. These models
provide useful insights into the nature of learning and
enhance learning effectiveness. Other studies have
found links between personality and learning.
■ An increasingly important aspect of effective performance is the idea of knowledge management which
is linked to organisational learning. Companies that
create new forms of knowledge and translate this
into innovative action can gain competitive advantage. Many organisations are now using learning
programmes that align learning and training with the
needs of the business. A suitable strategy for dealing
with the management of knowledge, assisted by appropriate use of information technology, is a distinguishing
feature of effective and capable organisations.
■ The importance of creativity as a management ability
has been creeping increasingly onto the management
education agenda. For organisations to be innovative,
creative solutions are required. Imaginative thought may
lead to new ways of seeing things that may be novel
for the person or completely novel in time. In order
to create businesses for the future, managers will be
required to use their senses of feeling, creativity and
intuition and to overcome common blocks to personal
■ Effective development, using the benefits of
coaching and mentoring, may encourage individuals
to be responsible for their own learning and may contribute to a climate of learning. Mentoring requires
a set of skills that includes the role of coach. However,
establishing training and development as the main
driver in fulfilling organisational strategies is the major
challenge for managers. This may be the only way to
create and establish an improved learning culture.
1 Explain fully what you understand by the meaning and significance of learning.
2 Evaluate critically the relevance today of the behaviourist theories of learning.
3 Illustrate the following learning concepts with examples from work or college:
(a) reward; (b) punishment; (c) shaping.
4 Explain fully the meaning and nature of the learning cycle and its links with organisational behaviour.
5 Give your own detailed interpretation of how people learn.
6 Debate critically the practical applications of knowledge management to an organisation of your choice.
7 Why is coaching and mentoring becoming a more common form of management learning in organisations?
Discuss the likely implications.
8 Relate your own experiences of applications of learning theory to study skills and organisations.
UK follows Dutch example with site simulations
Lucy Phillips
A new construction training centre is to open in the
autumn to improve the people management skills of
site workers. The centre, based in Coventry, will be
the first in the UK to use computer technology to
create virtual construction sites, enabling trainees to
play out real-life situations. A similar centre already
exists in the Netherlands, where it is used by more
than 360 firms. According to Michiel Schrijver,
managing director of ACT-UK, the organisation behind
the concept, it has ‘transformed’ the Dutch approach
to people management training.
Participants will use a control stick to ‘work’ on
construction projects that are projected onto a 12metre panoramic screen. Professional actors will work
alongside the simulated scenarios and present
trainees with different management situations to deal
with. At the same time, supervisors will observe the
trainees’ behaviour via cameras and pinpoint areas for
improvement. ‘Managing a construction project is
hugely challenging,’ said Schrijver. ‘Alongside
technical knowledge of the build process, site
managers need excellent people skills to manage
subcontractors and other site staff. The depth and
detail of the simulation means that the experience
goes beyond mere role playing and allows trainees to
test themselves fully in a safe, controlled environment.’
Construction firm Balfour Beatty is currently
developing a series of courses for site managers, to
be delivered at the centre from September. Tony
Ellender, training manager for the company’s
construction north division, said he expected ‘the
value of the training to be much higher’ because it
was more ‘specific and relevant to their day-to-day
activity’ than the classroom-based training that it will
be replacing. ‘You can do things in a simulator that
you can’t do on a construction site because of the
health and safety and financial implications of making
a mistake,’ he added.
Ellender said the focus would be on ‘management,
people and communication skills’, all of which needed
Source: Lisa F. Young/iStockphoto
Computer-generated virtual simulations can be powerful training
to be improved. ‘Traditionally, the industry has
focused on technical and health and safety training
and not enough on the people skills, yet that’s what
makes people better site managers,’ he added.
Balfour Beatty will pilot its first course with 12
supervisors to help them progress into management
roles and will then use the feedback to develop more
advanced courses. After that the firm, which has
25,000 UK employees and does primarily public sector
work, hopes to put 12 managers through a simulated
course every month.
Ellender said the centre would also help to raise
awareness in schools and colleges of the different
types of construction careers available. ‘Although
there’s plenty of people who want to join us, they are
not always aware of all the options. They see it as
trade and technical jobs and don’t realise that there
are lots of professional and managerial jobs as well,’
he said. The centre will also offer ‘taster courses’ for
14-to-19-year-olds doing the new diploma in
construction and the built environment.
Source: Adapted from Phillips, L. ‘UK Follows Dutch Example with
Site Simulations’, People Management Online, 20 May 2009.
Reproduced by permission of People Management magazine
(www.peoplemanagement.co.uk) and the author.
Discussion questions
1 Using relevant concepts from the chapter, explain
what type of learning theory is behind the idea of
the site simulator.
2 Given the costs involved in both developing and
running the simulator, what justification would
you make for its use by companies like Balfour
Beatty? Outline the business case for training site
managers in this way.
Compare and contrast the following learning situations:
a Learning to ride a bike/drive a car.
b Learning sign language.
c Learning an academic text.
d Learning to be a sales person.
e Learning self-awareness.
Which learning situation would you find most/least comfortable? Most/least satisfying? And why?
Prepare to share and discuss your responses with colleagues.
What conclusions did you draw from this assigment?
Coaching and mentoring: role play
Role play: manager/supervisor
You are a manager in the Accounts Department. Graeme, one of your most energetic people, has asked for
some of your time and is coming to see you in a couple of minutes. You’re not sure what it’s about but you
would like to take the opportunity to talk to him about the amount of work he takes on. He takes on anything
that needs doing and is always the first to volunteer for new projects. This has been particularly so over the past
few months and you are beginning to be concerned about his health. He looks pretty drained at the moment.
You obviously want his enthusiasm to remain high but you don’t want a burnt-out employee. Decide how you
will approach the issue and how you might get him to moderate the workload.
Role play: employee/Graeme
You have been in the Accounts Department for five years now and really love your job. In fact, since you and
your partner split up a year ago you’ve really thrown yourself into your work. It’s nothing for you to work late into
the evening and quite often at weekends. There are so many exciting things to get involved with that there isn’t
enough time to do as much as you’d like. Besides, your social life isn’t exactly buzzing at the moment and
you’ve never got hooked into any particular hobbies or pastimes.
Your manager has always been full of praise for your performance, consistently giving you a high rating on your
objectives. You’ve also made rapid progress during your time in the department. You have felt a bit drained recently.
You have asked to see your manager about an exciting new piece of work you’ve heard about. You’d really like
to get involved in it. You don’t want to give up your other stuff though.
Completing this exercise should help you to enhance the following skills:
Explore the nature of the creative process.
Unlock your creativity and elicit creative responses.
■ Recognise how creativity can help solve problems.
You are required to complete the following creative-thinking exercises and compare your answers to those of
others in the group.
1 Think of the members of your work group or study group for a few minutes and consider their personalities,
the dynamics of the group, the communication patterns and so on.
■ If they were a sports team, what would they be?
■ If they were a product of nature (flower, tree, bird, animal), what would they be?
■ If you were to draw a building representing their major characteristics, what would it be?
Fully discuss your answer with others in the group and compare responses.
2 Write a limerick starting with the line: ‘There was a fine manager called . . .’ OR write a six-line poem starting
with the words: ‘If only I had . . .’.
3 In a small group, identify blocks to your creative thinking and consider ways in which these blocks could be
minimised or eliminated.
How can creativity be best developed and managed within the workplace?
Is it possible for all people in workplaces to be creative?
■ What insights does this exercise provide?
In 2008 the charity Voluntary Service Overseas (VSO)
celebrated its 50th birthday. The President, broadcaster
Jonathan Dimbleby, hosted an evening event in the
Royal Festival Hall on 15 March involving some of
the 30,000 VSO volunteers past and present. Unlike
charities which work by sending money abroad to
support projects or provide direct financial aid, VSO
sends people, their energy and their expertise to partner
organisations in the developing world. It is a significant
aspect of the UK’s work for overseas development, and
the government provides approximately 70 per cent of
VSO’s income (almost £30m a year).93 VSO has come a
long way since the first dozen young people took ‘a year
between’ school and university during 1958–9 to head
for Nigeria, Ghana and Sarawak with the aim of offering
‘service that would not only make a positive
contribution to those countries but would constitute
an experience of inestimable benefit to many of our
young people.’94
Not only has it grown (to over 1,500 volunteers
working in 34 countries during 2007–8)95 but its
structure and emphasis has changed in line with
globalisation, economic development and new
challenges. One thing that hasn’t changed, however,
is the importance of and value placed on learning
and knowledge sharing, which is at the centre of
VSO’s mission.
The gap year
The phrase ‘year between’ was coined by a sub-editor
on the Sunday Times of 23 March 1958. It was used
in the headline given to a letter from the Bishop of
Portsmouth which had been written in collaboration
with Alec and Moira Dickson, the three founders of
what became VSO. In it they suggested that some of the
school leavers who found themselves having to wait
before university places became available (the ending
of national service had created a bottleneck) could both
offer something and benefit from a spell collaborating
in projects for education, youth work and community
development in poorer areas of the world. Alec Dickson
had worked in Nigeria and Iraq for the government and
for UNESCO, and he and his wife had also spent time
in Sarawak; so he understood the opportunities first
hand. What inspired him was the idea that young
people without specialist training, expertise or technical
skills, could offer help on a more equal footing than in
the usual types of aid project, which Western experts
Source: Imagestate Media Partners Ltd – Impact
The structure and emphasis of VSO’s practices has changed in line
with globalisation but the value of learning and knowledge sharing
remains at the core of its mission.
managed and ran. The idea took root; just over a dozen
18-to-19-year-olds signed up to the adventure, and the
idea of the ‘gap year’ had been born.
Yesterday, today, tomorrow
VSO today is different in many respects from its 1958
self. In its foundation year the average age of the UKrecruited volunteers was 18; they expected to be placed
for a year and were mainly involved in teaching (usually
English) and health care. This remained broadly
characteristic of the volunteer group for the first ten
years of operation, but by 2008 things had changed.
The 1,500 plus active volunteers had an average age
of 41; they were recruited in Asia and Africa as well as
in the UK and the average stay was two years.
In the early years of the new millennium, VSO
revised its strategy and approach to reflect the changing
needs of the developing world. Many developing
countries now have their own source of school leavers
and graduates, so the focus, according to Mark Goldring
(until 2008 the VSO’s Chief Executive and a former VSO
volunteer himself ), is now on sharing skills for future
professionals rather than providing immediate, direct
services. In 2006 it announced that it would be
attempting to recruit experienced head teachers and
education managers rather than newly qualified teachers
in order to focus on helping governments and training
colleges to improve schools in developing countries;
a number have since travelled to Rwanda, Namibia and
Ghana to do just this.96 At the same time it launched an
appeal to recruit senior level managers who could work
with government departments and private businesses,
even if only for a short period of a few weeks, to help
with such things as developing financial and HR
In further developments which aim to broaden the
volunteer base, VSO is currently seeking volunteers
from the UK’s diaspora98 communities; it also organises
international recruitment which enables the sharing of
expertise between developing countries. As Mark
Goldring explained:
Someone who has worked with Aids in Uganda may have
skills which are more useful in Cambodia than someone
who has worked in the UK.99
As was the case 50 years ago, education workers still
comprise the largest professional group amongst VSO
volunteers (36 per cent in 2007–8). By contrast, one of
the next most important areas of activity for the charity
is, sadly, entirely new: work related to HIV and AIDS,
which involves 17 per cent of volunteers and is counted
separately from the broader work in health care which
now occupies 7 per cent of the volunteers.100
Learning from experience
From the outset, VSO saw that learning had to be
reciprocal between volunteers and host organisations.
The history of the movement offers a wealth of
anecdotes and stories which suggest that the learning
is very much a two-way process.101 While volunteers
can be, and are, prepared for many aspects of their
experience through briefings and training activities prior
to leaving the UK, some things just have to be learned
the hard way. Culture shock was recognised as a major
risk from the outset – especially since VSO has always
maintained that a volunteer goes
not as a crusader, still less as a social revolutionary, and
least of all as a representative or advocate of some British
or Western ‘way of life’, but as an assistant, to work
within an established framework and for objectives
already formulated by the local authority which the
volunteer undertakes to serve.102
Learning to fit in, therefore, is crucial; and
misunderstandings or ignorance about significant
cultural norms can create unforeseen risks.103 Later
there are ‘re-entry’ problems; many volunteer diaries
tell of reluctance to leave their host communities, and
the anticipated difficulty of fitting back into a more
structured life at home with far less autonomy and
responsibility than they experienced during their
In the early years, culture shock was often
exacerbated by isolation, since most placements were in
remote and inaccessible areas where communication
was difficult and infrequent. Whilst satellite technology
may have helped resolve some of these difficulties, the
lack of reliable infrastructure (electricity in particular)
still means that volunteers can feel very ‘alone’.
However, communication is at the heart of learning,
which remains the core of VSO’s mission. Writing in
2004, two information and learning professionals with
VSO described the importance of a professional
approach to learning and knowledge transfer.104
They outline the creation of a ‘knowledge map’ of the
organisation’s often fragmented and locally stored
expertise which can be the basis of a catalogue for
volunteers to search as and when they need it. They are
alert to the need to store and make this knowledge
accessible in a variety of ways (such as manuals,
training plans, booklets and electronic media like CDs
as well as on-line material) so that individuals can get
hold of it in an appropriate format. They see the
enormous potential of message boards and blogs,
organised around key initiatives such as those
concerning HIV and AIDS. Finally, they suggest that
knowledge sharing should become part of everyone at
VSO’s job description and a measure against which
individual performance is assessed.
Sharing skills, changing lives
Of course, the volunteers themselves should learn as
much as their hosts, and return to the UK with new
found or honed skills. As Goldring remarks:
Returned volunteers are better at improvisation and
problem solving. They have better interpersonal,
cross-cultural and management skills.105
The recession seems to have had an impact on VSO,
with the organisation experiencing double the usual
number of inquiries in the last three months of 2008.106
Clearly there is value in being able to add a spell of
voluntary work to a CV in a tough jobs market, and we
should remember that poorer countries have suffered
from the recession too, perhaps more acutely than
wealthier ones; so volunteers still have much to offer.
A final thought about the role of volunteering in the
modern world comes from a piece by an Australian
volunteer turned development academic.
At its worst, international volunteering can be imperialist,
paternalistic charity, volunteer tourism or a self-serving
quest for career and personal development on the part of
well-off Westerners. . . . At its best, I argue, international
volunteering brings benefits (and costs) to individual
volunteers and the organisation with which they work, at
the same time as providing the space for an exchange of
technical skills, knowledge and cross-cultural experience
in developing communities.107
Your tasks
1 Outline what you would include in a four week pre-placement briefing programme for new volunteers. Who
should be involved in its delivery?
2 How can an understanding of learning styles improve the effectiveness of your proposed programme?
Explain the practical implications for the way the programme would be run.
3 When and how could VSO use e-learning systems to offer continuing development to its management team
in the UK as well as its volunteers? You may wish to think about the needs and contributions of volunteers
both during and after their placement.
4 Given the very varied circumstances in which volunteers operate, what are the major challenges for VSO in
the creation of its ‘knowledge map’? How might these be overcome?
Notes and references
1 We wish gratefully to acknowledge Linda Carter, the
original author of this chapter.
2 Hulse, S. H., Deese, J. and Egeth, N. The Psychology of
Learning, fifth edition, McGraw-Hill (1980).
3 Payne, E. and Whittaker, L. Developing Study Skills, second
edition, Financial Times Prentice Hall (2006), p. xxi.
4 Schneider, S. C. and Barsoux, J. Managing Across Cultures,
second edition, Financial Times Prentice Hall (2003),
p. 142.
5 Crainer, S. and Dearlove, D. Financial Times Handbook of
Management, third edition, Pearson Education (2004),
p. 750.
6 Clements, P. and Jones, J. The Diversity ‘Training Handbook’:
A Practical Guide to Understanding and Changing Attitudes,
Kogan Page (2002), p. 9.
7 Burgoyne, J., Cunningham, I., Garratt, B., Honey, P.,
Mayo, A., Mumford, A., Pearn, M. and Pedler, M. ‘The
Debate Starts Here’, in People Management in Perspective:
A Collection of Key Articles Published in the Last Year on
Training and Development, IPD (1999), pp. 16–17.
8 Eraut, M. ‘Managers Hold Key to Developing Knowledge
and Skills’, Professional Manager, March 1998, p. 41.
9 Ibid.
10 Rainbird, H., Munro, A., Holly, L. and Leisten, R. The
Future of Work in the Public Sector: Learning and Workplace
Inequality, Working Paper no. 2 (second edition), ESRC
Research Programme on the Future of Work, 1999,
p. 68.
11 Nonaka, I. ‘The Knowledge Creating Company’ in Starkey,
K. (ed.) How Organisations Learn, International Thomson
Business Press (1996), pp. 18–32.
12 Watson, J. B. Behaviourism, JB Lippincott (1924).
13 Pavlov, I. Conditioned Reflexes, Oxford University Press
14 Selye, H. The Stress of Life, McGraw-Hill (1956).
15 Thorndike, E. L. The Fundamentals of Learning, Teachers
College, New York (1932).
16 Skinner, B. F. Science and Human Behaviour, Macmillan
(1953) and Skinner, B. F. About Behaviourism, Jonathan
Cape (1974).
17 Stewart, S. and Joines, V. TA Today: A New Introduction to
Transactional Analysis, Lifespace Publishing (1987).
18 Armstrong, M. Employee Reward, CIPD, May 2002.
19 Bandura, A. Social Learning Theory, Prentice Hall (1977).
20 Miller, N. E. and Dollard, J. C. Personality and Psychotherapy,
McGraw-Hill (1950).
21 See, for example, Whitehead, M. ‘Churning Questions’,
People Management, 30 September 1999, pp. 46–9.
22 Gallwey, W. T. The Inner Game of Golf, Jonathan Cape
(1981), p. 19.
23 Kohler, W. The Mentality of Apes, Harcourt, Brace and
World (1925).
24 Tolman, E. C. Purposive Behaviour in Animals and Men,
The Century Co. Appleton–Century Crofts (1932).
25 Piaget, J. The Language and Thought of the Child, Harcourt,
Brace and Co. (1926).
26 Glaser, R. ‘Learning Theory and Instruction’, Paper for
International Congress of Psychology 1992, cited in
Assessment Issues in Higher Education (report produced for
the Department of Employment by Atkins, M. J., Beattie, J.
and Dockrell, W. B. (1993)).
27 Davis, L. Experience-Based Learning within the Curriculum,
Council for National Academic Awards (1990).
28 Kolb, D. A. Experiential Learning: Experience as the Source of
Learning and Development, Prentice Hall (1985).
29 Kolb, D. A., Rubin, I. M. and McIntyre, J. M. Organizational
Psychology: An Experiential Approach to Organizational
Behaviour, Prentice Hall (1984).
30 Kline, N. Time to Think, Ward Lock (2001), p. 35.
31 Hamblin, B., Keep, J. and Ash, K. Organisational
Change and Development: A Reflective Guide for Managers,
Trainers and Developers, Financial Times Prentice Hall
(2001), p. 5.
32 Coghlan, D. and Brannick, T. Doing Action Research in Your
Own Organization, Sage Publications (2001).
33 Weinstein, K. Action Learning: A Practical Guide, Gower
Press (1999), p. 187.
34 Thornhill, A., Lewis, P., Millmore, M. and
Saunders, M. N. K. Managing Change: A Human Resource
Strategy Approach, Financial Times Prentice Hall (2000).
35 Honey, P. and Mumford, A. The Manual of Learning Styles,
third edition, Honey (1992).
36 Honey, P. ‘Styles of Learning’, in Mumford, A. (ed.)
Handbook of Management Development, fourth edition,
Gower (1994).
37 Eysenck, M. ‘Learning, Memory and Personality’, in
Eysenck, H. J. (ed.) A Model of Personality, Springer (1981),
pp. 169–209.
38 Hirsch, S. K. Using the Myers–Briggs Type Indicator in
Organisations, second edition, Consulting Psychologists
Press Inc. (1991).
39 Mayo, A. and Lank, E. The Power of Learning: A Guide to
Gaining Competitive Advantage, IPD (1994) pp. 135–6.
40 See, for example, Scarborough, H. and Swan, J. Case Studies
in Knowledge Management, Institute of Personnel and
Development (1999).
41 Van der Linde, K., Horney, N. and Koonce, R. ‘Seven Ways
to Make Your Training Department One of the Best’,
Training and Development, vol. 51, no. 8, August 1997,
pp. 20–8.
42 Pickard, J. ‘Learning That Is Far From Academic’, People
Management, 9 March 1995.
43 Coulson-Thomas, C. ‘Knowledge Is Power’, Chartered
Secretary, January 1998, pp. 24–5.
44 Nonaka, I. ‘The Knowledge Creating Company’, in Starkey,
K. (ed.) How Organizations Learn, International Thomson
Business Press (1996), pp. 18–32.
45 Tan, J. ‘Knowledge Management – Just More Buzzards?’
British Journal of Administrative Management, March–April
2000, pp. 10–11.
46 Santosus, M. and Surmacz, J. ‘The ABCs of Knowledge
Management’, CIO Magazine, 23, May 2001.
47 Kerr, M. ‘Knowledge Management’, The Occupational
Psychologist, no. 48, May 2003, pp. 24–6.
48 McElroy, M. W. The New Knowledge Management:
Complexity, Learning and Sustainable Innovation,
Butterworth-Heinemann (2002).
49 ‘Emerging Technologies for Learning: A Becta Review of
How Technology Is Changing Learning’, May 2006.
50 Peters, T. Re-imagine, Dorling Kindersley (2003), p. 13.
51 Belhoula, A. ‘My Car Understands Me’, Pictures of the
Future, Siemens, Fall 2005, pp. 56–8.
52 www.jisc.ac.uk/whatwedo/themes/elearning (accessed
18 February 2009).
53 Bell, M. and Steward, C. ‘The Edinburgh Scenarios:
Global Scenarios for the Future of E-learning’, eLearn
International World Summit, Edinburgh 2004,
54 Mann, S. ‘“Push” and “Pull” of Online Learning’,
Professional Manager, vol. 17, no. 1, January 2008,
pp. 26–8.
55 Cohen, S. ‘Knowledge Management’s Killer App’,
Training and Development, vol. 52, no. 1, January 1998,
pp. 50–7.
56 Baker, M. ‘The Knowledge People’, The British Journal of
Administrative Management, March–April 2000, pp. 18–19.
57 See, for example: Personnel Management articles,
September/October 1995.
58 Cohen, op. cit.
59 Koulopoulos, T. Smart Companies, Smart Tools, Van
Nostrand Rheinhold (1997), p. 54.
60 Harrison, R. Employee Development, Institute of Personnel
and Development, second edition (2000), pp. 405–6.
61 Santosus and Surmacz op. cit.
62 Malhotra, Y. ‘Why Knowledge Management Systems Fail:
Enablers and Constraints of Knowledge Management in
Human Enterprises’, in Holsapple, C. W. (ed.) Handbook
on Knowledge Management 1: Knowledge Matters, Springer
Verlag, Heidelberg Germany (2002), pp. 577–90. Can also
be accessed at http://www.brint.org /whyKMSFail.htm.
63 McBrierty, V. and Kinsella, R. P. ‘Intellectual Property in a
Knowledge Society – The Role of the Universities’, Industry
and Higher Education, vol. 11, no. 6, December 1997,
pp. 341–8.
