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Organization Theories

Compiled by Don Morgan, Ph.D.

The following entries have been condensed from
several sources.  For complete articles visit:

http://en.wikipedia.org
www.businessballs.com

Maslow’s Hierarchy

Abraham Maslow extended the Hawthorne findings in 1943 when he proposed “A Theory of Human Motivation.”  Maslow's hierarchy theory is the most widely discussed theory of motivation.  The theory can be summarized as thus:
 

  • Human beings have wants and desires which influence their behavior
  • Only unsatisfied needs influence behavior, satisfied needs do not.
  • Needs become motivators in order, from the basic to the complex.
  • When one need is satisfied, another need emerges.

 
The needs, listed from basic (lowest, earliest) to most complex (highest, latest) are as follows:

  • Physiological
  • Safety and security
  • Social
  • Self esteem
  • Self-actualization

David McClelland’s Motivational Needs Theory

  • achievement motivation (n-ach)
  • authority/power motivation (n-pow)
  • affiliation motivation (n-affil)

The need for achievement (n-ach) person is 'achievement motivated' and therefore seeks achievement, attainment of realistic but challenging goals, and advancement in the job. There is a strong need for feedback as to achievement and progress, and a need for a sense of accomplishment.

The need for authority and power (n-pow) person is 'authority motivated.' This drive produces a need to be influential, effective and to make an impact. There is a strong need to lead and for their ideas to prevail. There is also motivation and need towards increasing personal status and prestige.

The need for affiliation (n-affil) person is 'affiliation motivated,' and has a need for friendly relationships and is motivated towards interaction with other people. The affiliation drive produces motivation and the need to be liked and held in popular regard. These people are team players.

Most people possess and exhibit a combination of these characteristics according to McClelland.  He suggested that n-affil motivation undermines objectivity, because of the need to be liked, and this affects the manager's decision-making.  N-pow motivation produces a determined work ethic and commitment to the organization, and these people are attracted to leadership roles, but may not have the flexibility and people skills.  McClelland observed that n-ach motivated people make the best leaders.  However, they tend to forget that not all employees are achievement and results focused.

McClelland’s characteristics and attitudes of achievement-motivated people:

  • achievement is more important than material or financial reward.
  • achieving the aim or task gives greater personal satisfaction than receiving praise or recognition.
  • financial reward is regarded as a measurement of success, not an end in itself.
  • security is not a prime motivator, nor is status.
  • feedback is essential because it enables measurement of success, not for reasons of praise or recognition (the implication here is that feedback must be reliable, quantifiable and factual).
  • achievement-motivated people constantly seek improvements and ways of doing things better.
  • achievement-motivated people will logically favor jobs and responsibilities that naturally satisfy their needs, i.e. offer flexibility and opportunity to set and achieve goals, e.g., sales and business management, and entrepreneurial roles.

McClelland believed that achievement-motivated people make things happen and get results, extending to getting results through other people and resources.  They prioritize achieving the goal above the interests and needs of their people.
Douglas McGregor’s Theory X and Theory Y

Theory X and Theory Y are theories of human motivation created and developed by Douglas McGregor at the MIT Sloan School of Management in the 1960s that have been used in human resource management, organizational behavior, and organizational development. They describe two very different paradigms for workforce motivation. McGregor felt that companies tended to follow either one or the other approach.

At lower levels of Maslow's hierarchy of needs, money is a motivator.  However, its motivating effect lasts only for a short period (in accordance with Herzberg's two-factor model of motivation).  McGregor places money in his Theory X  category and it is ineffective for those motivated by higher level needs.  At higher levels, praise, respect, recognition, empowerment and a sense of belonging are far more powerful motivators than money.

  • Motivated employees look for better ways to do a job.
  • Motivated employees are more quality oriented.
  • Motivated workers are more productive.

Theory X assumes employees are inherently lazy and will avoid work if they can.  Because of this, workers need to be closely supervised and comprehensive systems of controls developed. A hierarchical organizational structure is needed with a narrow span of control at each level. According to this theory employees have little ambition without an enticing incentive program and tend to avoid responsibility.

Many managers still subscribe to Theory X in the way they view their employees.  A Theory X manager believes employees do not really want to work, that they would rather avoid responsibility and that it is the manager's job to structure the work and energize the employee.  Theory X managers use a more authoritarian style based on the threat of punishment.

