MANAGEMENT AND BEHAVIORAL PROCESS

Sub Code: 08MBAHR341

MODULE-1
Management: Introduction: Definition of management, nature, purpose and functions, level and
types of managers, Manager/Non-Manager, Managerial Roles, Essential Managerial Skills, Key
personal characteristics for Managerial success. Evolution and various schools to management
thoughts, continuing management themes quality and performance excellence, global
awareness, learning organization, Characteristics of 21 century Executives. Social responsibility
of managers
MODULE -2
Planning: Meaning and nature of planning, types of plans, steps in planning process; Objectives:
meaning, setting and managing objectives MBO method: concept and process of managing by
objectives; Strategies: definition, levels of strategies, its importance in an Organization;
Policies: meaning, formulation of policies; Programs: meaning, nature; Planning premises:
concept, developing effective planning premises; Decision making, steps in decision making,
approaches to decision making, types of decisions and various techniques used for decision
making.
MODULE-3
Organizing: Organizing as managerial function organization structure, formal and informal
organization. Traditional Organization Structures Functional, Divisional and Matrix Structure
Directions in organizational Structures Team structure, network structure, boundary less
structure Organizing Trends and Practices Chain of command, unity of command, span of
control, delegation and empowerment, decentralization and use of staff, organizational design
and organizational configuration.
MODULE-4
Leading as a function of management, Leadership and vision, Leadership traits, classic
Leadership styles, Leaders behaviour Likerts four systems, Managerial Grid. Overlapping role
of leader and managers. The organizational context of communication, Directions of
communications, channels of communication, Barriers to communication. Motivation and
rewards, Rewards and performance. Hierarchy of need theory and two
factory theory. Integrated model of motivation.
MODULE-5
Controlling: Control function in management, The basic control process. Types of control feed
forward, concurrent and feedback controls. Factors in control effectiveness.
MODULE-6
Organizational behavior: Introduction, definition, goals, elements, historical development of
Organizational Behaviour, fundamental concepts, contributing disciplines to OB, Models of OB,
social systems and organizational culture, international dimensions of organizational behaviour,
limitations of Organizational behaviour, the future of OB.
MODULE-7
Individual behaviours: Introduction, foundation of individual behavior:
Personality: definition, determinants, personality traits, types, from concepts to skills, theories,
instruments to measure personality, personality attributes influencing OB
Perception: meaning, factors influencing perception, theories, perceptual errors
Emotions: meaning, types of emotions, determinants, emotional labour, emotional intelligence.
Attitudes: definition, sources of attitudes, types of attitudes, cognitive dissonance theory, from

concepts to skills, changing attitudes, work related attitudes.

Values: definition, importance of values, sources of our value systems, types of values, loyalty
and ethical behavior.
Learning: definition - theories of learning - some specific organizational applications.
MODULE -8
Behaviour in the organization: Introduction, Issues between organizations and individuals:
conformity issue, rights of privacy, discipline, individuals responsibilities to the organization.
Interpersonal behaviour: Conflict in Organizations: nature of conflict, levels of conflict, conflict
management styles.
Group dynamics: types of groups, meetings, teamwork, stages of group formation.
Employee stress: forms, causes, implications, approaches to stress management.
MODULE 1
Management: Introduction: Definition of management, nature, purpose and functions, level and
types
of managers, Manager/NonManager, Managerial Roles, Essential Managerial Skills, Key
personal
characteristics for Managerial success. Evolution and various schools to management thoughts,
continuing management themes quality and performance excellence, global awareness,
learning
organization, Characteristics of 21st century Executives. Social responsibility of managers.
INTRODUCTION TO MANAGEMENT
The field of Mgt has undergone revolutionary change from the period of F.W. Taylor The
Father of
Scientific Management to the present days of Peter DuckerThe Father of modern
Management
Traditionally controlling, enforcing, designing a top down hierarchy, directing
Modern Mgt leadership, creativity, visions, team work, participation, learning, sharing power,
etc.
Management is the process of designing and maintaining an environment in which individual,
working
together in groups, efficiently accomplishes stated aims.
It is defined as the art of getting things done through people both efficiently and effectively.
Efficiency ability to do things in the right way
Effectiveness ability to do right things.
DEFINITION OF MANAGEMENT
According to: Peter. F. DruckerManagement makes work productive and the worker
achieving.
Managers must work effectively with their subordinate to achieve maximum performance.
According to F.W. TaylorManagement is the art of knowing what you want to do and then
seeing that
it is done in the best and cheapest way

According to Lawrence A AppleyManagement is the accomplishment of results through efforts

of
other people
Management is the art of knowing what you want to do & then seeing that it is done in the best
&
cheapest way. F.W.Taylor
Management is the art of getting things done through and with people in formally organized
groups
Koontz
Management is to forecast and plan , to organize, to command, to coordinate and to control
Henry
Fayol
NATURE OF MANAGEMENT
Following are the characteristics of nature of management:
a) It is the art of getting things done through people both efficiently and effectively.
b )It is a science, a systematic body of knowledge, pertaining to a field of activity having
concepts,
hypotheses, theories, equipments, principles and techniques.
c) It is the art of application of skills to achieve desired results.
e) It is a process consisting of planning, organizing, staffing, leading (or influencing) or directing
and
controlling functions performed to determine and accomplish the objectives of an organization,
by the
use of people and resources.
f) It refers to a social group of people, who direct the activities of other people towards common
objective.
g) It is a profession which demands artistic application of scientific theories for efficient
functioning of
any organization.
h) Management is concerned with the attitude of mind to problems, risks, opportunities and
changes
and also the ability to forces, adapt, innovate, motivate, guide and inspire.
i) Management makes work productive and the worker achieving.
j) It is a social process.
k) It is group activity.
l) It is discipline.
m)It is required at all levels.
n) It is a authority and responsibility relationship.
q) It is an organized activity
r) It is a distinct process
s) It aims at accomplishing predetermined objectives
t) Its principles are universal in nature

u) It is dynamic in nature
v) It uses multidisciplinary approach
w)It is a system of authority
Importance or purpose of Management:
Management may be defined as a process whereby scarce resources (human, material, &
financial) are
combined to achieve organizational goals. Without management, people would pursue their own
objectives independently and this would lead to waste & inefficiency.
Management is
1) An economic resource and a critical element in the economic growth of a country.
a) Essential in all organizational efforts.
b) Dynamic life giving element of any organization.
c) A system authority.
d) A class or elite.
e) Concerned with technical skill, human skills, concept ional skills, analytical skills and
decision
making activities.
2) Management aims to create surplus.
3) Managerial resources determines productively and profitability of an organization.
4) Management is considered as a means to an end and not an end by itself.
Functions of Management:
A) Management Functions
Planning:
A management function that involves the process of defining goals, establishing strategies for
achieving
those goals and developing plans to integrate and coordinate activities.
Organizing:
The process of presenting formal relationships among people and resources to accomplish goals,
or the
process of grouping activities and resources in a logical or systematic manner.
Staffing:
The process of ensuring that the organization has qualified employed available at all levels to
meet
its short and long term objectives or goals.
Directing:
The process of talking a person what to do. It is better known as leading or influencing.
Leading:
Influencing others to do what the leader wants get members of the organization to work together
to
achieve the organization goals or objectives.
Influencing:
The process determining or affecting the behavior of others.
Coordinating:

The process of transferring information ideas, understanding or forcing among people.The

process of
ensuring that process who perform inter dependent activities work together in a way that
contributes to the achievement of overall objectives of goals.
Motivating:
It is the willingness to put forth effort in prevent of organizational objectives. It is the force that
energies
behavior gives direction to behavior and underlies the tendency to persist.
Reporting:
The process of transferring information to people in the higher level in the management
hierarchy (from
ordinate to superior)
Controlling:
The process of comparing actual performance with standards and taking any necessary corrective
action.
Budgeting:
The process of preparing a statement of planned allocation of resource expressed in financial or
numerical terms.
Decision making:
The process of generating and evaluating alternatives and making chains among them.
B) Operating Functions
Selection:
The act of selecting, or the state of being selected; choice, by preference. After all the screening
and
interview procedure the selection of the individual will take place if all the parameters are met.
Recruitment:
Recruitment is the process of searching the candidates for employment and stimulating them to
apply
for jobs in the organization.
Placement:
It is the process of assigning a specific job to each one of the selected candidates.
Performance Appraisal:
Performance appraisal is the process of measuring quantitatively and qualitatively an employees
past or
present performance against the background of his expected role performance. It is the periodic
and an
impartial rating of an employees excellence.
Compensation:
Marketing activities:
Finance activities:
Management: Science or Art or Profession:

Managing like all other practices whether medicine music composition, engineering,
accountancy or
even baseball is an art it is know how. It is doing thing in light of the realities of a situation. Yet
managers
can work better by using the organized knowledge about management it is knowledge that
constitutes a
science. Thus, managing as practice is an art, organized knowledge underlying the practice, it is
applying
of knowledge.
It is a science:
However, it is felt that management is more an art than science because:
a) It involves application of know how and skills.
b) It directed towards achievement of connect results.
c) It deals with a variety of human being.
d) It is evasive in nature.
e) It is personalized which means there no one is that way of managing for everybody.
f) It is a systematic body of knowledge.
Management as a Profession:
A profession is based on a systematic body of knowledge which enquires formal training for
example
profession of doctors, engineers, lawyers, and the like requires formal training and a set of code
of
ethics for practice likewise Management is also a profession and management practice requires
formal
training and code of ethics.
In conclusion, we can say that management is a profession which demands artistic application of
its
scientific theories of the efficient functioning of any organization. It is a profession because it is
specialized knowledge skill, training and ethical codes.
How old is the practice of management? The practices are as old as human civilization, but
study and
research started about 100 years ago The great wall of China, the pyramids of Egypt.
a) Scientific Management Theory
b) Administrative Management Theory
c) Behavioral Management theory
d) Management Science Theory
e) Organizational Environment Theory
Classical school of thought has come out with the following theories
The Evolution of Management Theory
Scientific Management: He was the first person who insisted on the introduction of scientific
methods in

management and made his first systematic study of management. Taylor is regarded as father of
scientific management.
Frederick Winslow Taylor(18561915) 1878 joined as worker at Midvale steel works.
Graduated in
science and engineering through evening study 1898 joined Bethlehem steel company as
Engineer. He
studied the work processes and introduced the,
Scientific Management
Fredrick W Taylor and Scientific Management:
Principles Of Scientific Management:
a) Scientific investigation in the place of Rule Of Thumb.
b) Scientific selection, training and placement of workers.
c) Cooperation between management and workers. There should be harmony within the group
and
in group action.
d) Maximum output in place of desired output.
e) Equal distribution of work between managers and workers.
To put these principles into practice he suggested the following techniques:
a) Scientific setting of fair days work.
b) Time and Motion study.
c) Standardization of equipment, tools, cost system etc.
d) Scientific selection, training and placement of workers.
e) Differential piece wage system
f) Specialization or functional foremanship.
Limitations of Scientific Management
Impersonal approach
Emphasis only on material needs
Monotonous and boring jobs
Exploitation device
Anti democratic
Harsh and difficult to perform
Henry Fayol and Administrative Management: Henry Fayol (18411925)
He was a French engineer who focused his research on the things that managers do:
His prime interest was the functioning of organization.
He developed 14 principles of management which were useful guidelines to help managers to
perform
the managerial function. Fayols functional approach to the practice of management is Known as
administrative management and he is known as father of administrative management.
Fayols principles of management are:
a) Division of work:
Work specialization increase output by making employees more efficient.
b) Authority and responsibility:
Authority is the right to give and the power to extract obedience. Whenever authority is
exercised,

responsibility exists.
c) Discipline:
Employees must obey and respect the rules that govern the organization. Discipline is absolutely
necessary for running the organization smoothly
d) Unity of command:
An employee should receive order from one superior only
e ) Unity of direction:
Activities aimed at the same objective should be organized so that there is one plan and one
person in
charge.
f) Subordination of individual interest to general interest:
The interest of one employees or group should not prevail over the goal of the organization
g) Remuneration:
Compensation should be fair to both the employee and employer.
h) Centralization:
The proper amount of centralization or decentralization of authority depends on the situation.
i) Scalar chain:
The hierarchical chain of authority from top to bottom of an organization in proper channel
j) Authority:
Giving orders
k) Equity:
Employees should be treated with kindness and justice without any bias.
l) Stability of tenure:
The employee turnover from job should be prevented
m) Initiative:
Manager should encourage and develop subordinates initiative to the fullest
n) Espirit de corps:
Unity and promoting team work for productivity
Bureaucracy by Max Weber: Max Weber (18641920) German sociologist.
Characteristics of Bureaucracy
a) Jobs are divided into specialized tasks
b) Standardized processrigorous rules
c) Well defined hierarchy
d) Life long employment
e) Career progression based on qualifications
f) Centralized power
Due to unrest caused by Taylors scientific principles in the 20s and 30s work was carried to see
that it
is not just focusing on money but also human relations. Elton Mayo was one of the main
theorists
involved.
Behavioral Management Theory
Human Relations Management
The Human Resource Approach
Human relations Neo classical theory. Elton Mayo Born in South Australia, in 1880

Died in Surrey in 1949. Worked in Australia, UK and the USA on various projects and lecturing.
Father of
Human Relations Movement
Human Relations Management Phases
a) Illumination experiments (in 1924)
b) Relay assembly test: (in 1925)
c) Terminal bank wiring observation experiment (in 1929).
Phase1Illumination experiments
Hawthorne Studies (in 1924)
Hawthorne Studies conducted at Western Electric Company in USA
IlluminationA hypothesis was made that lighting was a major factor influencing productivity.
Two groups were formedExperimental group(lighting was altered) & control group(lighting was
kept
constant)
There was no much variations on productivity.
But, when the lighting was reduced to moon light intensity the performance in the experimental
group
complained that they could not see anything.
The researchers concluded that factors other than lighting had an impact on performance.
Phase II (in 1925) Relay assembly theory test:
The experimental group of employees were given freedom to fix work schedules
Six breaks of five minutes per shift were allowed
Work day and week were shortened
Work was simplified
Financial incentives for increased production
Friendly supervision
These kinds of special attention and treatment enhanced productivity ( i.e. Hawthorne Effect)
Human relations theory
Phase III (in 1928) Interviewing programme:
Interviewed 21000 employees to find the reasons for increased productivity
Informal work groups and their productivity norms were recognized as the main causes for
productivity.
Human relations theory
Phase IV Terminal bank wiring observation experiment (in 1929).
Team work and performance based incentives introduced
Efficient workers did not pressure the others to work more for benefiting by incentive scheme.
They formed group norms to regulate the productivity.
Human relations theory
The group norms were
Dont turn out too much work
Dont turn out too little work
Dont tell supervisors anything that would harm a colleague
Dont be too officiousrather follow group norms.
Ultimate finding of all experiments

PEOPLE ARE NOT MERELY THE ECONOMIC BEINGS RATHER THEY ARE SOCIAL
BEINGS
Management Science theory
Application of mathematics, statistics & other quantative techniques to management decision
making
Organizational Environment Theory
Impact of external environment on the functioning of management
The Systems View: How organizations import resources from external environment, convert
them into useful goods & services & export them to the market.
The Contingency view: A contingency view uses a flexible approach. Draws a variety of
experiences and theories and evaluate many options as they solve problems. It recognizes that
there is no one best way to manage.
Systems Approach To Management
Just as the human body is formed of different interdependent systems so is also an organization.
A
change in any of the systems may affect all or some other systems to varying degrees. This
ripple
effect influences the effectiveness of the organization.
To understand the interactions and the consequences between the various systems of the
organization
the managers should possess the ability to get a perspective view. Treating an organization as
formed of
different systems is known as systems approach. Systems theory was first applied in the fields of
science
and engineering.
It also has found wide acceptance in the practice of management. A system can be defined as
essentially a set or assemblage of things interconnected or independent, so as to form a complex
unity.
Cars, computers, television and radio sets are some of the examples of systems.
A system is a set of interrelated but separate parts working towards a common purpose. The
arrangement of elements must be orderly and there must be proper communication facilitating
interaction between the elements and finally this interaction should lead to achieve a common
goal.
There are two major types of systems: closed and open.
A closed system has definite boundaries; it operates relatively independently and is not affected
by the
environment outside the system. Stand by the generator is an example of closed system. With its
different systems working together in perfect harmony the generator continues to supply power
as long

as it has sufficient fuel supply without much regard to the external environment.
An open system as the name implies, is characterized by its interaction with the external
environment.
Clearly, any business or organization must be described by an opensystem model that includes
interactions between the enterprise and its external environment.
SuperOrdinate system: A larger system in which every system can be seen as a part.
Key concepts of systems approach
Subsystem: Subsystems are those parts which make the whole system. Each system in turn may
be of a
still larger system. Thus, a department is a subsystem of a factory, which is a subsystem of a
firm, which
is a subsystem of a industry, which is a subsystem of a national economy, which is a subsystem
of the
world economic system.
Synergy: Synergy is a situation which the whole is greater than the sum of its parts. In
organizational
terms, synergy means, that departments that interact cooperatively are more productive than
they
would be, if they operated in isolation.
External
Environment
Input:
_Human
Output:
_Products
Transformation
Feedback
System Boundary: It is the boundary that separates each system from its environment. It is rig
in a
closed system while flexible in an open system.
Flows: A system has flows of information, materials and energy. These enter the system from the
environment as inputs (like raw materials), undergo transformation process within the system
(like
production process) and exist in the system as outputs (like production process) and exist in the
system
as outputs (like products/services).
Feedback: It is the part of the system control in which the results of action are returned to the
individual, allowing work procedures to be analyzed and corrected.
Systems approach helps the dynamic and interrelated nature of the organizations to plan for
actions and

anticipate consequences and mutual effects. It helps the general managers too maintain balance
among
various subsystems and the organization. Thus a major contribution of the systems approach
results
from its strong emphasis on the interrelations or mutuality of various subsystems of the
organization.
Treatment of the organization as an open system is another contribution to the systems approach.
Based on the systems approach, Talcot Parsons has suggested three meaningful levels in the
hierarchy
of complex organizations: Technical, Organizational, and Institutional.
The Technical Level is concerned with the actual production and distribution of products and
services. It also includes activities like research and development, operation research and
accounting.
The Organizational Level coordinates and integrates work performance at the technical level.
It
is concerned with obtaining the continued flow of inputs into the system and maintaining the
markets for the outputs from the system.
The Institutional Level is concerned wit relating activities of the organization to
environmental
system. It involves relating the organization to the need of the environment.
The Contingency View: The characteristics of the environment have an impact on organizations
political,
legal aspects. A contingency view uses a flexible approach. Draws a variety of experiences and
theories
and evaluate many options as they solve problems. It recognizes that there is no one best way to
manage.
Peter F Drucker (Father of Modern Management)
The greatest management thinker of 20th Century. His major contributions to management are:
a) Management by Objectives MBO
b) Jointly setting objectives by the managers and employees
c) Periodical evaluation of performance
d) Provide feedback to the employee
e) Reward according to the results.
f) Quality & Performance Excellence
g) Quality Degree of Excellence a product or service provides to the customer in present and
future.
h) Dimensions of Quality
i) Durability Useful life ,include repair.
j) ServiceResolution of problems, ease of repair.
k) Response Human relations with Customers.
l) AestheticsSensory Features.
m) Reputation Past performance, Company Image.

LEVELS OF MANAGEMENT:
It refers to a line of demarcation between various managerial positions in an organization. there
are three levels of management, namelya)
Top level management:
The managers responsible for the organization ,they establish operating policies and guide the
organizations interaction with its environments . it consists of top manager are chief executive
officer, president and vice president. It involvesIn formulating corporate level strategies, the company should decide where it wants to be in the
next1015years.
What kind of business the company should be engaged in?
What are the goals & expectations of each business?
How should resources be allocated to reach these goals?
b) Middle level management:
Manger in the mid range of organizational hierarchy they are responsible for other managers and
some times for some operating employs; they also report to more senior managers. Middle
managers principle responsibilities are to direct the activities that implement their organization
policies and to balance the demands of their managers with the capacities of their employers. It
sees itself as aA business unit is an organizational subsystem that has a market, a set of competitors & a goal
distinct
from those of the other subsystems in the group.
How should we operate?
c) Lower level management:
Managers who are responsible for the work of operating employs only and do not supervise other
managers ,they are the lowest level of managers in the organizational hierarchy low level
managers are called as supervisors. Here,
Each business unit has several departments , like manufacturing, sales, finance
Functional level management identifies the basic course of action that each of the departments
must
peruse in order to help the business unit to attain its goals.
Who is a Manager?
A manager is one, who contributes to the organizational goals/objectives indirectly by directing
the
efforts of others & not by performing the task himself.
Functions of managers
a) Manager as a planner
b) Manager must be imaginative to plan ahead and create new ideas
c) Manager must have capability of managing people
d) His function is to set objectives and to adopt corrective measures.
e) Manager must take necessary measures to train workers
f) Manager must make arrangement for incentives to his workers
g) He must create proper environment for work
h) Discipline among people is essential
i) Manager must function as a leader
j) Makes things happen

k) Accepts challenge
l) Never accepts defeats
m) Accelerates the achievements of results
n) Generates enthusiasm
o) Energizes the system
p) Recruits right person for the right jobs
q) Managers Focus Areas
r) Market standing
s) Innovation
t) Productivity
u) Profitability
v) Workers performance and attitude
w) Public responsibility
x) Physical and financial resources
Classification of Managers by level:
a) Top level Managers/corporate level(CEO and the President)
b) Middle level Managers/Business unit level( intermediaries interpret the third level)
c) Junior level Managers/Functional level/First level(Execute or implement the Top and
middle level instructions. Junior level, beginners and supervisors)
Classification of managers by activity:
a) Functional Manager:
Production, R&D, Marketing and Finance
b) General Manager:
Acts as a coordinator for all the activities.
Managerial Skills:
Skills refer to proficiency and understanding in any particular area or a field. These are
exhibited at
different levels in order to get the desired result.
a) Conceptual Skills at the top level
b) Human relations skill at the middle level
c) Technical skills at the Lower level or Supervisory level
Non Manager:
A person who makes his contribution directly to the organizational goals & objectives is a non
manager.
He answers to all higher authorities and has no one under him.
MANAGERIAL ROLES
MANAGER:
A manager is one, who contributes to the organizational goals indirectly, by directing the efforts
of
others and not by performing the task himself.
Role is defined as the pattern of behavior, which is, defined for different position. it depend on
formal
authority. A role is a set of behaviour, rights and obligations conceptualised in a social situation
or

expected behaviour that is associated with a particular position or a status

According to Mintzberg managerial roles can be classified as follows:
1) INTERPERSONAL ROLES:
a) Figure head: performs symbolic duties of a legal head or social nature.
Represent his/her organization
Signs certain documents
Attends events to add dignity and status to the organization
b) Leader: builds relationship with subordinates and communicate with, motivates and
coach them.
Determines the atmosphere of the work environment
Acts as a role model
Gives the organization direction and purpose
Makes strategic decisions
c) Liaison: maintains networks of contacts outside work unit that provide help and
information.
Maintains information links both inside and outside the organization. Builds rapport and
cultivates contacts with external parties.
Calls meetings to share information with other departments
Issues memos to keep the communication links flowing
2) INFORMATION ROLES:
a) Monitor: seeks internal and external information about issues that can affect organization.
He scans the environment and collects the information.
Seeks new information
Deals with information
Analyzes the information
Prepares the information to go to other departments
b) Disseminator: transmits information internally, that is obtained from either internal or external
sources.
Keeps communication flowing throughout the departments
Sends memos and reports to other departments
Passes information to the subordinates
c) Spokesperson: transmits information about organization to outsiders.
Transmits information to outside sources
Communicates verbally, nonverbally, and through writing
3) DECISIONAL ROLES:
a) Entrepreneur: acts as a initiator, designer and encourager of change and innovation.
Initiates improvement projects
Identifies new ideas
Delegates idea responsibility to others
b) Disturbance handlers: takes corrective action when organization faces unexpected major
difficulties.
Deals with involuntary changes
Reacts quickly in highpressure situations
Acts as a mediator between conflicting subordinates or departments. Also seeks solution to
various problems.
c) Resource allocation: distributes resources of all types, including time, finding equipment

and human resources.

Determines where to focus efforts
Allocates resources
d) Negotiator: represent the organization in major negotiations affecting the managers areas
of responsibility.
Represents the organization during negotiations
Negotiates contracts with new or existing employees and clients
Global Awareness:
A frame of reference, important to the success of a business person, that embodies tolerance of
cultural
differences and knowledge of cultures ...
Global Awareness:
Global Awareness is a conceptual understanding based upon an applicable knowledge of global
and
cultural perspectives.
The Global Awareness seeks to bridge cultures by emphasizing that cultural diversity is a source
of
enrichment rather than a source of confusion and strife.
It will bring expanded educational and cultural opportunities, encourage better understanding of
other
cultures, improve communication between cultures, and support the concept of mutual
acceptance.
The goal is to "meet your global neighbour" and build "crosscultural bridges."
Performance Excellence:
The term performance excellence refers to an integrated management approach that results in:
a) Delivery of everimproving value to customers.
b) Improvement of overall organizational effectiveness and capabilities.
c) Organizational and personal learning.
Learning Organization:
A Learning Organization is the term given to a company that facilitates the learning of its
members and
continuously transforms itself.
Learning Organizations develop as a result of the pressures facing modern organizations and
enables
them to remain competitive in the business environment.
Social responsibility:
Meaning
Conscious effort to operate in a manner that creates a winwin situation for all stake holders.
Who are the stake holders in a business
Investors
Customers
Suppliers
Employees

The government
The community
Business competitors
What does the stake holders want?
Investorprofit
Employeesbetter salary and service conditions
Statetaxes + legal compliance
Customer best goods and services at competitive price
Supplier better and dependable treatment
Competitor Healthy competition
Community accommodative policies/practices
Levels of social responsibility
a) Social obstruction
b) Social obligation
c) Social reaction
d) Social involvement
Levels of social responsibility
Social obstruction
a) Deliberately perform unethical or illegal business practices.
b) Levels of social responsibility
Social obligation
a) Meeting only the minimum legal requirements
b) Levels of social responsibility
Social reaction
a) Responding positively to social requests
b) Levels of social responsibility
Social involvement
a) Voluntary initiate socially responsible acts
Characteristics Of 21st century Executives
a) International Focus
b) Need for a Vision
c) The challenge of quality
d) The challenge of cultural diversity
e) The need for training
f) Innovation and change
g) The need for ethics
h) Nonbias
i) Staying close to customer
j) Promoting autonomy and entrepreneurship
k) Productivity and profitability
l) Corporate social responsibility
****************
MODULE 2
Planning: Meaning and nature of planning, types of plans, steps in planning process; Objectives:
meaning, setting and managing objectives MBO method: concept and process of managing by
objectives; Strategies: definition, levels of strategies, its importance in an Organization; Policies:

meaning, formulation of policies; Programs: meaning, nature; Planning premises: concept,

developing
effective planning premises; Decision making, steps in decision making, approaches to decision
making,
types of decisions and various techniques used for decision making.
INTRODUCTION:
Planning is outlining future course of action in order to achieve an objective.
It is the process of visualizing and anticipating the future by evaluating the past and assessing the
present.
Planning is the trap laid down to capture the future.
Planning is looking ahead.
Planning is the process of determining in advance what should be accomplished and how it
should be
realized.
According to KOONTZ O DONNELL, Planning is essentially decision making since it
involves choosing
from alternatives.
According to GEORGE TERRY, Planning is selecting and relating of facts and making use of
assumptions
regarding the future in the visualization and formulation of proposed activities believed
necessary to
achieve the desired results.
NATURE OF PLANNING:
a) It is Goal Oriented: The planning process is focused on those efforts necessary to achieve
Future
objective.
b) It is decision oriented: The planning process involves decision making that specifies action
necessary
to achieve future goals.
c) It is future oriented: The successful manager must plan for future to determine what needs to
be
done and how it must be done before the situation actually Occurs
d) It is Intellectual Process: Involves rational, fact based procedure.
e) It is a Selective Process: Goals & standard become standard against which performance is
measured.
Rational approach to selected goals.
f) It is an Integrated Process: Involves selecting missions n objective n action to achieve them.
g) It is Flexible: Changes according to the demand of the situation.
h) It is directed towards efficiency: Better chances of success. Leads to
better performance and efficiency.
i) Primacy of planning(first and foremost thing)

j) The pervasiveness of planning(spread throughout)

k) Efficiency of plans
l) It helps to meet uncertainty
m) It helps in economizing
n) It helps in planning, organizing and controlling
PRINCIPLES OF PLANNING:
a) Take time to plan
b) Planning can be top down or bottom up
c) Involve and communicate all those concerned
d) Plans must be flexible and dynamic
e) Evaluation and revision
TYPES OF PLANS:
a) Single Use Plan developed to achieve a specific goal. E.g. Programs, Budgets.
b) Standing Plan designed for recurring situation. E.g. Policies, Procedure, Rules.
c) Strategic Plan Statement of how the org will be going to utilize its resources and
conduct its Activities in order to achieve strategic goals.
Tactical Plans-established to attain medium range goal. Tactical planning involves
making concrete decisions regarding what to do, who will do it, and how to do itwith a
normal time horizon of a year or less.
E.g. Master production Schedule.
Operational Plans-developed for achieving operational range goals. Ex: Machine load.
Functional Plan-Production plan, financial plan, market plan, man power plan, Process
plan, facilities plan etc.
d) Contingency Plans are plans for dealing with specific situations unexpected conditions.
They helps in
addressing the problems relating to,
Identifying Uncontrollable Factors
Economic turndowns
Declining markets
Setting organizational objectives
Analyzing and Evaluating the
Environments
Identifying alternative ways of
achieving the objectives
Developing planning premises upon
which each alternative is based
Deciding the planning horizon
Evaluating the alternatives and
choosing the best alternative
Developing plans to pursue chosen
alternative
Increases in costs of supplies
Technological developments
Safety accidents
Minimize Impact of Uncontrollable Factors
Forecast a range of alternative responses to most-likely high-impact contingencies

e) Planning for High Performance

Central Planning = Traditional Department Group of planning specialists who
develop plans for the organization as a whole and its major divisions and departments
and typically report directly to the president or CEO
Decentralized Planning = High-Performance Managers work with planning experts to
develop their own goals and plans
f) Planning for the New Workplace
Have a strong mission statement and vision
Stretch goals for excellence
Establish a culture that encourages learning
Embrace event-driven planning
Utilize temporary task forces
Planning still starts and stops at the top
Therefore, Planning comes alive when employees are involved in setting goals and determining
the means to reach them
Step 1: Setting organizational objectives
The selection of objectives and the course of action to achieve them are influenced partly by the
organization's mission and values, the strategic plans and goals, the standing plans, the
environmental
conditions, the availability of resources and the philosophies, ethics, accumulated experience and
expertise of the managers of the organizations. The objectives indicate where we are, where do
we
want to be, and what do we want to accomplish and when. The objectives must be specific,
measurable,
realistic, achievable and probably challenging.
Step 2: Analyzing and evaluating the environment
Once the objectives are established, managers must analyze their present situations and
environments
to determine the opportunities in the light of the market, competition, customer's needs and
wants,
company's strengths and weakness, resources available and limiting factors company policies
that must
be considered as they evaluate possible courses of acting.
Step 3: Identifying alternative ways of achieving the objectives
Once the environment in which the organization is functioning is analyzed and evaluated and
organizational objectives are clearly stated, the managers should list as many available
alternatives as
possible for achieving those objectives.
Step 4: Developing planning premises on which to base each alternative
Planning premises in simpler words is the assumptions that are made about the various elements
of the
environment. It is important for all the managers involved in planning to agree on the premises.