Harrison, op. cit.
Mayo, E. The Social Problems of an Industrial Civilization,
Routledge and Kegan Paul (1949).
Morgan, G. ‘Emerging Waves and Challenges: The Need
for New Competencies and Mindsets’, in Henry, J. (ed.)
Creative Management, Sage Publications (1991),
pp. 284–93.
Agor Weston, H. ‘The Logic of Intuition: How Top
Executives Make Important Decisions’, in Henry, J. (ed.)
Creative Management, Sage Publications (1991), pp.
163–76; and Isenberg, D. ‘How Senior Managers Think’,
Harvard Business Review, November 1984, pp. 81–90.
West, M. A. Developing Creativity in Organizations, BPS
(1997), p. 135.
Goodman, M. Creative Management, Prentice Hall (1995),
p. 86.
Boden, M. The Creative Mind, Abacus (1992).
Ibid., p. 245.
Henry, J. ‘Making Sense of Creativity’, in Henry, J. (ed.)
Creative Management, Sage Publications (1991), pp. 3–11.
Goodman, M. Creative Management, Prentice Hall (1995),
p. 86.
Wallas, G. The Art of Thought, Cape (1926).
West, M. A. Developing Creativity in Organizations, BPS
Goodman, M. Creative Management, Prentice Hall (1995).
Hurst, D. K., Rush, C. and White, R. E. ‘Top Management
Teams and Organisational Renewal’, in Henry, J. (ed.)
Creative Management, Sage Publications (1991),
pp. 232–53.
Argyris, C. Strategy, Change and Defensive Routines, Pitman
?What If! Sticky Wisdom: How to Start a Creative Revolution
at Work, Capstone Publishing (2002).
Hadfield, C. ‘A Creative Education: How Creativity and the
Arts Enhance MBA and Executive Development
Programmes’, Art and Business, July 2000.
Rickards, T., Runco, M. A. and Moger, S. (eds) The
Routledge Companion to Creativity, Routledge (2009).
Clutterbuck, D. and Wynne, B. ‘Mentoring and Coaching’,
in Mumford, A. (ed.) Handbook of Management
Development, fourth edition, Gower (1994), p. 156.
Clutterbuck, D. ‘Crash Course in Mentoring’, Management
Today, April 2008, p. 24.
Somers, M. ‘Coaching Is a Key Skill for Managers’,
Professional Manager, vol. 17, no. 2, March 2008, pp. 24–6.
Williams, D. I. and Irving, J. A. ‘Coaching: An Unregulated,
Unstructured and (Potentially) Unethical Process’, The
Occupational Psychologist, vol. 42, April 2001.
Chapman, M. ‘Foreward – Towards a Psychology of
Coaching’, The Occupational Psychologist Special Issue:
Coaching Psychology, vol. 49, August 2003.
Woodruffe, C. ‘Could Do Better? Must Do Better!’,
Manager: The British Journal of Administrative Management,
January 2008, pp. 14–16.
Starr, J. The Coaching Manual: The Definitive Guide to the
Process, Principles and Skills of Personal Coaching, Pearson
Education Ltd (2003), p. 30.
Whitmore, J. Coaching for Performance, second edition,
London: Nicholas Brearley (1996).
Grant, A. M. and Greene, J. Coach Yourself – Make Real
Change in Your Life, Pearson Education (2001), p. 18.
91 Clutterbuck, D. and Wynne, B. ‘Mentoring and Coaching’,
in Mumford, A. (ed.) Handbook of Management
Development, fourth edition, Gower (1994), p. 156.
92 For further information on study skills, see Payne, E. and
Whittaker, L. Developing Essential Study Skills, second
edition, Financial Times Prentice Hall (2006).
93 VSO/DFID Partnership Programme Arrangement (2) for
94 Adams, M. Voluntary Service Overseas: The Story of the First
Ten Years, Faber and Faber (1968), p. 48.
95 Press release on DFID website, 28 March 2008,
Half-a-century-of-volunteering-VSO-at-50/ (accessed
8 August 2009).
96 BBC News website ‘Heads Learn from Africa Challenge’,
15 June 2009 (accessed 9 August 2009).
97 BBC News website ‘Charity Seeks Volunteer Managers’,
25 July 2006 (accessed 4 August 2009).
98 Any body of people living outside their traditional
homeland (SOED).
99 Bell, S. ‘The First VSO Volunteer’, BBC News website,
15 May 2008 (accessed 9 August 2009).
100 VSO website ‘What We Do’, http://www.beso.org/
what-we-do/ (accessed 12 August 2009).
101 Stories and blogs can be found on the VSO’s website;
102 Adams op. cit., p. 89.
103 For instance, the episode of Gillian Gibbons – not a VSO
worker – who, in 2007, found herself jailed in Sudan for
allowing her primary school class to name a teddy bear
‘Mohammed’. See an interview about her experience at
8010407.stm (accessed 8 August 2009).
104 Gilmour, J. and Stancliffe, M. ‘Managing Knowledge in
an International Organisation: The Work of Voluntary
Services Overseas (VSO)’, Records Management Journal,
vol. 14, no. 3, 2004, pp. 124–8.
105 Gould, M. ‘Leading Questions: Interview with Mark
Goldring’, The Guardian, 6 June 2007, http://
guardiansocietysupplement2 (accessed 12 August 2009).
106 Thorpe, A. ‘Recession Sends Volunteer Numbers Soaring’,
The Observer, 21 December 2008.
107 Devereux, P. ‘International Volunteering for Development
and Sustainability: Outdated Paternalism or a Radical
Response to Globalisation?’, Development in Practice,
vol. 18, no. 3, June 2008, pp. 357–70.
Now that you have finished reading this chapter, visit MyManagementLab at
www.pearsoned.co.uk/mymanagementlab to find more learning resources
to help you make the most of your studies and get a better grade.
Perceived reality, not actual reality, is the key to understanding
behaviour. How we perceive others and ourselves is at the root of
our actions and intentions. Understanding the perceptual process
and being aware of its complexities can help develop insights
about ourselves and may help in reading others. The words
we use, the way we look and the body language we display
communicate our view of the world. The importance of perception
and communications in guiding our behaviour needs to be
understood for effective relationships with others.
Learning outcomes
After completing this chapter you should be able to:
explain the nature of the perceptual process and selectivity and attention;
detail internal and external factors that provide meaning to the individual;
examine the organisation and arrangement of stimuli, and perceptual
explain the importance of selection and attention, and organisation and
identify problems and difficulties in perceiving other people and nonverbal communications;
evaluate the relevance of neuro-linguistic programming and transactional
review the importance of an understanding of perception and
Critical reflection
‘Many people do not consciously think about the person with whom they
are interacting. They translate their model of the world from their own
perceptions and assume that others are working from the same model.
There is no way managers can cope with so many individual perspectives
so they might just as well rely on their own judgement.’
What are your views?
The significance of individual differences is particularly apparent when focusing on the process of perception. We all see things in different ways. We all have our own, unique picture
or image of how we see the ‘real’ world and this is a complex and dynamic process. We do
not passively receive information from the world; we analyse and judge it. We may place
significance on some information and regard other information as worthless; and we may
be influenced by our expectations so that we ‘see’ what we expect to see or ‘hear’ what we
expect to hear. Although general theories of perception were first proposed during the last
century, the importance of understanding the perceptual process is arguably even more
significant today. Perception is the root of all organisational behaviour; any situation can
be analysed in terms of its perceptual connotations. Consider, for instance, the following
A member of the management team has sent an email to team leaders asking them to
provide statistics of overtime worked within their section during the past six months and
projections for the next six months. Mixed reactions could result:
One team leader may see it as a reasonable and welcome request to provide information
which will help lead to improved staffing levels.
Another team leader may see it as an unreasonable demand, intended only to enable
management to exercise closer supervision and control over the activities of the section.
A third team leader may have no objection to providing the information but be suspicious
that it may lead to possible intrusion into the running of the section.
A fourth team leader may see it as a positive action by management to investigate ways
of reducing costs and improving efficiency throughout the organisation.
Each of the section heads perceives the email communication differently based on their own
experiences. Their perceived reality and understanding of the situation provokes differing
In addition, there are likely to be mixed reactions to the use of email as the means of
communication in this instance.
We are all unique; there is only one Laurie Mullins and there is only one of you. We all have
our own ‘world’, our own way of looking at and understanding our environment and the
people within it. A situation may be the same but the interpretation of that situation by
two individuals may be vastly different. For instance, listening to a podcast may be riveting
to one person but a boring way to spend 20 minutes to another. One person may see a
product as user-friendly but another person may feel that it is far too simplistic and basic.
The physical properties may be identical, but they are perceived quite differently because
each individual has imposed upon the object/environment/person their own interpretations,
their own judgement and evaluation.
A possible framework for the study of perception and communication is set out in
Figure 6.1.
It is not possible to have an understanding of perception without taking into account its
sensory basis. We are not able to attend to everything in our environment; our sensory
systems have limits. The physical limits therefore insist that we are selective in our attention
Figure 6.1
A framework of study for perception and communication
and perception. Early pioneer work by psychologists has resulted in an understanding of
universal laws that underlie the perceptual process. It seems that we cannot help but search
for meaning and understanding in our environment. The way in which we categorise and
organise this sensory information is based on a range of factors including the present situation, our emotional state and any experiences of the same or a similar event.
Some information may be considered highly important to us and may result in immediate
action or speech; in other instances, the information may be simply ‘parked’ or assimilated
in other ideas and thoughts. The link between perception and memory processes becomes
obvious. Some of our ‘parked’ material may be forgotten or, indeed, changed and reconstructed
over time.2
Figure 6.2
Perceptions as information processing
We should be aware of the assumptions that are made throughout the perceptual process,
below our conscious threshold. We have learned to take for granted certain constants in our
environment. We assume that features of our world will stay the same and thus we do not
need to spend our time and energy seeing things afresh and anew. We make a number of
inferences throughout the entire perceptual process. Although these inferences may save
time and speed up the process, they may also lead to distortions and inaccuracies.
Perception as information processing
It is common to see the stages of perception described as an information-processing system:
(top-down) information (stimuli) (Box A in Figure 6.2) is selected at one end of the process
(Box B), then interpreted (Box C), and translated (Box D), resulting in action or thought
patterns (Box E), as shown in Figure 6.2. However, it is important to note that such a model
simplifies the process and although it makes it easy to understand, it does not do justice
to the complexity and dynamics of the process. In certain circumstances, we may select
information out of the environment because of the way we categorise the world. The dotted
line illustrates this ‘bottom-up’ process.
For instance, if a manager has been advised by colleagues that a particular trainee has
managerial potential, the manager may be specifically looking for confirmation that those
views are correct. This process has been known as ‘top-down’ because the cognitive processes
are influencing the perceptual readiness of the individual to select certain information.
This emphasises the active nature of the perceptual process. We do not passively digest the
information from our senses, but we actively attend and indeed, at times, seek out certain
information. (See also the discussion on self-fulfilling prophecy later in this chapter.)
Meaning to the individual
The process of perception explains the manner in which information (stimuli) from the
environment around us is selected and organised to provide meaning for the individual.
Perception is the mental function of giving significance to stimuli such as shapes, colours,
movement, taste, sounds, touch, smells, pain, pressures and feelings. Perception gives rise to
individual behavioural responses to particular situations.
Figure 6.3
Despite the fact that a group of people may ‘physically see’ the same thing, they each have
their own version of what is seen – their perceived view of reality. Consider, for example,
the image (published by W. E. Hill in Puck, 6 November 1915) shown in Figure 6.3. What
do you see? Do you see a young, attractive, well-dressed woman? Or do you see an older,
poor woman? Or can you now see both? And who can say with certainty that there is just
the one, ‘correct’ answer?
Internal and external factors
The first stage in the process of perception is selection and attention. Why do we attend to
certain stimuli and not to others? There are two important factors to consider in this discussion: first, internal factors relating to the state of the individual; second, the environment
and influences external to the individual. The process of perceptual selection is based, therefore, on both internal and external factors.
Our sensory systems have limits – we are not able to see for ‘miles and miles’ or hear very lowor very high-pitched sounds. All our senses have specialist nerves that respond differently to
the forms of energy that are received. For instance, our eyes receive and convert light waves
into electrical signals that are transmitted to the visual cortex of the brain and translated into
Our sensory system is geared to respond to changes in the environment. This has particular
implications for the way in which we perceive the world and it explains why we are able to
ignore the humming of the central heating system but notice instantly a telephone ringing.
The term used to describe the way in which we disregard the familiar is ‘habituation’.
Sensory limits or thresholds
As individuals we may differ in terms of our sensory limits or thresholds. Without eye glasses
some people would not be able to read a car’s number plate at the distance required for safety.
People differ not only in their absolute thresholds but also in their ability to discriminate
between stimuli. For instance, it may not be possible for the untrained to distinguish
between different types of wine but this would be an everyday event for the trained sommelier. We are able to learn to discriminate and are able to train our senses to recognise small
differences between stimuli. It is also possible for us to adapt to unnatural environments and
learn to cope.3
We may also differ in terms of the amount of sensory information we need to reach our
own comfortable equilibrium. Some individuals would find loud music at a party or gig
uncomfortable and unpleasant, whereas for others the intensity of the music is part of
the total enjoyment. Likewise, if we are deprived of sensory information for too long this
can lead to feelings of discomfort and fatigue. Indeed, research has shown that if the
brain is deprived of sensory information then it will manufacture its own and subjects will
hallucinate.4 It is possible to conclude therefore that the perceptual process is rooted to the
sensory limitations of the individual.
Psychological factors
Psychological factors will also affect what is perceived. These internal factors, such as
personality, learning and motives, will give rise to an inclination to perceive certain stimuli
with a readiness to respond in certain ways. This has been called an individual’s perceptual
set (see Figure 6.4).
Differences in the ways individuals acquire information have been used as one of
four scales in the Myers–Briggs Type Indicator (discussed in Chapter 4). They distinguish
individuals who ‘tend to accept and work with what is given in the here-and-now, and thus
become realistic and practical’ (sensing types) from others who go beyond the information
from the senses and look at the possible patterns, meanings and relationships. These
‘intuitive types’ ‘grow expert at seeing new possibilities and new ways of doing things’. Myers
and Briggs stress the value of both types and emphasise the importance of complementary
skills and variety in any successful enterprise or relationship.5
Figure 6.4
Factors affecting an individual’s perceptual set
Personality and perception have also been examined in the classic experiments by Witkin
et al. on field dependence/independence. Field-dependent individuals were found to be
reliant on the context of the stimuli, the cues given in the situation, whereas field-independent
subjects relied mainly on their internal bodily cues and less on the environment. These
experiments led Witkin to generalise to other settings outside the psychological laboratory
and to suggest that individuals use, and need, different information from the environment
to make sense of their world.6
The needs of an individual
The needs of an individual will affect their perceptions. For example, a manager deeply
engrossed in preparing an urgent report may screen out ringing telephones, the sound of
computers, people talking and furniture being moved in the next office, but will respond
readily to the smell of coffee brewing. The most desirable and urgent needs will almost
certainly affect an individual perceptual process. Members of a church choir might well form
a perception of the minister quite different from that of a parishioner seeking comfort after
the recent death of a close relative.
The ‘Pollyanna Principle’ claims that pleasant stimuli will be processed more quickly
and remembered more precisely than unpleasant stimuli. However, it must be noted that
intense internal drives may lead to perceptual distortions of situations (or people) and an
unwillingness to absorb certain painful information. This will be considered later in this
Learning from experiences has a critical effect throughout all the stages of the perceptual
process. It will affect the stimuli perceived in the first instance, and then the ways in which
those stimuli are understood and processed, and finally the response which is given. For
example, it is likely that a maintenance engineer visiting a school for the first time will notice
different things about it than will a teacher attending an interview or a child arriving on the
first day. The learning gained from experiences colours what is seen and processed.
Critical reflection
‘Popular sports, film or television celebrities often appear to have a far greater impact
on perception, communications and behaviour than any textbook, manager or training
Why do you think this is the case and to what extent does this apply to you? Is it
necessarily a bad thing?
There are many ways of describing culture but the following definition from Schein helps
relate culture to diversity and perception.
A pattern of basic assumptions – invented, discovered or developed by a given group as it learns to cope
with its problems of external adaptation and internal integration – that has worked well enough to be
considered valuable and therefore to be taught to new members as the correct way to perceive, think
and feel in relation to these problems.7
The ways in which people interact are also subject to cultural differences and such differences may be misconstrued. Embarrassment and discomfort can occur when emotional lines
are broken. This was demonstrated in an American study that researched the experience of
Japanese students visiting the USA for the first time. The researchers felt that the Japanese
students faced considerable challenges in adapting to the new culture. Some of the surprises
that the students reported related to social interaction:
Casual visits and frequent phone calls at midnight to the host room-mate were a new experience to
them. The sight of opposite-sex partners holding hands or kissing in public places also surprised them .
. . That males do cooking and shopping in the household or by themselves, that fathers would play with
children, and that there was frequent intimacy displayed between couples were all never-heard-of in
their own experiences at home.8
The ways in which words are used and the assumptions made about shared understanding are dependent upon an individual’s culture and upbringing. In cultures where it is
‘normal’ to explain all details clearly, explicitly and directly (such as the USA), other cultures
may find the ‘spelling out’ of all the details unnecessary and embarrassing. In France,
ambiguity and subtlety are expected and much is communicated by what is not said. Hall
distinguished low-context cultures (direct, explicit communication) from high-context
cultures (meaning assumed and non-verbal signs significant).9
Those organizations that can create a culture that challenges unhelpful perceptual processes
(stemming, say, from ignorance, prejudice or arrogance) will, in our view, be more able to absorb new
information and respond intelligently to change. Broadening our mind, however, is much easier said
than done. To understand why this is so, it is worth looking at influences on our perceptual processes.
At the most fundamental level lie our values and beliefs. These also colour what we see and how we
interpret events. Given this, it is important we reflect on how our own values influence the decisions
we make.10
McCrum refers to a joke circulated on the Web by disaffected UN staff. A worldwide survey
was conducted by the UN. The only question asked was: ‘Would you please give your honest
opinion about solutions to the food shortage in the rest of the world?’ The survey was a
failure. In Africa they didn’t know what ‘food’ meant; in India they didn’t know what ‘honest’
meant; in Europe they didn’t know what ‘shortage’ meant; in China they didn’t know what
‘opinion’ meant; in the Middle East they didn’t know what ‘solution’ meant; in South America
they didn’t know what ‘please’ meant; and in the USA they didn’t know what ‘the rest of the
world’ meant.11
Cultural differences often lead to stereotypical views. For example, Stewart-Allen discusses
a common mindset about Americans:
American business people seem to suffer from a long-standing image problem abroad. The stereotypical
view is that they are loud and impatient with a ‘bigger is better’ attitude; they lecture others about how
to do business the American way and are insular in outlook.
However, a more accurate assumption is that Americans lack international exposure.12
Stereotyping is discussed later in this chapter.
Diversity Resource Handbook
Portsmouth Hospitals NHS Trust has produced a comprehensive ‘Diversity Resource
Handbook’ that recognises the diversities of traditions, cultures and religious needs within a
multi-ethnic and multicultural society. The booklet is intended to provide practical advice and
guidelines for the delivery of a sensitive service to the diverse community they serve. The
booklet sets out advice on race, religious and cultural awareness; multicultural requirements;
major world religions; interpreting and translating; sexual orientation and gender; aids to
communication; and useful contacts.
Diversity Resource Handbook – continued
Myths and realities
There are many different myths concerning people from ethnic minorities. A few of these
myths are listed below:
People from ethnic backgrounds ‘look after themselves adequately’ and therefore do not
require much outside help.
Elderly people from ethnic minorities are generally looked after by their own families.
Black staff are the most suited to administer treatment of ethnic minority clients.
Awareness in a multicultural society – some guidelines
Be aware that in some communities it may not be the custom to shake hands, especially
among women. A woman may feel uncomfortable or may not wish to be in a room with a
man who is not a relative. An act of comfort, for example putting an arm around a person,
may cause embarrassment or offence.
Be sensitive to the difficulties that may be caused for ethnic minorities by using jargon and
slang. Using colloquialisms or terms of endearment may cause offence: for example, ‘love’,
‘dear’ or ‘darling’.
Appreciate cultural differences in body language: for example, looking away instead of
maintaining eye contact is not necessarily a sign of dishonesty or disrespect. In some
communities it may be the opposite.
Ask for the individual’s personal and family name. Don’t ask someone what his or her
Christian name or surname is.
Just because someone responds to questions in English they may not fully understand
what is being said.
Don’t underestimate the influence of your own cultural background on your unconscious
perceptions and behaviours.
Source: From Portsmouth Hospitals NHS Trust Diversity Resource Handbook. Courtesy of Florise Elliott, Diversity
Advisor. Reproduced with permission.
The importance of language
Our language plays an important role in the way we perceive the world. Our language not only
labels and distinguishes the environment for us but also structures and guides our thinking
patterns. Even if we are proficient skiers, we do not have many words we can use to describe
the different texture of snow; we would be reliant on using layers of adjectives. The Inuit,
however, have 13 words for snow in their language. Our language is part of the culture we
experience and learn to take for granted. Culture differences are relevant because they
emphasise the impact of social learning on the perception of people and their surroundings.
So, language not only reflects our experience but also shapes whether and what we
experience. It influences our relationships with others and with the environment. Consider
a situation where a student is using a library in a UK university for the first time. The student
is from South Asia where the word ‘please’ is incorporated in the verb and in intonation;
a separate word is not used. When the student requests help, the assistant may consider the
student rude because they did not use the word ‘please’. By causing offence the student has
quite innocently affected the library assistant’s perceptions.
Much is also communicated in how words are said and in the silences between words.
In the UK speech is suggestive and idiomatic speech is common:
‘Make no bones about it’ (means get straight to the point)
‘Sent to Coventry’ (means to be socially isolated).
And action is implied rather than always stated:
‘I hope you won’t mind if I’ (means ‘I am going to’)
‘I’m afraid I really can’t see my way to . . .’ (means ‘no’).
Conversational pitfalls
A well-known quotation, attributed to George Bernard Shaw, is:
‘England and America are two countries divided by a common language.’
From frequent visits to America, the author can give numerous personal testimonies to this,
including these actual words: ‘I am just going to the trunk (boot of the car) to get my purse
(handbag), fanny bag (bum bag) and money wallet (purse).’
McCrum gives some examples of conversational pitfalls:13
Far East
Greece, S.Cyprus
Latin America
The Netherlands
New Zealand
Northern Ireland
South Africa
US South
talking disparagingly about Aboriginal people
human rights; Tibet, Taiwan; sex; religion; bureaucracy
confusing Japanese, Chinese or Korean in any combination
asking for Turkish coffee
poverty; sex; dowry deaths
referring to Great Britain as the ‘Mainland’; talking about ‘the British
Isles’ to include Ireland; asking why they use euros rather than
pounds sterling
talking about ‘Americans’ to mean just North America
calling the country ‘Holland’ (inaccurate and offensive to people not
from the Holland provinces)
using the term ‘Mainland’ for either North or South islands; mispronouncing Maori place-names
asking people whether they’re Catholic or Protestant
corruption, contract killings, etc.
banging on about apartheid (it ended some time ago)
criticism of bullfighting
the Confederate flag
Source: McCrum, M. Going Dutch in Beijing, Profile Books (2007) pp. 44–5. Reproduced with permission
from Profile Books Ltd.
