Laurie j mullins management organisational behaviour, 9th edition

NINTH EDITION
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MANAGEMENT & ORGANISATIONAL
BEHAVIOUR LAURIE J. MULLINS

MANAGEMENT & ORGANISATIONAL
BEHAVIOUR LAURIE J. MULLINS

LAURIE J. MULLINS
MANAGEMENT &
ORGANISATIONAL
BEHAVIOUR
NINTH EDITION

NINTH
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MANAGEMENT &
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BEHAVIOUR

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About the author
Laurie Mullins was formerly principal lecturer at the University of Portsmouth
Business School. Laurie specialised in managerial and organisational behaviour,
and managing people at work, and was subject leader for the behavioural and
human resource management group.
Laurie has experience of business, local government and university administration
and human resource management. For a number of years he was also a member

of, and an instructor in, the Territorial Army. He has undertaken a range of
consultancy work including with the United Nations Association International
Service (UNAIS); served as a visiting selector for Voluntary Service Overseas
( VSO); acted as adviser and tutor for a number of professional and educational
bodies including UNISON Education; and served as an external examiner for
university degree and postgraduate courses, and for professional organisations.
Laurie has undertaken a year’s academic exchange in the Management
Department, University of Wisconsin, USA and a visiting fellowship at the School
of Management, Royal Melbourne Institute of Technology University, Australia,
and is a visiting lecturer in the Netherlands. Laurie is also author of Hospitality
Management and Organisational Behaviour and Essentials of Organisational
Behaviour, both published by Pearson Education.


MANAGEMENT &
ORGANISATIONAL
BEHAVIOUR
NINTH EDITION

LAURIE J. MULLINS
With Gill Christy
Principal Lecturer in the Department of Human Resource and Marketing
Management at the University of Portsmouth Business School


Pearson Education Limited
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Harlow
Essex CM20 2JE
England

and Associated Companies throughout the world
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First published in 1985 in Great Britain under the Pitman imprint
Fifth edition published in 1999 by Financial Times Pitman Publishing
Seventh edition 2005
Eighth edition 2007
Ninth edition 2010
© Laurie J. Mullins 1985, 1989, 1993, 1996, 1999, 2002, 2005, 2007, 2010
Chapters 4, 6 © Linda Carter and Laurie J. Mullins 1993, 1996, 1999, 2002, 2005, 2007
Chapter 5 © Linda Carter 1993, 1996, 1999, 2002, 2005, 2007
Chapter 16 © Peter Scott 2010
Chapter 17 © David Preece 1999, 2002, 2005, 2007
The right of Laurie J. Mullins to be identified as author of this work has been asserted by
him in accordance with the Copyright, Designs and Patents Act 1988.
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system,
or transmitted in any form or by any means, electronic, mechanical, photocopying, recording
or otherwise, without either the prior written permission of the publisher or a licence permitting
restricted copying in the United Kingdom issued by the Copyright Licensing Agency Ltd,
Saffron House, 6–10 Kirby Street, London, EC1N 8TS.
All trademarks used herein are the property of their respective owners. The use of any
trademark in this text does not vest in the author or publisher any trademark ownership
rights in such trademarks, nor does the use of such trademarks imply any affiliation with
or endorsement of this book by such owners.
Pearson Education is not responsible for content of third party internet sites.
ISBN: 978-0-273-72408-7
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging-in-Publication Data
A catalog record for this book is available from the Library of Congress

10 9 8 7 6 5 4 3 2 1
14 13 12 11 10
Typeset in 9.5/12 pt Giovanni by 35
Printed and bound by Rotolito Lombarda, Italy
The publisher’s policy is to use paper manufactured from sustainable forests.


To my wife Pamela
and for Nathan



CONTENTS IN BRIEF

Contents in detail
Management in the news and case studies
About this book
Guided tour of the book
Guided tour of MyManagementLab
In acknowledgement and appreciation
Publisher’s acknowledgements

Part 1 THE ORGANISATIONAL SETTING
Chapter 1
Chapter 2
Chapter 3

The Nature of Organisational Behaviour
Approaches to Organisation and Management
The Nature and Context of Organisations

ix
xv
xix
xxii
xxv
xxvii
xxviii
1
2
41
77

Part 2 THE INDIVIDUAL

127

Chapter
Chapter
Chapter
Chapter

128
171
208
252

4
5
6

7

Individual Differences and Diversity
The Nature of Learning
Perception and Communication
Work Motivation and Job Satisfaction

Part 3 GROUPS, TEAMS AND LEADERSHIP

305

Chapter 8 The Nature of Work Groups and Teams
Chapter 9 Working in Groups and Teams
Chapter 10 The Nature of Leadership

306
341
372

Part 4 THE NATURE OF MANAGEMENT

423

Chapter 11 The Role of the Manager
Chapter 12 Managerial Behaviour and Effectiveness
Chapter 13 Human Resource Management

424
456
493

Part 5 STRUCTURES OF ORGANISATION

541

Chapter 14 Organisation Strategy and Structure
Chapter 15 Patterns of Structure and Work Organisation
Chapter 16 Technology and Organisations

542
585
621

Part 6 ORGANISATION MANAGEMENT

663

Chapter
Chapter
Chapter
Chapter

664
704
736
775

17
18
19

20

Conclusion
Glossary
Index

Organisational Control and Power
Corporate Responsibility and Ethics
Organisation Culture and Change
Organisational Performance and Effectiveness

819
822
835
vii


Management & Organisational Behaviour, Ninth Edition
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CONTENTS IN DETAIL

Management in the news and case studies
About this book
Guided tour of the book
Guided tour of MyManagementLab
In acknowledgement and appreciation
Publisher’s acknowledgements

xv
xix
xxii
xxv
xxvii
xxviii

Part 1
THE ORGANISATIONAL SETTING
1 The Nature of Organisational Behaviour
The meaning of organisational behaviour
The study of organisational behaviour
A framework of study
Influences on behaviour
A multidisciplinary approach
Organisational metaphors
Orientations to work and the work ethic
Management as an integrating activity
The psychological contract
Organisational practices
The Peter Principle
Parkinson’s Law
The changing world of work organisations
Globalisation and the international context
A cross-cultural approach to management
Is organisational behaviour culture-bound?
Five dimensions of culture: the contribution of Hofstede
Cultural diversity: the contribution of Trompenaars
Emerging frameworks for understanding culture

Convergence or culture-specific organisational
behaviour
The importance of organisational behaviour
Synopsis
Review and discussion questions
Management in the news: A melting pot for forging
success
Assignments 1 and 2
Personal awareness and skills exercise
Case study: Virgin Atlantic and Ryanair
Notes and references

2 Approaches to Organisation and
Management
Theory of management
Developments in management and organisational
behaviour

2
3
3
4
6
8
9
10
12
14
18
18

19
20
22
24
26
27
28
31
31
32
32
33
34
35
35
36
39

41
42
42

The classical approach
Scientific management
Relevance of scientific management
Bureaucracy
Criticisms of bureaucracy
Evaluation of bureaucracy
Structuralism
The human relations approach

Evaluation of the human relations approach
Neo-human relations
The systems approach
The contingency approach
Other approaches to the study of organisations
The decision-making approach
Social action
A number of approaches
Postmodernism
Relevance to management and organisational
behaviour
Towards a scientific value approach?
Benefits to the manager
Synopsis
Review and discussion questions
Management in the news: The story of the
middleman
Assignment
Personal awareness and skills exercise
Case study: Dell Computers: the world at your
fingertips
Notes and references

43
45
47
49
50
51
53

53
55
56
57
59
59
59
61
62
64
65
67
67
68
69
70
71
72
72
74

3 The Nature and Context of
Organisations

77

Perspectives of the organisation
The formal organisation
Basic components of an organisation
Private and public sector organisations

Social enterprise organisations
Production and service organisations
Types of authority and organisations
The classification of organisations
The organisation as an open system
Interactions with the environment
The comparative study of organisations
The analysis of work organisations
Contingency models of organisation
The informal organisation
Organisational conflict

