DON BOSCO

INSTITUTE OF TECHNOLOGY

DEPARTMENT

OF

MBA

MANAGEMENT AND ORGANIZATIONAL BEHAVIOR

SUBJECT CODE: 20MBA11

SARITHA L ASSISTANT PROFESSOR

 PART –PRINCIPLES OF MANAGEMENT
UNIT -01 MANAGEMENT

INTRODUCTION:

One of the most important activities in a business is the management of 4M’s – men,
machines, material, and money. The term ‘management can be interpreted directly in
different contexts. Hence, it is difficult to define. In one context, it may comprise the
activities of executives and administrative personnel in an organization, while in another, it
may refer to a system of getting things done. In a broad perspective, management can be
considered as the proper utilization of people and other sources in an organization to
accomplish desired objectives. With increasing global competition, changes in the world of
technology, changing business practices and increasing social responsibility of organizations,
the role of managers has become all the more significant.
Organizations have a variety of goals. They usually direct their energies and
resources to achieve these goals. A profit-oriented business firm, for example, return-on-
investment goal; a hospital would have goal Centred around patient care; and an educational
institution would establish goals for teaching, research, and social service. Organization
process human as well as non- human resources (plant, equipment, land, money, etc.) that are
put to you in the service of specific goals. Management is the force that unifies human as well
as non-human resources in the service of organizational goals. It is a process of getting results
with and through people.
Management is needed whenever people work together in an organization the
managerial functions must be performed by anyone who manages organized efforts, whether
it is a business enterprise, religious organization, military outfit for a social Institutions- such
as planning, organizing, directing and controlling. These functions are performed at all levels
in an organization, regardless of its type or size. The services of Management are essential in
all cooperative endeavors.
MEANING OF MANAGEMENT:

Management is an important factor in the success of any organized activity. Today

management basically concerns with changes and challenges, and it is difficult to manage.

Management is the art of getting things done through others. Management is to plan,
organize, direct and control the resources of the organization for obtaining common
objectives or goals. It is related to resources like material, money, machinery, methods,
manufacturing, and marketing.

DEFINITION OF MANAGEMENT:

Peter F. Drucker defines, "Management is an organ; organs can be described and defined
only through their functions".

According to Terry, "Management is not people; it is an activity like walking, reading,

swimming or running. People who perform Management can be designated as members,
members of Management or executive leaders".

Koontz and O'Donnel, “Management is the creation and maintenance of an internal

environment in an enterprise where individuals, working in groups, can perform efficiently
and effectively toward the attainment of group goals. It is the art of getting the work done
through and with people in formally organized groups”.

William Spiegel, "Management is that function of an enterprise which concerns itself with
direction and control of the various activities to attain business objectives. Management is
essentially an executive function; it deals with the active direction of the human effort."

Henry Fayol, "To manage is to forecast and plan, to organize, to compound, to co-ordinate
and to control."

Harold Koontz says, "Management is the art of getting things done through and within a
formally organized group."
J.N. Schulze, "Management is the force which leads guides and directs an organization in the
accomplishment of a pre-determined object."

Charles Reynold, "Management is the process of getting things done through the agency of a
community. The functions of management are the handling of community with a view of
fulfilling the purposes for which it exists."

NATURE OF MANAGEMENT:

An analysis of the various definitions of management indicates that management has certain
characteristics. The following are the salient characteristics of management.

1. Management aims at reaping rich results in economic terms: Manager’s

primary task is to secure productive performance through planning, direction, and
control. It is expected of the management to bring into being the desired results. The
rational utilization of available resources to maximize profit is the economic function
of a manager. A professional manager can prove his administrative talent only by
economizing the resources and enhancing profit. According to Kimball, “management
is the art of applying the economic principles that underlie the control of men and
materials in the enterprise under consideration”.

2. Management also implies skill and experience in getting things done through
people: Management involves doing the job through people. The economic function
of earning profitable returns cannot be performed without enlisting co-operation and
securing positive response from “people”. Getting a suitable type of person to execute
the operations is a significant aspect of management. In the words of Koontz and
O’Donnell, “Management is the art of getting things done through people in formally
organized groups”.

3. Management is a process: Management is a process, function or activity. This

process continues until the objectives set by administration are actually achieved.
“Management is a social process involving coordination of human and material
resources through the functions of planning, organizing, staffing, leading and
controlling in order to accomplish stated objectives”.
4. Management is a universal activity: Management is not applicable to business
undertakings only. It is applicable to political, social, religious and educational
institutions also. Management is necessary when group effort is required.

5. Management is a science as well as an art: Management is an art because there

are definite principles of management. It is also a science because by the application
of these principles predetermined objectives can be achieved.

6. Management is a profession: Management is gradually becoming a profession

because there are established principles of management which are being applied in
practice, and it involves specialized training and is governed by ethical code arising
out of its social obligations.

7. Management is an endeavor to achieve pre-determined objectives:

Management is concerned with directing and controlling of the various activities of
the organization to attain the pre-determined objectives. Every managerial activity has
certain objectives. In fact, management deals particularly with the actual directing of
human efforts.

8. Management is a group activity: Management comes into existence only when

there is a group activity towards a common objective. Management is always
concerned with group efforts and not individual efforts. To achieve the goals of an
organization management plans organizes, coordinates, directs and controls the group
effort.

9. Management is a system of authority: Authority means power to make others act

in a predetermined manner. Management formalizes a standard set of rules and
procedures to be followed by the subordinates and ensures their compliance with the
rules and regulations. Since management is a process of directing men to perform a
task, the authority to extract the work from others is implied in the very concept of
management.

10. Management involves decision-making: Management implies making decisions

regarding the organization and operation of the business in its different dimensions.
The
 success or failure of an organization can be judged by the quality of decisions taken
by the managers. Therefore, decisions are the key to the performance of a manager.

11. Management implies good leadership: A manager must have the ability to lead
and get the desired course of action from the subordinates. According to R. C. Davis,
“management is the function of executive leadership everywhere”. Management of
the high order implies the capacity of managers to influence the behavior of their
subordinates.

12. Management is dynamic and not static: The principles of management are
dynamic and not static. It has to adapt itself according to social changes.

13. Management draws ideas and concepts from various disciplines: Management
is an interdisciplinary study. It draws ideas and concepts from various disciplines like
economics, statistics, mathematics, psychology, sociology, anthropology, etc.

14. Management is goal-oriented: Management is a purposeful activity. It is

concerned with the achievement of the pre-determined objectives of an organization.

15. Different levels of management: Management is needed at different levels of an

organization namely top level, middle level, and lower level.

16. Management need not be owners: It is not necessary that managers are owners
of the enterprise. In joint-stock companies, management and owners (capital) are
different entities.
17. Management is intangible: It cannot be seen with the eyes. It is evidenced only
by the quality of the organization and the results, i.e., profits increased productivity,
etc.

SCOPE OF MANAGEMENT:

The scope of management is too wide to be covered in a few pages. Herbison and Myres have
yet tried to restrict it under three broad groups, viz.
1. Economic Resource
2. System of Authority
3. Class or Elite
 Let us understand each of them one by one.
1. Economic Resource: Business Economics classifies the factors of production into
four basic inputs, viz. land, labor, capital, and entrepreneur. By the use of all these
four, basic production can be done. But to turn that into a profitable venture, effective
utilization of man, money, material, machinery, and methods of production has to be
ensured. This is guaranteed by the application of management fundamentals and
practices. The better is the management of an enterprise, the higher is its growth rate
in terms of profit, sales, production, and distribution. Thus management itself serves
as an economic resource.
2. System of Authority: As already discussed, management is a system of authority. It
formalizes a standard set of rules and procedures to be followed by the subordinates
and ensures their compliance with the rules and regulations. Since management is a

process of directing men to perform a task, authority to extract the work from others is
implied in the very concept of management.
3. Class or Elite: Management is considered to be a distinct class that has its own value
system. Managerial class often referred to as a collective group of those individuals
that perform managerial activities is an essential component of each organization.
The importance of the class has become so huge that the entire group of managers is
known as “management” in every organization.

Difference between Administration & Management

Basis of Manageme
differenc Administrati
on nt
e
Nature Determination of objectives & broad Implementation of plans &
of work policies (thinking) policies (doing)
It takes major decisions and is a wider term It takes the decision within
Scope than management the framework of
administration.
Level of It is a top management function It is a lower-level management function
Authorit
y
It consists of managerial personnel
Status It consists of the owners of an enterprise with specialized knowledge who
may be the employees.
Nature of Generally, it is used in relation to It is used mainly in business firms
organizatio government, military, educational and which have economic motives.
n religious organization
Its decisions are generally influenced by Its decisions are influenced by
Influence external factors such as social, political, legal, internal factors such as values,
etc. beliefs, and opinions.

PURPOSE OF MANAGEMENT:

The purpose of management can be understood as following:

1. Reducing ambiguity in methods of working,
2. Keeping costs down, and motivating others to do the same.
3. Taking calculated risks.
4. Managing prospective risk
5. Exercise good judgment

IMPORTANCE OF MANAGEMENT:

1. Management is goal-oriented:- Management is a concern with achievement of

specific goals. It is always directed towards achievement of objectives. The success of
management is measured by the extent to which objectives are achieved.

2. Management is associated with group efforts:-The business comes into existence

with certain objectives that are to be achieved by a group and not by one person alone.
Management gets things done by, with and through the efforts of group members. It
coordinates the activities and actions of its members towards a common goal.

3. Management is intangible:- It is an unseen force, its presence can be evidenced by

the result of its efforts up to date order but they generally remain unnoticed, Whereas
mismanagement is quickly noticed.

4. Management is an activity and not a person or group of person:- Management is

not people or not a certain class but it is the activity, it is the process of planning,
organizing, directing and controlling to achieve the objectives of the organization.

5. Management is situational:- Management does not advise the best way of doing
things. Effective management is always situational. A manager has to apply
principles, approaches, and techniques of management after taking into consideration
the existing situations.

6. Management is universal:- Most of the principles and techniques of management are

 universal in nature. They can be applied to government organizations, military,
educational institutes, religious institutes, etc. They provide working guidelines that
can be adapted according to situations.
7. Management is a concern with people:- Since management involves getting things
done through others only human being performed this activity with the help of
planning and control. The element man can not be separated from the management.
8. Management is the combination of art, science, and profession:- Management
makes use of science as well as art. It is science because it collects knowledge with
the methods and data, analyzes and measures it and decision is taken with the
help of

experiment. It is a systematic body of knowledge. Art means application of

knowledge for solving various problems. In modern times there is separation of
ownership and management, so professional experts are appointed.