The knowledge of, familiarity with, or expectations about a given situation or previous experiences will influence perception. External factors refer to the nature and characteristics of the
stimuli. There is usually a tendency to give more attention to stimuli which are, for example,
in strong contrast to their background.
Any number of these factors may be present at a given time or in a given situation. The use
of these stimuli is a key feature in the design of advertising. (Think of your own examples.)
It is the total pattern of the stimuli together with the context in which they occur that
influence perception. For example, it is usually a novel or unfamiliar stimulus that is more
noticeable, but a person is more likely to perceive the familiar face of a friend among a group
of people all dressed in the same-style uniform (see Figure 6.5).14
Figure 6.5
Is everybody happy?
Source: Block, J. R. and Yuker, H. E. Can You Believe Your Eyes?, Robson Books (2002), p. 163.
We are all familiar with the expression ‘what on earth is that doing here?’. The sight of a
fork-lift truck on the factory floor of a manufacturing organisation is likely to be perceived
quite differently from one in the corridor of a university. Consider another example: the
sight of a jet ski (left temporarily by someone moving house) in the garage of a person
known to be scared of water is likely to elicit such a remark. Yet the sight of numerous jet
skis on the beach is likely to pass without comment. The word ‘terminal’ is likely to be
perceived differently in the context of: (i) a hospital, (ii) an airport or (iii) a computer firm.
Consumer psychologists and marketing experts apply these perceptual principles with
extraordinary success for some of their products.
The Gestalt School of Psychology led by Max Wertheimer claimed that the process of
perception is innately organised and patterned. It described the process as one that has
built-in field effects. In other words, the brain can act like a dynamic, physical field in which
interaction among elements is an intrinsic part. The Gestalt School produced a series of
principles, which are still readily applicable today. Some of the most significant include the
figure and ground
Figure and ground
The figure–ground principle states that figures are seen against a background. The figure does
not have to be an object; it could be merely a geometrical pattern. Many textiles are perceived
as figure–ground relationships. Figure–ground relationships are often reversible, as in the
popular example shown in Figure 6.6. What do you see first? Do you see a white chalice
(or small stand shape) in the centre of the frame? Or do you see the dark profiles of twins
facing each other on the edge of the frame? Now look again. Can you see the other shape?
The figure–ground principle has applications in all occupational situations. It is important
that employees know and are able to attend to the significant aspects (the figure) and treat
other elements of the job as context (background). Early training sessions aim to identify
and focus on the significant aspects of a task. Managerial effectiveness can also be judged in
terms of chosen priorities (the figure). Stress could certainly occur for those employees who
are uncertain about their priorities and are unable to distinguish between the significant and
less significant tasks. They feel overwhelmed by the ‘whole’ picture.
The grouping principle refers to the tendency to organise shapes and patterns instantly into
meaningful groupings or patterns on the basis of their proximity or similarity. Parts that are
close in time or space tend to be perceived together. For example, in Figure 6.7 (a), the workers
are more likely to be perceived as nine independent people, but in Figure 6.7(b), because of the
proximity principle, the workers may be perceived as three distinct groups of people. Consider
the importance of the layout of the room and tables for a large wedding reception and the perception of people in terms of both at which table they are sat, and with whom they are grouped!
Taxi firms often use the idea of grouping to display their telephone number. In the
example below, which of the following numbers – (a), (b) or (c) – is most likely to be
remembered easily?
Figure 6.6
Figure 6.7
(a) 347 474 (b) 347474 (c) 34 74 74
Similar parts tend to be seen together as forming a familiar group.
In the following example there is a tendency to see alternate lines of characters – crosses
and noughts (or circles). This is because the horizontal similarity is usually greater than the
vertical similarity. However, if the page is turned sideways the figure may be perceived as
alternate noughts and crosses in each line.
It is also interesting to note that when asked to describe this pattern many people refer to
alternate lines of noughts and crosses – rather than crosses and noughts.
There is also an example here of the impact of cultural differences, mentioned earlier.
The author undertook a teaching exchange in the USA and gave this exercise to a class of
American students. Almost without exception the students described the horizontal pattern
correctly as alternate rows of crosses and noughts (or zeros). The explanation appears to be
that Americans do not know the game as ‘noughts and crosses’ but refer to it as ‘tic-tac-toe’.
There is also a tendency to complete an incomplete figure – to fill in the gaps (mentally)
and to perceive the figure as a whole. This creates an overall and meaningful image for the
individual rather than an unconnected series of lines or blobs.
In the example in Figure 6.815 most people are likely to see the blobs as either the letter
B or the number 13, possibly depending on whether at the time they had been more
concerned with written material or dealing in numbers. However, for some people, the
figure may be described in terms of just a series of 11 discrete blobs or perceived as
some other (to them) meaningful pattern/object. According to Gestalt theory, perceptual
organisation is instant and spontaneous. We cannot stop ourselves making meaningful
assumptions about our environment. The Gestaltists emphasised the ways in which the
elements interact and claimed that the new pattern or structure perceived had a character of
its own, hence the famous phrase ‘the whole is more than the sum of its parts’.
Figure 6.8
Source: King, R. A. Introduction to Psychology, third edition, McGraw-Hill (1996).
Reproduced with permission from the author, Professor Richard King.
Here are some examples to help you judge your perceptive skills. In Figure 6.9 try reading
aloud the four words.
Figure 6.9
M–A–C–P–H–E–R– S–O–N
M–A–C–H–I–N–E –R–Y
It is possible that you find yourself ‘caught’ in a perceptual set that means that you tend to
pronounce ‘machinery’ as ‘MacHinery as if it too were a Scottish surname.
In Figure 6.10, which of the centre blue circles is the larger – A or B?
Figure 6.10
Although you may have guessed that the two centre circles are in fact the same size, the
circle on the right (B) may well appear larger because it is framed by smaller circles. The
centre circle on the left (A) may well appear smaller because it is framed by larger circles.
In Figure 6.11 try saying the colour of the word, not the word itself.
Figure 6.11
The physiological nature of perception has already been discussed briefly but it is of
relevance here in the discussion of illusions. Why does the circle on the right in Figure 6.10
look bigger? Why is it difficult to say the colour, not the word? These examples demonstrate
the way our brain can be fooled. Indeed, we make assumptions about our world that go
beyond the pure sensations our brain receives.
Beyond reality
Perception goes beyond the sensory information and converts patterns to a three-dimensional
reality that we understand. This conversion process, as we can see, is easily tricked. We may
not be aware of the inferences we are making as they are part of our conditioning and
learning. The Stroop experiment illustrates this perfectly.16 (See Assignment 1 at the end of
this chapter.)
An illustration of the way in which we react automatically to stimuli is the illusion of the
impossible triangle (see Figure 6.12).
Figure 6.12
Source: Gregory, R. L. Odd Perceptions, Methuen (1986), p. 71. Reprinted by permission of the publishers, Routledge, a division of Taylor &
Francis Ltd.
Even when we know the triangle is impossible we still cannot stop ourselves from completing the triangle and attempting to make it meaningful. We thus go beyond what is given
and make assumptions about the world, which in certain instances are wildly incorrect.
Psychologists and designers may make positive use of these assumptions to project positive
images of a product or the environment. For instance, colours may be used to induce certain
atmospheres in buildings; designs of wallpaper or texture of curtains may be used to create
feelings of spaciousness or cosiness. Packaging of products may tempt us to see something
as bigger or perhaps more precious.
What information do we select and why? The social situation consists of both verbal and
non-verbal signals. The non-verbal signals include:
bodily contact
head nods
facial expression
direction of gaze
dress and appearance
non-verbal aspects of speech.
Verbal and non-verbal signals are co-ordinated into regular sequences, often without
the awareness of the parties. The mirroring of actions has been researched and is called ‘postural echoing’.17 There is considerable evidence to indicate that each person is constantly
influencing the other and being influenced.18
Cook has suggested that in any social encounter there are two kinds of information that
can be distinguished:
static information – information which will not change during the encounter – for example
colour, gender, height and age; and
dynamic information – information which is subject to change – for example mood,
posture, gestures and expression.19
Culture and socialisation
The meanings we ascribe to these non-verbal signals are rooted in our culture and early
socialisation. Thus it is no surprise that there are significant differences in the way we
perceive such signals. For instance, dress codes differ in degrees of formality. Schneider and
Barsoux summarise some interesting cultural differences:
Northern European managers tend to dress more informally than their Latin counterparts. At conferences, it is not unlikely for the Scandinavian managers to be wearing casual clothing, while their
French counterparts are reluctant to remove their ties and jackets. For the Latin managers, personal
style is important, while Anglo and Asian managers do not want to stand out or attract attention in
their dress. French women managers are more likely to be dressed in ways that Anglo women managers
might think inappropriate for the office. The French, in turn, think it strange that American businesswomen dress in ‘man-like’ business suits (sometimes with running shoes).20
Impression management
In some situations we all attempt to project our attitudes, personality and competence by
paying particular attention to our appearance and the impact this may have on others. This
has been labelled ‘impression management’21 and the selection interview is an obvious illustration. Some information is given more weight than other information when an impression
is formed. It would seem that there are central traits that are more important than others in
determining our perceptions.
One of these central traits is the degree of warmth or coldness shown by an individual.22
The timing of information also seems to be critical in the impressions we form. For example, information heard first tends to be resistant to later contradictory information. In other
words, the saying ‘first impressions count’ is supported by research and is called ‘the primacy
effect’.23 It has also been shown that a negative first impression is more resistant to change
than a positive one.24 However, if there is a break in time we are more likely to remember
the most recent information – ‘the recency effect’.
The way in which we organise and make judgements about what we have perceived is to a
large extent based on our previous experiences and learning. It is also important at this point
to be aware of the inferences and assumptions we make which go beyond the information
given. We may not always be aware of our pre-set assumptions but they will guide the way
in which we interpret the behaviour of others. There has been much research into the impact
of implicit personality theory.25 In the same way that we make assumptions about the world
of objects and go beyond the information provided, we also make critical inferences about
people’s characteristics and possible likely behaviours.
A manager might well know more about the ‘type of person’ A – a member of staff who
has become or was already a good friend, who is seen in a variety of social situations and
with whom there is a close relationship – than about B – another member of staff, in the
same section as A and undertaking similar duties, but with whom there is only a formal work
relationship and a limited social acquaintance. These differences in relationship, information
and interaction might well influence the manager’s perception if asked, for example, to
evaluate the work performance of A and B.
Judgement of other people can also be influenced by perceptions of such stimuli as:
role or status;
physical factors and appearance; and
non-verbal communication and body language (discussed later in this chapter).
Physical characteristics and appearance
In a discussion on managing people and management style, Green raises the question of how
managers make judgements on those for whom they are responsible including positive and
negative messages.
In my personal research people have admitted, under pressure, that certain physical characteristics tend
to convey a positive or negative message. For example, some people find red hair, earrings for men, certain scents and odours, someone too tall or too short; a disability; a member of a particular ethnic group
and countless other items as negative . . . Similarly there will be positive factors such as appropriate
hairstyle or dress for the occasion . . . which may influence in a positive way.26
A person may tend to organise perception of another person in terms of the ‘whole’ mental picture of that person. Perceptual judgement is influenced by reference to related characteristics associated with the person and the attempt to place that person in a complete
Perception and height
In one experiment, an unknown visitor was introduced by the course director to 110
American students, divided into five equal groups.27 The visitor was described differently to
each group as:
Mr England, a student from Cambridge;
Mr England, demonstrator in psychology from Cambridge;
Mr England, lecturer in psychology from Cambridge;
Dr England, senior lecturer from Cambridge;
Professor England from Cambridge.
After being introduced to each group, the visitor left. Each group of students was then asked
to estimate his height to the nearest half inch. They were also asked to estimate the height of
the course director after he too had left the room. The mean estimated height of the course
director, who had the same status for all groups, did not change significantly among groups.
However, the estimated height of the visitor varied with perceived status: as ascribed academic
status increased, so did the estimate of height (see Table 6.1).
Table 6.1
Estimated height according to ascribed academic status
Ascribed academic status
Average estimated height
Senior lecturer
Source: Adapted from Wilson, P. R. ‘Perceptual Distortion of Height as a Function of Ascribed Academic Status’, Journal of Social
Psychology, no. 74, 1968, pp. 97–102. Copyright © 1968 by Taylor & Francis Informa UK Ltd. Permission conveyed through the
Copyright Clearance Center, Inc.
Several popular surveys and newspaper articles appear to support the suggestion that tall
men are more likely to be successful professionally, have better promotion prospects and earn
higher salaries than short men. (We leave you to make your own judgement about this claim!)
An interesting example is the appointment (June 2009) of the new speaker of the House
of Commons, John Bercow, who is 5′ 6″ in height. This appointment prompted newspaper
articles about ‘heightism’ and perceptions about the ‘shorter man’.28
Critical reflection
‘We often mask what we really feel, act in ways that cover our true emotions and speak
words that we don’t really mean – so in our dealings with other people we need to look
beyond what is seen and heard and delve beneath the surface.’
How do you think we can best judge the true beliefs and intentions of other people?
Perceptual processes demonstrate the integration of our conscious self, our unconscious self
and our physiology.
Conscious self – this means our immediate awareness of what is around us. The state
of mind we are in when we are making decisions to act and the meaning we place on
the world.
Unconscious self – this relates to the way we carry out tasks with no active thinking
taking place; the way we habitually do things automatically – our autopilot. These habits
allow the conscious mind to be free to assess new and novel decisions. Habits are very
important to us as we do not want to think about everything we do, but habits can get in
the way when we want to change habits.
Physiology – the interconnectedness with physiology has already been explained and
there is growing evidence for using research identifying the mind–body connections.
Spitzer explains that:
The human brain contains in the order of 100 billion (1011) neurons and each neuron has
up to 10 thousand connections of which less than ten are to the same neuron, such that each
neuron is connected with a thousand other neurons. So there are approximately 100 trillion
connections (1014).29
Each thought and activity corresponds to a pattern of neuron activity – so by repeating the
same thought or action we strengthen the associated neural connection. Thus automatically
connecting the conscious and unconscious mind with physiology, each aspect influences the
other and our emotions operate in all.
The term framing is used to explain how we interpret particular circumstances. Rather like
a picture frame, we place into the frame our particular perspective, focus and colour on things.
So if we are feeling happy our experience is being ‘framed’ in a positive way. What is in the
‘frame’ will depend on what is filtered in or out. Whether we look at a difficult situation
as a ‘problem’ or as an opportunity, or whether we see a mistake as a terrible failure or as
a learning moment, will depend on how we have ‘framed’ the experience. If we are in a good
mood we may only filter in messages from our environment that confirm our happy state,
we may create an inner dialogue in which our inner voice is reaffirming why we are feeling
so content. We may also be visualising a situation in which we are successful and these
thoughts are establishing neural pathways. Helping people to reframe situations can be part
of the coaching process (see Chapter 5).
Appreciative inquiry
A reframing technique that has been used to positive effect in leading change has been
the approach of appreciative inquiry. This technique, initially introduced by Cooperrider,
Srivastva and colleagues30 in the 1980s, created a theory called appreciative inquiry that
proposed a constructive perspective on change. They started with the proposition that
everybody sees the world through their own set of personal ‘filters’ and that sharing these
could be helpful – thus differences should be valued. For every organisation, team or
individual something works well, which is worth building on and extending. That which we
understand to be reality arises from what we focus on and reality is created in the moment.
They emphasised the importance of language as the way we create our reality and that we
can therefore use it to create many realities. Asking questions of an organisation, the group,
the individual means they are influenced in some way and that people have more confidence
to progress to the future when they take with them what has been most helpful and of value
from the past. It is important to value difference because we see the world through our own
set of personal filters that is often different from a shared set of reality. So, in their approach,
teams of people are faced with a different frame, a different mindset in which to analyse and
evaluate change.
Hammond31 describes the different steps to solving an organisational problem:
Traditional problem-solving approach
‘felt need’ – identification of problem
■ analysis of causes
■ analysis of possible solutions
■ action planning
Appreciative inquiry approach
appreciating/valuing the best of ‘what is’
■ envisioning ‘what might be’
■ dialoguing ‘what should be’
■ innovating ‘what will be’
There are a number of well-documented problems that arise when perceiving other people.
Many of these problems occur because of our limitations in selecting and attending to information. This selectivity may occur because:
we already know what we are looking for and are therefore ‘set’ to receive only the information which confirms our initial thoughts; or
previous training and experience have led us to short-cut and see only a certain range of
behaviours; or
we may group features together and make assumptions about their similarities.
The Gestalt principles apply equally well to the perception of people as to the perception
of objects. Thus we can see, for example, that if people live in the same geographical area,
assumptions may be made about not only their wealth and type of accommodation but also
their attitudes, their political views and even their type of personality.
To interact effectively (present ourselves and communicate appropriately, influence others, work
with them in relationships and groups or lead them) we must have a grasp of what others are
thinking and feeling, including their motives, beliefs, attitudes and intentions. In social perception, accuracy and differentiation are essential but difficult. Achieving them may be linked to the
complexity of a person’s system of cognitive constructs.
Maureen Guirdham32
Is it any wonder that conflicts and differences of opinion occur when we perceive others?
The way we see others, the habits we have formed, the associations we have made and the
assumptions we make lead us to make errors and distortions when we are perceiving others.
The focus of the following section is to examine the perception of people and to consider the
impact this has on the management and development of people at work.
The principles and examples of perceptual differences explained earlier apply to the way
we perceive others. Some examples might be as follows:
Grouping – the way in which a manager may think of a number of staff – for example, either
working in close proximity; or with some common feature such as all IT technicians, all
graduate trainees or all black workers; as a homogeneous group rather than a collection
of individuals, each with their own separate identity and characteristics.
Figure and ground – a manager may notice a new recruit and set them apart from the
group because of particular characteristics such as age, appearance or physical features.
Closure – the degree to which unanimity is perceived and decisions made or action taken
in the belief that there is full agreement with staff when, in fact, a number of staff may be
opposed to the decision or action.
A manager’s perception of the workforce will influence attitudes in dealing with people
and the style of managerial behaviour adopted. The way in which managers approach the
performance of their jobs and the behaviour they display towards subordinate staff are likely
to be conditioned by predispositions about people, human nature and work. An example of
this is the style of management adopted on the basis of McGregor’s Theory X and Theory Y
suppositions, discussed in Chapter 12. In making judgements about other people it is
important to try to perceive their underlying intent and motivation, not just the resultant
behaviour or actions.
The perception of people’s performance can be affected by the organisation of stimuli. In
employment interviews, for example, interviewers are susceptible to contrast effects and the
perception of a candidate is influenced by the rating given to immediately preceding candidates. Average candidates may be rated highly if they follow people with low qualifications,
but rated lower when following people with higher qualifications.33
Testing assumptions
Recognising the assumptions held and testing these out requires a heightened level of critical reflection. Many leadership and management development courses start with a ‘selfawareness and diagnostic’ module intended to help their participants understand and
recognise their style and preferences and the impact their style has on others. Courses which
take a more challenging stance will encourage managers to question their existing frames of
mind and challenge them constantly to re-evaluate their purpose, strategies and action. Such
courses take an action inquiry approach and Testing Out Leadership courses typically start
with an awareness of self.
Testing out assumptions34
Action inquiry: widening our attention
Making unconscious assumptions can limit learning. Failure is perhaps the most common way
we become aware that they are only assumptions – at least the erroneous ones – not facts,
as we may have previously believed. The later in life we wait to discover our erroneous
assumptions in this manner, the more painful the consequences of the failure – divorce,
jobloss, etc.
We cannot be aware of all our assumptions and cannot help but act out of our assumptions,
but it is profoundly important that we learn to test our assumptions in the midst of action. By
doing so we create a climate in which others:
1 in the organisation become more aware that they too are making assumptions;
2 become more willing to help us test our own assumptions (sometimes even before we are
aware that we are making assumptions);
3 gradually become more willing to test their own assumptions as well.
Once formed, assumptions can blind us to the need for inquiry. We therefore need to
behave in a way that reveals the unknown in the midst of action. Cultivating ongoing selfawareness and consciousness is an essential part of action inquiry and self or organisational
Testing out assumptions – continued
transformation – a lifetime practice. Acting in such a way and being visibly committed to such
a course of action places you in a stronger position to influence others to do the same.
Our attention, perceptions and actions are limited by our untested assumptions.
Our attention does not register a great deal of what occurs – it is selective and limited by
our frame of attention at any given time.
Our language, mindsets, frame of reference tend to highlight and emphasise some aspects
of our experience and dispose us to see things in a certain way – personal bias.
Our actions generate much of what we know but we are often unaware of how our actions
skew what we know by the impact they have on others and their response.
Data we have about the world are ordinarily about the past rather than the present, are
drastically unsystematic and incomplete and rarely tested for validity on the spot. Scientific
method can only disconfirm not confirm a proposition. We often therefore rely on
assumptions to simplify matters.
Not all assumptions will be tested or tested well. Many assumptions will be tested and
generate learning, subsequent success and higher morale, while minimising failure and
accompanying lower morale. An organisation that cultivates courageous, intelligent,
competent testing of assumptions will have an enormous competitive advantage over those
in the same field which do not.
Figure 6.13
Cycle of perception and behaviour
Source: From Guirdham, M. Interactive Behaviour at Work, third edition, Financial Times Prentice Hall (2002), p. 162. Reproduced with permission from Pearson
Education Ltd.
The dynamics of interpersonal perception
Unlike with the perception of an object that just exists, when you perceive another individual
they will react to you and be affected by your behaviour – the dynamics are all-important.
This interaction is illustrated in the following quotation:
You are a pain in the neck and to stop you giving me a pain in the neck I protect my neck by tightening my neck muscles, which gives me the pain in the neck you are.35
The interaction of individuals thus provides an additional layer of interpretation and
complexity. The cue that we may attend to, the expectation we may have, the assumptions
we may make, the response pattern that occurs, leave more scope for errors and distortions.
We are not only perceiving the stimulus (that is, the other person), we are also processing
their reactions to us at the same time that they are processing our reactions to them.
Thus person perception differs from the perception of objects because:
it is a continually dynamic and changing process; and
the perceiver is a part of this process who will influence and be influenced by the other
people in the situation (see Figure 6.13).36
Setting and environment
Person perception will also be affected by the setting, and the environment may play a
critical part in establishing rapport. For example, next time you are involved in a formal
meeting, for example, attending an in-house development centre, consider the following
factors that will all influence the perceptual process.
Purpose of and motives for
Likely to be an important event for the participant, may be a catalyst for
promotion and may signal new and relevant development opportunities.
Chance to be visible and demonstrate skills and abilities.
Opportunity to network with other managers. Thus high emotional cost to
How participant prepares for the event will be influenced by factors listed
opposite and previous history and encounters of all parties.
Time, date of meeting
The timing of the event might be particularly affected by events outside of
the workplace. So if the participant has dependants or responsibilities, the
timing of this event may become significant. If the participant is asked to
attend in the middle of a religious festival, then again the relevance of time
is critical.
Organisations will often stage development events away from the ‘normal’
workplace in an attempt to bring about objectivity and neutrality.
How the event is staged, the amount of structure and formality, how
feedback is given, the demonstration of power and control will be evidence
of the culture of the organisation.
