Organizational Behavior, by definition, is the study of human behavior, attitudes, individual differences, and performance in organizational settings. Understanding the internal and external forces within an organization is important to the success of any business. The internal and external forces that are to be understood are restructuring, economy, competition, fiscal policies, organizational mission and globalization and economy. Economic factors for an educational institution are greater than is generally thought. Internal and external economic issues affect continued success and profitability of the organization. Receiving no tax monies, private educational institutions depend solely on students for their income stream.
Economic forces affecting educational forces usually work in reverse of the current economic conditions present in the private sector. As the economy worsens on a national level more people consider returning to school. As a general rule enrollment standards during periods of economic slumps tend to increase as schools tighten admission requirements to admit only the most qualified students. Although outside economic forces on private educational institutions are minimal, internal forces on the University of Phoenix prove to be of greater impact on the profitability of the parent organization.
Private organizations respond to internal economic forces by limiting expenses due to the fact that limited funds and controllable expenditures are the most easily manipulated items in any budget. Many organizations feel that salaries are the greatest controllable cost for the organization. However, “Colleges are faced with 3 types of costs: 1. uncontrollable costs, which include utilities, books, supplies, and equipment, 2.
controllable costs, which include wages, salaries, and contracted services, and 3. mixed costs, which include employee benefits and employment taxes. ” (Bernard & Beaven, 1985, 78) The University of Phoenix feels that reducing staff and therefore reducing salaries is counterproductive. Reducing staff levels inhibits the universities ability to service students and lessens the likelihood that students will complete the educational goals and graduate with the degree they desired. The University of Phoenix and the parent company The Apollo Group approach the subject of economic forces as opportunities.
By increasing staffing and visibility in the markets and providing options for education, the University of Phoenix feels that they are able to increase their market share and reduce the effect of both internal and external forces. The system seems to be working for the university; it has grown to be “the nation’s largest accredited university; with over 17,000 highly qualified instructors, 170 campuses, and Internet delivery worldwide students”(University of Phoenix, 2005) and continues to grow at a rapid rate. There is one aspect of life that is difficult to accept and that is change. Whether it is change of job, change of residence, or change of relationships, ultimately the process is stressful. Recently, my administrator resigned to take another position in our sister-facility. For the most part, the management team was ecstatic.
She had exhibited weak management skills and was not a good leader. With this change came the hiring of a new administrator. Everyone was pleased and hopeful that he would be able to make some necessary changes that had been requested for the past four years. After his 2nd week on the job, the new administrator (I will call him Mr. Jones), began to make some changes by restructuring the mission and goals of the entire facility.
To address the internal forces he let the management team know that the facility was financially weak and that the team needed to become creative and innovative about how we could pull together and begin to make a profit. Recognizing that we were going backwards rather than forwards, Mr. Jones set about to map out a future that represented success and financial solvency for the first time in the history of the 39 year-old facility.
To quote the text, Organization Behavior, “When mangers fail to monitor their environments, recognize important trends, or sense the need to change, their organization may slowly suffer and lose the competitive edge. ” Schermenhorn, Hunt, and Osborn (2005). The internal forces that were becoming roadblocks for Mr.Jones and our team to succeed were fear of the unknown, fear of loss of power, no reason to change, and habit (p. 34). The external forces that were making it necessary to restructure were the families, patients, doctors, and hospital.