FUNCTIONS OF MANAGEMENT

 Planning: Planning is the process of making decisions about the future. It is the
process of determining enterprise objectives and selecting future courses of action
necessary for their accomplishment. It is the process of deciding in advance what is to
be done, when and where it is to be done, how it is to be done and by whom. Planning
provides direction to enterprise activities. It helps managers cope with change. It
enables managers to measure progress toward the objectives so that corrective action
can be taken if progress is not satisfactory. Planning is a fundamental function of
management and all other functions of management are influenced by the planning
process.
 Organizing: Organising is concerned with the arrangement of an organization’s
resources – people, materials, technology, and finance in order to achieve enterprise
objectives. It involves decisions about the division of work, allocation of authority
and responsibility and the coordination of tasks. The function increases in importance
as a firm grows. A structure is created to cope with problems created by growth.
Through this formal structure, the various work activities are defined, classified,
arranged and coordinated. Thus, organizing refers to certain dynamic aspects: What
tasks are to be done? Who is to do them? How the tasks are to be grouped? Who is to
report to whom? Where the decisions have to be made?
 Staffing: Staffing is the function of employing suitable persons for the enterprise. It
 may be defined as an activity where people are recruited, selected, trained, developed,
motivated and compensated for manning various positions. It includes not only the
movement of individuals into an organization but also their movement through
(promotion, job rotation, transfer) and out (termination, retirement) of the
organization. Staffing involves selection of the right man for the right job. It has four
important elements:
 Directing: The function of guiding and supervising the activities of the subordinates
is known as directing. Acquiring physical and human assets and suitably placing them
on jobs does not suffice; what is more important is that people must be directed
towards organizational goals. This work involves four important elements:

(a) Leadership: Leadership is the process of influencing the actions of a person or a

group to attain desired objectives. A manager has to get the work done with and
through people. The success of an organization depends upon the quality of leadership
shown by its managers.
(b) Motivation: Motivation is the work a manager performs to inspire, encourage and
Impel people to take the required action. It is the process of stimulating people to take
desired courses of action. In order to motivate employees, manager must provide a
congenial working atmosphere coupled with attractive incentives.
(c) Communication: Communication is the transfer of information and understanding
from one person to another. It is a way of reaching others with ideas, facts, thoughts.
Significantly, communication always involves two people: a sender and a receiver.
Effective communication is important in organizations because managers can
accomplish very little without it.
(d) Supervision: In getting the work done it is not enough for managers to tell the
subordinates what they are required to do. They have also to watch and control the
activities of the subordinates. Supervision is seeing that subordinates do their work
and do it as directed. It involves overseeing employees at work.
 Controlling: The objective of control is to ensure that actions contribute to goal
accomplishment. It helps in keeping the organizational activities on the right path and
aligned with plans and goals. In controlling, performances are observed, measured
and compared with what had been planned. If the measured performance is found
wanting, the manager must find reasons and take corrective actions. If the
performance is not found wanting, some planning decisions must be made, altering
the original plans. If the controlling function is to be effective, it must be preceded by
 proper planning. Thus, controlling includes four things:
(a) Setting standards of performance,
(b) Measuring actual performance,
(c) Comparing actual performance against the standard and
(d) Taking corrective actions to ensure goal accomplishment.
Successful management involves active participation by managers in the above basic
managerial functions. These functions are interrelated and most managers use a combination
of all of them simultaneously to solve the problems facing their companies.

LEVELS AND TYPES OF MANAGERS:

 Top-Level Management: It consists of Chairman, Board of Directors, Managing

Director, General Manager, President, Vice President, Chief Executive Officer
(C.E.O.), Chief Financial Officer (C.F.O.) and Chief Operating Officer, etc. It
includes group of crucial persons essential for leading and directing the efforts of
other people. The managers working at this level have maximum authority.

Main functions of top-level management are:

(a) Determining the objectives of the enterprise. The top-level managers formulate the
main objectives of the organization. They form long term as well as short term
objectives.
(b) Framing of plans and policies. The top-level managers also frame the plans and
policies to achieve the set objectives.
(c) Organizing activities to be performed by persons working at middle level. The top-
level management assigns jobs to different individuals working at middle level.
(d) Assembling all the resources such as finance, fixed assets, etc. The top-level
 management arranges all the finance required to carry on day to day activities. They
buy fixed assets to carry on activities in the organization.
(e) Responsible for the welfare and survival of the organization—Top level is
responsible for the survival and growth of the organization. They make plan to run the
organization smoothly and successfully.
(f) Liaison with the outside world, for example, meeting Government officials, etc.
The top-level management remains in contact with government, competitors,
suppliers,

media, etc. Jobs of top-level are complex and stressful demanding long hours of
commitment towards organisation.
(g) Welfare and survival of the organization.

 Middle-Level Management: This level of management consists of departmental

heads such as purchase department head, sales department head, finance manager,
marketing manager, executive officer, plant superintendent, etc. People of this group
are responsible for executing the plans and policies made by top level.
They act as a linking pin between the top and lower-level management. They also
exercise the functions of top-level for their department as they make plans and
policies for their department, organize and collect the resources, etc.

Main functions of middle-level management are:

(a) Interpretation of policies framed by top management to lower level. Middle-level

management act as linking pin between top-level and lower-level management. They
only explain the main plans and policies framed by top-level management to lower
levels.
(b) Organizing the activities of their department for executing the plans and policies.
Generally middle-level managers are the head of some departments. So they organise
all the resources and activities of their department.
(c) Finding out or recruiting/selecting and appointing the required employees for their
department. The middle-level management selects and appoints employees of their
department.
(d) Motivating the persons to perform to their best ability. The middle-level managers
offer various incentives to employees so that they get motivated and perform to their
 best ability.
(e) Controlling and instructing the employees, preparing their performance reports,
etc. The middle-level managers keep a watch on the activities of low-level managers.
They prepare their performance appraisal reports.
(f) Cooperate with other departments for smooth functioning.
(g) Implementing the plans framed by the top level.
 Supervisory Level/Operational Level: This level consists of supervisors,
superintendent, foreman, sub-department executives; clerk, etc. Managers of this
group actually carry on the work or perform the activities according to the plans of
top and middle-level management.
Their authority is limited. The quality and quantity of output depend upon the
efficiency of this level of managers. They pass on the instruction to workers and
report to middle- level management. They are also responsible for maintaining
discipline among the workers.

Functions of lower-level management are:

(a) Representing the problems or grievances of workers before the middle-level

management. The supervisory level managers are directly linked with subordinates so
they are the right persons to understand the problems and grievances of subordinates.
They pass these problems to middle-level management.
(b) Maintaining good working conditions and developing healthy relations between
superior and subordinate. The supervisory managers provide good working conditions
and create a supportive work environment that improves relations between
supervisors and subordinates.
(c) Looking at the safety of workers. Supervisory level managers provide safe and
secure work environment for workers.
(d) Helping the middle-level management in recruiting, selecting and appointing the
workers. The supervisory level managers guide and help the middle-level managers
when they select and appoint employees.
(e) Communicating with workers and welcoming of their suggestions. The
supervisory level managers encourage the workers to take initiative. They welcome
their suggestions and reward them for good suggestions.
(f) They try to maintain a precise standard of quality and ensure steady flow of output.
The supervisory level managers make sure that quality standards are maintained by
 the workers.
(g) They are responsible for boosting the morale of the workers and developing the
team spirit in them. They motivate ‘the employees and boost their morale.
(h) Minimizing the wastage of materials.

MANAGERIAL ROLES:

To achieve results, they shift gears and restructure and reorganize things continually. The
diverse roles played by managers in discharging their duties have been summarised by Henry
Mintzberg in the late 1960s, under three broad headings: interpersonal roles, informational
roles, and decisional roles. Let us understand them one by one.

1. Interpersonal roles: Three interpersonal roles help the manager keep the
organization running smoothly. Managers play the figurehead role when they perform
duties that are ceremonial and symbolic in nature. These include greeting the visitors,
attending social functions involving their subordinates (like weddings, funerals),
handing out merit certificates to workers showing promise, etc. The leadership role
includes hiring, training, motivating and disciplining employees. Managers play the
liaison role when they serve as a connecting link between their organization and
 others or between their units and other organizational units. Mintzberg described this
activity as contacting outsiders who provide the manager with information. Such
activities like acknowledgments of mail, external board work, etc., are included in this
category.

2. Informational roles: Mintzberg mentioned that receiving and communicating

information are perhaps the most important aspects of a manager’s job. In order to
make the right decisions, managers need information from various sources. Typically,
this activity is done through reading magazines and talking with others to learn about
changes in the customers’ tastes, competitors’ moves and the like. Mintzberg called
this the monitor role.
In the disseminator role, the manager distributes important information to
subordinates that would otherwise be inaccessible to them. Managers also perform the
spokesperson role when they represent the organization to outsiders.

3. Decisional roles: There are four decision roles that the manager adopts. In the role
of entrepreneur, the manager tries to improve the unit. He initiates planned changes to
adapt to environmental challenges. As disturbance handlers, managers respond to
situations that are beyond their control such as strikes, shortages of materials,
complaints, grievances, etc. In the role of a resource allocator, managers are
responsible for allocating human, physical and monetary resources. As negotiators,
managers not only mediate in internal conflicts but also carry out negotiations with
other units to gain advantages for their own unit.

SKILLS FOR MANAGERS:

1. Conceptual Skills: Conceptual skills are the ability to think about the creative terms
understand and visualize the future, organize and translate observation into ideas &
 concepts. Conceptual skills are essential to identify and diagnose the problems. This
will help in determining the goals.

2. Analytical Skills: [Decision making] Analytical skills mean the ability to work out a
complex problem or situation into component. Analytical skills are required for
solving problems and decision making. This is also helpful for evaluation of
performance and arriving at judgment.

3. Human relation Skills: Human relation skills represent the ability to understand the
behavior of people, their problems, their needs, working conditions and motivation to
people. These skills are essential in directing the people and for better coordination.

4. Administrative Skills: It involves the implementation of the plan and use of available
resources to get the desired output that is profit and to regularize a performance in
orderly manner. It is also helpful in the coordination of activities.

5. Technical Skills: These skills are essential for first-line managers. He requires
knowledge of a job, ability to apply the methods and techniques of job. He is
responsible for providing technical guidance and instructions to subordinates.

6. Computer Skills: Computer knowledge is essential for today’s manager i.e.

knowledge of hardware & software. Hardware is a technical term & software is ability
to adapt the system in an organization to attempt goals. In modern days computer is
widely used in organization. Hence today’s’ manager should possess the knowledge
of computer. This is helpful in decision making. It also helps to increase productivity
in the organization.