Theory Y allows a business to expand while making more profit because factory-floor workers have their own responsibility.  In this theory management assumes employees are ambitious, self-motivated, anxious to accept greater responsibility, and exercise self-control and self-direction. It is believed that employees enjoy their mental and physical work activities. It is also believed that employees have the desire to be imaginative and creative in their jobs if they are given a chance. There is an opportunity for greater productivity by giving employees the freedom to be their best.

A Theory Y manager believes that, given the right conditions, most people will want to do well at work and that there is a pool of unused creativity in the workforce. They believe that the satisfaction of doing a good job is a strong motivation in and of itself. A Theory Y manager will try to remove the barriers that prevent workers from fully actualizing themselves.

McGregor's work was based on Maslow's hierarchy of needs.  He grouped Maslow's hierarchy into "lower order" (Theory X) needs and "higher order" (Theory Y) needs.  McGregor's X-Y Theory is a guiding principle of positive approaches to management, to organizational development, and to improving organizational culture.  Effective managers estimate the need level of their people and apply the appropriate approach to capitalize on employees’ motives.

Herzberg’s extensive research on motivation of accountants and engineers found that they only strive to achieve 'hygiene' when those needs are not met.  Once satisfied, the effect soon wears off—satisfaction is temporary.  Poorly managed organizations fail to understand that people are not 'motivated' by addressing 'hygiene' needs.  People respond to real motivators—deeper levels of meaning and fulfillment. 

Transactional Analysis

Subordinate behavior, in part, is contingent upon the leadership style of the manager.  The Scientific Management paradigm is a Theory X style.  Eric Berne explained how Theory X style managers tend to stimulate subordinate responses that confirm the need for a Theory X style of supervision.  The following information was obtained from Wikipedia.

Berne mapped interpersonal relationships to three ego-states of the individuals involved: the Parent, Adult, and Child state. He then investigated communications between individuals based on the current state of each. These interpersonal interactions he called transactions; certain patterns of transactions which popped up repeatedly in everyday life he called games.

Transactional Analysis (TA) describes how individuals interact with one another, and how the ego states affected each set of transactions. TA is a theory of personality and a systematic psychotherapy for personal growth and personal change.

  • As a theory of personality, TA describes how people are structured psychologically.
  • It introduces the idea of a "Life Script", that is, a story one perceives about ones own life, to answer questions such as "What matters?" "How do I get along in life?" and "What kind of person am I?"  This story, TA says, is often stuck to no matter the consequences, to "prove" one is right, even at the cost of pain, compulsion, self-defeating behavior and other dysfunction.
  • Outside the therapeutic field, it has been used in education, to help teachers remain in clear communication at an appropriate level, in counseling and consultancy, in management and in communications training.

At any given time, a person experiences and manifests their personality through a mixture of behaviors, thoughts and feelings. Typically, according to TA, there are three ego-states that people consistently use:

  • Parent: a state in which people behave, feel, and think in response to an unconscious mimicking of how their parents (or other parental figures) acted. For example, a person may shout at someone out of frustration because they learned from an influential figure in childhood the lesson that this seemed to be a way of relating that worked.
  • Adult: a state in which people behave, feel, and think in response to what is going on in the "here-and-now," using all of their resources as an adult human being with many years of life experience to guide them. While a person is in the Adult ego state, he or she is directed towards an objective appraisal of reality.
  • Child: a state in which people revert to behaving, feeling and thinking close to how they did in childhood. For example, a person being told off by the boss at work may look down and feel shame or anger, as they used to when being told off as a child.

Ego states do not correspond to Freud's Ego, Superego and Id.  Rather, ego states are consistent for each person and are more readily observable than the Freudian model.  The particular ego state that a given person is communicating from is observable.

Transactions and Strokes

  • Transactions are the flow of communication, and more specifically the unspoken psychological flow of communication that runs in parallel.
  • Transactions occur simultaneously at both explicit and psychological levels. Example: sweet caring voice with sarcastic intent. To read the real communication requires both surface and non-verbal reading.
  • Strokes are the recognition, attention or responsiveness that one person gives another. Strokes can be positive (nicknamed "warm fuzzies") or negative ("cold pricklies"). A key idea is that people hunger for recognition, and that lacking positive strokes, will seek whatever kind they can, even if it is recognition of a negative kind. We test out as children what strategies and behaviors seem to get us strokes, of whatever kind we can get.

