Organizational behavior models help you craft strategies to get employees to perform a certain way in certain situations. As the company leader, providing employees with an environment to succeed helps the business succeed. There are five main management models of organizational behavior in the workplace.
Autocratic Model of Organizational Behavior
The autocratic model of organizational behavior puts the boss in charge and the subordinates in a position to obey commands or be fired. It’s black and white, regarding who is in charge and quickly establishes consequence for insubordination or lack of performance. This environment uses a paycheck as the reward system rarely implementing any other incentive programs.
Loyalty, if it exists, is generally to the boss and not the company. This model can create a fearful workforce, unsure if any mistake could lead to disciplinary action.
Custodial Model of Organizational Behavior
Custodial models seek to make employees feel as if the boss is caring for their personal needs. This is often done through benefits packages such as healthcare, retirement plans and other incentives. An executive visiting various territory offices could get a company car as an incentive.
The custodial model looks to retain quality people by providing incentives that are meaningful to the employee. Loyalty is to the company and not individual company leaders.
Collegial Model of Organizational Behavior
The collegial model works to develop a structure in which managers are more like coaches and employees are team members. Power is shared to some degree. The coach leads through inspiration. In this model, the loyalty is to the bigger goal, and team responsibility rather than to an individual. Employees feel invested in the success of the company and take pride in the successful execution of goals.
Supportive Model of Organizational Behavior
The supportive model seeks to understand what motivates employees and focuses on those things to motivate and inspire. When employees are given opportunities to improve themselves, they often take personal initiative to perform better at their job. Managers support employees as they work toward established personal goals such as promotion or acquisition of new skills. In this model, a manager would ask employees for professional goals and would work with them to establish an action plan to succeed with them.
System Model of Organizational Behavior
The system model is really the foundation of positive corporate cultures. When people think about why LinkedIn is a great place to work, for example, it is because of the incentives, work schedule flexibility and creative encouragement that leadership provides. It is nurturing yet challenging, and so efficiency and productivity increase in a happier work environment that’s loyal to the company and excited to share its vision.
Small business owners don’t need to try to compete with what LinkedIn does, but should develop strategies within their resources to build a positive corporate culture.
Findings from organizational behavior research are used by executives and human relations professionals to better understand a business’s culture, how that culture helps or hinders productivity and employee retention, and how to evaluate candidates’ skills and personality during the hiring process.
Organizational behavior theories inform real-world evaluation and management of groups of people. There are a number of components:
Personality plays a large role in the way a person interacts with groups and produces work. Understanding a candidate’s personality, either through tests or through conversation, helps determine whether they are a good fit for an organization.
Leadership, what it looks like and where it comes from, is a rich topic of debate and study within the field of organizational behavior. Leadership can be broad, focused, centralized or de-centralized, decision-oriented, intrinsic in a person’s personality, or simply a result of a position of authority.
Power, authority, and politics all operate inter-dependently in a workplace. Understanding the appropriate ways these elements are exhibited and used, as agreed upon by workplace rules and ethical guidelines, are key components to running a cohesive business.
The leaders of the Hawthorne study had a couple of radical notions. They thought they could use the techniques of scientific observation to increase an employee’s amount and quality of work. And, they did not look at workers as interchangeable resources. Workers, they thought, were unique in terms of their psychology and potential fit within a company.
Over the following years, the concept of organizational behavior widened. Beginning with World War II, researchers began focusing on logistics and management science. Studies by the Carnegie School of Home Economics in the 1950s and 1960s solidified these rationalist approaches to decision-making.
Today, those and other studies have evolved into modern theories of business structure and decision-making.
The new frontiers of organizational behavior are the cultural components of organizations, such as how race, class, and gender roles affect group building and productivity. These studies take into account the ways in which identity and background inform decision-making.
KEY TAKEAWAYS
Organizational behavior is the study of how people behave within groups.
Early studies determined the importance of group dynamics in business productivity.
The study of organizational behavior is a foundation of corporate human resources.
Where Organizational Behavior Is Studied
Academic programs focusing on organizational behavior are found in business schools as well as at schools of social work and psychology. These programs draw from the fields of anthropology, ethnography, and leadership studies, and use quantitative, qualitative, and computer models as methods to explore and test ideas.
Depending on the program, one can study specific topics within organizational behavior or broader fields within it. Specific topics covered include cognition, decision-making, learning, motivation, negotiation, impressions, group process, stereotyping, and power and influence. The broader study areas include social systems, the dynamics of change, markets, relationships between organizations and their environments, how social movements influence markets, and the power of social networks.
