ORGANIZATION DESIGN
ARIZONA STATE UNIVERSITY
SOC 324 - SOCIOLOGY OF WORK AND ORGANIZATIONS
SPRING 2024
Introduction:
The organization is a collection of several individuals who move the organization in
the form of doing various kinds of work and supported by systems and organizational
elements to achieve organizational goals. To achieve its goals, an organization needs to
design an organizational design. Organizational design is a model chosen by the organization
to coordinate the various kinds of work in the organization. After designing the organization,
the next step is to select and determine the organizational structure. The organizational
structure aims to clarify the duties, authorities and responsibilities of each member in the
organization.
Organizational design and organizational structure are two different things although
many people have the misconception that organizational structure is the same as
organizational design. Organizational structure cannot be without organizational design, and
vice versa, so all elements in organizational design must be related to the organizational
structure.
The existence of an organization does not rely on the strength of organizational design
and structure but rather the ability of the organization to identify changes that occur in the
surrounding environment. Dynamic environmental characteristics require organizations to
make adjustments to the environment in order to survive. In other words, organizational
design and structure can change according to the state of the organization's environment. It is
very important to find the right combination of organizational design and structure that suits
the organization. The right organizational design and structure will improve communication,
output, performance of both the organization and employees.
This chapter discusses organizational design, organizational structure, differences in
organizational structure, and global organizational design and structure.
Mueller (2014) cites Robbins (1990), organizational
design:
Organization design is concerned with constructing and
changing an organization's structure to achieve the
organization's goals (Robbins, 1990).
(Organizational design is concerned with the
construction and change of an organizational structure
to achieve organizational goals)
Design Organization
Basically, organizational design shows a framework of task patterns, authority and
responsibility, relationships and different work procedures in an organization. Organizational
design is the whole set of structural elements and the relationship between these elements
used to manage the organization in total (Griffin, 2004: 352), while Mueller (2014), quoting
Robbins (1990), that organizational design deals with the construction and change of an
organizational structure to achieve organizational goals. Organizational design impacts the
organization's ability to deal with contingencies, achieving competitive advantage, improving
efficiency, and so on.
Robbin and Judge (2013) say there are three more common organizational designs:
simple structure, bureaucracy, and matrix structure.
1. Simple structure. A simple structure has a low degree of departmentalization, a wide
span of control, centralized authority in one person, and little formalization. It is a flat
organization that usually has only two or three vertical levels, a loose body of
employees, and one individual whose decision-making authority is centralized. The
simple structure is most widely adopted in small businesses where the manager and
owner are one and the same. The strength of the simple structure lies in its simplicity. It
is fast, flexible, inexpensive to manage, and accountability is clear. One of the major
drawbacks is that it becomes increasingly inadequate as an organization grows because
low formalization and high centralization tend to create information overload at the top.
As size increases, decision-making typically becomes slower and can eventually grind
to a halt as a single executive tries to continue making all the decisions. If the structure
doesn't change and is made more complicated, the company can lose momentum and
eventually fail. Another downside of a simple structure is that it is so risky-everything
depends on one person.
2. Bureaucracy. Standardization is the key concept underlying all bureaucracies.
Bureaucracies are characterized by highly routinized operating tasks achieved through
specialization, highly formal rules and regulations, tasks grouped into functional
departments, centralized authority, narrow spans of control, and decision-making that
follows a chain of command. Bureaucracy has its strengths. Its main strength is its
ability to perform standardized activities in a highly efficient manner. Standardized
operations and high formalization allow for decisions become centralized. There is little
need for innovative and experienced decision-making below the senior executive level.
Another major drawback of bureaucracy is the obsessive concern with following the
rules. When a case does not conform to the rules, there is no room for modification.
Bureaucracy is efficient only to the extent that employees confront problems with
programmatic decision rules.
