Organizational Behaviour - Main Challenges and Root Causes - Case Study Example

ORGANIZATIONAL BEHAVIOR

Introduction

Thaddeus, also known in the workplace as ‘Commodore’, is described in this case study as dominating and micromanaging boss who calls unnecessary and interruptive last-minute meetings and repeatedly frustrates his subordinates (Silverman, 2009: p34). As a result of his repressive character, one of his employees, David, is considering a job offer from the EVP of Finance Europe despite the fact that it would be a ‘horizontal’ move that would not result in a promotion or a pay rise. This situation within the organization is a symptom of poor management, a negative work environment, and a lack of communication and trust between employees and management. In this case, David and Steve in the organization are having difficulties managing their difficult and frustrating interactions with Thaddeus (Silverman, 2009: p36). This paper will discuss the main challenges facing Finance Europe in light of David’s commentary on Thaddeus and the work environment, as well as the root causes of and recommendations for these challenges.

Main Challenges and Root Causes

David faces several challenges in making this decision, one of which is the poor management practices at Finance Europe. Indeed, Aziri et al. (2014: p819) note that when employees in the organization or in a department complain about the working environment vocally, this is often the sign of bad or poor management. For instance, Steve tells David that working for anyone else would be better than the commodore would (Silverman, 2009: p36). Another sign of poor management is the presence of a big, overbearing ego with a personal agenda, which is normally a defensive mechanism against personally threatening situations in the workplace. Finally, a third sign of poor management is one-way communication, in which Thaddeus cannot take constructive criticism and cannot motivate their employees to achieve company objectives effectively (Teece, 2016: p212).

The root cause of this challenge is determinable using the Full-Range Theory of Leadership, which proposes several leadership/management behaviors or styles that range from transformational to laissez faire leadership (Teece, 2016: p206). As such, it is possible that Thaddeus is not a full-range leader and, therefore, lacks a repertoire of leadership behaviors or styles required for different contexts or situations. In this case, Thaddeus did not have individualized consideration, which is a component of this theory and refers to the degree to which Thaddeus attended to all the employees’ needs and concerns. In addition, this theory also identifies the extent to which managers solicit the employees’ ideas, or intellectual stimulation, as an important behavior of leadership that Thaddeus lacks (Teece, 2016: p206). Furthermore, leaders are required to inspire and appeal to their employees in articulating the organization’s vision through inspirational motivation, which Thaddeus also lacks.

Another challenge facing Finance Europe is the emergence of a negative work environment. One symptom of a negative work environment is the formation of cliques (Alexiev et al., 2016: p979), in which employees get together and talk to each other about Thaddeus but do not talk to Thaddeus or the intern, Lorelei. A second sign of stressful work environments is the presence of favoritism, inconsistent policies, and sketchy workplace practices. In this case, Lorelei receives an internship position because she was the daughter of the finance head. The third sign of a negative work environment is the presence of one or more toxic managers or leaders in the organization, particularly bosses with narcissistic tendencies who consider them-selves as more talented and intelligent than the rest. Finally, it is possible to identify a negative work environment if work affects the employee’s relational and emotional wellbeing negatively (Boateng et al., 2013: p295).

The root cause of this challenge is determinable using the Affective Events Theory, which describes how the moods and emotions of employees influence job satisfaction and job performance. The theory further describes how negative-inducing and positive-inducing emotional incidents in the workplace significantly affect on the employee’s job satisfaction (Naseer et al., 2016: p27). In this case, David is undergoing negative-inducing emotional events because of Thaddeus’ micromanagement and narcissism, which has drastically reduced his job satisfaction and encouraged him to move departments. Additionally, the theory proposes that these emotional incidents result in external and internal affective reactions that manifest through organizational commitment, job satisfaction, and job performance. The problems faced by Finance Europe are due to ignorance of emotions in the organization, which have accumulated with more frequency and caused employee performance and commitment to drop (Leblebici, 2012: p42).

The third challenge facing Finance Europe is a lack of communication and trust, which has led to difficulties managing workplace conflicts. One sign that shows a lack of communication and trust is the presence of managers who speak and act inconsistently (Auger, 2014: p339), with Thaddeus asking David for specific changes in his power point presentations and changing them as soon as David completes them. Further, organizations and departments suffer from a lack of trust when are close-minded and fail to consider the viewpoints and ideas of other people, while also creating a workplace atmosphere where everyone has to do things their way or leave. Lack of communication is also evidenced by poor teamwork in the workplace (Auger, 2014: p339), specifically since it is becoming increasingly unclear the responsibilities and roles that each employee assumes because of Thaddeus’ micromanagement and indecision.

