Strategic management is the management of an organization’s resources to achieve its goals and objectives. Strategic management involves setting objectives, analyzing the competitive environment, analyzing the internal organization, evaluating strategies, and ensuring that management rolls out the strategies across the organization.
Understanding Strategic Management
Strategic management is divided into several schools of thought. A prescriptive approach to strategic management outlines how strategies should be developed, while a descriptive approach focuses on how strategies should be put into practice. These schools differ on whether strategies are developed through an analytic process, in which all threats and opportunities are accounted for, or are more like general guiding principles to be applied.
KEY TAKEAWAYS
Companies, universities, nonprofits, and other organizations can use strategic management as a way to make goals and meet objectives.
Flexible companies may find it easier to make changes to their structure and plans, while inflexible companies may chafe at a changing environment.
A strategic manager may oversee strategic management plans and devise ways for organizations to
Frederick Herzberg approached the question of motivation in a different way. By asking individuals what satisfies them on the job and what dissatisfies them, Herzberg came to the conclusion that aspects of the work environment that satisfy employees are very different from aspects that dissatisfy them. Herzberg labeled factors causing dissatisfaction of workers as “hygiene” factors because these factors were part of the context in which the job was performed, as opposed to the job itself. Hygiene factorsincluded company policies, supervision, working conditions, salary, safety, and security on the job. To illustrate, imagine that you are working in an unpleasant work environment. Your office is too hot in the summer and too cold in the winter. You are being harassed and mistreated. You would certainly be miserable in such a work environment. However, if these problems were solved (your office temperature is just right and you are not harassed at all), would you be motivated? Most likely, you would take the situation for granted. In fact, many factors in our work environment are things that we miss when they are absent but take for granted if they are present.
Herzberg’s research is far from being universally accepted. One criticism relates to the primary research methodology employed when arriving at hygiene versus motivators. When people are asked why they are satisfied, they may attribute the causes of satisfaction to themselves, whereas when explaining what dissatisfies them, they may blame the situation. The classification of the factors as hygiene or motivator is not that simple either. For example, the theory views pay as a hygiene factor. However, pay may have symbolic value by showing employees that they are being recognized for their contributions as well as communicating that they are advancing within the company. Similarly, the quality of supervision or the types of relationships employees form with their supervisors may determine whether they are assigned interesting work, whether they are recognized for their potential, and whether they take on more responsibilities.
Despite its limitations, the theory can be a valuable aid to managers because it points out that improving the environment in which the job is performed goes only so far in motivating employees. Undoubtedly, contextual factors matter because their absence causes dissatisfaction. However, solely focusing on hygiene factors will not be enough, and managers should also enrich jobs by giving employees opportunities for challenging work, greater responsibilities, advancement opportunities, and a job in which their subordinates can feel successful.
ERG theory, developed by Clayton Alderfer, is a modification of Maslow’s hierarchy of needs. Instead of the five needs that are hierarchically organized, Alderfer proposed that basic human needs may be grouped under three categories, namely, existence, relatedness, and growth. Existencecorresponds to Maslow’s physiological and safety needs, relatedness corresponds to social needs, and growth refers to Maslow’s esteem and self-actualization.
ERG theory’s main contribution to the literature is its relaxation of Maslow’s assumptions. For example, ERG theory does not rank needs in any particular order and explicitly recognizes that more than one need may operate at a given time. Moreover, the theory has a “frustration-regression” hypothesis suggesting that individuals who are frustrated in their attempts to satisfy one need may regress to another. For example, someone who is frustrated by the growth opportunities in his job and progress toward career goals may regress to relatedness need and start spending more time socializing with coworkers. The implication of this theory is that we need to recognize the multiple needs that may be driving individuals at a given point to understand their behavior and properly motivate them.
Group behavior is the behavior of human groups, from formation to dissolution. Along with many other organisms, human beings tend to group up and engage in cooperative activities. The behaviors of a group can be highly variable, as can the factors that put pressure on the group. Social psychologists study group behavior. Their work contributes to everything from the development of advertising aimed at specific groups to the understanding of how crowds react to dangerous situations.