Past experience/rapport
The experience of the development event will in part be influenced by the
expectations of the participant. If this is the second development centre,
then experiences of the first will colour the perceptions; if this is the first
centre, then the participant may be influenced by previous experiences of
similar events (selection event) or by stories from previous attendees.
We have referred previously in this chapter to the significance of non-verbal communication
and body language. This includes inferences drawn from posture, gestures, touch, invasions
of personal space, extent of eye contact, tone of voice or facial expression. People are the only
animals that speak, laugh and weep. Actions are more cogent than speech and humans rely
heavily on body language to convey their true feelings and meanings.37 It is interesting to
note how emotions are woven creatively into email messages. Using keyboard signs in new
combinations has led to a new e-language – to signal pleasure :), or unhappiness :–c, or send
a rose –{[email protected] encapsulate feelings as well as words. The growth of this practice has led to an
upsurge of web pages replete with examples.
According to Mehrabian, in our face-to-face communication with other people the messages about our feelings and attitudes come only 7 per cent from the words we use, 38 per
cent from our voice and 55 per cent from body language, including facial expressions.
Significantly, when body language such as gestures and tone of voice conflicts with the
words, greater emphasis is likely to be placed on the non-verbal message.38
Although actual percentages may vary, there appears to be general support for this contention. According to Pivcevic: ‘It is commonly agreed that 80 per cent of communication is
non-verbal; it is carried in your posture and gestures, and in the tone, pace and energy
behind what you say.’39 McGuire suggests that when verbal and non-verbal messages are in
conflict, ‘Accepted wisdom from the experts is that the non-verbal signals should be the ones
to rely on, and that what is not said is frequently louder than what is said, revealing attitudes
and feelings in a way words can’t express.’40
James suggests that in a sense, we are all experts on body language already and this is part
of the survival instinct:
Even in a ‘safe’ environment like an office or meeting room you will feel a pull on your gaze each time
someone new enters the room. And whether you want to or not, you will start to form opinions about
a person in as little as three seconds. You can try to be fair and objective in your evaluation, but you
will have little choice. This is an area where the subconscious mind bullies the conscious into submission. Like, dislike, trust, love or lust can all be promoted in as long as it takes to clear your throat. In
fact most of these responses will be based on your perception of how the person looks.41
In our perceptions and judgement of others it is important therefore to watch and take
careful note of their non-verbal communication. Managers should also be aware of the subconscious message that their own body language conveys to members of staff. For example,
Kennett points out that we take signals from our leaders and if managers are exhibiting signs
of anxiety their body language and critical talk will amplify employees’ susceptibility to
stress.42 However, although body language may be a guide to personality, errors can easily
arise if too much is inferred from a single message rather than a related cluster of actions.
Consider the simple action of a handshake and the extent to which this can provide a meaningful insight into personality. Does a firm handshake by itself necessarily indicate friendship
and confidence? And is a limp handshake a sign of shyness or lack of engagement with the
other person? According to Fletcher: ‘You won’t learn to interpret people’s body language
accurately, and use your own to maximum effect, without working at it. If you consciously
spend half an hour a day analysing people’s subconscious movements, you’ll soon learn
how to do it – almost unconsciously.’43 However, as Mann points out, with a little knowledge about the subject it is all too easy to become body conscious. Posture and gesture
can unmask deceivers, but it would be dangerous to assume that everyone who avoids eye
contact or rubs their nose is a fibber.44
According to Akehurst the advice to anyone trying to spot a liar is simple. ‘Close your eyes.
Don’t look at them. Listen to what they are saying. Non-verbal cues are very misleading and
we use too many stereotypes.’45
The reality is that body language is not a precise science. One gesture can be interpreted
in several ways. It may give a possible indication of a particular meaning but by itself
cannot be interrupted with any certainty. Crossing your arms is often taken as a sign of
defensiveness but could equally mean that the person is cold or finds this a comfortable
Despite these limitations, it is essential that managers have an understanding of nonverbal communication and body language and are fully cognisant of the possible messages
they are giving out.
Cultural differences
There are many cultural variations in non-verbal communications, the extent of physical
contact and differences in the way body language is perceived and interpreted. Italians and
South Americans tend to show their feelings through intense body language, while the
Japanese tend to hide their feelings and have largely eliminated overt body language from
interpersonal communication. When talking to another person, the British tend to look away
spasmodically, but Norwegians typically look people steadily in the eyes without altering
their gaze. In South Korea, women refrain from shaking hands. The Japanese often have a
weak handshake whereas in Britain a firm handshake is encouraged. When the Dutch point
a forefinger at their temples this is likely to be a sign of congratulations for a good idea, but
with other cultures the gesture has a less complimentary implication.
In many European countries it is customary to greet people with three or four kisses on
the cheek and pulling the head away may be taken as a sign of impoliteness. All cultures have
specific values related to personal space and ‘comfort zone’. Arabs tend to stand very close
when speaking to another person but most Americans when introduced to a new person
will, after shaking hands, move backwards a couple of steps to place a comfortable space
between themselves and the person they have just met.47 One reason why Americans tend to
speak loudly is that their sense of personal space is twice that of the British.
All things are not what they seem. The ability to work out what is really happening with a person
is simple – not easy, but simple. It’s about matching what you see and hear to the environment
in which it all happens and drawing possible conclusions. Most people, however, only see the
things they think they are seeing.48
A concept map of interacting with other people is set out in Figure 6.14.
Critical reflection
‘There are so many forms of non-verbal communication cues, either intentional or
unintentional, that can be interpreted in a number of ways. There are also wide variations
in cultural norms that influence the essential meaning and context of interactions.
Attempting to make valid inferences from body language is of little real value and its use
should be discouraged.’
How would you argue against this assertion?
It is difficult to consider the process of interpersonal perception without commenting on
how people communicate. Communication and perception are inextricably bound. How we
communicate to our colleagues, boss, subordinates, friends and partners will depend on our
perception of them, on our ‘history’ with them, on their emotional state.
Fitzherbert draws an interesting comparison between magic, perception and communication.
Concept map of interacting with people
Source: Copyright © 2008 The Virtual Learning Materials Workshop. Reproduced with permission.
Figure 6.14
Magicians are acutely aware that the moment people see, hear, feel, taste or smell anything it automatically triggers a range of expectations and perceptions in their minds. In effect, it opens up a ‘file’ in their
brain that tells them what they already know about the subject and rejects anything that doesn’t fit.
Magicians build their communication and effects around the expectations and perceptions they trigger.
Clarity and impact aside, communication will be effective only if you can convince the
audience about what you are telling them or showing them. Fitzherbert sets out twenty rules
of perception and communication, shown in Figure 6.15.49
Importance of feedback
Feedback is a vital ingredient of the communication process. We may misjudge the receiver
and regard our communication as unsuccessful, but unless we have some feedback from the
other party we may never know whether what we have said or done was received in the way
it was intended. The feedback may reaffirm our perceptions of the person or it may force us to
review our perceptions. In our dealings with more senior staff the process of communication
can be of special significance, including non-verbal communication, posture and tone.50
Two major approaches to, and ways of explaining, interpersonal communications are neurolinguistic programming and transactional analysis.
Figure 6.15
Twenty rules of perception and communication
Source: Nick Fitzherbert, www.fitzherbert.co.uk. Reproduced with permission.
NLP emerged in the early 1970s as an offshoot of psychotherapy, psychology and hypnotherapy and as such appears to offer lots of different things to different people. A popular
definition of NLP is in terms of a model of interpersonal communication concerned with
the relationship between successful patterns of behaviour and subjective experiences that
underlie them. John Grinder and Richard Bandler, the co-founders of NLP saw it as a means
of helping to provide people with better, fuller and richer lives.51 It is an approach that aims
to enhance the effectiveness of interpersonal communications and facilitate learning and
personal development. The name originates from the three disciplines which all have a part to
play when people are communicating with others: neurology, linguistics and programming.
Neurology – the nervous system, and processes linking body and mind.
Linguistics – the study of words and how these are understood and communicated.
Programming – refers to behaviours and strategies used by individuals.
The broad nature of NLP has led to a variety of different definitions according to the interpretation of the individual.
Shapiro describes NLP in terms of:
a process where communication and psychotherapy come together. It is about understanding the way
we use our senses – sight, hearing, touch, smell and taste – to experience what’s going in the world and
learn to understand that not everyone is the same. It is about developing more tolerance and changing
things that aren’t going the way you want them to go in your life.52
The definition from the British Board of NLP is:
The study of human experiences, communication, thinking, language and behaviour. NLP is about
noticing conscious and unconscious behavioural patterns. It’s about duplicating excellence and modeling how we communicate to ourselves and others.53
Originally Grinder and Bandler studied notable therapists at work with their clients. The aim
was to identify ‘rules’ or models that could be used by other therapists to help them improve
their performance. The focus was on one-to-one communication and self-management. The
application of NLP shifted from therapy situations to work organisations, with clear messages
for communicating and managing others. NLP emphasises the significance of the perceptual
process and the way in which information is subjectively filtered and interpreted. These
interpretations are influenced by others and the world in which we live. Gradually individuals
learn to respond and their reactions and strategies become programmed, locked in, automatic.
Awareness and change
At its heart NLP concerns awareness and change. Initially knowing and monitoring one’s
own behaviour and being able consciously to choose different reactions are fundamental
to the process. Selecting from a range of verbal and non-verbal behaviours ensures control
happens and changes ‘automatic’ reactions into consciously chosen programmes. Many
different approaches and techniques are incorporated into NLP. Some concern mirroring
and matching the micro skills of communication in terms of body movements, breathing
patterns or voice tempo. Others concern the positive thinking required in goal-setting
‘outcome thinking’ and the personal resources required in its achievement.
NLP has attracted considerable interest in recent years and there are a number of
passionate devotees. There are numerous courses and seminars intended to demonstrate to
participants how they can learn the skills to change themselves for improved personal or
professional effectiveness and a greater enjoyment from life. It is also a popular approach
to coaching (discussed in Chapter 5). Paul McKenna, the well-known television hypnotist, is
a registered NLP practitioner and makes use of NLP principles in his courses on life training,
including for example helping people to lose weight.
Some of the ideas of NLP have been incorporated in other bodies of knowledge on communication. So, for example, McCann bases his communication work on the findings of
Grinder and Bandler to produce a technique called psychoverbal communication.54 Stone
reports on the value of NLP as central to the ability in influencing others, especially concerning establishing rapport in order to understand the opinions, insights or motivations of
others, and in the way you communicate and the outcomes you want to achieve.55
Another feature of NLP is ‘anchors’ that we all have. Anchors are ‘triggers’ that help keep
habits in place and put us in a certain state of mind.56
Anchors can be visual, like people, clothes and cars. They can be auditory, like a particular piece of
music, an advertising jingle or the voice of a dear friend. They can be kinaesthetic, like the feel of your
favourite clothes, sitting in your armchair or the warmth of a hot bath. They can be olfactory or gustatory, like the smell of a hospital (why do they all smell the same?) or the taste of coffee or chocolate
(Lindt!). Words can be anchors because they evoke ideas; your name is a powerful anchor for your identity. Anchors evoke emotional states and most of the time we do not notice the anchors, only the states.
Some anchors are neutral. Some put us into good states. Others put us into bad states.57
Transactional analysis is one of the most popular ways of explaining the dynamics of interpersonal communication. Originally developed by Eric Berne, it is a model of people and
relationships that encompasses personality, perception and communication.58 Although
Berne used it initially as a method of psychotherapy, it has been convincingly used by organisations as a training and development programme.
TA has two basic underlying assumptions:
All the events and feelings that we have ever experienced are stored within us and can be
replayed, so we can re-experience the events and the feelings of all our past years.
Personality is made up of three ego states that are revealed in distinct ways of behaving.
The ego states manifest themselves in gesture, tone of voice and action, almost as if they
are different people within us and they converse with each other in ‘transactions’ either
overtly or covertly.
Berne identified and labelled the ego states as follows, each with their own system of communication and language:
Adult ego state – behaviour that concerns our thought processes and the processing of
facts and information. In this state we may be objective, rational, reasonable – seeking
information and receiving facts.
Parent ego state – behaviour that concerns the attitudes, feelings and behaviour incorporated from external sources, primarily our parents. This state refers to feelings about
right and wrong and how to care for other people.
Child ego state – behaviour that demonstrates the feelings we remember as a child. This
state may be associated with having fun, playing, impulsiveness, rebelliousness, spontaneous behaviour and emotional responses.
Berne believed these transactions, that take place in face-to-face exchanges and verbal communication, form the core of human relationships. He claimed that the three ego states exist
simultaneously within each individual, although at any particular time any one state may
dominate the other two. All people are said to behave in each of these states at different times.
We may be unaware which ego state we are operating in and may shift from one to another.
Preferred ego state
We all have a preferred ego state which we may revert to: some individuals may continually
advise and criticise others (the constant Parents); some may analyse, live only with facts and
distrust feelings (the constant Adult); some operate with strong feelings all the time, consumed with anger or constantly clowning (the constant Child). Berne emphasised that the
states should not be judged as superior or inferior but as different. Analysis of ego states may
reveal why communication breaks down or why individuals may feel manipulated or used.
Berne insists that it is possible to identify the ego state from the words, voice, gestures,
and attitude of the person communicating. For example, it would be possible to discern the
ego state of a manager if they said the following:
‘Pass me the file on the latest sales figures.’
‘How do you think we could improve our safety record?’
(Adult ego state)
‘Let me help you with that – I can see you are struggling.’
‘Look, this is the way it should be done; how many more times do I have to tell you?’
(Parent ego state)
‘Great, it’s Friday. Who’s coming to the pub for a quick half?’
‘That’s a terrific idea – let’s go for it!’
(Child ego state)
Complementary or crossed reaction
A dialogue can be analysed in terms not only of the ego state but also whether the transaction produced a complementary reaction or a crossed reaction. Complementary means
that the ego state was an expected and preferred response. So, for instance, if we look at the
first statement, ‘Pass me the file on the latest sales figures’, the subordinate could respond:
‘Certainly – I have it here’ (Adult ego state) or ‘Can’t you look for it yourself? I only gave it
to you an hour ago’ (Parent ego state).
The first response was complementary whereas the second was a crossed transaction.
Sometimes it may be important to ‘cross’ a transaction. Take the example ‘Let me help you
with that – I can see you are struggling’ (Parent ego state). The manager may have a habit of
always helping in a condescending way, making the subordinate resentful. If the subordinate
meekly accepts the help with a thankful reply, this will only reinforce the manager’s perception and attitude, whereas if the subordinate were to respond with ‘I can manage perfectly
well. Why did you think I was struggling?’, it might encourage the manager to respond from
the Adult ego state and thus move their ego position.
Understanding of human behaviour
Knowledge of TA can be of benefit to employees who are dealing with potentially difficult
situations. In the majority of work situations the Adult–Adult transactions are likely to be
the norm. Where work colleagues perceive and respond by adopting the Adult ego state, such
a transaction is more likely to encourage a rational, problem-solving approach and reduce
the possibility of emotional conflict.
If only the world of work was always of the rational logical kind! Communications at work
as elsewhere are sometimes unclear and confused, and can leave the individual with ‘bad
feelings’ and uncertainty. Berne describes a further dysfunctional transaction, which can occur
when a message is sent to two ego states at the same time. For instance, an individual may
say ‘I passed that article to you last week, have you read it yet?’ This appears to be an Adultto-Adult transaction and yet the tone of voice or the facial expressions might imply a second
ego state is involved. The underlying message says, ‘Haven’t you even read that yet . . . you
know how busy I am and yet I had time to read it!’ The critical Parent is addressing the Child
ego state. In such ‘ulterior transactions’ the social message is typically Adult to Adult and the
ulterior, psychological message is directed either Parent–Child or Child–Parent.
Given the incidence of stress in the workplace, analysis of communication may be one
way of understanding such conflict. By focusing on the interactions occurring within the
workplace, TA can aid the understanding of human behaviour. It can help to improve
communication skills by assisting in interpreting a person’s ego state and which form of state
is likely to produce the most appropriate response. This should lead to an improvement in
both customer relations and management–subordinate relations. Therefore TA can be seen
as a valuable tool to aid our understanding of social situations and the games that people
play both in and outside work organisations.59
Critical reflection
‘Neuro-linguistic programming and transactional analysis may appear to have some
value when discussed in the classroom but are too theoretic and abstract for the
practical manager.’
Is there any way in which you can realistically see a manager known to you making use
of either of these concepts to improve interpersonal communications?
It seems, therefore, that part of the process of perceiving other people is to attribute characteristics to them. We judge their behaviour and their intentions on past knowledge and in
comparison with other people we know. It is our way of making sense of their behaviour.
This is known as attribution theory. Attribution is the process by which people interpret the
perceived causes of behaviour. The initiator of attribution theory is generally recognised as
Heider, who suggests that behaviour is determined by a combination of perceived internal
forces and external forces.60
Internal forces relate to personal attributes such as ability, skill, amount of effort or fatigue.
External forces relate to environmental factors such as organisational rules and policies,
the manner of superiors, or the weather.
Behaviour at work may be explained by the locus of control, that is whether the individual
perceives outcomes as controlled by themselves or by external factors. Judgements made
about other people will also be influenced strongly by whether the cause is seen as internal
or external.
Basic criteria in making attributions
In making attributions and determining whether an internal or external attribution is
chosen, Kelley suggests three basic criteria: distinctiveness, consensus and consistency.61
Distinctiveness. How distinctive or different was the behaviour or action in this particular
task or situation compared with behaviour or action in other tasks or situations?
Consensus. Is the behaviour or action different from, or in keeping with, that displayed
by most other people in the same situation?
Consistency. Is the behaviour or action associated with an enduring personality or
motivational characteristic over time, or an unusual one-off situation caused by external
Kelley hypothesised that people attribute behaviour to internal forces or personal factors
when they perceive low distinctiveness, low consensus and high consistency. Behaviour is
attributed to external forces or environmental factors when people perceived high distinctiveness, high consensus and low consistency (see Figure 6.16).
An example of these criteria related to a student who fails a mid-sessional examination in
a particular subject is given in Table 6.2.
Figure 6.16
Table 6.2
Representation of attribution theory
Example of criteria in making attributions
Internal attribution
Student fails all midsessional examinations
Student is the only
one to fail
Student also fails
final examination
External attribution
Student gains high marks
in other mid-sessional
All students in the
class get low marks
Student obtains a good
mark in final examination
Source: Adapted from Mitchell, T. R. People in Organisations, second edition, McGraw-Hill (1982), p. 104. Reproduced with permission
from the McGraw-Hill Companies.
An additional consideration in the evaluation of task performance within an organisational
setting is whether the cause of behaviour was due to ‘stable’ or ‘unstable’ factors:
stable factors are ability, or the ease or difficulty of the task;
unstable factors are the exertion of effort, or luck.62
The combination of internal and external attributions, and stable and unstable characteristics, results in four possible interpretations of a person’s task performance (see Table 6.3).
Table 6.3
Classification of possible attributions for performance
Internal attributions
External attributions
Stable factors
Unstable factors
Implications of attribution theory
Employees with an internal control orientation are more likely to believe that they can
influence their level of performance through their own abilities, skills or efforts. Employees
with an external control orientation are more likely to believe that their level of performance
is determined by external factors beyond their influence.
Studies appear to support the idea that staff with an internal control orientation are
generally more satisfied with their jobs, are more likely to be in managerial positions and are
more satisfied with a participatory style of management than staff with an external control
orientation.63 As a generalisation it might be implied that internally controlled managers are
more effective than those who are externally controlled. However, this does not appear to be
always the case.64
People with a high achievement motivation may perceive that successful performance is
caused by their own internal forces and their ability and effort rather than by the nature of
the task or by luck. If members of staff fail to perform well on their tasks they may believe
that external factors are the cause and as a result may reduce the level of future effort.
However, if staff perform well but the manager perceives this as due to an easy task or to
luck, the appropriate recognition and reward may not be given. If the staff perceive that good
performance was due to ability and/or effort, the lack of recognition and reward may well
have a demotivating effect. (Achievement motivation is discussed in Chapter 7.)
We have seen that differences in perception result in different people seeing different things
and attaching different meanings to the same stimuli. Every person sees things in their own way
and as perceptions become a person’s reality this can lead to misunderstandings. The accuracy
of interpersonal perception and the judgements made about other people are influenced by:
the nature of the relationship between the perceiver and the other person;
the amount of information available to the perceiver and the order in which information
is received;
the nature and extent of interaction between the two people.
There are five main features that can create particular difficulties and give rise to perceptual
problems, bias or distortions in our dealings with other people. These are:
the halo effect
perceptual defence
self-fulfilling prophecy.
These problems with people perception arise because of the selectivity which exists in the
perceptual process. We do not enjoy living in a world where uncertainty abounds and our
perceptual system works to minimise our energy consumption. We do not have to start every
day afresh – we have our store of memories and experiences to guide us. The paradox is that
this process is also our downfall. Errors and bias are inherent in such a system. Although
exhortations can be made for us to become more aware of our own biases and to take more
time in making judgements, we are working against our normal quick-fire perceptual system.
This is the tendency to ascribe positive or negative characteristics to a person on the basis of
a general categorisation and perceived similarities. The perception of that person may be
based more on certain expected characteristics than on the recognition of that person as an
individual. It is a form of typecasting. Stereotyping is a means of simplifying the process of
perception, making sense of the world and making judgements of other people instead of
dealing with a range of complex and alternative stimuli. It occurs when an individual is judged
on the basis of the group to which it is perceived that person belongs. When we see all
people belonging to a particular group as having the same characteristics, we are stereotyping individuals. Pre-judgements are therefore made about an individual without ever
really knowing whether such judgements are accurate; they may be wildly wrong.
Examples of common stereotyping may be based on:
nationality, for example all Germans are orderly and industrious, all Australians like cricket;
occupation, for example all accountants are boring, all librarians are serious and
age, for example all young people are unreliable, no old person wants to consider new ideas;
physical, for example all people with red hair have a fiery temperament; all fat people are
education, for example all graduates are intelligent;
social, for example all unemployed people are lazy; immigrants do not want to learn English;
politics, for example all Labour voters favour strong trade unions, all Conservative voters
support privatisation.
(See also the discussion of social identity theory in Chapter 8.)
Social implications
Although stereotyping condenses the amount of information that we need to know and thus
enables us to cope with a vast information flow, the consequences of attributing incorrect
characteristics are extremely negative. Stereotyping can lead to bias and a failure to try and
really understand other people.65
Stereotyping infers that all people within a particular perceived category are assumed to
share the same traits or characteristics. A significant social implication of stereotyping is
therefore the perception held about particular groups of people based on, for example,
gender, race, disability, sexual orientation, age, or religious belief.
A major danger of stereotyping is that it can block out accurate perception of the individual or individual situation. Stereotyping may lead to potential situations of prejudice or
discrimination. An example might be the perception of people with HIV or AIDS.66
Stereotyping may work either negatively or favourably for a particular group of people. For
example, a sizeable number of employers still appear to maintain negative and inaccurate
stereotypes about the capabilities and training of older workers. However, some firms, such
as B&Q, the home-improvement chain, have a policy of staffing certain stores with people
over 50 years of age. (See the Case Study at the end of Chapter 4.)
