MBA 531 – Organizational Behavior – Analysis of XYZ Company 1

ANALYSIS ON XYZ COMPANY’S PERFORMANCE PLUMMET

(Assignment)

By

A. Mendis

Semester I – First Half

15th February, 2010

Course: MBA 531 – Organizational Behavior

MBA 531 – Organizational Behavior – Analysis of XYZ Company 2

Summary

XYZ Company’s profits are solely based on its sales volumes. In the recent past the sales
reports recorded a slump in the figures. Market conditions are favorable for the products and
it has been identified the reason for sales drop is the low motivation and morale of the
employees. Superiors are facing difficulty to manage day today work as employees have
developed a habit to go on unplanned unapproved leave. Some of them notify their superiors
or a colleague on the day of the leave and some never. Sabotage acts have created mistrust.
Integrity in the organization has become a thing in the past. The latest developments were the
clashes between superiors and subordinates reported by the human resources to the CEO
showcasing the infested relationships within the organization.

This report evaluates the on going crisis of the XYZ Company, the reasons for such behavior
from organizations and individual point of view based on the theories in organizational
behavior. Recommendations to overcome this challenging situation will be suggested using
the results proven concepts and theories in the field.
MBA 531 – Organizational Behavior – Analysis of XYZ Company 3

Literature Review

MARS Model
McShane, S. L. , Glinow, M. A. V., Sharma, R. R.(2008) uses the MARS model to explain
the drivers of individual behavior and results. The authors have used this to highlight the
factors influence the individual’s behavior which results in the performance. The four factors
are Motivation, Ability, Role Perception and Situational Factors. The model explains the
combined effect of these factors for the performance of an individual.

Big Five Personality Traits

Costa & McCrae, (1992) explained the five traits of personality which have been
scientifically discovered to define human personality. This model explains the positive
relationship of the five characteristics and performance, motivation and job satisfaction.

Schwartz’s Values Model
Shalom Schwartz (1992, 1994) used his 'Schwartz Value Inventory' (SVI) with a wide survey
of over 60,000 people to identify common values that acted as 'guiding principles for one's
life'. He identified ten 'value types' that gather multiple values into a single category.
The values namely are Power, Achievement, Hedonism, Stimulation, Self-direction,
Universalism, Benevolence, Tradition, Conformity, Security, Super-grouping. They can also
be collated into larger super-groups namely Openness to change ( Stimulation, self-direction
and some hedonism) , Self-enhancement(Achievement, power and some hedonism)
,Conservation (Security, tradition and conformity) and Self-transcendence( Universalism and
benevolence)

Employee Engagement
McShane, S. L. , Glinow, M. A. V., Sharma, R. R.(2008) defines employee engagement as
“Employees’ emotional and cognitive (rational) motivation, their ability to perform their jobs,
their possessing a clear understanding of the organization’s vision and their specific roles in
that vision and a belief that they have been given the resources to get their jobs done”.
MBA 531 – Organizational Behavior – Analysis of XYZ Company 4

What is happening?

If XYZ company challenges were to analyze many years ago, according to Theory X
assumptions, by the scholar Douglas McGregor, a pay revise, ensure security of the job or a
favorable working conditions (Luthens, Fred, 2008) would have been recommended to boost
up the morale and increase the productivity of employees. Many research has identified
people are extremely complex, and theoretical understanding & empirical research is needed
to, implement solutions in order to manage people effectively.

As Sir Richard Branson, Chairman, Virgin Group, says “Engaged employees create loyal
customers who in turn create bigger profits”. From the description given on the
characteristics of the employees at XYZ, it is obvious employee engagement does not exist in
the slightest way resulting sales drops caused by poor performance.

Employee engagement is described in the book Organizational Behavior by McShane, S. L. ,

Glinow, M. A. V., Sharma, R. R.(2008) that the concept refers to, “Employees’ emotional
and cognitive (rational) motivation, their ability to perform their jobs, their possessing a clear
understanding of the organization’s vision and their specific roles in that vision and a belief
that they have been given the resources to get their jobs done”. As stated in the literature
review reasons or drivers for different individual behaviors have been in the focus of
organizational behavior experts.