7. Communication Skills: Communication is a systematic process of telling, listing,

and understanding. This skill requires the ability to listen and speak in an effective
manner. The manager is responsible for getting things done by others. He should be
expert in oral and written communication. Communication skill is essential for getting
success. It depends upon the manager who achieves the results with efforts of others.
Co- ordination can be attained with the help of proper communication. Success
depends upon proper communication.
EVOLUTION OF MANAGEMENT THOUGHT:

The origin of Evolution management can be traced back to the days when man started living
in groups. History reveals that strong men organized the masses into groups according to
their intelligence, physical and mental capabilities. Evidence of the use of the well-
recognized principles of management is to be found in the organization of public life in
ancient Greece, the organization of the Roman Catholic Church and the organization of
military forces. Thus management in some form or the other has been practiced in the various
parts of the world since the dawn of civilization. With the onset of the Industrial Revolution,
however, the position underwent a radical change. The structure of industry became
extremely complex. At this stage, the development of a formal theory of management became
absolutely necessary. It was against this background that the pioneers of modern management
thought laid the foundations of modern management theory and practice.
The formal study of management is largely a twentieth-century phenomenon, and to some degree, the rel

 THE CLASSICAL APPROACH: The classical approach is the oldest formal

approach to management thought. Its roots predate the twentieth century. The
classical approach of thought generally concerns ways to manage work and
organizations more
 efficiently. Three areas of study that can be grouped under the classical approach are
scientific management, administrative management, and bureaucratic management.

 Scientific Management: Frederick Winslow Taylor is known as the father of

scientific management. Scientific management (also called Taylorism or the
Taylor system) is a theory of management that analyzes and synthesizes
workflows, with the objective of improving labor productivity. In other words,
Traditional rules of thumb are replaced by precise procedures developed after
careful study of an individual at work.
 Administrative Management: Administrative management focuses on the
management process and principles of management. In contrast to scientific
management, which deals largely with jobs and works at the individual level
of analysis, administrative management provides a more general theory of
management. Henri Fayol is the major contributor to this approach of
management thought.
 Bureaucratic Management: Bureaucratic management focuses on the ideal
form of organization. Max Weber was the major contributor to bureaucratic
management. Based on observation, Weber concluded that many early
organizations were inefficiently managed, with decisions based on personal
relationships and loyalty. He proposed that a form of organization, called a
bureaucracy, characterized by division of labor, hierarchy, formalized rules,
impersonality, and the selection and promotion of employees based on ability,
would lead to more efficient management. Weber also contended that
managers' authority in an organization should be based not on tradition or
charisma but on the position held by managers in the organizational hierarchy.

 THE BEHAVIORAL APPROACH: The behavioral approach of management

thought developed, in part, because of perceived weaknesses in the assumptions of the
classical approach. The classical approach emphasized efficiency, process, and
principles. Some felt that this emphasis disregarded important aspects of
organizational life, particularly as it related to human behavior. Thus, the behavioral
approach focused on trying to understand the factors that affect human behavior at
work.
  Human Relations: The Hawthorne Experiments began in 1924 and continued
through the early 1930s. A variety of researchers participated in the studies,
including Elton Mayo. One of the major conclusions of the Hawthorne studies
was that workers' attitudes are associated with productivity. Another was that
the workplace is a social system and informal group influence could exert a
powerful effect on individual behavior. A third was that the style of
supervision is an important factor in increasing workers' job satisfaction.
 Behavioral Science: Behavioral science and the study of organizational
behavior emerged in the 1950s and 1960s. The behavioral science approach
was a natural progression of the human relations movement. It focused on
applying conceptual and analytical tools to the problem of understanding and
predicting behavior in the workplace.
The behavioral science approach has contributed to the study of management
through its focus on personality, attitudes, values, motivation, group behavior,
leadership, communication, and conflict, among other issues.

 THE QUANTITATIVE APPROACH: The quantitative approach focuses on

improving decision making via the application of quantitative techniques. Its roots can
be traced back to scientific management.

 Management Science (Operations Research): Management science (also

called operations research) uses mathematical and statistical approaches to
solve management problems. It developed during World War II as strategists
tried to apply scientific knowledge and methods to the complex problems of
war. The industry began to apply management science after the war. The
advent of the computer made many management science tools and concepts
more practical for industry.
 Production And Operations Management: This approach focuses on the
operation and control of the production process that transforms resources into
finished goods and services. It has its roots in scientific management but
became an identifiable area of management study after World War II. It uses
many of the tools of management science.
Operations management emphasizes the productivity and quality of both
manufacturing and service organizations. W. Edwards Deming exerted a
 tremendous influence in shaping modern ideas about improving productivity
and quality. Major areas of study within operations management include
capacity planning, facilities location, facilities layout, materials requirement
planning, scheduling, purchasing, and inventory control, quality control,
computer integrated manufacturing, just-in-time inventory systems, and
flexible manufacturing systems.

 SYSTEMS APPROACH: The simplified block diagram of the systems approach is

given below.
The systems approach focuses on understanding the organization as an open system
that transforms inputs into outputs. The systems approach began to have a strong
impact on management thought in the 1960s as a way of thinking about managing
techniques that would allow managers to relate different specialties and parts of the
company to one another, as well as to external environmental factors. The systems
approach focuses on the organization as a whole, its interaction with the environment,
and its need to achieve equilibrium

 CONTINGENCY APPROACH: The contingency approach focuses on applying

management principles and processes as dictated by the unique characteristics of each
situation. It emphasizes that there is no one best way to manage and that it depends on
various situational factors, such as the external environment, technology,
organizational characteristics, characteristics of the manager, and characteristics of
the subordinates. Contingency theorists often implicitly or explicitly criticize the
classical approach for its emphasis on the universality of management principles;
however, most classical writers recognized the need to consider aspects of the
situation when applying management principles.
CONTRIBUTION OF FAYOL AND TAYLOR:

F.W. Taylor and Henry Fayol are generally regarded as the founders of scientific
management and administrative management and both provided the bases for science and art
of management.
Taylor's Scientific Management: Frederick Winslow Taylor well-known as the founder of
scientific management was the first to recognize and emphasize the need for adopting a
scientific approach to the task of managing an enterprise. He tried to diagnose the causes of
low efficiency in industry and came to the conclusion that much of waste and inefficiency is
due to the lack of order and system in the methods of management.
He found that the management was usually ignorant of the amount of work that could be
done by a worker in a day as also the best method of doing the job. As a result, it remained
largely at the mercy of the workers who deliberately shirked work. He, therefore, suggested
that those responsible for management should adopt a scientific approach in their work, and
make use of "scientific method" for achieving higher efficiency. The scientific method
consists essentially of
 Observation
 Measurement
 Experimentation and
 Inference.

He advocated thorough planning of the job by the management and emphasized the necessity
of perfect understanding and co-operation between the management and the workers both for
the enlargement of profits and the use of scientific investigation and knowledge in industrial
work. He summed up his approach in these words:
 Science, not the rule of thumb
 Harmony, not discord
 Co-operation, not individualism
 Maximum output, in place of restricted output
 The development of each man to his greatest efficiency and prosperity.

Elements of Scientific Management: The techniques which Taylor regarded as its

essential elements or features may be classified as under:
1. Scientific Task and Rate-Setting (work-study): Work-study may be defined as the
systematic, objective and critical examination of all the factors governing the operational
efficiency of any specified activity in order to effect improvement.
Work-study includes:

 Methods Study: The management should try to ensure that the plant is laid out in the
best manner and is equipped with the best tools and machinery. The possibilities of
eliminating or combining certain operations may be studied.
 Motion Study: It is a study of the movement, of an operator (or even of a machine)
in performing an operation with the purpose of eliminating useless motions.
 Time Study (work measurement): The basic purpose of time study is to determine
the proper time for performing the operation. Such a study may be conducted after
the motion study. Both time study and motion study help in determining the best
method of doing a job and the standard time allowed for it.
 Fatigue Study: If a standard task is set without providing for measures to eliminate
fatigue, it may either be beyond the workers or the workers may overstrain
themselves to attain it. It is necessary, therefore, to regulate the working hours and
provide for rest pauses at scientifically determined intervals.
 Rate-setting: Taylor recommended the differential piece wage system, under which
workers performing the standard task within prescribed time are paid a much higher
rate per unit than inefficient workers who are not able to come up to the standard set.

2. Planning the Task: Having set the task which an average worker must strive to perform
to get wages at the higher piece-rate, necessary steps have to be taken to plan the production
thoroughly so that there are no bottlenecks and the work goes on systematically.

3. Selection and Training: Scientific Management requires a radical change in the

methods and procedures of selecting workers. It is, therefore, necessary to entrust the task of
selection to a central personnel department. The procedure of selection will also have to be
systematized. Proper attention has also to be devoted to the training of the workers in the
correct methods of work.

4. Standardization: Standardization may be introduced in respect of the following

 Tools and equipment: Standardization is meant the process of bringing about
uniformity. The management must select and store standard tools and implements
which will be nearly the best or the best of their kind.

 Speed: There is usually an optimum speed for every machine. If it is exceeded, it

is likely to result in damage to machinery.

 Conditions of Work: To attain standard performance, the maintenance of

standard conditions of ventilation, heating, cooling, humidity, floor space, safety,
etc., is very essential.

 Materials: The efficiency of a worker depends on the quality of materials and the
method of handling materials.

 Specialization: Scientific management will not be complete without the

introduction of specialization. Under this plan, the two functions of 'planning' and
'doing' are separated in the organization of the plant. The `functional foremen' are
specialists who join their heads to give thought to the planning of the performance
of operations in the workshop. Taylor suggested eight functional foremen under
his scheme of functional foremanship.

 The Route Clerk: To lay down the sequence of operations and instruct the
workers concerned about it.

 The Instruction Card Clerk: To prepare detailed instructions regarding different

aspects of work.

 The Time and Cost Clerk: To send all information relating to their pay to the
workers and to secure proper returns of work from them.

 The Shop Disciplinarian: To deal with cases of breach of discipline and

absenteeism.
  The Gang Boss: To assemble and set up tools and machines and to teach the
workers to make all their personal motions in the quickest and best way.

 The Speed Boss: To ensure that machines are run at their best speeds and proper
tools are used by the workers.

 The Repair Boss: To ensure that each worker keeps his machine in good order
and maintains cleanliness around him and his machines.

 The Inspector: To show to the worker how to do the work.

