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 1. Introduction
The idea of organizational behaviour is a crucial tool for all organisations. Generally, it
determines if a business will be successful or not. The role of ensuring appropriate organizational
behaviour relies on the managers, who should know how to effectively gauge response of
employees regarding various policies within the organization. Therefore, there is a significant
relation between management practices and organizational behaviour. The theories of
organizational behaviour appear from the evaluation and management of teams of people (Aithal
& Kumar, 2016). Here, personality, communication, leadership traits, power, authority and
policies play a huge role. These elements should be properly understood by managers in this
dynamic global business environment. This report will present the major management practices
from the early 20th century along with its evolution towards modern management theories. In
addition, how individual traits affect organizational behaviour is also explored through various
theories. Lastly, multinational organisations are hiring more and more diverse workforce every
day, therefore the proper management of such diverse multicultural teams are also a significant
part of this report.

2. Management practices from the early 20th century

A general overview on the science of management in the early 20th century shows that
management was then focused on increasing efficiency and productivity through standardisation,
labour division, centralisation and hierarchy. It was a "top-down" approach so that management
could strictly regulate people to dominate across markets. After the 1950s, organisations grew
more complex and there were functional movements in firms (Hoskisson et al., 1999). The
managers started to understand the necessity of considering the human factors instead of just
efficiency. The 1970s was the decade of strategic planning, as organisations focused on effective
allocation of resources and various strategic planning tools.

The System Approach to management states the concept that all organisations are systems and
all its components have a close connection with other external elements, although involving
limited function and purpose (Ionel et al., 2018). Nevertheless, managerial decisions do not just
occur due to the existence of these elements, rather they are combined and coordinated through a
Process Approach. Therefore, any kind of change in one of these elements can also contribute to
change in another which consequently spreads throughout the entire firm. As a result, managers
and leaders need to consider the long-term results for organisations as a whole. The first person
who spoke about the System Approach was Chester Bernerd, who considered that enterprises are
social systems with conscious coordination between two or several individuals (O'Connor,
2016). Managers must distribute operations in such a way that supports effective internal
communication, involvement in goal formulation. They need to balance between forces that
collide with each other and hold themselves accountable for the actions of junior workers
(Bergsteiner & Avery, 2011). Bernard thinks a manager’s primary duty is to manage the
operational incentives as all orders are considered only within specific ranges. According to
Bernerd, there are four kinds of general incentives: a) work satisfaction; b) work environment; c)
sense of belongingness through active participation and d) the capability of communicating with
others. Therefore, the author focuses on the importance of considering the ethical factors in
detail, as the primary factor behind management failure is the lack of moral factors.

The System Approach was also explored by Peter Drucker, a famous management theorist in the
early ‘90s. Drucker’s work emphasised the holistic ideas of management which defined the
responsibilities of management professionals in organisations. According to Drucker (1954),
managerial elite is the fundamental step of society and entrepreneurship, therefore it has a special
role in management. The author’s definition of management focuses on the creative capabilities
of managers which acts as an entire organization’s driving force. A manager’s role requires
removing an organization’s weaknesses and improving the strengths, often through the skill
development of the human capital. To be able to think long-term without bias is a great
capability in a manager. More importantly, a manager must always be conscious about
organizational prospects and attempt everything to reach those goals. Drucker also outlined the
managerial functions in an enterprise that includes arrangement and allocation of tasks, creating
structures where necessary. Defining organizational goals clearly to employees is crucial, and so
is forming responsible teams who would collaboratively work to reach organizational goals. In
addition, managers should evaluate the organizational policies, employee performance and also
ensure proper recruitment and hiring. However, Drucker’s most important theoretical stance is
the concept that organizational basis of control are the objectives. It is not possible to define
functions, systems, approaches and methodologies for management without establishing specific
goals first. American researcher Jay Forester showed six major criteria and six interconnected
flows which are raw materials, orders, cash, machinery/equipment, staff and information.
Forester says that the management system is complex due to the impact of psychological
reasons, for which future outcomes may turn out completely different than what is expected
originally (Sterman, 2000). As a result, only focusing on short-term goals is not enough for
managers.
 2. Current Theories, Concepts and Evidence in Organisational
Behaviour
Modern theories assume that an organization is a system that must adapt to environmental
changes. It defines an organization as a planned and structured process where people
communicate for reaching a goal (Hicks and Gullet, 1975). The modern approach to organization
is interdisciplinary, with many scholars from different disciplines contributing to its
development, highlighting the dynamic nature of communication and the significance of aligning
the interests of individuals and enterprises. This concept is in line with the Operations Research
Approach coined in 1940, which focused on multidisciplinary contributions. Von Bertalanffy
(1951) also created the base for modern management theories by proposing a portion of the
General System Theory.