78
79
80
82
83
84
86
86
88
90
92
92
94
94
96

ix

CONTENTS IN DETAIL

Contrasting views of conflict
Positive and negative outcomes
The sources of conflict
Strategies for managing conflict
Organisational stress
Is stress necessarily to be avoided?
Causes of stress
Coping with stress
The work/life balance
The organisation of the future
Synopsis
Review and discussion questions
Management in the news: Watch out for
an epidemic of petty fraud
Assignments 1 and 2
Personal awareness and skills exercise
Case study: Grameen Bank: a case of applied
business ethics
Notes and references

97
98
99
101
103
104
105

106
109
111
113
113

Academic viewpoint

121

Part 1 Case study
Cadbury: organisation, culture and history

122

114
115
116
117
119

Part 2
THE INDIVIDUAL
4 Individual Differences and Diversity

128

The recognition of individuality
How do individuals differ?
Personality

Nomothetic and idiographic approaches
Nomothetic personality theories
Idiographic theoretical approaches
Complementary approaches
Applications within the work organisation
Emotions at work
Type A and Type B personalities
Ability
Emotional intelligence (EI)
Attitudes
Attitude change
Testing and assessment
Diversity management
The business case for diversity
Diversity training
Top performing organisations
Criticisms and limitations
Diversity, gender and organisations
Synopsis
Review and discussion questions
Management in the news: The Apprentice,
week nine
Assignment
Personal awareness and skills exercise

129
129
130
130
133

135
136
138
139
140
141
144
145
148
149
151
153
157
158
160
161
162
163

x

163
164
165

Case study: B&Q: the business case for diversity
Notes and references

166
168

5 The Nature of Learning

171

The meaning and nature of learning
Organisations and the management of learning
How do people learn?
Behaviourism
Operant conditioning
Social learning
Limitations of the behavioural theories
Cognitive theories
Learning styles
Knowledge management
Emerging technologies and learning
Problems of managing knowledge
Creativity
Facilitating learning
Learning theory applied to study skills
Applications of learning theory to organisations
Synopsis
Review and discussion questions
Management in the news: UK follows Dutch
example with site simulations
Assignments 1 and 2
Personal awareness and skills exercise
Case study: VSO
Notes and references

172
175
176
177
178
181
181
182
182
187
190
192
193
196
198
199
199
200

6 Perception and Communication

208

The perceptual process
Selectivity in attention and perception
Internal factors
Cultural differences
External factors
Organisation and arrangement of stimuli
Perceptual illusions

Selection and attention
Organisation and judgement
Connection of the conscious, unconscious and
physiology
Perceiving other people
Non-verbal communication and body language
Interpersonal communications
Neuro-linguistic programming (NLP)
Transactional analysis (TA)
Attribution theory
Perceptual distortions and errors
Stereotyping
The halo effect
Perceptual defence
Projection
Self-fulfilling prophecy
Understanding the organisational process
Synopsis
Review and discussion questions

209
209
212
214
217
218
221
222
223

200
201
202
203
205

225
226
230
231
234
235
237
239
239
240
241
241
241
242
243
244


CONTENTS IN DETAIL

Management in the news: How to be happy in life:
let out your anger
Assignments 1 and 2
Personal awareness and skills exercise

Case study: Behavioural economics
Notes and references

245
246
247
248
250

7 Work Motivation and Job Satisfaction

252

The meaning of motivation
Needs and expectations at work
Money as a motivator
Broader intrinsic motivation
Frustration-induced behaviour
Theories of motivation
Content theories of motivation
Maslow’s hierarchy of needs theory
Alderfer’s modified need hierarchy model
Herzberg’s two-factor theory
McClelland’s achievement motivation theory
Process theories of motivation
Vroom’s expectancy theory
The Porter and Lawler expectancy model
Lawler’s revised expectancy model
Implications for managers of expectancy theories
Equity theory of motivation

Goal theory
Attribution theory
Relevance today for the manager
Organisational behaviour modification
The motivation of knowledge workers
Cross-cultural dimensions of motivation
Job satisfaction
Alienation at work
A comprehensive model of job enrichment
Contextual factors in job design
Synopsis
Review and discussion questions
Management in the news: Top marks for the best
employee awards
Assignments 1 and 2
Personal awareness and skills exercise
Case study: Don’t get mad, get on-line!
Notes and references

253
254
255
256
257
259
260
260
264
265
267

268
269
271
273
274
275
276
278
278
278
280
281
282
285
285
289
289
290

Academic viewpoint

298

Part 2 Case study
Philanthropy: the resurgence of personal social
responsibility?

299

291

292
292
293
296

Part 3
GROUPS, TEAMS AND LEADERSHIP
8 The Nature of Work Groups and Teams 306
The meaning and importance of groups and teams
Differences between groups and teams

307
307

Group values and norms
Formal and informal groups
Reasons for formation of groups or teams
Group cohesiveness and performance
Membership
Work environment
Organisational
Group development and maturity
Social identity theory
Potential disadvantages of strong, cohesive
groups
Characteristics of an effective work group
The effects of technology
Virtual teams
Role relationships
Role conflict

The importance of teamwork
Synopsis
Review and discussion questions
Management in the news: Dragon boat racing on
the Thames
Assignments 1 and 2
Personal awareness and skills exercise
Case study: Mumbai’s dabbawalahs: a world-class
quality service
Notes and references

309
311
313
314
314
316
317
317
319

9 Working in Groups and Teams

341

Interactions among members
Belbin’s team roles
Patterns of communication
Analysis of individual behaviour
Sociometry

Interaction analysis
Frameworks of behavioural analysis
Balance between the team and the individual
Individual compared with group or team
performance
Brainstorming
Quality circles
Group dynamics
Self-managed work groups
Building successful teams
Synopsis
Review and discussion questions
Management in the news: Falling down
Assignments 1 and 2
Personal awareness and skills exercise
Case study: Top Gear
Notes and references

342
342
344
347
347
349
350
351

10 The Nature of Leadership

372

The meaning of leadership
Leadership or management?
Approaches to leadership
The qualities or traits approach

373
373
375
375

320
321
321
322
326
328
331
333
334
335
336
336
337
339

353
355
357
358

360
361
364
365
366
366
367
368
370

xi


CONTENTS IN DETAIL

The functional (or group) approach
Action-centred leadership
Leadership as a behavioural category
Styles of leadership
Continuum of leadership behaviour
Contingency theories of leadership
Fiedler’s contingency model
Vroom and Yetton contingency model
The Vroom and Jago revised decision model
Path–goal theory
Readiness of the followers or group
Transformational leadership
Inspirational or visionary leadership
Leadership and innovation
The leadership relationship

Leadership effectiveness
Cross-cultural dimensions of leadership
Leadership development
No one best form of leadership
Leaders of the future
Synopsis
Review and discussion questions
Management in the news: Managing the mood
is crucial
Assignments 1 and 2
Personal awareness and skills exercise
Case study: Being Apple: Steve Jobs
Notes and references

377
378
379
380
381
383
384
386
387
387
389
391
392
396
397
399

401
402
404
405
406
407

Academic viewpoint

416

Part 3 Case study
The Eden Project

417

407
408
409
411
413

Part 4
THE NATURE OF MANAGEMENT
11 The Role of the Manager

424

The meaning of management
The process of management

Principles of management
Management as a social process
The tasks and contribution of a manager
Essential nature of managerial work
Management in private enterprise and public
sector organisations
The work of a manager
Managerial roles
Behaviour pattern of general managers
Determining what real managers do
Patterns of managerial work and behaviour
What great managers do
The attributes and qualities of a manager
The importance of management skills
The changing role of managers
Synopsis

425
428
429
431
432
433

xii

435
436
437
439

440
441
441
442
443
446
448

Review and discussion questions
Management in the news: Science of managing
monkeys
Assignments 1 and 2
Personal awareness and skills exercise
Case study: Stuck in the middle?
Notes and references

12 Managerial Behaviour and
Effectiveness

449
449
450
451
452
454

456

The importance of managerial style
Theory X and Theory Y management

The Managerial/Leadership Grid®
Management systems
Management by objectives (MBO)
Managing with and through people
The nature of people at work
Managerial effectiveness
Measures of effectiveness
The Management Standards Centre
The 3-D model of managerial behaviour
The management of time
Synopsis
Review and discussion questions
Management in the news: When a packed diary
betrays a busy fool
Assignment
Personal awareness and skills exercise
Case study: Effective management: a question
of context?
Notes and references

457
458
461
465
467
469
474
475
476
477

478
480
484
485

13 Human Resource Management

493

The nature of human resource management
Human capital management
HRM policies, activities and functions
Organisation of the HRM function
Working in partnership with line managers
A strategic business partnering approach
The importance of HRM
Training and development
The management of training
E-learning
Investors in People
Talent management
Performance management (PM)
Methods of measurement and review
360° feedback and upward feedback
Benefits of performance management
Employee relations
Unitary and pluralistic perspectives
Regulating the employment contract
International dimensions of HRM
Effectiveness of the HRM function

Synopsis
Review and discussion questions

494
495
497
498
499
501
502
502
504
506
507
509
510
513
514
515
519
520
520
523
525
527
528

485
486
487

488
491


CONTENTS IN DETAIL

Management in the news: The carrot and stick
approach
Assignment
Personal awareness and skills exercise
Case study: The changing role of HRM
Notes and references

528
529
529
531
533

Academic viewpoint

536

Part 4 Case study
Jamie Oliver: The Naked Manager?