3. Matrix structure. The matrix structure combines two forms of departmentalization:
functional and product. The strength of functional departmentalization is that it puts
specialists together, which minimizes the number required while allowing the pooling
and sharing of specialized resources across products. The main drawback is that it is
difficult to coordinate the tasks of diverse functional specialists on time and within
budget. Product departmentalization has both advantages and disadvantages. Facilitates
coordination between specialties to achieve timely completion time and meet budget
targets. Provides clear responsibility for all activities related to a product, but with
duplication of activities and costs. The matrix tries to gain the strengths of each while
avoiding the weaknesses. The most obvious structural characteristic of the matrix is that
it breaks the unitary-order concept. Employees in a matrix have two bosses: the
functional department manager and the product manager. The strength of the matrix is
its ability to facilitate coordination when the organization has a number of complex and
interdependent activities. Direct and frequent contact between different specialties in
the matrix can cause information to permeate the organization and more quickly reach
the people who need it. The main weaknesses of the matrix lie in the confusion it
creates, the tendency to encourage power struggles, and the pressure it places on
individuals.
Organizational design must be flexible and adaptable to the changing environment
and the new structure. When internal and external factors change, organizations grow, there
will be gaps in resources, infrastructure, government and organizational regulations, and so
on. To cover the gap against these various changes, organizational redesign is a process to
redesign the organization that adjusts and aligns the organization with the demands of
changes that occur in the organization. However, changes in one part of the organization
when redesigning the organization will have an impact on other parts.
Organization Structure
Along with the development and growth of organizations, organizational structures
are increasingly needed so that the work system in the organization runs well and efficiently.
The organizational structure is a framework for the arrangement and relationship between
different tasks, authorities and responsibilities in carrying out the work of the organization
activities to achieve organizational goals. The existence of an organizational structure makes
it easier to carry out management functions in an organization. In other words, a good
structure is one that supports work effectiveness with a minimum of complexity.
The results of research by Steiger et al (2014), show that knowledge transfer
management practices, information filtering, and knowledge culture are influenced by the
type of organizational structure. Latifi and Shooshtarian (2014) found that there is a
significant relationship between organizational structure and organizational trust dimensions.
Holagh (2014), found a positive relationship between organizational structure elements and
organizational creativity and all organizational structure elements have a positive effect on
organizational commitment.
According to Robbin and Judge (2013), an organizational structure defines how job
tasks are formally divided, grouped, and coordinated. Furthermore, they say that managers
need to know six key elements when designing an organizational structure, namely:
1. Work specialization. Today, the term work specialization or division of labor describes
the extent to which activities in an organization are divided into separate jobs. The
essence of work specialization is to divide work into steps, each completed by a separate
individual. In essence, individuals specialize in performing part of the activity rather than
the whole.
2. Departmentalization. Once jobs have been divided through work specialization, they
must be grouped so that common tasks can be coordinated. The basis on which work is
grouped is called departmentalization. To departmentalize work can be done in various
ways, namely: (1) functions performed, for example, a manufacturing manager may
organize a factory into engineering, accounting, manufacturing, personnel, and other
departments. (2) the types of products or services the organization produces, e.g., each
major product is placed under an executive who has overall responsibility for it; (3)
geographic or region of operation, e.g., the sales function may have western, southern,
central, and eastern regions, each, in effect, a department organized around a geographic
area; (4) the departmentalized processes that work to process customers as well as
products, e.g., to obtain a driver's license, a person may go through several departments
before receiving a license; and (5) the departmentalized processes that work to process
customers as well as products. (5) the specific types of customers the company wants to
reach, e.g. consumers, large companies, software developers, and small businesses.
3. Chain of command. The chain of command is an unbroken line of authority that extends
from the top of the organization to the lowest echelon and describes who reports to
whom. The chain of command also addresses authority and unity of command. Authority
refers to the inherent right in a managerial position to give orders and expect them to be
obeyed. To facilitate coordination, each managerial position is assigned a place in the
chain of command, and each manager is authorized to fulfill his or her responsibilities.
The principle of unity of command helps preserve the concept of an unbroken line of
authority. It is said that one is supposed to have one and only one superiorto which one is
directly responsible to. If unity of command is broken, an employee may have to cope
with conflicting demands or priorities from several superiors.
4. Span of control. How many employees a manager can direct
efficient and effective? The question of span of control is important because it largely
determines the number of levels and managers an organization has. All things being
equal, the wider or larger the span, the more efficient the organization. The trend in
recent years has been towards wider spans of control. This is consistent with companies'
efforts to reduce costs, reduce overheads, speed up decision-making, increase flexibility,
get closer to customers, and empower employees.