If you have ever held a job, taken a class, or participated in an organized activity, you have seen levels of influence. The three levels of influence are the individual, the group, and the organization. The three levels are interconnected so it is critical to understand each one.
The Individual
The individual level includes each individual person within an organization. Each individual acts differently which affects group dynamics and the organization as a whole. If there are a lot of happy and efficient individuals, the work environment will be an efficient and productive one. However, if there are a lot of negative and disgruntled individuals, it can create a toxic environment.
It is impossible for a company to study each individual employee’s behavior, however, it is important for a company to create guidelines and expectations that will attract employees with desirable behaviors. For example, a company may hire employees based on their personality or how they answer behavioral based interview questions. At the same time, companies can help influence individual behavior. They do this by creating a code of conduct, establishing policy and procedure guidelines, and by developing incentives and consequences.
The Group
The group level includes any groups within an organization. Groups can range in size from a couple people working together, to a large group with dozens or hundreds of members. As we just discussed, individuals can affect a group and a group can affect an organization. And at the same time, a group can affect individuals and an organization can affect a group. Imagine organizational behavior as a large spider web over each organization. The spider web connects each level of influence with the two others, creating a pathway between each one.
The Organization
Finally, the organization level incorporates the organization as a whole. In case you haven’t picked up on the trend, it’s important to point out that the organization impacts the individual and group behavior and that individual and group behavior impacts an organization.
In a nutshell, organizational behavior is the study of how human behavior affects an organization. Organizational behavior aims to learn how an organization operates through the behaviors of its members. Instead of taking a strictly numerical approach to determine an organization’s operations, it takes a more psychological approach. By understanding people, you can better understand an organization.
Organizational behavior is intended to explain behavior and make behavioral predictions based on observations. If you can understand behaviors, you can better understand how an organization works. In addition, organizational behavior studies how an organization can affect behavior. So, if you think about it, behavior affects an organization and an organization affects behavior. Let that sink in for a second—it’s all connected! They each affect the other, creating a never ending loop between the two. Therefore, in order to have a healthy and successful organization, it is extremely important to understand the ins and outs of organizational behavior!
Evolution of Organizational Behavior
The academic study of organizational behavior can be dated back to Taylor’s scientific theory as we discussed earlier in this module. However, certain components of organizational behavior can date back even further. In this section we will discuss how organizational behavior developed into a field of its own.
Looking back thousands of years we can find components of organizational behavior. Famous philosophers like Plato and Aristotle discussed key components of today’s organizations including the importance of leadership and clear communication. While these seem like very basic and broad concepts today, at the time they were innovative ideas and helped to lay the foundation for organizational behavior.
If organizational behavior were a simple topic, this course would be short and sweet. We could simply say that organizational behavior is how people and groups act within an organization. But it’s not so simple!
When organizational behavior grew into an academic study with the rise of the Industrial Revolution, it began to complicate what could appear to be simple topics. People began asking a lot of questions and started critiquing how organizations operated. Like many academic ventures, people began to deep dive into how behavior plays a role in organizations and why changes in behavior alter the way organizations operate. Along the way, organizational behavior has grown to incorporate components of management, psychology, leadership, personality traits, motivation, etc.
Organizational behavior has grown into its own niche within a wide variety of other genres. This is exciting because it allows us to really investigate each and every aspect of behavior within an organization! Today, organizational behavior is recognized as an essential component of an organization. Scholars and businesses alike recognize its importance and continue to help it adapt to current issues and new findings.
One of the great things about organizational behavior is that it is constantly changing. The rest of this module will discuss contemporary issues in organizational behavior and how organizations are adapting to and learning from these challenges.
The coronavirus has sent shockwaves rippling through U.S. stocks, forcing investors to contemplate outcomes more worrying than those of a recession, including several quarters of declining economic activity, a credit crisis or even a depression.
The rising global toll from the pandemic and uncertainty over how far it may spread has left investors and economists scrambling to gauge the financial fallout.
Forecasters at Goldman Sachs and other banks are now projecting a steep economic contraction in at least the second quarter, as governments in the United States and Europe start shutting restaurants, closing schools and calling on citizens to stay home.
“This market looks like it has already priced in most of a garden variety recession,” said Frances Donald, global chief economist at Manulife Investment Management. “It is now, on top of that, having to price in some probability of a credit crisis.”
But there is hope among some economists that the economy will start expanding again later this year – depending in part on efforts to contain the virus, known as COVID-19.