The halo effect is the process by which the perception of a person is formulated on the basis
of a single favourable or unfavourable trait or impression. The halo effect tends to shut out
other relevant characteristics of that person. Some examples might be as follows:
A candidate for employment who arrives punctually, is smart in appearance and friendly
may well influence the perception of the selectors, who then place less emphasis on the
candidate’s technical ability, qualifications or experience for the job.
A new member of staff who performs well in a first major assignment may be perceived
as a likely person for promotion, even though that assignment is not typical of the usual
duties the member of staff is expected to undertake.
A single trait, such as good attendance and timekeeping, may become the main emphasis
for judgement of overall competence and performance rather than other considerations
such as the quantity, quality and accuracy of work.
A particular danger with the halo effect is that where quick judgements are made on the
basis of readily available stimuli, the perceiver may become ‘perceptually blind’ to subsequent
stimuli at variance with the original perception and (often subconsciously) notice only those
characteristics that support the original judgement. See also the self-fulfilling prophecy,
discussed below.
The rusty halo effect
The process may also work in reverse: the rusty halo effect. This is where general judgements
about a person are formulated from the perception of a negative characteristic. For example,
a candidate is seen arriving late for an interview. There may be a very good reason for this
and it may be completely out of character. But on the basis of that one particular event the
person may be perceived as a poor timekeeper and unreliable. Another example may be
a new member of staff who performs poorly in a first major assignment. This may have been
due to an unusual set of circumstances and not typical behaviour, but the person may still
be perceived as a bad appointment.
Perceptual defence is the tendency to avoid or screen out certain stimuli that are perceptu-
ally disturbing or threatening. People may tend to select information that is supportive
of their point of view and choose not to acknowledge contrary information. For example,
a manager who has decided recently to promote a member of staff against the advice of
colleagues may select only favourable information which supports that decision and ignore
less favourable information which questions that decision.
Attributing, or projecting, one’s own feelings, motives or characteristics to other people is a
further distortion which can occur in the perception of other people. Judgements of other
people may be more favourable when they have characteristics largely in common with,
and easily recognised by, the perceiver. Projection may also result in people exaggerating
undesirable traits in others that they fail to recognise in themselves.
Perception is distorted by feelings and emotions. Projection may be used as a means of
attempting to externalise difficult or uncomfortable feelings. For example, a manager who
is concerned about possible redundancy may perceive other managers to be even more
concerned. People have a tendency to perceive others less favourably by projecting certain
of their own feelings or characteristics on to them. As another example, supervisors may
complain that their manager did not work hard enough to secure additional resources for
the department when in fact the supervisors failed to provide the manager with all the relevant information and statistics. However, projection may also be used to externalise positive
feelings onto other members of staff by attempting to create an overstated and unrealistic
level of expectations and performance.
Discussed by Freud in his description of defence mechanisms, projection is a way in
which we protect ourselves from acknowledging that we may possess undesirable traits and
assign them in exaggerated amounts to other people. For instance, a manager who considers
all subordinates as insincere may be projecting one of the manager’s own characteristics.
Perception of ‘self ’ and how people see and think of themselves, and evaluate themselves,
are discussed in Chapter 9.
A common feature of social interaction is the concept of the self-fulfilling prophecy (sometimes known as the Pygmalion effect), a term that is usually attributed to Merton.67 The essence
of the prophecy is that simply because it has been made, this will cause it to happen. People
strive to validate their perceptions irrespective of the actual reality. People’s beliefs or expectations influence their actions and behaviour in such a way as to make the beliefs or expectations
more likely to come true. If staff believe a rumour (prophecy) that there will be no promotions or bonuses for the foreseeable future, they are likely to behave in such a way that their
performance would not justify promotion or bonuses (even if the rumour were not true).
Rosenthal and Jacobson undertook a study of American school students in which psychological tests were claimed to predict levels of achievement. The researchers informed teachers
that certain named students had been identified as ‘fast developers’ when, in reality, students
were assigned at random to both the high-potential and control groups. At the end of the
academic year those students designated with high potential achieved noticeably greater
increased IQ scores and reading ability than the control group of students.68 In the
organisational setting, a study by Word et al. produced evidence that black candidates in job
interviews received fewer supportive non-verbal signs from white interviewers than white
candidates. As a result the black candidates gave less confident answers to questions and
were given a poorer rating.69
The expectation of managers has a powerful influence on the behaviour and performance
of staff. If a manager expects only minimal performance from staff, they are not likely to
perform to the best of their abilities. Therefore, managers need to establish an organisational
framework and supportive culture that reinforces positive performance expectations at all
levels of the organisation. Staff should also be encouraged to have high self-expectations of
performance through working towards common goals.
The process of perception has been outlined as selective and subjective: we perceive the world
in our own terms and expect the world to ‘fit’ into our constructs. Throughout our development
we have learned to distinguish what is important and significant (figure) from information
that is additional and contextual (ground). This process is repeated when we join new organisations or take a new job within the same organisation. Fitting into the organisation involves
selecting information that is necessary from that which is less significant. At times, the process can be distorted and we can also be ‘tricked’ into seeing the world in particular ways.
Although some organisations may discriminate, stereotyped perceptions are not always
calculated: they are often made automatically and without conscious thought – in much the
same way as we may be tricked by visual illusions. In fact, perceptual illusions are a very
appropriate way of understanding the organisational setting, including for example the
processes affecting women. The ‘Ames Room’ is relevant for this purpose.70 This is a room of
an irregular size with one of the far corners at a greater distance than the other, although
the room is arranged and decorated so that it gives the appearance of being rectangular. If
two people of the same size stand in diagonally opposite corners, one in the furthest corner
and the other in the near corner, a visual illusion occurs whereby our perception of depth
is ‘tricked’ to see the furthest away looking dramatically smaller (see Figure 6.17).
The culture of the organisation
By analogy it is possible to see the room as representing the culture of the organisation
surrounded by beliefs and traditions, rather like pictures on the wall. They seem reasonable,
logical and appropriate. The individual standing at the furthest corner of the room could, for
example, be seen as the female, the nearer the male. Both people are in the room surrounded
by the culture, but one, the male, is nearer and more visible. He is perceived differently and
advantageously, whereas the woman is perceived in a relatively inconsequential way. If the
woman stays at the back of the room in an ancillary position or leaves the room altogether,
she is reinforcing the beliefs around the walls.
Some women, however, do become managers and these exceptional women would then
join the male corner and would seem to become larger and more visible. However, the perceptual distortion is complete because the lone woman could legitimately be viewed as
a ‘trick’, as an illusion. For the males, their position fits and they have only to prove their
merit for a management post and not that they are different from the norm. Their success
will feed back into the system and reaffirm the beliefs that are held.
For any organisation to be effective it is imperative that the staff are competent to do their
work and satisfy the ‘psychological contract’ (discussed in Chapter 1). One part of the role
Figure 6.17
The Ames Room
Source: Hicks, L. ‘Gender and Culture: A Study of the Attitudes Displayed by Managers in the Hotel World’, unpublished doctoral thesis,
University of Surrey, 1991, p. 303.
of managers is to select and train those people whom they predict will perform successfully
on the job, and then to monitor and assess their competence for promotion. Accordingly, it
clearly seems important for managers to be aware of their own prejudices and assumptions.
By opening channels and encouraging and developing all staff, trust might be fed back into
the system from which equity could begin and stereotypes might end.
Critical reflection
‘It is not unreasonable to argue that there is no such thing as reality – only the
individual’s perception or interpretation of reality. Yet, managers require an
understanding of perception in order to help interpret the behaviour and intentions of
other people.’
If you were a manager how would you hope to avoid organisational problems that result
from perceptual differences?
■ The process of perception connects our physiology
with our conscious thoughts and actions as well as our
unconscious habits and assumptions. By understanding
how we see the world and sharing our thoughts with
others, we share the same social world. Although we
all see the world through our own ‘coloured spectacles’,
by understanding others’ perspectives and by widening
our understanding of how others may see the world,
depth and variety is encouraged and problems of bias
and distortion become minimised. Perception is the
root of all organisational behaviour and any situation
can be analysed in terms of its perceptual connotations.
■ For managers, an understanding of perception is
essential to ensure that they are aware of the problems
that can arise from the process of attention and selectivity. The process of perception is innately organised
and patterned in order to provide meaning for the
individual and is based on both internal and external
factors. It is important to recognise the importance
of cultural differences and the use of language. The
organisation and arrangement of stimuli is influenced
by three important factors: figure and ground, grouping and closure.
■ It is important to be aware of potential perceptual
illusions. Part of the process of perceiving other people
is to attribute characteristics to them. We judge their
behaviour and intentions on past knowledge and in
comparison with other people. Perception gives rise to
individual behavioural responses in given situations.
The principles of perceptual differences reflect the
way we perceive other people and are the source of
many organisational problems. In the work situation,
the process of perception and selection of stimuli can
influence a manager’s relationship with other staff.
■ The ways in which we organise and make judgements
about what we have perceived are to a large extent
based on previous experiences and learning. It is also
important to be aware that there are inferences and
assumptions that go beyond the information given.
Judgements of other people can also be influenced
by such stimuli as role or status, occupation, physical
factors and appearance, non-verbal communications
and body language. The social situation consists of
both verbal and non-verbal signals. It is necessary
to be aware of cultural differences in non-verbal
■ The importance of communication and the way we
interact with others cannot be overestimated, as our
well-being and morale can be affected by the nature
of these social experiences. Communication and perception are inextricably bound. Two major approaches
to interpersonal communications are neuro-linguistic
programming (NLP), which can illuminate areas of
understanding and help to improve communication
skills, and transactional analysis (TA), which is a
theory that encompasses personality, perception and
■ Part of the process of perceiving other people is
to attribute characteristics to them. Attribution is the
process by which people interpret the perceived causes
of behaviour. There are a number of potential difficulties and errors that arise with interpersonal perception
including stereotyping, the halo effect, perceptual
defence, projection and self-fulfilling prophecy. The
perceptual process is selective and subjective. In the
work situation, perceptual differences reflect the way
we perceive other people. It is important to understand
the organisational process.
1 Explain fully why the study of perception is important in the study of management and organisational
2 Discuss those factors that affect selection and attention in the process of perception. Give your own
examples of the importance of cultural differences and the use of language.
3 Identify clearly the most significant principles that influence the organisation and arrangement of stimuli.
Provide your own example of each of these principles.
4 Explain the main distortions or errors that can occur in perceiving other people and support your answer with
practical examples.
5 Discuss critically the amount of attention that you believe should be given to non-verbal communications and
body language.
6 What do you see as the practical benefits of (i) neuro-linguistic programming (NLP); and (ii) transactional
analysis (TA)?
7 Explain the principles of attribution theory and its importance to, and implications for, management. Apply
the principles to your own working life.
8 Give your own examples of what you believe are the main causes and implications of perceptual distortions
and errors.
How to be happy in life: let out your anger
Amelia Hill
Conventional advice about keeping a stiff upper lip
and staying cool can damage your career and lower
your satisfaction in life, according to new research. If
you want to be promoted and attain true happiness,
you should get angry. According to the Harvard Study
of Adult Development, a piece of research that has
tracked the lives of 824 men and women since 1965,
those who repress their frustration are at least three
times more likely to admit they had hit a glass ceiling
in their careers and have disappointing personal lives.
On the other hand, the study found, those who
learned to harness and channel their anger were far
more likely to be professionally well-established, as
well as enjoying emotional and physical intimacy with
their friends and family.
Professor George Vaillant, a psychiatrist at Harvard
Medical School, has spent the last 44 years as
director of the Study of Adult Development, based at
the Harvard University Health Service. ‘People think
of anger as a terribly dangerous emotion and are
encouraged to practise “positive thinking”, but we find
that approach is self-defeating and ultimately a
damaging denial of dreadful reality,’ he said. ‘Negative
emotions such as fear and anger are inborn and are of
tremendous importance. Negative emotions are often
crucial for survival: careful experiments such as ours
have documented that negative emotions narrow and
focus attention so we can concentrate on the trees
instead of the forest.’
Vaillant criticises the boom in anti-anger, moodstabilising drugs and the growing market for angermanagement counselling and classes. He believes
that, while uncontrolled exhibitions of anger are
destructive, learning to positively channel our anger
serves a vital role in our well-being. Internalising the
emotion can cause depression, health problems and
communication difficulties. ‘Psychologists, having
dealt for generations with damaged psyches, should
now be engaged in the psychological equivalent of
reverse engineering,’ he said. ‘We all feel anger, but
individuals who learn how to express their anger
while avoiding the explosive and self-destructive
consequences of unbridled fury have achieved
something incredibly powerful in terms of overall
emotional growth and mental health. If we can define
and harness those skills, we can use them to achieve
great things.’
Dr Carol Tavris, a social psychologist and author
of Anger: The Misunderstood Emotion, agrees. She
believes properly expressed anger can help to clarify
relationship problems and also clinch business deals,
fuel political agendas and give people a sense of
control during uncertain times. Dr James Averill, a
University of Massachusetts Amherst psychologist,
believes anger has a bad name because it is
erroneously associated with violence. In a study of
everyday anger, Averill found that angry episodes
helped strengthen relationships about half the time
and only lead to violence in less than 10% of cases.
‘Anger can be used to aid intimate relationships, work
interactions and political expression,’ said Averill.
‘When you look at everyday episodes of anger, as
opposed to those that have more dramatic outcomes,
the results are usually positive.’
The philosopher and author Alain de Botton agrees
that anger is a misunderstood emotion. ‘Though
philosophers have traditionally been concerned with
the pursuit of happiness,’ he said, ‘the stubborn
recurrence of anger means the development of
a workable approach to it must surely outstrip the
value of any utopian quest for happiness.’
Source: Adapted from Hill, A. ‘How to Be Happy in Life: Let Out
Your Anger’, Observer, 1 March 2009. Copyright Guardian News
& Media Ltd. 2009. Reproduced with permission.
Discussion questions
1 Using the ‘cycle of perception and behaviour’
model shown in Figure 6.13, examine how the
expression of anger by one person might have
a positive effect on the communication process
as the article suggests.
2 What particular problems might the expression
of anger (either verbally or using non-verbal
signals) cause in a culturally diverse environment?
3 What can the article tell us about the wider role of
emotions at work? Should managers control
displays of emotion such as anger in both
themselves and their staff? Give reasons for your
Stroop – illustrative experiment
(This is a development of Figure 6.11 and provides a further opportunity to review possible perceptual illusion.)
a Write two vertical lists of 20 colour names in felt tip pen. For the first list, use the correct colour pen for the
colour word you are writing (for example, blue pen for the word blue). Repeat some of the colours but place
them in random order.
b For the second list, use different colour pens for the colour word (for example, use a red pen for the word blue).
c Now ask a colleague to read out loud the colour that the word is written in (not the word itself). Compare the
amount of time it takes your colleague to read out the two lists. The second list probably not only took longer
but had more mistakes and more hesitations.
William Stroop, who first conducted this experiment, noted that the task interferes with expected behaviour. It is
difficult to stop yourself from reading the word (the result of our early learning), which in this case directly
impairs performance.
Form small groups and then undertake, individually, the following exercise.
1 Read everything before you do anything.
2 Put your name in the upper right-hand corner of the paper, in
the space provided.
3 Circle the word ‘name’ in the second sentence, above.
4 Draw five small squares in the upper left-hand corner of this paper.
5 Put an X in each of the five small squares you have drawn.
6 Put a circle around each of those five small squares above.
7 Sign your name, under and to the left of the title above.
8 Draw a circle, in pen, around sentences 6 and 7 above.
9 Multiply 70 30 and write the result on the reverse side.
10 Draw a circle around the word ‘paper’ in sentence 4, above.
11 Please now call out your first name, loudly.
12 If you feel that you have carefully followed these directions, call
out, loudly: ‘I have carefully followed directions!’
13 Add 107 and 278, and write the sum on the reverse, immediately
under the first figure that you wrote there.
14 Circle that figure on the reverse.
15 In a normal voice, count aloud from 1–10.
16 If no one else has said it, say now, ‘I am the leader!’
17 Now that you have read all of the foregoing, very carefully,
please complete ONLY sentences 1 and 2.
What conclusions do you draw from this exercise?
Completing this exercise should help you to enhance the following skills:
Distinguish between facts and assumptions or inferences.
Examine the basis upon which you make judgements.
■ Review the nature of your communication and decision-making processes.
After reading the following story you are required to:
1 Read the 15 statements about the story and check each to indicate whether you consider it to be true, false or?
‘T’ means that the statement is definitely true on the basis of the information presented in the story.
‘F’ means that it is definitely false.
‘?’ means that it may be either true or false and that you cannot be certain of which on the basis of the
information presented in the story. If any part of a statement is doubtful, mark it ‘?’.
Answer each statement in turn. You may refer to the story as often as needed but do not go back to change
any answer later and do not re-read any statements after you have answered them.
2 After you have checked all 15 statements, work in small groups of three to five and discuss your individual
answers. How much agreement is there among members of your group? Do not change any of your first
individual answers. However, if as a result of your group discussion you would now give a different answer
to any of the statements, note this alongside your original answer.
The story
A businessman had just turned off the lights in the store when a man appeared and demanded money.
The owner opened a cash register. The contents of the cash register were scooped up and the man sped away.
A member of the police force was notified promptly.
Statements about the story
A man appeared after the owner had turned off his store lights.
The robber was a man.
The man who appeared did not demand money.
The man who opened the cash register was the owner.
The storeowner scooped up the contents of the cash register and ran away.
Someone opened a cash register.
After the man who demanded the money scooped up the contents of the cash register,
he ran away.
While the cash register contained money, the story does not state how much.
The robber demanded money of the owner.
A businessman had just turned off the lights when a man appeared in the store.
It was broad daylight when the man appeared.
The man who appeared opened the cash register.
No one demanded money.
The story concerns a series of events in which only three persons are referred to:
the owner of the store, a man who demanded money and a member of the police force.
The following events occurred: someone demanded money, a cash register was opened,
its contents were scooped up and a man dashed out of the store.
Source: From Hanley, W. V. Communications and Interpersonal Relations, Texts and Cases, sixth edition, Irwin (1992), p. 213.
How would you explain differences in individual perceptions of the same statement?
On what basis did members of your group give different answers and how did their perception of
the statements about the story differ?
■ To what extent can you be absolutely certain about anything?
So, you have an assignment due tomorrow, 2,000 words,
deadline 1600. Have you written it yet? Maybe a
paragraph or two? But you’ve got lots of notes, a heap
of books from the library, a few articles downloaded
from Google Scholar and some ideas, but you just
haven’t quite got them down on paper yet. And you’ve
known about this deadline for, what, two weeks? A
month? More. . . . ? Still, no worries; twenty-four hours
to go. But first you need some more coffee – and, drat!
The milk has run out so a quick trip to the corner store.
And perhaps you can just read this text message. And
then you can get on with it. Honestly. If you are
‘Human’, the chances are you may recognise at least
part of this scenario. The good news is that almost
everybody else does. The less good news is that you will
probably do it again. It’s painful, it’s frustrating, but it’s
true. Luckily, a few recent and highly readable studies
by behavioural economists can give you an insight into
why, and how it can be avoided.
Reason and irrationality
The basis for these ideas is the link between perception,
thought and behaviour, and particularly our behaviour
in terms of the economic decisions and choices people
make in their everyday life. Many of these choices are
personal; how much to pay for a coffee at Waterloo
railway station, where to rent or buy a house, how
much to put into a pension plan or why you should be
the first to order your food when you go out to dinner
with a group of friends.71 However, the principles shed
light on the perception–thought–behaviour process,
which is equally important in organisational contexts.
Some choices and decisions are specifically related to
management and organisational behaviour: matters of
pay, reward, performance, honesty and discrimination.
In the cases discussed, the decisions people make
appear to be both irrational, but entirely
understandable. This was the starting point for Dan
Ariely, who explains that behavioural economics is
a relatively new field that links economics and
psychology; it focuses on judgement and decisionmaking and seeks to identify the causes of ‘irrational’
behaviour. Moreover, he considers that:
we are not only irrational, but predictably irrational –
that our irrationality happens in the same way, again
and again. Whether we are acting as consumers,
businesspeople or policy makers . . . Moreover, these
irrational behaviors of ours are neither random nor
Source: David Samuel Robbins/Getty Images
Behavioural economics
Behavioural economics explores the links between perception, thought
and behaviour, particularly in terms of the economic choices people
make in their everyday lives.
senseless, They are systematic, and since we repeat them
again and again, predictable.72
Social and market norms
Much of Ariely’s research has been experimental, and
one set of experiments offers an insight into the nature
of the effort reward bargain. Do we work harder when
we are paid? Not necessarily. The experiment which
revealed this involved three groups of participants who
were asked to carry out a simple repetitive task of
clicking and dragging circles across a computer screen
using a mouse. The system counted how many circles
were moved in the 5 minutes given for the task. Some
groups were paid well for participating; others paid less
well and yet others asked to take part as a favour. As
anticipated, the well paid worked harder than the
poorly paid (by about 50%); but the unpaid
outperformed both. Why? Ariely’s conclusion was that
different norms had been applied – social ones rather
than market ones – and that in many circumstances
social norms are more effective motivators.
Does this mean organisations can use social norms
as well as market norms to encourage effort? A group
of lawyers was shown to be content to offer free legal
advice to needy retired clients, but not at all likely to
offer the same service for a reduced fee. Here social
norms were powerful where market norms actually had
a deterrent effect. Indeed, further experiments showed
that even the mention of money could drive out social
norms and change behaviour. The psychological
technique of ‘priming’ (the creation of a certain set of
expectations, indirectly, prior to some kind of activity)
was used to introduce the idea of market norms to some
people but not others, although nobody was actually
going to be paid for taking part this time. Some
participants were primed to think about money via a
sentence unscrambling task before attempting a difficult
visual puzzle (the sentences they were given used words
like salary), and others were given neutral sentences.
The behaviour of the primed participants during
the puzzle element was notably different:
They were more selfish and self-reliant; they wanted
to spend more time alone; they were more likely to
select tasks that required individual input rather than
teamwork; . . . Indeed, just thinking about money makes
us behave as most economists believe we behave – and
less like the social animals we are in our daily lives.73
Moreover, it seems that once we have switched over
from social to market norms in our thinking, it is very
difficult for us to switch back. The social relationship
may have been irretrievably ruined.74 Obviously, the
vast majority of work organisations rely on market
norms to a significant extent, and rarely more so than
when people are paid for performance. The link
between pay and performance seems logical, and much
managerial work involves performance measurement
and judgement with the aim of improving performance.
For instance, when salaries were replaced by piecework
in a car windscreen repair business (workers were paid
per windscreen re-fit, and required to correct any
mistakes they made without extra pay) productivity
improved and errors were reduced.75 However, the
problem for advocates of this type of incentive scheme
is that performance in most jobs is not as easily
measured as it is in the windscreen repair business;
and workers will generally adjust their behaviour to
achieve the measured targets regardless of the overall
It’s simply too difficult for managers to work out the
details of what should be done, and to judge whether
what should be done is being done. The frustrations of
working life are a direct result of that struggle.76
All you need is Nudge
An example of the application of behavioural
economics shows how people can be encouraged, rather
than forced, to behave in ways which are seen to be
beneficial (to themselves, to their communities, the
environment etc.) and deals with the age-old problem
of why we can’t seem to do things that we know are
good for us or ‘right’. We lack self-control, especially
when costs are felt immediately but the pay-off doesn’t
arrive for some time. This is why dieting is hard but
chatting on Facebook is easy. We tend to defer changes
to our behaviour and are over-optimistic about our
future behaviour; our diets always start tomorrow and
will be spectacularly effective. But it seems that we can
be ‘nudged’ to change our future behaviour in a way that
makes it stick. For instance, Thaler and Sunstein report
on the success of the ‘Save More Tomorrow’ plan as
a means of encouraging people to contribute more
sensibly to pension schemes. Instead of requiring
people to contribute more of their pay today, they were
asked to commit to increasing their savings in the
future. The savings plan deducted the money from their
salaries, and the increased deductions were timed to
coincide with pay raises.