The Equity Theory proposes that employees strive to maintain equity between outcomes that they receive from the job and the inputs that they deliver in the workplace. This theory helps in identifying the root cause of the challenge above, specifically in its belief that employees will value their managers if they treat them fairly (Fuglsang & Jagd, 2015: p25). In turn, unfair treatment of employees in the workplace motivates them to regain fairness in their relationship with the organization and the department. As a result, David seeks to leave the unfair Thaddeus’ department and join Irving the EVP, who David believes will treat him more fairly. In addition, the theory also proposes that the employees’ perceptions of their respective incomes and outputs could be incorrect. Trust breaks in such situations due to the emergence of gossip and rumors about why the boss favors one employee over the other (Fuglsang & Jagd, 2015: p35).

Insight and Recommendations

The most important challenge facing Finance Europe was bad management, which in turn has led to a toxic work environment where there is a lack of communication and trust. In this case, the Full Range Theory of Leadership states the importance of connecting a worker’s sense of self and identity to work-related projects and their collective team/department identity to enhance their morale and motivation (Zamfir, 2013: p55). This theory recommends that Finance Europe’s management, including Thaddeus, should show individualized consideration as an aspect of good leadership. Here, Thaddeus is encouraged to attend to the needs and concerns of every employee in the department, rather than attending to all the employees from the same perspective. In turn, this would require Finance Europe’s managers to act as coaches or mentors for the employees to help them achieve the department’s goals effectively. The theory also recommends that Finance Europe’s management should incorporate intellectual stimulation as part of their leadership style (Zamfir, 2013: p55). In this case, Thaddeus should solicit and acknowledge ideas from his employees, while also taking more risks in challenging the assumptions made by employees in the workplace.

Thaddeus and the rest of Finance Europe’s management should also use inspirational motivation as a component of their leadership behavior, specifically by ensuring they articulate an inspiring and appealing vision to the employees (Bolino et al., 2016: p379). In this case, management should raise optimism and expectations among the employees, instead of dampening their expectations by always being critical of their work. For instance, Thaddeus may offer words of encouragement instead of criticism when David delivers his dashboard presentations, which would raise David’s optimism about his role in the department. Further, Finance Europe’s management could incorporate the Full Range Theory’s element of idealized influence into their leadership. This component refers to the extent to which Thaddeus and other managers instill pride about the quality of work in their subordinates, as well as the trust and respect that they gain from their subordinates (Bolino et al., 2016: p379). From the case study, Thaddeus has not gained the trust and respect of employees like David and Steve, which makes it difficult for him to instill pride in the employee’s work for the department. Instead, Thaddeus should use his work to become a role model whom employees identify with and emulate.

From the recommendations made by Full Range Theory of Leadership, Finance Europe needs to improve the relationship between their management and employees in order to improve the workplace environment. Generally, different management styles will suit varied organizational contexts based on the organizational culture, particular personalities of the employees, nature of the work, and size of the organization or department (Zamfir, 2013: p57). To begin with, Finance Europe’s managers should select the right employees by ensuring that they select the right people for the right job and that there is a complementary team in place that allows for alignment between the employees and the department’s goals. Being knowledgeable about the different roles in the workplace will help Thaddeus define the requirements and needs against which they assess employees for effectiveness. Moreover, the development of employees will be a vital determinant of the department’s ability to counter uncertainty regarding Thaddeus’ wishes and create a cohesive and united department (Zamfir, 2013: p57).

Thaddeus and other managers at Finance Europe should also show empathy towards the employees by listening to them and relating to their experiences, which is essentially a core competency for leaders and managers (Bolino et al., 2016: p399). For instance, the EVP of Finance Europe has offered David a job but the latter is not sure whether Irving wants him as an employee or just wants his dashboards because Irving has not connected with him in a genuine manner and even seems to have forgotten their meeting. Therefore, the company’s management should develop the capacity to understand and connect with their employees in a meaningful and genuine manner, which will make it easier for them to set objectives and influence employees to achieve these goals. They can foster empathy by ensuring effective communication with their employees based on relationships of honesty and openness with the team. For example, Thaddeus may attempt to create the space and time for his subordinates to ask questions and observe strategies for achieving organizational objectives. Clearly communicating the organization’s expectations and goals, defining the employee’s responsibilities and roles in achieving the goals, and space for negotiations and discussions could improve the work environment (Bolino et al., 2016: p400).