Experts have identified the main factors influencing the individual behavior as Motivation,
Ability, Role Perception and Situational Factors defined in the MARS model. The model
says the four factors have a combined effect on individual’s good or poor performance. These
four factors are influenced by individuals’ variables such as values, personality, perception,
emotions and attitudes and stress. The most stable important variables in the model are the
personality and values (McShane, S. L. , Glinow, M. A. V., Sharma, R. R.(2008)). Then the
importance comes as perception, emotions & attitude and stress respectively.

The main challenge XYZ company is facing at present is the low morale and low motivation
of the employees which has been affected the individual performance and thereby the
company’s performance resulting sales drops.
MBA 531 – Organizational Behavior – Analysis of XYZ Company 5

Motivation can be either intrinsic or extrinsic. The intrinsic motivation is an incentive to do

something that arises from factors within the individual, such as a need to feel useful or to
seek self-actualization. These factors can vary from individual to individual. Then the
extrinsic motivation is an incentive to do something that arises from factors outside the
individual, such as rewards or punishments. The promise of a bonus if one meets agreed
performance targets is an obvious example of such motivation. In this case, with the given
context, the employees’ motivation has become low. Therefore it can be assumed that XYZ
Company’s employees’ intrinsic or extrinsic drive or both have diminished at present. First
factor adversely influencing the individual behavior and results of XYZ company in MARS
model is Motivation.

According to the context of the XYZ Company it is assumed that its cadre is skilled and
competent to do each of their roles. This can be made under the assumption of XYZ’s sales
figures had been superior in the past. As a result, the factor ‘ability’ in the MARS model is
present in XYZ Company.

Further employees’ morale or the dictionary definition, self-confidence or self-esteem or

spirit(s) or team spirit or enthusiasm is low. In management subject point of view employee
morale is how employees actually feel about themselves as workers, their work, their
managers, their work environment, and their overall work life. It incorporates all the mental
and emotional feelings, beliefs, and attitudes that individuals and groups hold regarding their
job. It could be seen that employees’ perception on what they how they do and to whom they
do is distorted and unfavorable. This can be seen in MARS model point of view that another
factor namely the individual’s role perception is weak or in danger in XYZ Company.

XYZ employees at different levels experience difficulties to carry out their jobs. Assume the
company still posses an engaged supervisor, and he / she does not get the support from the
subordinates to perform his/she job. On the other hand assume an engaged sales officer does
his job and he is unable to complete is job if his / her supervisor is absent. Therefore the
situational factors are not in favor of the XYZ Company individuals.

In summary, XYZ Company’s employee behavior displays that there are issues in areas of
motivation, role perception and situational factors. MARS model says, the four factors
(Motivation, ability, role perception, Situational factors) have a combined effect on individual
MBA 531 – Organizational Behavior – Analysis of XYZ Company 6

performance. (McShane, S. L. , Glinow, M. A. V., Sharma, R. R.(2008)) Further it says if any

factor weakens there will be an impact to employee performance in a negative manner.
Figure 1 depicts what has happened to XYZ Company in the purview of the MARS model.

Individual Characteristics

Values Motivation Situational Factors

Personality
Perceptions Ability

Emotions
& Individual Behavior & Results
Attitudes Role Perception
Stress

Decreased Performance

Figure 1. MARS model of individual behavior and results for XYZ Company
MBA 531 – Organizational Behavior – Analysis of XYZ Company 7

Reasons for weakened motivation, role perception, situational factors

It is of great importance to evaluate the reasons for issues in the areas of motivation, role
perception and situational factors. MARS model indicates the individual characteristics
which influence the four factors as values, personality, perception, emotions, attitudes and
stress. Out of these factors the two deeply held characteristics of people that influence their
attitudes, motivation and behavior and therefore it is vital to study XYZ companies values
and perceptions in detail as a measurement to understand why these things happen at the
organization.