537

Part 5
STRUCTURES OF ORGANISATION

14 Organisation Strategy and Structure

542

The importance of strategy
SWOT analysis
Organisational goals
Objectives and policy
Dimensions of organisation structure
The importance of good structure
Levels of organisation
Underlying features of organisation structure
Division of work
Centralisation and decentralisation
Principles of organisation
Span of control
The chain of command
The importance of the hierarchy
Formal organisational relationships
Project teams and matrix organisation
Effects of a deficient organisation structure
Organisation charts
Empowerment and control
Synopsis
Review and discussion questions
Management in the news: A taxing merger
Assignments 1 and 2
Personal awareness and skills exercise
Case study: Zara: a dedicated follower of fashion
Notes and references

543
545
546
549
551
552
553
555
557
560
561
562
563
564
566
569
572
573
574
576
577
577
578
579
580
582

15 Patterns of Structure and Work
Organisation

Variables influencing organisation structure
The contingency approach
Size of organisation
Technology
The Woodward study
Major dimensions of technology: the work
of Perrow
Environment
The Burns and Stalker study
‘Mixed’ forms of organisation structure
The Lawrence and Lorsch study

585
586
586
588
589
589
593
594
594
595
597

Evaluation of the contingency approach
Contribution of contingency theory
Culture as a contingent factor
The changing face of the workplace
The demand for flexibility
The shamrock organisation

Structure and organisational behaviour
Synopsis
Review and discussion questions
Management in the news: Independents will
always have their day
Assignments 1 and 2
Personal awareness and skills exercise
Case study: John Lewis, Waitrose and Ocado:
distinctively successful
Notes and references

598
600
601
603
605
608
611
613
614

16 Technology and Organisations

621

614
615
616
616
619

Peter Scott
Why study technology?
What do we mean by technology?
Approaches to technology and organisation
Decision-making processes
Involvement of HRM specialists and users of
technology
Technology, work and organisational behaviour
Skill, work design and job quality
Centralisation versus decentralisation of control
Location of work
Nature of social interactions
The pace and intensity of work
The ‘digital divide’ and job security
Synopsis
Review and discussion questions
Management in the news: Should Twitter be
confined to the marketing department?
Assignment
Personal awareness and skills exercise
Case study: Accessible technology: Tesco’s
accessible website
Notes and references

622
623
625
629

Academic viewpoint

656

Part 5 Case study
Co-operatives

657

632
634
635
636
639
642
643
644
645
646
647
648
648
649
651

Part 6
ORGANISATION MANAGEMENT
17 Organisational Control and Power

664

The controversial nature of control
Expression of managerial behaviour
Elements of an organisational control system
Forms of control
Strategies of control in organisations

665
667
668
669
671

xiii


CONTENTS IN DETAIL

Characteristics of an effective control system
Power and management control
Perspectives of organisational power
Pluralistic approaches to power
The balance between order and flexibility
Behavioural factors in control systems
Financial and accounting systems of control
The concept of empowerment
The manager–subordinate relationship
Benefits of delegation
Reasons for lack of delegation
The art of delegation

A systematic approach to empowerment and
delegation
Does empowerment deliver?
Synopsis
Review and discussion questions
Management in the news: The undercover boss
Assignment
Personal awareness and skills exercise
Case study: What you say is what you get . . .?
Notes and references

673
675
676
678
679
680
681
683
684
686
687
688

18 Corporate Responsibility and Ethics

704

Organisational ideologies and principles
Mission statements

The profit objective
The balanced scorecard
Corporate social responsibilities (CSRs)
Organisational stakeholders
The UN Global Compact
Values and ethics
Ethics and corporate social responsibility
Business ethics
Codes of business conduct (or ethics)
Synopsis
Review and discussion questions
Management in the news: Trade-offs in the
moral maze
Assignments 1 and 2
Personal awareness and skills exercise
Case study: The Fairtrade Foundation
Notes and references

705
707
709
711
712
714
716
717
718
721
725
727

728

689
692
694
695
695
697
698
699
701

Organisational climate
Employee commitment
The nature of organisational change
Planned organisational change
Resistance to change
The management of organisational change
Overcoming resistance to change
Synopsis
Review and discussion questions
Management in the news: The time is ripe for
fresh ideas
Assignments 1 and 2
Personal awareness and skills exercise
Case study: Moving with the times
Notes and references

20 Organisational Performance and
Effectiveness

748
749
751
753
756
759
761
764
765
765
766
769
770
773

775
776
778
779
782
785
786

728
729
730
731
734

The nature of organisational effectiveness
The democratic enterprise
The learning organisation
Total quality management (TQM)
Business process re-engineering (BPR)
The importance of effective management
The meaning and nature of management
development
Management development process
Continuing professional development (CPD)
The EFQM Excellence Model
Assessing organisational performance
A range of different criteria
Successful organisations and people
Employee engagement
The future of work and management
Synopsis
Review and discussion questions
Management in the news: How to manage
the clever squad
Assignments 1 and 2
Personal awareness and skills exercise
Case study: Who says business is boring?
M&S’s rollercoaster ride
Notes and references

19 Organisation Culture and Change

736

Academic viewpoint

813

Organisation development, culture and change
Organisational culture
Types of organisational culture
Influences on the development of culture
The cultural web
The importance of culture

737
739
740
742
743
744

Part 6 Case study
Riverford Organic

814

Conclusion
Glossary
Index

819
822
835

xiv

787
789
791
792
794
796
799
800
801
803
804
804
805
807
808
811


MANAGEMENT IN THE NEWS and CASE STUDIES

Chapter

Page
no.

Type of
case

Chapter 1
The Nature of
Organisational
Behaviour

34

Subject

Organisation/
business person

Country/
region

Management A melting pot for
in the news
forging success

See how a well managed,
culturally diverse workforce can
come together to produce a better
product

Dillinger Hütte

Germany/
France/
Luxembourg

36

Case study

How can two similar organisations
develop very different
organisational cultures?

Virgin Atlantic
Airways, Richard
Branson and
Ryanair, Michael
O’Leary

UK/Ireland

70

Management The story of the
in the news
middleman

This examination takes the pulse
of the current state of middle
management

Paul Osterman,
author of The Truth
about Middle

Managers

USA/Global

72

Case study

From small business to global
giant, Dell Computers mobilises
workers on three continents to get
your new PC to you

Dell Computers,
Michael Dell

USA/Global

114

Management Watch out for an
In a tough economy, many
in the news
epidemic of petty fraud companies are finding dishonesty
and fraud in the workplace on
the rise

UK

117

Case study

Grameen Bank: a case
of applied business
ethics

How ingenuity coupled with
Grameen Bank,
enterprise can present an alternative Mohammed Yunus
to charity and government aid as
a route out of poverty

Bangladesh

Part 1
122
The Organisational
Setting

Longer case
study

Cadbury: organisation,
culture and history

The historical context may change Cadbury
organisational practices, but doesn’t
necessarily change core values

UK

Chapter 4
Individual
Differences and
Diversity

163

Management The Apprentice, week
in the news
nine

Employers learn the lessons of
making assumptions about age
and the experience and capability
of employees

UK

166

Case study

Diversity in the workforce is shown B&Q
to be a strength and a way to
grow a business

UK

200

Management UK follows Dutch
in the news
example with site
simulations

The construction industry uses
virtual reality to train its workers

Balfour Beatty

UK/the
Netherlands

203

Case study

Discovering the value of learning
and sharing knowledge and the
changes it can make in people’s
lives

VSO

UK/Global

Chapter 6
Perception and

Communication

245

Management How to be happy in
in the news
life: let out your anger

248

Case study

Chapter 7
Work Motivation
and Job
Satisfaction

291

Management Top marks for the best
in the news
employee awards

Do weekly, monthly or yearly
awards provide incentive or cause
resentment among employees?