The modern concepts of organizational behaviour differ from the earlier approaches as they
follow a systems perspective and the communication process is dynamic. The multidimensional
and interdisciplinary nature of these concepts make them more detailed and agile. There are three
major classifications of the modern understanding of management.

● The systems approach: This approach sees organisations as systems of interlinked and
interdependent components subsystems. A system is the combination of several elements,
functionalities and procedures, as told by Albrecht (1983). According to Bakke (1959),.
An organization includes five basic components: people, the formal or informal
organization, behavioural patterns incurring from demand of roles, understanding of roles
by workforce and lastly the work environment. The system approach also links various
components and processes together, including communication, balance and decision-
making. Communication refers to detailing future action, establishing control and
collaboration to connect decision centres in the organization system. On the other hand,
balance is the equilibrium between these various components to ensure a unified and
systematic relationship. Lastly, analysis of organization decisions acts as a linking
process in the Systems Approach which includes decision to manufacture, and
participate. The group decision making process comes from the core concepts of this
approach.
● Socio-Technical theory: Only enhancing or enriching business is not important, rather
the people who manage these enhancements are more crucial components to consider.
Therefore, socio-technical theory is based on the idea that all organisations consist of
people, technical systems and environments (Pasmore, 1988). People are the social
system who use the machinery and equipment known as the technical system. Lastly,
with the combination of both, products or services are manufactured which offer value to
consumers, who are considered the external environment of businesses.
● Contingency/Situational Approach: Many scholars have spoken about this approach. It
is based on the premise that there is no universal rule for approach choice in any
organization that will suit them for all seasons (Lawrence and Lorsch, 1967). As
 interrelated systems, organisations should follow the contingency approach which states
that various conditions require different work approaches and environment and considers
different external factors like Social, Political, Legal, Technological, and Economic
drivers (Hellriegel and Slocum, 1973).

Late 20th century field of management found a popular theory called the “7S Framework”,
created by Peter, Waterman & Philips (1980). The scholars presented seven connected variables,
all of which have the same initial, “S ''.

Figure: 7S Framework

Source: Peters, Waterman & Philips (1980)

As shown in the figure, all these elements are interconnected. Therefore, change in one of these
elements can affect the entire organization. Modern day managers are in charge of finding and
maintaining the balance between all these components within an enterprise.

3.0 Personality, Individual Differences, Motivation Theories and

Their Application
Motivation theory deals with understanding what drives an individual towards achieving a
specific result or goal. This theory is relevant for the entire society, however shows more
significance in application in the management field. Motivated employees show more
productivity which brings more profitability to an organization. Motivational theories are divided
in three categories (Saif et al., 2012). Mainly, these theories include:

3.1. Maslow’s Hierarchy of Needs

As per Smith & Cronje (1992), Maslow's theory is based on the fact that individuals are willing
to increase their belongings and achievements in life, therefore, giving them priority is of utmost
importance within organisations. The author’s model Hierarchy of Needs focuses on job
satisfaction for employees by fulfilling their needs (Saif et al., 2012). All human beings have
physical, biological, social and psychological needs. Therefore, Maslow introduced a theory with
five stages which places these needs in various parts and ranks them based on their contribution
in motivation.

3.2 Herzberg’s Two-Factor Theory

This theory is also called Motivator-Hygiene, emanating from a research done among engineers
and accountants to understand what makes a person satisfied regarding their job (Saif et al.,
2012). Herzberg states that there are five elements that work as satisfiers for workers within a
company, which are: a) achievement; b) recognition; c) the nature of the job; d) roles and
responsibilities; e) Improvement or advancement. On the other side of the spectrum, Herzberg
locates politics, approaches to management, monitoring, incentives, work relationships and
working conditions that may affect employees’ motivation or willingness to be productive.
Golshan et al. (2011) state that companies are implementing Herzberg’s theory more and more to
create more scopes for employee personal growth, skills improvement and recognition. At some
points of their professional life, they are given promotions which act as recognition for their
special work efforts. For instance: when they show a good amount of productivity and quality
performance in their field, employees are given more responsibilities to handle more tasks.
However, the theory of Herzberg is not without its limitations and criticisms. The authors
indicate that its failure lies between the distinction between physical and psychological
components and describing how they are different from hygiene factors. Moreover, the theory
cannot present employee satisfaction or dissatisfaction level in a measurable or numerical
manner. Another significant limitation of the theory is that it assumes all people will show the
same reaction to one situation.