Personality
‘A person’s personality is like all other people’s, like some other people’s, and like no other
people’s.’ This statement was made by kluckhohn and Murray and it explains how complex
and diverse a personality is. The experts say heredity, the brain, environment, maturation and
learning contribute to the formation of human personality. These complex characteristics are
simplified in The ‘Big Five’ personality traits. Research shows a positive relationship
between the ‘Big Five’ and performance motivation and job satisfaction. Figure 2 analyzes
the XYZ employee personalities as specified in ‘Big Five’ core personality traits.

Core Trait Characteristics of High Scorers XYZ individuals Score

Conscientiousness Dependable, Hardworking, organized, Low
self-disciplined, persistent, responsible Needs attention
Emotional Stability Calm, Secure, Happy, unworried Low
Need attention
Agreeableness Cooperative, warm, caring, good- Low
nurtured, courteous, trusting Needs attention
Extraversion Sociable, outgoing, talkative, assertive, OK
gregarious
Openness to Curious, intellectual, creative, cultured, OK
Experience artistically sensitive, flexible,
imaginative

Figure 2. The ‘Big Five’ personality traits and XYZ Company’s standing
 MBA 531 – Organizational Behavior – Analysis of XYZ Company 8

Experts have proved that the most important trait of the five, which has a strong positive
relation to performance, is conscientiousness. The background of XYZ Company shows the
negative set of characteristics from individuals for the most vital trait, the conscientiousness
for high performance.

Values
“Employ the whole person, the mind and the soul” (McShane, S. L. , Glinow, M. A. V.,
Sharma, R. R.(2008)) Tom Chapell, the co-founder of Tom’s of Maine, speaks about
importance of values of an individual to an organization. Values are the stable evaluative
beliefs that guide our preferences for outcomes or courses of action in a variety of situations.
XYZ’s individual behavior actions at different circumstances are evidence for adverse set of
personal values among individuals. Although it is necessary to conduct a survey among
employees to come in to a accurate picture of the individual value distribution for the
different values identified by S.H. Schwartz, with the individual actions at XYZ company it
can be identified the majority of the individual values fall in to the colored area (Blue Lines)
of the Schwartz’s Values Model depicted in Figure 3.

Self-transcendence

Openness to Conservation
Change

Self-enhancement

Figure 3. Schwartz’s Values Model and XYZ Company’s behavioral study

MBA 531 – Organizational Behavior – Analysis of XYZ Company 9

Ethics
Ethics is defined by the dictionary as a branch of philosophy dealing with values relating to
human conduct with respect to the rightness or wrongness of certain actions.

As mentioned earlier humans are complex and ethics is based on their values, perception and
attitudes making the problem of ethics too complex. People perceive things in different ways,
but most people agree that ethics involves a lot of common sense. (People's ethical standards
are often based on values instilled in them in their youth, and in their environmental
background. As the definition says ethics deals with individual values, XYZ Company’s
ethics can be assessed based on the Schwartz’s Values Model distribution (Figure 3.). Among
XYZ individuals it is often observed disturbing actions for the daily activities of the
company. Some of the ethically deficient behaviors are unplanned leave without notifying,
conflicts, loss of integrity and acts of sabotage. Therefore, since these actions are hindering
the company performance this behavior can be seen as unethical self conduct, among groups
of people in the organization. As Figure 4. depicts when observed the XYZ’s individuals,
considering the three principles of ethics it can be derived that the interest is towards ‘My
interests’ and ‘Our interest’, but not ‘Everybody’s interest’, in other words not Company
interest.