Kwik-Fit Financial
Services

UK

293

Case study

Don’t get mad, get
online!

Blogging may open a new window
on organisational life, but it can
get you fired

Ellen Simonetti,
Queen of the Sky;
IBM

UK/USA/
France

Part 2
The Individual

299

Longer case
study

Philanthropy: the
resurgence of personal

social responsibility?

It was big in the 19th century,
but is there a resurgence in
philanthropy as a new form of
ethical behaviour by business
leaders?

Bill Gates,
Warren Buffet and
Anita Roddick

Global

Chapter 2
Approaches to
Organisation and
Management

Chapter 3
The Nature and
Context of
Organisations

Chapter 5
The Meaning and
Nature of Learning

Title

Virgin Atlantic and
Ryanair

Dell Computers: the
word at your fingertips

B&Q: The business
case for diversity

VSO

Harnessing your anger can lead to
personal and professional success

Global

Behavioural economics Explore the links between
perception, thought and behaviour
and the decisions we make

Global

xv


MANAGEMENT IN THE NEWS AND CASE STUDIES

Chapter

Page

no.

Type of
case

Chapter 8
The Nature of
Work Groups and
Teams

335

337

Subject

Organisation/
business person

Country/
region

Management Dragon boat racing on
in the news
the Thames

Tight teamwork and simple
technique makes dragon boat
racing the perfect corporate
team sport

Thames Dragon
Boat Club

UK

Case study

The extraordinary teamwork that
Dabbawalahs
delivers thousands of hot lunches
from home to workplace every day

India

Management Falling down
in the news

Charting the rise and fall of
companies and the need to avoid
complacency in business

Jim Collins, author
of How the Mighty
Fall

Global

368

Case study

A winning team in front of and
behind the cameras provide the
formula for television success

Top Gear, BBC,
Jeremy Clarkson,
James May,
Richard Hammond
and The Stig

UK

407

Management Managing the mood
in the news
is crucial

Are moods contagious?
Temperament and character can
help stop a bad situation from
getting worse

411

Case study

Being Apple: Steve

Jobs

This computer giant is quirky,
stylish and generates fierce loyalty
among its fans; but can it survive
without Steve?

Apple, Steve Jobs

USA

Part 3
Groups, Teams
and Leadership

417

Longer case
study

The Eden Project

Promoting environmental
awareness may be an altruistic
aim, but the project need more
than good will and enthusiasm
to survive

Eden Project,
Tim Smit

UK

Chapter 11
The Role of the
Manager

449

Management Science of managing
in the news
monkeys

Is the key to success in the
managing of groups allowing
employees to follow their ‘animal’
instincts?

Charles Jacobs,
author of
Management
Rewired

Global

452

Case study

Stuck in the middle?

Most managers are middle
managers; but are they happy with
their lot?

UK

485

Management When a packed diary
in the news
betrays a busy fool

Is a busy schedule a sign of
neurosis or an achievement?
How the balance between structure
and being accessible can save time

UK

488

Case study

Merchant banking is an
aggressive, macho world, so how
does a working mum succeed?

Nicola Horlick,
Bramdean Asset

Management

UK

528

Management The carrot and stick
in the news
approach

Should organisations reward
employees for adopting healthy
lifestyles?

Unilever, Pitney
Bowes

UK/USA

531

Case study

The changing role
of HRM

The HRM function has long been
seen as a service to line
managers, but can it be
outsourced successfully?

BT, Accenture

Global

Part 4
The Nature of
Management

537

Longer case
study

Jamie Oliver: The
Naked Manager?

In the fast and intense atmosphere Jamie Oliver,
of a kitchen, can a chef also be
Fifteen
a good manager?

UK

Chapter 14
Organisational
Structures and
Design

577

Management A taxing merger
in the news

When two organisations merge,
creating a common culture can
prove difficult

Her Majesty’s
Revenue and
Customs (HMRC)

UK

580

Case study

In the frenetic world of high street
fashion, innovative organisational
structures have created one of the
most sophisticated JIT operations
in the world

Zara, Inditex

Spain/
Global

Chapter 15

Patterns of
Structure and
Work Organisation

614

Management Independents will
in the news
always have their day

The indies of the business world
bring innovation to the
marketplace and force the big
players to up their game

Case study

An unusual organisational structure John Lewis,
leads to a very particular culture and Waitrose and
style of organisational behaviour
Ocado

Chapter 9
366
Working in Groups
and Teams

Chapter 10
The Nature of
Leadership

Chapter 12
Managerial
Behaviour and
Effectiveness

Chapter 13
Human Resource
Management

616

xvi

Title

Mumbai’s
Dabbawalahs: a worldclass quality service

Top Gear

Effective management:
a question of context?

Zara: a dedicated
follower of fashion

John Lewis, Waitrose
and Ocado:
distinctively successful

Global

Global

UK


MANAGEMENT IN THE NEWS AND CASE STUDIES

Chapter

Page
no.

Type of
case

Chapter 16
Technology and
Organisations

647

Management Should twitter be
Are the rewards worth the risk
in the news
confined to the
when organisations venture online
marketing department? in a ‘network society’?

Twitter, Don
Tapscott, Bernhard
Warner, Oliver
Toubia

Case study

649
Part 5
Structures of
Organisation

657

Chapter 17
695
Organisational
Control and Power
699

Chapter 18
Corporate
Responsibility and
Ethics

Chapter 19
Organisation
Culture and
Change

Chapter 20
Organisational
Performance and
Effectiveness

Part 6
Organisation
Management

Title

Subject

Organisation/
business person

Tesco’s accessible
website

How technical advances can
change people’s quality of life

Tesco, RNIB

Co-operatives

Invented in the 19th century,
cooperatives are still going strong

Rochdale Equitable
Pioneers Society,
Mondragón
Cooperative
Corporation

Management The undercover boss
in the news

A CEO dons a disguise and learns
that an effective, open dialogue is
the key to your communicating
key messages to staff

Clugston Group,
Stephen Walker

Case study

Gender differences in
communication may partly explain
the ‘glass ceiling’, but not
everywhere

Female managers
in France, UK,
Germany and
China
Prof Michel Anteby,
Harvard Business

School

Longer case
study

What you say is what
you get . . . ?

Management Trade-offs in the moral
in the news
maze

An examination into the moral
ambiguities of the workplace
versus the black and white world
of business ethics

731

Case study

As the popularity of fairtrade
The Fairtrade
increases, is its growth sustainable Foundation
or has commercialisation resulted
in a ‘cleanwashing’ of an idealistic
movement?

765

770

804

808

814

Management The time is ripe for
in the news
fresh ideas

Do recessionary times act as the
catalyst to spur changes in
organisational cultures?

Case study

Can hot-desking really work?
One team of professionals shows
the way

Moving with the times

Global

UK

Global

UK/Global

Global
NHS Workforce
Review Team
(WRT)

Management How to manage the
in the news
clever squad

Is it time to reframe the debate
over talent, and knowledge
workers?

Case study

Who says business is
boring? M&S’s
rollercoaster ride

How Marks & Spencer went from
takeover target to the toast of the
stock exchange

Marks & Spencer,
Stuart Rose

Riverford Organic

What does it mean to be an
‘ethical organisation’? Can an
organisation go even further to
actively reduce the environmental
impact of modern life?