Internal premises include sales forecasts and policies of the organization. External premises are
those
factors that are out side the organization such as technological changes, general economic
conditions.
Tangible premises are the quantitative measurements such as population growth industry
demand.
Intangible premises are the qualitatively measured, for example political stability, business and
economic environment, attitudes.
PLANNING PREMISES
Planning is undertaken under certain planning premises. Premises are the assumptions on which
plans
are formulated. A major source of premises is forecasting which indicates what is to be expected
in the
future & thus provides a frame work on which plans are developed. But not all premises are
forecasts.
Factors of planning premises:
A) External premises.
B) Internal premises.
A) External premises:
Premises external to the organization relate to external constraints & facilitators. These are
events in
the organizations environment such as changes in social values & norms, changes in the
economy,
changes in resource availability, and changes in market place so on.
External premises includes three typesa)
General business environment
b) Factor market
c) Product market.
General business environment:
It includes:
a) Political atmosphere.
b) Government approach towards business
c) Population trends
d) National income & its distribution
e) Price levels
f) Monetary policy
g) Technological innovations
Factor market:
Organization employs many factors of productionland, labour, capital, management. Etc.
forecasting is necessary in respect of the availability of these following factors affect the
operation
of a business organization.

a) natural resources
b) infrastructure facilities
c) raw materials & suppliers
d) plant & equipment
e) Financial facilities.
Production market:
The purpose of determining & developing premises in respect of product market in the
determination of the kind of market is available for organizations products & services.
a) Industry demand
b) Nature of competition
c) Elasticity of demand
B) Internal premises:
These relate to events occurring within the organization. The basic nature of these factors is that
they
can be changed by managerial actions depending on the time.
a) Basic policies & programmers
b) Organization structure
c) Sales forecast.
Step 5: Deciding the planning horizon
Based on the vision of the managers responsible for planning, the planning horizon can be long
term for
strategic planning, intermediate term for tactical planning and short term for operational
planning.
Step 6: Evaluating the alternatives and choosing the best alternatives
Each alternative can be evaluated to determine which one alternative or combination of two or
more
alternatives is most likely to achieve the objectives efficiently and effectively. After evaluating
each
alternative, the managers would be able to identify any one alternative which is most cost
effective and
beneficial to the organization.
Step 7: Developing plans to pursue chosen alternative
After an alternative has been chosen, the managers begin to develop strategic and tactical plans.
Also
supporting plans should be developed.
Step 8: Implementing the plan
Once plans are developed, they must be implemented. The organization can not directly benefit
from
the planning process until the plan developed is implemented.
Step 9: Controlling and evaluating the results
Once the plan is executed, measuring and controlling progress becomes crucial for the success of

planning and to take remedial action if necessary to make plans work and change original plan if
found
unrealistic.
MISSION
Organizational Mission: Mission = organizations reason for existing
Mission Statement
Broadly states the basic business scope and operations that distinguishes it from similar types of
organizations. It may include the market and customers, while some may describe company
values,
product quality, attitudes toward employees.
IBMs Mission as stated by Thomas Watson (1960)
Respect for the individual. We want to give the best customer service as of any company in
world. We
believe that organization should pursue all tasks with the idea that they can be accomplished in a
superior fashion.
Mision Statement of IFB
Our mission is to create and deliver high quality and innovative products that will contribute to
our
customers success and deliver value to our shareholders. We shall provide complete solutions
through
our system capabilities in design, analysis, development, testing and validation.
We are committed to environmental preservation and social responsibility.
VISION
Vision statement: It is the future state of affairs of the organization. Down the lane how it should
be and
how others should view it.
Vision Statement of IFB
To be the vehicle manufacturers first choice for safety and comfort related products through
innovation
and quality excellence.
OBJECTIVES:
Objectives are defined earlier as the important end points towards which organizational and
individual
activities are directed.
CHARACTERISTICS OF OBJECTIVES:
a) Multiple in Nature:
Objectives are needed in all areas and functional activities of business.
b) Objectives have hierarchy: The objectives which are based on a mission or purpose of the
company form a hierarchy from top to the lowest position in the organization structure.
c) Objectives may be long range or short range: The objectives may be of two types : LONG
Range

objectives such as SURVIVAL & GROWTH and SHORT Range objectives like Market
Standing,
Maximization of sales, Product Development, Productivity, Effective Utilization of Resources
etc.
d) Objectives are independent: Objectives are interdependent and must support another so that
the may be realized simultaneously.
e) Objectives are either tangible or intangible: For some of the Objectives such as in the areas
of
Productivity, Market Standing, Physical & financial Standing, there are Quantifiable values
available.
f) Objectives have priority: This implies that at a given point of time, the accomplishment of
one
Objective is relatively more important than that of others.
g) Objectives can clash with each other: In an enterprise, each Department is given a
responsibility
for attaining a specified objective.
ADVANTAGES OF OBJECTIVES:
a) Unified Planning.
b) Individual Motivation.
c) Coordination
d) Standards for Control.
e) Basis for Planning.
f) Elimination Haphazard Action.
g) Better Management.
h) Reduce Misunderstanding and Conflict.
GOAL:
Goal is the future target or the end result that is to be achieved.
Characteristics of Effective Goal Setting
a) Specific and measurable
b) Specific and measurable
c) Challenging but realistic
Defined time period
Linked to rewards
STRATEGY
Strategy is the determination of organizational objectives in the light of environmental variables
&
determination of course of action & commitment of organizational resources to achieve these
objectives.
Features of strategy:
a) Strategy is the action of relating the organization with its environment.
b) It is the relative combination of actions.
c) It may involve even contradictory action.

d) Strategy is forward looking.

e) It is the right combination of factors both external & internal.
Strategic Goals/Plans:
a) Where the organization wants to be in the future.
b) Pertain to the organization as a whole.
c) Tends to be long- term
d) It is a blueprint that defines the organizational activities and resource allocations
The four main aspects of strategic planning that managers can directly influence include:
a) Vision and Mission
b) Goals
c) Resource Allocation
d) Strategies
Strategy Levels:
Corporatelevel strategy:
It focuses on the types of businesses the firm wants to be in, ways to acquire or divest businesses,
allocation of resources among the businesses, and ways to develop learning and synergy among
those
businesses.
Strategic business unit (SBU)
Growth Strategies
Strategic Levels and Planning
Businesslevel strategy:
It refers to the resources allocated and actions taken to achieve desired goals in serving a specific
market with a highly interrelated set of goods and/or services.
Three basic questions at the business level are:
Who will we be served?
What customer needs will be satisfied?
How will customer's need be satisfied?
Functionallevel strategy:
It refers to the actions and resource commitments established for operations, marketing, human
resources, finance, legal services, accounting, and the organizations other functional areas.
Operations
strategies, Marketing strategies, Finance strategies.
TOWS Matrix For Strategy Formulation
Introduced for analyzing the competitive situation of the company that leads to the development
of four
distinct sets of strategic alternatives. These strategies are based on the analysis of the external
and
internal environment.
It facilitates matching of the external threats and opportunities with the internal weakness and
strengths of the organization.

Alternative Strategies TOWS matrix

Alternative Strategies TOWS matrix
WT Strategy Minimize weaknesses and threatsJoint ventures, Collaborations, Liquidate.
WO StrategiesMinimize weaknesses and maximize opportunitiesAcquire competencies, take
advantage of opportunities.
Alternative Strategies TOWS matrix
ST StrategyMaximize strengths and minimize threatsBuild on core competencies
SO StrategyMaximize strengths and opportunitiesMost desirable position
Relationship between Objectives, Strategies, and Plans:
MANAGEMENT BY OBJECTIVES (MBO)
Objectives
Strategies
(For non-repetitive
activities)
Single use plans
Programs and budgets
(For repetitive activities)
Standing plans
Some think MBO is an appraisal tool, a motivational technique and others consider it as a
planning and
control device. But MBO is a comprehensive managerial system that integrates many key
managerial
activities in a systematic manner and is consciously directed toward the effective and efficient
achievement of organizational and individual objectives. They also includeHRP, HRD, career
planning,
reward system and
The philosophy of management that emphasis the setting of agreed on objectives by managers
and the
use of these objectives as the primary bases of motivation, evaluation and control efforts.
budgeting.
MBO is a process where by, the superior and subordinate managers of an organization jointly
identify
common goals, define each individuals major areas of responsibility in terms of results expected
by him
and jointly evaluates and reviews performance and contributions.
THE STEPS IN MBO PROCESS:
a) Set Goals:
Strategic, corporate and functional goals
Establishing long range objectives and plans:

Long range objectives or overall goals are based on the mission or basic purpose of the
organization.
Establishing specific short range objectives and plans:
Determining specific short term objectives which support the over all long term range objectives
and
expressing the shorter term objectives as specific and quantifiable targets such as productivity,
sales
volume and profitability. These specific goals are set for individual departments, sections and
individuals
in key result areas.
a) Formulate action plans:
Challenging but attainable objectives and standards are established through interaction between
superiors and subordinates. Action plans indicates:
What specially is to be accomplished? When it is to be accomplished? How, Where and By
whom it is to
be accomplished?
c) Review progress: Periodic reviews by superiors are important to ensure that plans are being
implemented as expected and that goals ultimately will be met. If it is not upto our expectations
take
corrective actions. Managers must take the corrective actions when results are not as planned.
Review
progress periodically.
d) Appraise performance:
a) Ensure stability and control:
Individuals should be given considerable latitude in carry out their activities as per their action
plans.
Individuals in managerial positions must be able to exercise Self Control and self evaluation and
judge
their progress against set goals. Motivate the performers by rewarding.
e) Top management support and commitment:
MBO to be effective requires participative approach to management requiring active
involvement of
managers at all the levels and enthusiastic support of top management and their commitment.
STRENGTHS AND WEAKNESS OF MBO:
STRENGTHS:
a) Aids Co-ordination of goals or objectives and plans.
b) Helps clarify priorities and expectations.
c) Facilitates vertical and horizontal communication.
d) Fosters employee Motivation.
e) Manager and employee efforts are focused on activities that will lead to goal attainment

f) Performance can be improved at all company levels

g) Employees are motivated
h) Departmental and individual goals are aligned with company goals
i) Development of effective controls that measure results and lead to corrective actions.
WEAKNESS:
a) Tends to fail if strong commitment from the top management doesnt exist.
b) Necessitates considerable training of managers.
c) Can be Misused as a punitive device.
d) Over emphasis of Quantitative goals or objectives.
e) Constant change prevents MBO from taking hold
f) An environment of poor employer-employee relations reduces MBO effectiveness
g) Mechanistic organizations and values that discourage participation can harm the MBO
process
h) Too much paperwork saps MBO energy
STEPS IN MBO:
30
Model of the MBO Process
Step 1: Set Goals Step 2: Develop Action Plans
Step 3:
Review Progress
Corporate Strategic Goals
Departmental goals
Individual goals
Step 4: Appraise Overall
Performance
Appraise Performance
Take Corrective Action
Review Progress
Action Plans
POLICY:
An operational definition of policy may be as follow a policy is the statement or general
understanding
which provides guidelines in decision making to members of an organization in respect to any
course of
action. A policy is a general guide to action and provides direction for people within the
organization.
Policies can be Written, Implied and Appealed.
Characteristics of sound policy:
a) Relationship to organizational objectives
b) Planned formulation
c) Fair amount of clarity
d) Balanced
e) Communication should be easy

f) Should be consistent
g) Broad outlines to be defined
h) Should be feasible and achievable
i) Goal-oriented
TOP MANAGEMENT
Establish Specific Long term Objectives and
Establishing Specific Short term organizational
Objectives
Establish individuals performance objectives and
standards (Action Plans)
Appraise Results
Take Corrective Actions
Superior Subordinates
j) Flexible
Differences between policy and procedure:
Policies Procedures
General guidelines for people at higher levels.
Help in fulfilling the objectives of Enterprise.
Generally broad and allow some Discretion.
Often established without any study or analysis
Procedures are general guidelines usually for lower ends.
these show us the way to implement policies.
Procedures are specific and lay down the sequence of definite acts.
Are always established after through study and analysis of work.
DECISION MAKING
Decision making includes defining problems, gathering information, generating alternatives, and
choosing a course of action.
Managerial Decision Making
Decision making is not easy. It must be done amid everchanging factors unclear information
conflicting points of view. It is selection of a course of action from among many alternatives.
Decisionmaking is an essential part of modern management. A plan cannot exist unless a
decision a commitment of resources, direction, has been made. Mangers sometimes see
decision making as their
central job because they constantly choose what is to be done, which is to be done, when and
where it
is to be done. It is necessary and permeated through all managerial functions such as planning,
organization, and direction and control. In planning it is through the process of decisionmaking
that objectives and policies are laid down and the manager decides many things such as what to
produce, what to sell where, when and how and so on.
In organizing the decisionmaking is related to the choice of structure, nature and the form of
organization. It also includes division of work, delegation of authority, fixing of responsibility

and the like. In directing, decisionmaking relates to determining the course, deciding the orders
and instructions to be given, providing leadership etc. In controlling the decisions relate tom the
laying down the performance standards, strategic control etc.
Meaning of decision
a) A decision is a choice between two or more alternatives. This implies three things.
b) When managers make decisions they are choosing. (Based on rationality)
c) Managers have alternatives available when they are making a decision. It does require a wise
manger to evaluate several alternatives and select the best one.
d) Managers have a purpose in mind when they make decision.
Types of decisions
a) Programmed decisions are those that are made in accordance with some policy, rule or
procedure so
that they do not have to be handled new each time they occur. These decisions are generally
repetitive,
routine and are obviously the easiest for mangers to make. E.g. determining salary decisions,
recording
the performance appraisal etc.
Situations occurred often enough to enable decision rules to be developed and applied in the
future.
Made in response to recurring organizational problems
b) Nonprogrammed decisions are novel and nonrepetitive. If a problem has not arisen
before or if
there is no previous experience how to handle it then, deserves a nonprogrammed decision. Non
programmed Decisions in response to unique, poorly defined and largely unstructured, and
have
important consequences to the organization.
E.g. How to allocate an organizations resources, what to do about a failing product line etc
require nonprogrammed
decisions.
In the case of programmed decisions service each manager is guided by the same set of rules
and
policies, it is not possible for two managers to reach different solutions to the same problem. But
in the
case of nonprogrammed decisions, since each manger may bring his own personal beliefs,
attitudes and
value judgments to bear on the decision process, it is possible for two mangers to arrive at two
different
solutions to the same problem, each claiming that he is acting rationally.

The ability to make nonprogrammed decisions help differentiate between effective and
ineffective
managers.
c) Major and minor decisions: some decisions are considerably more important than others the
relative
importance of decisions are bases on degree of futurity of decisions, impact of the decision o n
other
functional areas, qualitative factors that enter the decision, and repetition of decision.
d) Routine and strategic decisions:
e) Longterm and shortterm decisions:
f) Individual and group decisions:
g) Heuristics in decision:
When there seems to be many alternatives to choose from, managers rely on their own decision
rules.
These decision rules are called heuristics. They allow complex judgments to be made more
simply
Steps for managerial decision making
Six Steps in the Managerial Decision-Making Process

Evaluation and Feedback

Diagnosis and Analysis of Causes
Recognition of Decision Requirement
Development of Alternatives
Selection of Desired Alternative Implementation of Chosen
Alternative Decision- Making Process

a) Recognition of decision requirement:

Managers make a mistake if they jump into generating alternatives without first exploring the
cause of
the problem more deeply.
b) Diagnosis and Analysis of Causes:
Diagnosis = analyze underlying causal factors associated with the decision situation
Underlying Causes Kepner /Tregoe
What is the state of disequilibrium affecting us?
When did it occur?
Where did it occur?
How did it occur?
To whom did it occur?
What is the urgency of the problem?

What is the interconnectedness of events?

What result came from which activity?
c) The search of alternatives:
There are almost always alternatives to any course of action. In fact if there seems to be only one
way
of doing thing, that way is probably wrong. And may be on has not thought hard.
The ability to develop alternatives is often as important as being able to select correctly form
among
them.
Research and common sense will often reveal so many choices to a problem. Sometimes a
limiting
factor, which strands in the way of accomplishing a desired objective need to be recognized. The
principle of the limiting factor is as follows: by recognizing and overcoming those factors that
stand
critically in the way of a goal, the best alternative course of action can be selected.
d) Evaluation of alternatives:
This is the point of ultimate decisionmaking. There are three critical decisions to be considered
in this
stage. They are, quantitative and qualitative factors; marginal analysis; and cost effective
analysis.
Quantitative and qualitative factors:
Quantitative factors are those, which can be measured, in numerical terms, such as time or
various fixed
or variable costs.
Qualitative or intangible factors are those that are difficult to measure numerically, such as
quality of
labor relations, the risk of technological change etc.
The manger must recognize these factors in the problem and then determine whether these can
be
measured quantitatively. Or he/she must find out as much as possible about the factors, perhaps
rate
them in terms of importance, and compare their influence on the goal and then take a decision.
Marginal analysis: the theory of marginal analysis can be used in evaluating
alternatives. This is to compare additional revenues arising from additional costs.
If the additional revenues of a larger quantity are greater than its additional costs, more profits
can be
made by producing more. But if the additional revenues of the larger quantity is less than its
additional
costs, a larger profit can be made by producing less.

For example, to find the best output of a machine, inputs can be varied until the additional input
equals
additional output. Or the number of subordinates reporting to a manager might be increased at
which
additional savings in costs, better communication and morale and other positive results, equal
additional losses in leadership, effectiveness in control etc.
Cost effectiveness analyses:
This seeks the best ratio of benefits and costs. This means finding the least costly way of
reaching an
objective or getting the greatest value for given expenditures.
It is a technique for choosing the best plan with the best cost.
e) Selecting the desired alternatives:
f) Implementation of the selected alternative:
Using managerial, administrative, and persuasive abilities to translate the chosen alternative into
action
g) Assessment and feedback:
Factors to be considered in Decision Making:
a) Risk Propensity : willingness to undertake risk with the opportunity of gaining an
increased payoff
b) Time Involved
c) Organizations Policies and rules
d) Values of the organization
Virtually all decisions are made in an environment of at least some uncertainty. However,
the degree
will vary from less to most. And there are certain risks involved in making decisions.
DECISION MAKING UNDER CERTAINITY, UNCERTAINITY AND RISK:
a) Under Certainty:
Sure about what will happen when they make decisions. The information is available and is
considered
to be reliable, and the cause and effect relationship is known.
Where managers are reasonably selecting an alternative involves three approaches:
Experience, experimentation and research and analysis, are the three basic approaches to select
the best alternative.
Experience: experienced mangers usually believe, often without realizing it. That things they
have successfully accomplished and the mistakes they have made are valuable guides in the
future.
To some extent, experience is the best teacher. The very fact that managers have reached their
position appears to justify their past decisions. But relying on experience can be dangerous also.
Since, most people do not understand the reasons behind their mistakes or failures and these
lessons may be inapplicable to new problems. Good decisions must be evaluated against future
events, while experience belong to the past.

Experimentation: this is a scientific inquiry. This is to try all the alternatives and sees what
happens. It is likely to be expensive. Experimentation can be used in other ways. A company
may test a new product in a certain market before expanding nationally.
Research and analysis: this approach means solving a problem by first comprehending it. It
involves a reach for relationships among the more critical of the variables, constraints, and
premises that bear upon the goal sought. A major step in this approach is to develop a modal
simulating the problem. Using operations Research techniques this can be done.
b) Under Uncertainty: here mangers are very unsure and do not know whether data are reliable.
They
cannot evaluate the different variables.
Modern approaches to decision making under uncertainty:
a) Risk analysis
b) Decision trees, and
Risk analysis: all managers who deals with uncertainty like to know the size and nature of the
risk they are taking in choosing a course of action. Every decision is based on the interaction of a
number of important variables, many of which have an element of uncertainty, but also a high
degree of probability. The manager needs to analyze the probabilities of various factors and its
effect on the final objective.
Decision trees: this is one of the best ways of analyzing a decision. Decision tree depict in the
form of a tree, the decision points, chance events and probabilities involved in various courses
that might be undertaken.
Risk:
Here the information may exist, but it may be incomplete. To improve decision making one may
estimate the probabilities of an outcome by using mathematical models.
Risk(factual information exist but is incomplete) decision has clearcut goals good information is
available but future outcomes associated with each alternative are subject to chance
47
Conditions that Affect the Possibility
of Decision Failure
Organizational
Problem
Problem
Solution
Low Possibility of Failure High
Certainty Risk Uncertainty Ambiguity
Programmed
Decisions
Nonprogrammed
Decisions
Certainty, Risk, Uncertainty, Ambiguity
a) Certainty
all the information the decision maker needs is fully available
b) Uncertainty

Degree and nature has to be known. Managers though they know which goals they wish to
achieve, but
information about alternatives and future events is incomplete.
Managers may have to come up with creative approaches to alternatives.
c) Risk
Factual information exist but is incomplete. Decision has clearcut goals good information is
available
but future outcomes associated with each alternative are subject to chance
Ambiguity
By far the most difficult decision situation where the goals to be achieved or the problem to be
solved is
unclear.
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rocessare attempt
understandi
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rationality. T
problems is s

not be comp
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ing to
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They
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This is
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Political Model of Decision Making
56
Political Model of Decision Making
Political decision
making
Multiple Stakeholders with power such as:
Divergence in problem definition
Divergence in goals
Divergence in solutions
Customers Investors Employees
Unions Competitors
Suppliers Regulatory Agencies Legislative Bodies
Benefits of these models for the Organization
a) Legitimacy
What the organization stands for reason for being
Symbolizes legitimacy
Employees identify with overall purpose
b) Source of Motivation and Commitment
Employees identification with the organization
Motivate by reducing uncertainty
c) Guides to Action
Provide a sense of direction; focus attention on specific targets
Direct efforts toward important outcomes
d) Rationale for Decisions
Learn what organization is trying to accomplish
Make decisions to ensure that internal policies, roles, performance, structure, products, and
expenditures will be made in accordance with desired outcomes
55
e) Standard of Performance
Serve as performance criteria
Provide a standard of assessment
Rationality model for decision making

The best decision maker is rational and makes consistent, value maximizing choices within
specified
constraints. It relies on a number of assumptions, including that the decision maker has complete
information, is able to identify all the relevant options in an unbiased manner, and chooses the
option
with the highest utility.
Steps in Rational decisionmaking model:
Define the problem
Identify the decision criteria
Allocate weights to the criteria
Develop the alternatives
Evaluate the alternatives
Select the best alternative
Intuition decision making
An unconscious process created out of distilled experience. Its defining qualities are that it
occurs
outside conscious thought, it relies on holistic associations, or links between disparate pieces of
information, its fast and is effectively charged, meaning that usually engages emotions.
Techniques for Decision making
a) Marginal analysis(to determine the extra output in increase in the variables)
b) Financial analysis( to determine the increase in the profit level)
c) Break-even analysis(to determine the break-even point for the company)
d) Ratio analysis(it helps the interpret the financial position and the strengths and
shortcomings of the company)
e) Operations research(helps to best design and utilize the available resources)
HOW ARE DECISIONS ACTUALLY MADE IN ORGANIZATION
Decision makers in organizations are rational, they carefully assess problems, identify all
relevant
criteria, use their creativity to identify all viable alternatives, and painstakingly evaluate every
alternative to find and optimal choice.
The capacity of the human mind for formulating and solving complex problems is far to small to
meet the requirements for full rationality, individuals operate within the confides of bounded
rationality.
Most decisions are made by judgment rather than by a defined prescription models.
a) Bounded rationality:
When faced with a complex problem, most people respond by reducing the problem to a level at
which it can be relay understood. This is because of limited information processing ability of
human
beings.
b) Intuition:
Intuitive decision making is an unconscious process created outoff distilled experience. Intuition
is

not dependent of rational analysis. The two compliment each other.

c) Problem identification:
Decision makers self interest influences in identifying problem.
d) Alternative development:
Select the satisfactory once.
e) Making choices:
To avoid informations overload decisions makers rely on heuristics or judgmental shortcuts in
decision making. Two common categories:
Availability heuristics tendency for people to base their judgment on information that is readily
available to them.
Representative heuristics: Predicting the performance of a new product by relating it to a
previous
product success.
f) Escalation of committeemen: An increased commitment to a pervious decision in spite of
negative information.
ORGANIZATIONAL CONSTRANTS IN DECISION MAKING
The organization itself constraints decision makers. Managers for instance shape their decision to
reflect the organization performance evaluation and reward system to comply with the
organizations formal regulations and to meet organizationally imposed time constraints.
Performance Evaluation:
Managers are strongly influenced in their decision making by the criteria by which they are
evaluated. If a division manager believes that the manufacturing plants under his responsibility
are
operating best when he hears nothing negative, we shouldnt be surprised to find his plant
mangers
spending a good part of their time ensuring that negative information doesnt reach the division
boss. Similarly, if a college principal believes that an instructor should never fail more that 10
percent of her students to fail more reflects on the instructors ability to teach we should
expect that instructor who want to receive favorable evaluation will decide not to fail to many
students.
Reward System:
The organizations reward system influences decision makers by suggestion to them what
choices
are preferable in terms of personal pay off. For example, if the organization rewards risk
aversion,
manager are more likely to make consistently gave out promotion and bonuses to managers who
kept a low profile, avoided controversy, and were good team players. The result that GM
manager
became very adept at dodging tough issues and passing controversial decisions on to committees.
Formal Regulations:
David Gonzales a sift manager at a TACO BELL restoring in SUM ANTONIO TEXAS describes

constraints he faces on his job:I have got rules and regulations converging all most every
decision.
I make from how to make a BURRITO to how often I need to clean the rest rooms. My job
doesnt
come with much freedom of choice .
Davids situation is not unique. All but smallest of organizations create rules, policies, procedure
and
other formalized regulation in order to standardized the behavior of the members. By
programming
decision, organizations are able to get individuals to achieve high level of performance without
paying for the years of expense that would be necessary in the absented of regulation. And of
course in so doing, they limit the decision makers choices.
SystemImposed Time Constraints:Organizations impose dead lines on decisions. For instance,
department budget need to be completed by next Friday or the report on the new product
development has to be ready for the executive committee to review by the first of the month. A
host of decision must be made quickly in order to stay ahead of the competition and keep
customer
satisfied. And almost all important decision comes with the explicit dead lines. These conditions
create time pressures on decision maker and often make it difficult, if not in possible, to gathered
all
the information they might like to have before making a final choice.
*****************

MODULE 3
Organizing: Organizing as managerial function organization structure, formal and informal
organization. Traditional Organization Structures Functional, Divisional and Matrix Structure
Directions in organizational Structures Team structure, network structure, boundary less
structure
Organizing Trends and Practices Chain of command, unity of command, span of control,
delegation
and empowerment, decentralization and use of staff, organizational design and organizational
configuration.
ORGANIZATION:
The term organization derives from the Greek word organon, meaning a tool or an
instrument. And
a good tool is one which has precision, efficiency, reliability, and predictability built into it.
Organizations are, after all, only instruments to achieve certain ends and like instruments they
need to

be molded to achieve these objectives.

