Organisations are an increasingly dominant part of our life. The hospital where we (typically) are born; the schools and universities where we learn about the world; the workplaces where we earn our living; the stores, theatres, restaurants, sports arenas and other places where we spend our money; and the retirement village or hospital where we (typically) come to the end of our life, all impact us in many direct and indirect ways. It is therefore important that we understand how they work, and how they might be made to work better.

People are an important part of all organisations and research suggests that how people are managed is a key factor in determining whether it will prosper or fail. Contributing to this outcome is the view that traditional sources of competitive advantage for organisations are becoming less influential. Access to financial resources, product and process technologies, protected or regulated markets, and economies of scale, used to be the most critical sources of competitive advantage. But in an increasingly global economy, where tariff barriers are coming down, where money flows easily between large companies, where innovations are put to use very rapidly, and where computer-aided design and manufacture allows small batch production, these traditional sources of competitive advantage are not as vital as they used to be.

Although most organisations recognise that it is important to manage their people well, doing so is not a straight-forward task. Developing the right organisational culture, for example, is much more complex than, say, changing a manufacturing method or a marketing channel. This is because organisational policies and processes are interlinked and just changing one or two of them is generally ineffective. A related challenge is the impact of change itself, where resistance often arises from various subgroups within the organisation who have a vested interest in maintaining the status quo.

In a world that is dominated by the presence and influence of organisations, the ability to effectively manage people within them is an incredibly valuable skill. This unit therefore seeks to develop students’ understanding of the factors that influence organisational effectiveness. It does so by focusing on three key aspects of organisations – the behaviour of individuals, groups and the broader organisational system.