Organizational Behavior: Groups, Teams and Motivation - Research Paper Example

 Organizational Behaviour - Groups/Teams and Motivation Abstract Organizational behavior is the study of how groups and individuals behave inside the organization for the growth of the organization. Organizational behaviors are motivated by the activities of decision makers or policy makers of the organization. Organizations normally contain different people from different social, economical and cultural backgrounds. The management should formulate strategies to derive maximum productivity of these individuals by allowing them to function individually or in groups smoothly. The financial services firm Merrill Lynch has spoiled its reputation in 2001 because of dishonest practices, including involvement with the Enron scandal. This paper briefly explains the strategies required to improve the motivation, group performance factors (composition, norms, size and cohesiveness), and the phases of team development (forming, storming, norming, performing, adjourning) in Merrill Lynch. Introduction Merrill Lynch is one of the world's leading financial management and advisory companies, which is focussing on providing financial advice and investment banking services to the customers. ‘The recent merger or combination with bank of America has made Merrill Lynch; The largest brokerage in the world, with more than 20,000 advisors and $2.5 trillion in client assets; A leading provider of global corporate and investment banking services, including commercial lending, global high-yield debt, global equity and global M&A; A global leader in wealth management, private banking and retail brokerage; A global leader in investment management, with approximately 50 percent ownership in BlackRock, which has $1.4 trillion in assets under management, in addition to the $589 billion in assets under management with Bank of America as of June 30, 2008’ (Merrill Lynch, 2009) Merrill Lynch has spoiled its reputation among investors because of its illegal business relation with Enron Company which is considered now as one of the biggest fraud companies of all time. Merrill Lynch has purchased some Nigerian barges from Enron on the last day of 1999 only because Enron secretly promised to buy the barges back within six months, guaranteeing Merrill Lynch a profit of more than 20%. This deal has resulted in a loss of $80 million to Merrill Lynch. (The Enron Fraud) Investors all over the world has started to raise doubts about Merrill Lynch’s business strategies. “The stock market was down, reducing the firm’s profits. On September 11, 2001, Merrill headquarters, located next to New York’s World Trade Centre, were damaged and three employees died. The events of 2001 caused Merrill managers to re-evaluate the company’s direction and make sweeping changes. One area targeted for change was the firm’s performance management and reward system.” (Case Study) Following the complaints and concerns from customers all over the world, Merrill Lynch has decided to form groups/teams to accomplish specific functions /actions, analyze the situations. Team development (forming, storming, norming, performing, adjourning) There are five different stages for a team development; forming, storming, norming, performing and adjourning. In the forming stage the team members are introduced with each other and also the organizational goals will be introduced to them. Team Forming is a silent process in which everyone tries to identify the concepts and the goals of the team. Excitement, anticipation, and optimism are usually associated with forming stage. (Alleman, 2004) Merrill Lynch management must identify the desired goals and objectives for each team or groups before forming the team. The team must be formed based on the pre-planned objectives. The management must make sure that all the team members have the desired skill and competence to ensure the success of team work. Storming stage is the stage in which the actual mission begins. The honeymoon period of team formation is over and the leaders may try to establish their supremacy over the team members during this period. The members may reveal their disagreement or unhappiness of the team concept during this period. (Alleman, 2004) The manager has to exercise his management skills judiciously during this period for the success of the team work. Since the team members work based on the manager’s instructions, the manager must be a smart person who can guide the team members properly to ensure the success of their mission. Customers are the biggest asset for a financial company like Merrill Lynch and hence the manager must implement innovative strategies to regain the lost faith of customers. He must convince his team members about the objectivity of his strategies. Norming is the stage in which the team begins to combine well and function well. Most of the problems occurred during the storming period will be settled and the members will concentrate more on the objectives rather than conflicts at this stage. “Often, the team will bounce back and forth between “storming “and “norming” when issues crop up.” (Alleman, 2004) The role of the managers will be reduced during this period since most of the conflicts and confusions over the mission might have settled in the previous stage itself. Next stage is the performing stage in which the team members will function at the top gear. They can be given new projects and tasks and accomplish them successfully, and very seldom fall back into the “storming” phase. (Alleman, 2004) Once the team reached the performing level the manager’s role will again be reduced. The mission every manager has to undertake in Merrill Lynch is to work hard to