The S&P 500 on average has fallen 28% from peak to trough during recessions, according to an analysis of the past 70 years by Keith Lerner, chief market strategist at Truist/SunTrust Advisory Services. As of Monday’s close, the benchmark index had declined 29.5% from its Feb. 19 closing record high.
But the market’s plunge was much deeper over a decade ago during the financial crisis, with the S&P 500 tumbling more than 50%.
“A 2008-like financial contagion is not yet priced into this market,” Donald said, adding, however, that the market “probably won’t have any reassurance that we have avoided that 2008-type scenario completely until we see a calming of credit spreads and the pace of COVID-19 cases starts to decline.”
Stocks crumbled anew on Monday a day after the Federal Reserve took emergency action designed to cushion the economy, using tools similar to those the central bank deployed to help the country emerge from the 2007-2009 financial crisis.
Some $2.7 trillion in market value was wiped from the S&P 500 on Monday as it suffered its third-largest daily percentage decline on record. Over the past 18 days, the benchmark index has lost $8.3 trillion. World stocks have hemorrhaged over $15 trillion.
Global share markets and oil prices again struggled on Tuesday after coronavirus panic caused Wall Street’s worst one-day rout since the Black Monday crash of 1987.
Asia’s traders saw the Philippines become the first country to close its markets. Europe’s watched an early rebound get wiped out as the region’s battered airline and travel stocks suffered another 7% drubbing.
Data showed German investor morale at lows last seen in the 2008 financial crisis, and rating agency S&P Global warned the inevitable global recession this year would lead to a spike in defaults.
In Europe, early 1.5.% to 3% gains in London, Frankfurt and Paris were quickly wiped out as airline and travel stocks suffered a 6.5% drubbing.
The dollar recouped some lost ground against the safe-haven Japanese yen. Oil gave up attempted gains after Brent’s dropped below $30 a barrel on Monday. Financial markets cratered on Monday with the S&P 500 tumbling 12%. Emergency central bank rate cuts globally only added to the investor panic.
Tuesday’s stabilization saw Australian shares close 5.9% higher, their biggest daily percentage gain since October 2008, after plunging nearly 10% on Monday.
MSCI’s broadest index of Asia-Pacific shares and Japan’s Nikkei both finished steady. South Korea finished down 2.4%, however, and the Philippines became the first country to suspend all trading over the virus.
Prolonged slump?
Joachim Fels, PIMCO’s global economic adviser, said in written commentary that a global recession appeared to be a “foregone conclusion” and that the task for governments and central banks was to ensure that the recession “stays relatively short-lived and doesn’t morph into an economic depression.”
Fels loosely defined a depression as “a combination of a prolonged slump of activity that lasts longer than just a few quarters, a very significant rise in unemployment, and mass business bankruptcies and bank failures.”
Data out of China, where the pathogen originated late last year, underscored just how much economic damage the disease had already done with industrial output plunging 13.5% and retail sales 20.5%.
At least one other big Wall Street name appears concerned that the current crisis could snowball into something bigger than a recession.
Billionaire investor Ray Dalio, whose main Bridgewater Associates LP hedge fund fell sharply amid the coronavirus-led market rout, is worried that the Fed and other central banks may have already expended a good deal of their firepower by cutting rates to near zero.
In a note on Monday, Dalio said he had been concerned that the next economic downturn would “lead to hitting the 0% interest rate floor with a lot of debt outstanding and big wealth and political gaps in the same way that configuration of events happened in the 1930s.”
Strategists at Deutsche Bank said in a note last week that the market’s recent volatility, marked by swings of over 3% in the S&P 500, was coming at “a frequency previously seen only in the Great Financial Crisis and the Great Depression.” Following the Fed’s action, Wall Street’s focus is now on what fiscal policies governments will enact and even more so, on what can be done to contain the virus.
“Nothing else matters if we can’t get this under control,” said Eric Winograd, chief U.S. economist at AllianceBernstein. The market’s pullback has taken the S&P 500 down to the level it was last at in late 2018 and mid-2017.
“I don’t think it is quite pricing in a prolonged depression scenario at this stagem and I think it is probably appropriate not to,” Winograd said. “That’s not the base case.” However, Winograd said, he is concerned the situation could turn into a “durable recession” that stems in part from distress in the banking sector. “If we end up in a multiple-quarter level decline, I would expect there still to be a significant downside for the market.”