Riverford Organic

Longer case
study

Global

UK

728

The Fairtrade
Foundation

Country/
region

UK

Global

UK

UK

xvii



ABOUT THIS BOOK

The concepts and ideas presented in this book provide a basis for an appraisal of contrasting perspectives on the structure, operation and management of organisations, and interactions among people who work in them. It is hoped that this will encourage a greater level
of awareness and sensitivity to organisational factors and management processes influencing
the behaviour and performance of people at work. The underlying theme of the book is the
need for organisational effectiveness based on an understanding of organisational behaviour, the people resource, and the role of management as an integrating activity. Adopting
a managerial perspective provides a clear focus of attention and helps to overcome any
perceived distinction between organisational behaviour and organisational analysis.

The aims of this book
The aims of this book are to:
■
■
■
■

relate the study of organisational behaviour with that of management;
provide an integrated view embracing both theory and practice;
point out applications of social science within work organisations and implications for
management action;
indicate ways in which organisational performance may be improved through better
understanding of human resources and the effective management of people.

The intended audience
The comprehensive coverage and progressive presentation of contents will appeal to students

at undergraduate level or on related professional courses; and to graduate and post-experience
students who through their course of study wish to enhance their knowledge and understanding of the subject area. It is also hoped that the book may appeal to those aspiring to
a managerial position.

The scope of this book
The behaviour and actions of people at work and the activities of an organisation are directed
towards the achievement of certain goals and also have social implications. The study of
organisational behaviour should not therefore be considered in a vacuum but related to
the process of management and to the wider organisational context and environment.
Broadening the scope of the subject matter beyond the concerns of traditional organisational behaviour texts is a distinctive feature of this book.

The study of organisational behaviour is a wide and essentially multidisciplinary field of
inquiry and no single book could hope to cover adequately all aspects of the subject
area. In order to attain a reasonable depth, this book concentrates on selected topics
of particular relevance to organisational behaviour and management of the human
resource, and which meet the needs of the intended audience. The design and contents
of this book mean that it is especially suitable across a range of different but related
modules, including single or double semester units, and will help provide an integrated approach to your course of study.
xix


ABOUT THIS BOOK

Format of this book
There is a logical flow to the sequencing of topic areas and each chapter of the book is selfcontained with appropriate cross-referencing to other chapters. Main sections are identified
clearly within each chapter and there are detailed headings and sub-headings. This provides
a flexible approach. The selection and ordering of chapters can be varied to suit the demands
of your particular courses of study or individual interests.
The book is written with a minimum of technical terminology and the format is clearly
structured. Each chapter is supported with illustrations and contains:

■
■
■
■
■
■
■
■
■

a short introduction and learning outcomes;
critical reflections throughout the text;
a synopsis of key points;
review and discussion questions;
a practical example of management in the news;
assignment(s);
a personal awareness and skills exercise;
a case study;
detailed notes and references.

For each Part of the book there is also an academic viewpoint and an integrative case
study.
Words set in colour throughout the main text indicate inclusion in the Glossary.

The ninth edition
The text retains the same underlying aims and approach that have been a hallmark of the
success of the book. For this ninth edition there have been an extensive review of the overall plan and order of contents between and within chapters; and considerable additional and
updated contents, figures and practical examples throughout. Readers familiar with previous
editions may wish to note the main changes in this ninth edition, including:
■

■
■
■
■
■
■
■
■
■
■

■
■
■

xx

Reworking of Chapter 1 including expanded coverage of orientations to work, globalisation and cultural influences.
Major new section on social enterprise organisations, new section on the future of work
and the ‘Y’ factor, extended coverage of stress and work/life balance (Chapter 3).
Expanded coverage and major new organisational examples of diversity (Chapter 4).
New section on lifelong learning, extended coverage of the Honey and Mumford styles of
learning (Chapter 5) and material on learning organisations consolidated in Chapter 20.
Extended coverage with additional examples of cultural influences on perception and
communication (Chapter 6).
Major new section on organisational behaviour modification, and new section on the
ultimatum game (Chapter 7).
New sections on creative leadership and group development, and social identity theory
(Chapter 8).
Additional coverage of leadership effectiveness and cross-cultural dimensions (Chapter 10).

Increased attention to the changing role of management (Chapter 11).
Updated Management Standards (Chapter 12).
Reworking of Chapter 13 ‘Human Resource Management’ to provide greater emphasis on
a strategic approach, and new material throughout including Investors in People, performance management and a new section on talent management.
Organisation strategy moved to provide a closer link with organisation structure in a
rewritten Chapter 14.
Complete rewriting of Chapter 16, ‘Technology and Organisations’ with greater emphasis
on social implications and impact on people.
Expanded coverage of corporate responsibility and ethics in a separate Chapter 18.


ABOUT THIS BOOK
■
■
■
■

Expanded coverage of organisational change including new section on the neuroscientific
approach to resistance to change (Chapter 19).
Consolidated material on the learning organisation, new material on organisational effectiveness, employee engagement, and the future of work and management (Chapter 20).
For each chapter there is now a set of six critical reflections throughout the text.
A completely new ‘Management in the news’ for every chapter; a significant number
of new and updated end of chapter Case studies; and the addition of an ‘Academic
viewpoint’ feature at the end of each Part of the book.

Attention continues to be focused on design features and overall appearance to provide a
manageable and attractive text with enhanced clarity and user friendliness.

Your study of this book
This book adopts an applied approach to the study of management and organisational behaviour. The objective analysis of organisations is supported, where appropriate, by a more

prescriptive stance. For example, the underlying need to establish a framework of order
through which the work of the organisation is undertaken demands attention to certain
basic principles and consideration of organisation and management.
■

■

■

■
■
■
■

The Critical reflections throughout each chapter are controversial statements to help
provoke critical thinking, inspire personal reflection about the areas you have just read
and about what happens in your own organisation.
The Review and discussion questions at the end of each chapter help test your knowledge and understanding of the contents, and provide a basis for revision and review of
progress.
The Management in the news, Assignments, Personal awareness and skills exercises,
and Case studies provide an opportunity to relate ideas, principles and practices to specific
work situations, to think and talk about major issues, and to discuss and compare views
with colleagues.
The Notes and references given at the end of each chapter are to encourage you to
pursue further any issues of particular interest.
The Academic viewpoint at the end of each Part relates to a recent article in an academic
journal that prompts you to explore and question a topic relating to that Part of the book.
The integrative Part Case studies provide a further opportunity to relate and discuss key
concepts and ideas to your reading of the text.
The comprehensive Glossary provides a brief description of key terms referred to in

the text.

In order to help relate the contents of the chapters to real-life situations, many of the
questions ask you to support your discussion with examples from your own organisation.
This can, of course, be your college or university. Alternatively, you may have work experience, even part-time or casual employment, in other organisations that you may draw
upon.
You are encouraged to complement your reading by drawing upon your own experiences
of work organisations. Search for both good and bad examples of organisational behaviour
and people management. Consider the manner in which concepts, ideas and examples presented in this book can best be applied in particular work situations. Contemporary examples
from your own observations should help illustrate real-life applications and further your
interest in the subject area.
I hope you will find satisfaction, and even some measure of enjoyment, from this book.
Laurie J. Mullins

xxi


GUIDED TOUR OF THE BOOK

Part 1

THE ORGANISATIONAL SETTING

1

The Nature of Organisational Behaviour

2

Approaches to Organisation and Management

3

The Nature and Context of Organisations

The book is divided into six parts, each of which
opens with a list of chapters and a link to
relevant online video content.

The Global Context
Visit www.pearsoned.co.uk/mymanagementlab to access the online
video case study that complements Part 1: The Organisational Setting.
This video offers a real life example of how one company responds to
ONLINE VIDEO
CASE STUDY the context of business today. Maersk is a global shipping company
with over 500 vessels moving nearly 2 million containers. In this video,
Customer Service Director Brian Godsafe describes how the company
operates and meets the varied needs of customers around the world.

7
Chapter introductions provide a
brief description of the key themes
in the chapter.
Learning outcomes enable you to
focus on what you should have
achieved by the end of the chapter.