5. Centralization and decentralization. Centralization refers to the extent to which decision-
making is concentrated at one point in the organization. In a centralized organization, top
managers make all the decisions, and low-level managers simply carry out their
directives. In extreme organizations, decentralized decisions are pushed to the manager
closest to the action. An organization characterized by centralization is inherently
structurally different from a decentralized one. Decentralized organizations can act more
quickly to solve problems, more people provide input to decisions, and employees are
less likely to be distanced from the people who make decisions that affect their working
lives. Management's efforts to make organizations more flexible and responsive have
resulted in a recent trend towards decentralized decision-making by lower-level
managers, who are closer to the action and who are usually the ones making the
decisions have more detailed knowledge of the problem than top managers.
6. Formalization. Formalization refers to the degree to which work within the organization
is standardized. If work is highly formalized, the incumbent has a minimum amount of
discretion over what to do and when and how to do it. Employees can be expected to
always handle the same inputs in exactly the same way resulting in consistent and
uniform outputs. At high formalization there are explicit job descriptions, many
organizational rules, and clear procedures covering work processes in the organization.
At low formalization, work behavior is relatively unprogrammed, and employees have
the freedom to exercise discretion in their work. Standardization not only eliminates the
possibility of employees engaging in alternative behavior, but even eliminates the need
for employees to consider alternatives The level of formalization can vary greatly
between and within organizations.
Organizational structure and organizational chart look similar but actually the
organizational structure is clearly visible in the organizational chart. An organizational chart
is a diagram that shows the internal structure and formal structure of an organization, in
which various positions, position holders, and lines of authority connecting one to another are
visible.
Changes in the internal and external environment, demands, and organizational
development cause organizations to be able to evaluate and adapt so that the organization can
survive and compete. Sometimes the organization wants a change in structural form in order
to improve the organization's performance revenue, reduce company financing, improve
product quality, thus changing the organizational structure that is considered less effective or
less suitable to be applied. Not infrequently, organizations carry out organizational
restructuring which is the concept of redesigning the organizational structure in accordance
with the above. Redesigning the organizational structure means redesigning the
organizational chart including the coordination system and organizational integration.
Redesigning the right organizational structure will get the right organizational structure that
results in effective coordination of activities in the organization and clarify the duties,
responsibilities and authority in the organization.
Howard and Frink (1996) found that organizational restructuring has real implications
for employee job satisfaction. In addition, redesigning the organizational structure requires
competence, experience, and wisdom in order to get the right organizational structure that
improves organizational performance. Organizations must still evaluate the performance
results of organizational restructuring has been implemented, especially in relation to
improving organizational performance. If it is considered that restructuring has not been
optimal or unsuccessful, the organization can identify the factors that cause organizational
restructuring to not run in accordance with organizational goals.
Differences in Organizational Structure
In general, organizational structures differ from one another. There are several
reasons for the difference in organizational structure. Robbins (2003), says there are two
extreme models of organizational structure, namely the mechanistic model and the organic
model. The mechanistic model is generally synonymous with bureaucracy because it has
departmentalization, high formalization, limited information networks (mostly downward
communication) and little participation of low-level members in decision making. The
organic model looks very similar to a boundaryless organization, is flat, uses cross-
hierarchical and cross-functional teams, low formalization, has a comprehensive information
network, and has a high level of involvement in decision-making (using lateral, upward and
downward communication), and involves high participation in decision-making.
Robbins (2003) further explains the forces that determine whether an organization
will be structured after a mechanistic model or an organic model, as follows:
1. Strategy. Organizational structure is a means to help management achieve its goals.
Since objectives are derived from the overall strategy of the organization, it is logical
that strategy and structure should be closely linked. More specifically, structure should
follow strategy. If management makes significant changes in its organizational strategy
then the structure needs to be modified to accommodate and support those changes.
2. Organization size. There is enough evidence to support the notion that organizational
size significantly affects structure. Size affects structure at a decreasing rate where the
impact of size becomes less important as an organization grows.
3. Technology. The term technology refers to how an organization moves inputs to outputs.
Every organization has at least one technology to convert financial, human, and physical
resources into products or services. A common theme for differentiating technologies is
the level of routine or technologies that tend to lead to routine or non-routine activities.