Following in the steps of central banks around world, the Turkish central bank in an emergency meeting cut its benchmark one-week repo rate from 10.75% to 9.75% as it responded to the negative impact of the coronavirus on the global growth outlook
The Central Bank of the Republic of Turkey (CBRT) cut its key interest rate by 100 basis points on Tuesday in an earlier-than-scheduled policy meeting and took steps to support volatile financial markets to offset the negative impact of the coronavirus.
In its 7th consecutive rate cut in an aggressive easing cycle since July 2019 designed to boost economic growth, the bank cut its benchmark one-week repo rate to 9.75% from 10.75%.
The bank was set to meet Thursday, but with fears of the virus mounting and cases climbing worldwide, the meeting was moved ahead.
The bank’s Monetary Policy Committee (MPC) said that despite the recent slide in the Turkish lira, the sharp fall in international commodity prices combined with a broader economic slowdown will help lower Turkish inflation more than expected.
Inflation was a pressing issue for the economy in the second half of 2019 when it surged to a 15-year high above 25%. But it has since dropped gradually throughout last year and briefly touched single digits, going all the way down from 20.35% in January to 8.55% in October, thanks mostly to base effects from high volatility in exchange rates in 2018. It closed the year at 11.84% in December. In response to the hike, the CBRT had raised its policy rate to 24%, where it stayed until last July.
The consumer price inflation rose less than expected to 12.37% year-on-year in February. Month-on-month, consumer prices rose 0.35%, according to the Turkish Statistical Institute (TurkStat).
“In order to contain negative effects of the coronavirus pandemic on the Turkish economy, it is of crucial importance to ensure the healthy functioning of financial markets, the credit channel and firms’ cash flows,” the bank said.
The bank unveiled measures including the provision of lira liquidity with an interest rate 150 basis points lower than the benchmark one-week repo rate, through repo auctions with maturities up to 91 days.
These measures aim to boost predictability by providing banks with flexibility in the Turkish lira and foreign exchange liquidity management, offering targeted additional liquidity facilities to banks to secure uninterrupted credit flow to the corporate sector.
The bank said it would also provide banks with as much liquidity as they need through intraday and standing overnight facilities.
Central banks such as the U.S. Federal Reserve and the Bank of England (BoE) have also taken urgent measures to contain the fallout from the coronavirus. Economists said the Fed’s move opens the door for Turkey’s central bank to ease policy by even more.
Turkey identified 29 new cases of the coronavirus, bringing its total to 47, Health Minister Fahrettin Koca said on Monday, marking the highest daily rise since the country announced its first case last week, as the country embarked upon measures to mitigate its spread.
Last Wednesday, the country became the last major economy to report an outbreak after taking what the World Health Organization (WHO) described as “vigilant” measures to delay it.
Since then, the government has ramped up measures to halt the spread of the virus, closing schools and universities, holding sports events without spectators and halting flights to many countries.
On Monday the country imposed flight bans on six more countries including the U.K. and the United Arab Emirates, bringing the total number of countries to 20. The country also said it will temporarily close cafes, sports and entertainment venues and is suspending mass prayers in mosques to contain the spread of the coronavirus.
Treasury and Finance Minister Berat Albayrak on Monday said measures will be taken to ensure markets have access to liquidity, adding that support will be provided to all sectors of the economy beginning with those more affected.
President Recep Tayyip Erdoğan expected this week to announce new measures to reduce the economic impact of the virus.
Turkey is considering tax relief for businesses as one possible step to help the economy through a slowdown in the face of the spreading coronavirus, Reuters cited two sources as saying on Monday.
Adjustments to tax regulations may be on the agenda as the government decides how to help companies and small businesses especially in the export and tourism sectors seen as vulnerable, said the sources, who are aware of the planning.
“Some tax regulations may come on the agenda but a final decision has not been made,” said one of the two sources, who requested anonymity. The government will provide “serious support” to help businesses, the person added.
Debt repayments could also be delayed or deferred, said the two sources, adding that the central bank and BDDK financial regulator are expected to take steps.
The country is the world’s sixth-largest tourism destination but waves of travel restrictions and flight cancellations could pinch a sector that accounts for some 12% of the economy.
Separately, the central bank Monday lowered the remuneration rate on required reserves to 6% from 8%, effective on March 20
Priority given to completing domestic competitions in an unprecedented solidarity move by UEFA. Working group set up to examine possibilities for this season’s UEFA Champions League and UEFA Europa League competitions.