People often create pressure in (or experience pressure from) others to communicate in a way that matches their style, so that a boss who talks to his staff as a controlling parent will often engender self-abasement or other childlike responses. Those employees who resist may get removed or labeled as "trouble."
Transactions can be experienced as positive or negative depending on the nature of the strokes within them. However, a negative transaction is preferred to no transaction at all, because of a fundamental hunger for strokes.  The nature of transactions is important to understanding communication.

A simple, reciprocal transaction occurs when both partners are addressing the ego state the other is in. These are also called complementary transactions.

Example 1

A: "Have you been able to write the report?" (Adult to Adult)

B: "Yes - I'm about to email it to you." (Adult to Adult)

Example 2

A: "Would you like to come and watch a film with me?" (Child to Child)

B: "I'd love to - what shall we go and see?" (Child to Child)

Example 3

A: "Is your room tidy yet?" (Parent to Child)

B: "Will you stop hassling me? I'll do it eventually!" (Child to Parent)

Communication like this can continue indefinitely. (Clearly it will stop at some stage—but this psychologically balanced exchange of strokes can continue for some time).

Communication failures are typically caused by a 'crossed transaction' where partners address ego states other than that their partner is in. Consider the above examples jumbled up a bit.

Example 1a:

A: "Have you been able to write that report?" (Adult to Adult)

B: "Will you stop hassling me? I'll do it eventually!" (Child to Parent)

is a crossed transaction likely to produce problems in the workplace. "A" may respond with a Parent to Child transaction. For instance:

A: "If you don't change your attitude you'll get fired"

Example 2a:

A: "Is your room tidy yet?" (Parent to Child)

B: "I'm just going to do it, actually." (Adult to Adult)

is a more positive crossed transaction. However there is the risk that "A"           will feel aggrieved that "B" is acting responsibly and not playing his role,     and the conversation will develop into:

A: "I can never trust you to do things!" (Parent to Child)

B: "Why don't you believe anything I say?" (Child to Parent)

According to the TA philosophy, people are OK.  Each person has validity, importance, equality of respect.  Everyone (with only few exceptions) has full adult capability to think.  TA is goal-oriented, not merely problem-oriented. 

Win-Win Paradigm

Win - Win solutions are synergistic.  Collaboration implies an attempt to meet the needs of all people involved.  It means looking at situations from several vantage points—seeing another’s point of view.  I am not suggesting a non-assertive approach.  Candor is important.  All parties are expected to communicate their needs and to acknowledge that everyone is important. This style is useful when you need to bring together a variety of viewpoints to get the best solution, when there have been previous conflicts in the group, or when the situation is too important for a simple trade-off. 

Powerful labor unions of the past, through a win - lose paradigm had little concern for the health of their industries.  Steel negotiated 15 week vacations and railroads negotiated work days based on antiquated timetables with no concern for the profitability of the companies.  In the long run, everyone lost.

From Habit 4 of Seven Habits Of Highly Effective People, Covey listed Six Paradigms of Human Interaction: (1) Win - Win, (2) Lose - Lose, (3) Win - Lose, (4) Win, (5) Lose - Win, (6) Win - Win or No Deal

Win - Win agreements or solutions are mutually beneficial  A belief in the Third Alternative -- a better way

In Win - Lose, people use position, power, credentials, possessions or personality to get one's way.  The win - lose mentality is dysfunctional to interdependence.

In Lose - Win, people are quick to please or appease, to capitulate—give in or give up.  Many executives, managers and parents oscillate between Win - Lose and Lose - Win.

Lose - Lose is a result of encounters between two Win - Lose individuals.  It is a philosophy of highly dependent people.

Win is to win at all costs.  Other people do not matter.  This is the most common approach in everyday negotiation.