Routine activities are characterized by automated and standardized operations while non-
routine are customized activities. Although the relationship is not very strong, it is found
that routine tasks are associated with higher and more departmentalized structures.
4. Environmental uncertainty. Some organizations face relatively static environments; other
organizations face highly dynamic environments. Static environments create less
uncertainty than dynamic ones. Because uncertainty is a threat to organizational
effectiveness, management will try to minimize it. One way to reduceuncertainty
environment is through adjustments to the organizational structure.
Organizational Design and Structure Global
An organization that begins to expand its organizational activities internationally
(multinational) will have an impact on changes in organizational design and structure. This is
done to adapt to the increase in international activities even if only as a passive exporter
(export department). However, when international sales are growing, the organization must
have the right organizational structure to manage global operations and adapt to global
competition. Some organizations prefer to form a new international organization but some
choose to form international divisions. The international division structure is used to
distinguish the level of domestic and international operational activities by determining the
managers in the division while.
Wild et al (2008), mention several structural forms that can be chosen by
organizations such as: Global Corporate Form-Product, Global Corporate Form-Geographic
Regions, Global Corporate Form- Function, Hybrid Forms, Matrix Organizations, and
Strategic Business Units.
Table 12.1. Shape of Global Organizational Structure
Shape
Description
Global
Corporate
Form-Product
The product division is responsible for
worldwide operations such as marketing
and production of products under their
control.
Global
Corporate
Form-
Geographic
Regions
The geographical area division is
responsible for all activities under the
area manager who directly reports to the
CEO (Chief Executive Officer).
Executive Officer).
Global
Corporate
Form- Function
A function-focused global corporate form
where worldwide functional expertise
yields more significant results for the
company than a product- or geographic-
focused one
Hybrid Forms
An organizational structure that is
governed by more than one dimension at
the top level of an organizational
structure or company.
Matrix
Organizations
An organizational structure consisting of
one or more layered organizational
structures, in an attempt to combine
product, regional, functional expertise
and so on.
Strategic
Business Units
Strategic Business Units which are
business entities with clearly defined
markets, specific competitors, and the
ability to execute their business mission,
of a size suitable for control by a single
manager.
In designing the organizational design, the organization will make decisions related to
the concept of global areas such as centralization or decentralization, control systems,
coordination mechanisms, strategies, resources, policies and procedures or operating
standards, or marketing activities. Global organizations in their operations can face
challenges such as the complexity of high differences because each region (country) has a
different culture, law, and regulatory system or coordination that refers to time and resources.
MICRO PERSPECTIVE ORGANIZATIONAL BEHAVIOR
Biography Characteristics
Organizational behavior, as defined earlier, is basically shaped by the individual
behavior of organizational members, which includes biographical characteristics, individual
abilities, personality, and learning.
One of the easiest factors to analyze or assess a person is their biographical
characteristics. Personal data such as a person's age, gender, marital status, and length of
service are very common and easy to obtain and then relate to their level of work
productivity.
The age factor associated with job performance is becoming an increasingly important
issue. Robbins in Ratmawati and Herachwati (2007), provides several reasons why this
relationship is important, namely first, it is a common belief that a decrease in a person's
work productivity occurs along with his increasing age. Whether or not this belief is true
needs further investigation. Second, there is the reality that the workforce is aging. Third,
there is legislation (in the US, US legislation) stating that mandatory pensions are considered
unlawful. Therefore, workers there no longer retire at the age of 70. In Indonesia itself, which
currently has regulations for Civil Servants (PNS) to retire at the age of 56 years and civil
servants for educational personnel of class IV to retire at the age of 65 years, it still needs to
be further evaluated considering that at these ages healthy people are still able to work well.
Of course, this also requires further investigation/research. In this case, what needs to be the
focus of attention is what impact the age factor has on work productivity, loyalty,
absenteeism, replacement, or job satisfaction.
In addition to age, a factor that is often analyzed is gender. This factor is much
debated in connection with the question of whether there is a similarity in performance
between female employees and male employees. For this issue, evidence should be seen
based on research conducted by previous researchers. Robbins (2000) provides an overview
of the research reviewed, where the results state that there is a very slight difference between
the performance of women compared to men. Psychological studies have found that women
are more compliant with authority, while men are more aggressive and more likely to have
expectations. Basically, consistent women and men are equally capable in terms of problem
solving, analytical skills, competitive drive, motivation, sociability, or learning ability. In
addition to this, it is also necessary to prove whether there is a significant difference in
absenteeism and "turn over" rates between female and male employees. Even if there are
studies that prove the existence of these differences, it certainly cannot be generalized that
these differences also apply in other workplaces and in other countries.