Utilitarianism
Distributive Justice (Group)

Individual Rights

Figure 4. Ethical Principles standing at XYZ Company

Revisit To the Outcome of Applied Theory To XYZ Company

MBA 531 – Organizational Behavior – Analysis of XYZ Company 10

In Summary, from the MARS model it, it says in the given context of XYZ Company, it has
issues in Motivation, Role Perception and Situational Factors. It was considered that the most
important factors to affecting performance are Values and Personality. When analyzed the
personality in detail, the Big Five personality trait showed that the employees has low score
characteristics for the core traits namely Conscientiousness, Emotional Stability and
Agreeableness. In the area of values XYZ company employee displayed strength in openness
to change qualities defined as Stimulation, Self-Direction and Hedonism. In the same way
they had the strength in self-enhancement defined as Achievement and Power. The ethical
principles analysis showed that the employees are only interested in themselves and the group
they are in but not the company.

Recommendations
MBA 531 – Organizational Behavior – Analysis of XYZ Company 11

Therefore XYZ company has a talented set of employees who has a high ego and talent
who’s values are not aligned with the company values. Value motivated workforce is more
long lasting than a incentive motivated workforce. They are proven to be more engaged.
Starting from the company values ethics should be considered as a vital component for
success. The ethical values of the company should be shared with the employees and those
should be implanted in them. As David M. Taylor is a professional engineer, says companies
having shared values that are consistently modeled within the organization results in:

Employees focused on what is important to the organization

Less stress on individuals ,Less tension between individuals and departments

Enthusiasm in the workplace , Pride in work , Direction in the workplace

Less bureaucracy , Positive attitudes , Positive momentum

Examples of companies that did not have proper alignment around a value system and paid
the price in the marketplace;

WorldCom , Enron , Bre-X

Examples of companies that have built themselves around their values;

Disney , Home Depot , Walmart , Starbucks

Some suggested morale-boosters for the high talented employees suggested by

Morale Encyclopedia of Management
Practicing of fairness and consistency ,Bestowing praise in public while leveling criticism in
private , Encouraging humor and fun in the workplace, Communication ,Listening and
remaining receptive to new ideas , Getting to know something about employees' personal
lives and treating them as individuals, Creating opportunities for employees to learn and
grow, Sharing decision making and offering employees choices, Promoting from within, and
most importantly Leading by example.

Reference
MBA 531 – Organizational Behavior – Analysis of XYZ Company 12

Luthens, F. (2008). Organizational Behavior, Irwin: McGraw-Hill/Irwin Companies, Inc.

McShane, S. L. , Glinow, M. A. V., Sharma, R. R.(2008). Organizational Behavior, New

Delhi: Tata McGraw-Hill Publishing Company Limited.

Draft R. L. (2009). Principles of Management, New Delhi:Cengage Learning India Private

Limited.

'Behavioral Coaching' by Zeus and Skiffington -published and copyrighted by McGraw-Hill,

New York

Holmquist, D. (1993). Ethics--How important is it in today's office?. Public Personnel

Management, 22(4), 537. Retrieved from MasterFILE Premier database.

Taylor, D. M. (2008, June 11). Values in the Workplace. Retrieved February 10, 2010, from
http://ezinearticles.com/?Values-in-the-Workplace&id=1242121

Straker, D. “Schwartz's Value Inventory” Changing Minds Org. 2006. Retrieved February 10,
2010 from Changingminds.org:
http://changingminds.org/explanations/values/schwartz_inventory.htm

"intrinsic motivation." A Dictionary of Business and Management. 2006. Retrieved February

10, 2010 from Encyclopedia.com:http://www.encyclopedia.com/doc/1O18-
intrinsicmotivation.html

"extrinsic motivation." A Dictionary of Business and Management. 2006. Retrieved February

10, 2010 from Encyclopedia.com:http://www.encyclopedia.com/doc/1O18-
extrinsicmotivation.html

"morale." The Oxford Essential Dictionary of the U.S. Military. 2001. Retrieved February 10,
2010 from Encyclopedia.com:http://www.encyclopedia.com/doc/1O63-morale.html
MBA 531 – Organizational Behavior – Analysis of XYZ Company 13

"Morale." Encyclopedia of Management. 2009. Retrieved February 10, 2010 from

Encyclopedia.com: http://www.encyclopedia.com/doc/1G2-3273100191.html