WORK MOTIVATION AND JOB
SATISFACTION

The relationship between the organisation and its members is
influenced by what motivates them to work and the rewards and
fulfilment they derive from it. The nature of the work organisation,
styles of leadership and the design and content of jobs can have
a significant effect on the satisfaction of staff and their levels of
performance. The manager needs to know how best to elicit the
co-operation of staff and direct their efforts to achieving the goals
and objectives of the organisation.
Learning outcomes
After completing this chapter you should be able to:
■

explain the meaning and underlying concept of motivation;

■

detail main types of needs and expectations of people at work;

■

explain frustration-induced behaviour and possible reactions to frustration
at work;

■

examine main theories of motivation and evaluate their relevance to
particular work situations;

■

review the meaning, nature and dimensions of job satisfaction;

■

assess broader influences on motivation and job satisfaction;

■

evaluate the relationship between motivation, job satisfaction and work
performance.

Critical reflection
PART 4

THE NATURE OF MANAGEMENT

the top of the hierarchy. One of her most notable contributions was emphasis on the situational approach as one of the main forces in influencing the manager–subordinate relationship through the depersonalising of orders and obeying ‘the law of the situation’.48
Parker suggests that Follett’s ideas on human relations in the workforce foreshadowed the state
of things to come and continue to offer managers in the new century fresh food for thought.
Her proposals for best management practice have not only reflected much of what is portrayed
as new today but offer managers fresh insight into the task of leadership and management.49
The fact is that management ultimately depends on an understanding of human nature. I suggest
it goes much further than that. In the first place, good management depends on the acceptance
of certain basic values. It cannot be achieved without honesty and integrity, or without consideration for the interests of others. Secondly, it is the understanding of human foibles that we
all share, such as jealousy, envy, status, prejudice, perception, temperament, motivation and
talent, which provides the greatest challenge to managers.
HRH The Duke of Edinburgh50

Management is about human beings. Its task is to make people capable of joint performance, to
make their strengths effective and their weaknesses irrelevant. This is what organization is all

about, and it is the reason that management is the critical, determining factor . . . We depend on
management for our livelihoods and our ability to contribute and achieve.

‘Some writers argue that people do not lack motivation, only the right
triggers to motivate them. Some claim that motivation can only come from
within and attempts from other people to motivate you have little lasting
influence.’
What are your views? In your own words, what motivates you most?

Management quotes provide insight
into managerial thinking.

Peter F. Drucker 51

Critical reflection
‘A number of eminent writers have drawn attention to the changing nature of management
and the work of the manager. Yet reading the ideas of other “gurus” such as Peter
Drucker and Mary Parker Follett it appears little is really new, and the underlying role of
management remains unchanged.’
What are your views? What specifically do you see as the likely role of the manager in
ten years’ time?

SYNOPSIS
■ ‘Management’ is a generic term and subject to
many interpretations. A number of contrasting ideas

xxii

‘doing’ we can summarise the nature of managerial
work as clarification of objectives, planning, organis-

Critical reflections are controversial
statements to inspire critical thinking
about the areas you have just read.


GUIDED TOUR OF THE BOOK

The Academic viewpoint feature is new to this edition
and links you to relevant research that will help you
take your learning further by examining the applications
of various theoretical approaches, prompting you to
question and build up on what you have learnt so far.

PART 3

The Management in the news feature
provides interesting journalistic comment
on relevant current issues and companies.

GROUPS, TEAMS AND LEADERSHIP

PART 1

THE ORGANISATIONAL SETTING

MANAGEMENT IN THE NEWS

ACADEMIC VIEWPOINT

A melting pot for forging success
Below you will find the title and abstract of a recent article in an academic journal which explores a topic relevant
to the chapters in Part 3.

Abstract
Purpose: The purpose of this paper is to examine the use of expletives and swearing in the workplace. It proposes to challenge leadership style and to suggest ideas for management best practice.
Design/methodology/approach: Case studies and qualitative analysis were applied, methods that
fit well for this sensitive topic.
Findings: This paper identifies the relevance, and even the importance, of using non-conventional
and sometimes uncivil language in the workplace.
Research limitations/implications: Sample size and representativeness present limitations.
Practical implications: There is a need for leaders to apply, under certain circumstances,
a permissive leadership culture. This paper advises leaders on how it may lead to positive
consequences.
Originality/value: The paper is an original contribution to an area where research is scarce.
A certain originality element stems from the fact that, focusing on swearing language, the paper
found it necessary to use swear words (avoiding usage of the explicit form); bearing in mind the
purpose of the paper, the paper hopes that this will not cause offence to the readership of the
journal.

Academic discussion of topics such as
communication in relation to group dynamics,
workplace culture and leadership style tend to focus
on formal behaviours. However, the reality of many
work environments (and indeed the fictionalised
depiction of the workplace in film and on television) is
often characterised by informality and ‘colourful’
language including swearing. There is often an
assumption that swearing and bad language are
negative behaviours. This interesting paper challenges

that assumption, and suggests that there are different
types of swearing, some of which may be positive in
effect. It also reveals some interesting characteristics
of language use in terms of gender and culture; and it
concludes with some important observations about
the role of managers with regard to ‘industrial
language’.

N.B. The article itself contains a small number (12) of
annotated expletives to illustrate points.
The article might prompt you to consider the
following questions.
■

What does the information in the article tell us
about the importance of the ‘informal’ aspects of
group and team behaviour?

■

How can the study of workplace language,
including swearing, enhance our understanding of
the nature of managerial leadership?

■

What light do studies of this sort shed on problems
experienced by team members and team leaders
who are not part of a dominant organisational
culture?

■

How far do you think the idea of a workplace
‘language policy’, initiated by managers, is feasible?

416

them.’ In the tough business of making money out of
steelmaking, it helps if companies can offer something
special. In the effort to make this happen, the mix of
cultures at Dillinger provides a soufflé of experiences,
Mr Belche believes, that gives it a decent chance of
success even in the current uncertain climate.
Source: Marsh, P. ‘A Melting Pot for Forging Success’, Financial
Times, 8 March 2009. Copyright © 2009 The Financial Times
Limited, reproduced with permission.

Discussion questions
1 Analyse the organisational behaviour elements of
this article using the multidisciplinary framework
illustrated in Figure 1.3. What evidence can you
find about factors relevant to each of the five
areas?
2 In the light of ideas put forward by Hofstede,
Trompenaars and Hall, what do you think are
the advantages of having a culturally diverse
workforce like this? What particular challenges
do you think it poses for managers?

Discussion questions and Your tasks
encourage you to relate the Management
in the news and Case studies to theories
covered in the chapter.

PART 6 CASE STUDY

No hippies here
For some decades the organic movement had a rather
hippie, ‘muck and magic’ image which viewed organic
production and consumption as an act of faith rather
than a business proposition. However, a variety of food
scares in the 1980s and 1990s, together with longerstanding concerns about the health and environmental
impact of chemicals used in food production, gradually
brought organic farming into the mainstream, and by
the turn of the century most major supermarkets
included at least some organic produce in the fruit and
vegetable section. This might have provided a better
outlook for organic growers, but the major food retailers
remained both powerful and strongly focused on price
and consistency, and this often made relationships with
suppliers combative and lopsided. Experience of the
power of supermarket buyers and a desire to escape
their stranglehold on vegetable distribution and sales
was one of the reasons why Riverford came about.1
The business was created by Guy Watson, who grew
up on his father’s farm in Devon. However, it took
Guy’s wider business expertise, partly gained during a
brief consultancy career in the mid 1980s, to create the
network of farms and the distribution system which

forms the basis of the organisation today. His insight,
which seems to have helped formulate the Riverford
strategy, was to see the market for organic produce as
similar in nature to the emerging markets he had been
involved with as a management consultant.2 This
insight has meant that, whilst true to the values of

Source: Courtesy of Riverford Organic Vegetables

Riverford Organic

What does it mean to be an ethical organisation?
Arguably an ethical business is one which operates fairly
and decently in its dealings with suppliers, customers
and workers, obeys the law and pays its taxes. However,
the meaning of ‘ethical’ as commonly used by the
media seems to have become equated with ‘green’ in
the environmental sense. Clearly, all organisations, both
public and private sector, can be challenged to run at
lower levels of energy use etc., and many now include
such objectives in their strategic plans. But is it possible
to go even further, and seek to develop products and
services which can actively reduce the environmental
impact of modern life? And if so, how can an
organisation be sure that what it is doing really achieves
that aim? One organisation that seems to be attempting
just this is Riverford Organic, a vegetable box delivery
scheme based in the south-west of England.