By synchronising pay raises and savings increases,
participants never see their take-home amounts go down,
and they don’t view their increased retirement
contributions as losses.77
The scheme enlisted the power of four key behavioural
responses to perceived factors. The ‘painful’ part was
deferred; there was never a perception of ‘loss’, in this
case of spending power; the system was easy and
the default contributions were the increasing ones;
and the power of inertia meant that opting out of
the increases was more effort than staying in.
The combined effects meant that the ‘nudge’ was
effective, even though there was no obligation to
continue with the increases.
Now, about that essay
A further practical example of this is the website
created by Yale Economics professor Dean Karlan
called ‘stickK.com’ which is described as a ‘commitment
store’, and which is based on two key principles of
behavioural economics:
1 People don’t always do what they claim they want
to do.
2 Incentives get people to do things.78
The process is described by Thaler and Sunstein:
An individual puts up money and agrees to accomplish
a goal by a certain date. He also specifies how to verify
that he has met his goal. For example he might agree to
a weigh-in at a doctor’s office . . . (if the goal is to lose
weight). If the person reaches his goal, he gets his money
back. If he fails, the money goes to charity.79
So, back to that essay. Only 20 hours to go and still
only 426 words. If only you’d written 250 words a day
for the last 10 days, you’d be polishing off the
references and making it look nice by now! So, next
time you get an assignment, how about you and your
mates visit stickK.com?
Your tasks
1 Discuss and plan an experiment like the ‘circle-dragging’ one carried out by Ariely which you could use to
see if you find the same differences in motivation resulting from the use of ‘social’ and ‘market’ norms.
2 To what extent should managers appeal to ‘social norms’ when planning the work of their staff? What are
the benefits and what are the dangers?
3 Consider the idea of ‘priming’. Explain how this might fit into the cycle of perception and behaviour illustrated
in Figure 6.13. How might a manager, either consciously or unconsciously, ‘prime’ others to receive their
communications in different ways?
4 What can we learn from the ideas behind the ‘Save More Tomorrow’ scheme or ‘stickK.com’ about how to
help people to change both their perceptions and behaviour at work in such a way as to improve personal
Notes and references
1 We wish gratefully to acknowledge Linda Carter, the joint
author of this chapter in earlier editions.
2 Bartlett, F. C. Remembering Cambridge, Cambridge
University Press (1932).
3 Kohler, I. ‘The Formation and Transformation of the Visual
World’, Psychological Issues, vol. 3, 1964, pp. 28–46,
4 Bexton, W., Heron, W. and Scott, T. ‘Effects of Decreased
Variation in the Sensory Environment’, Canadian Journal
of Psychology, vol. 8, 1954, pp. 70–6.
5 Myers, I. B. Introduction to Type, Oxford Psychologists Press
6 Witkin, H. A., Lewis, H. B., Hertzman, M., Machover, K.,
Meissner, P. P. and Wapner, S. S. Personality Through
Perception, Harper & Row (1954).
7 Schein, E. H. Organizational Culture and Leadership, Jossey
Bass (1992), p. 9.
8 Ling, C. and Masako, I. ‘Intercultural Communication and
Cultural Learning: The Experience of Visiting Japanese
Students in the US’, The Howard Journal of Communications,
vol. 14, 2003, pp. 75–96.
9 Hall, E. T. ‘The Silent Language of Overseas Business’,
Harvard Business Review, vol. 38, no. 3, 1960,
pp. 85–7.
10 Dainty, P. and Anderson, M. ‘Mindset for Managers’, in
Chowdhury, S. (ed.) Management 21C, Financial Times
Prentice Hall (2000), pp. 109–10.
11 McCrum, M. Going Dutch in Beijing, Profile Books (2007),
p. vii.
12 Stewart-Allen, A. L. ‘Changing the Mindset about
Americans’, Professional Manager, vol. 15, no. 5, September
2006, p. 37.
13 McCrum, M. Going Dutch in Beijing, Profile Books (2007),
pp. 44–5.
14 Block, J. R. and Yuker, H. E. Can You Believe Your Eyes?,
Robson Books (2002).
15 Morgan, C. T. and King, R. A. Introduction to Psychology,
third edition, McGraw-Hill (1966), p. 343.
16 Stroop, J. R. ‘Studies of Interference in Serial Verbal
Reactions’, Journal of Experimental Psychology, vol. 4, no. 18,
1935, pp. 643–62; and Penrose, L. S. and Penrose, R.
‘Impossible Objects: A Special Type of Illusion’, British
Journal of Psychology, part 1, February 1958.
Kendon, A. ‘Some Functions of Gaze Direction in Social
Interaction’, Acta Psychologica, vol. 26, 1967, pp. 22–63.
Mehrabian, A. Nonverbal Communication, Aldine Atherton
Cook, M. Interpersonal Perception, Penguin (1971).
Schneider, S. C. and Barsoux, J. Managing Across Cultures,
second edition, Financial Times Prentice Hall (2003),
p. 29.
Goffman, E. The Presentation of Self in Everyday Life,
Penguin (1971).
Asch, S. E. ‘Forming Impressions on Personality’, Journal of
Abnormal and Social Psychology, vol. 41, 1946, pp. 258–90.
Miller, N. and Campbell, D. T. ‘Recency and Primacy in
Persuasion as a Function of the Timing of Speeches and
Measurements’, Journal of Abnormal and Social Psychology,
vol. 59, 1959, pp. 1–9.
Hodges, B. ‘Effect of Volume on Relative Weighting in
Impression Formation’, Journal of Personality and Social
Psychology, vol. 30, 1974, pp. 378–81.
Gahagan, J. Interpersonal and Group Behaviour, Methuen
Green, J. ‘When Was Your Management Style Last
Applauded?’, Chartered Secretary, December 1998, p. 28.
Wilson, P. R. ‘Perceptual Distortion of Height as a
Function of Ascribed Academic Status’, Journal of Social
Psychology, no. 74, 1968, pp. 97–102.
See, for example, Leitch, L. ‘The Big Problem that Short
Men Face’, The Times, 24 June 2009.
Spitzer, M. ‘Brain Research and Learning over the Life Cycle
in Personalising Education’, OECD (2006).
Cooperrider, D. L. and Srivastva, S. ‘An Invitation to
Organizational Wisdom and Executive Courage’, in
Srivastva, I. S. and Cooperrider, D. L. (eds) Organizational
Wisdom and Executive Courage, New Lexington Press
Hammond, S. A. The Thin Book of Appreciative Inquiry,
second edition, Thin Book Publishing Company, (1998).
Guirdham, M. Interactive Behaviour at Work, third edition,
Financial Times Prentice Hall (2002), p. 161.
33 Wexley, K. N., Yukl, G. A., Kovacs, S. Z. and Sanders, R. E.
‘Importance of Contrast Effects in Employment Interviews’,
Journal of Applied Psychology, vol. 56, 1972, pp. 45–8.
34 Torbert, W. R. Managing the Corporate Dream, McGraw-Hill
(1987). See also Breakthrough Consultancy,
35 Laing, R. D. Knots, Penguin (1971), p. 30.
36 Guirdham, M. Interactive Behaviour at Work, third edition,
Financial Times Prentice Hall (2002).
37 See, for example, Torrington, D. Face-to-Face in
Management, Prentice Hall (1982).
38 Mehrabian, A. Tactics of Social Influence, Prentice Hall
39 Pivcevic, P. ‘Taming the Boss’, Management Today, March
1999, p. 70.
40 McGuire, T. ‘Don’t Just Listen’, Chartered Secretary,
September 1998, p. 24.
41 James, J. Body Talk at Work, Judy Piatkus (2001), p. 3.
42 Kennett, M. ‘First-Class Coach’, Management Today, May
2008, p. 68.
43 Fletcher, W. ‘Let Your Body Do The Talking’, Management
Today, March 2000, p. 30.
44 Mann, S. ‘Message in a Body’, Professional Manager,
November 2000, pp. 32–3; and Ribbens, G. and
Thompson, R. Understanding Body Language in a Week,
Institute of Management and Hodder & Stoughton (2000).
45 Akehurst, L. in Morrish, J. ‘Spot the Liar’, Management
Today, October 2006, pp. 46–51.
46 See, for example, James, J. The Body Language Bible,
Vermillon (2008).
47 For other examples of cultural differences, see Schneider, S.
C. and Barsoux, J. Managing Across Cultures, second edition,
Financial Times Prentice Hall (2003).
48 Pease, A. and Pease, B. The Definitive Book of Body Language,
Orion Books Limited (2005), p. 2.
49 ‘Nick Fitzherbert Applies the Rules of Magic to Coaching
People in Communication Skills’, www.fitzherbert.co.uk.
See also Fitzherbert, N. ‘Magic Tricks in Communication’,
Professional Manager, vol. 14, no. 5, September 2005,
pp. 32–3.
50 See, for example, Pivcevic, P. ‘Taming the Boss’,
Management Today, March 1999, pp. 68–72.
51 Bandler, R., Grinder, J., Dilts, R. and Delozier, J. Neuro
Linguistic Programming Volume I: The Study of the Structure
of Subject Experience, Meta Publications (1980).
52 Shapiro, M. ‘Getting Your Brain in Gear’, Professional
Manager, vol. 16, no. 5, September 2007, pp. 26–9.
53 From www.bbnlp.com (accessed 13 February 2009).
54 McCann, D. How to Influence Others at Work, second
edition, Butterworth Heinemann (1993).
55 Stone, K. ‘Influential People’, Manager: The British
Journal of Administrative Management, June/July 2005,
pp. 22–3.
56 Shapiro, M. ‘Getting Your Brain in Gear’, Professional
Manager, vol. 16, no. 5, September 2007, pp. 26–9.
57 O’Connor, J. and Lages, A. Coaching with NLP, Element
(2004), pp. 114–15.
58 Berne, E. Games People Play, Penguin (1966).
59 For a summary of NLP, TA, and other thoughts on business
psychology, see Butcher, D. ‘Buyer’s Guide to Business
Psychology’, Management Today, May 2005, pp. 54–7.
60 Heider, F. The Psychology of Interpersonal Relations,
John Wiley & Sons (1958).
61 Kelley, H. H. ‘The Process of Causal Attribution’, American
Psychologist, February 1973, pp. 107–28.
62 Bartunek, J. M. ‘Why Did You Do That? Attribution Theory
in Organizations’, Business Horizons, September–October
1981, pp. 66–71.
63 Mitchell, T. R., Smyser, C. M. and Weed, S. E. ‘Locus of
Control: Supervision and Work Satisfaction’, Academy of
Management Journal, September 1975, pp. 623–31.
64 Durand, D. E. and Nord, W. R. ‘Perceived Leader Behaviour
as a Function of Personality Characteristics of Supervisors
and Subordinates’, Academy of Management Journal,
September 1976, pp. 427–38.
65 See, for example, Stewart-Allen, A. L. ‘Changing the
Mindset about Americans’, Professional Manager, vol. 15,
no. 5, September 2006, p. 37.
66 Goss, D. and Adam-Smith, D. Organizing AIDS, Taylor &
Francis (1995).
67 Merton, R. K. Social Theory and Social Structure, Free Press
68 Rosenthal, R. and Jacobson, L. Pygmalion in the Classroom,
Holt, Rinehart and Winston (1968).
69 Word, C. O., Zanna, M. P. and Cooper, J. ‘The Nonverbal
Mediation of Self-Fulfilling Prophecies in Interracial
Interaction’, Journal of Experimental Social Psychology,
vol. 10, no. 1, 1974, pp. 109–20.
70 Ames, A. ‘Visual Perception and the Rotating Trapezoidal
Window’, Psychological Monographs, vol. 65, no. 7, 1951.
71 Ariely, D. Predictably Irrational; The Hidden Forces that Shape
Our Decisions, Harper Collins (2008), Chapter 13.
72 Ibid., p. xx.
73 Ibid., p. 75.
74 The first of the 2009 Reith Lectures by Prof. Michael Sandel
‘Markets and Morals’ makes similar points; available as
a podcast and transcript from the BBC website,
75 Harford, T. The Logic of Life, Little, Brown (2008).
76 Ibid., p. 102.
77 Thaler, R., and Sunstein, C. Nudge: Improving Decisions
about Health, Wealth and Happiness, Yale University Press
(2008), p. 113.
78 See the ‘About Us’ section of the website at
79 Thaler and Sunstein op. cit., p. 231.
Now that you have finished reading this chapter, visit MyManagementLab at
www.pearsoned.co.uk/mymanagementlab to find more learning resources
to help you make the most of your studies and get a better grade.
The relationship between the organisation and its members is
influenced by what motivates them to work and the rewards and
fulfilment they derive from it. The nature of the work organisation,
styles of leadership and the design and content of jobs can have
a significant effect on the satisfaction of staff and their levels of
performance. The manager needs to know how best to elicit the
co-operation of staff and direct their efforts to achieving the goals
and objectives of the organisation.
Learning outcomes
After completing this chapter you should be able to:
explain the meaning and underlying concept of motivation;
detail main types of needs and expectations of people at work;
explain frustration-induced behaviour and possible reactions to frustration
at work;
examine main theories of motivation and evaluate their relevance to
particular work situations;
review the meaning, nature and dimensions of job satisfaction;
assess broader influences on motivation and job satisfaction;
evaluate the relationship between motivation, job satisfaction and work
Critical reflection
‘Some writers argue that people do not lack motivation, only the right
triggers to motivate them. Some claim that motivation can only come from
within and attempts from other people to motivate you have little lasting
What are your views? In your own words, what motivates you most?
The study of motivation is concerned, basically, with why people behave in a certain way.
The basic underlying question is ‘Why do people do what they do?’ In general terms, motivation can be described as the direction and persistence of action. It is concerned with why
people choose a particular course of action in preference to others, and why they continue
with a chosen action, often over a long period and in the face of difficulties and problems.1
From a review of motivation theory, Mitchell identifies four common characteristics which
underlie the definition of motivation:2
Motivation is typified as an individual phenomenon. Every person is unique and all
the major theories of motivation allow for this uniqueness to be demonstrated in one way
or another.
Motivation is described, usually, as intentional. Motivation is assumed to be under
the worker’s control, and behaviours that are influenced by motivation, such as effort
expended, are seen as choices of action.
Motivation is multifaceted. The two factors of greatest importance are: (i) what gets people
activated (arousal); and (ii) the force of an individual to engage in desired behaviour
(direction or choice of behaviour).
The purpose of motivational theories is to predict behaviour. Motivation is not the
behaviour itself and it is not performance. Motivation concerns action and the internal
and external forces which influence a person’s choice of action.
On the basis of these characteristics, Mitchell defines motivation as ‘the degree to which
an individual wants and chooses to engage in certain specified behaviours’.
A fuller definition is given by the Chartered Management Institute:
Motivation is the creation of stimuli, incentives and working environments that enable people to perform
to the best of their ability. The heart of motivation is to give people what they really want most from
work. In return managers should expect more in the form of productivity, quality and service.3
Underlying concept of motivation
The underlying concept of motivation is some driving force within individuals by which they
attempt to achieve some goal in order to fulfil some need or expectation. This concept gives
rise to the basic motivational model, which is illustrated in Figure 7.1. People’s behaviour is
Figure 7.1
A simplified illustration of the basic motivational model
determined by what motivates them. Their performance is a product of both ability level
and motivation.
Performance = function (ability × motivation)
Kreitner et al. suggest that although motivation is a necessary contributor for job performance, it is not the only one. Along with ability, motivation is also a combination of level
of skill, knowledge about how to complete the task, feelings and emotions, and facilitating
and inhibiting conditions not under the individual’s control.4 However, what is clearly
evident is that if the manager is to improve the work of the organisation, attention must be
given to the level of motivation of its members. The manager must also encourage staff to
direct their efforts (their driving force) towards the successful attainment of the goals and
objectives of the organisation.
But what is this driving force and what is it that people really want from work? What are
people’s needs and expectations and how do they influence behaviour and performance at
work? Motivation is a complex subject, it is a very personal thing, and it is influenced by
many variables. Farren reminds us of the 12 human needs that have been around since
the beginning of recorded history: family, health and well-being, work/career, economic,
learning, home/shelter, social relationships, spirituality, community, leisure, mobility, and
environment/safety. ‘Work and private life in the new millennium will continue to revolve
around the 12 human needs.’5
The various needs and expectations at work can be categorised in a number of ways – for
example the simple divisions into physiological and social motives or into extrinsic and
intrinsic motivation.
Extrinsic motivation is related to ‘tangible’ rewards such as salary and fringe benefits,
security, promotion, contract of service, the work environment and conditions of work.
Such tangible rewards are often determined at the organisational level and may be largely
outside the control of individual managers.
Intrinsic motivation is related to ‘psychological’ rewards such as the opportunity to use
one’s ability, a sense of challenge and achievement, receiving appreciation, positive
recognition and being treated in a caring and considerate manner. The psychological
rewards are those that can usually be determined by the actions and behaviour of
individual managers.6
Higher set of motivational needs
According to Kets de Vries, the best-performing companies possess a set of values that creates
the right conditions for high performance; he questions whether in such best companies
there is something more going on that touches upon a deeper layer of human functioning,
causing people to make an extra effort. The emphasis is on widening choice that enables
people to choose more freely, instead of being led by forces of which they are unaware;
and it is a motivational needs system on which such choice is based. Kets de Vries suggests
that in addition to the motivation needs system for physiological needs, sensual and
enjoyment needs, and the need to respond to threatening situations, companies that get
the best out of their people are characterised by a system based on a higher set of
motivational needs:
attachment/affiliation – concerning the need for engagement and sharing, a feeling of
community and a sense of belonging to the company; and
exploration/assertion – concerning the ability to play and work, a sense of fun and
enjoyment, the need for self-assertion and the ability to choose.7
Figure 7.2
Needs and expectations of people at work
A three-fold classification
Given the complex and variable nature of needs and expectations, the following is a
simplistic but useful, broad three-fold classification as a starting point for reviewing the
motivation to work (see Figure 7.2):
Economic rewards – such as pay, fringe benefits, pension rights, material goods and security. This is an instrumental orientation to work and concerned with ‘other things’.
Intrinsic satisfaction – derived from the nature of the work itself, interest in the job, and
personal growth and development. This is a personal orientation to work and concerned
with ‘oneself’.
Social relationships – such as friendships, group working and the desire for affiliation,
status and dependency. This is a relational orientation to work and concerned with ‘other
A person’s motivation, job satisfaction and work performance will be determined by the
comparative strength of these sets of needs and expectations and the extent to which they are
fulfilled. For example, some people may make a deliberate choice to forgo intrinsic satisfaction and social relationships (particularly in the short term or in the earlier years of their
working life) in return for high economic rewards. Other people are happy to accept comparatively lower economic rewards in favour of a job that has high intrinsic satisfaction
and/or social relationships. Social relationships would appear to be an important feature for
many people, especially, for example, for those working in the hospitality industry where
interactions with other people and the importance of supportive working relationships and
good teamwork can be strong motivators at work.8
Earlier writers, such as F. W. Taylor, believed in economic needs motivation. Workers would
be motivated by obtaining the highest possible wages through working in the most efficient
and productive way. Performance was limited by physiological fatigue. For Taylor, motivation
was a comparatively simple issue – what the workers wanted from their employers more
than anything else was high wages. This approach is the rational–economic concept of
motivation. The ideas of F. W. Taylor and his ‘rational–economic needs’ concept of
motivation (discussed in Chapter 2) and subsequent approaches to motivation at work have
fuelled the continuing debate about financial rewards as a motivator and their influence on
Where there is little pleasure in the work itself or the job offers little opportunity for
career advancement, personal challenge or growth, many people may appear to be motivated
primarily, if not exclusively, by money. Weaver suggests that for many hourly workers in
the hospitality industry, such as dishwashing, waiting or housekeeping staff, the work
does not change much among different companies and there is little attachment to a
particular company. For such staff, Weaver proposes a ‘Theory M’ programme of motivation based on direct cash rewards for above-average performance. A percentage base is
calculated from the average performance of workers on the staff.9 Yet we frequently see
pronouncements from prominent business figures that motivation is about much more
than money.
Work is about letting people know they are important, their hard work and efforts matter,
and they’re doing a good job. And this kind of recognition, in fact, can sometimes be more
important than money.
Gary Kusin, CEO, FedEx Kinko’s10
The short answer appears to be that for the vast majority of people, money is clearly
important and a motivator at work but to what extent and how important depends upon
their personal circumstances and the other satisfactions they derive from work. The bottom
line is surely the extent to which money motivates people to work well and to the best of
their abilities. Although pay may still make people tick, there are now a number of other
important influences on motivation. For many people, the feeling of being recognised and
valued appears more important than money in motivating them to stay in a particular job.
(See the discussion of Herzberg’s two-factor theory of motivation later in this chapter.)
Popular press reports appear to indicate that many people are increasingly motivated
by broader concerns such as their work/life balance (discussed in Chapter 3), opportunities
for flexible working, career advancement and personal development and growth, and a
feeling of identification with the values of the organisation. The motivation to work is
also influenced by the changing nature of the work environment and the concept of the
‘psychological contract’, which was discussed in Chapter 1.
If your staff do something good, tell them. And then tell them again. And again. Keep it up. Put
it in writing. Send them a memo – something they can keep. Put it in the company newsletter.
Add a note to their file. Whatever, but make it widely known they did good. This is a quick and
cheap method of praising and motivating your team and it lets everyone know you are monitoring,
praising, motivating.11
As Grayson and Hodges point out, historically loyalty was bought and employers offered
gradual progression up the hierarchy, a decent salary and job security in return for a hard
day’s work. ‘Increasingly, motivation is based on values rather than purely on financial
However, according to Gratton finding intrinsically motivating tasks is not easy.
Finding tasks and experiences that are intrinsically motivating sounds relatively straightforward but in
fact it requires a heightened awareness of who we are. Without this emotional self-awareness we have
no capacity to judge whether the tasks available to us could be intrinsically motivating . . . Finding
intrinsically motivating tasks also requires the companies of which we are members to communicate the
tasks available and to encourage volunteering.13
Waller refers to the importance today of identity and that work inevitably plays a key role
on shaping identity. Waller questions how much of ourselves do we put into our job. He
points out that not long ago, a job was something you did to put bread on the table but
nowadays (global financial situation apart) people in a cushy job with a decent salary, paid
holiday, pension, health care and a well-stocked sandwich trolley will jack it all in, saying
‘It’s not really me’. If people are getting absorbed by their work-life, they expect their job to
help them to discover and develop themselves.14
Critical reflection
‘It’s all very well talking about a contented workforce, praise and recognition but at times
of high unemployment, rapid change or uncertainty a secure job, increased training and
steady income are the true motivators. In the real world money is the most potent need
and strongest motivator.’
Can you argue convincingly against this contention?
