The downturn in Aussieco’s performance is mainly due to issues with the company’s management and organizational behavior. Organizational Behavior refers to ‘the understanding, prediction and management of human behavior in organizations’ (Luthans,2010). It is the study of individuals and their behavior in a work place. A company’s performance and outcome largely depends on its organizational behavior as it is an interdisciplinary field that includes sociology, psychology, communication and management.
Aussieco’s organizational behavior issues can be explained through Henri Fayol’s 14 management principles. Henri Fayol’s theory of administration and organizational behavior focuses on the personal duties of management and managerial effectiveness which aussieco lacked. (Fayol,1971). The company has inexperienced staff and no specialization as major high authority staff is friends and family without skilled knowledge. The executive managing director is the owner’s nephew with no practical or industrial experience. The production supervisor is the production manager’s best friend who has little knowledge of the daily production tasks as he is a carpet fitter by qualification. Employees at the operative level are migrant labor mostly lacking formal qualification. On diversification, management failed to understand the changing market needs.
Aussieco follows the power culture where control is centralized. The major motivational or driving force is fear (Luthans,2011). Suggestions and personal preferences are not welcomed. The