Organization refers to a concrete and tangible entity, which describes the manner in which men,
machine, and material resources are or should be organized and interrelated.
A group of people who work together
According to Henney, Organization is a harmonious adjustment of specialized parts for the
accomplishment of some common purpose or purposes.
Organization is an identified group of people contributing their efforts towards the attainment of
goals
is called an organization.
Nature of Organization
a) Every org exists to achieve some common objective.
b) The positions are arranged into grades series adopting a rank system.
c) Every organization has its own communication system and methods.
d) Every organization has certain rules and regulations for orderly functioning.
e) Economic, social, legal and political environment influences the functioning of the
organization.
f) Organization is a structure and a process.
Principles of Organization
a) Unity of objective
b) Efficiency
c) Span of control
d) Division of labour
e) Clear definition of functional authority
f) Chain of command
g) Management by exception
h) Unity of command
i) Authority and Responsibility
j) Balance
k) Flexibility
l) Continuity
Importance of Organization
a) Facilitates Management
b) Enables contribution
c) Paves way for growth diversification
d) Helps in use of technological improvements
e) Encourages initiative
f) Improves human relations
g) Provides scope for training and development
ORGANIZING
Meaning:
Organizing is the process of identifying and grouping work to be performed, defining and
delegating

responsibility and responsibility and establishing relationship for the purpose of enabling people
to work
most effectively together in accomplishing objectives. Louis Allen.
It is the establishment of authority relationship with provision for coordination between them,
both
vertically and horizontally in the enterprise structure. Harold Koontz and ODonnell
It is in this sense that we think of organizing as:
a) The identification and classification of required activities.
b) The grouping of activities necessary to attain objectives.
c) The assignment of each group to a manager with the authority (delegation) necessary to
supervise it.
d) The provision for coordination horizontally (on the same or a similar organizational level) and
vertically (e.g., between corporate headquarters, division, and department) in the organization
structure.
An organization structure should be designed to clarify who is to do what task and who is
responsible for
what results in order to remove obstacles to performance caused by confusion and uncertainty of
assignment and to furnish decisionmaking and communication network reflecting and
supporting
enterprise objectives.
Organizing as Managerial Function
Organizing is an important managerial activity by which management brings together the
manpower
and material resources for the achievement of predetermined objectives.
Organizing involves the following steps:
a) Identification of activities required for the achievement of objectives.
b) Grouping of activities so as to create well defined jobs.
c) Assignment of jobs to employees
d) Delegation of authority to subordinates.
FORMAL AND INFORMAL ORGANISATION:
Formal Organization:
a) The formal organization is deliberately designed to achieve some particular objectives.
b) It refers to the structure of well defined jobs, each bearing a definite authority, responsibility
and accountability.
c) According to Chester Bernard, Formal organization is a system of consciously coordinated
activities of two or more persons toward a common objective.
d) It means the intentional structure of roles in a formally organized enterprise. Describing an
organization as formal, however, does not mean it is rigid. If a manager is to organize well, the
structure must finish an environment in which individual performance, both present and future
contributes most effectively to group goals.
e) Activities of two or more persons are consciously coordinated towards a given objective.
However a formal organization must be flexible. There should be room for description for
beneficial utilization of creative talents and for recognition of individual likes and capacities in

the most formal of organization. Yet individual effort in a group situation must be channeled
towards group and organizational goals. Via line, staff, line and staff, divisional, committee,
matrix and project.
f) Although the attainment of goals must be the reason for any cooperative activity, we must look
further for principles to guide the establishment of effective formal organization.
Characteristics Of Formal Organization:
a) Organization structure is designed by the top management to fulfil certain requirement
performance of necessary activities there by achieving organizational goals
b) Organization structure is based on the principles of division of labour and efficiency in
operation
c) Organization concentrates more on the performance of jobs and not on the individual
performing the jobs
d) The authority and responsibility assigned to each job have to be adhered to by the jobholders.
Based on the concept of authority and responsibility, people are placed in hierarchy, and their
status is determined accordingly.
e) It has written rules and procedures
f) It specifies the official lines of communication
g) Coordination among members and their control are well specified through processes,
procedures, rules, etc.
h) Here more autonomy and selfcontrol is required. Flexibility and innovation is required and
experienced subordinates is required.
Advantages
a) Definite boundaries of each worker is defined.
b) It reduces conflicts among workers.
c) Overlapping of responsibility is avoided.
d) It motivates the employees as standards of performance are well established.
e) Favoritism in evaluation and appraisal is avoided
Disadvantages
a) It does not consider the sentiments and values of the social groups
b) Problems of coordination are created
c) It does not consider the goals of the individuals
Informal Organization
The informal organization refers to people in group association at work, but these associations
are not
specified in the blueprint of the formal organization.
Informal organization means natural grouping of people in the work situation.
It is a network of personal and social relationships that arise spontaneously as people associate in
work
environment.
Chester brand, author of the management classic The Function of the Executive, described
informal
organization as any joint personal activity without conscious joint purpose, even though
contributing to

joint results. Thus, the informal relationship established in the group of people playing chess
during
lunch time may aid in the achievement of organizational goals. It is much easier to ask for help
on an
organization problem from some one you know personally, even if he or she may be in a
different
department than from some one you know only as a name on an organization chart. Keith
Davis of Arizona state University, the Informal organization as a network of personal and social
relations not established or required by the formal organization but arising spontaneously as
people
associate with one another. Thus informal organizations relationship not appearing on an
organization
chart might include the machineshop group, the sixthfloor crowd, the Friday evening bowling
gang,
and the morning coffee regulars.
Characteristics of informal organization
a) Informal organization is a natural outcome at the work place. It is not designed and planned
b) Informal organization is created on the basis of some similarity among its members. The bases
of similarity may be age, sex, place of origin, caste, religion, personality characteristics, likings
or
disliking etc.
c) Membership in an informal organization is voluntary. A person may become members of
several
informal organizations at the same time.
d) Behaviour of members of the informal organization is coordinated and controlled by group
norms and not by the norms of the normal organization.
e) It reflects human or social relationships among people
f) It has no written rules and regulations
g) It is not portrayed on the organizational chart of the company
Advantages
a) It provides for satisfying social and psychological needs to inspire employees to work more
efficiently and sincerely
b) Information can be communicated through personal and social relations promptly and safely
c) Less conflicts
d) It provides an atmosphere of socialization
Disadvantages
a) Informal organizations often evolve their own standards of performance, exercising social
pressure on the employees who produce more
b) Informal communications tend to be grapevine, tends to be rumour
c) In trying to meet the social needs of a member, it has a tendency to produce role conflict

Many writers on management distinguish between formal and formal organization. Both types
are
found in organizations.
ORGANIZATIONAL STRUCTURES:
a) Structure is the pattern in which various parts or components are interrelated or
interconnected.
b) Thus, organization structure is the pattern of relationship among various components or parts
of
the organization.
c) This prescribes the relation among various activities and position.
d) Since these positions are held by various persons, the structure is the relationships among
people in the organization.
Formal and informal framework of policies and rules, within which an organization arranges its
lines of
authority and communications, and allocates rights and duties. Organizational structure
determines the
manner and extent to which roles, power, and responsibilities are delegated, controlled, and
coordinated, and how information flows between levels of management. This structure depends
entirely on the organization's objectives and the strategy chosen to achieve them. In a centralized
structure, the decision making power is concentrated in the top layer of the management and
tight
control is exercised over departments and divisions. In a decentralized structure, the decision
making
power is distributed and the departments and divisions have varying degrees of autonomy. An
organization chart illustrates the organizational structure.
Organization Chart
Executive
TRADITIONAL ORGANIZATIONAL STRUCTURE
Organizational structure refers to the way that an organization arranges people and jobs so that
its work
can be performed and its goals can be met.
When a work group is very small and facetoface communication is frequent, formal structure
may be
unnecessary, but in a larger organization decisions have to be made about the delegation of
various
tasks.
Thus, procedures are established that assign responsibilities for various functions. It is these
decisions
that determine the organizational structure.
Traditional Structures
A. Functional structure

B. Divisional structure
C. Matrix structure
But one of the most comprehensive and rational approach for classifying structures was proposed
by
Mintzberg. According to him, an organization can be composed of five basic parts:
The Strategic apex (top level mgmt in charge of the overall org) ,
The Operating core (employees performing the basic work related to production or for which the
org is
meant),
The Middle line (people who connect the strategic apex and the operating core),
The techno structure (staff functionaries and analysts),
The Support staff (services like cafeteria, mailing, transport etc)
A. Functional Structure
The functional structure groups employees together based upon the functions of specific jobs
within the
organization.
Functional Structure
Sales Department (sales function)
Customer Service Department (customer service function)
Engineering Department (engineering function)
Accounting Department (accounting function)
Administration Department (administration function)
Advantages
a) Creates highly skilled specialists
b) Lowers costs through reduced duplication
c) Communication and coordination problems are lessened
Disadvantages
a) Crossdepartment coordination can be difficult
b) May lead to slower decision making
c) Produces managers with narrow experiences
B. Divisional Structure
Because managers in large companies may have difficulty keeping track of all their company's
products
and activities, specialized departments may develop. These departments are divided according to
their
organizational outputs. Examples include departments created to distinguish among production,
customer service, and geographical categories. This grouping of departments is called divisional
structure. These departments allow managers to better focus their resources and results.
Divisional
structure also makes performance easier to monitor. As a result, this structure is flexible and
responsive

to change.
Divisional Structure
The divisional structure is
broken down into three
areas: product, market,
and geographic.
Continued..
Product Structure
Product structure groups employees together based upon specific products produced by the
company.
An example of this would be a company that produces three distinct products, "product C",
"product
M", and "product I".
Product Structure
Easy Food Market
Cheese Milk Ice cream
This company would have a separate division for each product.
Product Structure
Advantages
a) Managers specialize but have broader experience
b) Easier to assess workunit performance
c) Decision making is faster
Disadvantages
a) Duplication often increases costs
b) Difficult to coordinate across departments
Geographic structure
Geographic structure groups employees together based upon specific geographic location.
This is often used by large companies that operate in many areas National & overseas.
Geographic Structure
Coca-Cola Enterprises
a) Responsive to demand of different markets
b) Reduce costs by locating resources close to customers
c) Facilitates expansion of business
d) Managers experience autonomy at the region level
Disadvantages
a) Duplication of resources
b) Difficult to coordinate across departments
Market/Customer Structure
An organization may find it advantageous to organize according to the types of customers it
serves. For

example, a distribution company that sells to consumers, government clients, large businesses,
and
small businesses may decide to base its primary divisions on these different markets. Its
personnel can
then become proficient in meeting the needs of these different customers. In the same way, an
organization that provides services such as accounting or consulting may group its personnel
according
to these types of customers. Figure depicts an organization grouped by customers and markets.
Market/ Customer Structure
Advantages
a) Encourages concentration on customer needs
b) Promotes strong public image
c) It adopts well to environmental changes
Disadvantages
a) Managers and staff should have expertise and understanding the problems of the customer
b) Through duplication of efforts resources can be wasted
C.MATRIX STRUCTURE
Matrix structure groups employees by both function and product. This structure can combine the
best of
both separate structures.
The matrix structure combines functional specialization with the focus of divisional structure.
This
structure uses permanent crossfunctional teams to integrate functions.
Employees in a matrix structure belong to at least two formal groups at the same timea
functional
group and a product, program, or project team. They also report to two bossesone within the
functional group and the other within the team.
74
This structure not only increases employee motivation, but it also allows technical and general
management training across functional areas as well.
Matrix structure is the most complex of the different organizational structures.
Matrix Structure
Advantages
a) Better cooperation and problem solving.
b) Increased flexibility.
c) Better customer service.
d) Better performance accountability.
e) Improved strategic management.
Disadvantages
a) The twoboss system is susceptible to power struggles, as functional supervisors and team
leaders lie with one another to exercise authority.

b) Members of the matrix may suffer task confusion when taking orders from more than one
boss.
c) Teams may develop strong team loyalties that cause a loss of focus on larger organization
goals.
d) Adding the team leaders, a crucial component, to a matrix structure can result in increased
costs.
The other organizational structures are categorized as:
a) Line organizational structure
A line organization has only direct, vertical relationship between different levels of the firm there
are only line departments departments directly involved in accomplishing the primary goal of
the
organization. Authority follows the chain of command. It has only vertical relationships between
different levels in the firm.
Line organizational chart:
Advantages:
a) Tends to simplify and clarify authority, responsibility and accountability relationships.
b) Promotes fast decision making
c) Simple to understand.
Disadvantages:
a) Neglects specialists in planning
b) Overloads key persons
b) Staff or functional authority organizational structure
The task of management and direction of subordinates should be divided according to the type
of work involved. All activities are grouped together according to certain functions like
production, marketing, finance, personnel etc. and are put under the charge of different
persons. The person in charge of a function is a specialist in it and brings out the best in him.
While this type of organizational structure overcomes the disadvantages of a pure line
organizational structure, it has some major disadvantages. They are:
The potential conflicts resulting from violation of principle of unity of command.
The tendency to keep authority centralized at higher levels in the organization.
c) Simple structure: It is characterized by a low degree of departmentalization, wide span of
control, authority is centralized in a single person and less formalization.
d) The Bureaucracy: High routine tasks achieved through specialization, tasks are grouped into
functional departments, centralized authority and narrow span of control and decision making
follows chain of command.
e) The Pizza structure: Here hierarchy is abolished. Functions dont have separate goals. People
work in selfdirected teams or work teams. All managers are members of one such team.
f) The Network structure: Linking separate organizations to achieve a common goal. It requires
synergy and high level of collaboration.
g) The Spaghetti Organization: It is a new IT system which led to the virtual elimination of
paper.
Focusing on technology to serve the end users.

h) The Fishnet Organization: It is flexible and adaptable. It can form and reform while
retaining
its inherent strength.
i) Empowered Organization: It is an organization in which individuals have the knowledge,
skills,
desire and opportunity to succeed in a way that leads to collective organization success.
j) Virtual Organization: A small core organization that outsource major business function.
DIRECTION IN ORGANIZATIONAL STRUCTURE
Direction is the sum total of managerial efforts that is applied for guiding and inspiring the
working teams to make better accomplishments in the organization.- S.S. Chatterjee.
Team Structure
Team is a group of whose individual efforts result in performance that is greater than the sum of
the individual inputs
The primary characteristics of the team structure are that it breaks down departmental barriers
and decentralizes decision making to the level of the work team. Team structure also require
employees to be generalists as well as specialists.
77
Types Of Teams
Problem solving teams: Groups of 5 to 12 employees from the same department who meet for a
few hours each week to discuss ways of improving quality, efficiency , and the work
environment.
Self-Managed work teams: Groups of 10 to 15 people who take on responsibilities of their
former supervisors.
Cross-functional teams: Employees from about the same hierarchical level, but from different
work areas, who come together to accomplish a task.
Virtual teams: Teams that use computer technology to tie together physically dispersed
members in order to achieve a common goal. This type of organizations comprises a group of
independent people or organizations that come together to execute a project or render a service to
an ongoing activity and then disperse. It is made possible by telecommuting, off-shoring,
outsourcing, strategic alliances and customer organization linkages. It takes advantage of
globalization and technological innovations, organizations form relationships with customers,
suppliers and competitors. They are usually connected with each other through information
technology tools, like the internet, video conferencing etc. Dell is a classic example of a virtual
organization. It assembles a wide range of computers, laptops and servers without manufacturing
the component itself. All the parts are ordered from established vendors, which make them
almost available on time for assembling. This ensures minimum risk and inventory for the
company. It also enables Dell to focus on its core activities which are online sales marketing.
Advantages of teams:
a) Easy communication and decision making
b) Barriers between departments are broken
c) Increase employee morale
d) Empowerment of employees
e) Synergy is witnessed
f) Disadvantages

g) Loss of productive time in team meetings

h) At times interpersonal relations can be affected
The Network Structure
The network structure is a modern structure and includes the linking of numerous separate
organizations to optimize their interaction in order to accomplish a common, overall goal.
At the core lies only the core component of the business, all peripheral components are
outsourced to strategic alliance.
There can be intra-networking, a joint venture to build complex technical systems. Or there may
be inter organizational networking, like a network of construction companies to build a large
structure.
Networking requires synergy and a high level of collaboration.
Advantages
a) Business alliances can be made
b) Better focus on core-business
c) Internal systems becomes simpler
d) Creative use of IT capabilities
Disadvantages
a) Lack of control over outsourced activities
b) Failure in one part may affect the entire system
Boundary less Structure
a) An organization that seeks to eliminate the chain of command, have limitless spans
of control, and replace department with empowered teams.
b) It is a combination of both team and network
c) The internal boundaries among functional departments are removed with the help
of team.
d) The external boundaries that separate the organization form its suppliers, customers,
distributors and even competitors are removed by creating a network alliances.
e) Boundary less organizations enjoys flexibility and speed.
f) It is ideal for learning organizations.
g) It increases interaction with customers and suppliers.
Advantages
a) Knowledge sharing, creativity, flexibility, speed of operations, reduction of bureaucracy are
the advantages.
b) The boundary less organizations have advantages and disadvantages of both team and network
structure.
Flat organization structure
A Flat organization structure is also known as a horizontal organisation. It is a level wherein
there is no level between the staff and managers
In such an organisation the most trained employees are involved in the decision making
process.
This structure mostly takes place in smaller organisation or also on a small scale within large
organisation. However, when these organisations begin to grow and expand, the company turns
into a hierarchical organisation structure. In fact most of the organisations worldwide start with
a flat organisation structure.
Flat organization structure have their own problems, such as more managerial pressures on the

executives, lesser promotional opportunities etc.

The features of a flat organization are stated below:
a) Flat Organizational Structure
b) (Wide span of control)
c) More autonomy and self control is required.
d) Flexibility and innovation is required.
e) Ambiguous tasks and roles; specialization doesnt work.
f) Nonroutine technology.
g) Continued..
h) Experienced subordinates.
i) Unstable, turbulent environment.
j) Lack of proper control; encourages laissezfaire.
k) Too much demand on the manager for coordinating.
l) Reduced promotional opportunities.
Advantages of organization structure are:
a) More easy control over the resources because resources can be rationed and allocated to
different units to use them to their most productive uses at micro level.
b) Clearly defined reporting lines make it easy for employees to know to whom to report.
c) Reduce redundancies by eliminating extra and unproductive processes.
Stream line processes by giving it more focus and adoptive nature.
d) It helps to reduce costs because the controlling of various cost control centres are controlled
at micro level.
e) It gives focus and direction to an organization.
Organizing Trends and Practices
Trends: The general direction in which something tends to move.
A general tendency or inclination. (current style)
Practices: Frequently repeated or customary action.
(habitual performance, a succession of acts of a similar kind, usage, habit, custom)
Organizational Authority
Managers rely on authority to ensure that their subordinates do what their subordinates do what
is
desired from them. Authority is the legitimate power of a manger to direct his/her subordinates to
take
action within the scope of the managers position.
Chain of command
Line versus staff authority
Delegation of authority
Degree of centralization
80
Chain of Command
The vertical line of authority in an organization. It describes comparable hierarchical structure of
authority.
Clarifies who reports to whom

It secures compliance and addresses issues

The chain of command is an unbroken line of authority that extends from the top of the
organization to
the lowest level and clarifies who reports to whom.
It answers question for employees such as to whom do I go if I have a problem? and to whom
am I
responsible?
Unity of command
Workers report to only one boss
SPAN OF CONTROL
Span of control refers to the number of subordinates that can be adequately and effectively
supervised
by the managers/supervisor. Number of people reporting to a specific supervisor. While the
purpose of
organization is to make human cooperation effective, the reason for levels of organization is the
span of
management.
Factors Influencing span of control
a) Capability and experience of manager
b) Quality of planning
c) Availability of time for supervision
d) Ability of subordinates
e) Effectiveness of managerial communication(degree of interaction between the superior and the
subordinate)
f) Nature of work performed(simple or complex)
g) Physical distribution of the employees
h) Degree of standardization
Depending on the number of subordinates that are put under a single manager, the span of
control can
be broadly classified into the following two categories:
81
Wide Span: The wide span of control involves a relatively flat organizational structure with
fewer
hierarchical levels and a good number of subordinates reporting to a single manager.
Narrow Span: The narrow span of control involves a hierarchical organizational structure
wherein a
smaller number of subordinates report to a single manager. Thus it leads to a taller organizational
structure with many hierarchical levels.
Choosing the Span
In every organization, it must be decided how many subordinates a superior can manage.
Students of

management have found that this number is usually four to eight subordinates at the upper levels
of
organization and eight to fifteen or more at the lower levels.
Principles of Span of Management
The principle of the span of management states that there is limits to the number of subordinates
a
manager can effective supervise, but the exact number will depend on the impact of several
underling
factors.
Apart from such personal capacities as comprehending quickly, getting along with people, and
commanding loyalty and respect, the most important determinant is a managers ability to reduce
the
time he or she spends with subordinates. This ability naturally varies with manager and their job,
but
several factors material influence the number and frequency of such contacts and therefore the
span of
management.
Line Versus Staff Authority
Line authorityfunction has the right to command immediate subordinates in the chain of
command(authority flows from top to bottom)
It consists of direct vertical relationship(Senior and subordinates relationship)
Departmental heads are given full freedom to control
The superior takes decision within the scope of his authority
Line and staff have direct vertical relationships between different levels.
Staff specialists are responsible for advising and assisting line managers/officers in specialized
areas.
These specialized staffs nature are:
82
a) Advisory
b) Service
c) Control
It is for the line managers to decide whether to take any decision with respect to the given
advice. Staff
personal lack authority to implement their solution themselves. Staff position are usually
identified in an
organizational chart by coloured or broken lines. Examples of staff position include human
resources,
accounting and finance function.
Advantages and Disadvantages

Simple. Prompt decisions, effective discipline, unified control, orderly communication, co

ordination and
fixed responsibility, focus on results, better supervision and control, support for decision making.
No scope for specialization, autocratic approach, low morale, instability, rigid and inflexible, line
and staff conflicts, problem of coordination, lack of well-defined demarcation, authority issues.
Line and staff organizational chart:
President
ManagerMarketing
(Line)
Manager
Production
PA to
President
Manager
Personnel
(St ff)
83
.
STAFFING
Staffing is managerial function, concerned with assessing the manpower requirement,
recruitment,
relation of personnel, training and development of personnel and periodic appraisal of the
performance
of personnel.
Staff Authority
Inorder to reap the advantages of both line organization and functional organization, line and
staff is
developed.
Here they have the right to advise but not command others and it is an activity that supports line
activities
Advantages:
a) Good coordination
b) Disadvantages:
c) Lack of specialization, resist new ideas.
Delegation of Authority
Delegation of authority refers to the passing the right to make decisions without having to obtain
approval from a higher up within the prescribed limits.
Plant Manager
1
(Li )
Plant Manager
2

(Li )
Assistant to
Production
Manager
(Staff)
84
Just as the authority is the right of a superior to issue commands, responsibility is the obligation
of a
subordinate to obey these commands. Thus when a superior assigns some work to a subordinate,
it
becomes his responsibility to perform it.
Definition:
The assignment of direct authority and responsibility to a subordinate to complete tasks for
which the
manager is normally responsible.
Delegation is a process of assigning the Responsibility along with needed authority
Delegation is the process a manager follows in dividing work assigned to him so that he
performs only
that part which he can perform effectively and so get others help him with the remaining work.
Three transfers from manager to subordinate
Transfer of full responsibility of assignment
Transfer of authority over required resources
Transfer of accountability
How to Be a More Effective Delegator
a) Trust your staff to do a good job
b) Avoid seeking perfection
c) Give effective instructions
d) Know your true interests
e) Follow up on progress
f) Praise the efforts of your staff
g) Dont wait until the last minute to delegate
h) Ask questions, expect answers and assist employees
i) Provide sufficient resources
j) Delegate to the lowest possible level
k) Develop a good attitude
l) Decide what to delegate
m) Select the right person
n) Communicate responsibility
o) Provide support
p) Monitor the delegation
q) Evaluate the delegation.
Advantages
Relieves the manager from heavy load

85
Speeds up decisionmaking
Training ground and builds morale
Builds good relationship
Disadvantages/Barriers
Fear of loss of power
Lack of confidence may create problem
Delegation is Art rather than Science:
Delegation is mostly an art rather than a science. All the managers should have necessary skills
of
delegation.
Most managers fail to delegate not because they are unaware of principles. Like their personal
attitudes
like respective ness, willingness to trust the subordinates.
a) Define the assignments and delegate the authority to get expected results.
b) Select the right man based on the job analysis.
c) Maintain proper control and good communication.
d) Establish and maintain open lines of communication
e) Use appropriate control techniques and
f) Reward the superiors who delegate authority appropriately and assume the authority properly.
Empowerment
Permanently passing decisionmaking authority and responsibility from managers to workers.
And to
make this happen, workers need information and resources to make good decisions, also,
Workers
should be rewarded for taking initiative.
Principles of Empowering Employees
Demonstrating concern
Sharing leadership vision
Sharing goals and direction
Providing information for decision making and frequent feedback.
Point out problems and not the people
86
Help employees feel empowered
Degree of Centralization
In Centralization of authority most authority is held at the upper levels of the organization.
Centralization/Decentralization is an important dimension of organizational effectiveness, since
it refers
directly to how appropriately and swiftly the organization is able to deal with critical issues and
arrive at
relevant decisions.

Hage defined this dimension as the proportion of jobs whose occupants participate in decision
making
and the number of areas in which this participation takes place. Similarly,
Reimann described centralization as reflecting the locus of decision making, with respect to
major and
specific policies, the degree of information sharing between levels, and the degree of
participation in
longrange planning..
In the light of the above definitions, it is important to qualify our understanding of this
concept with a
few salient points:
a) Centralization/Decentralization refers to the distribution of formal authority within the
organization. It is quite likely that there are informal coalitions and leaders in the
organization who may have influence over the decisions. This, however, cannot be
interpreted as affecting the level of centralization in the organization.
b) Centralization of decision making may be with a single person, unit or level. This single
point, however, should be placed at a higher level in the organization.
c) If decision making is delegated down the line, but there are elaborate formalized policies,
systems and rules which constrain the discretion of the employees, this cannot be
understood as decentralization. On the other hand, many organizations provide
discretionary powers to the lower levels, but also develop information-systems to keep
the top management aware of the decisions that are taken. If the information-system only
helps the top management to monitoring without hindering with the decision making
authority of lower levels, it cannot be understood as centralization. Thus, the
centralization-decentralization issue needs to be understood in terms of the amount of
discretion available with the decision-maker rather than the point at which the decision is
being taken.
Relative advantages and Disadvantages of centralization and Decentralization
Centralization Decentralization
87
Advantages: Advantages:
Uniformity of policies, standards and actions. Greater flexibility and appropriateness in
responding to local situations.
Enables closer control and coordination. Allows top management to focus on policy issues.
Maximizes economies of scale; eliminates
duplication.
Facilitates intra-unit communication.
Reduces risk-factor in decision making by less
informed or less skilled subordinates.
Increases morale and commitment. Creates
healthy competition among units.
Disadvantages: Disadvantages:
Causes alienation and lack of initiative. Causes conflicts of goals and interests among

units.
Standardization
Solving problems by applying rules, procedures, and processes.
Decentralization of authority:
Definition:
Everything that goes to increase the importance of the subordinates role is decentralization and
everything that goes to reduce it is centralization. Henry Fayol.
Delegation of authority is necessary for an organization to exist. No one person in an enterprise
can do
all the tasks necessary for accomplishing a group goal.
Decentralization is necessary when,
a) The greater the number of decisions made at lower levels,
b) The more important are the decisions made at lower levels,
c) The more is the number of areas in which decisions can be made at lower levels,
d) The fewer are the people to be consulted and less is the checking required on the decisions
made at the lower levels.
Factors determining the amount of Decentralization:
88
e) Size of the organization
f) Philosophy of top management
g) Abilities of lower level managers
h) Organizations strategy & environment &the nature of management function.
Advantages of decentralization:
a) Decentralization permits quicker and better decision making: the manger that are close to the
work and are, most knowledgeable about the specific details of the problem can solve the
problem better than the top managers who are not in touch with the specifics of the situation.
b) Decentralization reduces problems of communication and red tape: as the organization grows
larger, the top mangers take longer time to get the information necessary to tak3e decisions.
c) Decentralization recognizes the importance of the human element: This gives more power,
prestige and status to the people. They feel more motivated and satisfied in their jobs.
d) Decentralization leads to competitive climate within the organization: since each person is
compared with his peers the performance improves.
e) Decentralization ensures the development of more capable mangers: since mangers in this
system have to adapt and deal with difficult situations, they are assumed to be excellently
trained for promotions in to positions of greater authority and responsibility.
f) Decentralization facilitated diversification of products, activities and markets: as the
companies
expand their operations and production, centralization may prove inefficient.
Factors determining the amount of decentralization:
a) Size of the organization,
b) History and age of organization,
c) Philosophy of top management,
d) Abilities of lower level managers, and,
e) Organizations strategy and environment and the nature of management function.

Organization Design
Organization design involves the creation of roles, processes, and formal reporting relationships
in an
organization. It is the overall set of structural elements and the relationships among those
elements
used to manage the total organization as a whole. It involves designing the organization structure
by
developing, changing etc.
Organization design is concerned with making decisions about the forms of coordination, control
and
motivation that best fit the enterprise. In making these decisions, it is necessary to consider
external
factors like the market and internal factors like the needs and aspirations of the member of the
enterprise.
Steps In Organizational Process
89
a) Consideration of organizational objectives.
b) Grouping of activities into departments.
c) Deciding which department will be key departments.
d) Determining level at which various decisions are to be made.
e) Determining the span of management.
f) Setting up organization mechanism.
Departmentation
Department is a distinct area or a branch of the organization which handles task of similar nature.
A
department has a manager as an authority for ensuring the performance and coordination of its
tasks
and responsibilities. Departmentation is a managerial process that forms the basis on which work
or
individuals are grouped into managerial units.
Departmentation by Time:
It is grouping activities on the basis of time the use of shifts is common in many enterprises
where for
economic, technological, or other reasons the normal workday will not suffice.
Department by Function:
Grouping of activity in accordance with the functions of an enterprise like finance,
manufacturing,
marketing, accounts, research etc. Here specialists managers with knowledge, skills and
orientation for
the specialized tasks are appointed heads of those functional units.

Departmentation by territory or Geography:

Departmentation based on territory is rather common in enterprises that operate over wide
geographic
areas. In this case, it may be important that activities in a given area or territory be grouped and
assigned to a manager and these managers are accountable for the success or failure of the
organization.
Customer Departmentation:
Grouping activities so that they reflect a primary interest in customers in common in a variety of
enterprises. Customers are the key to the way activities are grouped when each of the different
things
an enterprise does for them is managed by one department head. This form of Departmentation
groups
jobs on the basis of common set of needs or problems of specific customers.
Process or equipment Departmentation:
90
Manufacturing firms often group activities around a process or a type of equipment. Such a basis
of
departmentation can be found in paint or electroplating process grouping or in the arrangement in
one
plant are brought together in order to carry out a particular operation.
Departmentation by Product:
Grouping activities on the basis of product or product lines has long been growing in importance
in
multilane, largescale enterprises. It can be seen as an evolutionary process. Typical companies
and
other enterprise adopting this form of departmentation ware organized by enterprise functions.
ADVANTAGES OF DEPARTMENTALIZATION
a) Skill development
b) Economies of scale
c) Good coordination
d) High efficiency
DISADVANTAGES OF DEPARTMENTALIZATION
a) Lack of communication across departments
b) Employees identity with the department will be less
c) Slow response to external demands
d) Narrow specialization
-------------------------------------*********************--------------------------------------MODULE 4
Leading as a function of management, Leadership and vision, Leadership traits, classic
Leadership

styles, Leaders behaviour Likerts four systems Managerial Grid. Overlapping role of leader
and
managers. The organizational context of communication, Directions of communications,
channels of
91
communication, Barriers to communication. Motivation and rewards, Rewards and performance.
Hierarchy of need theory and two
factory theory. Integrated model of motivation.
LEADERSHIP
Leadership is defined as the art or is a process of influencing people so that they will strive
willingly and
enthusiastically towards the achievement of group goals.
The term lead has two meanings: to excel or to be ahead and to guide govern and command
others or to
head an organization. The first meaning refers to certain qualities of leaders while the second
meaning
reflects the role and responsibilities of an individual as a leader.
Definitions:
It is a process of influencing the behavior of subordinates to work willingly and enthusiastically
to
achieve the organizational goals. It is the managers ability to inspire subordinates to work with
confidence and enthusiasm.
Leadership is the activity of influencing people to strive willingly for mutual objectives
George Terry
The ability to influence a group toward the achievement of goals.
Leadership is the lifting of mans vision to higher sights, the raising of mans performance to
higher
standards, the building of mans personality beyond its normal limitationsPeter Drucker
VISION:
Where there is no vision, the people perish
a) Vision sees what must be tomorrow, beyond what is today
b) Vision inspires
c) Vision is clarity
d) Vision is a worthy commitment
e) Vision generates supportive actions .
LEADERSHIP AND VISION
a) Leaders have vision. They share a dream and direction that other people want to share and
follow.
92
b) Inspire enthusiasm, belief, commitment and excitement in company members;
c) Help employees believe that they are part of something bigger than themselves and their daily

work;
d) It is being regularly communicated and shared
e) Challenge people to outdo themselves, to stretch and reach.
f) The leadership vision goes beyond your written organizational mission statement and your
vision statement
g) It Clearly sets organizational direction and purpose;
h) It inspires loyalty and caring through the involvement of all employees;
i) It displays and reflect the unique strengths, culture, values, beliefs and direction of the
organization;
The very essence of leadership is that you have to have a vision T. Hesburgh,
President of the University of Notre Dame
There's nothing more demoralizing than a leader who can't clearly articulate why we're
doing what we're doing.James Kouzes and Barry Posner
IMPORTANCE OF LEADERSHIP
a) Guides and inspires subordinates
b) Creates sense of belongingness, loyalty and commitment
c) Creates healthy environment in the workplace
d) Ensures discipline and decorum
e) They act as a change agent
f) They develop vision for building great organizations
g) Alignment of the organization with the business environment
h) Source of motivation
i) Directing group activities
j) Fulfilling social responsibilities
THE INGREDIENTS OF LEADERSHIP
a) The ability to use power effectively and in a responsible manner.
b) The ability to comprehend those human beings has different motivation forces at different
times and in different situation.
c) The ability to inspire.
d) The ability to act in a manner that will develop a climate conducive to responding to and
arousing motivations.
Who are leaders and who are not?
93
Leaders are Pioneers People who are willing to step out into the unknown. They are people
who are
willing to take risks, to innovate and experiment in order to find new and better ways of doing
thing
A person with no followers is not a leader
Management and Leadership
Management is the process of getting things done through the efforts of others. Leadership is
influencing others to what the leaders wants them to do. Since managers get all sorts of things
done
through the efforts of others, they must lead. The primary role of a leader is to influence others to
voluntarily seek defined objective.