Groups can vary widely in size and composition. Individuals tend to drift to people with like characteristics, and the composition of a group that arises organically may be more homogeneous. In contrast, a group with enforced membership, like an assigned group of people in a class who must complete a project together, will be more variable. Various activities may facilitate bonding within the group, one reason many organizations use retreats and ice-breaking exercises to get their members to work together.
Within a group, a number of interesting phenomena can occur and these are topics of study in the field of group behavior. Some personalities may be more dominant than others, and some members may emerge as natural leaders and trendsetters within the groups. Groups can create a situation where individual members will be influenced by each other. Members of the group may act as a herd or mob to make decisions, rather than considering issues as individuals. Groups can also become narrow minded, as seen in group think, where pressures within the group lead to a bad decision.
Humans can be members of more than one group at the same time, and group membership may only be temporary. At a concert, for example, attendees form a group and may behave in unison for a few hours before separating at the end of the event to return to their own lives. While functioning as a group, they can be prone to situations like mass panic that may endanger the group as a whole. Stampedes and tramplings usually involve a series of events that trigger the development of thoughtless and dangerous group behavior.
Understanding the way that groups work is important in a number of settings. For teachers and work supervisors, it is important to know how groups operate and how to improve their functionality. Law enforcement officers, on the other hand, need to know how to control and work with crowds for safety. Marketing professionals also observe group behavior and use their findings to tailor advertisements and public outreach.
Maslow first introduced his concept of a hierarchy of needs in his 1943 paper “A Theory of Human Motivation” and his subsequent book Motivation and Personality. This hierarchy suggests that people are motivated to fulfill basic needs before moving on to other, more advanced needs.
While some of the existing schools of thought at the time (such as psychoanalysis and behaviorism) tended to focus on problematic behaviors, Maslow was much more interested in learning about what makes people happy and the things that they do to achieve that aim.
As a humanist, Maslow believed that people have an inborn desire to be self-actualized, that is, to be all they can be. In order to achieve these ultimate goals, however, a number of more basic needs must be met such as the need for food, safety, love, and self-esteem.1
There are five different levels of Maslow’s hierarchy of needs. Let’s take a closer look at Maslow’s needs starting at the lowest level, known as physiological needs.
From Basic to More Complex Needs
Maslow’s hierarchy is most often displayed as a pyramid. The lowest levels of the pyramid are made up of the most basic needs, while the most complex needs are at the top of the pyramid.
Needs at the bottom of the pyramid are basic physical requirements including the need for food, water, sleep, and warmth. Once these lower-level needs have been met, people can move on to the next level of needs, which are for safety and security.
As people progress up the pyramid, needs become increasingly psychological and social. Soon, the need for love, friendship, and intimacy becomes important. Further up the pyramid, the need for personal esteem and feelings of accomplishment take priority.
Like Carl Rogers, Maslow emphasized the importance of self-actualization, which is a process of growing and developing as a person in order to achieve individual potential.
Deficiency Needs vs. Growth Needs
Maslow believed that these needs are similar to instincts and play a major role in motivating behavior.2 Physiological, security, social, and esteem needs are deficiency needs, which arise due to deprivation. Satisfying these lower-level needs is important in order to avoid unpleasant feelings or consequences.
Maslow termed the highest level of the pyramid as growth needs. These needs don’t stem from a lack of something, but rather from a desire to grow as a person.
While the theory is generally portrayed as a fairly rigid hierarchy, Maslow noted that the order in which these needs are fulfilled does not always follow this standard progression. For example, he noted that for some individuals, the need for self-esteem is more important than the need for love. For others, the need for creative fulfillment may supersede even the most basic needs.
Physiological Needs
The basic physiological needs are probably fairly apparent—these include the things that are vital to our survival. Some examples of physiological needs include:
Food
Water
Breathing
Homeostasis
In addition to the basic requirements of nutrition, air and temperature regulation, the physiological needs also include such things as shelter and clothing. Maslow also included sexual reproduction in this level of the hierarchy of needs since it is essential to the survival and propagation of the species.