What about the marital status factor? Does this factor individually affect a person's
work effectiveness? For this Robbins (2000) states that there are not enough studies to draw
conclusions. However, it is explained that there is research that found the results that married
employees have less absenteeism than employees who are not married. Logically, someone
who is married will have more responsibility so they will be more steady and organized in
their work. However, more information on the causation associated with this issue is needed.
The last factor that concerns productivity is tenure. Previous research/studies suggest that
seniority, which a person gains from his/her work experience, is closely related to
productivity levels. People with more experience/longer tenure are more productive than their
junior counterparts. Evidence also suggests that seniority is negatively related to absenteeism.
Tenure is also cited as a reliable variable in explaining employee "turn over".
1.1. Individual Ability
The definition of ability according to George & Jones in Ratmawati and Herachwati
(2007) is the mental and physical capacity to do something. The concept of ability, which
includes cognitive and physical abilities, needs to be studied and has very important
implications for understanding and managing the behavior of people in organizations. Nature
(from parents) and nurture (from education and experience) are determinants of cognitive and
physical abilities. For managers, knowledge of a person's abilities can be obtained during
selection, placement, and training.
Robbins in Ratmawati and Herachwati (2007), defines ability as the capacity of
individuals to complete their tasks or jobs. Ability in this case is divided into intellectual and
physical abilities. Intellectual ability is defined as the ability needed to perform mental
activities. Robbins further states that there are seven dimensions that are often used to
structure intellectual skills, namely; (1) number aptitude, (2) verbal comprehension, (3)
perceptual speed, (4) inductive reasoning, (5) deductive reasoning, (6) spatial visualization,
and (7) memory.
While physical ability is mentioned as the ability needed to perform tasks that require
stamina, dexterity, strength, and similar skills. In addition, Robbins presents "basic physical
abilities" which consist of three factors, each of which is detailed as follows.
1. Strength factor which includes dynamic, strength, trunk strength, static strength,
explosive strength.
2. Flexibility factor which includes extent flexibility and dynamic flexibility.
3. Other factors include body coordination, balance, and stamina.
Both intellectual and physical abilities are always linked to the type of work, so based on
this concept, studying organizational behavior is to be able to see or predict the behavior of
people when working. This is where efforts to find a match between work and ability to
achieve organizational effectiveness. If there is a job match with the ability then employee
performance will increase.
1.2. Perception
Perception is the process by which individuals organize and interpret their sensory
impressions to give meaning to their environment. Research on perception consistently shows
that different individuals can see the same thing but understand it differently. The reality is
that none of us see reality. What we do is interpret what we see and call it reality.
1. Factors that influence perception
How do we explain the fact that individuals have different understandings of the same
thing? A number of factors work to shape perception and sometimes bias perception. These
factors may lie in the person perceiving, the object or target being perceived, or the context in
which the perception is made.
When an individual looks at an object and tries to interpret what he sees, the
interpretation is strongly influenced by the personal characteristics of the individual who
sees. Personal characteristics that influence perception include attitudes, personality, motives,
interests, past experiences, and expectations.
The characteristics of the observed target can influence what is perceived. A cheerful person
stands out more in a group than a quiet person. The same applies to individuals who are either
extremely attractive or unattractive. Since objects are not perceived in isolation, the
background of the object can affect perception, such as our tendency to group things that are
close together and things that are similar in a place. The context in which we perceive an
object or event can affect understanding, as can location, light, heat, or any number of other
situational factors.
2. Attribution Theory
Much of the research on perception has been conducted on inanimate objects. But
organizational behavior devotes its attention to humans, so the discussion of perception
should focus on human perception.
Our perception of people is different from our perception of inanimate objects such as
tables, machines or buildings, because we need to infer a person's actions. We do not do this
with inanimate objects. Inanimate objects are subject to natural laws, but do not have beliefs,
motives or desires. Individuals do. The result is that when we observe individuals, we seek to
develop explanations for why they do things in certain ways. Our perceptions and opinions
about a person's actions, therefore, will be significantly influenced by the assumptions we
make about that person's internal state.