LEADING AS A FUNCTION OF MANAGEMENT

a) The main function of a leader is to make the environment conducive to work
b) Leadership integrates the efforts of the followers and the organizational objectives
c) Leadership performs the functions of an intermediary between the top management and
the work
d) Leaders work as an appropriate counselor
e) The leader must have a thorough knowledge of the principles of the time management.
f) Leader should develop a climate of cooperation among workers
g) A leader must communicate the organizational policies, procedures and programmes to
the members of the organization group.
DIFFERENCES BETWEEN ADMINISTRATION, MANAGER AND A LEADER
Differences OFFICERS MANAGER LEADER
Main concern Follow procedure Get result Excel
Emphasis on Conformity Interaction Creativity
Focus on Status quo Stability Trend setting
Assessment
criteria
Efficiency Effectiveness Boundary management
Driven by Past experience Present Future
94
Approach Tactics Strategy Vision
Structure Hierarchy Matrix Network
Response made Reactive Pro action Pro action
Managing by
Developing
procedure
Building system Building culture
H.R.D Approach Supervision Coaching Mentoring
Dominant need
Control
dependency
Achievement of
power
Power extension
Concept of power Limited un sharable Sharable Multiplying
Source of power Status\Authority competence empowerment
Leaders and Managers
Personality
Dimension
Manager Leader
Attitudes
toward goals
Impersonal, passive,
functional; goals arise
out of necessity, reality

Personal, active, goals

arise from desire,
imagination
Conceptions
of work
Combines people,
ideas, things; seeks
moderate risk
Looks for fresh
approaches to old
problems; seeks high risk
Relationships
with others
Prefers to work with
others; avoids close
relationships and
conflicts
Comfortable in solitary
work; encourages close
relationships, not averse
to conflict
Sense of self Accepts life as it is;
unquestioning
Questions life; struggles
for sense of order
95
Leaders vs. Managers
LEADERS:
Innovate
Focus on people
Inspire trust
Have a longrange view
Ask what and why
Originate
Challenge status quo
Do the right thing
MANAGERS:
Administrate
Focus on systems and
structures
Rely on control
Have a shortrange view
Ask how and when
Initiate
Accept status quo

 Do things right
TRAIT APPROACHES TO LEADERSHIP
Early research tried to identify the traits physical, intellectual and personality characteristics that
differ
between leaders and non leaders or between successful and unsuccessful leaders. Some
cognitive
psychological factors studied were intelligence ambition and aggressiveness. Some organizations
use
personality characteristics to label managers on four dimensions as extroverts or introverts,
thinkers or
feelers, sensors or initiators and judges or perceivers.
The current research on leadership traits suggests that some factors do help differentiate leaders
from
nonleaders. The most important traits are a high level of personal drive, the desire to lead,
personal
integrity and selfconfidence cognitive (analytical) ability, business knowledge, charisma,
creativity,
flexibility and potential warmth are also some of the frequently desired personal traits of leaders.
96
It is important to note that the leadership traits do not necessarily guarantee successful
leadership.
Many people who have the capabilities to be effective leaders may not be demonstrating their
traits.
Some others may have the needed traits and the desire to use them but may not have the
opportunity
to do so.
LEADERSHIPS TRAITS
a) Energy, Drive.
b) Appearance, present ability.
c) A sense of cooperation.
d) Enthusiasm.
e) Personality height and weight
f) Initiative
g) Intelligence
h) Judgment
i) Self confidence
j) Sociability.
k) Tact and diplomacy
l) Moral courage and integrity
m) Will power and flexibility

n) Emotional stability
o) Knowledge of human relations.
p) Adaptable to situations
q) Alert to social environment
r) Ambitious and achievementorientated
s) Assertive (being bold and confident)
t) Cooperative
u) Decisive(power to determine an outcome)/ determined
v) Dependable
w) Dominant (desire to influence others)
x) Energetic (high activity level)
y) Persistent(to stand firm)
z) Selfconfident
aa) Tolerant of stress
bb) Willing to assume responsibility
cc) Characteristics Of Leadership
dd) Attainment of group goals
ee) Changing the statusquo
ff) Ability to influence the followers thoughts and action
gg) Situational or contextual leadership
hh) Persistence
ii) Proactive
jj) Winning and inspiring trust
97
These TRAITS are not universal in nature nor do all the leaders have all these traits not all these
traits
work all the time
CHARACTERISTICS OF LEADERSHIP
a) Attainment of group goals
b) Changing the statusquo
c) Ability to influence the followers thoughts and action
d) Situational or contextual leadership
e) Persistence
f) Proactive
g) Winning and inspiring trust
h) Turning the subordinates into competent hands
i) Selfconfidence and emotional stability
j) Motivating the followers and making them confident
k) Communication skills
l) Social skills
m) Charisma
n) Character and capacity
o) Solitude
Skills that a Leader must Posses
p) Clever (intelligent)

q) Conceptually skilled
r) Creative
s) Diplomatic and tactful
t) Fluent in speaking
u) Knowledgeable about group task
v) Organized (administrative ability)
w) Persuasive
x) Socially skilled
LEADERSHIP BEHAVIOR AND STYLES
Leadership style is the manner and approach of providing direction, implementing plans, and
motivating
people.
98
Styles based on Authority
AUTOCRATIC LEADER
In this type of leader have little trust on subordinates, motive people through fear and
punishment and
only occasional rewards. There is one way communication.
The executives make decisions and simply tell team members what to do, it is known as directive
or
autocratic leadership. The word autocratic suggests being dictatorial, but clear direction.
The idea is that leaders should be directive when time is of the essence, when subordinates don't
know
what to do, or they are not motivated.
Here leader makes decisions without reference to anyone else. The leaders are highly dictatorial
and
have little trust in their subordinates
It is based on the principle of centralization of power and the leader uses sanctions,
communication is
downward, superiors & subordinates are psychologically distant & the decisions are generally
made by
the top management.
Advantages
Provides strong motivation and reward for the leader
Quick decision making is guaranteed
AUTOCRATIC
LEADER
FOLLOWER
FOLLOWER
FOLLWER
99

Less competent employees can be employed because they just need to execute things.
Disadvantages
People generally dislike this style. (poor motivators)
Full potential and creative ideas cannot be put to use.
Succession or career planning is threatened.
DEMOCRATIC LEADER
In this case of leadership the leader will consults with subordinates on proposed actions and
decisions
and encourages participation from them. This type of leader ranges from the person who does not
take
action without subordinates concurrences to the one who makes decisions but consults with
subordinates before doing so.
Encourages decision making from different perspectives leadership may be emphasised
throughout
the organisation.
Consultative: process of consultation before decisions are taken
DEMOCRATIC
LEADER
FOLLOWER FOLLOWER FOLLOWER
100
Persuasive: Leader takes decision and seeks to persuade others that the decision
is correct
It is valuable in some types of business where decisions need to be made quickly. In this case of
leadership the leader will consults with subordinates on proposed actions and decisions and
encourages
participation from them. This type of leader ranges from the person who does not take action
without
subordinates concurrences to the one who makes decisions but consults with subordinates before
doing so.
Helps motivation and involvement.
Workers feel ownership of the firm and its ideas improves the sharing of ideas and experiences
within
the business. Can delay decision making
FREE REIN LEADER
101
In this type of leadership leader uses his or her power very little, if at all, giving subordinates a
high
degree of independence in their operations. Such leaders depend largely on subordinates to set
their

own goals and the means of achieving them, and they see their role as one of aiding the operation
of
followers by furnishing them with information and acting primarily as a contact with the groups
external environment.
In this style, the leader allows the employees to make the decisions.
He believes in giving complete freedom to his subordinates.
In this type of leadership leader uses his or her power very little. Such leaders depend largely on
subordinates to set their own goals and the means of achieving them.
They see their role as aiding the operation of followers by furnishing them with information and
acting
primarily as a contact with the groups external environment.
However, the leader is still responsible for the decisions that are made.
This is used when employees are able to analyze the situation and determine what needs to be
done
and how to do it. You cannot do everything! You must set priorities and delegate certain tasks.
This style of leadership is suitable only in the situations where the leader has competent and
committed
subordinates.
Advantages
It enhances job satisfaction of the employees
It increases the morale of the employees
Potential of the subordinates can be optimally utilized
Scope for development of the employees
FREE REIN LEADER
FOLLOWER FOLLOWER FOLLOWER
102
Disadvantages
The subordinates do not get the guidance and support of the leader
It ignores the leaders contribution
Conclusion
A good leader uses all three styles, depending on what forces are involved between the followers,
the
leader, and the situation
LIKERTS FOUR SYSTEM
Professor Renesis Likert conducted extensive research on different styles of leadership. Based on
these
findings, he developed an important conceptual background for understanding the leadership
behavior.
He proposed that leadership can be classified into the following four alternative styles.
Leadership Behaviour
System1 Autocratic Style(ExploitativeAuthoritative)
a) A HighTask & Low Relationship leader emphasis showing employee how to get the task

accomplished & spend minimum time giving psychological support.

b) The leaders are highly dictatorial and have little trust in their subordinates
c) It is based on the principle of centralization of power
d) As a Exploitative authoritarian, the leader uses sanctions, communication is downward,
superiors & subordinates are psychologically distant & the decisions are generally made by the
top management.
SystemII Paternalistic (Benevolent authoritative)
a) Benevolent authoritative may not necessarily consult people but he has the interest of the
community at heart & makes decisions which he or she genuinely thinks is right(will of
the leader)
b) Their tools of motivation include some rewards along with fear and punishment.
c) He is like a father to his subordinates.
d) He/she patronizes confidence and trust in their subordinates and seeks opinion.
e) Benevolent authoritative then persuades people to accept the decision based on the merits of
the decision.
f) He exercises total control on policymaking.
g) Subordinates become dependent on them and do not grow professionally under them
SystemIII Consultative Style
a) The authority seeks the views & advise of the community members but makes the final
decision himself after listening to the argument.
b) The final decision is a binding to all .
c) They have substantial but not complete confidence and trust on their subordinates.
d) Upward and Downward communication flow.
103
e) Rewards accompanied by punishment are the primary tools of motivation used by these
leaders.
SystemIV Participative Leadership style
a) A participative leader puts the issue before the members of the community or their
representatives & invites discussion.
b) At the end of the discussion, the decision accepted by the majority is the final decision &
every
one abides by it.
c) Leaders have complete trust and confidence in their subordinates, and their ideas and opinions
are frequently sought
d) These leaders believe in the process of decentralization
e) Flow of communication is upward, downward and horizontal
f) It improve productivity and facilitate by objectives and creates an environment where the
potential of the subordinates can be effectively utilised.
Likert's four systems conclusion
g) According to Likert (1961), optimal performance can only be achieved if attention is paid to
the
human aspects of subordinates' problems and behavioral aspects, such as motivating forces,
communication processes, interactioninfluence processes, decision making processes, goal
setting processes, control processes, and performance characteristics.

ROBERT BLAKE AND JANE MOULTON MANAGERIAL GRID

One of the most widely known leadership theory is based on MANAGERIAL GRID. The
managerial grid is
the 2dimensional matrix developed by ROBERT BLAKE and JANE MOULTON that shows
concern for
people on the vertical axis and concern for production on the horizontal axis.1 reflects minimum
concern,9 reflects maximum concern. As a result 81 different positions with respect to leadership
styles
or behaviors have been created in the form of a managerial grid or a 9X9 matrix. The leadership
styles of
different individuals can be defined on the basis of the positions that they are likely to occupy on
the
managerial grid.
Five key Grid combinations.
1/1 low concern for production, low concern for people.
1/9 low concern for production, high concern for people.
5/5 moderate concern for production, moderate concern for people.
9/1 high concern for production, low concern for people.
9/9 high concern for production, high concern for people.
HIGH
104
LOW
123456
789
LOW
HIGH
CONCERN FOR PRODUCTION
(1, 1) Impoverished management:
Exertion of minimum effort to get required work done is appropriate to sustain organizational
membership (low concern for production, low concern for people).
(9, 1) Task management or authority obedience:
Efficiency in operation results from arranging conditions of work in such a way that human
elements
interfere to minimum degree (high concern for production, low concern for people).
Country club
management
(1,9)
Team
management
(9,9)
Organization
management

(5,5)
Impoverished
management
(1,1)
Task
management
(9,1)
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(1, 9) Country club management:
Thoughtful attention to needs of people for satisfying relationship leads to a comfortable,
friendly
organization atmosphere and work tempo (low concern for production, high concern for people).
(5, 5) Organization management (Middle of the road):
Adequate organizational performance is possible through balancing the necessity to get out work
with
maintaining Normal of people at a satisfactory level (medium concern
For production, medium concern for people).
(9, 9) Team management:
Work accomplishment is from committed people, Interdependence through common
sake Organization purpose leads to relationships to trust respect.
The managerial grid used the behavior dimension: CONCERN FOR PEOPLE and
CONCERN FOR PRODUCTION and evaluated a leaders use of these behaviors,
ranking them on a scale from 1 (low) to 9 (high). Although the grid has 81 potential
categories into which a leaders behavioral style might fall, emphasize was placed on 5:
a) IMPOVERISHED MANAGEMENT (1,1)
b) TASK MANAGEMENT (9,1)
c) MIDDLE OF THE ROAD MANAGEMENT (5,5)
d) COUNTRY CLUB MANAGEMENT (1,9)
e) TEAM MANAGEMENT (9,9)
These 5 leadership styles are described below:
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a) Impoverished Management (1, 1)
The manager has little concern for either people or production.
b) Authority obedience or task management (9,1)
The manager stresses operating efficiently through controls in situations through controls in
situations where
human elements cannot interfere.
c) Country club management (1,9)
The manager is thoughtful, comfortable and friendly and has little concern for output.
d) Organization management or Middle of the road management ( 5,5)
The manager attempts to balance and trade off concern for work in exchange for a satisfactory
level of

morale a compromise.
e) Team management (9,9)The manager seeks high output through committed people achieved
through
mutual trust, respect and a realization of interdependence.
According to BLAKE and MOUNTON, the first 4 styles are not the most effective. The (9, 9)
team management
style (maximum concern for both output and people) is the most effective style. Blake and
Mouton say their
studies prove this approach will result in improved performance, lower employee turn over and
absenteeism
and greater employee satisfaction. Managerial grid consultants attempt to use job enrichment
and participative
decision making to create a situation where both the organization and its members are accorded
maximum and
equal concern.
Limitations of Managerial Grid
They failed to provide an insight on the leadership in action.
Also it doesnt provide any guidance or handholding with respect to the development of the
leadership ability.
BASIC THEORIES OF MOTIVATION
McGregors theory x and theory y
Maslows need hierarchy
Hygiene approach to motivation
BASIC THEORIES OF
MOTIVATION
McGregors THEORY X
AND
THEORY Y
MASLOWS HIERARCHY
NEEDS
THEORY
HERTZBERGS HYGIENE
THEORY
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MOTIVATION:
Motivation is the willingness to put forth effort in pursuit of organizational objectives.
Motivation is the willingness to most high levels of efforts to achieve organizational goals,
conditioned
by the ability to satisfy some individual need.
Definition

Motivation has been defined as all those inner striving condition described as wishes, desires,
drives
etc. It is an inner state that activates or more an individual as a group of people.
Mc GREGORS THEORY X AND Y:
This theory was propounded by Douglas McGregors. Mc Gregors suggest must start with the
basic
question of how manager see themselves in relation to other. This view point requires some
thought on
the perception of human nature. Theories X and Y one two sets of assumptions about nature of
people.
McGregors choose these terms because he wanted neutral terminology without any connotation
of
being good or bad.
108
McGregor, in his book The Human side of Enterprise states that people inside the organization
can be
managed in two ways.
The first is basically negative, which falls under the category X and the other is basically
positive, which
falls under the category Y.
After viewing the way in which the manager dealt with employees, McGregor concluded that a
managers view of the nature of human beings is based on a certain grouping of assumptions and
that
he or she tends to mould his or her behaviour towards subordinates according to these
assumptions.
The assumptions of theory X :
Employees inherently do not like work and whenever possible, will attempt to avoid it.
Because employees dislike work, they have to be forced, threatened with punishment to
achieve goals.
Employees avoid responsibilities and do not work till formal directions are issued.
McGregors
THEORY
THEORYX THEORYY
109
McGregors Theory X assumes that workers:
Dislike work
Lack ambition
Are irresponsible
Resist change
Prefer to be led

The assumptions of theory Y :

Physical and mental effort at work is as natural as rest or play.
People do exercise selfcontrol and selfdirection and if they are committed to those goals.
Average human beings are willing to take responsibility and exercise imagination, genunity and
creativity in solving the problems of the organization.
McGregors Theory Y assumes that workers are:
Willing to work
Capable of self control
Willing to accept responsibility
Imaginative and creative
Capable of selfdirection
Implications of Theory X and Theory Y:
Theory X managers create situations where workers become dependent and reluctant.
Theory Y managers create situations where workers respond with initiative and high
performance.
MASLOWS HIERARCHY OF NEEDS THEORY:
One of the most widely mentioned theories of motivation. This theory was propounded by
Abraham
Maslow. Maslow saw human needs in the form of a hierarchy, ascending from the lowest to the
highest
and he concluded that when one set of needs is satisfied this kind of need cases to be a motivator.
He
postulated that people have needs and these needs can influence behavior. The needs are
prioritized as
per their importance
Needs were categorized as five levels (lower to higherorder needs)
Individuals must satisfy lowerorder needs before they can satisfy higher order needs.
Satisfied needs will no longer motivate.
Motivating a person depends on knowing at what level that person is on the hierarchy.
Hierarchy of needs
110
Lowerorder (external): physiological, safety
Higherorder (internal): social, esteem, selfactualization
Maslows hierarchy of human needs.
111
a) Physiological Needs:
There are the basic needs for sustaining human life itself such as food, water, shelter, sleep etc.
b) Safety Needs:
People want to be free of physical danger and of the fear of losing a job, property, food or shelter.
c) Acceptance Need:
Since people are social being they need to being, to be accepted by other.
d) Esteem Needs:

Self
actualization
Self esteem
Social needs
Safety/security needs
Physiological needs
112
Once people began to satisfy their need to belong, they tend to want to be held in esteem both by
themselves and by others. This kind of need producers such satisfactions as power, prestige
status and
self confidences.
e) Need for Selfactualization:
Maslow regards this as the highest need in his hierarchy. It is the desire to become what one is
capable
of becoming to maximize ones potentials and to accomplish something.
Examples of different needs
Physiological needs: Food, water, warmth, shelter and sleep.
Security and safety needs: Bank balance, fixed assets, insurance.
Social needs: He/she needs to be accepted and loved by others.
Esteem needs: He/she desire to be respected by others, attaining prestige in society, acquiring
branded products.
Need for selfactualization: Desire of an individual to be free to do what they want to do in life.
It maximizes their capabilities.
Implications of Maslows theory:
The needs theory extends from physiological needs at the bottom to the need for self
actualization at
the top.
a) Until physiological needs are reasonably will satisfied higher level needs will not significantly
influences behavior.
b) A person is never completely satisfied on any needs level.
c) A type of need can have exceptional power to influences only when those below it in the
hierarchy one largely fulfilled.
d) An average person might be 85% satisfied in physiological needs, 70% in safety and security
needs 50% in belongings needs, 40% in esteem needs and 10% in selfactualizations needs. This
implies that the managers of the average person pay attention to the belongings and esteem
needs. Physiological needs and safety needs are viewed as weak motivations because more than
70% of people are satisfied in respect of these two needs. Also self actualization is viewed as a
weak motivator became only 10% are satisfied at this level.
Criticism of Maslows Theory:
a) Certain suggestion that needs fall into only two or three distinct and not five, according to
some
researchers.
b) Some critics say that the orders of needs may not always be the same.

c) Maslows theory is presented and is being universally accepted as accurate. However people
in
various firms position or countries differ.
113
d) Another criticism of the needs hierarchy is that needs overlap and can fit in more than one, or
ever all of the categories. An equitable salary for example may satisfy needs in all five
categories, the salary received by a person has an impact on many different needs.
e) Maslows needs hierarchy is static. But needs change overtime in various situations and when
people make comparison about their satisfaction and the satisfaction of others.
HERTZBERGS MOTIVATION HYGIENE OR TWO FACTOR THEORY:
114
Fred ride Herzbergs (1959) advocated another content explanation of motivation. He based his
theory
on a study of need satisfaction and on the reported motivational effects on that satisfaction on
200
engineers and accountants. In this study Hertzberg and his associates asked the group of
professionals
to think of times both when they felt especially good and when they felt especially bad about
their jobs.
Each employees was then asked to describe the conditions that led to these particular feelings.
The
respondents in the study named different kind of conditions as cause of each of the feelings.
Hertzberg
identified two distinct classes of factors which were important to behavior on the job. The factors
are:
Hygiene Factor:
Hygiene factors are capable of creating dissatisfaction but not positive motivation. These are
conditions
of a job which operate primarily to cause dissatisfaction to the employee when they are not
present. But
the pressure of these conditions or factors does not build strong since they are necessary to
maintain a
reasonable level of job satisfaction. Many of these factors have often been wrongly perceived by
managers as factors that can motivate subordinate but they are in fact more as dissatisfies when
they
are absent. The interrelated conditions in which the job is done. These include pay and benefits,
working

conditions, interpersonal relations company policy etc. Hertzberg concluded that hygiene factors
cannot
promote motivation but can cause dissatisfaction.
Motivators:
Motivators produce high levels of satisfactions. These are job conditions or factors which build
high
levels of motivation. However if there conditions are not present, they do not prove highly
dissatisfying.
Motivators are concerned mainly with the job content and tend to be internal to the job.
Motivators
include challenging work, recognition for accomplishment and the feeling of achievement.
HERZBERGS
MOTIVATION THEORY
Hygiene Factor Motivator Factor
115
Criticism of Hygiene Theory:
a) This theory is most applicable to professionals and not relevant to blue collars workers.
b) Hertzberg study focused on level of satisfaction, not performances and satisfaction and
performances are not synonymous.
Relative Analysis of Theories
SELF
ESTEEM
ESTEEM
NEEDS
SOCIAL
NEEDS
SAFETY/SECURITY
NEEDS
PHYSIOLOGICAL
NEEDS
MOTIVATORS
HYGIENES
116
MASLOWS NEED HIERARCHY HERZBERGS TWO FACTOR THEORY
Self actualization Challenging work, achievement, growth in job.
Esteem or status Responsibility, advancement, recognition.
Social needs Status , inter personal relationship
Security and safety needs Quality of supervision, company policy and
administration
Physiological needs Working condition, job satisfaction, salary.
COMPARISION BETWEEN MASLOWS NEED HIERARCHY AND HERZBERGS
TWO FACTOR THEORY

Primarily about the relationship of human needs, whereas Herzberg's theory is about relationship
between various factors related with the job and employee satisfaction.
Human needs follow a five level hierarchywhereas Herzberg saw no hierarchy but classified
human needs into two categorieshygiene factors and motivators.
Continued..
Human needs have different levels and when a particular level of needs of an employee is
satisfied, it ceases to be a motivator. But, Herzberg opined that only motivators and not the
hygiene factors, could motivate individuals because they lead to job satisfaction.
Herzberg's theory seemed to be more relevant to a society where basic needs are almost
assured and providing hygiene factors to employees does not create any satisfaction for them.
However in developing and underdeveloped countries, the large percentage of population, that
does not have access to even basic amenities, might be motivated through provision of hygiene
factors(physiological and safety needs as suggested by Maslow.
INTEGRATED MODEL OF MOTIVATION
117
Integrated Model of Motivation
There are many theories of motivation but they are not mutually exclusive. They can be
understood and used complimentary to each other. Hence an effort to integrate different
theories is made so that one comprehensive model of motivation is available.
Motivation includes the three dimensions of direction toward a goal, work effort and
persistence. This motivation level is enhanced by the individual ability and organizational
support which results in work performance.
When performance receives rewards the behavior of accomplishment is reinforced and the kind
of rewards determine the satisfaction level of employees and the level of satisfaction
determines the level of motivation in the employee for the future endeavor. This concept is
derived from different theories.
CARROT AND STICK THEORY OF MOTIVATION
The various leading theories of motivation and seldom make reference to the carrot and the stick.
This
metaphor relates of course, to rewards and penalties in order to induce desired behavior.
118
The inducement of some kind of carrot is recognized. Often this is the money in the form of
pay or
bonuses.
The stick in the form of fear fear of loss of job, loss of income, reduction of bonus, demotion
or some
other penalty has been and continues to be a strong motivator.
It comes from the old story that makes a donkey move, one must put a carrot in front of him or
jab him
with a stick from behind.
REWARDS AND PERFORMANCE
Putting pay in context

 For most of the 20th century, the belief was that people go to work to collect a paycheck and
money was the main, or even the sole, motivator.
For most people, money is an important motivator because it supplies many things fulfilling
basic needs( food and shelter) to provide higher education for ones children and a means of
retirement.
In 21st century , we now recognize that pay is not everything.
People seek more than just a paycheck, when they go to work.
People want to work in an environment of trust and respect, where they can develop
relationships with others, and do meaningful and interesting work.
People look for learning and developmental opportunities that may lead to better career
opportunities in the future.
So managers must realize that pay is just one element in a set of management practices that can
either improve or reduce employee commitment and satisfaction, team work, and performance.
When we think about rewards, then, we must think in broader terms than just pay.
We can define rewards as something that increases the frequency of an employee action.
Performance measurement is concerned with measuring individuals effectiveness in their roles,
understanding their aspirations and determining which development actions would be
appropriate.
Reward is about understanding individuals motivating factors, and determining the level of pay,
bonus
and others rewards they receive. The purpose is to provide a positive reinforcement and motivate
them
for achieving outstanding performances. They not only need money but also recognition and
selfsatisfaction.
MOTIVATIONAL TOOLS AND TECHNIQUES
a) Money
b) Rewards (Extrinsic (are external in nature. They are granted by others and include money,
perks,
promotion, recognition and praise and Intrinsic are internal in nature and provide a feeling of
satisfaction, accomplishment, selfactualization.)
c) Participation
d) Character and capacity(trust, character and capacity to deliver)
119
e) Content of communication(guiding rather than ordering, listening, compelling)
f) Quality of work life
g) Having volunteers on the project team (usually volunteers are more committed and motivated)
h) Inspiring a shared vision (his role is to create a vision of what is possible and then
demonstrate)
i) Clearly articulated shared values
j) Leading by example
k) Empowering team members
l) Celebrating accomplishments

m) Recognizing Individuality
n) Showing confidence in followers
Communication and Organizations
The word communicate is derived from the word common, means to share, exchange, send
along,
transmit, talk, gesture, write, put in use, relate, etc. In general parlance communicate is referred
to as
sharing or exchange of ideas and information.
Communication is not a secondary or derived aspect of organizationsit is not a helper
Communication is an inherent and defining feature of organizations
No human relationship could be maintained, no organizational objective achieved, no
activities
coordinated and no decisions reached without communication.
In very large organizations the ability to express onself is perhaps the most important of all the
skills. Peter F. Drucker
Communication Process
The communication process represents a sequence of steps that can lead to the transfer of
meaning and
understanding of a message from the sender to the receiver and preferably a feedback from the
receiver to the sender.
Shanon provided a general model of the communication process and this marked the general
beginning
of the modern field of communication. Shanon outlined the basic constituents of communication
to
highlight how it happens and why it sometimes fails.
Information source:
The sender in the communication process is an individual who initiates the communication
process.
H/she is the information source.
Message:
An idea, a meaning or an understanding in the mind of a sender cannot get communicated on its
own. It
needs to be converted into certain verbal or nonverbal codes that can reach the receiver to be
understood by him or her.
120
Transmitter:
For Shanon, the telephone instrument that captures the audio signal , converts it into an
electronic
signal, and amplifies it for transmission through the telephone network, represents a form of

transmitter. Similarly facetoface communication mouth(sound) and body(gesture) that enable

the
transmission of signals to the receiver.
Signal:
It represents what flows from a sender to the receiver through a channel.
Channel/Medium for transmission of the message:
It is the means that is used for transmitting the message from the sender to the receiver.
Receiver of the message:
Is the one who receives signal, like ears (sound) and eyes (gesture).
Destination:
It represents the persons who consumes and processes the signals to transform it into an
understanding. After receiving the signals they are translated into thoughts or ideas by the
destination.
This completes the communication process by developing an understanding of the intended
message.
Forms of communication
Verbal Communication:
It is conducted with the use of words. It is of two typeswritten and oral communication.
Nonverbal communication:
It refers to the tools other than words that are employed consciously and unconsciously by the
sender
to communicate ideas and thoughts to the receiver of the message.
Critical Elements in Communication
Participantsuniquely situated actors in a particular context. Those participants are affected by
their own particular frame of referencetheir culture, gender, level of education, organizational
rank, etc.
Interpretationinvolves the encoding and decoding of symbols transmitted during the
interaction. Those processes are not uncomplicated.
Context of the workplacecontext is always important in communication, the workplace
brings
special challenges to context.
121
Why study Organizational Communication
1) Org communication provides the basis for understanding virtually every human process that
occurs in
organizations.
2) To be aware of communication skills that you as a college graduate should possess in order to
meet
organizational expectation.
3) May start you down the path to a career as a communication professional in an organization or
as an

academic scholar in the field.