6. Mental Revolution: At present, industry is divided into two groups – management

and labor. The major problem between these two groups is the division of surplus.
The management wants the maximum possible share of the surplus as profit; the
workers want, as large share in the form of wages. Taylor has in mind the enormous
gain that arises from higher productivity. Such gains can be shared both by the
management and workers in the form of increased profits and increased wages.

FAYOL’S FOURTEEN PRINCIPLES OF MANAGEMENT:

1) Division of Work (specialization):- A business activity carried out by small scale
may be managed & controlled by proprietor. As business expands, activities grow &
need more people to control those activities. The organization is jointly managed by a
group of people. Fayol has advocated division of work to take advantage of
specialization.

2) Authority & Responsibility:- Authority represents a power enjoyed by a person of

his position in the organization. It may be for taking decision, spending money or in
many other ways. Responsibility is obligation created upon a person for the use of
authority, which is entrusted to him. These two terms are co-related. Fayol suggested
that there must be balance between authority & responsibility.

3) Discipline:- All the personnel serving in an organization must follow discipline.

Discipline is obedience, application of behavior & energy shown by an employee.
Discipline may be self -employed or command discipline. Discipline can be obtained
lower remuneration, dismissal, demotion of position. While applying such
circumstances proper proof should be taken into account.

4) Unity of Command:-Each employee should receive order from single superior. In the
organization structure it should be clearly stated that who is responsible to whom? &
who should receive order from whom?

5) Unity of Direction:- According to this principle each group of activity with some
objective must have one head. There is a difference between unity of command &
unity of direction. The direction is concerned with planning & unity of command is
concerned with reporting.

6) Subordination of individual interest to general interest:- In an organization

individual interest should not be given any importance. The manager should always
keep organizational interest before him & should determine such policies which will
be beneficial to entire group & not just few personnel. It is responsibility to
management to create common understanding between all.

7) Remuneration:-Every employee must be paid an adequate remuneration for his

services. Remuneration should be fair & should provide maximum satisfaction to
person who is working in the organization. Personal factors such as demand for labor,
 position of the labor & competition as well as cost of living index should be taken into
account. General Economic Conditions should be considered while deciding the
remuneration of an employee. In any case exploitation of the worker should be
avoided.

8) Order:- Fayol has suggested that at one position one person should be appointed.
Each person must have an appropriated position in organization.

9) Centralization:- It means the extent to which authority should be concentrated in the

hands of top-level management. It may be centralized or decentralized. There are
limitations of complete centralization & complete decentralization. Therefore, there
should be a proper balance between these two.

10) Scalar Chain:-(Straight line & Command) It shows the straight line of authority
from highest level to lower level for communication. The scalar chain is the extract of
organization chart & shows the responsibility or position of everybody in an
organization.

11) Stability of Tenure:-Effort must be made to keep the employee stuck to organization
so that the labor turnover can be low by keeping check on administrative cost of
organization. Care must be taken to satisfy the staff otherwise there will be bad effect
& loss of labor.

12) Equity:-Equity is combination of justice & kindness; equity in treatment & behavior
is liked by everyone & it brings loyalty in the organization.

13) Initiative:- Within the limits of authority & discipline managers should encourage
their employees for taking initiative. Initiative is concern with thinking. Thinking
leads to execution of plan. The initiative increases energy on the part of human
beings.

14) Esprit De Corps:-This is a French term. It means manager is like a captain of a team
who is responsible to maintain high morale between all workers. It may be possible
through effective communication among all persons in organization. His
understanding & differences in opinions should not be harmful. The best way of
taking such situation is to establish dialogue between parties. The participation of
workers in the process of decision making is important.
RECENT TRENDS IN MANAGEMENT:

Recent trends in management refer to the latest managerial practices that managers use to
effectively manage their employees. As the market situation evolves, the managerial trends
also evolve and change. These changes are subject to the market conditions of that time
period. The most popular recent trends in management are

 Total Quality Management

 Risk Management
 Crisis Management
 Resistance to Change
 Change Through Management Hierarchy
 Concept of Change Management
 Global Practices/International Business
 Role of an International Manager
 UNIT -02

PLANNING: AN INTRODUCTION:

A plan is a forecast for accomplishment. It is a predetermined course of action. It is today’s

projection for tomorrow’s activity. In other words, to plan is to produce a scheme for future
action, to bring about specified results at a specified cost, in a specified period of time.
Management thinkers have defined the term, basically, in two ways:

1. Based on futurity: “Planning is a trap laid down to capture the future” (Allen). “Planning
is deciding in advance what is to be done in future” (Koontz). “Planning is informed
anticipation of future” (Haimann). “Planning is ‘anticipatory’ decision-making” (R.L.
Ackoff).

2. As a thinking function: “Planning is a thinking process, an organised foresight, a vision

based on fact and experience that is required for intelligent action” (Alford and Beatty)

“Planning is deciding in advance what to do, how to do it, when to do it and who is to do it.”
(Koontz and O’Donnell)

It is deciding in the present, what is to be done in future. It is the process of thinking before
doing. A plan is a specific, documented intention consisting of an objective and an action
statement. The objective portion is the end, and the action statement represents the means to
that end. Stated another way, objectives give management targets to shoot at, whereas action
statements provide the arrows for hitting the targets. Properly conceived plans tell what,
where and how something is to be done.
MEANING:

In simple word planning is deciding in advance what to do, how to do, when to do & who is
to do it. Planning is a bridge between present & future. It is an intellectual process & thinking
before doing.

Planning bridges the gaps from where we are to & where we want to go. Planning involves
the selection was the course of action to achieve desired result. In this change planning is
projected course of action.

DEFINITIONS: -

1) According to ‘Koontz and O’Donell’:- “Planning is an intellectual process, the conscious

determinatory of courses of action, the basing of decisions on purpose, facts and considered
estimates.”

2) According to ‘James Lundy’:- “Planning is determination of what is to be done, how and

where it is to done, who is to do it & how results are to be evaluated.”

3) According to ‘George Terry’:-“The selection & relating of facts & the making & using
of assumptions regarding the future in the visualization & formulation of proposed activities
believed necessary to achieve the desired results.”

NATURE OF PLANNING:

1. Objectives oriented: The main purpose of a plan is to accomplish the objectives of the
organization.

2. Basic function of management: Planning is the foundation of organization. No planning,

no organization. The manager decides upon the policies, procedures, programmes and
projects before proceeding with his work.

3. Directed towards efficiency: The plan is said to be efficient, when the objectives are
accomplished.

4. It is flexible and dynamic: Planning leads to the adoption of a specific course of action
and the rejection of other possibilities. Management is dynamic as well as flexible because
future is unpredictable, and when future cannot be moulded to confirm to the course of
action, flexibility has to be ingrained.
 OBJECTIVES OF PLANNING:

1) Planning & Objectives: Planning is object oriented. Every plan must contribute for
accomplishment of group objectives. If objectives are not decided planning will be of no use.

2) Efficiency of Plan: Efficiency is the ability to minimize the use of resources in achieving
organizational objectives. Efficiency of plan is measured by its contribution to objective as
economical as possible. Planning should be done in such a way that maximum results will be
obtained at minimum cost.

3) Planning & Forecasting: The essence of planning is forecasting. Forecasting means

looking ahead & making assumptions about the future. Forecasting is not speculation. It
involves logical & intelligent guess work. Forecasting provides basis for planning. It helps
management to make assumptions about future. It forms the basis for development. Planning
in various areas like purchase of raw material, production, marketing is based on forecasting.
Forecasting describes what will happen in future.

4) Planning & Decision Making: Decision making is a process of selecting a better course
of action from available alternatives. Decisions are taken about the use of organizational
resources. It is an important part of planning. Decision making is wider term. It includes
organizing, directing, controlling & co-ordination.

5) Planning is essential at each level: This figure clearly indicates the nature of planning
is different at each level. Planning is done in all types of organizations & in all departments.

• Long Term
Middle Level
Strategic
• B.O.D. •Medium Term • Short Term Operative
• M.D •Purchase Manager • Supervisor Foreman
• G.M. •Production Manager
•Sales Manager Lower Level
Top Level
•Finance Manager
Administrative
•R. & D. Manager
 6) Planning & Controlling: Planning is flexible & it is continuous process. It is never
ending activity. On the basis of feedback, controlling function changes. Planning is looking
ahead & controlling is looking back. Planning means fixing objectives & preparing budget.
Controlling involves comparison of actual results with planned result.

Planning Execution Controlling

Feedback

PROCESS OF PLANNING/ STEPS IN PLANNING:

Alternative Course of Action

Identification of Problems Establishing Objectives Establishing Premises

Formulating (substitute) Derivative plan

Provision for Ideal Course of
follow up Action

1. Identification of problems & awareness of opportunities: The manager must

identify the problems while planning so that suitable action can be taken. This will
help to take further steps for completing the objectives. Planning starts with analysis
& external environment. This is essential for businessmen to be aware of
opportunities in the market. They must consider changes in consumer demand,
number of competitors, change in habits, change in technology etc. At the same time
the businessmen has to conduct internal analysis of its strengths & weaknesses. It
means it has to examine its resources & production. E.g. An audio cassette
manufacturer must have awareness of new opportunities in the market. At the same
time he has to verify availability of resources while planning.
2. Establishing Objectives: The entire planning activity is directed towards achieving
the objectives of the enterprise. Determining objectives is a real starting point of
planning

process. Once the objectives are fixed it is necessary to finalize objectives for various
department.
 E.g. 1. Increase sales by 30% or 40%.
 Provide better working conditions to workers.
 Reduction in cost of production by 25%.

3. Establishing Planning Premises: On the basis of information collected assumption

about the future should be made. This process is known as planning premises.
Premises are forecast about the future. Premises may be internal or external; it may be
controllable & uncontrollable. Normally, internal premises are controllable & external
are uncontrollable. Internal premises include capital investment, availability of
material, labour & financial position. It includes the part of decision making &
external premises include economical, social, political & competitors. It also includes
government policies.

4. Determining Alternative Courses: In this step various possible course of action or

plans are developed to achieve a particular object.

5. Selecting Ideal Courses of Action: After the careful examination of various

alternatives ideal course of action, the most suitable course of action or plan is
selected to achieve pre-determine objective.

6. Formulation of Derivative Plans: Once the overall plan is selected it becomes

essential to fix the detail sequence & timing of the plan. Then subsidiary or derivative
plan is to be considered. Primary plan of action is decided by preparing separate
derivative plans for eachsection or division of the enterprise.