814

This mixing of the practical and theoretical must be linked to
a single aim: making good products that will do a better job of
solving customers’ problems.

34

Case studies conclude each chapter and each part,
providing insight into organisational behaviour in
a wide variety of contemporary UK and international
organisations.

PART 6
CASE STUDY

Source: Geoff Kuchera/iStockphoto

Baruch, Y. and Jenkins, S. ‘Swearing at Work and Permissive Leadership Culture’, Leadership and
Organizational Development Journal, vol. 28, no. 6, 2006, pp. 492–507.

Commentary

FT

Peter Marsh
Paul Belche uses a culinary metaphor to explain how
he tries to coax the best qualities from the mix of
cultures at the steel plant he runs in western Germany,
close to the borders with France and Luxembourg.
‘If you mix the yellow part of an egg with mustard and

oil without being careful, you will produce something
unexciting. But, if you pay correct attention to the
details, you end up with the best mayonnaise,’ he
says. He is explaining his approach to managing
Dillinger Hütte, a global leader in specialist steels for
applications such as oil pipelines. Mr Belche’s tactics
for getting the best out of his employees provide
wider lessons for managers of diverse workforces.
The company aims to take advantage of the
different cultural characteristics of Saarland – the
German state where it is based that, over the
centuries, has switched between French and German
sovereignty. Of the 5,500 employees in Dillinger, about
10 per cent have French as their main language, and
the rest German. Mr Belche, a 56-year-old physicist,
is from Luxembourg. ‘The Germans are strong when
it comes to practical work. The French are good at
theory and we try to get the best of these two
characteristics,’ he says. Mr Belche poses a question:
‘Who do you think would be better at plant safety –
the German [speakers] or the French? You might think
it would be the Germans. But actually it’s the French –
they realise they are possibly behind in this field and
so they work at it. Sometimes weakness can be a
strength – as long as it’s recognised.’
His approach, he says, is to put teams of people
from the different cultures together and encourage
them to learn from each other. The factory follows the
French approach to dining, with a siren announcing
the end of the lunchtime break at 3pm, an hour later

than is normal at other German steelworks. ‘This is to
give us time for a decent lunch,’ says Mr Belche.
When it comes to sales and technology, he says, the
aim is to link the practical aspects of steelmaking and
its applications, which he considers more German,
and the theoretical, which he considers more French.
This mixing of the practical and theoretical must be
linked to a single aim: making good products that will
do a better job of solving customers’ problems, Mr
Belche says.
He sums up his philosophy: ‘The biggest costs are
the ones that the accountant will miss. They come
from the products that you never developed or the
prices [of specific types of steel] that you never
reached because you weren’t good enough at selling

What does it mean to be an ‘ethical organisation’? Can an organisation
go even further actively to reduce the environmental impact of
modern life?

organic farming and environmentally sustainable
operating systems, Riverford has been able to become
a very large player in business terms. In 1992 Watson’s
vegetable box delivery scheme was typically small-scale,
local and focused around a single grower, serving about
200 customers in the south Devon area. In 2008 the
company made on average 47,000 deliveries a week in
England and Wales, with sales reaching £33 million.3
Five regional farms, each supporting a co-operative or
grower group of local farms, now form the network of

regional producers that operate under the Riverford
banner, and the boxes are delivered by 110 local
franchisees, who do the rounds which put the veg boxes
on customers’ doorsteps. The business has even
managed to sustain its sales volumes despite two very
bad growing seasons (2007 and 2008) and the
possibility that customers would cut back on organic
food purchases during the recession.
Why organic?
Watson often explains his decision to produce organic
vegetables in personal terms.
When I was growing up our family farm, like most
others, used loads of chemicals. As a teenager I got ill
after getting careless while spraying sweetcorn, not
wearing protection. My brother got paraquat poisoning.
Agribusiness uses chemicals to grow our food, while
neglecting the health of the soil.4
His farm gained organic status as far back as 1986, and
the door to door delivery scheme helped reduce the

As Riverford has grown, however, communication of
this sort has become more of a challenge. The staff
surveys too show that more work needs to be done here.
The relatively flat structure means that significant news
about the business can be communicated to all staff in
about two weeks; but the aim is to speed this up and
ensure it happens. There are quarterly briefing sessions
on all five farms across the country open to all staff and
attended by Guy and the Managing Director. They are
used to encourage suggestions and discussion as well as

to convey information about business progress. There is
also a staff committee of six elected representatives.
Promotion opportunities are limited by the flat
structure, but there are often chances to move sideways.
However, all staff are expected to be flexible and there is
a strongly anti-bureaucratic ethos. A number of staff
have moved from working on picking or box packing
to go into management or specialist roles such as IT.
The company aims to grow as many people from within
the business as possible; there is a staff development
programme lasting ten weeks for all new and also more
established staff who show an interest; this involves one
day a week spent in the key areas including box
planning, quality control, marketing and customer
services, the Field Kitchen and even accounts. Riverford
has run a management development programme using
external advisors, and is developing in-house
supervisory training.
Away from Devon, the 110 franchisees delivering the
boxes are the lifeblood of the business. As the growth of
2004–6 has stabilised, and supermarkets are now

RIVERFORD ORGANIC

competing both in terms of organics and home
deliveries, the company has recognised that franchisees
themselves need to become more sales-oriented and
more confident in talking to people about what
Riverford has to offer. In support of this, five regional
Sales Development Managers are being recruited to help

the franchisees to become more effective at
communicating this message. These appointments have
been difficult to make as the blend of sales knowledge,
a passion for food/cooking and a commitment to
organic values is hard to locate.
‘We want to use our business to make the world
a better place’16
The term ‘social entrepreneur’ has recently come into
use to describe business founders whose motives and
businesses are designed around a specific principle or
social problem which can benefit from a commercial
approach. Grameen Bank is one such organisation; so is
the Fifteen Foundation. Guy Watson’s approach seems
similar, and his concern is not confined to improving
eating habits or promoting environmentalism in the
UK. For a number of years Riverford has collaborated
with small-scale farmers in Uganda with a view to
improving trade opportunities with the UK by linking
directly with producers at local level. He has also
encouraged the development of sustainable agriculture
in Uganda through a training initiative. It is Watson’s
belief that trade and training can bring about beneficial
change, and in this respect we may add Riverford to
the growing list of social enterprises.

Your tasks
■

Explain the organisational control strategies that appear to be operating in the Riverford organisation. Why
and how have these control systems needed to change as the business grew?

■

Using an appropriate model (such as that at Figure 19.1) outline the key elements of Riverford’s
organisational culture. How might the culture need to change if the organisation is to survive both increased
competition and threats to its growth as a result of economic recession?

■

How important is management development to the future of Riverford? What would you include in a
management development programme for future leaders of the business? Explain the management
development techniques that would be appropriate, bearing in mind the nature of the organisation’s work
(principally agricultural), structure (regionalised and dispersed) and values.

Notes and references
1 Clarke, N., Cloke, P., Barnett, C. and Malpas, A. ‘The Spaces and Ethics of Organic Food’, Journal of Rural Studies, vol. 24, 2008,
pp. 219–30.
2 Watson, G. ‘Part of a Solution’, Resurgence, Issue 237, July/August 2006, available on-line at www.resurgence.org/magazine/
article369-PART-OF-A-SOLUTION.html (accessed 17 June 2009).
3 Stone, A. ‘How I Made It’, The Sunday Times, 27 July 2008.
4 Sowerby, N. ‘Organic Champion Guy Watson Takes On the Big Guns’, City Life online,
(accessed 16 June 2009).
5 Slater, L. ‘Root Manoeuvre’, The Sunday Times, 31 August 2008.
6 Clarke et al. op. cit.