Attribution theory was proposed to develop an explanation that differences in our
judgments of individuals depend on the attributions we give to certain behaviors. Basically,
the theory suggests that when we observe a person's behavior, we attempt to determine
whether this judgment is due to internal or external factors. The determination depends on
three factors: (1) specific distinctiveness, (2) mutual agreement, and (3) consistency.
Let's first clarify the difference between internal and external causes, and then break
down each of these determinants. Behavior caused by internal factors is behavior that we
believe is under the control of the individual's behavior. Behavior caused by external factors
is produced by external causes; that is, a person's behavior is seen as a result of situational
pressures. If one of your employees is late for work, you might attribute his lateness to a late
night party, and he overslept. This is an internal interpretation. But if you attribute his
lateness to a car accident that congested the road he was traveling on, then you are making an
external attribution. As observers, we have a tendency to assume that others' behavior is
internally controlled. While we tend to exaggerate causes, where our own behavior is
externally determined. But this is not a generalization. There are many distortions in
attribution, which depend on the consistency of the actions.
Distinctiveness refers to whether an individual exhibits different behaviors in different
situations. Is the employee who arrived late today also a source of complaint for his co-
workers for being a "time waster"? What we actually want to know is whether the late
behavior is habitual. If not, the observer will judge the behavior as an external attribution.
However, if this action is habitual, the observer will judge it as an internal attribution.
When everyone faced with the same situation responds in the same way, we can say
that the behavior demonstrates a common agreement. The tardy employee's behavior would
meet this criterion if all employees who take the same route to work also arrive late. From an
attribution point of view, if the collective agreement is high you would be expected to give an
external attribution to the employee's tardiness. However, if other employees who took the
same route were able to arrive at work on time, your inference for the cause of the tardiness
would be internal.
Finally, an observer looks for consistency in a person's actions. Does the person
respond the same way all the time? Arriving ten minutes late to work is not understood as a
habit if the employee represents an unusual case (he/she has not been late for several
months), while for another employee it is a habit. is routine (she could be late two or three
times a week). The more regular the behavior, the more likely observers are to attribute this
behavior to internal causes.
Every similar behavior is not understood in the same way. We look at an action and judge it
in the context of the situation. If you have a good reputation as a student but fail a subject
test, the lecturer will likely not care about the poor exam. Why? He will attribute the cause of
this unusual result to external conditions. It's probably not your fault! Similarly, if everyone
in the class fails an exam, the lecturer will probably attribute the result to external causes
beyond the students' control. Conversely, the instructor is unlikely to ignore the low test score
of a student who has a consistent record of poor performance.
Perception is a process of noticing and selecting, organizing and interpreting
environmental stimuli. The process of paying attention and selecting occurs because every
moment our five senses are faced with so many environmental stimuli. However, not all of
these stimuli we pay attention to, because if all of them are perceived it will cause us
confusion and overwhelm. Therefore, there is then a selection process (perceptual selection)
to prevent this confusion and make our environment more meaningful. There are a number of
factors that influence the process of attention to environmental stimuli. These factors are as
follows:
1). Size. The larger the size of a physical object, the more likely it is perceived to be
2). Intensity. The greater the intensity of a stimulus, the more likely it is to be noticed.
A loud voice, for example, will be noticed more than a soft voice.
3). Frequency. The more often the frequency of a stimulus is delivered, the more likely it is
to be noticed. This repetition principle is used in advertising to attract consumers.
4). Contrast. A stimulus that is contrasting or striking with its surroundings is more likely to
be selected for attention than a stimulus that is the same as its environment.
5). Movement. A moving stimulus is noticed more than a fixed or stationary stimulus.
6). Change. A stimulus will be more noticed if the stimulus or object is in a changing form.
Lights that flicker will be more noticed than ordinary lights.
7). New. A new and unique stimulus will get attention faster than a stimulus that is
commonly seen.
2.4 Personality
Some people are quiet and passive; others are cheerful and aggressive. When we
describe people in terms of their characteristics, it could be quiet, passive, cheerful,
aggressive, ambitious, loyal or sociable, we are categorizing them in terms of personality
traits. Hence, a person's individual personality is the combination of psychological traits that
we use to classify that person.