3.3 McClelland’s Need Achievement Theory

The postulation of Need Achievement Theory is that sometimes success drives people as they
focus more on personal achievements instead of rewarding themselves (Saif et al., 2012). In
terms of academic working environments, this theory is the most applicable and gives
explanations for the high-achieving mindset of scholars and teachers, no matter what difficulties
they experience. Lastly, the ERG theory by Alderfer is quite similar to the Hierarchy of Needs
theory by Maslow, however ERG reduces two categories from Maslow’s theory and only
categorises self-esteem and social needs as ‘relatedness being’; self-actualization as growth
being and physiological and security needs as ‘existence’.

4. The Influences of Organisational Culture and Structure

Organisational culture are the values and norms existing within a company and also involves
feelings and the procedure of transferring those values and norms among the entire workforce
(Vecchio, 1988). Derek et al. (2005) states that organisational culture can be defined with the
similar complexity as its existence, because there is no universal definition for this. As per the
recognitions of David & Fahey (2000), the cultural features identify the background or context of
social communications and therefore, affect behaviours in terms of people’s management
capabilities of current organizational knowledge. Authors like Lee et al. (2016), Wiewiora et al.
(2013) and Moon & Lee (2014) have considered organisational culture as appropriate
management of knowledge because a major factor for sharing knowledge is organisational
culture. One of these works concluded that the more cultural systems in the workplace focuses
on sharing of knowledge, knowledge sharing level increases ensure a smooth management
system. Organisational culture ensures collaborations between individuals and teams, learning
and development as well as support from senior management (Islam et al., 2015).

The major influence of culture within an organization can be divided into six factors:
Leadership Influence: The leader has a huge role to play in the formation of organizational
structure. Leaders also set the organisational mission, vision and core values. In turn it shapes the
organizational structure, incentive systems, decision-making approach etc.
Organization size: Large businesses are more complex, therefore the dynamic business world
forces them to change their culture accordingly. They follow a more formal approach to
conducting operations, communications, policies and procedures.
Rewards or Incentives: Reward system is a huge part of an organizational culture. It is the
routinely paid commission or salary to the workforce of an organization.
Industry: Employee incentives sometimes vary based on which type of industry they are
working in. Some industries or markets are highly competitive and employees are expected to be
fulfilling specific roles. For instance: energy and pharmaceuticals follow regulations intensely,
whereas creative industries foster more team work, innovation and creativity.
Organizational Structure: This component of organizational culture requires a separate
discussion. Both of them really influence each other. A company with a strong culture will
require different policies and control measures than another company where authority is not that
centred. At the same time, a company with a flat hierarchy will adapt different methods of doing
things.
Work environment: Organizational culture is highly reflected in the work environment.
Physical offices, remote working, functional teams or teams working in seperate buildings, etc.
determine a lot about company culture.

When it comes to organizational structure, Chen et al. (2010) indicates that structural
components are relationship patterns drawn among people and departments, which facilitates the
access to implementable knowledge within an organization. As a result, the role of
organizational structure has been highly noticed by scholars as to how they help different
departments in knowledge, information and resource sharing. Organizational structure moderates
between innovation and knowledge management too. Moreover, it is categorised in three
components namely formalisation, centralisation and integration. The findings of Islam et al.
(2015) show that the first two elements stand for the relationship between organizational
structure and resource sharing. The argument of Kanter (1994) is that knowledge sharing
happens at the low centralised organisations.

5. Managing Teams, Workforce Diversity and Globalisation.

The 21st century is the time of more connectedness through technology and other advancements.
It is the age of globalisation that gave birth to numerous multinational organisations. These
companies need to manage cultural diversity, as the workforce integrates people from various
cultural backgrounds. As a multidimensional construct, diversity deals with the total amount of
variances among group members of a social unit. As per Cox (1991), diversity reflects the
differences in social and cultural identities of different individuals who work in the same work
environment. In recent times, diversity management has gained huge popularity in both local and
global level as this strategy helps a company gain competitive advantage by valuing differences
among diverse workforce. The interest and studies in diversity management shows that positive
job outcomes and job satisfaction is crucial to keep employees happy. It is also a crucial factor
for managers to consider because proper management of diversity ensures appropriate use of
organizational resources which contribute to raising efficiency levels. Diversity means
employees of different social and cultural backgrounds will work together, despite being of
different races, genders, ages, colours, ethnicities and physical capabilities. Diversity is highly
valued in global organisations because it is easier to respond to competition, shortage of labour,
changing demographics and workforce with a diverse workforce. An organization with
multicultural teams shows that there is a strategic drive behind that company which is well-
managed and focuses on quality to satisfy shareholders, workers, consumers and the
communities. Managing and motivating a multicultural workforce requires enough preparation,
training and development efforts. As a result, such companies achieve competitive edge by
determining, appealing and retaining highly skilled and experienced workers with maximum
productivity (Kundu, 2001).

