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Organizational behavior

Last updated on 15.07.2020


“Want to be world leader #1” (WTBWL) is a multinational company which have an electronic manufacturing plant and sales office in Bangalore, India. CEO of WTBWL, Mr. Money announced another Business unit re-organization. As per this announcement; the business unit “Orphaned Product Lines” (OPL), which is relatively small globally but is the largest in India, is being split and a large portion of the business is merged to other several business units. Some part of this unit remains and is renamed to “Unwanted Product Lines” (UPL).

Employees learn that the Country Manager responsible for the business in India, Mr. Popular South India, is leaving and Mr. Boring North India, who was the Country Manager of a much smaller business unit, formerly based in Bombay, is taking over. Mr. Boring is excited about his promotion, has big plans for UPL including radical measures to improve productivity and efficiency. Management also wants him to bring the costs (and headcount) of UPL in line with the revenue that is lost as a result of the re-organization. Mr. Boring has additional plans to bring-in his loyal staff from the older BU. These actions bring him in direct conflict with the existing staff in UPL, who were already unhappy with all the changes to their Business Unit.

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While these conflicts did not help, there were other underlying complications that compounded the chaos in Unwanted Product Lines BU. Mr. Popular South India was charismatic and agreeable. He spoke the local language, cracked local jokes, had a Laissez-faire management style and knew his direct staff intimately. He managed a very cohesive team, who were very loyal to him. Mr. Boring North India had a big language and cultural barrier to overcome. He is not as laid back as the former Manager and his management style is more hierarchical. His controlling behaviour was possible because of the smaller size of the business unit he was managing before, but now is in a much larger organization. Due to these differences, he struggles to engage effectively with his new team.

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Organizational Culture and The Competing Values Framework

Culture is a complex issue that essentially includes all a group’s shared values, attitudes, beliefs, assumptions, artifacts, and behaviors [Bruce M. Tharp. 2009]. For example, believing people from the South of India respond to authority just as well as people from the North might unknowingly influence the management’s policies and behavior towards the employees. While it may not be possible for the new Management to account for all the elements of a Business Unit’s culture, Robert Quinn and John Rohrbaugh (1983) deliberated many studies on the subject and determined that two dimensions could account for such a broad range. Their Competing Values Framework combines these two dimensions, creating a 2×2 matrix with four clusters.

Competing Values Framework is useful for identifying the major approaches to organizational design, theories of effectiveness, leadership roles, and management skills [Kim S. Cameron, Robert E. Quinn. 2011]. The 4 organizational Culture types are Control (Hierarchy), Compete (Market), Collaborate (Clan), and Create (Adhocracy). These four core values represent opposite or competing assumptions. Each dimension highlights a core value that is opposite from the value on the other end of the continuum-i.e., flexibility versus stability, internal versus external.

By using these dimensions that make up the four quadrants that represent different cultural factors; the management of UPL will be able to identify the most effective strategy that must be pursued based on the underlying culture of UPL. If this approach was used while reviewing the dimensions Mr.Boring could have realized that the culture of UPL is more towards Collaborate, with Create as a strong secondary component while the dominant quadrant of the former business unit of Mr. Boring is more likely to be Control and Compete as a secondary category.

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This knowledge and analysis would have given him a better understanding of how to effectively supervise his new team and what strategies would work in this culture. According to Kim Cameron (2011), the leadership type suitable for this kind of organizational culture is as a Facilitator, Mentor, and a Team Builder. The value drivers are Commitment, Communication and Development. In this quadrant – Human development and high commitment produces effectiveness. Mr. Boring should employ tools and techniques such as teamwork, collaboration, talent management, empowerment, or inter-personal relationships to be effective in the Clan / Collaborate Culture.

Equity Theory

Mr. Boring brings in his confidants from his former business unit. UPL employees who were already dispirited because of mass restructurings are even more wounded. There is a total lack of mistrust between employees and a rumor is spread that the employees who newly joined from Bombay (capital of another State) are given very high relocation benefits.

Equity theory proposes that individuals who perceive themselves as either under-rewarded or overrewarded will experience distress, and that this distress leads to efforts to restore equity. According to this theory proposed by John Stacey Adam (1963), when people feel distress from inequity, they may react in one or all the following ways. First, they may restrict their inputs to a level they believe is consistent with the outcomes they receive. Second, they may meet with their supervisors to verbally negotiate a better deal—meaning they will struggle to find a balance between work and reward. And/or third, the distress of feelings of inequity may cause some employees to quit the organization. Nevertheless, many managers still do not know how to communicate with employees when they have feelings of inequity. [Regina L Bell. 2012]

Transactional Analysis

Mr. Boring planned a team outing combined with HR training and a team meeting to discuss the next steps. He hoped this will improve employee morale. In the team meeting, he starts by being overly friendly, but he observed that people are not very communicative or participatory. He assumes this is because of the “South Indian culture” and decides that he needs to show authority to be taken seriously. He decides to start with Ms Congeniality, who is a Customer Care team leader.

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Transactional Analysis is a psychological theory of social intercourse developed by Dr. Eric Berne in the late 1950s. The main idea is that psychologically people have 3 basic ego states called Parent, Adult and Child.

Three Ego states in Transactional analysis

The position is, then, that at any given moment each individual in a social aggregation will exhibit a Parental, Adult or Child ego state, and that individuals can shift with varying degrees of readiness from one ego state to another.

Let us examine the conversation between Mr. Boring and Ms Congeniality from the perspective of these concepts.

Boring; “Ms Congeniality, Customer Cry-baby called me yesterday. He was complaining that they still have not received shipment XYZ.”

Congeniality; “Yes, he had also called me. I have calmed him down. We will deliver this on Monday”

Boring; “Why is this happening all the time? Why can’t we keep our promises?”

Congeniality; ”This is because of a manufacturing delay. I have escalated this. I kept you on CC on the escalation”

3Boring; “I get hundreds of emails every day. I don’t check emails where I am CCd. You know Cry-baby is an important account. Why didn’t you walk into my office or you should have at least called? I would have spoken directly with Plant Manager and got it done.”

3Congeniality; “It… it …it …. You are always in meetings. I didn’t want to disturb you”.

4Boring; “This is the problem here. People do not take responsibility”.

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