Moreover, providing meaningful and timely feedback to the company’s employees and determining the best way to provide this feedback is an important characteristic of good management (Tjosvold et al., 2014: p45). Thaddeus could, for instance, tailor his approach to every employee individually and identify the employees like David who more autonomy, and employees like Marissa who require regular support and assurance. Management should also let their employees know their successes and areas for improvement, while also fostering an environment where employees can understand each other’s limitations and strengths. In this case, they should be open to the employees’ input and integrate the employees’ feedback in their decision-making. Furthermore, good and effective management also requires that they lead by example. For instance, Thaddeus should take more responsibility for the workplace atmosphere by using their behavior to shape this environment. Tjosvold et al. (2014: p46) recommend that managers should ensure their demeanor and posture in the morning, for example, motivates employees to share problems and challenges in achieving departmental or organizational objectives.

Nevertheless, Equity Theory also points out that employee perception of fairness or equity between their inputs such as skill level and their outputs, such as recognition determines their motivation in the workplace (Al-Zawahreh & Al-Madi, 2012: p166). In this case, David feels that Thaddeus does not recognize his high skill level in making dashboard presentations, which in turn causes him to feel de-motivated and discontented in his current position under Thaddeus. Most importantly, Equity Theory proposes that David’s workplace motivation depends on what he considers fair in comparison to others, which explains why he felt discontented that Thaddeus recognized an intern’s work before him. The Equity Theory focuses on the employee’s attempt to reduce their perceptions of unfairness that results from the compensation-work requirement and, therefore, deals with workplace relationships and unfairness/fairness. Finance Europe’s management should ensure fair treatment of employees for their contributions in the workplace, which will significantly improve the employees’ attitudes and motivation (Al-Zawahreh & Al-Madi, 2012: p166). In addition, they should strive to improve employee perceptions of fairness in the workplace in order to reduce the feelings of mistrust between management and employees, as well as among employees.

Indeed, Equity Theory insinuates that the days when leaders and managers like Thaddeus could simply control and command employees like David are gone and that Finance Europe must seek to achieve their objectives by motivating their employees. In this case, the company’s management can motivate its employees by creating a positive work environment where the employees’ are internally motivated by their belief of fair treatment in the workplace in relation to the other employees (Zeffane, 2012: p71). As such, Thaddeus should ensure that David and other employees consider the treatment given to Lorelei fair in terms of her inputs and outcomes compared to those of other employees. Equity Theory proposes that employees like David will consider the workplace as fair when workers providing similar inputs to the company also receive similar outcomes including recognition. By ensuring equity in the relationship between inputs and outcomes for all employees, Finance Europe will motivate its employees to increase their inputs, be more satisfied with their output, show commitment to the company, and reduce their resistance to department policies (Giddings et al., 2013: p967).

Finance Europe can ensure more fairness in the workplace by reaffirming to its employees that they will all receive fair and equal opportunities, especially in terms of recognition (Cheung et al., 2013: p943). In addition, they should also provide for a fair and equitable appeals process when employees have grievances that they need heard by management. For instance, the company should allow for an open door policy where management and employees have effective feedback mechanisms that allow the latter to voice their grievances or concerns to managers away from the normal channels of communication. In addition, the company may also focus on enhancing workplace transparency and communication frequency to cut down on concerns of unfairness and inequity; thus enabling all employees including David to focus on more productive and rewarding responsibilities. Effective communication enables organizations to establish clear employee expectations, which convey how employee performance influences the organization and what they should do in order to receive positive feedback (Lohikoski et al., 2016: p16). Effective communication also helps organizations like Finance Europe to adopt innovations and ideas, particularly when management helps employees understand their value to the organization.

Conclusion

Finance Europe faces significant challenges related to a lack of communication and trust in the workplace, as well as a negative work environment. Using the Equity Theory and the Full Range Theory of Leadership, it emerges that the root cause of these challenges are poor management. As such, Finance Europe should seek to improve the company’s management with the aim of enhancing a positive work environment and trust within the organization. Using Equity Theory, the paper recommended that Thaddeus and the rest of the company’s management should seek to achieve fairness between the employees’ inputs and outcomes, while also communicating this fairness by recognizing the most deserving employees. Further, recommendations based on the Full Range Theory of Leadership indicate that managers like Thaddeus should apply different forms of leadership for various employees depending on their personalities.