7. Provision for Follow-up: Planning is always followed by action. Some modifications

may be required for achieving pre-determined objective & adequate follow up
provides assurance about fulfillment of objective.
 ADVANTAGES OF PLANNING:

1) Planning provides economy in operation: Planning helps in achieving goals

with efficiency & economy. It involves selection of profitable course of action. It
also involves selection of best alternative.
2) Uncertainties about the future is easily located in advance for that planning is very
essential in the organization.
3) Planning provides basis for control in the organization: In planning goals are
planned and actions are measured for effective control. In this, actual performance
is checked with standard performance.
4) Planning has unique Contribution: Planning makes the functions of directing,
controlling, co-ordination, communication more effective in organization.
5) Planning secure unity of purpose & direct efforts: Planning is distinct activity
which leads to co-ordination in the organization. It helps for determining common
goals in the organization. It avoids duplication of utilization of resources & helps
effective utilization of all available resources.
6) Planning Promote Internal Co-ordination: The activities are coordinated in the
organization with the help of planning to attain the goals. It helps to maintain the
discipline between the departments.
7) Planning result in more productivity: Planning makes better utilization of all
the available resources & helps to increase productivity. It also increases overall
profitability.
8) Planning is helpful in forecasting: It gives proper strength for the business to
grow & prosperity.

LIMITATIONS OF PLANNING:

1) Lack of Dependable Information: The basic of planning is collect perfect

information but dependable data is not available while planning. It leads to
failure in planning. The period of planning is also short. It is difficult to use
advance forecasting techniques.
2) Time Consuming & Expensive: Planning is time consuming & expensive
process. The value expected from planning should be more than the cost
involved in it.
 3) Internal Inflexibility: Business environment is always changing. Industries
have to work under dynamic conditions. They have to face many problems. The
manager may be negligent while revising the plans & procedure.

TYPES OF PLANNING

 The process of planning may be classified into different categories on the following basis:

(i) Nature of Planning:

 a. Formal planning.

b. Informal planning.

(ii) Duration of planning:

 a. Short term planning.

 b. Long term planning.

(iii) Levels of Management:

 a. Strategic planning.

 b. Intermediate planning.

 c. Operational planning.

(iv) Use:

 a. Standing plans

 b. Single-use plans.

(i) Nature of Planning:

a. Formal Planning:

 Planning is formal when it is reduced to writing. When the numbers of actions are large it is
good to have a formal plan since it will help adequate control.

 The term formal means official and recognised. Any planning can be done officially to be
followed or implemented. Formal planning is aims to determine and objectives of planning.
It is the action that determine in advance what should be done.

Advantages:

 1. Proper Cooperation among employees,

  2. Unity of Action,

 3. Economy,

 4. Proper coordination and control,

 5. Choosing the right objectives, and

 6. Future plan.

b. Informal Planning:

 An informal plan is one, which is not in writing, but it is conceived in the mind of the
manager.

 Informal planning will be effective when the number of actions is less and actions have to
be taken in short period.

(ii) Duration of Planning:

 a. Short term Planning:

 Short term planning is the planning which covers less than two years. It must be formulated
in a manner consistent with long-term plans. It is considered as tactical planning. Short-term
plans are concerned with immediate future; it takes into account the available resources only
and is concerned with the current operations of the business.

 These may include plans concerning inventory planning and control, employee training,
work methods etc.

Advantages:

 1. It can be easily adjustable.

 2. Changes can be made and incorporated.

 3. Easy to Gauge.

 4. Only little resources required.

Disadvantages:

 1. Very short period-left over things will be more.

 2. Difficult to mobiles the resources.

 3. Communication cycle will not be completed.

b. Long-Term Planning:

 Long-term planning usually converse a period of more than five years, mostly between five
 and fifteen years.

 It deals with broader technological and competitive aspects of the organisation as well as
allocation of resources over a relatively long time period.

 Long-term planning is considered as strategic planning.

Short-term planning covers the period of one year while long term planning covers 5-15 years. In
between there may be medium-term plans.

 Eg: production, labour, overhead expenses and so on.

PLANNING TOOLS AND TECHNIQUES:

Planning consists of several individual plans or components of planning, which are usually bound
together.

 (i) Forecasting.

 (ii) Objectives.

 (iii) Policies.

 (iv) Programmes.

 (v) Strategies.

 (vi) Schedules.

 (vii) Procedures.

 (viii) Rules, and

 (ix) Budgets.

i. Forecasting:

 Forecasting becomes an integral part of the planning process. It is a prediction of future

events and conditions. It, therefore, includes both the assessment of the future and the
provision for it. It helps to reduce the uncertainties that surround management, decision
making.

ii. Objectives:

 Objectives are the ends toward which activity is aimed— they are the results to be achieved.
They represent not only the end point of planning but also the end toward which organising,
staffing, leading and controlling are aimed.

iii. Policies:

 Koonte and O’Donnell defines “policies are general statements or undertakings which

 guide or channel thinking in decision-making of subordinates.” 

 So, policies act as guides to thinking and action of subordinates in the organisations. It
should be clearly prescribed and understandable by all.

iv. Programmes:

 It refers to the course of action of work to be carried out in proper sequence for the purpose
of achieving specific objectives.

v. Strategies:

 Konnoz and Heinz Weihrich defined strategies as “a general programme of action and
deployment of resources to attain comprehensive objectives” or ” the determination of
the basic long-term objectives of an enterprise “and the adoption of courses of action and
allocation of resources necessary to achieve these goals

vi. Schedules:

 Fixing a time sequence for every operation is known as schedules. Normally it forms part of
programming a part of action plan.

vii. Procedures:

 Procedures are plans that establish a required method of handling future activities.

 They are guides to action, rather than to thinking and they detail the exact manner in which
certain activities must be accomplished. They are chronological sequences of required
actions.

viii. Rules:

 Rules spell out specific required actions or non-actions, following no direction. They are
usually the simplest type of plan.

ix. Budgets:

 A budget is a statement of expected results expressed in numerical term. It may be referred

to as a numberised programme.

 A budget may be expressed either in financial terms or in terms of labour-hours, units of

product, machine hours, or any other numerically measurable term. It helps the organisation
to control the action by comparing budgetary and actual results.
DECISION MAKING:

Management is essentially a decision making process. In case of every section of

management, a manager has to make a choice among alternative courses of action. Whatever
a manager does, he does it through making, decisions. A manager by way of taking decisions
directs the behavior of subordinate. So management is defined as an art and science of
decision making. However, it may be noted that decision making is the means for carrying
out managerial tasks and responsibilities. The efficiency of the organization depends upon the
efficiency of decision making of its management.
A decision is an act or choice where the organisation reaches to conclusion. What must not be
done in a given situation is explained by decision making. It is a point where policies,
procedures & objectives come into action. The main purpose of decision making is to direct
human behavior.

Definition:
According to Melwin, “Administration is a decision making process & authority is
responsible factor for making decisions & ascertainment of decisions is carried out or not. In
a business whether the enterprise is small or large, decisions are important.
Terry – “Decision making is the selection based on some criteria from two or more possible
alternative.”
“Decision making is a rational process including all those investigative, creative, diagnostic
and evaluative activities which take place while making a decision.

NATURE OR CHARACTERISTICS OF DECISION MAKING:

On the basis of above definitions the main characteristics of decision making may be started
as follows.
i) Decision making is a process of making a rational choice or selecting one of the various
alternative courses of action.
ii) Decision making is necessary only when different alternative solutions are available.
iii) Decision making is a purposeful activity.
iv) Decision making involves the commitment of resources and reputation of the organization.
v) Decision making is always related to the situation or environment.

PROCESS OF DECISION MAKING:

Development of
Selection of Alternative
Defining the Problem Criteria for
cessful
SucionSolut

Identification of Resources
Collection of Data Implement Decisions

Finding the Course of Problem

Analysis of Problem Follow Up

1) Defining the Problem:- Defining the problem is the problem half solved. Sufficient
timing should be spent on defining the problem. It is very difficult to define the problem. The
manager is responsible for defining the problem.
E.g.: - Like a doctor, he has to take into account all the symptoms before giving a medicine.
A manager must carefully diagnose the problem & should tackle it tactfully.

2) Collection of Data:- Information can be collected from internal sources as well as external
sources. Right decisions depend upon the quality of information collected by the
management.
3) Analysis of the Problems:- Subject to systematic study depth information should
collected & it should be classified properly. Information is based on facts, speculation&
assumption. Normally 98% information should be based on facts, 2% on speculation, 0%
assumption.

4) Finding causes of problems:- This is the most important aspect of understanding the
problem. It is complicated process to find out the exact cause is very essential.

5) Identification of Resources:- It is necessary to identify available resources & the use of

resources for achievements of goals. The management must make the list of resources that are
available for solving the problem.

6) Development of Criteria for successful Solution:- Criteria should not be established as

early as possible. This criteria is useful for choosing the best alternative & divert the
resources accordingly. This criteria is divided into “must & want”. The must criteria are
satisfied first & want criteria later on.

7) Development of Alternatives:- Development of alternatives is most important step in the

process of decision making. The effectiveness in decision making depends upon development
of alternatives.

8) Selection of Alternatives:- In order to select the best alternative following points should
be considered i.e. risk, economy, time, availability of resources.

9) Implementation of Decisions:- Implementation means putting the selective alternative

into action. The process of implementation starts with assigning the responsibilities.
Management must focus on the duties of the person. He must consider following points:-
1. Effective communication
2. Time for Decision Making
3. Acceptance by employee.

TYPES OF DECISIONS:

1) Major Decision & Minor Decision:- Decision may be major or minor. Major decision
includes purchase of raw material, flow of production process.
E.g.: - Major decisions are:- Location of plant, schedule of production, etc.
E.g.: - Minor decisions are:- Purchase of stationary.

2) Programmed & un-programmed Decision :- Decisions are classified on the basis of

nature of problems. Programmed decisions are routine in nature. It does not involve any risk
factor. It can be easily delegated. They are according to rules, regulations & policies. On the
other hand, un-programmed decisions deal with unique problems which involve risk factor &
high expenditure.

3) Group Decisions & Personal Decisions :- Group decisions are known as ‘Organizational
Decisions’ which are related with formulating of policies. These decisions are taken by BOD,
Shareholders, MD & all committee members. On the other hand, Personal Decisions are
taken by Manager as an individual & not as a member. Normally in sole proprietary
organization, personal decision is taken.

4) Policy Decisions & Operating Decisions :- Policy Decisions are taken by Top Level
Management such as to give bonus to employee, expansion of plan, change of product line
etc. On the other hand, operating decisions are taken by middle or lower management such as
follow up production process, calculation of bonus etc.

