HR Assignment essay help overview analysis:: Dissatisfaction in Organization. Hirschman responses
Question Proposed??
Dissatisfaction in Organization & Hirschman responses
Solutions Proposed::
Introduction:
As a response to the decline of firms, big organisation and even states Albert O. Hirschman designed the theory of exit, voice and loyalty thirty years ago (Hirschman, 1970). There are a large number of applications of the theory in the field of economics and even social sciences and leads to positive enrichment.
Reaction in case of dissatisfaction can be in two distinct ways exit and voice. Exit occurs in a situation where a buyer or a supplier, or we can even say one or more members of a firm is dissatisfied either because of the purchase and sale or the relationship and decides to shift from one product to another , or change the client or the organisation. Exit is a very indirect and private way of showing that something is wrong and is based on individual outlook like when an organisation experiences a decline in its sales or there is a high employee turnover in the firm it has to revise its production plan in order to avoid decline (Hirschman, 1970:21-29). In some case Voicing is required as when one or more than one suppliers, buyers, or member of an organisation make complains to their counterpart or the management of the organisation to make changes so that the cause of dissatisfaction is eliminated and the organisation becomes suitable to work in. So, we can see that voice is a direct and more informative way of providing signal to the problems faced (Hirschman, 1970: 30-43). In a competitive market exist is a more feasible and typical reaction as compared to voice as it is a more costly medium and is exercised only when either exit is not feasible or is more expensive in economic terms or emotional and social terms. For example when one has to leave his family and country, and in some cases voicing can be done by an individual like a client protesting in case of delay in supply, but many times it also needs a collective response like in case of the salary being claimed by the workers in a union (Freeman and Medhoff, 1984), and even in case where expressing it requires the involvement of some private or public institution (Hirschman, 1987: 219; 1995: 12).
The ease in exit leads to reduction in the chances of practising voicing which could have been more effective in many cases (Hirschman, 1970: 44-45). When you have exercised exit then voicing as an option is not available. The other outcome is termed as loyalty by Hirschman which is defined by him as the factor that influences the outcome rather than the outcome itself (Dowding, John, Mergroupis and Vugt 2000:447). Loyalty is an important factor that affects the course of action chosen by an individual in case of dissatisfaction as to whether he will exit or continue to work in the firm and voice the problems faced by him. In case of loyalty Hirschman believes that those people who are loyal to the organisation will opt for voicing option and others will choose the exit option. The expectation on behalf of the customer regarding the influence their voice will have on the supplier also decides whether he will opt for voicing or exit. Loyalty in a way holds exit and activates voice.
Hirschman says that in cases where the entry cost is high the people cease to choose exit as an option as they had paid heavily to entry the industry rather would raise their voices in a more assertive manner, similar would be the result in case the exit cost is too high.
RESPONSES IN CASE OF DISSATISFACTION
When exit is taken as an option:
1) Exit and Voice: In this case the person exits the organisation and then also keeps complaining about the bad experience and even communicates it to the employer.
2) Exit and Silence: The person leaves the organisation without telling anyone about the reason of such an action. It is usually done because the individual does not want the reason to be detected by the other people to avoid mass exit (Kolarska & Aldrich, 1980).
When they choose to stay in the organisation:
1) Stewardship: The person tries to voice his reasons of dissatisfaction in the expectation of improvement (Gorden 1988: 285).
2) Sabotage: When the person who is dissatisfied tries to use his voice in destruct like complaining to the other workers, getting verbally aggressive, bad mouthing.
3) Resignation: As Hirschman has always stressed on maintaining a balance between voice and silence in an organisation, so resigning would have a moderate effect of voice as well as exit both it won’t be too strong (Farrell, 1983).
4) Neglect: The individual chooses the option of waiting till the things go out of control or unbearable one can say (Rusbult et al, 1983). It sometimes leads to virtual withdrawal or apathy. The person starts to work just for the heck of it without any commitment to the welfare of the organisation..