817

xxiii

GUIDED TOUR OF THE BOOK

CHAPTER 3

THE NATURE AND CONTEXT OF ORGANISATIONS

SYNOPSIS
■ The application of organisational behaviour and
process of management take place not in a vacuum
but within the context of an organisational setting.
There are many different types of organisations set up
to serve different purposes and needs, and they come
in all forms, shapes and sizes. However, there are
at least three common factors in any organisation –
people, objectives and structure – to which can be
added a fourth factor – management. The qualities of
these factors determine organisational effectiveness.
■ Organisations can, traditionally, be distinguished
in terms of two generic groups: private enterprise and
public sector. The increasing rate of privatisation has
led, however, to a blurring of commercial interests
and service to the community. In recent years greater
attention has been given to social enterprise organisations. Another major distinction is arguably between
production and service organisations. In order to relate
the study of management and organisational behaviour to one particular type of organisation as distinct
from another, it is necessary to group similar types of
organisations together.
■ Organisations differ in many important respects
but they also share common features. Business organisations can be viewed as open systems in continual
interaction with the external environment of which

they are part. The open systems model enables the
comparative study and analysis of work organisations.
Within the organisation as a whole there are a number
of sub-systems interrelating and interacting with each
other. These sub-systems can be identified as task,
technology, structure, people, and management.

■ Whatever the type or nature of an organisation or
its formal structure, an informal organisation will
always be present and arises from the interactions of
people, their psychological and social needs and the
development of groups with their own relationships
and norms of behaviour. The informal organisation
serves a number of important functions and has
an influence on the morale, motivation, job satisfaction
and performance of staff.

Synopsis brings together the key concepts
of the chapter to aid your understanding.

■ It might be expected that a healthy organisational
climate would be reflected by complete harmony in
working relationships, but conflict is a reality of
management and organisational behaviour. There are
contrasting views of conflict and it can be seen to have
both positive and negative outcomes. The important
point is how conflict is handled and managed.
Managers need to adopt appropriate strategies for
dealing with the harmful effects of conflict.
■ There appears little doubt that stress at work is a

major concern and a potential source of mental and
physical ill-health. However, a certain amount of
pressure may arguably help promote a higher level
of performance. There are a number of measures to
help reduce the harmful effects of stress. Increasing
attention is focused on the role organisations play in
the lives of staff and with broader concerns for the
work/life balance and for meaning in people’s lives.
Organisations of the future need to be aware of the
importance of people and of new social contracts
between employers and employees.

REVIEW AND DISCUSSION QUESTIONS
1 How would you define an organisation and why do organisations exist? What are the common factors in any
organisation?
2 Contrast various organisations, including your own, in terms of classifications based on (i) prime beneficiary,
and (ii) primary activity.
3 Discuss critically the extent to which differences among various organisations limit the value of the study of
management and organisational behaviour.
4 Assess critically the practical value to both the student and the manager of adopting an open systems view
of organisational analysis.
5 Distinguish between the formal and the informal organisation and explain their main characteristics. What
functions are served by the informal organisation?
6 To what extent do you accept the view that conflict is an inevitable feature of management and
organisational behaviour?
7 Why do you think increasing attention is being given to the work/life debate? Is this attention justified? As
a senior manager, what steps would you take to help improve the quality of working life for staff?
8 Give your own critical views on how you see the organisation of the future and the humanisation of organisations.

Review and discussion questions help you

to check your understanding of the topic,
stimulate further investigation and encourage
debate.

113

Assignments help you to understand theories
and challenge your assumptions by applying
ideas and analysis to your own experiences.

PART 2

Personal awareness and skills exercises
develop your interpersonal and work-based
skills.

THE INDIVIDUAL

CHAPTER 6

ASSIGNMENT 1

PERSONAL AWARENESS AND SKILLS EXERCISE

Stroop – illustrative experiment

Objectives

(This is a development of Figure 6.11 and provides a further opportunity to review possible perceptual illusion.)
a Write two vertical lists of 20 colour names in felt tip pen. For the first list, use the correct colour pen for the

colour word you are writing (for example, blue pen for the word blue). Repeat some of the colours but place
them in random order.
b For the second list, use different colour pens for the colour word (for example, use a red pen for the word blue).
c Now ask a colleague to read out loud the colour that the word is written in (not the word itself). Compare the
amount of time it takes your colleague to read out the two lists. The second list probably not only took longer
but had more mistakes and more hesitations.

PERCEPTION AND COMMUNICATION

Completing this exercise should help you to enhance the following skills:
■
■
■

Distinguish between facts and assumptions or inferences.
Examine the basis upon which you make judgements.
Review the nature of your communication and decision-making processes.

Exercise
After reading the following story you are required to:
1 Read the 15 statements about the story and check each to indicate whether you consider it to be true, false or?
‘T’ means that the statement is definitely true on the basis of the information presented in the story.
‘F’ means that it is definitely false.
‘?’ means that it may be either true or false and that you cannot be certain of which on the basis of the
information presented in the story. If any part of a statement is doubtful, mark it ‘?’.

William Stroop, who first conducted this experiment, noted that the task interferes with expected behaviour. It is
difficult to stop yourself from reading the word (the result of our early learning), which in this case directly
impairs performance.

Answer each statement in turn. You may refer to the story as often as needed but do not go back to change
any answer later and do not re-read any statements after you have answered them.

ASSIGNMENT 2
Form small groups and then undertake, individually, the following exercise.

2 After you have checked all 15 statements, work in small groups of three to five and discuss your individual
answers. How much agreement is there among members of your group? Do not change any of your first
individual answers. However, if as a result of your group discussion you would now give a different answer
to any of the statements, note this alongside your original answer.

The story
COMMUNICATION
1 Read everything before you do anything.
2 Put your name in the upper right-hand corner of the paper, in
the space provided.
3 Circle the word ‘name’ in the second sentence, above.
4 Draw five small squares in the upper left-hand corner of this paper.
5 Put an X in each of the five small squares you have drawn.
6 Put a circle around each of those five small squares above.

A businessman had just turned off the lights in the store when a man appeared and demanded money.
The owner opened a cash register. The contents of the cash register were scooped up and the man sped away.
A member of the police force was notified promptly.
Statements about the story
1
2
3
4
5

6
7

7 Sign your name, under and to the left of the title above.
8 Draw a circle, in pen, around sentences 6 and 7 above.

12 If you feel that you have carefully followed these directions, call
out, loudly: ‘I have carefully followed directions!’

8
9
10
11
12
13
14

13 Add 107 and 278, and write the sum on the reverse, immediately
under the first figure that you wrote there.

15

9 Multiply 70 ϫ 30 and write the result on the reverse side.
10 Draw a circle around the word ‘paper’ in sentence 4, above.
11 Please now call out your first name, loudly.

14 Circle that figure on the reverse.
15 In a normal voice, count aloud from 1–10.

A man appeared after the owner had turned off his store lights.

The robber was a man.
The man who appeared did not demand money.
The man who opened the cash register was the owner.
The storeowner scooped up the contents of the cash register and ran away.
Someone opened a cash register.
After the man who demanded the money scooped up the contents of the cash register,
he ran away.
While the cash register contained money, the story does not state how much.
The robber demanded money of the owner.
A businessman had just turned off the lights when a man appeared in the store.
It was broad daylight when the man appeared.
The man who appeared opened the cash register.
No one demanded money.
The story concerns a series of events in which only three persons are referred to:
the owner of the store, a man who demanded money and a member of the police force.
The following events occurred: someone demanded money, a cash register was opened,
its contents were scooped up and a man dashed out of the store.

T
T
T
T
T
T
T

F
F
F
F

F
F
F

?
?
?
?
?
?
?

T
T
T
T
T
T
T

F
F
F
F
F
F
F

?
?

?
?
?
?
?

T

F

?

Source: From Hanley, W. V. Communications and Interpersonal Relations, Texts and Cases, sixth edition, Irwin (1992), p. 213.

16 If no one else has said it, say now, ‘I am the leader!’
17 Now that you have read all of the foregoing, very carefully,
please complete ONLY sentences 1 and 2.

Discussion
■
■

What conclusions do you draw from this exercise?

246

xxiv

■

How would you explain differences in individual perceptions of the same statement?
On what basis did members of your group give different answers and how did their perception of
the statements about the story differ?
To what extent can you be absolutely certain about anything?

247