Unique Perspectives on Communication in Organizations
Downward communication (superior to subordinate)
Upward communication (subordinate to superior)
Horizontal communication (among colleagues)
Informal communication (the grapevine)
Formal Communication Structure
Definition: Communication through officially designated channels of message flow between
organization positions usually found in organizational charts, policy
manuals, or hierarchical structures
3 Types of Formal Communication
1) Downward Communication
2) Upward Communication
3) Horizontal Communication
Downward Communication
Definition: Communication that flows from upper to lower (such as manager to employer
or superior to subordinate).
Types of messages:
(job instructions, procedures and practices information, feedback)
Advantages efficient (fast)
Disadvantages managerial control
122
Upward Communication
Definition: Transmission of messages from lower to higher levels of the organization (such as
communication initiated by subordinates with their superiors).
Types of messages: performance on the job, job related problems, fellow employees and their
problems, subordinates perceptions of org policies and practices, tasks and procedures.
Advantages: promotes morale among all employees
Disadvantages: not enough superiors encourage subordinate
Horizontal Communication
Definition: Flow of messages across functional areas at a given level of an organization (this
permits
people at the same level to communicate directly).
Type of messages: facilitates problem solving, information sharing across different work groups,
task
coordination between departments and project teams.
Advantages:Effective
Disadvantages: Not efficient (time consuming)
Informal Communication
Definition: Episodes of interaction that do not reflect officially designated channels of
communication.
The grapevine emerges from social and personal interests of the employees rather than formal
requirements of the organization. Informal communication is inherent and even a necessary
aspect of

organization life.
Advantages: Creates a relaxed, comfortable climate
Disadvantages: Should not become a substitute for an ineffective, formal system
123
Communication Barriers
The reasons that prevent effective communication can be classified into three categories of
barriers,
namely personal barriers, organizational barriers and noise.
Personal Barriers:
Are the factors that are related with individuals involved in communication. They are:
a) Lack of knowledge
b) Emotions and mood
c) Occupation
d) Hostility
e) Past experience
f) Hidden agendas
g) Inarticulateness
h) Stereotyping
i) Daydreaming
j) Defensiveness
k) Information overload
Organizational Barriers
a) Organizational structure
b) Nature of authority relationship
c) Information overload
d) Time pressures
e) Nature of job
Noise Barriers
Anything that acts as an obstacle or hindrance in effective communication between sender and
the
receiver is noise.
Noise can even distort the clarity of message. Ex: fault in the telephone line, noise in the
environment,
parallel communication from other sources.
******************
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MODULE 5
Controlling: Control function in management, The basic control process.
Types of control feed forward, concurrent and feedback controls. Factors
in control effectiveness.
CONTROLLING
Controlling is the last function among the basic managerial functions; it is a vital part of the

management process. Controlling is defined as any process that directs the activities of
individuals
toward the achievement of organizational goals. Planning and controlling is closely related.
Planning
and controlling may be viewed as the blades of a pair of scissors. Without objectives and plans,
control is
not possible because performance has to be measured against some established criteria.
A properly designed control system alerts managers to the existence of potential problems and
helps
then take necessary corrective action. Controlling as a managerial function can be defined in
several
ways, they are:
a) Controlling means ensuring that the organization is actually achieving the planned objectives.
b) Controlling is the process of comparing actual performance with standards and taking any
necessary corrective action.
c) Controlling is the process of monitoring activities to ensure that they are being accomplished
as
planned and of correcting any significant deviation.
d) Controlling is the process of measuring progress toward planned performance and applying
corrective measures to ensure that performance is in line with the objectives set.
e) Controlling is the process of regulating organizational activities so the actual performance
confirm to expected organizational standards.
Controlling is necessary in managing organizational activities for the following reason:
a) Controlling builds most directly on the planning function by providing means for monitoring
and
making adjustment in performance so that plans can be realized.
b) Controlling ensures efficient and effective utilization of all resources of the organization.
c) Some means of control is necessary because once managers form plans and strategies, the
must
ensure that plans are carried out. This means that making sure that other people are doing what
125
needs to be done and not doing inappropriate things. If plans are not carried out properly,
management must take steps to correct the problems.
Organizational Control
It is not enough to have great qualities, we should also have the management of them.
Francois de La
Managers monitor and regulate how efficiently and effectively an organization and its members
are
performing the activities necessary to achieve organizational goals.
Managers must monitor and evaluate:
Is the firm efficiently converting inputs into outputs?

Are units of inputs and outputs measured accurately?

Is product quality improving?
Is the firms quality competitive with other firms?
Are employees responsive to customers?
Are customers satisfied with the services offered?
Are our managers innovative in outlook?
Does the control system encourage risktaking?
According to Henry Fayol
Control of an undertaking consists of seeing that everything is being carried out in accordance
with the
plan which has been adopted, the orders which have been given, and the principles which have
been
laid down.
Its object is to point out mistakes in order so that they may be rectified and prevented from
recurring.
According to Koontz
Controlling is the measurement and correction of performance in order to make sure that
enterprise
objectives and the plans devised to attain them are accomplished.
126
Characteristics of Control
a) Control is a continuous process
b) Control is a management process
c) Control is embedded in each level of organizational hierarchy
d) Control is forward looking
e) Control is closely linked with planning
f) Control is a tool for achieving organizational activities
Establishing right standards
a) Guide for measurement
b) Realistic and flexible
c) Preventive
d) Cost effective(it should not exceed the benefit that it is likely to deliver)
e) Clarity of responsibility for delivery
f) Timeliness
g) Ease of understanding
h) Based on facts
i) Motivating
j) Importance of Control
k) Bringing focus
l) Ensures consistency in organizational activities
m) Enables organizational effectiveness and efficiency
n) Provides feedback on the project status
o) Aid in decision-making

p) Maintains discipline
q) Input for future planning
The Organizational Control Process
The control process involves carefully collecting information about a system, process, person, or
group
of people in order to make necessary decisions about each. Control techniques and systems are
essentially the same for controlling cash, office procedures, morale, product quality and anything
else.
The basic control process wherever it is found and whatever is being controlled, involves these
steps:
Managers set up control systems that consist of four key steps:
1. Determine areas to control.
2. Establish standards to measure performance.
3. Evaluate performance
4. Develop a report
5. Take corrective actions.
127
STEP 1: Determine areas to control.
Mangers must choose areas to control because it is expensive and virtually impossible to control
every
aspect of an organizations activity
Major controls are based on organizational goals and objectives developed during the planning
process.
For example some of the key result areas for controlling could be market share, quality, output,
labour
efficiency, discipline, costs etc..
STEP 2: Establish standards to measure performance.
The second step in the control process is the setting up of clear and specific standards for an
activity and
these standards should be established for all the operations. A standard defines in specific terms
what
the outcome of an activity or tasks needs to be. It also includes a statement of conditions for
satisfactory
performance. In the Organizational context standards are performance goals and targets.
Performance
standards are a precise statement of expected results from a product, service, machine, an
individual
etc.
They predetermine the points for which performance is measured and represent a criterion for
measuring the results.

Employees must know what is expected of them, before the control process can be implemented.
Because plans are the yardsticks against which managers devise controls the first step in the
control
process logically would be to establish plans. However, since plans vary in detail and complexity
and
since managers cannot usually watch everything, special standards are established. Standards are
established levels of quality or quantity used to guide performance. Standards are sometimes
viewed as
objectives to be achieved. Whenever possible, standards should be expressed numerically to
reduce
subjectivity and to depersonalize the control process.
The most frequently used types of standard are:
a) Time standards: They state the length of time to should take to carryout a task or to produce
a
product or to perform a certain service.
b) Productivity standards: These are based on the output of goods of services during a set time
period. (Per hour, per day)
c) Cost standards: These are based on the cost associated with producing the goods or services.
(Material cost etc)
d) Quality standards: These are based on the level of perfection or accuracy needed.
e) Behavioral standards: These are based on the type of behavior of workers in the
organizations.
For example Workers are required to wear standard clothing. Be neat and treat customers
courteously.
128
Other common areas that are generally depicted are:
Profitability(PAT, ROCE, ROI)
Market share (market position with respect to competitors)
Productivity(cost per unit and reduction in rejected units)
Innovation(time period for a new product from conception stage till the market launch)
Product specification standards
Corporate social responsibility(socially responsible entities)
STEP 3: Evaluate performance
This step consists of two activities
a) Measuring performance
b) Comparing performance against standards
Evaluating performance consists of checking of deviation from standard and determines whether
the
deviations exceed control tolerances. The evaluation process involves observing and measuring
performance, evaluation requires accurate measurement of what is taking place and an effective
means

of comparison with standards. Although quantitative measures are often used wherever possible,
many
aspects of performances can be difficult to measure quantitatively. Most organizations prepare
formal
reports of performance measurements that managers review regularly.
These measurements should be related to the standards set in the first step of the control process.
For
example, if sales growth is a target, the organization should have a means of gathering and
reporting
sales data.
Business performance can be measured and evaluated on the basis of different parameters.
Jack Welch recommended three key measurements that can determine the successful
performance of a
business organization: Employee satisfaction, customer satisfaction and cash flow
When managers read computer reports or walk through their plants, they identify whether actual
performance meets, exceeds, or falls short of standards.
Typically, performance reports simplify such comparison by placing the performance standards
for the
reporting period alongside the actual performance for the same period and by computing the
variance
that is, the difference between each actual amount and the associated standard.
The actual performance is compared against standards of performance is compared against
standards of
performance so that if standards are met or exceeded, performance is recognized and no
corrective
action is necessary. If standards are not met suitable corrective actions are necessary.
STEP 4: Develop a report
129
The purpose of a report is to bring clarity about an issue among the different stake holders. The
report includes/informs:
The superiors about the current situation
It includes possible recommendations
And the awareness and clarity provided by the report, serve as the basic foundation on the basis
of which an appropriate corrective and preventive action could be selected.
Advantages of a report
It can helpful in analyzing different facets of a problem in detail.
It gives substantial information to the manager to make an intelligent decision
It is also helpful in interpreting the data provide by the subordinate.
Disadvantages of a report
Request for a report by the superior can be perceived as a threat
It is time consuming

 Lots of effort and resources needed to prepare a report

Possibility of errors can prove great loss.
Types of reports
Oral reports
Statistical reports
Written reports
STEP 5: Take corrective actions.
After the evaluator determines the cause or causes of deviation, he or she can take the fifth
stepcorrective action.
When performance deviates from standards, managers must determine what changes, if any,
are necessary and how to apply them.
In the productivity and quality centred environment, workers and managers are often
empowered to evaluate their own work.
The most effective course may be prescribed by policies or may be best left up to employees'
judgment and initiative.
Correcting deviations
Methods for correcting deviations can be done through a systematic problemsolving approach
in the form of different functions of management.
Planning, organizing, staffing, directing, implementing and control.
The manager must consider what action to be taken to correct performances when deviation
occurs.
The cause of deviation must be found before taking corrective action.
Standards should reflect the various positions in an organization structure. If performance is
measured
accordingly, it is easier t correct deviations. Managers know exactly where in the assignment of
individual or group duties, the corrective measures must be applied.
If standards are met appropriate or not realistic because of changing conditions, then corrective
action
to meet standards is not desirable. In such cases, standards must be adjusted according to
changed
circumstances.
130
Correction of deviations is the point of which control can be seen as a point of the whole system
of
management and can be related to the other managerial functions. Managers may correct
deviations by
not redrawing their plans or by modifying their goals. Or they may correct deviations by
exercising their
organizing function through reassignment or clarification of duties. Another way is to correct
through
better leading full explanation of the job or more effective leadership techniques.

Corrective actions may be either immediate of permanent. Immediate corrective action is often
aimed
at correction symptoms where as permanent corrective action is aimed at correcting the cause of
the
symptoms or problems.
Types of control
Types of control
On the basis of Time Implementation:
A. Feed forward
B. Feedback
C. Concurrent
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Three Types of Control
On the basis of managerial level:
A. Strategic control (performed by the top management is directed at ensuring the achievement
of
strategic plans such as org vision, mission, goals and strategies.
B. Managerial control (are derived from strategic controls and are implemented by the middle
level
management of an organization)
C. Operational control ( are derived from the managerial control . Controls are implemented by
the
frontline managers or supervisors and they ensure that the daytoday operations are carried out
efficiently and effectively.
On the basis of Time Implementation:
A. Feed forward
B. Feedback
C. Concurrent
A. Feed forward Controls
132
Feed forward control focuses on the regulation of inputs (human, material, and financial
resources that
flow into the organization) to ensure that they meet the standards necessary for the
transformation
process.
Feed forward controls are desirable because they allow management to prevent problems rather
than
having to cure them later. Unfortunately, these control require timely and accurate information
that is
often difficult to develop.

Feed forward control is sometimes called preliminary control, pre control, preventive control,
or
steering control.
B. Feedback Controls
This type of control focuses on the outputs of the organization after transformation is complete.
Sometimes called post action or output control, fulfils a number of important functions.
For one thing, it is often used when feed forward and concurrent controls are not feasible or are
too
costly. This is the most popular type of control which relies on feedback. Many systems control
themselves through information feedback which shows deviations from standards and initiates
changes.
In other words systems use some of their energy to feed back information that compares
performance
with a standard and initiates corrective action.
This control takes places after the activity is carried out. It regulates after a product or a service
has
been completed in order to ensure that the final output meets the standards set also called post
action
control or output control. it is used when feed forward and concurrent controls are not feasible or
are
too costly . It provides information which will facilitate modification plans and re planning.
Examples of feedback system
The house thermostat is a system of feedback and information control. When the house
temperature
falls below the present level an electric message is sent to the heating system which is then
activated.
When the temperature rises and reaches the set level, another message shuts off the heater. This
continually measurement and turning on and off the heater keeps the house at the desired
temperature. a similar process activates the aircondition system. As soon as the temperature
exceeds
the present level, the air conditioning system cools the house to the desired temperature.
Likewise in
the human body a number of feedback systems control temperature, blood pressure, motor
reactions
and other conditions. Another example of feedback is the grade a student receives on a midterm
test.
This is intended of course to give the student information above than desirable the send a signal
suggesting improvement.
133

Management control is usually perceived as a feedback system similar to that which operates in
the common household thermostat. This can be seen clearly in the following figure which shows
the
feedback process in management control. This system places control in a more complex and
realistic
light than if it is regarded merely as a matter of establishing standards, measuring performance
and
correcting for deviations. Managers do measure actual performance compo rare this
measurement
against the standards and identify and analog deviations. But then to make the necessary
corrections
thy must develop a program for corrective action and implement this program in order to arrive
at the
performance desired.
The feedback control system has two advantages over feed forward and concurrent control.
They are:
a) Feedback provides manager with meaningful information on how effective their planning
efforts
are. If the feedback indicates little variance between standard and actual performances it
indicates that the planning is on forget. If the deviation is significant the feedback information
can use it when formulating new plans to make them more effective.
b) Feedback control can enhance employee motivation. people can be informed about their
performance through feedback control.
However there are some drawbacks in feedback control system. The major
drawback is that by the time the manager has the feedback information the problems have
already occurred and resulted in a citation amount of wastage or damage. Another draws aback
is time required to collect feedback information and make if available to the managers to take
correctable action based on it.
C. Concurrent Controls
Concurrent control takes place while an activity is in progress.
It involves the regulation of ongoing activities that are part of transformation process to ensure
that
they conform to organizational standards.
Concurrent control is designed to ensure that employee work activities produce the correct
results.
Effective Organizational Control Systems
The management of any organization must develop a control system tailored to its organization's
goals
and resources.

Effective control systems share several common characteristics. These characteristics are as
follows:
A focus on critical points. For example, controls are applied where failure cannot be tolerated or
where
costs cannot exceed a certain amount. The critical points include all the areas of an organization's
operations that directly affect the success of its key operations.
134
Integration into established processes. Controls must function harmoniously within these
processes
and should not bottleneck operations.
Acceptance by employees. Employee involvement in the design of controls can increase
acceptance.
Availability of information when needed. Deadlines, time needed to complete the project, costs
associated with the project, and priority needs are apparent in these criteria. Costs are frequently
attributed to time shortcomings or failures.
Economic feasibility. Effective control systems answer questions such as, How much does it
cost?
What will it save? or What are the returns on the investment? In short, comparison of the
costs to
the benefits ensures that the benefits of controls outweigh the costs.
Accuracy. Effective control systems provide factual information that's useful, reliable, valid, and
consistent.
Comprehensibility. Controls must be simple and easy to understand.
Requirements of effective control:
All alert managers want to have an adequate and effective system of controls to assist them in
making
sure that events conform to plans. It is sometimes not realized that the controls used by mangers
must
be designed for the specific task and person they are intended to serve while the basic process
and the
fundamentals of controls are universal the actual system requires special design.
Instead, if controls are to work, they must be tailored to plans and positions, to the individual
managers
and their personalities, and to the needs for efficiency and effectiveness.
a) Tailoring controls to plans and positions:
All control techniques and systems should reflect the plans they are designed to follow. They
should also
b tailored to positions. What managers need is the information that will then how the plans for
which

they are responsible are progressing. What will be appropriate for a vice president in charge of
manufacturing will certainly not be suitable for a shop supervisor? Controls for each department
will
differ. The very nature of control emphasizes the fact that the more controls are designed to deal
with
and reflect the specific nature and structure of plans the more effectively they will serve
managerial
needs.
Certain techniques, such as budgets, standard hours, and costs and various financial ratios, have
general
application in various situations. However, none of these widely used techniques is completely
applicable in any given situation. Managers must always be aware of the critical factors in their
plans
and operation requiring control, and they must be techniques and information suited for them.
135
Controls should also reflect the organization structure, showing who is responsible for the
execution o
plans sand for any deviation from them.
b) Tailoring controls to individual managers:
Controls must also be tailored to individual managers control and information are of course
intended to
help individual manager can or will understand, they will not trust. And what they do not trust
they will
not use.
What is said about tailoring information for understanding is true also of control techniques.
Even quite
intelligent of planning and control, like variable budgeting or network planning, can fail in
practice solely
because the systems either were not comprehensible to the people who had to use them or
appeared
to be too complex for them. Experts in those matters must not try to show others how export they
are;
rather, they should design a system at the level of ready comprehension so that people will use it.
Obtaining 80% of the possible benefit from a fairly used system is for better than obtaining no
benefit
from a more perfect but unworkable system.
c) Designing controls to point exceptions at critical points:

One of the most important part of tailoring controls to the needs of the efficiency and
effectiveness is to
design them to point up exceptions. In other words controls that concentrates on exceptions from
planned performance allow managers to benefit from the time honored exception principle and
detect
areas that require their attention. But it is not enough merely to look at exceptions. Some
deviations
from standards have some little meaning while others have a great deal. Small deviations in
certain
areas may have greater significance than larger exception in other areas. A manager might be
concerned
if the cost of office labor deviated from the budget by 5 percent but might be unworried it the
cost of
postage stamps deviated from the budget by 20 percent.
Consequently, the exception principle should be accompanied in practice by the principle of
critical
point control. It is not enough just to look for exceptions; one must look for them at critical
points.
Certainly the more that managers concentrate their control efforts on exceptions the more
efficient
their control will be. But effective control requires that managers pay primary attention to things
that
are most important
d) Seeking objectively of controls
Management necessarily has many subjective elements, but whether a subordinate is doing a
great job
should ideally not be a matter for subjective determination. If controls are subjective, a managers
or a
subordinate personality may influence judgment of performance and make them less accurate.
However
people would have difficulty dismissing control of their performance if the standards an
measurements
are kept up to date through periodic review. Effective control requires objective review. Effective
control requires objective accurate and suitable standards. McDonalds for example is very strict
in
applying and maintaining the same quality standards in all its restaurants.
e) Ensuring Flexibility of controls
136

Controls should remain workable in the face of changed plans, unforeseen circumstances or
outright
failures. If controls are to remain effective despite failure or unexpected changes of plans they
must be
flexible.
The need for flexible control can readily be illustrated. A budget system may project a certain
level of
expenses and grant authority to managers to hire labor and purchase materials and services at this
level.
It as is usually the core, this budget is based on a forecast of a certain level of sales. It may
become
meaningless as a system of control if the actual sales volume is considerably above or below the
forecast. Budget system has been brought into ill repute in some companies because of
inflexibility in
such circumstances. What is needed of course is a system that will reflect sales variations as well
as
other deviations form plans.
f) Fitting the control system to the organization culture
To be most effective any control systems or techniques must fit the organization culture. If an
organization has given its employees considerable freedom and participation a tight control
system may
go so strongly against the gain that it will be boomed to failure. On the other hand if subordinates
have
been managed by superior who allows little participation in decision making a generalized and
permissive control system will hardly succeed people who have little desire to participation who
have
not been accustomed to participating are likely to want clear standards and measurements and
specific
directions.
g) Achieving economy of controls
Controls must be worth their costs. Although this requirement is simple it is often difficult to
accomplish
in practice. A manager may have difficulty ascertaining what a particular, control system is worth
or
what if costs, economy is relative. Since the benefits of control vary with the importance of the
activity,
the size of the operation, the expense that might be incurred in the absence of control and
contribution
in the systems can make.

h) Establishing control that need to corrective action

An adequate system will disclose where failure is occurring and who is responsible for them, and
it will
ensure that corrective activities are taken. Control is justified only if deviations from plans are
corrected
through appropriate planning, organizing, staffing and leading.
Critical control points and standards:
Standards are yardsticks against which actual or expected performance is measured. In simple
operation
a manager might control through careful personal observation of the work being done. However
is a not
operation this is not possible because of the complexity of the operations and the fact that a
manager
has far more to do then personally observe performance for a whole day. A manager must choose
137
points for special attention and then watch them to be sure that the whole operation is proceeding
as
planned.
The points selected for control should be critical in the senesce either of being limiting factors in
the
operation or of being better indicators than other factors of whether plans are working out with
such
standards managers can handle a larger group of subordinates and thereby increase their span of
management with resulting cost savings and improvement of communication. The principle of
critical
point control one of the more important control principles states that effective control requires
attention to those factors critical to evaluating performance against plans another way of
controlling is
comparing performance with that of other films through benchmarking.
Employees must know what is expected of them before the control process can be implemented.
Standards are established levels of quality or quantity used to guide performance. Standard are
sometimes viewed as objectives to be achieved whenever possible standards should be expressed
numerically of reduce subjectively and to depersonalizes that control.
Types of critical points standards:
Every objective every goal of the e many planning programs every procedure and every budget
can
become a standard against which actual or expected performance might be measured. In practice
however standards tend to be of the following types.

a) Physical standards: physical standards are no monetary measurements and are common at
the
operating level where materials are used labor is employed services are rendered and goods are
produced. They may reflect quantities such as labor hours per hour, ten miles of freight traffic of
wire per ton of copper. Physical standards may also reflect quality such as hardness of bearings
closeness of tolerances rate of climb of an airplane durability of a fabric or fastness of a color.
b) Cost standards: cost standards are monetary measurements and like physical standards are
common of the operating level. They attach monetary values to specific aspects of operations
illustrative of cost standards are such widely used measures as direct and indirect cost per unit
produced labor cost per unit or per hour material cost per unit machine hour costs, cost per seat
selling cost per dollar or unit or sales and cost per foot of oil well drilled.
c) Capital standards: there are varieties of capital standards all arising from the application of
monetary measurement to physical items. They have to do with the capital invested in the firm
rather then with operating costs and are therefore primarily related to the balance sheet rather
than to the income statement. Perhaps the most widely used standards for new investment s
well as for overall control is return on investment The typical balance sheet will disclose other
capital standards such as the ratios of current assets to current liabilities due to net worth cash
and receivables to payables and bonds to tool as well as the size and turnover of inventories.
d) Revenue standards: revenue standards arise from attaching monetary values to sales they
may
include such standards as revenue per bus passenger mile sales per customer and sales per
capita in a given market area.
e) Program standards: a manager may be assigned to install a variable budget program a
program
for formally following the development of new products or a program for improving the quality
138
of a sales force. Although some objective judgment may have to be applied in appraising
program performance timing and other factors can be used as objective standards.
f) Intangible standards: More difficult to set are standards not expressed in either physical or
monetary measurements. What standard can a manager use for determining the competence of
the divisional purchasing agent or the personnel director of the divisional purchasing agent or
the personnel director what can one use for determining whether the advertising program
meets both short and long term objective? Or whether the public relations program is successful
are supervisors loyal to the companys objectives? Are the offices staffs alert? Questions show
the difficulty of establishing standards or goal for clear quantitative or qualitative measurement.
g) Goals as standards: with the present tendency for better managed enterprises to establish an
entire network of verifiable quantitative or quantitative goals at every level of management the
use of intangible standards while still important is diminishing. In complex program operations s
well as in the performance of manager themselves modern mangers are finding that through
research and thinking it is possible to define goals that can be used as performance standards.
While the quantitative goals are likely to take the form of the standard outlined above the
definition of qualitative goals represents an important development in the are of standards for
e.g. if the program of district sales office is spelled out to include such elements as training sales
people in accordance with a plan with specific characteristic the plan and its characteristics

themselves furnish standard that tend to become objective and therefore tangible.
h) Strategic plans as control points for strategic control: Strategic control requires systematic
monitoring of strategic control points and modifying the organizations strategy based on this
evaluation. As pointed out earlier planning and controlling are closely rela4ed. Therefore
strategic plans require strategic control. Moreover ,since control facilities comparison of
intended goals with actual performance it also provides opportunities for learning which in turn
is free basis for organizational change , finally, through the use of strategic control one gains
insight not only about organization performance but also about the ever changing environment
by monitoring it.
**********************
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MODULE 6
Organizational behavior: Introduction, definition, goals, elements, historical development of
Organizational Behaviour, fundamental concepts, contributing disciplines to OB, Models of OB,
social
systems and organizational culture, international dimensions of organizational behaviour,
limitations of Organizational behaviour, the future of OB.
ORGANIZATION BEHAVIOR
Organizational Behaviour Introduction,
The way in which people in different organizations act, react, and behave are different, resulting
in
different performance and productive output of these organizations.
A study in detail about the behavior of people in organizations, accumulating knowledge about
the
behaviour for further research has become extremely important.
Different behaviors are:
Desirable Behavior (Punctuality, positive thinking, creative, team playing and performance
excellence.)
Nondesirable Behavior (Absenteeism, indiscipline, abusing and underperforming.
Organizational Behavior is the study and application of knowledge about how people as
individuals
and as groups act within the Organization. It strives to identify way in which people can act
effectively.
It is a field of study that investigates the impact that individuals, groups and structure have a
behavior within organizations, for applying such knowledge toward improving Organization
effectiveness.
Who does it study? It studies three determinants of behavior in org: individuals, groups, and
structure. OB applies the knowledge gained about individuals, groups and the effect of the
structure
on behavior in order to make organizations to work more effectively.
OBDefinition
According to News Storm and Davis,

Organizational Behavior is the study and application of knowledge about how people act within
an
organization. It is the human tool for human benefit. It appears broadly to the Behavior of people
in
all Organizations.
140
OB is a management discipline which deals with understanding behaviors in organizations,
predicting peoples behavior, and control their behaviors so as to achieve organizational
conducive
behaviors.
According to Callahan,
Organizational Behavior is a subset of management activities concerned with understanding
with
understanding, predicting and influencing the individual Behavior in Organizational setting.
Nature and scope:
The subject Organizational Behavior is based on certain fundamental concepts, which revolve
around the nature of people and organizations. Every discipline, be it a social science or a
physical
science, will flourish on definite assumptions.
The basic assumptions are:
a) Every individual is different from other individuals
b) Whole person
c) Behavior of an individual is caused
d) An individual has dignity
e) Organizations are social system
f) Mutuality of interest among Organizational members
g) Holistic Organizational Behavior
a) Individual differences:
Each person in the world is individually different. Each one is different from the other in several
ways whether it is intelligence, physique or any such trait. By birth each person is unique and
individual experiences after birth make them even more different. It is because of individual
differences that Organizational Behavior begins with the individual.
b) A whole person:
When an individual is appointed his/her skill alone is not hired, social background, likes and
dislikes,
pride and prejudice are hired.
c) Caused behavior:
The Behavior of the individuals is not random, it is caused (i.e., he react to some situation). This
behavior is directed towards someone that the employees believes, rightly or wrongly, is in
his/her
interest
d) Human dignity:

141
This concept is more concerned with ethical philosophy than scientific. It confirms that people
are to
be treated differently from other factors of production because they are of high order in the
universe. That is they are to be treated with respect and dignity.
e) Organizations are social systems:
People need psychological needs, as well as social needs also like social roles and status. Their
behavior is influenced by their group as well as by their individual drives. There are two types of
social systems. One is the formal and the others the informal.
f) Mutuality of inters:
Mutual interest is represented by the statement that organization need people and people also
need organization. People see organizations as a basis to help then reach their goals , while at the
same time organizations need people to help them to attain their organizational objectives.
g) Holistic concept:
When the above six fundamental concepts of organizational behavior are placed together ,
holistic
concept emerges. This concept interprets people organization relationship in terms of the whole
person, whole group, whole organization and the whole social system.
Scope of organizational behavior:
A study of organizational behavior is beneficial in many ways. Organizational behavior is the
study of
human behavior in the organization. The study encompasses the study of individual behavior,
interpersonal Behavior and of the organization themselves.
Individual behavior covers aspects such as personality, perception, learning, opinion, motivation,
job
satisfaction and stress management.
Interpersonal Behavior includes group dynamics, team dynamics, intercrop conflict, leadership,
communication, transactional analysis etc.,
About organization, the study covers factors like formation, structures, effectiveness formal and
informal organization.
These three levels of analysis are not necessarily mutually exclusive. The field of organizational
behavior embraces them as being complementary. Managers in business, healthcare, education,
government and religious organizations all have problems in common that require an
interdisciplinary approach. This can be provided by organizational behavior because it emphasis
on
al the levels of analysis the individual, the group and the formal organization.
142
Need for the Study of OB
a) It is needed to describe, understand, predict and control human behavior.
b) Importance of Human Skill Management
c) Among the various skills like technical, conceptual, analytical and human skillsHuman skills
are most important because of the unpredictability of Human Behaviour

d) Interdependency of Men in Global Achievement

e) Importance of Group Efforts/Managers.
f) In the process managers job is changing. To cope up with these the study of OB is getting
great significance.
Characteristics of OB
a) It is a normative science(Normative science is a type of inquiry by which people seek to
determine which goals are good, and which means toward those goals are good)
b) OB is objective oriented
c) OB draws ideas and knowledge from different disciplines like psychology, sociology, and
anthropology, economics, political science, law and history.
d) OB replaces intuition(immediate apprehensions) with systematic study/gut feeling not
necessarily supported by research)
e) OB focuses on humanitarian aspects and believes that peoples needs are to be attended to
achieve organizational goals
Goals of OB/ Objectives of OB
a) Describe/Explain individual and group behavior: To describe systematically, how people
behave under a variety of circumstances and conditions. If managers achieve this talent they
can succeed in communicating about human behavior at work using common language.
b) Understand: Why people behave as they do. Managers have to learn to probe underlying
explanations.
c) Predict certain behavioral response to change: To predict future employee behavior, as to
haw an employee will behave in a particular situation in the future.
d) Control behavior: Human activity at work. Managers have to improve the performance
through the actions they take on their employees.
e) Transform people from the nondesirable to the organizationally conducive behavior.
And OB can help them in the pursuit of their goal.
Elements of OB
a) Company philosophy, values, vision and goals.
b) Company culture (style of leadership, communication, values and practices)
c) People: are recruited by the organization so as to achieve the objective. Organizations are
run by the people and people make up the internal social system of the organization. People
consists of individuals and groups, large as well as small, formal and informal official and
unofficial. We should believe that the survival of organizations depend on serving and
143
keeping people happy. This calls for definite structure of the organization. Definite
structure: A formal relationship of people in organization is called structure. Structures are
also changing with the passage of time fro downsizing and restructuring, mergers and
acquisitions and joint ventures making structure very complex.
d) Technology: The organization also needs technology to help in getting the job done. It
provides the resources with which people work and affects the task that they perform.
Technology makes people to do more work and in a better way. And also restricts people in
many ways. Therefore managers need to balance between both technical and social
systems.
Historical development of Organizational Behaviour
a) Early contributors:

Plato: Greek philosopher on the importance of leadership.