Psychologists have studied personality traits in depth, and identified sixteen major
personality traits. These are shown in Table 2.1. Note that each trait is bipolar; that is, each
has two extremes (e.g., aloof versus outgoing). These sixteen commonly encountered traits
are fixed and constant sources of behavior, which allow forecasting of individuals' behavior
in specific situations by measuring their situation-related characteristics. Unfortunately, the
relevance of these traits in understanding organizational behavior is hazy.
1. Myers-Briggs Type Indicator
One of the most commonly used personality frameworks is called the Myers-Briggs
Type Indicator (MBTI). It is basically a 100-question personality test that asks about how a
person usually feels or acts in certain situations.
Based on each individual's answers to the test, they were classified as extroverted or
interoverted (E or I), sensing or intuitive (S or N), thinking or feeling (T or F), and perceiving
or judging (P or J). These classifications were then combined into sixteen personality types.
(This classification is different from the sixteen personality traits). For clarity, let's take some
examples. INTJs are visionaries. They generally have original thinking and strive to realize
their ideas and goals. They are characterized as skeptical, critical, independent, determined,
and often stubborn. ESTJs are organizers. They are practical, realistic, matter-of-fact people,
with a natural talent for being businesslike or mechanical. They like to organize and run
activities. The ENTP type is conceptual. He or she is usually fast-moving, straightforward
and reliable in handling things. This person tends to be full of ideas in solving challenging
problems, but neglects routine assignments. A recent book profiling thirteen of today's
business people who created super successful companies such as Apple Computer, Federal
Experss, Honda motors, Microsoft, Price Club, and Sony found that all thirteen were intuitive
thinkers (NT). This finding is especially interesting because intuitive thinkers represent only
about five percent of the population.
In the United States, more than two million people each year undergo MBTI.
Organizations that use the MBTI include; Apple Computer, AT&T, Citicorp, Exxon, GE, 3M
Co,. plus many hospitals, educational institutions, and even the US armed forces. There is no
real evidence to suggest that the MBTI is a valid personality measurement. However, this
does not prevent organizations from using it.
2. Top Five Model
While the MBTI lacks valid supporting evidence, that is not the case with the five-
factor personality model more commonly referred to as the "Big Five".
Today, a leading research body believes that there are five basic personality dimensions that
underlie all other dimensions. The big five factors are:
1). Extrovertedness: Sociable, talkative, assertive
2). Friendliness: Kind, cooperative, and trustworthy
3). Prudence: Responsible, reliable, diligent, and achievement-oriented.
4). Emotional stability: Calm, enthusiastic, and able (positive) to deal with tension,
anxiety, moodiness, and insecurity (negative)
5). Openness to experience: Imaginative, artistically sensitive and intelligent.
Besides providing a unified personality framework, research on the big five has also
found an important relationship between this personality dimension and job performance.
Five job categories were observed: professionals (including engineers, architects,
accountants, lawyers), police officers, managers, salespeople, and semi-skilled and skilled
employees. Job performance was assessed based on performance ratings, training proficiency
(performance during the training program), and personal data, such as salary level. The
results showed that the conscientiousness dimension was the most predictive of job
performance for all five occupational groups. For other personality dimensions, the likelihood
of predictability depends on the performance criteria as well as the job group. For example,
the extroversion dimension was able to predict performance in managerial and sales
positions. This result makes sense as these jobs involve high social interaction. Similarly,
Openness to experience is important in predicting training aptitude; that, too, seems
logical.What seems less obvious is why emotional stability is not related to job performance.
Intuitively, it would seem that a calm and steady person would be better at doing almost any
job than an anxious and insecure person. The researchers suggest that the answer may be that
only people who score high enough on emotional stability keep their jobs. If that is true, then
the range among the people studied, all of whom were employed, would tend to be small on
emotional stability scores.
Five additional personality attributes have been identified as having a more direct
bearing on explaining and predicting behavior in organizations. They are place of control,
authoritarianism, Machiavellianism, self-monitoring, and risk propensity.