Five Dimensions of Win - Win according to Covey

  • Character. The foundation of Win - Win.  Integrity. The value we place on ourselves. (a) Maturity. The balance between courage and consideration. (b) Abundance Mentality. There is plenty out there for everybody.
  • Relationships. Courtesy, respect and appreciation for the other person and his or her point of view.
  • Agreements. Cover a wide scope of interdependent action. (a) Desired results, (b) Guidelines, (c) Resources, (d) Accountability, (e) Consequences
  • Supportive Systems. Reward systems must reflect the values of the mission statement.
  • Processes. The route to Win - Win: (a) See the problem from another point of view. (b) Identify the key issues and concerns involved. (c) Determine what results would constitute a fully acceptable solution. (d) Identify possible new options to achieve those results.

Tannenbaum and Schmidt Continuum

The Continuum is a simple model of delegation and team development which shows the relationship between the level of freedom that a manager chooses to give to a team, and the level of authority used by the manager. As the team's freedom is increased, the manager's authority decreases. This is a positive way for both teams and managers to develop.  As a manager, one responsibility is to develop your team. You should delegate and ask a team to make its own decisions to varying degrees according to their abilities.  The Tannenbaum-Schmidt Continuum has 7 Levels of team empowerment as shown below.
 

Graphic use of authority

Level 1. The Manager decides and announces the decision.

The manager reviews options in light of aims, issues, priorities, timescale, etc., then decides the action and informs the team of the decision. The manager will probably have considered how the team will react, but the team plays no active part in making the decision. The team may well perceive that the manager has not considered the team's welfare at all. This is seen by the team as a purely task-based decision, which is generally a characteristic of X-Theory management style.

Level 2. The manager decides and then 'sells' the decision to the group.

The manager makes the decision as in Level 1 above, and then explains reasons for the decision to the team, particularly the positive benefits that the team will enjoy from the decision. In so doing the manager is seen by the team to recognise the team's importance, and to have some concern for the team.

Level 3. The manager presents the decision and invites questions.

The manager presents the decision along with some of the background which led to the decision. The team is invited to ask questions and discuss with the manager the rationale behind the decision, which enables the team to understand and accept or agree with the decision more easily than in Levels 1 and 2 above. This more participative and involving approach enables the team to appreciate the issues and reasons for the decision, and the implications of all the options. This will have a more motivational approach than Level 1 or 2 because of the higher level of team involvement and discussion.

Level 4. The manager offers a provisional decision and invites discussion.

The manager discusses and reviews the provisional decision with the team on the basis that the manager will take on board the views and then finally decide. This enables the team to have some real influence over the shape of the manager's final decision. This also acknowledges that the team has something to contribute to the decision-making process, which is more empowering, therefore more motivating than the previous level.

Level 5. The manager presents the situation, gets suggestions, then decides.

The manager presents the situation, and maybe some options, to the team. The team is encouraged and expected to offer ideas and additional options, and discuss implications of each possible course of action. The manager then decides which option to take. This level is one of high and specific involvement for the team, and is appropriate particularly when the team has more detailed knowledge or experience of the issues than the manager. Being high-involvement and high-influence for the team this level provides more motivation and freedom than any previous level.

Level 6. The manager explains the situation, defines the parameters and asks the team to decide.

At this level the manager has effectively delegated responsibility for the decision to the team, albeit within the manager's stated limits. The manager may or may not choose to be a part of the team which decides. While this level appears to give a huge responsibility to the team, the manager can control the risk and outcomes to an extent, according to the constraints that he stipulates. This level is more motivational than any previous level, and requires a mature team for any serious situation or problem. (Remember that the team must get the credit for all the positive outcomes from the decision, while the manager remains accountable for any resulting problems or disasters. This isn't strictly included in the original Tannenbaum and Schmidt definitions, so it needs pointing out because it's such an important aspect of delegating and motivating, and leadership.)

Level 7. The team identifies the problem, develops options, and decides on action, within the limits of manager's authority.

This is the highest level of freedom where the team does what the manager did in level 1. The team identifies and analyzes the situation and the process for resolving it; develops and assesses options; evaluates implications; and decides on and implements a course of action.  The manager states in advance support for the decision and helps the team implement it. The manager may or may not be part of the team, and has no more authority than others on the team. The only constraints for the team are those imposed on the manager from above. 

For empowerment, the goal is to take the team to Level 7.  This level is the most motivational, and also the most risky.  The team must be mature, competent, and capable.  Aim to develop potential successors from your team to take over from you. This process can take awhile.  Be patient, explain what you're doing, and check on how your team is responding and developing.