Just having a diverse workforce is not enough, it is crucial to successfully manage that diverse
workforce to ensure an organization reaches its ultimate goals. The change in demographics is
forming a more older and ethnically diverse labour pool. As a result, all companies can grab the
same opportunity of increasing their workforce through recruitment and selection procedures.
Not every organization requires a diverse workforce, rather only those with enough learning,
skills and experience of managing such a labour force should own it. Proper management of
diversity means taking proactive efforts on all aspects of the organization, where members
effectively respond to rising challenges posed by diversity differences in teams. Simply leaving a
complicated situation will never work while trying to manage a multicultural workforce, rather it
needs a learning mentality while such issues occur within global firms. Managing a diverse
workforce helps companies to generate fresh ideas as the collective knowledge of all employees
affect the knowledge sharing process. Companies with diverse workforces with proper
management have improved abilities and more motivation for productivity, which helps a firm to
grow successfully. Current global companies are concerned with their public image. This image
can be enriched by decreasing the amount of lawsuits for disicrimination, and effective
inclusivity of diverse workforce can definitely help them in this process. Generally,
mismanagement of such diverse firms occur due to the social identity of individuals, as described
in the Social Identity Theory. The self-esteem issues and bias in individuals can lead to conflict
while working on a team setting. That is why managers must ensure proper diagnosis of diversity
to understand the organization's ability of managing a diverse workforce to improve efficiency
and learning (Plummer, 2003). Management of a geographically diverse team requires stronger
connections among team members, availability of resources to all team members and a
successful implementation of a project management system. Without trust and proper addressing
of cultural differences, it will not be possible for managers to embrace the obstacles and stay on
top with international team management.

6. The Concept of Learning Organisations

Developing an organization requires the use of intervention tools like organizational learning.
Learning develops the workforce and improves their capability of solving problems. In this
competitive era, companies should transform the workplace into an effective place where talents
can be optimised and aligned with business goals. It is a complex process based on strategies, but
the goal remains the same which is to increase performance by using learning principles. A
learning organization fosters developmental processes of skills and attitudes among employees to
have better intellectual capital, which provides them with sustainable competitive advantage.
Learning in an organization includes personal learning, critical and creative thinking abilities.
The Decision Support System (DSS) is used by top executives in organisations for future
decision making. This DSS framework turns implicit knowledge into explicit ones, and
facilitates speedy knowledge sharing within a firm. The similar idea was given the name
"Organizational Learning" by Argyris & Schon (1978). According to Senge (2006), learning
organisations allow people to enhance their capacities continuously to reach the goals they want
to reach, to nurture new thinking patterns with free collective aspirations. Watkins & Marsick
(1992) see learning organisations as a process that involves all employees to ensure collective
accountability and shared value principles.
According to Kerka (1995), learning organisations have six major characteristics. They
continuously provide workers with learning scopes and use learning to reach objectives. They
connect personal performance with organisational performance, support dialogue and questions
which facilitates open knowledge sharing and more risk-taking. Creativity is a major source of
renewable energy for such firms. Learning organisations are also conscious about the
environment and constantly communicate with the environment.
Learning organisations are also deeply committed to three major elements as told by Zacharias,
learning environment, learning process and practices; and leadership. They gather all types of
information from internal and external sources to evaluate and interpret it for problem solving
and trend identification. Organisations facilitate learning among the workforce through training
and development programs. As a result, employees are more confident in what they do and like
their company even more as job satisfaction increases. Satisfied employees means more retention
rate and less turn-over rate. New ideas and solutions bring in new innovation for the company,
giving them a competitive edge against market rivals. In order to become a learning organization,
a firm should consider if it is open to change, its current learning culture and gaps, willingness of
senior leadership for transformation etc.

7. Conclusion
The organizational management theories have evolved a lot since the early 20th century. This
report explores the earlier versions of management theories, concepts, models and evidence and
investigates how modern theories are different from the old ones. The major difference in the
perspective of classic and modern management theorists is the focus on the human capital, their
job satisfaction and individual behaviours, which affects the companies as a whole. At present
times, a good workplace should have a good incentive and reward culture that motivates the
employees to improve their own skills and also help the organization to reach its long-term goals.
In addition, the report also focuses on the current global business work and its diverse labour
force management. When managers can handle a diverse and multicultural workforce efficiently,
it can facilitate creativity, innovation and successful teamwork.
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