It helps the business to find out communication problems, helps employees see their position in the hierarchy, increasing their motivation level and responsibilities. For a tall organizational structure like Daewoo, it had a long chain of command and a narrow span of control where the two way communication between seniors and subordinates could not take place easily. There was a huge gap leading to various human resource problems and the work efficiency and morale of employees’ decreased, which is another reason why Daewoo collapsed.
Inadequate use of Organizational theories: kfc planning process(1954) a psychologist came up with the “hierarchy of needs” theory in which he stated that to be successful a company had to satisfy the hierarchy of needs of employees to gain higher levels of worker motivation, productivity, sales and profits. He classified the hierarchy of needs by a pyramid with the basic needs of food and shelter at the top then the security needs follow which include job security and safe working conditions.
After the basic and security needs are fulfilled the workers look for social needs, that is, to work as a team in the firm and have good relations with colleagues. Then the esteem needs follow, as workers start expecting recognition and appreciation for work they do. At last, the Self-Actualization Need arises, where the workers seek promotion and more challenging jobs. Due to rapid takeovers and mergers, it is expected that the Daewoo group could not pay attention to Maslow’s theory which led to the low motivation in staff (Robbins & Judge, 2008).
Elton Mayo (1927-1932) developed an organizational theory based on an experiment which became known as the Hawthorne effect. Elton believed that management should allow the workers to feel a part of the organization by treating their goals as goals of the organization as a whole and workers should be allowed in the decision-making process in order to make them feel more committed to their tasks.
Examples of motivation incentives can be Mary Kay’s seminars in the USA, which are presented like the American Academy awards for company employees and another example can be Tupperware sales rallies, where everyone gets a “badge” and has their achievements recognized. Large organization like MacDonald’s and Toyota also apply these goal oriented theories and that is the reason why they are successful (Robbins & Judge, 2008).
Fredrick Herzberg (1966) attempted to find the factors that ensured job satisfaction in the workforce and factors that de-motivated the workers. So, he developed the two-factory theory of organizational behavior in which he showed that: 1. Motivators were the factors that led the workers towards job satisfaction, such as recognition for their work by giving them rewards/bonuses. 2. Hygiene Factors were those factors which led to the dissatisfaction of the workforce due to unacceptable pay rates and unsafe working conditions.
If these could be implemented the workers could be further motivated. Herzberg’s theory can predict that Daewoo, Tyco, Enron etc failed to provide the motivators and hygiene factors to the employees which led the companies towards their downfall (Robbins & Judge, 2008)
References: Colquitt, J. A. , Wesson, M. J. & LePine, J. A. (2008). Organizational Behavior: Improving Performance and Commitment in the Workplace. McGraw-Hill/Irwin Robbins, S. P. & Judge, T. A. (2008). Organizational Behavior. 13th edn, Prentice Hall.