5) Long Term & Departmental Decisions :- In long term decisions, the period of decisions
are more than 1 year. These decisions are taken by top level management. It involves risk.
E.g. Plant expansion, diversification, replacement of machinery, change in technology etc.
Departmental Decisions are related with departments. It is taken by Departmental Heads such
as production department, sales department, purchase department, finance department.

6) Routine Decisions & Strategic Decisions:- According to Peter Ducker, “Tactical

Decisions are ‘Routine decision. They have certain alternatives which are related to economic
use of resources. Strategic Decisions are related to find out what resources are available how
they can be use alternatively.
 TECHNIQUES IN DECISION MAKING:

 In the decision making process three specific techniques have proved valuable. These
are marginal analysis, financial analysis and the Delphi decision making techniques.
 It has been observed that there is a current emphasis on competitive analysis. Various
disciplines have contributed to research and development of application of
mathematical techniques. The significance of their contribution depends essentially on
the management attitude behind them.
 Techniques are only aid to judgment and not substitute for judgment. Experience,
experimentation, research and analysis also come into play in making decisions.
 Planning and control are closely inter-related and they determine the accuracy of
decision making. Control function ensures that objectives are met. It specifically
considers ‘Progress’ towards and achievement of the end result, evaluation of the
process used and ‘Validation’ of the end result. Hence, in decision making is
important to set up control system.

TECHNIQUES OF DECISION MAKING:

Group Discussions.
Brainstorming.
Delphi technique.
Marginal Analysis.
Cost-Benefit Analysis.
Ratio Analysis.
Financial Analysis.
Break-even Analysis.

DECISION-MAKING

1. Directive decision-making
A directive decision-maker typically works out the pros and cons of a situation based on what they already know.
Directive decision-makers are very rational and have a low tolerance for ambiguity. Their decisions are rooted in
their own knowledge, experience, and rationale, rather than going to others for more information. The upside to
this style is decision-making is quick, ownership is clear, and it doesn’t require extra communication. However,
directive decisions can sometimes be made impulsively, without all the necessary information.

When to use directive decision-making

This style of decision-making lends itself well to situations characterized by stability, repeating patterns, and
consistent events. Reserve directive decisions for instances where there is a clear and undisputed cause-and-effect
relationship; in other words, a right answer exists and is understood collectively.

A leader’s role in directive decision-making

A leader needs to sense the situation, categorize it as a scenario that calls for a direct decision and respond
appropriately. Make sure there are best practices in place for recurring processes. When classifying the situation,
remember to ask yourself: Is this my decision to make, and do I have all the required information to make this
decision? Delegate if necessary, but remember to communicate in clear, direct language. It’s a leader’s job to
understand when extensive, interactive communication is unnecessary and to make direct decisions based on the
information they already have.

2. Analytic decision-making
Analytic decision-makers examine much information before taking action. For example, analytic leaders rely on
direct observation, data, and facts to support their decisions. However, unlike directive decision-makers, an
analytic decision-maker will seek information and advice from others to confirm or deny their own knowledge.
These decision-makers have a high tolerance for ambiguity and are very adaptable, but they like to control most
aspects of the decision process. This style is a well-rounded approach to decision-making but can be time-
consuming.

When to use analytic decision-making

Analytic decisions are helpful in situations where there may be more than one right answer. Use this style of
decision-making to solve problems where the cause-and-effect relationship is discoverable but not immediately
apparent. Primarily, you’re using this approach to explore several options or solutions and using fact-based
management to guide appropriate action.

A leader’s role in analytic decision-making

Unlike directive decision-making, leaders need to analyze all the information available to them before deciding on
a course of action. It’s beneficial to assemble a team of industry experts to assist with analytic decisions; however,
leaders need to consider conflicting advice and ideas openly. At the same time, leaders need to consider the
viewpoints of non-experts in order to make the most of the analytic decision-making process.

3. Conceptual decision-making
The conceptual decision-making style takes a more social approach compared to the directive or analytic
methods. Conceptual decision-makers encourage creative thinking and collaboration and consider a broad array of
perspectives. These decision-makers are achievement-oriented and like to think far into the future when making
important decisions.

When to use conceptual decision-making

Apply conceptual decision-making to problems that involve many competing ideas. This style of decision is best
suited for situations characterized by unpredictability and suited to creative and innovative approaches. In these
scenarios, you find there is no immediate solution, but patterns emerge over time. Using a conceptual style of
decision-making accounts for long-term planning and unknown variables.
A leader’s role in conceptual decision-making

For conceptual decision-making to be effective, leaders need to create an environment that encourages
experiments designed to reveal instructive patterns over time. As well, leaders need to make a point of increasing
interaction and communication. Create groups of people who can contribute innovative ideas and help with the
development and delivery of complex decisions. Patience is key, and leaders need to give themselves time for
reflection.

4. Behavioral decision-making
Behavioral decision-makers try to make sure everyone works well together. Like the conceptual style, behavioral
decision-making is group-oriented; however, rather than brainstorming potential solutions, the group is given the
options available to them. From there, the group discusses the pros and cons of each choice. This style of
decision-making considers many different outlooks and opinions in the process.

When to use behavioral decision-making

Like conceptual decision-making, the behavioral style requires proactive communication. This style takes a more
introspective approach by discussing solutions that have worked in the past rather than trying to reveal new
patterns.

A leader’s role in behavioral decision-making

Leaders need to open up lines of communication in this style of decision-making. Again, create groups of people
who can contribute their opinions and encourage democratic discussions. When employing the behavioral
decision-making style, don’t just impose a course of action. Instead, look at what decision creates the most
harmony within the organization.
 ORGANIZING

Organizing is a process of co-coordinating employee’s activities in an orderly manner. It is a

managerial job. It specifies how work or duties shall be divided among the departments in the
company, the policies to be followed while accomplishing the objectives, the scope and limits
of responsibilities and the relationship of one job to another etc.

Organization defines the relationship between person to person, position to position, job to
job and so on. It specifies orderly communication between various levels of responsibilities.
It defines their authority and responsibility in a formal manner.

Definitions:

It is often define as, “A collective entity of people who continuously engaged in same activity
on a sustained basis to achieve an objective or objectives.”

According to Oliver Sheldon, “A person of so combining the work which individuals or

groups have to perform with facilities necessary for its execution that the duties to so perform
provide the best channel for the efficient, systematic, positive & co-ordinate application of
the available efforts.”

According to Chester Bernard, “Organization is a system of consciously coordinate activity

of two or more persons.”

ORGANISATION STRUCTURE:

An organisation structure shows the authority and responsibility relationships between the
various positions in the organisation by showing who reports to whom. Organisation involves
establishing an appropriate structure for the goal seeking activities. It is an established pattern
of relationship among the components of the organisation. March and Simon have stated that-
"Organisation structure consists simply of those aspects of pattern of behaviour in the
organization that are relatively stable and change only slowly." The structure of an
organisation is generally shown on an organisation chart. It shows the authority and
responsibility
relationships between various positions in the organisation while designing the organisation
structure, due attention should be given to the principles of sound organisation.

SIGNIFICANCE OF ORGANISATION STRUCTURE:

1. Properly designed organisation can help improve teamwork and productivity by

providing a framework within which the people can work together most effectively.
2. Organisation structure determines the location of decision-making in the
organisation.
3. Sound organisation structure stimulates creative thinking and initiative among
organisational members by providing well defined patterns of authority.
4. A sound organisation structure facilitates growth of enterprise by increasing its
capacity to handle increased level of authority.
5. Organisation structure provides the pattern of communication and coordination.
6. The organisation structure helps a member to know what his role is and how it
relates to other roles.

FORMAL AND INFORMAL ORGANISATION:

The formal organisation refers to the structure of jobs and positions with clearly defined
functions and relationships as prescribed by the top management. This type of organisation is
built by the management to realise objectives of an enterprise and is bound by rules, systems
and procedures.

Everybody is assigned a certain responsibility for the performance of the given task and given
the required amount of authority for carrying it out. Informal organisation, which does not
appear on the organisation chart, supplements the formal organisation in achieving
organisational goals effectively and efficiently. The working of informal groups and leaders
is not as simple as it may appear to be. Therefore, it is obligatory for every manager to study
thoroughly the working pattern of informal relationships in the organisation and to use them
for achieving organisational objectives.
FORMAL ORGANISATION:

When the managers are carrying on organising process then as a result of organising process
an organisational structure is created to achieve systematic working and efficient utilization
of resources. This type of structure is known as formal organisational structure.
Formal organisational structure clearly spells out the job to be performed by each individual,
the authority, responsibility assigned to every individual, the superior- subordinate
relationship and the designation of every individual in the organisation. This structure is
created intentionally by the managers for achievement of organisational goal.

Features of Formal organisation:

1. The formal organisational structure is created intentionally by the process of

organising.
2. The purpose of formal organisation structure is achievement of organisational goal.
3. In formal organisational structure each individual is assigned a specific job.
4. In formal organisation every individual is assigned a fixed authority or decision-
making power.
5. Formal organisational structure results in creation of superior-subordinate relations.
6. Formal organisational structure creates a scalar chain of communication in the
organisation.

Advantages of Formal Organisation:

1. Systematic Working: Formal organisation structure results in systematic and smooth

functioning of an organisation.
2. Achievement of Organisational Objectives: Formal organisational structure is
established to achieve organisational objectives.
3. No Overlapping of Work: In formal organisation structure work is systematically divided
among various departments and employees. So there is no chance of duplication or
overlapping of work.
4. Co-ordination: Formal organisational structure results in coordinating the activities of
various departments.
5. Creation of Chain of Command: Formal organisational structure clearly defines superior
subordinate relationship, i.e., who reports to whom.
6. More Emphasis on Work: Formal organisational structure lays more emphasis on work
than interpersonal relations.

Disadvantages of Formal Organisation:

1. Delay in Action: While following scalar chain and chain of command actions get delayed
in formal structure.
2. Ignores Social Needs of Employees: Formal organisational structure does not give
importance to psychological and social need of employees which may lead to demotivation of
employees.
3. Emphasis on Work Only: Formal organisational structure gives importance to work only;
it ignores human relations, creativity, talents, etc.

INFORMAL ORGANISATION:

In the formal organisational structure individuals are assigned various job positions. While
working at those job positions, the individuals interact with each other and develop some
social and friendly groups in the organisation. This network of social and friendly groups
forms another structure in the organisation which is called informal organisational structure.