UEFA today announced the postponement of its flagship national team competition, UEFA EURO 2020, due to be played in June and July this year. The health of all those involved in the game is the priority, as well as to avoid placing any unnecessary pressure on national public services involved in staging matches. The move will help all domestic competitions, currently on hold due to the COVID-19 emergency, to be completed.
All UEFA competitions and matches (including friendlies) for clubs and national teams for both men and women have been put on hold until further notice. The UEFA EURO 2020 play-off matches and international friendlies, scheduled for the end of March, will now be played in the international window at the start of June, subject to a review of the situation.
A working group has been set up with the participation of leagues and club representatives to examine calendar solutions that would allow for the completion of the current season and any other consequence of the decisions made today.
The decisions, taken by UEFA’s Executive Committee, followed videoconference meetings held today with the presidents and general secretaries of the 55 national associations, as well as representatives of the European Club Association, European Leagues and FIFPro Europe, convened by UEFA President Aleksander Čeferin, to find a coherent plan to break the logjam of fixtures building up due to the spread of the virus across the continent.
Announcing the decisions, Aleksander Čeferin said:
“We are at the helm of a sport that vast numbers of people live and breathe that has been laid low by this invisible and fast-moving opponent. It is at times like these that the football community needs to show responsibility, unity, solidarity and altruism.
“The health of fans, staff and players has to be our number one priority and, in that spirit, UEFA tabled a range of options so that competitions can finish this season safely and I am proud of the response of my colleagues across European football. There was a real spirit of cooperation, with everyone recognising that they had to sacrifice something in order to achieve the best result.
“It was important that, as the governing body of European football, UEFA led the process and made the biggest sacrifice. Moving EURO 2020 comes at a huge cost for UEFA but we will do our best to ensure that the vital funding for grassroots, women’s football and the development of the game in our 55 countries is not affected. Purpose over profit has been our guiding principle in taking this decision for the good of European football as a whole.
“Football is an uplifting and powerful force in society. The thought of celebrating a pan-European festival of football in empty stadia, with deserted fan zones while the continent sits at home in isolation, is a joyless one and one we could not accept to celebrate the 60th anniversary of the competition.
“I would like to thank the European Club Association, the European Leagues and FIFPro Europe for their great work today and for their cooperation. I would also like to thank from the bottom of my heart the 55 national associations, their presidents and general secretaries, and my colleagues from the Executive Committee for their support and wise decisions. The fine detail will be worked out in the coming weeks but the basic principles have been agreed and that is a major step forward. We have all shown that we are responsible leaders. We have demonstrated solidarity and unity. Purpose over profit. We’ve achieved this today.
“I would also like to thank Alejandro Domínguez and CONMEBOL, who have agreed to move CONMEBOL’s 2020 Copa America in order to follow the recommendations issued by the international public health organisations to enact extreme measures and as a result of EURO 2020 being postponed. This means that clubs and leagues in Europe will have as little disruption as possible in the availability of their players. These joint efforts and especially this coordinated and responsible decision, are deeply appreciated by the whole European football community.
“I would like to thank FIFA and its President, Gianni Infantino, who has indicated it will do whatever is required to make this new calendar work. In the face of this crisis, football has shown its best side with openness, solidarity and tolerance.”
UEFA EURO 2020 was scheduled to take place in 12 cities across Europe from 12 June to 12 July 2020. The proposed new dates are 11 June to 11 July 2021. UEFA would like to reassure existing ticket buyers and hospitality clients that if they cannot attend the tournament in 2021, the face value of their tickets and packages will be refunded in full. Within the next month, further information on the refund process will be communicated to existing ticket buyers via email and on euro2020.com/tickets.
Decisions on dates for other UEFA competitions, whether club or national team for men or women, will be taken and announced in due course.
A Beyoğlu Municipality worker disinfects the area around Istanbul’s Taksim Square and Istıklal Avenue on Thursday, March 12, 2020 (AA photo)
Turkey’s health minister announced on Friday another case of the coronavirus (COVID-19), only the second case seen in the country.
“He is from the immediate circle of our first patient, who was followed up as soon as the diagnosis was made,” Fahrettin Koca said on Twitter.
“We have taken the necessary measures to keep the possible spread of the virus within these limits. We will overcome this problem together,” he added.
Turkey’s first case was announced earlier this week, a man who had recently returned from Europe. The patient was completely isolated, along with monitoring of his family and those who came into contact with him.
After emerging in Wuhan, China last December, the novel coronavirus, officially known as COVID-19, has spread to at least 114 countries.
The Real World is Here 