EXAMPLE FOR APPLICATION OF THE THEORY
Cooperative workers organisation
The worker cooperative is an organisation which is collectively owned and managed by the employees of the organisation themselves, and due to co-ownership and high degree of participation in the decision making process of the organisation results in increased level of loyalty on the part of the employees. So we can say that the employees of a cooperative organisation are much more loyal as compared to the employees working in the conventional business place, this is due to two main reasons, firstly may be due to the ideological commitment on the part of the employee and secondly may due to the high buy in cost i.e. the capital invested in order t o enter the business and sometimes both the reasons are responsible. Granting ownership alone does not generate high levels of loyalty like the employee stock option plans, the management has to introduce the concept of collective ownership and increased worker participation to induce high levels of loyalty (Cornforth, Thomas, Lewis and Spear 1988). In case of cooperative workplace high degree of loyalty can sometimes lead to greater expectation and which would result in the increase in the level of dissatisfaction (Rothschild and Whitt 1986) generally some of the portion of the members of the organisation are selected by themselves (Rothschild and whit 1986; Hoffmann 2005). The decision to work together and create a cooperative workplace leads to creation of loyalty before the actual employment has begun. The worker who join the organisation afterwards and have entered the organisation with less commitment and loyalty will gain such sentiments soon. The experience of having greater freedom to participate in the managerial decision making process will make a new entrant in the organisation a well commitment and highly loyal staff member (Jackall and Levin 1984). So when the level of loyalty is high voice as an option is exercised more and not exit. This application of the theory has been proved with the help of research conducted in the Taxi Cab industry and responses of both the members of private cab and cooperative cab were taken into account and their behaviour was evaluated in accordance with the theory.
Taxicab Industry
In the research it was found out that most of the members of the cooperative cab utilised voicing as a way to handle grievances and considered having a informal or formal discussion of the problems being faced can be a solution whereas in case of the members of the private cab didn’t usually laid stress on communicating their problem rather considered exit as a very good option. The private cab members were also of the view that it has not got a long term career potential, but in spite of lack of long term career potential and low entry and exit costs the coop cab members were loyal to their profession and did not want to quit.
RECOMMENDATION
In case of application of the theory in labour economics and management the model can be termed to be very basic without providing any space for discussion on the theoretical debates. The stress is put on exit and voice is kept as a collective expression through unions (Dowding et al., 2000: 486).
Hirschman has taken into account the high entry and exit cost while a person decides to voice or exit as a response to the dissatisfaction and has ignored the fact that no industry can exist in isolation so the other employment opportunities available to the employees of the organisation also has an effect on their decision to exit or voice.
All the units in an organisation are considered to be homogeneous in the research whereas it is not true in real case scenario.
There are certain industries that have self-sacrificial type of loyalty, like teaching and nursing (Abel and Nelson 1990; Grimwood and Popplestone 1993). When this type of loyalty exists it may not have the same pattern which has been described in the research of Hirschman.
The research stress on the fact that when high level of loyalty exist the rate of employee turnover is whereas it is not the case as reduction in the turnover level require the application of constant motivational techniques on the part of the organisation so that the employees get committed to the company and do not choose exit as an option in case of dissatisfaction.
In the model Loyalty is termed as a form of behaviour whereas exit and voice are considered mutually exclusive. It is also said that these finding are primarily dependent on cross sectional analyses and are not able to solve the problems of temporary nature.
Analysis is done of the reported behaviour rather than the actual behaviour.
CONCLUSION
The EVL model of Hirschman in spite of the fact that it suffers from some limitations has made a great contribution in the field of economic theory and the fact has been approved by many researchers. The contribution of Hirschman has been termed as the only book that fits to the rank with Downs’ Economic Theory of Democracy (1957) and Olson’s Logic of Collective Action (1965), according to Barry (1974). In accordance to him, it helped the stretching of economic approach beyond the conventional topics. Each term in the theory is addressed to a specific domain. The economic analysis lays stress on the exit i.e. employee turnover in a firm and reduction in buying of products by customers. The political dimension was added to the analysis by the study of voice (Kolarska & Aldrich, 1980: 42), whereas the study of loyalty introduced the socio-psychological dimension to the model. So it is clear that the model can be applied to various fields of research.
The social-psychological literature applied the model to attain a deep understanding of the interpersonal and intergroup relations (Dowding et al., 2000). The main finding of the study which was of great help was the addition of the fourth element to the EVL model which is neglect, and introduction of the idea that a response to dissatisfaction can be passive/active, or destructive/constructive. The theory will be of great help in the future research as well.
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