The informal organisational structure gets created automatically and the main purpose of
such structure is getting psychological satisfaction. The existence of informal structure
depends upon the formal structure because people working at different job positions interact
with each other to form informal structure and the job positions are created in formal
structure. So, if there is no formal structure, there will be no job position, there will be no
people working at job positions and there will be no informal structure.

Features of informal organisation:

(1) Informal organisational structure gets created automatically without any intended
efforts of managers.
 (2) Informal organisational structure is formed by the employees to get psychological
satisfaction.
(3) Informal organisational structure does not follow any fixed path of flow of authority
or communication.
(4) Source of information cannot be known under informal structure as any person can
communicate with anyone in the organisation.
(5) The existence of informal organisational structure depends on the formal organisation
structure.

Advantages of Informal Organisation:

1. Fast Communication: Informal structure does not follow scalar chain so there can be
faster spread of communication.
2. Fulfills Social Needs: Informal communication gives due importance to
psychological and social need of employees which motivate the employees.
3. Correct Feedback: Through informal structure the top level managers can know the
real feedback of employees on various policies and plans.
4. Strategic Use of Informal Organisation: Informal organisation can be used to get
benefits in the formal organisation in the following way:

 The knowledge of informal group can be used to gather support of employees and
improve their performance.
 Through grapevine important information can be transmitted quickly.
 By cooperating with the informal groups the managers can skillfully take the
advantage of both formal and informal organisations.

Disadvantages of Informal organisation:

1. Spread Rumours: According to a survey 70% of information spread through informal

organisational structure are rumors which may mislead the employees.
2. No Systematic Working: Informal structure does not form a structure for smooth working
of an organisation.
3. May Bring Negative Results: If informal organisation opposes the policies and changes
of management, then it becomes very difficult to implement them in organisation.
4. More Emphasis to Individual Interest: Informal structure gives more importance to
satisfaction of individual interest as compared to organisational interest.

FUNCTIONAL ORGANISATION:
In the functional organisation work is divided according to specific function. Every specialist
has authority to issue orders relating to specific functions of his department. Identical
function of various departments are grouped together & headed by specialist.

 Routine Clerk: He is the person who determines the method of work. He is expert
technician. He determines complete lay out of work. E.g.: How raw material should
be processed & in what stages.
 Instruction Card Clerk: This person implements work according to the plan
prepared by routine clerk instructions are prepaid in writing in advance. These
instructions are prepaid for each job. This person has close contacts with workers.
 Time & Cost Clerk: This clerk has contact with routine clerk & instruction card
clerk. He determines the schedule for different types of jobs. He determines
requirement of material for each job.
 Disciplinarian: This person is responsible for the maintenance of piece orders &
discipline. His main job is to see that workers attend work on time and that they
complete their job within the scheduled time.
 Gang Boss: It is the person who comes directly in to contact with the workers. He is
responsible for implementation of the work i.e. making the workers work according to
pre-determined standards. He looks after the lay-out of machines. He arranges for
machinery & tools.
 Speed Boss: The main function of speed boss is to see how quickly & skillfully the
work can be done. He provides necessary instructions. He also gives demonstration on
the machines. Speed boss is regarded as instructor teacher for the workers.
 Repair Boss: Repair boss is responsible for maintenance for machinery tools &
equipment. There are damages, depreciations, wear& tear of mechanical equipments.
The main job of Repair Boss is to keep all machineries & tools in working condition.
  Inspector: This inspector carefully analyses & examines actual performance and
compares it with standard. He prepares report about performance of different workers
on different jobs. He rejects those jobs which are not up to standard.

Advantages of Functional Organisation:

1) Benefits of minute specialization: When the area of operation of each foreman is

decided on the basis of technical division of labour all the advantages of specialization
can be acquired, skill efficiency & knowledge in specific job increases. It plays as
motivating factor.
2) Benefits of expert’s knowledge: While preparing & determining policies expert
services are taken. The plan becomes more efficient. In this process expert’s knowledge
talent and skill is utilized.
3) Reduce pressure of duties: The work of superior & foreman is reduced because of
specialization. There is not strain the quality of supervision & control improved.
4) Staff Specialization: The advisory & executor staff specialized in the function of
consultancy, staff officers, specialize in specific person are appointed. Hence adequate
training is provided. They can share more responsibilities.
5) Large production possible: In the functional system there is high degree of flexibility.
Thus specialization & standardization can be brought.
6) Availability of supervisory staff: Depending upon the nature of functional
specialization the organization can employ the services of expert. The skill of employees
can be increased by providing necessary training.
Disadvantages of Functional Organisation:

1) Over-lapping of Authority: Due to specialization these are disorders in the

organisation. The authority of two expert offices may be clash with each other.
2) Difficult in assigning responsibility: When many experts are responsible for doing job
, responsibility can not be assigned to a particular individual. This reduces efficiency.
3) Increasing cost: In this type there are many experts and specialists are involved,
results into increase in cost due to high salary. Such increase in cost is not favorable.
4) Useful only for big organisation: Only big manufacturing unit can adopt functional
organisation system. Only such organisation can bear heavy cost of specialization.
5) Indiscipline due to lack of unity of command: Workers are instructed by many
experts & they get confused. They can not decide as to what priority is to be given. This
creates many problems. So there is lack of co-operation.

DIVISIONAL STUCTURE:
Divisional Stucture, as the name suggests perceives an enterprises as the integration of
independent divisions. We must note that such structure is adopted in large and complex
enterprises which handle diverse products. This is beacause although an organization
produces a homogeneous set of prodcts, it can deal in a wide variety of differentiated
products. Again, the organization does this deal with complexity.
The divisional structure is a type of organizational structure that groups each organizational
function into a division. ... Each division contains all the necessary resources and functions
within it to support that product line or geography (for example, its own finance, IT, and
marketing departments).
Advantages of Divisional Structure:

1. Development of Skills: Handling all aspects relating to a product line enhances various
skills in a divisional head and thus makes him worthy of promotion to next higher level.
2. Accountability: Performance measurement of each division is easily possible since the
divisional heads are accountable for profits. This further helps in fixing responsibilities and
taking appropriate remedial action in case of poor performance.
3. Quick Decision Making: Each division acts as an autonomous unit; hence divisional
structure promotes flexibility and quick decision making.
4. Easy Expansion: Under divisional structure, new divisions can be easily added without
interrupting the working of other divisions. Thus, it facilitates growth and expansion of the
enterprise.

Disadvantages of Divisional Structure:

1. Duplication of Activities: Similar types of activities performed in all divisions leads to

duplication of work and increased expenditure.
2. Conflict: There may be conflicts among different divisions over allocation of funds.
Further, the divisions may also try to maximize their profits at the cost of other divisions.
3. Organisational Interest Ignored: Since the managers have authority to supervise all the
activities within their respective divisions, they may gain tremendous power; focus on their
goals alone and ignore all else including even organisational interests.

GEOGRAPHICAL STUCTURE:

Geographical organisational structure suits businesses that have offices or units in different
regions or geographical areas. This form of structure enables businesses to:
 Have a reporting and functional system across multiple locations.
 Operate separate sites according to local demand but still be directed by business
policy. Depending on the size of the business, each geographic unit may report to an
executive who oversees several locations. Alternatively, it may report directly to top
management located at the business' headquarters. The reporting structure can adapt to the
size and industry of the business.
Advantages Of Geographical Structure

A geographical structure can offer a number of operational and strategic advantages, including:

 Close communication with local customers.

 Strong collaborative teams at each location.
 The ability to better serve local needs and tailor their approach to the local market.
 The ability to encourage positive competition between different departments.

It makes sense to divide an organisation by region if different cultures, rules, languages and
customer preferences exist in the area where the business operates. Logistics relating to
shipping, resources and staff also sometimes make geographical structure a good choice.

Disadvantages Of Geographical Structure:

The main downside of a geographical organisational structure is the potential conflict
between local and central management, as individual divisions often take on a great deal of
autonomy. Other disadvantages include:

 Potential duplication of jobs, resources and functions.

 Some economies of scale may be lost.

Geographic organisational structure suits mainly industries like retail and hospitality,
transportation and other businesses that need to be near sources of supply and customers (eg
for deliveries, production or on-site support).
CUSTOMER BASED STRUCTURE:

Departmentation by customer may be followed in enterprises enagaged in providing

specialized services to different classes of customers. Under this, customers are the guide for
grouping the activities. The management groups the activites on this basis of cater the
requirements of clearly defined customer groups.
For instance, a big automobile servicing enterprise may organize its departments as follows-
heavy vehicles servicing division, car servicing, and scooter servicing division. Many
educational institutions usually follow this type of departmentation. They offer day courses,
evening courses and correspondence courses to meet the requireemnts of different types of
students. Similarly, a commercial organization may be divided into wholesale, retail and
export departments.

Adavatages of Customer Based Structure:

1. Customer departmentation can focus on the special needs of different kinds of

customer.
2. It employ’s personnel with special abilities for meeting different customer
requirements.
3. It leads to greater satisfaction of customers which enhances the reputation of the
enterprise among the public.4

Disadavatages of Customer Based Structure:

Customer based structure is also not free from drawbacks. For instance, it creates the
difficulty of co-ordination between the departments organized on this basis and those
organized on other bases. Greater emphasis to need of the customers may lead to less than
optimum use of space, equipment and specialized personnel.
MATRIX ORGANIZATION:

Matrix organisation is hybrid structure. It is the combination of two structure i.e. functional
department & project structure. Project team is created for specific project with high degree
of technical skill and functional structure is permanent characteristic of matrix organisation.
Matrix organisation has two dimensional structures. It is the combination of project structure
and traditional functional department. The project manager is responsible for the success of
particular project. He has authority over the members of project staff. Such project has
definite time duration. Matrix organisation is originated in defense & aerospace industries in
U.S.A.

Matrix organisation has been defined as ‘Any organisation that employees a multiple
command system, that include not only the multiple command structure & behaviour pattern.

Sometimes matrix & project structures are considered to be same. However there is
difference between these two. In project organisation the person who is the head of the
project is completely responsible for that project. Matrix organisation is applied when
organisation has large number of small projects and resources are diverted to other project.

In matrix organization project manager is appointed to co-ordinate the activities of project

personnel. Each functional staff has two bosses.
1) Administrative head 2) Project manager. There should be co-ordination between these
two.
Advantages of Matrix Organization:

1) Flexible & better response: It is the combination of traditional & project structure. So it
can be easily changed according to changes in marketing condition, technology etc. which is
helpful for the progress of the project. Effective information system helps to response
quickly.
2) Motivation: The project staff is motivated as the members are focuses directly for the
completion of particular project. It helps to increase communication, coordination & co-
operation.
3) Avoidance of duplication: Each project is assigned the physical resources and personnel
as per the requirement & duplication is avoided. Functional department provides support to
project manager to balance between time, cost & performance.
4) Proper environment for professionals: A proper environment helps the professionals to
complete the job in time & make maximum contribution. Maximum contribution helps
decision making process smoothly & helps in better control with proper chain.