Aristotle: Emphasized on persuasive communication.
Confucius: Chinese Philosopher emphasized on ethics and leadership.
b) Recognized as discipline in early 19 century
Scientific Management Era:
F.W Taylor: was known as the father of scientific management. He came out with the
principles of scientific management. His ideas was spread in U.S.A, France, Russia, Germany
and Japan.
Henry Fayol: Father of administrative management. He brought out the 14 management
principles that constitute good management practices.
Max Webber: Developed theory of authority structure and laid emphasis on bureaucratic
management.
c) Industrial Revolution: The Industrial Revolution was a period from the 18th to the 19th
century where major changes in agriculture, manufacturing, mining, transport
d) Labor Movements: Is a broad term for the development of a collective organization of
working people, to campaign in their own interest for better treatment from their
employers and governments, in particular through the implementation of specific laws
governing labor relations.
e) Elton Mayo: Father of behavioral sciences. People side of organization came into limelight
by famous Hawthorne studies. Illumination experiment, Relay assembly test room
experiments, experiments in interviewing workers, these studies laid foundation for further
studies in developing and understanding human behavior.
f) HR Movement( when HR movement developed significantly, the field of study matured and
the research gave a new term to the field called OB in around 1950s)
Contributing disciplines to OB,
144
a) Sociology (Study of Group Behaviour)
It is a study of human beings in relation to their fellow beings. It is concerned with the variety of
roles within a society or culture, the norms and standards of behavior that emerge within
societies
and groups. While sociology focuses on the individual, sociology studies people in relation to
their
social environment or culture. Sociologists have contributed to OB through their study of group
behavior in organizations, particularly formal and complex organizations. Perhaps most
importantly,
sociology has contributed to research on organizational culture, formal organization theory and
structure, organizational technology, communications, power and conflict.
b) Psychology
It is the science that seeks to measure, explain and sometimes change the behavior of humans. In
organizations they concern themselves with perception, motivation, job satisfaction, work stress
etc. Is the science that seeks to measure, explain, and sometimes change the behavior of human
and other animals. Psychologists concern themselves with studying and attempting to understand
individual behavior. Early industrial/ organizational psychologists concerned themselves with the
problems of fatigue, boredom and other factors relevant to working conditions that could impede

efficient work performance. More recently, their contributions have expanded to include
learning,
perception, personality, emotions, training , leadership effectiveness, needs and motivational
forces, job satisfaction, decision making process, performance appraisals, attitude measurement,
employee satisfaction, work design and job stress.
c) Social Psychology (Influence of People on one another)
It is a blend of aspects from psychology and sociology. It has made significant contributions in
the
area of measuring, and understanding the changing attitudes, communication patterns in which
group activities can satisfy individual needs. It blends concept from both psychology and
sociology,
though it is generally considered a branch of psychology. It focuses on peoples influence on one
another. One major area receiving considerable investigation from social psychologists has been
changehow to implement it and how to reduce barriers to its acceptance. In addition, we find
social
psychologists making significant contributions in the areas of measuring, understanding and
changing attitudes, communication patterns and building trust. Finally, social psychologists have
made important contributions to the study of group behavior, power and conflict.
d) Anthropology (Human Race & Culture)
It is the study of human societies with an intention of understanding different human activities. It
helps us in understanding differences in fundamental values, attitudes, and behavior between
people of different countries and within different organizations.
It is the study of societies to learn about human beings and their activities. For instance,
anthropologists work on cultures and environments has helped us understand differences in
fundamental values, attitudes and behavior between people in different countries and within
145
different organizations. Much of our current understanding of organizational culture,
organizational
environments, and differences between national cultures is a result of the work of anthropologists
or those using their methods.
e) Political Science
Study of individuals in a political setting. It is all about organization power, politics and conflict.
Models of OB
It is required that a systematic approach should be there to understand, explain and predict
human
behavior. Models have been developed to identify major variables. To show how they are related
to
each other. The models are unconscious but a powerful guide to manage behavior. Hence they
are
of great significance.
a) Autocratic Model (Power Oriented)

b) Custodial Model (Performance and system)

c) Supportive Model (Mentoring)
d) Collegial Model (Team Spirit)
a) Autocratic Model: The basis is power of the boss. Management does the thinking and
employees obey the orders.
Management is Power centre. Feel bosses are born leaders.
Management uses power & authority to get things done.
Employees are expected to be obedient.
Employees are dependent on boss.
Fear and punishment act as tools to motivate.
It is useful in times of crisis when faster action is warranted.
b) Custodial Model: It is a model used by the progressive managers. It came into existence
to
overcome the short comings in the autocratic model. Focus is to improve employer and
employee
relations.
Security & Benefits drive the employees to perform
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Cooperation of people are anticipatedemployees give passive cooperation and do not work
vigorously.
Dependence on organization is maximal (employees are oriented towards securing benefits and
employment security)
Money/Incentives is the main motivation
They look at their needs rather than their boss.
This model does not suite for the employees who are highly matured
c) Supportive Model: It depend on leadership instead of power and money.
It emphasizes mainly on Human Aspect
It believe that participation & involvement of employees increases job performance
Voluntary participation and selfdirection
People work for status and recognition
SelfMotivated employees
Leaders assumes that worker will take responsibility.
d) Collegial Model: Is based on the partnership between the employees and the
management.
It is a progressive model
Based on Partnership(employees and employer)
Team work is the managerial orientation(combined effort to achieve the goal)
Selfactualization needs of employees are met
Employees are self disciplined
Everybody work for a common goal
It facilitates personal growth
Social systems and organizational culture

A social system is a complex set of human relationships interacting in many ways. The social
system
includes all people in, their relationship to each other and the outside world.
147
Social system for an organization comprises of stakeholders who are directly affected by the
organization and who have a stake in its performance.
Social responsibility is the set of obligations an organization has to protect and enhance the
society
in which it functions.
Culture is the conventional behavior that encompasses beliefs, customs, knowledge and
practices. It
influences human behavior. It gives them stability, security, understanding and the ability to
respond in a given situation.
A set of understandings shared by a group of people that are largely tacit(implied) among
members
and are clearly relevant and distinctive to the particular group which are also passed on to new
members. Belief, value system, knowledge & attitude. A strong appropriately focused
organizational
culture can be used to support innovative activity. Some of the organizations are3M, Proctor and
Gamble, Texas Instruments, Jhonson and Jhonson are known to have strong innovation oriented
culture that valueIndividual creativity, Risk taking and Inventiveness.
Factors that Influence corporate culture are:
a) Work groups: Nature of work is affected by the character of immediate group to which the
employees belong.
b) Managers leadership style: The leadership style of the immediate supervisor will have a
considerable effect on the culture of the group.
c) Organizational characteristics: Organizational size, complexity, formalization and
autonomy have
considerable influence and the levels of decentralization also matters.
d) Administrative process: Open and free flow communication system, reward system based on
performance and attitude towards tolerance of conflict and handling of risks have considerable
influence on culture.
International dimensions of organizational behaviour
Current scenario (growing internationalization of business). Global challenges faced by todays
managers are another set of areas to be addressed. Organizations are no longer constrained by the
national borders.
Challenges faced: Globalization, workforce diversity(managers need to cope with people from
different specializations. Changed employee expectations, Ethics and social responsibility,
managing
change, increased quality consciousness.
The international context of OB is becoming increasingly significant as org expand beyond their
national boundaries. Difference between the countries in the cultural aspects affect the way

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business could be conducted across the globe. Managers need to cope with the following:
Unfamiliar laws, languages, practices, attitudes, management style, ethics etc.
Multi National Culture (unfamiliar languages, labor laws, attitudes, work ethics)
Complexities Internationalization of business has a large impact on people management. It has
to
cope with the differences(unfamiliar aspects) in order to gain a international perspective. The
management has to become flexible to adapt to such changing situations and should be proactive
to
adapt to the changing behavior.
Impact of Globalization in India:
The globalization trend is visible in change in employeeemployer equation. The move has been
a
shift from the so called permanent employees to contractual employees. Working relationship has
become extremely transitory in nature and changing of jobs is being viewed as matter of prestige.
Added these with India being accepted as having a rich number of IT professionals, thus seems
to be
increasing demand for expertise in many service oriented organizations. Organizational operation
has also moved beyond national boundaries.
Managing the workforce diversity:
Work force diversity implies that organization is turning in to heterogeneous entities. Visible in
terms of differences in gender, races, culture, ethics, groups etc. usually it is perceived that
employees will adapt the organizational requirements or set by giving up individual differences
in
cultural values beliefs, attitudes & lifestyle, preferences. The challenge before the manager is to
learn and appreciate individual differences and treat every one equally. Such an attitude long way
and helping the detection of good employees and they increase productivity.
Developing good interpersonal skills:
Managerial effectiveness will be judged on the basis of ability to manage people managers need
possess good interpersonal skill not only to motivate employees to perform well but also to retain
good employees. Present day managers have to shoulder the responsibility of interacting and deal
with varied employees profile. The test before manager is to understand the aspiration of
employees, learn how to motivate them , create effective working environment and learn to skill
for
larger organizational goal.
Empowering employees:
The modern day manager is often require to perform the role of a coach, a mentor, adviser, a
facilitator and at times even as a sponsor. the line divided the manager and worker is getting
thinner
and has almost been done away with in todays organization. Many of the family managed
business

have also leaned and are learning more on the issue of professionalism. The companies have
provide more empowerment has changed the conventional superior subordinate relationship.
149
Managers have learned to give up control, allow employees to shoulder more responsibility and
be
involved in the actual decision making process.
Managing in the age of new technology:
The new age has its impact felt in converting the whole world in to a single world economy. No
doubt this world market continues to be dominated y big brother USA and also CANADA.
Amidst all
this the biggest responsibility of the manages is to handle global competitiveness. The fields of
management faces big challenges in the form of frequent/ rapid technological changes. Another
aspects of new technology is the world wide requirement of quality services.
The future of OB
Challenges and perspectives of organizational behavior:
a) New paradigm shift in management: The new paradigm characteristics include second
generation information technology, total quality management and learning organizations.
Organizational behavior helps managers to meet the new paradigm challenges.
b) Changing demographics of workplace: The emerging new work places and dramatically
changing
environments call for new understanding of new people oriented solutions. (growing number of
youngsters and gender factors.)
c) Workforce diversity and ethics: Are the developments that have a significant environmental
impact on organization and management.
d) Workplace issues and challenges: Employee privacy, employee rights, unionism and
changed
employee expectations.
e) Organizational challenges: Organizational behavior helps managers in understanding these
developments.
Improving people skills(technological changes, structural changes, environmental changes)
which
are accelerated at a fast pace.
Improving Ethical Behaviour(organizing workshop and training programs)
Technology transformation(ecommerce, ebusiness)
Responding to Globalization(opportunities and challenges)
Improving quality and productivity.
Empowering people(it reshapes the relationship)
150
Stimulating innovation and tolerance to change
One of the biggest challenges before organizational behavior is on how to attract, manage and

nurture talented employees. The following discussions will help to understand how OB can
facilitate
a clear understanding of human behavior in the organization contest.
The above challenges have to be faced by organizations. There are no perfect solutions for such
problems. But if handled with care and diligence, these challenges can be converted into
profitable
opportunities.
Limitations of Organizational behaviour
a) Too much focus on people( unethical manipulation of people to be avoided)
b) Trade Unions criticize OB is selfish & exploitative
c) Tendency of managers for immediate gains
d) OB cannot stop conflicts & frustrations
e) The law of diminishing returns
f) Improved OB will not make up for organization deficiencies.
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151
152
MODULE 7
Individual behaviours: Introduction, foundation of individual behavior:
Personality: definition, determinants, personality traits, types, from concepts to skills, theories,
instruments to measure personality, personality attributes influencing OB
Perception: meaning, factors influencing perception, theories, perceptual errors
Emotions: meaning, types of emotions, determinants, emotional labour, emotional intelligence.
Attitudes: definition, sources of attitudes, types of attitudes, cognitive dissonance theory, from
concepts to skills, changing attitudes, work related attitudes.
Values: definition, importance of values, sources of our value systems, types of values, loyalty
and
ethical behavior.
Learning: definition theories of learning some specific organizational
applications.
Individual behavior
Organization is composed of individuals and the behavior of individuals either positive or
negative
affects the organization performance. The personal and the psychological factors influence their
behavior.
The motives, ambitions, perceptions, attitudes, competencies and abilities vastly differ amongst
individuals.
The behaviors of an individual in an organization is dependent on many factors. It is influenced
by
the environmental factors and organizational attributes.
FOUNDATIONS OF INDIVIDUAL BEHAVIOR

153
Personal Factors
Age
Sex
Education
Income
Marital Status
No of Dependents
Creativity
Psychological Factors
Personality
Perception
Attitudes
Values
Learning
Organizational System &
Resources
Physical facilities
Organization Structure &
Design
Leadership
Reward System
Work Related Behaviour
Environmental Factors
Economic
Social Norms
Cultural Values
Political actors
Individual
Behaviour
Abilities refers to an individuals capacity to perform the various tasks in a job. An individuals
overall
abilities are essentially made up of the following factors:
A) Intellectual abilities
B) Physical abilities
A) Intellectual abilities: are those that are needed to perform mental activities. Mental activities
can
be measured by Intelligent Quotient (IQ)tests that are designed to ascertain ones general mental
abilities. Some of the most frequently cited dimensions of intellectual capacities are:
a) Number aptitude
b) Verbal comprehension
c) Perceptual speed
d) Reasoning
e) Deductive reasoning
f) Memory

B) Physical abilities: gain importance for successfully doing less skilled and more standardized
jobs.
For eg., jobs in which success demands stamina, manual dexterity, leg strength, or similar talents
require management to identify an employees physical capabilities.
PERSONALITY
Our personality shapes our behavior so if we want to better understand the behavior of someone
in
an organization, it helps if we know something about his or her personality.
154
DEFINITION:
Personality means a dynamic concept describing the growth and development of a persons
whole
psychological system. Rather than looking at part of the person, personality looks at some
aggregate
use whole that is grater that the sum of the parts.
Stephen.P.Robbins:
Sum total of ways in which an individual reacts and interacts with others.
Hilgard:
Personality may be understood as the characteristic pattern of behavior and modes of thinking
that
determine a persons adjustment to the environment.
Personality as the sum of total ways in which an individual reacts to and interacts with others.
Personality Determinants:
There Are basically three determinants which is used to measures an individual personality are as
follows:
1) Heredity
2) Environment
3) Situational
1) Heredity:
Heredity refers to those factors that were determined at conception, Physical structure, Facial
alternativeness, gender, temperament , muscle, composition and reflexes etc. The heredity
approach argues that the ultimate explanation of an individuals personality is the molecular
structure of the genes, located in the chromosomes.
2) Environment:
Among the factors that exert pressure on our personality formulation are the occur in which we
are
raised; our early auditioning the norms among our family, friend and social groups; and other
influences that are experienced. it includes:
a) Culture
b) Religion
c) Family

155
d) Caste
e) Parental influence
f) Siblings influence
g) School
h) work place
i) Socialization process
3) Situation:
The situation, inferences the effects of heredity and environment on personality. An individuals
personality although generally stable and consistent, does changes in different situations.
Personality Traits:
Popular characteristic include shy, aggressive, submissive, lazy, ambitions, loyal, and timid.
Those
characteristics, when they are exhibited in a larger number of situation are called personality
traits.
Traits helps in employee relation, matching people to their jobs, and in guiding carrier
development
decisions.
A personality traits can be defined as an attribute of a person that appears constantly in a variety
of
situations. A trait differentiates one from another in a relatively permanent or consistent way.
E.g., Traits of a person are cautious aggressive, kindhearted, hard hearted And anxious etc.,
MBTI (The MyersBriggs Type Indicator)
In the 1920s, Swiss psychologist Carl Jung proposed this personality theory.
It identifies the way people prefer to perceive their environment.
Later, Katherine Briggs and Isable BriggsMyers developed the MBTI, a personality test that
measures each of the traits of Jungs model.
156
Personality Types
Extroverted or Introverted (E or I)
Sensing or Intuitive (S or N)
Thinking or Feeling (T or F)
Perceiving or Judging (P or J)
It was used in employee hiring process.
Its a 100 questionnaire personality test that asks people how they feel or act in particular
situations.
On the basis of their answers individuals were classified as follows:
Extrovert V/S Introvert
Sensing V/S Intuitive
Thinking V/S Feeling
Judging V/S Perceiving
It measures how people prefer to focus their attention(E v/sI),
Collect information (S v/s I),

Process and evaluate information (T v/s F),

Orient themselves to the other world (J v/s P).
It is the most widely used personalityassessment instrument in the world.
E v/s I: Extrovert individuals are outgoing, sociable, and assertive. Introverts are quiet shy and
happy.
157
S v/s I: Sensing are practical and prefer routine and order. They focus on details. Intuitive rely on
unconscious processes and are not systemmatic.
T v/s F: Thinking types use reason and logic to handle problems. Feeling types rely on their
personal
values and emotions.
J v/s P: Judging types want control and prefer their world to be ordered and structures.
Perceiving
types are flexible and spontaneous.
These classifications together describe 16 personality types.
Personality Traits
Popular characteristics includes shyness, aggressive, submissive, lazy, ambitions, loyal, and
timid.
These characteristics, when they are exhibited in a larger number of situation are called
personality
traits.
Traits helps in employee relation, matching people to their jobs, and in guiding carrier
development
decisions.
Sixteen Primary Traits
158
INTJ: are visionaries(they have great drive for their ideas and purposes. They are independent,
determined and often stubborn)
ESTJ: are organizers(they are realistic, logical, decisive and have a natural head for business).
They like to organize and run activities.
ENTP: are conceptualizes(they are innovative, individualistic, versatile and attracted to
entrepreneurial ideas). This person tends to be resourceful in solving challenging problems.
Conclusion: It is a valuable tool for increasing selfawareness and providing career guidance.
But
because results tend to be unrelated to job performance, managers probably shouldnt use it as a
selection test for job candidates.
The Big Five Personality Model
The big five traits have been found to be related to job performance. Different people have these
traits in varying degrees from high to low. There are five basic factors that encompass most of
the
significant variations in human personality are as following:

1) Extroversion
2) Agreeableness
3) Conscientiousness
4) Emotional Stability
5) Openness to Experience
a) Extroversion: The dimension captures ones comfort level with relationship, Extroverts tend
to be
gregarious, assertive and sociable. Introverts tends to be reserved, timid and quite.
b) Agreeableness: This dimension refers to an individuals propensity to defer to others. Highly
agreeable peoples are cooperative, warm and trusting. This dimension refers to an individuals
propensity to defer to others. Highly agreeable peoples are cooperative, warm and trusting. It is
relevant because it is better liked more compliant and conforming. It results in higher
performance
and lower deviant behavior.
c) Conscientiousness: A highly conscientious person is responsible, organized, dependable, and
persistent. It is relevant because greater effort and persistence, more drive and discipline, better
organized and planning. It results in higher performance, enhanced leadership.
159
d) Emotional Stability: This dimension taps a persons ability to withstand stress. People with
positive emotional stability tend to be calm, selfconfident and secure. It is relevant because less
negative thinking and fewer negative emotions. And it results in higher job and life satisfaction
and
lower stress levels.
e) Openness to Experience: The final dimension to address ones range of interests and
fascinates
with novelty. Extremely open people are creative, curious and sensitive. It is relevant because
increased learning, more creative, flexible and autonomous. It results in enhanced leadership and
more adaptable to change.
Conclusion
The Big Five framework encompasses and integrates different set of traits that appear to be valid
predictors of certain behaviors in different situations.
Types of Personality
Introverts and Extroverts:
Person with Introvert personality are primarily oriented to the subjective world. Such people look
inward and experience their thought and ideas within themselves.
Extroverts are friendly, sociable, aggressive and express their feelings and ideas openly.
Type A and Type B personality:
Type A people are characterized by hardworking, highly achievement oriented, impatient, have
sense of time urgency, aggressive with competitive drive etc.,
Type B people are easy going , sociable, free from urgency of time , non competitive.
Judging and perceptive personality:
People with judging personalities like to follow a plan, make decisions and need only that what
is

essential for their work.Perceptive personality people who adapt well to, want to know all about
a
job and at times may get over committed.
Major Personality Attributes Influencing OB
In this section we want to more careful evaluate specific personality attribute that have been
found
to be powerful predication of behavior in organizations.
Different types of personality attributes that influencing OB are as follows:
160
1) Locus of Control
2) Machiavellianism
3) Self Esteem
4) Self Monitoring
5) Risk Taking
6) Type A Personality
7) Type B Personality
8) Proactive Personality
Attributes influencing OB :
1) Authoritarianism:
The individuals tend to be rigid in their position, social value, place and are strongly oriented
towards conformity to rules and regulations.
2) Locus of Control:
The degree of which people believe they are masters of their own fate. A persons perception of
the
source of his or her fate is called as locus of control. It refers to an individual beliefs that events
are
within ones control or determined by forces beyond ones control.
Internals: Individuals who believe that they control what happens to them.
Externals: Individuals who believe that what happens to them is controlled by outside forces
such as
luck or chance.
3) Machiavellianism :
Refers to individuals propensity to manipulate people.
They are prone to participate in organizational politics and tend to identify influence systems in
organizations. They use power tactics. In the jobs that require bargaining they are likely to
perform
better. Degree of which an individual is Pragmatic, Maintains Emotional distance and believes
that
ends can justify means.
Conditions Favoring High Machiavellianism:
Direct interaction

161
Minimal rules and regulations
Distracting emotions
4) Self Esteem and Self Monitoring:
People differ in the degree to which they like or dislike, themselves. This trait is called self
esteem.
High self esteem believe that they process the ability they need to succeed at work. People with
high selfesteem believe that they have abilities to undertake challenging jobs.
People with low selfesteem need somebody to push them and are more likely to seek approval
from others.
Selfesteem is also related to job satisfaction. High esteems are more satisfied with their jobs
than
low esteems.
Selfmonitoring prefers to an individuals ability to adjust his or her behavior to internal
situational
factors. Individuals high in selfmonitoring show considerable adaptability in adjusting their
behavior
to external situation factors.
5) Risk Taking:
This property to assume or avoid risk has been shown to have an impact how long to takes
managers to make a decision and how much information they required before making their
choice.
High Risktaking Managers
Make quicker decisions.
Use less information to make decisions.
Operate in smaller and more entrepreneurial organizations.
Low Risktaking Managers
Are slower to make decisions.
Require more information before making decisions.
Exist in larger organizations with stable environments.
Risk Propensity
Aligning managers risktaking propensity to job requirements should be beneficial to
organizations.
6) Type A Personality:
A person with a Type A personality Aggressively involved in a chronic, incessant struggle to
achieve
more and more in less and less time.
162
Type As Characteristics:
i) Are always moving, walking and eating rapidly
ii) Fell impatient with the rate at which most events take place.
iii) Strive to think or do Two or more thing at once.

iv) Cant cope with leisure time are observed with numbers, measuring their success in
terms of how many or how much of everything they acquire.
7) Type B Personality:
Type B are rarely hurried by the desire to obtain a widely increasing number of things and
participate in an endless going series of events in an ever decreasing amount of time.
Type Bs Characteristics:
i) Never suffer from a sense of time urgency with its accompanying impatience.
ii) fell no need to display or discuss either their achievement or failure unless such exposure is
demanded by the situation.
iii) Play for fun and relaxation, rather that to exhibit their superiority at any cost.
iv) Can relax without guilty .
8) Proactive Personality :
Proactive identify opportunities show initiative, take action and preserve until meaningful change
occurs. They create positive change in their environment, regardless or even in spite of
constraints
or barriers.
10) Introversion and extraversion:
It is generally established that introverts and extraverts have significantly different behavior and
require different organizational environments to maximize performance.
Theories of Personality
a) Type theory
b) Trait theory
c) Psychoanalytic theory
d) Social learning theory
e) Humanistic theory
163
Type theory
It is based on physical attributes and psychological factors. Sheldon is credited with the physical
attributes and Carl Jung with the psychological factors.
Short person is said to be sociable, relaxed and even tempered.
Tall person is selfconscious and fond of solitude.
Heavyset muscular individual is described as noisy, and fond of physical activity.
Trait theory
Traits are reactions and not something a person possesses. It doesnt classify an individual by one
feature but by many features.
Here they identify traits and at the same time measure them. Here the person describes by
answering questions about his attitudes, feeling and behaviors. And others evaluate the persons
traits either from what he knows about the individual or from direct observations of behavior.
It is an improvement of the type theories. Type theory place personality into
discrete/discontinuous
categories. The trait theory, on the other hand gives recognition to the continuity of personalities.
Psychoanalytic theory
Id (Unconscious)
Ego (Conscious State)

Super Ego (Super Conscious)

Perception
INTRODUCTION:
Human beings may differ because of their differences & uniqueness. People often see the same
situation/ phenomenon differently within the organization & outside the organization. For
example:
when there is an accident in the factory, the supervisor may treat it as the carelessness of worker
while
the worker may treat it as lack of adequate provision of security measures.
Thus the situation remaining the same, cause have been assigned differently by different group of
people. In order to understand why people see the same situation differently, one has to
understand
PERCEPTION & its different aspect.
164
WHAT IS PERCEPTION ? Perception is a congnitive process. congnition is basically bit of
information,
congnitive process involves the way in which people process/understand that information.
Perception
process involves selecting, organising and interpreting the stimulus. Thus perception is the
process
selecting, organising and interpreting or attaching meaning to the events happening in the
environment.
However, what one can perceive can be different from objective reality. Their need not be but
there is
often, disagreement. For example: its possible that all the employee in a firm may view it as a
great
place to work favourable working conditions, intresting job assignment, good pay and excellent
benefit
but as most of us know,its very unusal to find such agreement.
DEFINITION :
PERCEPTION may be defined as a process by which individual organise and interpret their
sensory
impression in order to give meaning to their environment.
FEATURES OF PERCEPTION :
Perception is the intellectual process through which a person select the data from the
environment,
organise it, and obtains meaning from it.
Perception is a psychological process also. The manner in which a person perceive the
environment

affects his behaviour.

Perception, being an intellectual and psychological process, become a subjective process and
different
people may perceive the same environmental event differently.
Perception is a process by which individuals organize and interpret their sensory impressions in
order to give meaning to their environment. However, what one perceives can be substantially
different from objective reality.
Peoples behavior is based on their perception of what reality is, not on reality itself .
Stephen.P.Robbins
Perception is a process by which individuals organize and interpret their sensory impressions
inorder
to give meaning to their environment.
Fred Luthans
Perception is an important mediating cognitive process through which persons make
interpretation
of the stimuli or situations they are faced with.
165
Factors Influencing Perception
How do we explain that individuals may look at the same thing, yet perceive it differently. A
number
of factors operate to shape and sometimes distort perception. These factors can reside in the
perceiver, in the object or target being perceived, or in the context of the situation in which the
perception is made.
166
Factors in the perceiver is the personal characteristics that influence in interpreting.
Ex: Police officers are very authoritative, individuals holding public offices to be unscrupulous
all
these you perceive regardless of your actual traits.
Characteristics of the target we observe can affect what we perceive.
Ex: Loud people are more likely to be noticed in groups than the quiet ones. Because we dont
look
at individuals in isolation. The relationship of a target to its background also influences
perception.
Ex: Members of any group that has clearly distinguishable characteristics are often perceived as
alike.
The context in which we see objects or events is also important. And the time is also important.
Ex: A person is dressed in party wear at a nightclub on Saturday nights. And you may notice the
same person very well attired on a Monday morning for a management class would certainly
catch
your attention.