What happens if a person’s motivational driving force is blocked and they are unable to
satisfy their needs and expectations, and what is the likely effect on their work performance?
There are two possible sets of outcomes: constructive behaviour or frustration (see Figure 7.3).
Constructive behaviour
Constructive behaviour is a positive reaction to the blockage of a desired goal and can take
two main forms: problem-solving or restructuring.
Figure 7.3
A basic model of frustration
Problem-solving is the removal of the barrier – for example finding an alternative means
of undertaking a task, repairing a damaged machine or bypassing an unco-operative
Restructuring, or compromise, is the substitution of an alternative goal, although such
a goal may be of a lower or different order – for example taking an additional part-time
job because of failure to be promoted to a higher grade, or reassessing the work/life
Note: Even if a person engages in constructive behaviour in response to a barrier or
blockage, it could be said that the person was ‘frustrated’, if only mildly or in the short term,
in an attempt to satisfy a desired goal. However, the term ‘frustration’ is usually interpreted
as applying to negative responses to a barrier or blockage which prevents satisfaction of
a desired goal.
Frustration (negative responses)
Frustration is a negative response to the blockage of a desired goal and results in a defensive
form of behaviour. There are many possible reactions to frustration caused by the failure to
achieve a desired goal. These can be summarised under four broad headings: aggression,
regression, fixation and withdrawal.15 However, these categories are not mutually exclusive.
Most forms of frustration-induced behaviour at work are a combination of aggression,
regression and fixation.
Aggression is a physical or verbal attack on some person or object, for example striking
a supervisor, rage or abusive language, destruction of equipment or documents, or malicious
gossip about a superior. This form of behaviour may be directed against the person or object
that is perceived as the source of frustration, that is the actual barrier or blocking agent.
However, where such a direct attack cannot be made, because, for example, the source of
frustration is not clear or not specific, or where the source is feared, as with a powerful
superior, aggression may be displaced towards some other person or object.
With displaced aggression the person may find an easier, safer person or object as a
scapegoat for the outlet of frustration – for example picking arguments with colleagues,
being short-tempered with subordinates, shouting at the cleaners or kicking the waste-paper
bin. A more constructive form of displaced aggression is working off frustrated feelings
through demanding physical work or sport, or perhaps by shouting/cursing when alone or
in the company of an understanding colleague.
Regression is reverting to a childish or more primitive form of behaviour – for example
sulking, crying, tantrums or kicking a broken machine or piece of equipment.
Fixation is persisting in a form of behaviour which has no adaptive value and continuing
to repeat actions which have no positive results – for example the inability to accept change
or new ideas, repeatedly trying a door that is clearly locked or a machine which clearly will
not work, or insisting on applying for promotion even though not qualified for the job.
Withdrawal is apathy, giving up or resignation – for example arriving at work late and
leaving early, sickness and absenteeism, refusal to accept responsibility, avoiding decisionmaking, passing work over to colleagues or leaving the job altogether.
Factors influencing frustration
Among the factors which determine an individual’s reaction to frustration are the:
level and potency of need (see, for example, Maslow’s theory of motivation, discussed
degree of attachment to the desired goal;
strength of motivation;
perceived nature of the barrier or blocking agent; and
personality characteristics of the individual.
It is important that managers attempt to reduce potential frustration, for example through:
effective recruitment, selection and socialisation;
training and development;
job design and work organisation;
equitable HRM policies;
recognition and rewards;
effective communications;
participative styles of management;
attempting to understand the individual’s perception of the situation.
Proper attention to motivation and to the needs and expectations of people at work will help
overcome boredom and frustration-induced behaviour.
There are many competing theories that attempt to explain the nature of motivation. These
theories may all be at least partially true and help to explain the behaviour of certain people
at certain times. The issue of motivation is often most acute for younger people starting on
their career, for people at mid-career positions or for those who find limited opportunities for
promotion or further advancement. For employers there may be difficulties in motivating
staff both in the longer term and in the short run. It is because of the complexity of motivation
and the fact that there is no ready-made solution or single answer to what motivates people
to work well that the different theories are important to the manager. They show there are
many motives that influence people’s behaviour and performance. Collectively, the different
theories provide a framework within which to direct attention to the problem of how best
to motivate staff to work willingly and effectively.
Criticisms and reservations
It is important to emphasise, however, that these various theories are not conclusive. They
all have their critics (this is particularly true of the content theories of motivation) or have
been subject to alternative findings that purport to contradict original ideas. Many of these
theories were not intended initially to have the significance that some writers have subsequently placed upon them. It is always easy to quote an example that appears to contradict
any generalised observation on what motivates people to work. Despite these reservations
the different theories provide a basis for study and discussion, and for review of the most
effective motivational style (see Figure 7.4).
You don’t motivate individuals. You provide them with an environment to be self-motivated. It is
a personal decision, but it’s management’s job to provide the right environment.
Kathy Schofield, Director of Human Resources, HFC Bank16
The manager, therefore, must judge the relevance of these different theories, how best to
draw upon them, and how they might effectively be applied in particular work situations.
The manager should be aware of at least the main theories of motivation.
Content theories and process theories
The usual approach to the study of motivation is through an understanding of internal
cognitive processes – that is, what people feel and how they think. This understanding
should help the manager to predict likely behaviour of staff in given situations. These different cognitive theories of motivation are usually divided into two contrasting approaches:
content theories and process theories.
Figure 7.4
An overview of main theories of work motivation
Content theories attempt to explain those specific things that actually motivate the
individual at work. These theories are concerned with identifying people’s needs and their
relative strengths, and the goals they pursue in order to satisfy these needs. Content theories
place emphasis on the nature of needs and what motivates.
Process theories attempt to identify the relationship among the dynamic variables that
make up motivation. These theories are concerned more with how behaviour is initiated,
directed and sustained. Process theories place emphasis on the actual process of motivation. These theories are discussed later in this chapter.
Major content theories of motivation include:
Maslow’s hierarchy of needs model;
Alderfer’s modified need hierarchy model;
Herzberg’s two-factor theory;
McClelland’s achievement motivation theory.
A useful starting point is the work of Maslow and his theory of individual development
and motivation, published originally in 1943.17 Maslow’s basic proposition is that people are
Figure 7.5
Maslow’s hierarchy of needs model
wanting beings, they always want more, and what they want depends on what they already
have. He suggests that human needs are arranged in a series of levels, a hierarchy of importance.
Maslow identified eight innate needs, including the need to know and understand,
aesthetic needs and the need for transcendence. However, the hierarchy is usually shown as
ranging through five main levels, from, at the lowest level, physiological needs, through
safety needs, love needs and esteem needs, to the need for self-actualisation at the highest
level. The hierarchy of needs may be shown as a series of steps but is usually displayed in
the form of a pyramid (see Figure 7.5). This is an appropriate form of illustration as it implies
a thinning out of needs as people progress up the hierarchy.
Physiological needs. These include homeostasis (the body’s automatic efforts to retain
normal functioning) such as satisfaction of hunger and thirst, the need for oxygen and to
maintain temperature regulation. Also sleep, sensory pleasures, activity, maternal behaviour
and, arguably, sexual desire.
Safety needs. These include safety and security, freedom from pain or threat of physical
attack, protection from danger or deprivation, the need for predictability and orderliness.
Love needs (often referred to as social needs). These include affection, sense of belonging, social activities, friendships, and both the giving and receiving of love.
Esteem needs (sometimes referred to as ego needs). These include both self-respect and
the esteem of others. Self-respect involves the desire for confidence, strength, independence
and freedom, and achievement. Esteem of others involves reputation or prestige, status,
recognition, attention and appreciation.
Self-actualisation needs. This is the development and realisation of one’s full potential.
Maslow sees this as ‘What humans can be, they must be’ or ‘becoming everything that one
is capable of becoming’. Self-actualisation needs are not necessarily a creative urge and
may take many forms which vary widely from one individual to another.
Once a lower need has been satisfied, it no longer acts as a strong motivator. The needs
of the next higher level in the hierarchy demand satisfaction and become the motivating
influence. Only unsatisfied needs motivate a person. Thus Maslow asserts that ‘a satisfied need
is no longer a motivator’.
Not necessarily a fixed order
Although Maslow suggests that most people have these basic needs in about the order indicated, he also makes it clear that the hierarchy is not necessarily a fixed order. There will be
a number of exceptions to the order indicated. For some people there will be a reversal of
the hierarchy, for example:
Self-esteem may seem to be more important than love to some people. This is the most
common reversal of the hierarchy. It is often based on the belief that the person most
loved is strong, confident or inspires respect. People seeking love try to put on a show of
aggressive, confident behaviour. They are not really seeking self-esteem as an end in itself
but for the sake of love needs.
For some innately creative people the drive for creativity and self-actualisation may arise
despite lack of satisfaction of more basic needs.
Higher-level needs may be lost in some people who will continue to be satisfied at lower
levels only: for example, a person who has experienced chronic unemployment.
Some people who have been deprived of love in early childhood may experience the
permanent loss of love needs.
A need which has continued to be satisfied over a long period of time may be undervalued.
For example, people who have never suffered from chronic hunger may tend to underestimate its effects, and regard food as rather an unimportant thing. Where people are
dominated by a higher-level need this may assume greater importance than more basic
People with high ideals or values may become martyrs and give up everything else for the
sake of their beliefs.
Maslow claims that the hierarchy is relatively universal among different cultures, but he
recognises that there are differences in an individual’s motivational content in a particular
Degrees of satisfaction
Maslow points out that a false impression may be given that a need must be satisfied fully
before a subsequent need arises. He suggests that a more realistic description is in terms
of decreasing percentages of satisfaction along levels of the hierarchy. For example,
arbitrary figures for the average person may be: satisfied 85 per cent in physiological needs;
70 per cent in safety needs; 50 per cent in love needs; 40 per cent in esteem needs; and
10 per cent in self-actualisation needs. There is a gradual emergence of a higher-level need
as lower-level needs become more satisfied. The relative importance of these needs changes
during the psychological development of the individual. Maslow subsequently modified his
views by noting that satisfaction of self-actualisation needs by growth-motivated individuals
can actually enhance these needs rather than reduce them. Furthermore, he accepted that
some higher-level needs may still emerge after long deprivation of lower-level needs rather
than only after their satisfaction.
Evaluation of Maslow’s theory
Based on Maslow’s theory, once lower-level needs have been satisfied (say at the physiological and safety levels), giving more of the same does not provide motivation. Individuals
advance up the hierarchy as each lower-level need becomes satisfied. Therefore, to provide
motivation for a change in behaviour, the manager must direct attention to the next higher
level of needs (in this case, love or social needs) that seek satisfaction.
Applications to the work situation
There are a number of problems in relating Maslow’s theory to the work situation. These
include the following:
People do not necessarily satisfy their needs, especially higher-level needs, just through
the work situation; they satisfy them through other areas of their life as well. Therefore the
manager would need to have a complete understanding of people’s private and social
lives, not just their behaviour at work.
There is doubt about the time that elapses between the satisfaction of a lower-level need
and the emergence of a higher-level need.
Individual differences mean that people place different values on the same need. For
example, some people prefer what they might see as the comparative safety of working in
a bureaucratic organisation to a more highly paid and higher status position, but with less
job security, in a different organisation.
Some rewards or outcomes at work satisfy more than one need. Higher salary or promotion, for example, can be applied to all levels of the hierarchy.
Even for people within the same level of the hierarchy, the motivating factors will not be
the same. There are many different ways in which people may seek satisfaction of, for
example, their esteem needs.
Maslow viewed satisfaction as the main motivational outcome of behaviour. But job
satisfaction does not necessarily lead to improved work performance.
A useful basis for evaluation
Although Maslow did not originally intend that the need hierarchy should necessarily be
applied to the work situation, it remains popular as a theory of motivation at work. Despite
criticisms and doubts about its limitations, the theory has had a significant impact on
management approaches to motivation and the design of organisations to meet individual
needs. It is a convenient framework for viewing the different needs and expectations that
people have, where they are in the hierarchy, and the different motivators that might
be applied to people at different levels. The work of Maslow has drawn attention to a
number of motivators and stimulated study and research. The need hierarchy model
provides a useful base for the evaluation of motivation at work. For example, Steers and
Porter suggest a list of general rewards and organisational factors used to satisfy different
needs (see Table 7.1).18
Saunders contends that despite the time that has elapsed, Maslow’s theory remains
When prehistoric man first took shelter in a cave and lit a fire, he was satisfying his lowest – physiological and safety needs. When a Buddhist achieves a state of nirvana, she is satisfying the fifth and
highest – self-actualisation . . . The cave these days might be a three-bedroom semi with garden and
Table 7.1
Applying Maslow’s need hierarchy
Needs levels
General rewards
Organisational factors
1 Physiological
Food, water, sex, sleep
2 Safety
Safety, security, stability, protection
3 Social
Love, affection, belongingness
4 Esteem
Self-esteem, self-respect, prestige, status
5 Self-actualisation
Growth, advancement, creativity
Pleasant working conditions
Safe working conditions
Company benefits
Job security
Cohesive work group
Friendly supervision
Professional associations
Social recognition
Job title
High-status job
Feedback from the job itself
Challenging job
Opportunities for creativity
Achievement in work
Advancement in the organisation
Source: Steers, R. M. and Porter, L. W. Motivation and Work Behaviour, fifth edition, McGraw-Hill (1991), p. 35. Reproduced with permission from the McGraw-Hill
off-street parking, but the fact remains that once we’ve got enough to feed, clothe and house our families money is a low-level motivator for most people. The dash for cash is soon replaced by the desire for
recognition, status and ultimately (although Maslow reckoned that a lot of us never get this far) the
need to express yourself through your work.19
Critical reflection
‘John Adair points out that presenting Maslow’s hierarchy as a pyramid model gives
the impression that the greatest needs are in the lower levels. Adair suggests that the
pyramid should be inverted as physiological needs, for example, are limited but there
are fewer limitations the further up you go.’20
How would you best explain and present Maslow’s hierarchy of human needs?
A modified need hierarchy model has been presented by Alderfer.21 This model condenses
Maslow’s five levels of need into only three levels based on the core needs of existence,
relatedness and growth (ERG theory) (see Table 7.2 on p. 267).
Existence needs are concerned with sustaining human existence and survival and cover
physiological and safety needs of a material nature.
Relatedness needs are concerned with relationships to the social environment and cover
love or belonging, affiliation and meaningful interpersonal relationships of a safety or
esteem nature.
Growth needs are concerned with the development of potential and cover self-esteem
and self-actualisation.
A continuum of needs
Like Maslow, Alderfer suggests that individuals progress through the hierarchy from existence
needs to relatedness needs to growth needs as the lower-level needs become satisfied. However,
Alderfer suggests these needs are more a continuum than hierarchical levels. More than one
need may be activated at the same time. Individuals may also progress down the hierarchy.
There is a frustration–regression process. For example, if an individual is continually frustrated
in attempting to satisfy growth needs, relatedness needs may reassume most importance.
The lower-level needs become the main focus of the individual’s efforts.
Alderfer proposed a number of basic propositions relating to the three need relationships.
Some of these propositions followed Maslow’s theory, some were the reverse of the theory.
A number of studies were undertaken to test these propositions across different samples
of people in different types of organisations. Results from the studies were mixed. For
example, the proposition that the less existence needs are satisfied the more they will be
desired received constant support from all six samples. However, the proposition that
satisfaction of existence needs activates desire for relatedness needs was not supported in any
of the six samples.
Satisfaction of needs
Unlike Maslow’s theory, the results of Alderfer’s work suggest that lower-level needs do not
have to be satisfied before a higher-level need emerges as a motivating influence. The results,
however, do support the idea that lower-level needs decrease in strength as they become
satisfied. ERG theory states that an individual is motivated to satisfy one or more basic sets
of needs. Therefore if a person’s needs at a particular level are blocked, attention should be
focused on the satisfaction of needs at the other levels. For example, if a subordinate’s
growth needs are blocked because the job does not allow sufficient opportunity for personal
development, the manager should attempt to provide greater opportunities for the subordinate to satisfy existence and relatedness needs.
Herzberg’s original study consisted of interviews with 203 accountants and engineers, chosen
because of their growing importance in the business world, from different industries in the
Pittsburgh area of America.22 He used the critical incident method. Subjects were asked to
relate times when they felt exceptionally good or exceptionally bad about their present job
or any previous job. They were asked to give reasons and a description of the sequence of
events giving rise to that feeling. Responses to the interviews were generally consistent and
revealed that there were two different sets of factors affecting motivation and work. This led
to the two-factor theory of motivation and job satisfaction.
Hygiene and motivating factors
One set of factors are those which, if absent, cause dissatisfaction. These factors are related
to job context, they are concerned with job environment and extrinsic to the job itself. These
factors are the ‘hygiene’ or ‘maintenance’ factors (‘hygiene’ being used as analogous to the
medical term meaning preventive and environmental). They serve to prevent dissatisfaction.
The other set of factors are those that, if present, serve to motivate the individual to superior
effort and performance. These factors are related to job content of the work itself. They are
the ‘motivators’ or growth factors. The strength of these factors will affect feelings of
satisfaction or no satisfaction, but not dissatisfaction. The opposite of dissatisfaction is not
satisfaction but, simply, no dissatisfaction (see Figure 7.6).
The hygiene factors can be related roughly to Maslow’s lower-level needs and the motivators
to Maslow’s higher-level needs (see Table 7.2). To motivate workers to give of their best, the
manager must give proper attention to the motivators or growth factors. Herzberg emphasises
that hygiene factors are not a ‘second-class citizen system’. They are as important as the
motivators, but for different reasons. Hygiene factors are necessary to avoid unpleasantness
at work and to deny unfair treatment. ‘Management should never deny people proper
treatment at work.’ The motivators relate to what people are allowed to do and the quality
of human experience at work. They are the variables which actually motivate people. The
work of Herzberg indicates that it is more likely good performance leads to job satisfaction
rather than the reverse.
Evaluation of Herzberg’s work
Herzberg’s theory is, however, a source of frequent debate. There have been many other
studies to test the theory. The conclusions have been mixed. Some studies provide support
for the theory. However, it has also been attacked by a number of writers. There are two
common general criticisms of Herzberg’s theory. One is that the theory has only limited
application to ‘manual’ workers. The other is that the theory is ‘methodologically bound’.
It is often claimed that the theory applies least to people with largely unskilled jobs or
whose work is uninteresting, repetitive and monotonous, and limited in scope. Yet these are
the people who often present management with the biggest problem of motivation. Some
workers do not seem greatly interested in the job content of their work or with the motivators or growth factors.
A second, general criticism concerns methodology. It is claimed that the critical incident
method, and the description of events giving rise to good or bad feelings, influences the
Figure 7.6
Representation of Herzberg’s two-factor theory
results. People are more likely to attribute satisfying incidents at work, that is the motivators,
as a favourable reflection on their own performance. The dissatisfying incidents, that is, the
hygiene factors, are more likely to be attributed to external influences and the efforts of other
people. Descriptions from the respondents had to be interpreted by the interviewers. This
gives rise to the difficulty of distinguishing clearly between the different dimensions and to
the risk of possible interviewer bias.
Despite such criticisms, there is still evidence of support for the continuing relevance of
the theory. According to Crainer and Dearlove:
Herzberg’s work has had a considerable effect on the rewards and remuneration packages offered by
corporations. Increasingly, there is a trend towards ‘cafeteria’ benefits in which people can choose
from a range of options. In effect, they can select the elements they recognise as providing their own
motivation to work. Similarly, the current emphasis on self-development, career management and
self-managed learning can be seen as having evolved from Herzberg’s insights.23
Whatever the validity of the two-factor theory, much of the criticism is with the benefit of
hindsight, and Herzberg did at least attempt an empirical approach to the study of motivation
Table 7.2
Linking Maslow’s, Alderfer’s and Herzberg’s theories of motivation
Maslow’s hierarchy of needs
Alderfer’s ERG theory
Herzberg’s two-factor theory
at work and job satisfaction. Furthermore, his work has drawn attention to the importance
of job design in the ‘quality of work life’.
McClelland’s work originated from investigations into the relationship between hunger needs
and the extent to which imagery of food dominated thought processes. From subsequent
research McClelland identified four main arousal-based, and socially developed, motives:
the Achievement motive;
the Power motive;
the Affiliative motive;
the Avoidance motive.24
The first three motives correspond, roughly, to Maslow’s self-actualisation, esteem and
love needs. The relative intensity of these motives varies between individuals. It also tends
to vary between different occupations. Managers appear to be higher in achievement
motivation than in affiliation motivation. McClelland saw the achievement need (n-Ach) as
the most critical for the country’s economic growth and success. The need to achieve is
linked to entrepreneurial spirit and the development of available resources.
Use of projective tests
Research studies by McClelland use a series of projective ‘tests’ – Thematic Apperception
Tests (TATs) – to gauge an individual’s motivation. For example, individuals are shown
a number of pictures in which some activity is depicted. Respondents are asked to look
briefly (10–15 seconds) at the pictures and then to describe what they think is happening,
what the people in the picture are thinking and what events have led to the situation
depicted.25 An example of a picture used in a projective test is given in Assignment 2 at
the end of this chapter. The descriptions are used as a basis for analysing the strength of the
individual’s motives.
People with high achievement needs
Despite the apparent subjective nature of the judgements, research studies tend to support
the validity of TAT as an indicator of the need for achievement.26 McClelland has, over years
of empirical research, identified four characteristics of people with a strong achievement
need (n-Ach): a preference for moderate task difficulty, a preference for personal responsibility for performance, the need for feedback, and innovativeness.
They prefer moderate task difficulty and goals as an achievement incentive. This provides
the best opportunity of proving they can do better. If the task is too difficult or too risky,
it would reduce the chances of success and of gaining need satisfaction. If the course of
action is too easy or too safe, there is little challenge in accomplishing the task and little
satisfaction from success.
They prefer personal responsibility for performance. They like to attain success through
the focus of their own abilities and efforts rather than by teamwork or chance factors
outside their control. Personal satisfaction is derived from the accomplishment of the task
and recognition need not come from other people.
They have the need for clear and unambiguous feedback on how well they are performing.
A knowledge of results within a reasonable time is necessary for self-evaluation. Feedback
enables them to determine success or failure in the accomplishment of their goals and to
derive satisfaction from their activities.
They are more innovative. As they always seek moderately challenging tasks they tend always
to be moving on to something a little more challenging. In seeking short cuts they are more
likely to cheat. There is a constant search for variety and for information to find new ways
of doing things. They are more restless and avoid routine and also tend to travel more.
Characteristics of achievement motivation
The extent of achievement motivation varies between individuals. Some people rate very
highly in achievement motivation. They are challenged by opportunities and work hard to
achieve a goal. Money is not an incentive but may serve as a means of giving feedback on
performance. High achievers seem unlikely to remain long with an organisation that does not
pay them well for good performance. Money may seem to be important to high achievers,
but they value it more as symbolising successful task performance and goal achievement.
McClelland’s research has attempted to understand the characteristics of high achievers. He
suggests that n-Ach is not hereditary but results from environmental influences and he has
investigated the possibility of training people to develop a greater motivation to achieve.27
McClelland suggests four steps in attempting to develop achievement drive:
Striving to attain feedback on performance. Reinforcement of success serves to strengthen
the desire to attain higher performance.
Developing models of achievement by seeking to emulate people who have performed well.
Attempting to modify their self-image and to see themselves as needing challenges and
Controlling day-dreaming and thinking about themselves in more positive terms.
