Organizational Behavior & Systems Theory

8. Organization Behavior
A contemporary management approach that studies and identifies management activities that promote employee effectiveness by examining the complex and dynamic nature of individual, group, and organizational processes.

Organizations began to understand that an employees work performance and company successes are based on more than the fulfillment of monetary or social need.

In the 1960’s Douglas McGregors’s Theory X and Theory Y marked the transition from human relations.

  • Theory X: Mangers assume workers are lazy and irresponsible and require constant supervision and external motivation to achieve organizational goals.
  • Theory Y: Mangers assume employees WANT to work and can direct and control themselves.
  • Theory X: is known as a self-fulfilling prophecy…
  • Manager treats employees as lazy, unmotivated people in need of being micro-managed.
  • Theory Y: suggests that managers who encourage participation and allow opportunity for individual challenge and initiative would achieve superior performance.

Chris Argyris. A major influencer in organizational behavior. Recommends greater autonomy and better jobs for employees. 

Rensis Likert. Stressed the value of participation management.

9. Systems Theory
A theory stating that an organization is a managed system that changes inputs into outputs.

Inputs: Goods and services organizations take in and use to create product or services.

Outputs: the products and services organizations create.

Classical Management Approaches…

  1. Ignore the relationship between the organization and it’s external environment.

  2. Usually stressed one aspect of the organization or its employees at the expense of other considerations.
  • Organizations are open systems.
  • Dependant on inputs from the outside world, such as raw metals, human resources, and capital.
  • Organizations transform these inputs into
  • Outputs that meet the market’s needs for goods and services.
  • The external environment acts to the outputs through a feedback mechanism. 
  • That information and data provides input for the next cycle of the system.
  • The process repeats itself for the life of the system.