You can identify there is no change in the perceiver nor the target. Only the situation is changed.
Perceptual process:
The perceptual process is a sequence of steps that begins with the environment and leads to our
perception of a stimulus and an action in response to the stimulus.
The world is full of stimuli that can attract our attention through various senses. The
environmental
stimulus is everything in our environment that has the potential to be perceived.
We can take an inputthroughputoutput approach to understand the dynamics of perceptual
process.
The stimuli in the environmentsubjects, events, or peoplecan be considered as the perceptual
inputs. The actual transformation of these inputs through the perceptual mechanisms of selection
and interpretation cab be treated as throughputs and the resultant opinions, feelings and attitudes
which ultimately influence the behavior can be viewed as perceptual throughputs.
167
Perceptual Input
Stimuli
Objects
Events
People
Information
Perceptual Throughputs
Receiving
Selecting
Organizing
Interpreting
Perceptual
Outputs
Behaviour
Actions
Believes
Feelings
Attitudes
PERCEPTUAL PROCESS : :
Perception process is explained by inputthroughputoutput approach. This approach emphasises
that
there is input which is processed and gives output.
Perceptual process present three elements of perception. These are: existence of stimuli(objects,
event,
&people) perceptual mechanism (selecting, organising,& interpretation) and perceptual
outputs(attitude, opinion,& values). Perceptual output along with other determinant of human
behaviour affects and shape behaviour. Let us see how perceptual process works in terms of its
three
basic elements.

A) Perceptual inputs
The stimuli in the environment objects, events, or people can be considered as the perceptual
inputs.
Thus everything in the setting where the events occur, or which contributes to the occurrence of
the
events, can be treated as perceptual input. When the perceiver interacts with a stimulus,sensation
take
place which starts perceptual process. (Sensation be describe as the response of a physical
sensory
organ. The physical senses are vision, hearing, touch, smell,and taste.)
B) Perception throughput Perceptual mechanism involves three elements selection of stimuli,
organization of stimuli, and interpretation of stimuli.
168
After receiving the stimuli from the environment, some are selected for further processing while
others
are screened out because it is not possible for a person to select all stimuli which he see in the
environment. There are two types of factors which affects the selection of stimuli. These are
external
and related to stimuli and internal related to the perceiver.
PERCEPTUAL SELECTIVITY :
Perception is the process of receiving and interpreting stimuli.
The process of perception includes perceptual selection, perceptual organization and perceptual
interpretation.
Perceptual selection:
Receiving stimuli: we are constantly boarded with various stimuli. These stimuli enter
We through various sensory organs like vision, hearing, smell touch and taste. Not all the stimuli
received by us are accepted by us. Some stimuli are noticed and some are screened out. The
process of
filtering information received by or sense is called selecting stimuli or selective attention.
Several
factors influence selective attention.
Perception is a selective process. While selection, certain aspects of stimuli are screened out and
others
are admitted. For example: when people read a newspaper, they do not read the entire newspaper
but
read only those news which intrest them. This is known as perceptual selectivity. This caused by
variety
of factors which may be grouped into two categories: 1. Extrenal factor 2. Internal factor
EXTERNAL FACTORS :

The external factors are Nature, Location, Size, Intensity, Repetition, Novelty & Familiarity,
Contrast And
Motion. Their impacct on the perceptual selectivity is as follow:
Nature: By nature we mean, whether the object is visual or auditory, and whether it involves
pictures,
peoples or animals. It is well known that pictures attract attention more readily than words.
Location: The best location of a visual stimulus for attracting attention is in the center of the
page. When this position is not available in the newspaper or a magazine, a position in the upper
portion
of a page is more favourable than on in the lower portion and left hand side receive more
attention than
the right hand side.
Size: Generally objects of larger or bigger size attract more attention than the smaller ones. For
Example: in an advertisement in newspaper full page spread attract more attention than a few
lines in
the classified section.
Intensity: The intensity principle states that more intentse the external stimulus is, the more
likely is to
be perceived. A loud sound, or bright light is noticed more as compared to soft sound, or dim
light. For
169
Example: advertisement on televisions are slightly louder than the regular programmes to gain
customers attention.
Repetition: The repetition principle state that a repeated external environment is more
attentiongetting
than a single one. Repetition increase peoples alertness to the stimulus. For example:
Advertisers use this principle by repeated advertisement of the same product to attract peoples
attention.
Novelty and familiarity: Novelty & familiarity principle state that either a novel or a familiar
external
situation can serve as attentiongetter. New objects or events in a familiar setting, or familiar
objects or
events in new setting draw better attention. For Example: in job rotation, when workers jobs are
changed from time to time, they become more attentive to their new jobs as compared to the
previous
ones.
Contrast: Contrast is a kind of uniqueness which can be used for attention getting. Letters of
bold types,

persons dressed differently than others, buildings of different colours in the same locality,etc. get
more
attention.
Motion: Motion principle states that a moving object draws more attention as compared to a
stationary
object. For Example: commercial on televisions(moving ones) get more attention than print
media.
Interpretation of stimuli The perceptual inputs that have been organized will have to be
interpreted by
the perceiver to extract some meaning of what is going on in the situation. People interpret the
meaning
of what they have selected and organized in term of their own assumption of people, things and
situations. They interpret the things as good/bad, beautiful/ugly, and so on. Interpretation of
stimuli is
affected by situation under which perception take place and characteristics of perceiver.
INTERNAL FACTORS :
While external factors are related to environment stimuli, internal factors are related to the
individuals
complex psychological makeup or oneself.people generally select those stimuli and situation
which are
compatible to their personality, motivation, and other personal factors. Such factors are self
concept,
inner needs, response disposition, individual attitude, interset, learning, and experience. A brief
discription of their impact on perception
selectivity is as follow:
Selfconcept: The way a person views the world depends a great deal on the concept or image
he has
about himself. Knowing oneself makes it easier to see others accurately. Peoples own
characteristics
affect the characteristics which they are likely to see in others. They select only that aspects
which they
find match with their characteristics.
170
Inner needs: Peoples perception is determined by their inner needs. The need is feeling of
tension or
discomfort when one thinks he missing something or when he feels he has not quite closed a gap
in his

knowledge. People with different needs select different items to remember or respond to. When
people
are not able to satisfy their needs they are engaged in wishful thinking, which is a way to satisfy
the
needs not in real world but imaginary world , the day dreaming.
Response disposition: Response disposition refers to a persons tendency to perceive familiar
stimuli
rather than unfamiliar ones. Thus, a person perceive the things with which he is familiar. For
Example:
persons having dominant religious value took lesser time in recognising such related word as
priest
whereas they took longer time in recognising words related with economic value such as cost or
price.
Individual attitude: The person tries to fit his attitude (whether positive or negative) in the
situation and
perceive something . For Example: if a person always think negative,he thinks that whatever is
happen in
his life will be negative, he will perceive everything in the negative way. On the contrary if he
thinks
positive, he is an optimistic, he will perceive everything in a positive way.
Interest: If a person is interested in something he will perceive that thing in better way. On the
other
hand, if the person is not interested in that thing, he will not perceive that thing in a better way.
For
Example: children watch television with the good interest and curiosity, so they perceive quickly
whatever is shown in TV.
Learning experience: People perceive many things differently according to their learning and
experience
of the past. If a person has wrong impression or bad past experience of something, he see the
things
negative and he perceive that thing in only negative way because it is his experience that forces
him to
perceive in this way.
C) Perceptual output Based on perceptual mechanism which ends with interpretation of
stimuli,
perceptual output emerge. The output may be in the form of attitudes, opinions, beliefs,
impression

about the stimuli. These output along with other factors affecting human behaviour may result in
overt
behaviour.
Shortcuts used in judging others
Selective perception: The tendency to selectively interpret what one sees on the basis of ones
interest, background experience and attitude.
Halo effect: The tendency to draw a general impression about an individual on the basis of a
single
characteristic.
Contrast effects: Evaluation of a persons characteristics that is affected by comparisons with
other
people recently encountered who rank higher or lower on the same characteristics.
171
Stereotyping: Judging someone on the basis of ones perception of the group to which that
person
belongs.
Profiling: A form of stereotyping in which a group of individuals is singled outtypically on the
basis
of race or ethnicityfor intensive inquiry, scrutiny, or investigation.
How perception influence decision making in organizations:
Individual decision making styles: research shows that there are four types of decision making
styles.
This classification is based on the way of thinking, where some people are logical and rational.
They
process information in serial order. Some are intuitive and creative. They process the information
as a
whole. The other dimension is tolerance ambiguity. This means some people have a high need
to
structure information in ways that minimize ambiguity, while others are able to process many
thoughts
at the same time.
High
low
Rational Intuitive
There are four types of decision makers:
a) Directive: have a low tolerance for ambiguity and seek rationality. They are efficient and
logical,
but their efficiency concerns result in decision made with minimal information and with few
alternatives assessed. These types make decisions fast and they focus on the short run.
b) Analytic: they have much greater tolerance for ambiguity than do directives. This leads to the

desire for more information and consideration of more alternatives than is true for directives.
Analytic Conceptual
Directive Behavioral
Tolerance
ambiguity
Way of thinking
172
Analytic are careful decision makers with the ability to adapt to or cope with novel and
unexpected situations.
c) Conceptual: they tend to use data from multiple sources and consider many alternatives. The
focus on long range and they are good at finding creative solutions to problems.
d) Behavioral: these have a strong concern for the people in the organization and their
development. They are concerned with the well being of their subordinates and are receptive to
suggestions from others. They focus on short term and try to avoid conflicts and seek
acceptance from everybody.
Attribution theory
It tries to explain the ways in which we judge people differently, depending on the meaning we
attribute to a given behavior. We observe an individual behavior and we attempt to determine
whether it was internally or externally caused.
Internally caused:(under the control of individual)
Externally caused:(situation that caused the external to do)
The above determination is based on three factors:
A) Distinctiveness (whether an individual displays different behavior in different situations.)
B) Consensus
173
C) Consistency
Ex: Student coming late to college
Attribution theory
FindingsErrors and Biases in Attributions
Fundamental attribution error
The tendency to underestimate the influence of external factors and overestimate the influence of
internal factors when making judgment about the behavior of others. Ex: Sales manager prone to
attribute the poor performance of her sales agents to laziness rather than the innovative product
line introduced by a competitor.
Selfserving bias error
The tendency for individuals to attribute their own success to internal factors while putting the
blame for failures on external factors.
Ex: When former CEO of Enron Ken was tried for fraud, he blamed former CFO Andrew, saying
the
primary reason for Enrons collapse was Andy and his group.
Emotions:
Caused by a specific event
Very brief in duration(seconds or minutes)
Numerous in nature(anger, fear, sadness, happiness, disgust, surprise)

Usually expressed by distinct facial expressions.

Action oriented nature(you make take immediate decisions)
Moods:
Moods last longer than emotions
Moods are more general in nature
Moods are generally not indicated by distinct expressions
Cognitive in nature (you brood for a while over the incident)
Ex: A friend at work may make you feel glad
174
Ex: When dealing with a rude client you may feel angry
Types of Emotions
Positive Emotions: Such as joy and gratitude
Negative emotions: Anger or guilt
Emotions van be neutral as well. Being neutral is nonemotional
Felt emotion: An individuals actual emotion.
Displayed emotion: Emotions that are organizationally required and considered appropriate in a
given
job.
Happiness
Surprise
Fear
Sadness
Anger
Disgust
Structure of Moods
175
Determinants of Emotion
a) Personality
b) Day of the Week and Time of the Day(weekends, morning and evenings)
c) Weather
d) Stress(students during exam)
e) Social Activities(going out with friends, partying)
f) Sleep
g) Exercise(early morning walks)
h) Age( negative emotions as we grow older)
i) Gender(women are more emotionally expressive than menwomen nurture and have a smile on
face and men are tough and focussed)
j) Facial Expressions Convey Emotions
Emotional labour
A situation in which an employee expresses organizationally desired emotions during
interpersonal
transactions..

Ex: This concept of Emotional labor emerged from studies of service jobs. Flight attendants,
funeral
staff, doctors. But it is relevant in almost all the jobs. Managers expect employees to be
courteous and
not hostile.
176
The true challenge arises when employees have to project one emotion while simultaneously
feeling
another. This disparity is emotional dissonance.
Any bottledup feelings of frustration, anger and resentment can eventually lead to emotional
exhaustion and burnout.
Emotional Intelligence
It is a persons ability to be Self aware, detect emotions in others and manage emotional cues and
information.
Emotional Intelligence is defined as the capacity for recognizing our own feelings and those of
others,
for motivating ourselves, and for managing our emotions well in ourselves and in our
relationships
Daniel Goleman.
Goleman has identified five dimensions of EI at the workplace. These five dimensions have the
biggest
impact on understanding behaviour in the workplaces.
a) Selfawareness
Selfawareness is knowing ones emotions. It is the ability to recognize the feeling as it happens.
It is the
keystone to EI.
Ability to monitor the feelings from the moment to moment is crucial to psychological insight
and selfunderstanding.
Ex: People with greater certainty about their feelings are better pilots of their lives, having a
surer sense
of how they feel about personal decisions from whom to marry to what job to take.
b) Selfmanagement
It is the ability to handle ones emotions to facilitate rather than hinder the task at hand.
It helps in shaking off negative emotions and to get back on constructive track for problem
solutions.
Handling feelings so that they are appropriate is an ability that builds on selfawareness.
c) Selfmotivation
It is the ability to continue the efforts till the goals are met. Selfmotivation helps in overcoming
negative
emotional impulses.

People having this skill tend to be more productive and effective in what ever they undertake.
Ex: Studies of Olympic athletes, worldclass musicians, and chess grand masters find their
unifying trait is
the ability to motivate themselves to pursue relentless training routines.
177
d) Empathy
The more open we are to our own emotions, the more skilled we are in reading feelings.
The key to empathy is ability to read, tone of voice, gesture, facial expression etc.
e) Social skills
It is the ability to read social situations.
People with social skills are good in interacting with others and developing networks.
It also helps in guiding others emotions and the way they act.
The art of relationship is in large part skill in managing emotions in others.
These are the skills, which results in popularity, leadership and interpersonal effectiveness.
People who excel in these skills do well in anything that relies on interacting smoothly with
others and
they become Social stars.
For example a manager with good social skills will be always success in building a team and
carrying all
the team members towards common objective with minimum conflicts
Advantages of EI
a) Greater productivity
b) Improved job performance
c) Fewer grievances
d) Better conflict resolution
e) Increased creativity and innovation
f) Better teamwork
g) High motivation
h) Better employee retention
According to a survey American Express managers, after launching EI training program,
increased
business by 18.1% as compared to 16.2% for those who had not received the training. It is found
that
employees who have high EI are 12 times more productive than those with low EI in jobs that
involve
sales and marketing.
VALUES
Values represent stable, longlasting beliefs about what is important. Beliefs of a person or social
group
in which they have an emotional investment (either for or against something).
178

Values refer to the cognition of an individual that a certain mode of conduct or style of behavior
is
socially preferable to the other possible modes of conduct or behavioral styles.
According to MILTON ROKEACH, Values are defined as Global beliefs that guide actions and
judgments
across a variety of situations.
Values represent the broad preferences of people concerning appropriate courses of action or
outcomes. Values reflect a persons sense of what is right, good or desirable and what is wrong,
bad or
undesirable.
Values are judgmental in nature since they convey an individuals idea. The value system of an
individual
is determined by factors such as national culture, personal dictates, teachers and friends.
Value system is defined by the relative importance we assign to values such as freedom,
pleasure, self
respect, honesty, obedience and equality.
Values represent basic convictions that a specific mode of conduct or endstate of existence is
personally or socially preferable to an opposite or converse mode of conduct or endstate of
existence.
Importance of Values:
Values are important to the study of organizational behavior because they lay the foundation for
the
understanding of attitudes and motivation and because they influence our perceptions.
Individuals enter an organization with the preconceived notions what ought and what ought
not to
be. Of course these notions are not value free. On the contrary, they contain interpretations of
right and
wrong. Furthermore, they imply that certain behaviors or outcomes are preferred over others. As
a
result, values cloud objectivity and rationality.
Values generally influence attitudes and behavior. Suppose that you enter an organization with
the view
that allocating pay on the basis of seniority is wrong or inferior. How are you going to react if
you find
that the organization you have joined rewards seniority and not performance? You are likely to
be
disappointed and this can lead to job dissatisfaction and the decision not to exert a high level of
efforts
since its probably not going to lead to more money anyway.

Sources of our value system :

A persons value system indicates a hierarchy of values based on a ranking of the individuals
values in
terms of their intensity.
Values differ from person to person as a result of variations in their learning and experience.
Values
have both content and intensity attributes. The content attribute says that a mode of conduct or
endstate
of existence is important where as the intensity attribute specifies how important it is.
179
Sources of our values:
Parents, friends, teachers and peer groups can influence individual values. Values may have their
roots
in the early years of ones life and hence the differences in values are likely to be deep rooted and
difficult to change.
A persons values develop as a product of the learning and experience in the cultural settings in
which
he or she lives. As children we are told that certain behaviors or outcomes are always desirable or
always undesirable.
At a very young age we are taught the right and the wrong kind of behaviors which are desirable
or
undesirable.
Religion (from the religion we belong to)
Social Norms (values we learn from the society)
Education (values learnt from our teachers)
Culture (from the culture we are brought up)
Family (values held by parents)
Organization (from the place we work)
Types of values:
a) Extrinsic values: Not forming an essential or inherent part of a thing; extraneous. Originating
from the
outside; external.
Ex: responsible towards society
b) Intrinsic values: Values relating to the essential nature of a thing; inherent.
c) Aesthetic values: the values that form some grace to life, harmony and emphasizes the artistic
aspects
of life.
d) Social values: Values love of people and emphasizes concern over others.
e) Political values: Values power, position and influence and emphasizes competition and
winning.
f) Religious values: Values unity and peoples relationship with other religions.

180
Rokeach Value Survey
Milton Rokeach created the Rokeach value survey (RVS). The RVS consists of two sets of
values, with
each set containing 18 individual value items. One set called Terminal values and the other set
called
Instrumental values.
Several studies confirm that the RVS values vary among groups. People in the same occupations
or
categories (e.g. Corporate managers, Union members, Parents, Students) tend to hold similar
values.
For instance one study compared corporate executives, members of the steel workers union, and
members of the community activist group. Although a good deal of overlap was found among the
three
groups, there were also some significant differences.
Terminal values:
It reflects a persons preferences or beliefs about the ends to be achieved referring to the
desirable
endstate of existence. These are goals a person would like to achieve during ones lifetime.
Instrumental values:
181
It reflects a persons beliefs about the means for achieving desired ends. It represents how one
might
go about achieving their important end states, depending on the relative importance they attach
to
instrumental values.
Research has shown that both terminal and instrumental values differ by groups viz,
executives,
activists, union members etcThese preferential differences can encourage conflict when
different
groups have to deal with each other.
A Classification of human values developed by Psychologist Gordon Allport and his associates
puts
values under six major types :
a) Theoretical Values :
Interest in the discovery of truth through reasoning and systematic thinking.
b) Economic Values :
Interest in usefulness and practicality including the accumulation of wealth.
c) Aesthetic Values :

Interest in beauty, form and emphasizing the artistic harmony of life.

d) Social Values :
Interest in people, and love as an enduring part of human relationships.
e) Political Values :
Interest in gaining power, position and influencing other people emphasizing competition.
f) Religious Values :
182
Interest in unity and in understanding the cosmos as a whole.
Cohort(gener
ation group)
Entry For
Work
Current
Age
Dominant work values
Veterans 1950-60s 65+ Hardworking, conservative and loyal to
the organization, in terms of Terminal
values their greatest importance on a
comfortable life and family security.
Boomers 1965-85s Mid 40 to
mid 60s
Success, achievement, ambition,
dislike of authority, career loyalty.
Their Terminal values social
recognition.
Xers 1985-2K Late 20 to
40s
Work/life balance, team oriented,
dislike if rules, loyalty relationship.
Their Terminal values-true friendship,
happiness and pleasure.
Nexters 2000 to
present
Under 30 Confident, financial success, selfreliant
but team oriented, loyalty to
both self and relationships. Highly
fidil
Loyalty and Ethical behavior
Ethics and loyalty
Ethics: Is a system of moral values.
Loyal: Is to be faithful to people. A feeling or attitude of devoted attachment and affection.
Ethical awareness: Refers to the obligation of duty reflecting concern for the dignity and moral
status of
the individual.

Ethical convention: Involves achieving the common goals by applying socially acceptable
norms.
Ethical puzzle: Is a stance where an individual develops principles that is right.
Ethical neutrality: Refers to the suspension of normal ethical standards if the standards interfere
in
getting the job.
Loyalty and Ethical Behavior
183
Managers consistently report that their bosses are the most important factor influencing ethical
behavior in their organization.
The values of those in middle and upper management should have a significant bearing on entire
ethical
climate within an organization.
Therefore, when personal and organizational values are merged organizations grow and prosper.
Ex: Individual entering an organization with a
Personal value system(Intended values)to be successful managers need to learn adopted
values(set of
values that are part of organizations culture)when both are congruent these become operating
values.
This improves consistency in making decisions and relations with others.
Attitudes
Attitude is an internal state of a person that is focused on objects, events, people that can exist in
the
persons psychological world. An attitude is also a cognitive element; it always remains inside a
person.
Attitude is a state of mind of an individual towards something. It may be defined as a tendency to
feel
and behave in a particular way towards objects, people or events.
It is also the predisposition of the individual to evaluate some object or symbol in a favorable or
an
unfavorable manner.
Thearestone defined attitude as The sum total of a persons inclinations and feelings, prejudice
or bias,
preconceived notions, ideas, fears, threats and convictions about any specific topic.
Attitude means settled behavior, which implies that in a given situation a person will act
automatically in
a certain manner depending on his or her attitude.
It is the degree of positive or negative effect associated with some psychological object. It is an
acquired

tendency to act in specific ways towards objects.

Attitude of an individual generally remains unchanged for a prolonged period of time unless he
is
influenced by external forces.
Attitudes refer to feelings and beliefs held by an individual towards an object or event or any
person.
Components of Attitudes
Components of attitude continued
184
How the three components of attitude are related?
An employee didnt get promotion though he thought he deserved; Ex: Employees attitude
toward his
superioremployee thought he deserved the promotion(cognition), the employee strongly dislikes
his
superior(affect), and the employee is looking for another job(behavior).
Sources of Attitudes
Attitudes have the following sources, they are:
Experience:
Individuals develop certain job related attitudes through job experience. They develop attitudes
about
salary, performance reviews, job reviews, work group affliction and managerial capabilities.
Association:
Our geographical region, religion, educational background, race, sex, age and incomeclass all
strongly
influence our attitudes.
Family:
Family members exert influence on the initial core of attitudes held by an individual.
Peer groups:
185
As people approach their adulthood, they increasingly rely on their peer groups for
approval/attitudes.
How others judge an individual largely determines his or her self image and approval seeking
behavior.
Society :
Social class and religious afflictions play a vital role in forming attitudes of an individual. The
culture,
subculture and the structure of the society.
Personality factors :

Personality differences between individuals appear to be very important factor of attitude

formation.
Economic status and Occupation
Vicarious learning (observing behavior of others)
Mass communication
Classical conditioning and attitudes
Experience with an object
Individuals are more willing to modify their attitudes to align with behavior of people whom
they look
up to.
Types of attitudes:
An individual may have a number of attitudes regarding different aspects of life, but the field of
organizational behavior focuses only on the study of job related attitudes. Organizational
behavior
focuses on three attitudes.
Job satisfaction:
It refers to an individuals general attitude towards his job. A person wit high level of job
satisfaction
holds a positive attitude towards his/her job while a person who is dissatisfied with his/her job,
holds
negative attitudes about his/her job.
Causes of Job satisfaction:
Organizational Factors(Wages, promotions, nature of work, policies and procedures, working
conditions)
Group Factors:
Size and Supervision
Individual Factors:
186
Status, Jobs congruent with their interests, life satisfaction
Job involvement:
It is a new concept in the field of organizational behavior. It refers to the extent to which a person
identifies himself psychologically with his job, actively participates in it, and considers that his
performance in the job contributes to his self worth. Employees who are highly involved with
their jobs
strongly identify themselves with the kind of work they do and strive to deliver quality work.
Research
shows that high levels of job involvement leads to lower absenteeism and employee turnover
levels.
Organizational commitment: It refers to an employees satisfaction with a particular organization
and its

goal. An employee who has a high level of organizational commitment is a strong supporter of
the
values and goals of the organization, has a strong inclination to continue being a member of the
organization and wants to strive hard to achieve the goals of the organization.
CHANGING
ATTITUDES
CONGRUENT
CHANGES
INCONGRUENT
CHANGES
187
CHANGING ATTITUDES:
Employee attitudes need to be changed particularly when they are unfavorable. It is in the best
interest
of the organization to change attitudes.
Research proves that not only do people try to achieve consistency among their various attitudes
but
also try to behave in a manner that is consistent with their attitudes.
Three factors which prevents the changing attitudes are
a) Escalation of commitment (prior commitment of people to a particular cause and their
unwillingness to change)
DETERMINANTS
WORK ITSELF
PAY
PROMOTIONAL
OPPORTUNITIES
SUPERVISION
CO WORKERS
WORKING
CONDITIONS
188
b) Cognitive dissonance (a state on inconsistency between an individuals attitude and behavior)
c) Insufficient Information (employees having negative attitude and boss failing to tell)
Attitudes are not as stable as personality attributes. Attitude may change as a result of new
information.
For example: A manager may have a negative attitude about a new colleague because of his lack
of job
related experience. After working with that new colleague for sometime, the manager may
realize that
his new colleague is actually highly talented and hence will subsequently develop more positive
attitude

about him.
To know how attitudes change or can be made to change is a theoretical and practical problem
of great
moment. Perhaps the most urgent psychological problem of great moment in our world today.
Sometimes , people may change their attitudes so that they do not contradict their actions.
Attitudes changes may be roughly classified into:
Congruent changes :
It means a movement in the same direction; a mild proway attitude may become, under changed
conditions, even more proway.
Incongruent changes:
It involves a change towards the other end of the continum . For example, turning dislike into
like,
unfavorable into favorable.
A manager attempting to change an individual employees attitudes should keep in mind the
following
factors :
The characteristics of the communicator .
The method of communication.
The characteristics of the person to be influenced .
Situational factors.
Ultimately, it can be inferred that, individuals change their attitudes as a way of reducing their
cognitive
dissonance.
Be aware of self
Interpret on the positives and negatives of the attitude you are carrying
Keep an open mind (take others input)
Get into continuous education programme
189
Build a positive self esteem
Stay away from negative influences
Cognitive Dissonance theory
In the late 1950s Leon Festinger proposed the theory of Cognitive Dissonance Theory to
explain the
relationship between attitudes and behavior.
Cognitive Dissonance refers to the incompatibility that an individual may perceive between two
or more
of his attitudes, or between his behavior and attitudes. Dissonance refers to a psychological
inconsistency among different cognitions associated with internal attitudes and behavior. It
means
simply consistency. Two cognitions are said to be in a dissonant relation if one implies the
opposite of

the other. However, no individual can completely eliminate dissonance.

