This is the 2007 version. Click here for the 2017 chapter 15 table of contents.

Organizational Psychology

Industrial/Organizational psychology also includes the study of organizational and management structures. From about the 1950s through the 1970s, organizational psychology concerned itself with "the organization" and how it was structured. This meant analyzing charts that showed who supervised whom and how information or material resources flowed around the organization.

Toward the end of the 20th Century, however, organizational psychologists paid more attention to organization as a verb rather than as a noun. As a verb, organization is the act or process of organizing. Rousseau (1997) argued that this second meaning of the word is potentially richer in meaning. It brings up a whole set of topics relevant to the formation and function of work groups, networking, communicating, goal setting, and adjusting to the flexible demands of today's working environments.

How is the emphasis changing, in organizational psychology?

How are leadership styles changing?

Among the interests of organizational psychologists are new patterns of leadership in corporations. Historically, the boss was somebody to be feared, and workers simply followed the boss's orders. The new breed of manager that emerged in the late 20th Century was less dependent on trappings of authority and made less effort to stand apart from the worker. Supervisors made more effort to learn from workers as a way of improving the way a company functioned. For example, in a manufacturing plant, workers would be encouraged to suggest modifications and improvements. Usually the workers are in a better position to know "what needs fixing" than a manager in an office. Sometimes contests were held to reward the idea that resulted in the most savings.

What was the ideal of the "One-Minute Manager"?

The new model of an ideal boss can be traced to the early 1980s and such publications as The One Minute Manager (Blanchard and Johnson, 1982). The effective manager, Blanchard and Johnson argued, was neither a pushover nor a tough-as-nails authoritarian type. Rather, an effective manager was a person who set limited, realistic goals for subordinates...then got out of the way. If the job was well done, workers received praise in relatively brief meetings (one minute a week) where new goals could also be outlined.

What is self-management?

By the 1990s, many companies were experimenting with management styles in which employees not only made suggestions for bettering the workplace but also set their own goals. Self-management became a much-used term (Rousseau, 1997). A typical implementation of this idea involves splitting the work force into teams, each oriented toward a problem. The teams meet once a week to examine results and adjust their goals.

Variations of self-management have been used for years in American colleges and universities. An example is the self-study carried out every ten years by the Psychology Department at our campus. Our self-study is an exercise in bottom-up self-management. It includes the following steps:

How is self-management used in a Psychology Department self-study?

—We meet and review the larger institutional goals. In our case, our university is defined by the larger state university system as a regional university which seeks to define and meet special needs of the region, so we have to analyze those and how they may have changed since the previous self-study.

—We define our departmental objectives, spelling out what skills and abilities we hope our students will take away from their course work in the psychology department. Objectives are defined for each course.

—We gather data about how well we are meeting those objectives, and how we might improve our performance. We design questionnaires for students, faculty, and recent graduates, asking them for feedback and suggestions for improvements.

—We define goals for ourselves, spelling out changes we would like to see in the next few years and how we would measure them.

During this entire process, we are never once told by a "superior" how we must behave, individually or as a department. We figure it out for ourselves, although the resulting document must meet certain guidelines and must be approved by higher-ups in the organization. Self-direction is possible because we have a fairly good idea of what psychology departments are supposed to do, and we can be realistic about what we are capable of doing with the resources at our disposal. We are self-managed in this process, and it works. Increasingly, this type of management style is used outside academia, in other organizations.

Every company has its own culture, and this corporate culture can determine whether employees are satisfied or disgruntled. Executive Mort Meyerson tells how he returned to Ross Perot Systems in 1992, after five years away from the company, and found a poisonously negative corporate culture:

How did Meyerson attempt to improve the corporate culture at Ross Perot Systems?

For example, I listened to some of our senior leaders talk about how they handled people on teams who didn't perform. I heard talk of "drive-by-shootings" to "take out" nonperformers; then they'd "drag the body around" to make an example out of them. They may have meant it only as a way of talking, but I saw it as more: abusive language that would influence behavior. Left unchallenged, these expressions would pollute the company culture. (Meyerson, 1997)

In response, Meyerson started programs to make workers feel respected and valued.

What programs were instituted as a result?

We initiated a company-wide program to teach us how to disagree with each other without tearing each other down... During these seminars, we identified people who were abusive. We coached them and took them through a person reinvention process to show them new ways of leading... We started to behave like a company whose people not only focused on day-to-day business and economic performance, but also concerned themselves with the well being of the people on their teams and the concerns of their customers. We were becoming a company where the larger issues of life were as important as the demands of profit-and-loss performance. (p.6)

What are some benefits of a people-centered management approach?

A compassionate or people-centered management approach turns out to be beneficial for all concerned. Naturally the workers like it, but there are many benefits for the company as well. Morale is higher, and employees are less likely to sabotage the company with unproductive practices. Customers feel better treated, and turnover rates are lower because fewer employees quit, so expertise is conserved and training costs are reduced.

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