bring their employees in this performance stage. At present the employees are at the storming stage because of the conflicts and problems occurred due to Enron scandal. The challenges of transition from storming stage to performing stage may be immense and the competence of the managers will be severely tested at this period. Adjourning is the last stage of a team development. The team members will often exchange the new ideas developed and challenges overcame during different stages of their mission during this period. “When the team finally completes that last briefing; there is always a bittersweet sense of accomplishment coupled with the reluctance to say good–bye.” (Alleman, 2004) The Merrill Lynch management must not forget to allocate new challenges to the team once they successfully completed their mission along with proper rewards. The confidence obtained from the previous work can be utilized in the new work if the same team is being utilized for another mission. The structure of the winning combination should not be altered as far as possible. The core elements of the team must be retained for another mission since the relationship established in the previous mission may help the team members in their future assignments as well. Two key factors affecting motivation in the given case study Since the manager and the employee agreed up on the target and the reward based on the organizational requirement and the employee capabilities, the employee’s complaints about huge work load will come to an end. The employee must feel comfortable in his new target and hence his performance will be motivated by the offered reward and the mutually agreed target. No employee will agree to perform beyond their abilities and hence the stress associated with their work will be reduced considerably. There is a gap between an individual’s actual state and some desired state in most of the organizations. (Employee Motivation: Theory and Practice) In the given case these gaps were reduced considerably by the mutual agreements between the manager and the employee regarding the employee performances. The offered acceptance of middle level performance by the management is another motivating factor for the employees. “The middle category is an acceptable level of performance. Most of us are in that category. Now, let’s talk about how, relative to your peers, we can move you up in the rankings.” (Case Study) The above statement clearly suggests that the management understands the employee performances based on a practical way. Moreover the proposed 360 degree feedback where each employee is evaluated by superiors, peers, and clients is another motivating factor. As per the traditional system, the performances were analysed by the superiors alone and hence the probability of error in judgement or biasing were more compared to the new system Expectancy theory and improvement of performance and motivation As per expectancy theory Motivational Force MF = Expectancy x Instrumentality x Valence, where expectancy is the perceived effort-performance relationship, instrumentality is the perceived performance-reward relationship and valence is the value the individual personally places on the rewards. (Expectancy Theory, 2007) As per the new policy adopted in Merrill Lynch the management sets a mutually agreed target for each employee after the discussion between the manager and the employee which will remove unnecessary tension for the employees and the manager. As per the old tradition the management has forcefully implemented the target without the consent of employees. The new policy will help the managers to perceive the performances or expectance of each employee more positively since it is based on individual abilities. Moreover as per the new system the employees can expect what reward (instrumentality), they are going to receive once they reach the target. Previously the performances of each employee were equated against others in order to decide about the performance rewards and hence the employees were not sure about the future outcome of their performances. As per expectancy theory the attitude of employees towards reward system (valence) is important in deciding the success of the new system implemented. If the offered rewards were not of considerable value, normally most of the employees will neglect such offers. So the management must carefully evaluate the attitude of each employee against the rewards offered to them once they reach the target. The employee must feel that the offered reward worth a go at it. Conclusions Team development and motivation are two important factors the Merrill Lynch management must concentrate in order to regain their lost status due to the tie up between the fraud companies like Enron. Organizational behavior must be changed in accordance with the scientific management theories in order to regain the lost customer focus. The merger between Bank of America definitely made the company one of the biggest in its class, but the size alone may not save them from collapsing as we have seen in the case of Lehman Brothers. References 1. Merrill Lynch, 2009, Retrieved on May 22, 2009 from http://www.ml.com/index.asp?id=7695_8134 2. The Enron Fraud Retrieved on May 22, 2009 from http://www.enronfraud.com/ 3. Expectancy Theory, 2007 Retrieved on May 22, 2009 from http://www.quickmba.com/mgmt/expectancy-theory/ 4. Employee Motivation: Theory and Practice, 2008, Retrieved on May 22, 2009 from http://www.accel-team.com/motivation/ 5. Alleman Glen B., 2004, Forming, Storming, Norming, Performing and Adjourning, Retrieved on May 22, 2009 from http://www.horizonsmt.org/docs/Info%20For%20Communities/Leadership%20Plenty/FormStormNormPerform.pdf Read More