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Importance of Organizational Behaviour Theories in Modern Corporations

Question:

Discuss About The Organizational Relationship And Performance?

This essay will determine the role of organisational behaviour (OB) theories in modern corporations and analyse how leaders use these theories to increase employees’ productivity. In recent years, corporations are facing fierce competition, and they have to implement strategic business policies to gain a competitive advantage over others. The significance of organisational behaviour theories has grown substantially among modern companies since it provides a competitive advantage to firms (Umphress, Bingham and Mitchell, 2010). Organisations implement these policies to address various issues relating to businesses in order to improve the efficiency of their operations. Organisational behaviour theories play a crucial role in establishing a positive working environment which encourages employees to improve their productive performance. This essay will identify various issues in corporations and how leaders can use OB theories to address such problems. Successful leaders and managers use OB theories while performing various business activities which increase company’s performance as well as profitability. This essay will discuss how leaders can implement OB theories while performing business practices such as motivating employees, designing jobs, setting goals and others. The essay will discuss the significance of OB theories in modern corporations and provide recommendations for leaders to implement these theories across different processes in a firm which positively influence employees’ productive performance.


Previously, employees were not given importance in a company and leaders did not focus on their requirements or demands while developing business strategies. But, in recent years, the demand for specialised and talented workers has grown substantially, and management focuses on fulfilling their demands. Employees are considered as key asset in companies since productive employees provide a competitive advantage to firms. Highly productive employees are crucial to business success, and leaders implement various strategies to increase their productivity. Organisational behaviour theories assist leaders in effectively managing workplace environment which results in increasing employees’ productivity (Colquitt et al., 2011). Leaders have to consider various behavioural factors while determining OB theories which assist in establishing a positive working environment. Organisational behaviour studies various activities in a company related to employees and group performance. It assists leaders in gaining a better understanding of the organisational environment which is necessary to establish effective strategies. There are various benefits of effective OB strategy such as establishment of positive culture, workers skill development, understanding customers’ behaviour and gaining insight, establishing employee motivation policies, faster decision-making process and others (Walumbwa, Hartnell and Oke, 2010). Leaders have to carefully perform various strategies to get a better understanding of employees’ attitude and behaviour. By understating employees’ behaviour, managers can get the best out of employees and increase their productive performance.

Role of Organizational Behaviour Theories in Establishing a Positive Working Environment


Establishing positive working environment is one of the primary requirements in modern corporations because they face the issue of high employee retention. Many industries such as technology, software, manufacturing and retailing find it difficult to retain employees for a longer period of time. Due to the high rate of retention, organisation faces various challenges such as high recruitment cost, lack of experienced employees, and negative working environment (Chiang and Hsieh, 2012). Leaders focus on establishing positive working environment throughout the different process to increase employee retention rate and increasing job satisfaction rate. Leaders establish OB theories for communication to improve the working condition of a workplace and implement it throughout different division. Stanley Deetz provided ‘Critical theory of Communication’ which focus on balancing human and corporate interest. He considered the company as an economic and political institution in which communication plays a crucial part (Deetz, 2012). Communication in this theory focus on resolving conflicts between employees, prevent problems in groups, provide guidance and encourage employees to work towards a single goal. Effective communication can be used to diagnose distorted decision-making process which results in increasing employees’ productivity and company’s performance. Leaders can implement it upon processes across the company by establishing various communication channels which assist employees in sharing their quarries and feedback with top-level management (Myers and Sadaghiani, 2010).


Designing organisational jobs based on employees’ skills and company’ requirement can improve employees’ productivity along with corporation’s profitability. Job design referred to the process of hiring qualified employees for right jobs and providing them a responsibility which challenges them and engages them in their work which results in increasing their job satisfaction. During job design process, managers use job enlargement, rotation, enrichment and simplification techniques to assign right candidate at right post (Shantz et al., 2013). It is difficult for managers to design jobs based on employees’ qualification and company’s requirement which increase job dissatisfaction among employees and result in decreasing company’s performance. Leaders can use ‘Fundamental attribution error’ theory while designing organisational jobs. The theory focuses on focus on employees’ personality and analyse their actions while overlooking different external factors such as contextual influences and social aspects (Dieser, 2011). There are several issues which negatively affects employees’ performance such as learning problems, not coping with work, motivation issues, lack of communication, and personality problems. Leaders can implement this theory in recruitment and selection process to ensure that qualified candidates are selected whose behaviour is suitable for the company. Managers can implement this strategy across different process by designing jobs based on task requirements and assigning them to qualified employees.

Communication and Organizational Behaviour Theories

In recent years, corporations focus on increasing their employees’ productivity by motivating them to increase their performance. Leaders focus on analysing and learning about employees’ behaviour since it results in implementing OB theories that encourage employees’ productive performance. OB theories allow managers to analyse their employees’ requirement which assists in motivating them (Pinder, 2014). Traditional theories of employee motivations included carrot and stick approach, reward theory, and fear and punishment theory. Modern motivation theories include Herzberg hygiene theory, McGregor Theory X, and Y, Maslow Hierarchy of needs theory and many others. Modern organisations face issue relating to employees such as high retention, worker absenteeism, job dissatisfaction and others. OB theories assist them in addressing these issues by motivating employees to perform better. ‘Douglas McGregor developed ‘Theory X and Theory Y’ in the 1960s, and it provides two completely different views on employee motivation (Kopelman, Prottas and Falk, 2010).