Delegating freedom and decision-making to a team does not change the accountability.  If everything goes well, the team gets the credit; if it goes wrong, the manager takes the blame. The manager is ultimately responsible.

Graphic / chart

The Peter Principle

Laurence J. Peter formulated the idea in his best-selling book The Peter Principle: Why Things Always Go Wrong (1969). The book’s central thesis is that "in a hierarchy, every employee tends to rise to his level of incompetence."  Work is accomplished only by employees who have not yet reached their level of incompetence.  Stagnant companies are more likely to have incompetent employees at many levels of their organization.

Members of a hierarchical organization are eventually promoted to their highest level of competence, after which further promotion raises them to a "level of incompetence," achieving the ceiling of his career growth within the organization.
The employee's incompetence is not necessarily exposed as a result of the higher-ranking position being "more difficult"—the position requires different skills.  An example used by Peter involves a factory worker being promoted to management, where the skills that got him promoted in the first place are no longer essential in performing the duties of a manager.

 

Group Dynamics

Group dynamics is the study of groups, and also a general term for group processes. In psychology and sociology, a group is two or more individuals who are connected to each other by social relationships (Forsyth, 2006). Because they interact and influence each other, groups develop a number of dynamic processes that separate them from a random collection of individuals. These processes include norms, roles, relations, development, need to belong, social influence, and effects on behavior. The field of group dynamics is primarily concerned with small group behavior. (Wikipedia)

Kurt Lewin is commonly identified as the founder of scientific study of groups. He coined the term group dynamics to describe the way groups and individuals act and react to changing circumstances.

William Schutz looked at interpersonal relations from the perspective of three dimensions: inclusion, control, and affection. This became the basis for a theory of group behavior that sees groups as resolving issues in each of these stages in order to be able to evolve to the next stage. Conversely, a group may also devolve to an earlier stage if unable to resolve outstanding issues in a particular stage.
Bruce Tuckman proposed the 4-stage model for a group.  The model states that the ideal group decision-making process should occur in four stages:

  • Forming (pretending to get on or get along with others)
  • Storming (letting down the politeness barrier and trying to get down to the issues even if tempers flare up)
  • Norming (getting used to each other and developing trust and productivity)
  • Performing (working in a group toward a common goal on a highly efficient and cooperative basis)

Tuckman later added a fifth stage for the dissolution of a group called adjourning. It should be noted that this model refers to the overall pattern of the group, but of course individuals within a group work in different ways. If distrust persists, a group may never even get to the norming stage.

Peter F. Drucker
A few excerpts from a recent interview with Forbes.com are printed below: 
Successful leaders don't start out asking, "What do I want to do?" They ask, "What needs to be done?" Then they ask, "Of those things that would make a difference, which are right for me?" They don't tackle things they aren't good at. They make sure other necessities get done, but not by them. Successful leaders make sure that they succeed! They are not afraid of strength in others. Andrew Carnegie wanted to put on his gravestone, "Here lies a man who knew how to put into his service more able men than he was himself."

Effective leaders check their performance. They write down, "What do I hope to achieve if I take on this assignment?" They put away their goals for six months and then come back and check their performance against goals. This way, they find out what they do well and what they do poorly. They also find out whether they picked the truly important things to do. I've seen a great many people who are exceedingly good at execution, but exceedingly poor at picking the important things. They are magnificent at getting the unimportant things done.

Leaders communicate in the sense that people around them know what they are trying to do. They are purpose driven—yes, mission driven. They know how to establish a mission. And another thing, they know how to say no. The pressure on leaders to do 984 different things is unbearable, so the effective ones learn how to say no and stick with it.

Make sure the people with whom you work understand your priorities. The CEO needs to say, "This is what I am focusing on." Then the CEO needs to ask of his associates, "What are you focusing on?" Make sure that you understand your associates' priorities and make sure that after you have that conversation, you sit down and drop them a two-page note—“This is what I think we discussed. This is what I think we decided. This is what I think you committed yourself to within what time frame."  Finally, ask, "What do you expect from me as you seek to achieve your goals?"

This is a work in progress.  If you come across research or theory that you think should be included please contact us.  Related summaries are presented in Studies in Motivation.  It contains brief descriptions of the Hawthorne Studies, Herzberg’s motivation studies, Pygmalion expectation, and Milgram’s research.

 

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