For example: Though a person knows that it is not ethical to preach to others without actually
practicing what he is preaching, he may still continue to do so. A politician may announce in
public that
strict action will be taken against government officers who accept bribes, but he may accept
illegal
donations for his party fund.
According to FESTINGER, an individuals desire to reduce dissonance depends on the
importance of the
elements that cause the dissonance, the degree to which the individual can influence these
elements,
and the rewards that the individual is likely to lose as a result of such dissonance. An individual
will make
little effort to reduce dissonance if the elements that are responsible for the dissonance are not
important to him.
The desire of individuals to reduce dissonance also depends on the extent of control they have
over the
elements causing dissonance. If an individual believes that the elements causing dissonance are
not in
his control, he will try to justify his behavior.
For instance: If an individuals superior directs him to act in a manner that opposes his personal
values
and beliefs, the individual would perform the task. He would try to justify his action by arguing
that he
would lose his job if he did not obey the orders of his superior. However, if his job requires him
to
continuously act against his personal values, he will attempt to change his attitude. This would
help him
achieve consistency between his attitude and behavior.Thus the efforts made by an individual to
reduce
dissonance depend on the significance of the elements that lead to dissonance, their
controllability, and
the rewards associated with the dissonance. The greater the dissonance, the higher the pressure
on the
individual to overcome the dissonance.
The desire to reduce the dissonance depends on the extent of control over the elements causing
dissonance. It can be done by adopting any of the below methods:
Change a behavioral cognitive element (importance of the element creating it)

190
The degree of influence the individual feels he/she has over the elements. (the dissonance is
something
they can control)
Add a new cognitive element(high rewards accompanying high dissonance tends to reduce the
tension
inherent in the dissonance)
No individual can completely avoid dissonance. Ex: Income tax.
No individual will rush toward reducing dissonance. If the issues underlying the dissonance are
of
minimal importance, if it is externally imposed and is substantially uncontrollable and if rewards
are
significant enough to offset it, an individual will not be under great tension to reduce the
dissonance.
JOB SATISFACTION
DEFINITION:
Job satisfaction has been described by EDWIN A LOCKE as the Pleasurable or positive
emotional state
that results when an individual evaluates his job or job experience.
Job satisfaction results when an individual perceives that his job provides him with what is
important to
him. The three important dimensions of job satisfaction are provided below:
Job satisfaction is an emotional response to a job. This response can be inferred but not seen.
Job satisfaction that an individual derives from his job depends on the extent to which outcomes
meet
his expectations.
Job satisfaction reflects other attitudes of employees.
According to P.C.Smith, L.M.Kendall and C.L.Hullin, there are six job dimensions that represent
the most
important characteristics of a job and elicit favorable or unfavorable responses from employees
(determinants).
The work itself:
Job that includes interesting tasks and provide opportunities to the employee to learn and to
shoulder
responsibilities bring more satisfaction to the employees than jobs that do not provide these.
Pay:
An employee will have a positive attitude towards his job if the compensation he receives for the
work
he does is comparable to that of others in similar jobs in the organization.
191

Promotion opportunities:
An employees level of job will be higher in a job that provides him an opportunity to move up
in the
organizational hierarchy than in a job that does not.
Supervision:
An employee whose supervisor offers him technical help and behavioral support in times of need
will
experience more satisfaction in his job than an employee whose supervisor does not offer any
such
support.
Coworkers:
An employee will experience a higher level of job satisfaction when his fellow workers are
cooperative
and able to offer him technical assistance.
Working conditions:
Good working conditions have a positive impact on job satisfaction.
192
Effect of job satisfaction on employee perfoemance :
For years, management researchers and practitioners have tried to find out the impact of
employees
job satisfaction on organizational effectiveness. They wanted to know whether job dissatisfaction
would
lead to decline in employee output and consequently, organizational performance. They analyzed
the
outcomes of job satisfaction by studying the relationship between job satisfaction and various
other
organizational aspects such as productivity, turnover, absenteeism etc
These relationships are discussed below :
Job satisfaction and productivity : Though many people assume that there is a positive
relationship
between satisfaction and performance, research results have proved that there is no strong
relation
between satisfaction and productivity. There are other mediating variables like rewards that lead
to an
increase in productivity. Recent research findings suggest that though satisfaction may not bring
about
EFFECTS OF
JOB
SATISFACTION

PRODUCTIVITY
ABSENTEEISM
OTHER
EFFECTS
TURNOVER
193
considerable improvement in individual performance, it does result in an overall improvement in
organizational performance.
Job satisfaction and turnover : Research has indicated that only a moderate relationship exists
between
satisfaction and turnover. High job satisfaction will not eliminate employee turnover but will
only help
reduce the rate of turnover. While job dissatisfaction will encourage employees to switch
organizations
at the slightest opportunity for better prospects in other organizations, the satisfied employees
will
consider several aspects before leaving the organization, like job tenture (i.e the number of years
an
employee has worked in a job in an organization). The higher the job tenure the lesser chances of
his
leaving the organization.
Job satisfaction and absenteeism: Research studies have shown that job satisfaction and
absenteeism
have an inverse relationship. A high level of job satisfaction leads to low absenteeism and a low
level of
satisfaction results in high absenteeism. However, other variables, such as the extent to which
people
consider their jobs important also have an impact on absenteeism. A research conducted on state
government employees in the US revealed that the employees who felt that their work was
important
took less leave than employees who did not feel that there were work was important. Their
research
also revealed that job satisfaction may not necessarily result in low absenteeism, but low job
satisfaction
will led to high absenteeism.
Other effects of job satisfaction: Research has shown that high job satisfaction has an impact on
an

employees life inside the organization as well as outside the organization. Employees who are
highly
satisfied with their jobs have low stress levels (and thus have better mental and physical health ),
have
less onthejob accidents, and have fewer grievances. They also show enthusiasm in learning
jobrelated
tasks. Satisfied employees have high morale and help fellow employees, customers and other
people in
society by undertaking social activities.
Thus we can say that job satisfaction is of overall health and effectiveness of an Organization.
LEARNING
Learning is a complex behavior. If we want to explain and predict behavior, we need to
understand
how people learn. Learning occurs all the time.
Definition:
Learning is any relatively permanent change in behavior that occurs as a result of experience. We
can say that changes in behavior indicate that learning has taken place and that learning is a
change
in behavior.
Learning takes place when there is a change in actions. A change in a individuals thought process
or
attitudes, if not accompanied by a change in behavior, would not be learning.
194
Some form of experience is necessary for learning. Experience may be acquired directly through
observation or practice, or it may be acquired indirectly through reading.
Characteristics of Learning
Theories of learning:
Three theories have bee offered to explain the process of learning:
1) Classical Conditioning
2) Operant conditioning
3) Social learning
1) Classical Conditioning: It is learning of a conditional response involves building up an
association
between a conditioned reaction and an unconditioned reactions.
Components of Classical Conditioning:
195
A Russian physiologist Ivan Pavlov, conducted this experiment. A simple surgical procedure
allowed
Pavlov to measure accurately the amount of saliva secreted by a dog. When Pavlov presented the
dog with a piece of meat, the dog exhibited a noticeable increase in salivation.

When Pavlov withheld the presentation of meat and merely rang a bell, the dog didnt salivate.
Then Pavlov provided to link the meat and the ringing of the bell. After repeatedly hearing the
bell
before getting the food, the dog began to salivate as soon as the bell rang.
The easiest place to start is with a little example. Consider a hungry dog who sees a piece of
food.
Something this might happen:
FOOD SALIVATION
D
The dog is hungry, the sees the food the dog salivate. This is a natural sequence of events, and
unconscious, uncontrolled, and unlearned relationship see the food, then salivate. Now, because
we
are a humans who have and insatiable curiosity, be experiment. When we present the food to the
hungry dog (and before the dog salivate), we ring a bell.
THUS, Bell* With* Food Salivation.
We repeat this action ( food and bell given simultaneously) at several meals. Every time the dog
sees
the food, the dog also hear the bell DingDong, Alpo. Now, because we are humans who like to
play
tricks on our pets, we do another experiment. We ring the bell (DingDong), but we dont show
any
food. What does the dog do? Right BELLSALIVATE
L
The bell elicits the same response the sight on the food gets. Over repeated trials the dog has
learned to associate the bell with the food and now the bell has the power to produce the same
response as the food.(and of course after you had tricked your dog into drooling and acting even
more stupidly then usual, you must give it a special treat). This is the essence of classical
conditioning. It really is that simple. You start with two things that are already connected with
each
other (food and salivation). Then you add a third thing (bell) several trials eventually this third
thing
may become so strongly associated that is the power to produce the old behavior. Now, where we
do get the term, conditioning from all this? Let me drawnup the diagram with the official
terminology.
FOODSALIVATION
sUnconditioned
stimulus unconditioned
response
unconditioned
simply
means
that the stimulus
and the response are naturally connected. They just came that way, hard wired together like a
horse
and carriage and love and marriage as the song goes. unconditioned means that this connection
was already present before e got there and started messing around with the dog or the child or the
spouse. stimulus simply means the theme that starts it while response means the, the theme
that

ends it. A stimulus elicit and a response is elicited (this is circular reasoning, true, hang in there
Another diagram conditioning stimulus,
196
BELL WITH FOOD SALIVATION
D
sUnconditioned stimulus Unconditioned response
We already know that unconditioned means unlearned, unthoughtof, preexisting, already
present before we got there. conditioning just means the opposite. It means that we are trying
to
associate, connect, bound, link something new with the old relationship. And we want this new
thing to elicit so it will be a stimulus and not a response. Finally after many trials we hope for,
L
BELLSALIVATION
sConditioned stimulus Conditioned response
Lets Review These Concepts
Unconditioned stimulus: A thing that can already elicit a response.
Unconditioned Response: A thing that is already elicited by a stimulus.
Unconditioned Relationship: An existing stimulus response connection.
Conditioning stimulus :A new stimulus we deliver the same time we give the old stimulus.
Conditions Relationship :The new stimulus response relationship we created by associating a
new
stimulus with an old response There are two key parts. First we starts with
an existing relationship,
Unconditioned Stimulus Unconditioned Response.
Second, we pair a new theme (conditioning stimulus) with the existing relationship until the new
theme has the power to elicit the old response.
2) Operant Conditioning:
A type of conditioning in which desired voluntary behavior lids to a record or prevent
punishment
Operant behavior means voluntary or learned behavior in contrast to reflexive or unlearned
behavior.B.F. Skinner is the name of the person closely associated with this learning theory.
Skinner
proposed that behavior is determined from outside, which means that it is a learned involuntary
behavior. The term operant conditioning is used in context with voluntary behaviors which are
called operant, for they have some influence on the environment. Skinner had opined that if
certain
pleasant consequences were created to reinforce desirable forms of behavior, there would be an
increase in the frequency of such behavior. This means that people will be engaged in desirable
behaviors provided they are positively reinforced. Also that rewards would be more effective, if
the
desired behavior is immediately rewarded. further, undesirable behavior if punished, is less likely
to
197

be repeated. In fact, most of our behaviors walking, talking, working etc., can be termed as
operant
behavior.
It is also called as instrumental conditioning
The behavior will depend on future consequences.
It emphasizes voluntary behavior
Researchers called operant behavior because they operate on environment. They make the
environment respond in the ways they want.
Ex: Coffee vending machine
Ex: Executive is asked to speak in a board meeting
Operant Learning behavior and consequences
Behaviors Consequences
Works Is paid
Talks to others Meets more people
Enters a restaurant Obtains food
Enters a library Finds a book
Increases productivity Receives merit pay
Completes a difficult assignment Receives praise and promotion
It has greater impact on human learning.
The consequences of this learning can change the environment situation and greatly affect
subsequently employee behaviors.
3) Cognitive Learning
198
It assumes that people are conscious, active participants in how they learn.
In the process they learn the meaning of various objects and events.
Here they use past learning which is based on their experiences as a basis for present
behavior(presumed knowledge or cognitions)
Ex: An employee faced with a choice of job assignment.
Conclusion
It is very relevant in contemporary managerial practices. Expectations, locus of control are all
cognitive concepts.
Differences between Classical and Operant
a) Responses are elicited from a person(reactive)
b) Responses are fixed to stimulus
c) Conditioned Stimulus is stimulus such as sound, an object, a person
d) Reinforcement is not received by choice.
e) Responses are emitted by a person(proactive)
f) Responses are variable in types and degrees(choice)
g) Conditioned Stimulus is situation such as office, a social setting, a specific set of
circumstances
h) Person instrumental in securing reinforcement by operating on the environment.
199
4) Social Learning: it is a process through which people can learned through observation and
through direct experience.

Ex: Much of what we have learned comes from watching models like parents, teachers, peers,
motion pictures and television etc.
This theory has relevance to organizational behavior because most of the work going on in the
organization is based on the knowledge and behavior generated by others in that organization.
The four processes that determine the influence that a model will have on an individual:
a) Attention process: learn only when recognized and pay attention to critical features.
b) Retention process: depends on how well the individual remembers actions.
c) Production process: watching must be converted into doing.
d) Reinforcement process: individuals will be motivated to exhibit the modeled behavior if
positive incentives or rewards are provided.
Some specific organizational applications:
a) Well Pay Versus Sick Pay
b) Employee Discipline
c) Developing Training Programs
d) Self Management
1) Well Pay Versus :
Most organizations provides their salaried employees with paid sick leave as part of the
employees
benefit program. The reality is that sick leave program reinforce the wrong behavior absence
from
work.
2) Employee Discipline :
disciplining employees for undesirable behaviors tells them only what not to do. It doesnt tell
them
what alternative behaviors are preferred. The result is that this form of punishment frequently
leads
to only shortterm suppression of the undesirable behavior rather that its elimination.
3) Developing Training Program:
Most organizations have some type of systematic training program. This training programs
improve
the effectiveness of their training the workers (employees). Training should offer a model to grab
the trainees attention; provide motivational properties; help the trainee to file away what he or
she
has learned for later use provides opportunities to practice new behaviors; offers positive records
for accomplishments of work.
4) SelfManagement: This concept is used to allow individuals to manage their own behavior
and, in
so doing, reduce the need for managerial control. This is called selfmanagement.
200
**********************
MODULE 8

Behaviour in the organization: Introduction, Issues between organizations and individuals:

conformity
issue, rights of privacy, discipline, individuals responsibilities to the organization.
Interpersonal behaviour: Conflict in Organizations: nature of conflict, levels of conflict,
conflict
management styles.
Group dynamics: types of groups, meetings, teamwork, stages of group formation.
Employee stress: forms, causes, implications, approaches to stress management.
Behaviour in the Organization
Issues between Organizations and Individuals
201
Individuals use organizations as instruments to achieve their goals just as much as organizations
use
people to reach objectives. There is a mutual social transaction in which each contributes to, and
benefits from the other.
Individualization occurs when employees successfully exert influence on the social systems
around them
at work by challenging the culture or deviating from it.
Rights of Privacy
Refers to organizational invasion of a persons private life and unauthorized release of
confidential
information about a person in a way that would cause emotional harm or suffering. And as
business
intrude more deeply into domains of employee privacy, the potential of conflict arises.
Business activities that may involve Employee rights of Privacy
Lie detectors, Personality tests, location trackers, medical examinations, treatment of alcoholism,
monitoring employee lifestyle, treatment of drug abuse, surveillance devices, computer data
banks,
confidential records, biometric data, inquiry into personal relationship.
Policy guidelines relating to privacy
a) Relevance: Only necessary, useful information shpuld be recorded and retained.
b) Recency: Obsolete information should be removed periodically.
c) Notice: No personal data system unknown to an employee should be used.
d) Fiduciarys duty: The keeper of the information should be responsible for its security.
e) Confidentiality: Information on need based for outside with employee consent.
f) Challenge if incorrect: The employee can challenge if anything is found incorrect.
g) Protection of the individual: The employees inner self not to be invaded or exposed.
Discipline
Its a management action to enforce organizational standards. Positive standards are supported
rather
than negative standards.

The objective of Discipline:

To reform the offender
To stop others from similar actions
202
To maintain consistency
To ensure continuous improvement
Individuals responsibility to organizations
The employment relationship is a two way relationship. (responsibilities, profits, plan with the
manager,
do work as expected, use available resources and take responsibility, creative thinking,
cleanliness)
Employees can demonstrate larger responsibilities toward the organization. They are:
Organizational citizenship
Avoid unethical behavior
Responsible for all the actions
Dos and Donts
DO'S
Maintain office / organisation decorum. Maintain a quiet environment and a clean desk.
Maintain proper hygienic environment. Adhere to punctuality on duty and lunch hours.
Inform HRD in case of change in address, telephone no. or any other relevant personal
information.
Handle office equipments carefully.
Switch off PC's and electrical appliances before leaving the office premises.
Strictly adhere to all rules and regulations of the company.
Maintain confidential information gained or received during the employment with the company.
Assist in maintaining good and healthy relations with associates and clients.
Donts
Dont use screensavers / backgrounds on PC, which are not good taste / sensibilities Of the other
employees.
Dont speak in any slang language, making conversation looking personal, thereby offending
others.
Dont make personal telephone calls except when it is absolutely necessary.
Dont utilize internet for requirements not pertaining to office job.
Dont gamble or consume alcohol while at work. Going out of the office for any personal use
daily twice
and more.
Dont use of company's property for personal purposes. Dont use any information / documents
gained
or received during the employment for personal benefit or profit.
Conclusion
203

The new and existing employees that are hired in an organization have a certain responsibility
towards
the organization, society, and the nation, at large. Therefore, it is important to induct the 'right'
employees in the organization. The traits that these employees personify include teamwork,
integrity,
commitment, and work ethic.
Conformity Issue
Refers to acting in accordance with prevailing norms or standards; correspondence in character,
agreement, compliance.
Employees when they are agreeing to the standards of the organization their behavior will be
conducive
to the organization which will result in improved organization performance.
Interpersonal Behaviour
Introduction:
Individuals when they join organizations, they bring their skills as well as their customs, beliefs,
values
etc also. For many reasons individuals do not like other individuals, disagree with others, point
out
others weakness, express their hostility to others etc under different circumstanceswhich results
in
conflicts.
Conflicts: Disagreement over the goals to attain or the methods to be used to accomplish them.
It also
means any dispute or differences.
Conflicts in organization
Conflict is a situation where two or more parties feel themselves in opposition.
Conflict is interpersonal & arises from disagreements
Disagreements may be towards attaining goals, methods adopted to achieve etc
Conflicts arise due to task interdependence, ambiguity of roles, policies, rules.
Knowledge & understanding of conflicts is essential to resolve it.
Nature of Conflict
Conflict arises when individuals or groups encounter goals that both parties cannot obtain
satisfactorily.
204
Conflict is an interpersonal process that arises from disagreements over goals or any issues. It
arises due
totask interdependence, policy and rules, ambiguity of roles, competition over scarce resources,
personal stress, differences in attitudes, beliefs and experiences.
Conflict may be cognitive or affective(Differences in perspectives and judgments about issues)
or

(affective conflict can be destructive because it can lead to goal displacement, and poor
decisions)
Sources of conflicts:
a) Organizational change: People holding different views over the direction to go.
b) Different sets of Values: People hold different beliefs and adhere to different value
system.
c) Threat to status: When ones status is threatened.
d) Contrasting Perceptions: People perceive things differently.
e) Lack of Trust: Depending on each others words and actions when minimal.
f) Personality clashes: Not everyone look, feel or act alike.
a) Organizational changes
People holding different views over the directions to go, the routes to take & the resources to be
used &
the profitable outcome.
With the pace of technological, political & social changes increasing in the market place
organizational
changes are evident.
b) Different sets of values
People hold different sets of belief and adhering to different value system
The philosophies may divulge
Ethical values may lead them into different directions
The result is Conflict
c) Threat to status
The social rank of a person in a group is important to an individual.
Status & its maintenance is a driving force to maintain image.
Conflicts arise between defensive persons & with whoever creates threat to status.
205
d) Contrasting Perceptions
People perceive things differently
It is based on experience & expectations
Since perceptions are very real to them, they feel that their perception must be equally apparent
to
others.
They sometimes fail to realize that others may hold contrasting perceptions.
Conflicts may arise unless employees learn to see thinks as others see them & help others to do
the
same.
e) Lack of Trust
Every continuing relationship requires trust
It is the capacity to depend on each others words & actions.
Trust opens up boundaries, provides opportunities in which it acts & enriches the entire social
behavior

in organizations.
f) Personality Clashes
The concept of individual differences is fundamental organizational behavior.
Thinking, feelings, looks or acts are not alike.
Some people rub the wrong way & it leads to clashes between individuals.
g) Personality differences cause conflicts
Employees need to accept, respect & learn to solve differences.
Changing views of conflict
Traditional View of Conflict
The belief that all conflicts is harmful and must be avoided.
Conflict is avoidable
Conflict is caused by management error in designing organizations or by trouble makers
Conflicts disrupts the organization and prevent optimal performance
The task of the management is to eliminate conflict
206
Optimal organizational performance requires the removal of conflict
Human relations View of Conflict
The belief that conflict is a natural and inevitable outcome in any group.
Conflict is inevitable
Conflict arises from many causes, including organizational structure, unavoidable difference in
goals,
differences in perceptions and values of specialized personnel and so on.
Conflict contributes and detracts from organizational performance in varying degrees
The task of the management is to manage the level of conflict and its resolution for optimal
organizational performance
Optimal organizational performance requires a moderate level of conflict
Interactionist view
Most recent perspective proposes not only that conflict can be a positive force in a group but
explicitly
argues that some conflict is absolutely necessary for a group to perform effectively.
Under this view it tells managers to maintain a minimum level of conflict which is enough to
keep the
group working, selfcritical and creative. (not all conflicts are good). Functional and
Dysfunctional.
Levels of Conflict
a) Intraindividual conflict
b) Interindividual conflict
c) Intragroup conflict
d) Inter group conflict
a) Intra Individual Conflict (an employees supervisor or peers sending conflicting
expectations from him
or her)
Conflict within an Individual

Frustration, numerous roles, goals having both positive and negative aspects, cognitive
dissonances.
Because of dual responsibility.
207
Competing roles are taken
Finance & HRM
Finance & Marketing
b) InterPersonal Conflict (between different employees in the organization)
Between two individuals
It arises mainly because of
Differences in perception, temperaments, personalities, value systems, sociocultural factors, and
role
ambiguities.
Effects a persons emotions
Need to protect self image
When self status is threatened
Conflicts develop from failure perception
Conflicts arise due to ineffective communication
c) IntraGroup Conflict
Disputes among some or all of a Groups members, which often affect the groups performance.
Ex:
Ambani brothers
Between two departments
To gain power
Different view points
Shortage of resources
d) InterGroup Conflict (between different departments, divisions)
Conflict between groups, departments, or sections in an organization.
Reasons:
Task Interdependence
Task Ambiguity
Goal incompatibility
208
Competition for limited resources
Reward system
Line and staff managers are not congruent
Conflict Resolution Strategy
a) Avoiding Strategy
b) Smoothing
c) Forcing
d) Compromising
e) Confronting
Cooperativeness

Assertiveness
Collaboration
Compromise
Avoidance Competition
Accommodation
a) Avoiding
Physical or mental withdrawal
209
Low assertiveness and low cooperation
Low concern for either parties
LoseLose situation
b) Smoothing(free from obstruction):
Accommodating the other parties interest
Low assertiveness and highly cooperative
Losewin situation
c) Competition(Forcing):
Uses power, skills, tactics to achieve domination
High assertiveness and low cooperation
Aggression
Winlose situation
d) Compromising:
Search for middle group
Willing to give up something in exchange for gain
Moderate levels of assertiveness and cooperation
Moderate degree of concern
No clear outcome
e) Confronting(meeting face to face):
Facing the conflict directly
Mutual satisfaction
Problem solving
Both assertiveness and cooperation are maximized.
WinWin out come
Conflict Management Styles
210
Conflict Resolution Process
1.Causes for conflict
*Organisational Changes
*Different sets of values
*Threat to status
*Contrasting Perceptions
*Lack of Trust
*Personality clashes
2.Perception of conflict
*Constructive

*Destructive
3.Participants intentions
Winning
Loosing
4.Resolution Strategies
Avoiding
Smoothing
Forcing
Compromising
Confronting
5.Conflict outcomes
LoseLose
WinWin
WinLose
LoseWin
Conflict Resolution Process
Group
Introduction
A group is any collection of individuals who have mutually dependent relationship.
Two or more individuals interacting and interdependent who have come together to achieve
particular
objectives.
Characteristics of Group
a) Interaction among members
b) Common interest or goals
c) Recognition as being a group: People see themselves as members
d) Two or more people needed to form a group.
e) Stability: Groups must possess a stable structure.
Types of Groups
211
Formal & Informal Groups
Open & Closed Groups
A) Formal Groups
Formal group is the one that is deliberately created to perform a specific task
a) A standing task group: permanently specified in the organizational structure and consists of a
supervisor who execute formal authority.
b) A task group: is temporary formal group that is created to solve specific problems
B) Informal Groups
An informal group is an alliance that is neither formally structured, nor organizationally
determined
a) Interest group: To achieve an objective of mutual interest that have nothing to do with their
formal
task membership

b) Friendship groups: develops common characteristics such as marital status, political views,
college
affiliation and sports
c) Reference group: an individual identifies for the purpose of forming opinions or making
decisions
Open & Closed Groups
At one extreme is the completely open group, which is in a constant state of change;
At the other extreme is the completely closed group, which is quite stable.
The difference between open & closed groups are changing membership, frame of reference,
time
perspective and equilibrium.
Stages of Group Formation
a) Forming
212
b) Storming
c) Norming
d) Performing
e) Adjourning
Stages of Group Formation
Forming
The first stage in group development, characterized by much uncertainty(Purpose, structure and
leadership).
Awareness (about self and what types of behavior are acceptable)
Commitment
Acceptance
This stage is complete when members think themselves as part of groups.
Storming(to attack)
The second stage in group development, characterized by intragroup conflict.
Members accept but there is resistance to the limitations groups impose on individuals.
Conflict (who will control the group)
Clarification
Belonging
This stage will be complete when there is relatively a clear hierarchy
Stages of Group Formation
Norming (reaching consensus)
The third stage in group development, characterized by close relationship and cohesiveness.
Cooperation
Development
Support
This stage is complete when the group has common set of expectations.
213
Performing
The fourth stage in group development, during which group is fully functional and is accepted.

Productivity
Achievement
Pride
For permanent work groups performing is the last stage in the group development.
Adjourning(to suspend)
The final stage in group development for temporary groups(committees, teams and task forces),
characterized by concern with wrapping up activities rather than task performance.
Separation
Recognizing
Satisfaction
Advantages of Group
Groups are useful in promoting innovation & creativity.
Groups can gain commitment of members for carrying out decisions.
Groups can control and discipline members in ways otherwise difficult to do.
Groups facilitate synergy.
Disadvantages of Group
Social loafing
Group Size
Conflict among group members
Dominance by few
Divided responsibility
Group decision making techniques
214
The most common form of group decision making takes place in interacting groups.
In these groups members interact with each other face to face and rely on both verbal and non
verbal
interaction to communicate with each other.
Brainstorming: An idea generation process that specifically encourages any and all alternatives
while
withholding any criticism of those alternatives.
Nominal group technique: A group decisionmaking method in which individual members
meet facetoface
to pool their judgments in a systematic but independent fashion.
The most recent approach to group decision making blends the nominal group technique with
sophisticated computer technology. It is called computerassisted group, or an electronic
meeting.
Factors influencing group effectiveness:
Many factors influence group effectiveness during them are individual roles, group norms,
conformity,
leadership, group cohesiveness, group size and synergism.
a) Individual roles:
Factors influencing
group effectiveness

SYNERGISM
INDIVIDUAL ROLES
GROUP NORMS
CONFORMITY
LEADERSHIP
COHESIVENESS
GROUP SIZE
215
A role is the total pattern of expected behavior of an individual. In a group individuals are
expected to
perform certain roles, because of this position in the group. These roles tend to be oriented
towards
other task accomplishment or maintaining group member satisfaction.
b) Group norms:
A norm is a standard of behavior expected of informal group members. Different norms exist for
managers and nonmanagerial employees, for professionals and nonprofessionals and for men
and
women. Norms are established and enforced only for selected behavior.
c) Conformity:
Once norms are established, the next matter of concern is the issue of conformity to the norms.
Conformity offers the advantage of maintaining a predictable pattern of work, team work and
defending
individual and group interests.
d) Leadership:
In the formal organisations the leaders are managers who are placed in the position of authority
by top
management.
e) Group cohesiveness:
It is the degree of attraction of the group has over its members. Cohesiveness is identified by
attitudes
such as loyalty to the group, friendliness, group efforts and a willingness to defend the group
against
outside attack.
f) Group size:
Informal groups tend to be small so that its members can inter act frequently. But when groups
are too
small, difficulties arise. Most effective group size determined by research is as below:
a) When quality of a complex group decision is important, the use of 7 to 12 members under a
formal
leader is most appropriate.

b) When consensus in a conflict solution is important, the use of 3 to 5 members with no formal
leaders
will ensure that each members view will be taken into account.
c) When both quality and consensus are important 5 to 7 members seems more appropriate.
g) Synergy:
The cooperative action of 2 or more persons working together to accomplish more than they
could
working separately is known as synergism.
Teamwork
0
216
A group whose individual efforts result in performance that is greater than the sum of individual
inputs.
Teamwork generates positive synergy through coordinated effort.
A team is a small number of people with complementary skills who are committed to a common
purpose, set of performance goals and approach for which they hold themselves mutually
accountable.
Types of Teams
Crossfunctional teams: Employees from about the same hierarchical level, but from different
work
areas, who come together to accomplish a task.
Virtual Teams: Teams that use computer technology to tie together physically dispersed
members in
order to achieve a common goal. It has a limited social context and has the ability to overcome
time and
space constraints.
Problemsolving teams: Groups of five to twelve employees from the same department who
meet for a
few hours each week to discuss ways of improving quality, efficiency and the work environment.
Selfmanaged work teams: Groups of ten to fifteen people take on responsibilities of their
former
superiors.
Differences between Groups and Teams
Dimensions for comparision Group Team
Work products Individual Collective
Performance monitoring source External Internal
Focus on activity Efficient and task
performance
Problem solving
Leadership Single Shared
View of conflict Dysfunctional Functional
Meetings

A meeting is an assembly where people interact to discuss the issues and problems, find solutions
and
take decisions on them.
And for a successful meeting you need to,
Clearly define the purpose
Distribute the agenda among all the members
Provide all the facts
Time for discussing and exchanging views
Types of meetings
Formal meeting(as per the company rules, quorum must be maintained and minutes must be
recorded)
Annual general meeting(Once in a year)
Statutory meeting(directors and shareholders)
Board meeting(chairman and directors)
Informal meeting(informal gathering)
Departmental meeting(Heads of different departments holding a meeting)
Working party meeting(progress reports and further actions to be taken will be discussed here)
Employee Stress
Stress is the body's reaction to a change that requires a physical, mental or emotional adjustment
or
response.
Stress is an adaptive response to an external situation that results in physical, psychological and
behavioral deviations for organizational participants.
Stress can manifest itself in both positive and negative way.
Stress is associated with demands(responsibilities, pressures, obligations and even uncertainties
that
individuals face in the workplace and resources(things within an individuals control that can be
used to
resolve demands)
Stress can be good and can be bad.
Stress can be categorized into two types:
Eustress and Distress:
Eustress: It is a healthy, positive and developmental stress.
Distress: It is unhealthy and negative stress.
All jobs inevitably causes stress, though the intensity may vary from job to job
Challenge stressors are stressors associated with work load, pressure to complete tasks and time
urgency.
Hindrance stressors are stressors that keep you from reaching your goals (red tape, office
politics,
confusion over job responsibilities)
Potential Sources of Stress
a) Personal Factors
Family and personal relationships

Economic problems from exceeding earning capacity

Personality characteristics( Personality problems) potential stress and employees reaction
toward it.
b) Individual Differences
Perceptual variations(based on the ability some thrive and for few stressful situations are
overwhelming)
Greater job experience moderates stress effects.
Social support buffers job stress.
Internal locus of control lowers perceived job stress.
Strong feelings of selfefficacy reduce reactions to job stress.
c) Environmental Factors
Economic uncertainties of the business cycle
Political uncertainties of political systems
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Technological uncertainties of technical innovations
d) Organizational Factors
Task demands (related to the persons job)
Role demands (functioning in an organization)
Interpersonal demands (created by other employees)
Organizational structure (rules and regulations)
Organizational leadership (managerial style)
Implications of stress
a) Physiological symptoms
Stress could result in increase heart and breathing rates, increase blood pressure, bring on
headaches
and induce heart attacks.
People having low selfefficacy are susceptible to upper respiratory problems and poor immune
system
functioning when they are linked to stressful job demands.
b) Psychological symptoms
Stress can cause dissatisfaction. Job related stress can cause job related dissatisfaction resulting
in
tension, anxiety, irritability, boredom.
The evidence to this is that people when placed in jobs that make multiple and conflicting
demands/or
in which there is lack of clarity about duties, roles and responsibilitiesboth stress and
dissatisfaction is
increased.
c) Behavioral symptoms
Symptoms include changes in productivity, absence and turnover as well as changes in eating
habits,
increase smoking or consumption of alcohol, rapid speech and sleep disorders.

Managing Stress
A) Individual Approaches
Implementing time management
Prioritizing activities by importance and urgency
Increasing physical exercise
Relaxation techniques (meditation)
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Expanding social support network
B) Organizational Approaches
Improved personnel selection and job placement(person with internal locus of control and
experience)
Training (improves self efficacy)
Use of realistic goal setting(specific and challenging and attainable)
Redesigning of jobs(more meaningful job, responsibility, regular feedback, more autonomy)
Increased employee involvement and improved organizational communication
Offering employee sabbaticals.
Establishment of corporate wellness programs(which focuses on employee physical and wellness
program)
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