Security and Safety Needs
As we move up to the second level of Maslow’s hierarchy of needs, the requirements start to become a bit more complex. At this level, the needs for security and safety become primary. People want control and order in their lives, so this need for safety and security contributes largely to behaviors at this level.
Some of the basic security and safety needs include:
Financial security
Heath and wellness
Safety against accidents and injury
Finding a job, obtaining health insurance and health care, contributing money to a savings account, and moving into a safer neighborhood are all examples of actions motivated by the security and safety needs.
Together, the safety and physiological levels of the hierarchy make up what is often referred to as the basic needs.
Social Needs
The social needs in Maslow’s hierarchy include such things as love, acceptance, and belonging. At this level, the need for emotional relationships drives human behavior. Some of the things that satisfy this need include:
Friendships
Romantic attachments
Family
Social groups
Community groups
Churches and religious organizations
In order to avoid problems such as loneliness, depression, and anxiety, it is important for people to feel loved and accepted by other people. Personal relationships with friends, family, and lovers play an important role, as does involvement in other groups that might include religious groups, sports teams, book clubs, and other group activities.
Esteem Needs
At the fourth level in Maslow’s hierarchy is the need for appreciation and respect. When the needs at the bottom three levels have been satisfied, the esteem needs begin to play a more prominent role in motivating behavior.
At this point, it becomes increasingly important to gain the respect and appreciation of others. People have a need to accomplish things and then have their efforts recognized.
In addition to the need for feelings of accomplishment and prestige, esteem needs include such things as self-esteem and personal worth. People need to sense that they are valued and by others and feel that they are making a contribution to the world. Participation in professional activities, academic accomplishments, athletic or team participation, and personal hobbies can all play a role in fulfilling the esteem needs.
People who are able to satisfy the esteem needs by achieving good self-esteem and the recognition of others tend to feel confident in their abilities. Those who lack self-esteem and the respect of others can develop feelings of inferiority.
Together, the esteem and social levels make up what is known as the psychological needs of the hierarchy.
Self-Actualization Needs
At the very peak of Maslow’s hierarchy are the self-actualization needs. “What a man can be, he must be,” Maslow explained, referring to the need people have to achieve their full potential as human beings.
According to Maslow’s definition of self-actualization:
“It may be loosely described as the full use and exploitation of talents, capabilities, potentialities, etc. Such people seem to be fulfilling themselves and to be doing the best that they are capable of doing… They are people who have developed or are developing to the full stature of which they capable.”
Self-actualizing people are self-aware, concerned with personal growth, less concerned with the opinions of others, and interested in fulfilling their potential.
Criticisms of Maslow’s Hierarchy of Needs
Maslow’s theory has become wildly popular both in and out of psychology. The fields of education and business have been particularly influenced by the theory. While popular, Maslow’s concept has not been without criticism.
Chief among these:
Needs Do Not Necessarily Follow a Hierarchy
While some research showed some support for Maslow’s theories, most research has not been able to substantiate the idea of a needs hierarchy. Wahba and Bridwell reported that there was little evidence for Maslow’s ranking of these needs and even less evidence that these needs are in a hierarchical order.
The Theory Is Difficult to Test
Other criticisms of Maslow’s theory note that his definition of self-actualization is difficult to test scientifically. His research on self-actualization was also based on a very limited sample of individuals, including people he knew as well as biographies of famous individuals that Maslow believed to be self-actualized.
Why Was Maslow’s Hierarchy of Needs so Influential?
Regardless of these criticisms, Maslow’s hierarchy of needs represents part of an important shift in psychology. Rather than focusing on abnormal behavior and development, Maslow’s humanistic psychology was focused on the development of healthy individuals.
While there was relatively little research supporting the theory, the hierarchy of needs is well-known and popular both in and out of psychology. In a study published in 2011, researchers from the University of Illinois set out to put the hierarchy to the test.3
What they discovered is that while the fulfillment of the needs was strongly correlated with happiness, people from cultures all over the world reported that self-actualization and social needs were important even when many of the most basic needs were unfulfilled.
Such results suggest that while these needs can be powerful motivators of human behavior, they do not necessarily take the hierarchical form that Maslow described.
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.
The Real World is Here 