Theory X provides that employees are lazy and avoid work, and managers require to closely monitoring and supervising them. In this theory, employees are not ambitious about incentive program and avoid organisational responsibilities wherever they can. This theory provides that managers should adopt a natural leadership approach which effectively controls employee performance by threatening and punishing them. Theory Y, on the other hand, provides that employees are self-motivated and ambitious towards their job, and they accept greater organisational responsibilities (Sahin, 2012). Management believes that employees like their job, and they have a desire to be creative in the workplace and given the right conditions, workers will prefer to increase their productive performance. This theory provides that job satisfaction itself is motivation which increases employees’ productive performance. The co-founder and former CEO of Apple Incorporation, Steve Jobs, used Theory X and Y approach to motivate employees in order to create innovative products (Kannan-Narasimhan, 2015). To implement this theory across different processes, leaders have to analyse employees’ behaviour in order to ensure that they belong to ‘Theory Y’ category and implement positive working conditions to increase their job satisfaction which results in increasing their productive performance.

According to the study conducted by Turkay (2014), setting small goals can assist people in increasing their performance and achieve desired targets. Therefore, most of the modern corporations implement small goals for their employees to increase their productive performance. The ‘Goal-Setting theory’ is significantly popular among managers that provided policies for setting effective goals. The goals have to be clear and challenging at the same time; the commitment of employees along with managers is needed. The managers have to collect feedback from employees continuously, and they should analyse task complexity to ensure it is not too difficult for workers (Munson and Consolvo, 2012). Managers can implement this theory throughout different process to increase job satisfaction and enhancing employees’ productive performance.

Designing Organizational Jobs Based on Employees' Skills and Company's Requirement

In conclusion, managers use organisational behaviour theories while performing various business functions such as goal setting, motivation, job designing and others in order to increase employees’ productive performance. Productive employees provided a competitive advantage to companies which assist in increasing their profitability. Various organisational behaviour theories assist managers in establishing a positive working environment which increases job satisfaction and motivates employees to perform better such as Goal-setting theory, Theory X and Y, Critical theory of communication, Fundamental attribution error and many others. These OB theories assist managers in analysing employees’ behaviour and attitude to establish a working environment which is suitable for their requirements that result in increasing their productive performance. Following are various recommendations that assist managers in effectively implementing OB theories across different process. The managers should implement OB theories while performing human resource functions such as recruitment, selection, training, and others to ensure that qualified employees are selected who are suitable for company’s working environment. Managers should also implement theories in different processes since different incentive schemes motivate different employees. For example, low-level employees prefer monitory incentives whereas top-level employees motivate by non-monetary rewards. Effective OB theory can increase employees’ productive performance which sustains future growth of companies.

References

Chiang, C.F. and Hsieh, T.S. (2012) The impacts of perceived organizational support and psychological empowerment on job performance: The mediating effects of organizational citizenship behavior. International journal of hospitality management, 31(1), pp.180-190.

Colquitt, J., Lepine, J.A., Wesson, M.J. and Gellatly, I.R. (2011) Organizational behavior: Improving performance and commitment in the workplace. Pennsylvania, US: McGraw-Hill Irwin.

Deetz, S.A. (2012) Communication Yearbook 17 (No. 17). Abingdon: Routledge.

Dieser, R.B. (2011) A follow-up investigation of the fundamental attribution error in leisure education research. Therapeutic Recreation Journal, 45(3), p.190.

Kannan-Narasimhan, P. (2015) Creating a culture for innovation: Theory X or Theory Y?. [Online] LinkedIn. Available at https://www.linkedin.com/pulse/creating-culture-innovation-theory-x-y-priya-kannan-narasimhan [Accessed 19th January 2018].

Kopelman, R.E., Prottas, D.J. and Falk, D.W. (2010) Construct validation of a Theory X/Y behavior scale. Leadership & Organization Development Journal, 31(2), pp.120-135.

Munson, S.A. and Consolvo, S. (2012) Exploring goal-setting, rewards, self-monitoring, and sharing to motivate physical activity. In Pervasive computing technologies for healthcare (PervasiveHealth), 2012 6th international conference on (pp. 25-32). IEEE.

Myers, K.K. and Sadaghiani, K. (2010) Millennials in the workplace: A communication perspective on millennials’ organizational relationships and performance. Journal of Business and Psychology, 25(2), pp.225-238.

Pinder, C.C. (2014) Work motivation in organizational behavior. Hove, UK: Psychology Press.

?ahin, F. (2012) The mediating effect of leader–member exchange on the relationship between Theory X and Y management styles and affective commitment: A multilevel analysis. Journal of Management & Organization, 18(2), pp.159-174.

Shantz, A., Alfes, K., Truss, C. and Soane, E. (2013) The role of employee engagement in the relationship between job design and task performance, citizenship and deviant behaviours. The International Journal of Human Resource Management, 24(13), pp.2608-2627.

Turkay, S. (2014) Setting Goals: Who, Why, How?. [Online] Harvard University. Available at https://hilt.harvard.edu/files/hilt/files/settinggoals.pdf [Accessed 19th January 2018].

Umphress, E.E., Bingham, J.B. and Mitchell, M.S. (2010) Unethical behavior in the name of the company: the moderating effect of organizational identification and positive reciprocity beliefs on unethical pro-organizational behavior. Journal of Applied Psychology, 95(4), p.769.

Walumbwa, F.O., Hartnell, C.A. and Oke, A. (2010) Servant leadership, procedural justice climate, service climate, employee attitudes, and organizational citizenship behavior: a cross-level investigation. Journal of Applied Psychology, 95(3), p.517.

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