McClelland was concerned with economic growth in underdeveloped countries. He has
designed training programmes intended to increase the achievement motivation and
entrepreneurial activity of managers.
McClelland and Burnham has also suggested that as effective managers need to be successful leaders and to influence other people, they should possess a high need for power.28
However, the effective manager also scores high on inhibition. Power is directed more towards
the organisation and concern for group goals and is exercised on behalf of other people. This
is ‘socialised’ power. It is distinguished from ‘personalised’ power that is characterised by
satisfaction from exercising dominance over other people, and personal aggrandisement.
Process theories, or extrinsic theories, attempt to identify the relationships among the
dynamic variables that make up motivation and the actions required to influence behaviour
and actions. They provide a further contribution to our understanding of the complex nature
of work motivation. Many of the process theories cannot be linked to a single writer, but
major approaches and leading writers under this heading include:
Figure 7.7
Expectancy theory: the motivational link
expectancy-based models – Vroom, and Porter and Lawler;
equity theory – Adams;
goal theory – Locke;
attribution theory – Heider and Kelley (discussed in Chapter 6).
Expectancy theories of motivation
The underlying basis of expectancy theory is that people are influenced by the expected
results of their actions. Motivation is a function of the relationship between:
1 effort expended and perceived level of performance; and
2 the expectation that rewards (desired outcomes) will be related to performance.
There must also be:
3 the expectation that rewards (desired outcomes) are available.
These relationships determine the strength of the ‘motivational link’ (see Figure 7.7).
Performance therefore depends upon the perceived expectation regarding effort expended
and achieving the desired outcome. For example, the desire for promotion will result in high
performance only if the person believes there is a strong expectation that this will lead to
promotion. If, however, the person believes promotion to be based solely on age and length
of service, there is no motivation to achieve high performance. A person’s behaviour reflects
a conscious choice between the comparative evaluation of alternative behaviours. The
choice of behaviour is based on the expectancy of the most favourable consequences.
Expectancy theory is a generic theory of motivation and cannot be linked to a single
individual writer. There are a number of versions and some of the models are rather complex.
More recent approaches to expectancy theory have been associated with the work of Vroom
and of Porter and Lawler.
Vroom was the first person to propose an expectancy theory aimed specifically at work
motivation.29 His model is based on three key variables: valence, instrumentality and
expectancy (VIE theory or expectancy/valence theory). The theory is founded on the idea
that people prefer certain outcomes from their behaviour over others. They anticipate
feelings of satisfaction should the preferred outcome be achieved.
The feeling about specific outcomes is termed valence. This is the attractiveness of, or
preference for, a particular outcome to the individual. Vroom distinguishes valence from
value. A person may desire an object but then gain little satisfaction from obtaining it.
Alternatively, a person may strive to avoid an object but find, subsequently, that it provides
satisfaction. Valence is the anticipated satisfaction from an outcome. This may differ
substantially from value, which is the actual satisfaction provided by an outcome.
The valences of certain outcomes may be derived in their own right, but more usually
they are derived from the other outcomes to which they are expected to lead. An obvious
example is money. Some people may see money as having an intrinsic worth and derive
satisfaction from the actual accumulation of wealth. Most people, however, see money in
terms of the many satisfying outcomes to which it can lead.
The valence of outcomes derives, therefore, from their instrumentality. This leads to a distinction between first-level outcomes and second-level outcomes.
The first-level outcomes are performance-related. They refer to the quantity of output or
to the comparative level of performance. Some people may seek to perform well ‘for its
own sake’ and without thought to expected consequences of their actions. Usually,
however, performance outcomes acquire valence because of the expectation that they will
lead to other outcomes as an anticipated source of satisfaction – second-level outcomes.
The second-level outcomes are need-related. They are derived through achievement of
first-level outcomes – that is, through achieving high performance. Many need-related
outcomes are dependent upon actual performance rather than effort expended. People
generally receive rewards for what they have achieved rather than for effort alone or
through trying hard.
On the basis of Vroom’s expectancy theory it is possible to depict a general model of
behaviour (see Figure 7.8).
Figure 7.8
Basic model of expectancy theory
When a person chooses between alternative behaviours which have uncertain outcomes, the
choice is affected not only by the preference for a particular outcome but also by the probability that such an outcome will be achieved. People develop a perception of the degree of
probability that the choice of a particular action will actually lead to the desired outcome.
This is expectancy. It is the relationship between a chosen course of action and its predicted
outcome. Expectancy relates effort expended to the achievement of first-level outcomes. Its
value ranges between 0, indicating zero probability that an action will be followed by the
outcome, and 1, indicating certainty that an action will result in the outcome.
Motivational force
The combination of valence and expectancy determines the person’s motivation for a given
form of behaviour. This is the motivational force. The force of an action is unaffected by
outcomes which have no valence or by outcomes that are regarded as unlikely to result from
a course of action. Expressed as an equation, motivation (M) is the sum of the products of
the valences of all outcomes (V ), times the strength of expectancies that action will result in
achieving these outcomes (E). Therefore, if either, or both, valence or expectancy is zero,
then motivation is zero. The choice between alternative behaviours is indicated by the
highest attractiveness score.
M = ∑ E·V
There are likely to be a number of outcomes expected for a given action. Therefore,
the measure of E·V is summed across the total number of possible outcomes to arrive at
a single figure indicating the attractiveness for the contemplated choice of behaviour.
Vroom’s expectancy/valence theory has been developed by Porter and Lawler.30 Their model
goes beyond motivational force and considers performance as a whole. They point out that
effort expended (motivational force) does not lead directly to performance. It is mediated by
individual abilities and traits, and by the person’s role perceptions. They also introduce
rewards as an intervening variable. Porter and Lawler see motivation, satisfaction and
performance as separate variables and attempt to explain the complex relationships among
them. Their model recognises that job satisfaction is more dependent upon performance,
than performance is upon satisfaction.
Explanation of relationships
These relationships are expressed diagrammatically (see Figure 7.9) rather than mathematically. In contrast to the human relations approach which tended to assume that job
satisfaction leads to improved performance, Porter and Lawler suggest that satisfaction is
an effect rather than a cause of performance. It is performance that leads to job satisfaction.
Value of reward (Box 1) is similar to valence in Vroom’s model. People desire various
outcomes (rewards) which they hope to achieve from work. The value placed on a reward
depends on the strength of its desirability.
Perceived effort–reward probability (Box 2) is similar to expectancy. It refers to a
person’s expectation that certain outcomes (rewards) are dependent upon a given amount
of effort.
Effort (Box 3) is how hard the person tries, the amount of energy a person exerts on a
given activity. It does not relate to how successful a person is in carrying out an activity.
The amount of energy exerted is dependent upon the interaction of the input variables of
value of reward and perception of the effort–reward relationship.
Figure 7.9
The Porter and Lawler motivation model
Source: From Porter, L. W. and Lawler, E. E. Managerial Attitudes and Performance (1968), p. 165. Copyright © 1968 Richard D. Irwin Inc. Reproduced with permission
from the McGraw-Hill Companies.
Abilities and traits (Box 4). Porter and Lawler suggest that effort does not lead directly to
performance but is influenced by individual characteristics. Factors such as intelligence,
skills, knowledge, training and personality affect the ability to perform a given activity.
Role perceptions (Box 5) refer to the way in which individuals view their work and the role
they should adopt. This influences the type of effort exerted. Role perceptions will influence
the direction and level of action which is believed to be necessary for effective performance.
Performance (Box 6) depends not only on the amount of effort exerted but also on the
intervening influences of the person’s abilities and traits, and their role perceptions. If the
person lacks the right ability or personality, or has an inaccurate role perception of what
is required, then the exertion of a large amount of energy may still result in a low level of
performance or task accomplishment.
Rewards (Boxes 7A and 7B) are desirable outcomes. Intrinsic rewards derive from the
individuals themselves and include a sense of achievement, a feeling of responsibility and
recognition (for example Herzberg’s motivators). Extrinsic rewards derive from the organisation and the actions of others and include salary, working conditions and supervision
(for example Herzberg’s hygiene factors). The relationship between performance and
intrinsic rewards is shown as a jagged line. This is because the extent of the relationship
depends upon the nature of the job. If the design of the job permits variety and challenge,
so that people feel able to reward themselves for good performance, there is a direct
relationship. Where job design does not involve variety and challenge, there is no direct
relationship between good performance and intrinsic rewards. The wavy line between
performance and extrinsic rewards indicates that such rewards do not often provide a
direct link to performance.
Perceived equitable rewards (Box 8). This is the level of rewards people feel they should
fairly receive for a given standard of performance. Most people have an implicit perception
about the level of rewards they should receive commensurate with the requirements and
demands of the job, and the contribution expected of them. Self-rating of performance links
directly with the perceived equitable reward variable. Higher levels of self-rated performance
are associated with higher levels of expected equitable rewards. The heavily arrowed line
indicates a relationship from the self-rated part of performance to perceived equitable
Satisfaction (Box 9). This is not the same as motivation. It is an attitude, an individual’s
internal state. Satisfaction is determined by both actual rewards received and perceived
level of rewards from the organisation for a given standard of performance. If perceived
equitable rewards are greater than actual rewards received, the person experiences dissatisfaction. The experience of satisfaction derives from actual rewards that meet or exceed
the perceived equitable rewards.
Following the original Porter and Lawler model, further work was undertaken by Lawler (see
Figure 7.10).31 He suggests that in deciding on the attractiveness of alternative behaviours,
there are two types of expectancies to be considered: effort–performance expectancies
(E → P) and performance–outcome expectancies (P → O).
The first expectancy (E → P) is the person’s perception of the probability that a given
amount of effort will result in achieving an intended level of performance. It is measured
on a scale between 0 and 1. The closer the perceived relationship between effort and performance, the higher the E → P expectancy score.
The second expectancy (P → O) is the person’s perception of the probability that a given
level of performance will actually lead to particular need-related outcomes. This is measured
also on a scale between 0 and 1. The closer the perceived relationship between performance
and outcome, the higher the P → O expectancy score.
Motivational force to perform
The multiplicative combination of the two types of expectancies, E → P and the sum of
the products P → O, determines expectancy. The motivational force to perform (effort
Figure 7.10
An illustration of the Lawler expectancy model
expended) is determined by multiplying E → P and P → O by the strength of outcome
valence (V).
E(Effort) = (E → P) × ∑ [(P → O)V]
The distinction between the two types of expectancies arises because they are determined by
different conditions. E → P expectancy is determined in part by the person’s ability and selfconfidence, past experience and the difficulty of the task. P → O expectancy is determined
by the attractiveness of the outcomes and the belief about who controls the outcomes, the
person him/herself or other people.
There are a number of versions of expectancy theory. The main elements tend to be very
similar, however, and this suggests the development of a generally accepted approach.
Expectancy models are not always easy to understand, or to apply. There are many variables
which affect behaviour at work. A problem can arise in attempting to include a large number
of variables or in identifying those variables which are most appropriate in particular situations.
Expectancy theory does, however, draw attention to the complexities of work motivation.
It provides further information in helping to explain the nature of behaviour and motivation
in the work situation, and helps to identify problems in performance. Expectancy theory indicates that managers should give attention to a number of factors, including the following:
Use rewards appropriate in terms of individual performance. Outcomes with high valence
should be used as an incentive for improved performance.
Attempt to establish clear relationships between effort–performance and rewards, as
perceived by the individual.
Establish clear procedures for the evaluation of individual levels of performance.
Pay attention to intervening variables such as abilities and traits, role perceptions,
organisational procedures and support facilities, which, although not necessarily direct
motivational factors, may still affect performance.
Minimise undesirable outcomes which may be perceived to result from a high level of
performance, such as industrial accidents or sanctions from co-workers, or to result
despite a high level of performance, such as short-time working or layoffs.
Porter and Lawler also emphasise that the expectancy model is just a model and that
expectancy theory applies only to behaviours which are under the voluntary control of the
individual. The two general types of choices over which individuals have voluntary control
of work performance in organisations are:
1 the amount of effort and energy expended; and
2 the manner in which they go about performing their work.
There is always a choice about the way you do your work, even if there is not a choice about
the work itself. You always have a choice about the attitude you bring to the job.
World famous Pike Place Fish Market, Seattle32
Critical reflection
‘Expectancy theories of motivation appear to make sense in the classroom and form
the basis of an interesting academic debate, but it is unlikely the practising manager will
be impressed or take much notice.’
What do you think? How would you explain the potential benefits of expectancy theory to
a sceptical manager?
One of the major variables of satisfaction in the Porter and Lawler expectancy model is
perceived equitable rewards. This leads to consideration of another process theory of motivation – equity theory. Applied to the work situation, equity theory is usually associated with
the work of Adams.33
Equity theory focuses on people’s feelings of how fairly they have been treated in comparison with the treatment received by others. It is based on exchange theory. Social
relationships involve an exchange process. For example, a person may expect promotion as
an outcome of a high level of contribution (input) in helping to achieve an important organisational objective. People also compare their own position with that of others. They determine the perceived equity of their own position. Their feelings about the equity of the
exchange are affected by the treatment they receive when compared with what happens to
other people. Most exchanges involve a number of inputs and outcomes. According to equity
theory, people place a weighting on these various inputs and outcomes according to how
they perceive their importance. When there is an unequal comparison of ratios the person
experiences a sense of inequity.
Behaviour as a consequence of inequity
A feeling of inequity causes tension, which is an unpleasant experience. The presence of
inequity therefore motivates the person to remove or to reduce the level of tension and the
perceived inequity. The magnitude of perceived inequity determines the level of tension. The
level of tension created determines the strength of motivation. Adams identifies six broad
types of possible behaviour as consequences of inequity (see Figure 7.11):
Figure 7.11
Changes to inputs. A person may increase or decrease the level of their inputs, for
example through the amount or quality of work, absenteeism, or working additional
hours without pay.
An illustration of Adams’s equity theory of motivation
Changes to outcomes. A person may attempt to change outcomes such as pay, working
conditions, status and recognition, without changes to inputs.
Cognitive distortion of inputs and outcomes. In contrast to actual changes, people may
distort, cognitively, their inputs or outcomes to achieve the same results. Adams suggests
that although it is difficult for people to distort facts about themselves, it is possible,
within limits, to distort the utility of those facts: for example, the belief about how hard
they are really working, the relevance of a particular qualification, or what they can or
cannot obtain with a given level of pay.
Leaving the field. A person may try to find a new situation with a more favourable
balance, for example by absenteeism, request for a transfer, resigning from a job or from
the organisation altogether.
Acting on others. A person may attempt to bring about changes in others, for example to
lower their inputs or accept greater outcomes. Or the person may cognitively distort the
inputs and outcomes of others. Alternatively, a person may try to force others to leave the
Changing the object of comparison. This involves changing the reference group with whom
comparison is made. For example, where another person with a previously similar outcome–
input ratio receives greater outcomes without any apparent increase in contribution, that
other person may be perceived as now belonging to a different level in the organisation
structure. The comparison need not necessarily be made with people who have the same
inputs and outcomes. The important thing is a similar ratio of outcomes to inputs.
Under the control of the manager
The manager may seek to remove or reduce tension and perceived inequity among staff by
influencing these types of behaviour – for example by attempting to change a person’s inputs
or encouraging a different object of comparison. People measure and compare their total
inputs and outcomes so, for example, a working parent may prefer greater flexibility in working hours in return for lower monetary rewards. However, there are likely to be only two
courses of action under the direct control of the manager. Outcomes can be changed by, for
example, increased pay, additional perks or improved working conditions, or by instigating
a person leaving the field through transfer, resignation or, as an extreme measure, dismissal.
It is important to remember that equity theory is about the perceived ratio of inputs to outputs and these perceptions may not reflect the reality of the situation.
The ultimatum game
The ultimatum game is an economic behavioural game that can arguably be related to the
concept of equity theory.34 Two participants, A and B, are given the opportunity to split a
given sum of money between them. The game is played anonymously and once only. One
person (A) has to decide to make a one-time, take it or leave it, offer to B (ultimatum). If the
other person (B) agrees to the division, both A and B keep their share of the money.
However, if the offer is rejected neither person receives anything. Experiments indicate that
if A offers around 50% of the money then B will accept the offer. But if A offers a noticeably
lesser amount than 50%, B will typically refuse the offer in which case neither participant
receives anything. One might expect B to accept because even a lesser amount, whatever the
offer, is better than nothing. Can you see how this might be related to perceptions of equity
theory? Viewers of the ITV1 television quiz programme Divided, in which contestants have
to agree how to divide a cash prize, may see a similarity with the ultimatum game.
Another theory usually considered under the heading of motivation to work is goal theory,
or the theory of goal-setting (see Figure 7.12). This theory is based mainly on the work of
Figure 7.12
An illustration of Locke’s theory of goal-setting
Locke.35 The basic premise of goal theory is that people’s goals or intentions play an important
part in determining behaviour. Locke accepts the importance of perceived value, as indicated
in expectancy theories of motivation, and suggests that these values give rise to the experience
of emotions and desires. People strive to achieve goals in order to satisfy their emotions
and desires. Goals guide people’s responses and actions. Goals direct work behaviour and
performance and lead to certain consequences or feedback. Locke subsequently pointed out
that ‘goal-setting is more appropriately viewed as a motivational technique rather than as
a formal theory of motivation’.36
Goal-setting and performance
The combination of goal difficulty and the extent of the person’s commitment to achieving
the goal regulates the level of effort expended. People with specific quantitative goals, such
as a defined level of performance or a given deadline for completion of a task, will perform
better than people with no set goal or only a vague goal such as ‘do the best you can’. People
who have difficult goals will perform better than people with easier goals.
Gratton refers to ‘stretch goals’ which are ambitious, highly targeted opportunities for
breakthrough improvements in performance. These goals should stem from critical success
indicators and come from deep discussions within the company, and from collaboration
within and across task forces, and lead to the development of activities and tactics to achieve
the goals.37 People lacking positive motivation at work may also help gain improved results
and a better sense of achievement by setting themselves specific goals and identifying tasks
directly related to their work and measurable targets of time and performance.
Practical implications for the manager
Goal theory has a number of practical implications for the manager:
Individuals lacking in motivation often do not have clear goals. Specific performance goals
should systematically be identified and set in order to direct behaviour and maintain
Goals should be set at a challenging but realistic level. Difficult goals lead to higher
performance. However, if goals are set at too high a level or are regarded as impossible to
achieve, this can lead to stress and performance will suffer, especially over a longer period.
Complete, accurate and timely feedback and knowledge of results is usually associated
with high performance. Feedback provides a means of checking progress on goal attainment
and forms the basis for any revision of goals.
Goals can be determined either by a superior or by individuals themselves. Goals set by
other people are more likely to be accepted when there is participation. Employee participation in the setting of goals may lead to higher performance.
Much of the theory of goal-setting can be related to the system of management by objectives (discussed in Chapter 12). MBO is often viewed as an application of goal-setting,
although it was devised originally before the development of goal-setting theory. However it
is viewed, the theory of goal-setting provides a useful approach to work motivation and performance. And Hannagan goes so far as to suggest: ‘At present goal-setting is one of the most
influential theories of work motivation applicable to all cultures.’38
A more recent approach to the study of motivation is attribution theory. Attribution is the
process by which people interpret the perceived causes of behaviour. This was discussed in
Chapter 6.
Given that most major theories of motivation date back many years it is inevitable that questions will be raised about their relevance today. Reis and Pena question whether motivating
people to work in the 21st century with theories conceived during the past hundred years is
likely to be feasible. They conclude that the core message is that managers should reconsider
the outdated motivational patterns utilised to maintain role performance in organisations
and adopt a fresh motivation formula for the 21st century based on friendship, work and
However, we have seen from the discussions above that there still appears to be general
support for the theories – and, perhaps ironically, particularly for the early theories of
Maslow, Herzberg and McClelland. A Chartered Management Institute checklist maintains
that these theories are still valid today. ‘A basic understanding of their main principles will
provide the background for building a climate of honesty, openness and trust.’40 From a
12-year study of the use of management concepts in technical organisations, Flores and Utley
found the work of Maslow and McGregor the most popular motivational theories and also
refer to the relationship between Maslow and Herzberg and the successful implementation
of quality systems.41
Whatever the relevance of the different theories of motivation, to what extent do individuals have control over their own level of motivation or how much is dependent upon the
leadership they encounter? Adair reassesses the theories of Maslow and Herzberg in terms of
action-centred leadership, which is discussed in Chapter 10. Adair also argues that the extent
to which you can motivate anyone else is limited and refers to the fifty-fifty rule of motivation, that is:
Fifty percent of motivation comes from within a person and 50% from his or her environment, especially from the leadership encountered there. The fifty-fifty rule in motivation does not claim to indentify the different proportions in the equation exactly. It is more like a rough and ready rule of thumb.
In effect it says no more than a substantial part of motivation lies with a person while a substantial part
lies, so to speak, outside and beyond control.42
Another possible approach to motivation is that of organisational behaviour modification
(OBMod) . This is the application of learning principles to influence organisational
behaviour. In particular it can be seen as a form of Skinner’s operant conditioning, or
reinforcement theory, discussed in Chapter 5. Reinforcement is a feature of the behaviourism
approach and shaped by environmental influences. The reward for a particular form of
behaviour is likely to result in the reinforcement of that behaviour. A negative outcome or
lack of acknowledgement for the behaviour is likely to mean that the behaviour will stop.
Luthans and Kreitner suggest that OBMod ‘represents a merging of behavioral learning theory
on the one hand and organizational behavior theory on the other’.43
According to Luthans and Kreitner, a major premise of OBMod is that positive consequence management is much more effective than negative consequence management.
Organisations that encourage the members to learn and undertake desired behaviours and
not to undertake undesired behaviours follow five main steps:
1 Identify the observable, objective and measurable behaviours relevant to the desired
organisational performance.
2 Measure the frequency with which those behaviours actually occur under normal conditions. Provide baseline performance data as a point of reference to compare with changes
in step 5.
3 Determine the antecedents of the behaviours, the reinforcements to encourage patterns
of behaviour and the consequences that follow from those behaviours.
4 Develop an intervention strategy for change in order to strengthen desirable behaviours
and weaken undesirable behaviours, through the use of operant conditioning and reinforcement theory including punishment if necessary.
5 Measure and evaluate systematically (using the same measure as in step 2) the extent to
which the frequency of desired behaviours and undesired behaviours have changed, and
improvements in organisational performance.
Applications of OBMod
To what extent can OBMod be applied effectively to improve motivation and performance
in work organisations? OBMod works best for behaviours that are specific, objective and
countable. There have been a number of studies in the United States that indicate positive
results in behaviours that improved performance in reducing errors, attendance and
punctuality, health and safety and customer service.44 In a study of a Russian textile factory,
following the OBMod approach, workers were subjected to two forms of intervention –
extrinsic rewards and social rewards. The extrinsic rewards provided valued American
products, such as clothing, music tapes and hard-to-get foods, for improved performance.
Social rewards such as attention, recognition and praise from supervisors were for performing specified actions such as checking looms, undertaking repairs and helping others.
Both the extrinsic and social interventions led to highly significant increases in performance.
This contrasted with a previous participative job design approach that involved asking
workers for ideas for improving performance and enriching their jobs that did not work.
The researchers suggest cultural issues and the workers’ past experiences may explain the
failure of the participative intervention strategy, and that the OBMod approach has wider
Although there appear to be a nu