Some people believe that they are the arbiters of their own destiny. Others see
themselves as victims of their destiny; believing that what happens to them is due to luck or
chance. The locus of control in the former case is internal; these people believe that they
alone control their destiny. People who see their lives being controlled from the outside are
external. It is a fact that employees who rank high in externality are less satisfied with their
jobs, more alienated from their work setting, and less engaged in their work than those who
are internal. A manager may find external people blaming their poor performance evaluation
results on the prejudices of their boss, their coworkers, or other events beyond their control.
Internal people will explain poor performance evaluations as a result of their own actions.
Authoritarianism is the belief that there should be differences in status and power
among individuals in the organization. Extreme authoritarian personalities are usually
intellectually rigid, judgmental of others, bossy and exploitive of subordinates, suspicious,
and resistant to change. Of course, few people are extreme authoritarians, so caution should
be exercised in drawing conclusions. Nonetheless, it seems reasonable to accept the premise
that having a high authoritarian personality will negatively affect performance, if the job
demands sensitivity to the feelings of others, tact, and adaptability to complex and changing
situations. Conversely, in highly structured jobs where success depends on adherence to rules
and regulations, highly authoritarian employees will certainly perform very well.
Closely related to authoritarianism is Machiavellianism (Mach), named after Niccolo
Machiavelli, who wrote in the sixteenth century about how to acquire and use power. An
individual who exhibits strong Machiavellian tendencies is pragmatic, emotionally distanced,
and believes that achieving goals can justify any means. "If it works, use it" is consistent with
the viewpoint of a highly Mach person. Can a highly Mach person be a good employee? The
answer depends on the type of job and whether you consider the ethical implications in
evaluating a Mach person performance. In jobs that require bargaining skills (such as labor
negotiators) or where there are large rewards for winning (such as in commission sales), a
highly Mach person will be highly productive. But if achieving goals does not justify any
means or there are no absolute standards of performance, our ability to predict the
performance of a highly Mach person will be limited altogether.
Have you ever noticed that some people are better than others at adjusting their
behavior to changing situations? This is because they score high in self-monitoring. People
who are good at self-monitoring are usually sensitive to external cues and can behave
differently in different situations. They are chameleons who can change to suit the situation
by hiding their true selves. In contrast, people with low self-monitoring will not change. They
show their true colors and attitudes in every situation. Evidence shows that people who are
good at self-monitoring tend to be very attentive to the behavior of others and are more
adaptable than people with low self-monitoring. Self-monitors also tend to be better at
playing organizational politics because they are sensitive to cues and can put on different
"faces" for different colleagues.
Different people have different willingness to use opportunities. Individuals with high
risk propensity make decisions more quickly and use less information in making their
choices than individuals with low risk propensity. Managers may use this information to
match risk-taking employees with specific job demands. For example, a risk taker may
perform more effectively as a stockbroker in a securities firm. This type of job demands
quick decision-making. On the other hand, this personality characteristic can be a major
hindrance for an accountant who performs auditing activities. This latter job may be better
filled by a low risk taker.
2.6. Summary
Organizational behavior is basically shaped by the individual behavior of
organizational members which includes biographical characteristics, individual abilities,
personality, and learning. The easiest factor that can be used to analyze or assess a person is
through his biographical characteristics. Personal data such as age, gender, marital status, and
length of service are very common and easy to obtain and then linked to the level of work
productivity.
The definition of ability is the mental and physical capacity to do something. The
concept of ability, encompassing both cognitive and physical abilities, needs to be studied
and has very important implications for understanding and managing the behavior of people
in organizations.
Perception is the process by which individuals organize and interpret their sensory
impressions to give meaning to their environment. Research on perception consistently shows
that different individuals can see the same thing but understand it differently. The reality is
that none of us see reality. What we do is interpret what we see and call it reality.
When we describe people in terms of their characteristics, be they quiet, passive,
cheerful, aggressive, ambitious, loyal or outgoing, we are actually categorizing them in terms
of personality traits. A person's individual personality is the combination of psychological
traits that we use to classify that person. Psychologists have studied personality traits in
depth, and identified sixteen main personality traits. Each trait is bipolar; meaning that each
has two extremes (e.g., aloof versus outgoing). These sixteen commonly encountered traits
are fixed and constant sources of behavior, which allow predicting individuals' behavior in
specific situations by measuring their situation-related characteristics.