Disadvantages of Matrix Organization:

1) Problem of co-ordination: Conflicts may arise between team members & functional
heads. Working relationship is not clearly balanced.
2) Complex organizational relationship: In matrix organisation, organizational relationship
becomes very complex. Apart the formal relationship, informal relationship will also arise,
that will create the problem of co-ordination.
3) Conflicts & problems of co-ordination: The problem of co-ordination violates the
principle of unity of command. Each employee has two bosses 1) Functional 2) Project
manager. Multiple flow of authority create problem of co-ordination.
4) Low moral: The success or failure of functional group depends upon its performance in
the project. This may lead to emphasis on own group & on own function only. Therefore it
will lead to conflicts between functional groups.
5) Time consuming process: Matrix organization is time consuming it requires major
organizational changes which may give rise to number of problems. Re-organisation may
lead to harm to the status and security of he employee. It will lead to delay in decision.
6) Lack of clarity: In matrix organisation there is multiplicity of vertical and horizontal
relationship. This will lead to decrease in efficiency and increase in the cost of project.
7) Violation of scalar principle: The scalar principle is also violated as there is no proper
balance between functional and project manager. Working relationship is not clearly defined.

TEAM BASED ORGANIZATION:

A team based organization has self-managing teams and coordinating mechanisim among
these teams as against the tradional groups of people. The basic difference between a team
and group is in three contexts- job categories group has many narrow job categories and team
has one or two broad categories; authority group is directly controlled by the immediate
superior and team has its own control mechanism; and reward system reward in group system
depends on individual performance and seniority and reward in team system is based on team
performance and individual breadth of skills.

Self-managing teams have the following characteristics:

a. They are empowered to share various management and leadership functions.

b. They plan, control, and improve their own work processes.
c. They set their own goals and inspect their own work.
d. They often create their own schedules and review their performance as a group.
e. They prepare their own budgets and coordinate their work with other departments.
f. They usually order materials, keep inventories, and deal with suppliers.
g. They are frequently responsible for acquiring any new training they might need.
h. They may hire their own replacement or assume responsibility for disciplining their
own members.
i. They, and no others outside the team, take responsibility for the quality of their
products or services.

A team-based organization is considered to be better than group-based organization as the

former leads to enhanced performance, reduced costs, organizational enhancement, and better
employee satisfaction. This is the reason why more and more organizations have put
emphasis on creating self-managing teams. However, it is not free from shortcomings. First,
team-based organization requires a work culture that is quite different from traditional
hierarchy-based organization.
If such a culture is not established, team-based organization tends to perform poorer than
hierarchy-based organization. Second, creating self-managing teams is a long-drawn process
full of anxiety and tension. If teams are not created properly, there may be chaos in the
organization.

VIRTUAL ORGANIZATION:

The concept of virtual organization/corporation, also known as networked organization or

modular organization along with virtual team and office has entered management field very
recently. The literal meaning of virtual is having the efficacy without the material part; unreal
but capable of being considered as real for the purpose.

Based on this concept, virtual organization has been defined as follows – “Virtual
Corporation is a temporary network of independent companies—supplies, customers, even
erstwhile rivals—linked by information technology to share skills, costs, and access to one
another’s markets. It has neither central office nor organization chart; it has no hierarchy, no
vertical Integration.”

Thus, virtual organization is a temporary alliance between two or more organizations that
band together to undertake a specified venture. Recently, in telecommunication sector in
India, many virtual organizations have been created to provide different services.

The basic reason behind creating a virtual organization is to generate synergy through
temporary alliances. Creating synergy is the process of putting two or more elements together
to achieve a sum total greater than the sum total of individual elements separately. The
synergistic effect is generated in virtual organization because of the complementarity of
competences of different partners. Some companies can do something very well but struggle
with most others.

Other companies can do very well in those areas in which the first group of companies feels
handicapped. If both these types of companies put their efforts jointly to undertake any
project, their combined strengths could lead to much better results than what individual
companies could have achieved separately. However, management scholars have divided
opinions over
the effectiveness of virtual organizations because of the kind of trust that is required in
creating such organizations.

Often, clash of interest generates much sooner than expected. For example, one of the virtual
organizations created by Intel, USA and a Japanese company could not work properly
because the Japanese company was not able to complete its part of the project, leaving Intel
with a major product delivery problem. Intel was not happy about that venture and decided
not to participate in any such venture.

BOUNDARY LESS ORGANIZATION:

A boundary less organization, the term coined by Jack Welch, former chairman of GE (USA),
seeks to eliminate vertical and horizontal boundaries in the organization as well as the
boundaries between the organization and its customers and suppliers. It deemphasises chain
of control, span of control, and rigid departmentation. Instead, it has limitless span of control
without the existence of hierarchical control. Departments are replaced by self-managing
teams.

It relies heavily on information technology. Therefore, some people tend to call it T-form
(technology-based) organization. Boundary less organization has self-managing teams but it
differs from a team-based organization. A team-based organization is comparatively more
structured as compared to a boundary less organization. Further, a boundary less organization
differs from a virtual organization in the sense that the former is a kind of structure that an
organization may adopt while the latter is an alliance between two or more organizations to
achieve certain specified objectives.

The major characteristics of a boundary less organization are as follows:

i. In the boundary less organization, vertical boundaries are removed through flattening of
organizational hierarchy. Status and rank are minimised.

ii. Cross-hierarchical teams which include top executives, middle managers, supervisors, and
operative employees adopt participative decision making. These teams collectively share the
responsibility of decision outcomes as against individual responsibility in traditional
organizations.

iii. In performance appraisal, 360-degree appraisal system is used. In this system, an

individual’s performance is appraised by his superior, peers, subordinates, and outsiders
interacting with him. Besides, the individual himself appraises his performance, known as
self- appraisal, which is used along with 360-degree appraisal to arrive at the conclusion
about the individual’s performance.

iv. In traditional organizations, functional departments create horizontal boundaries which

stifle interaction between functions, product lines, and units. In boundary less organizations,
functional departments are replaced by cross-functional teams and organising activities
around processes. For example, for new product development, no functional department is
created but a multidisciplinary team is created that works on a single process.

v. In order to develop multi skills among employees, emphasis is put on horizontal transfer,
just as is the case with job rotation. Through this way, the horizontal boundaries are also
minimised.

vi. When fully operational, the boundary less organization also breaks down barriers to
external constituents such as customers, suppliers, regulators, and others with whom the
organization deals, by linking them to the organization.

In the present era of globalisation, strategic alliances and organization-customer-supplier

links have become significant sources for developing competitive advantage. Boundary less
organizations are better equipped to manage these features. This is the reason why more and
more organizations are moving towards becoming boundary less organizations. Low-cost but
efficient information technology has also facilitated this process.

However, the boundary less organizations should not be treated as panacea for all
structural ills because they have their own drawbacks which are follows:

i. The concept and practice of boundary less organizations is quite new. Therefore,
organizational members do not find these very comfortable in comparison to traditional
hierarchical systems. Even the earliest adopter of this concept, GE, has not yet achieved this
boundary less status. However, this can be treated as an operational problem which can be
overcome through experience over the period of time.

ii. Boundary less organizations use computer networks extensively. These networks may
include Internet, extranet, and intranet. Through these networks, people of boundary •less
organizations communicate across intra-organizational and extra-organizational boundaries.
These networks are not fully reliable at all times.

The most important problem is in the form of network security. Computer networks are
susceptible to attack from network hackers, viruses, and other types of mischiefs either for
making money or just for fun. Though some of these problems may be overcome by
installing appropriate security devices, computer networks do not remain fully safe. In spite
of both these problems, boundary less organization is in practice and their popularity is
increasing day-by- day.

CHAIN OF COMMAND:

The chain of command is a common term for the vertical reporting an authority relationship
in organization chart. The chain of command is the unbroken line of authority that ultimately
links each individual with the top organizational position through a managerial position at
each successive layer in between.

The concept of chain of command stems from two basic principles: unity of command and
the scalar principle. Unity of command means that an individual should have only one boss at
any given point in time. The scalar principle states that there should be a clear line of
authority from position of ultimate authority at the top to every individual in the organization.

Elements That Determine Organizational Structure:

This section is based largely on Kathryn M. Bartoland David C. Martin, Management,

McGrawHill, Inc., 1991,334 363.
Structure is more than an organizational chart. Organizational structure is considered by
many to be "the anatomy of organization, providing a foundation within which the
organization functions" similar to the anatomy of a living organism. Thus, the structure of an
organization can be viewed as a framework. The idea of structure as framework "focuses on
the differentiation of positions, formulation of rules and procedures, and prescriptions
authority".

Here organizational structure is viewed as having fourelements:

 The assignment of tasks and responsibilities that define the jobs of individuals and
units.
 The clustering of individual positions into units and units into departments and larger
units to form an organization's hierarchy.
 The various mechanisms required to facilitate vertical coordination, such as the
number of individuals reporting to any given managerial position and the degree of
delegation of authority.
 The various mechanisms needed to foster horizontal coordination, such as task forces
and interdepartmental teams.

SPAN OF CONTROL or MANAGEMENT:

There is a limit to the number of persons or activities that a manager can effectively manage.
Span of management indicates the number of people who can be effectively managed by one
executive.
Span of management refers to the number of subordinates for whose activities an executive
should be held responsible.

Definitions:
Manager’s span of control is a statement or expression or the limitation of the number of
subordinates or activities that he can manage properly.

Factors influencing the span of management:

1. Time devoted to supervision.
2. Variety and importance of activities.
 3. Repetitiveness of activities.
4. Capacity and experience of manager.
5. Ability of subordinates.
6. Centralization.

It is clear that there is a limit to the number of persons that can be supervised by one boss.
The span of control should be minimum as far as possible. The number of subordinates
depends upon manager’s ability, his job, the complexity of the duties of subordinates, the
nature and importance of the work to be supervised etc.

DELEGATION:

Many companies fail in their specific businesses because of their lack of effective delegation.
Delegation is not just telling an employee to answer a call or to fill out some paperwork for a
manager or make him do such easy task; rather, it is about assigning challenging jobs.

The reason why most companies find it hard to delegate difficult tasks is the lack of
confidence in their employees. Delegation is very important for a business to prosper.
Effective delegation allows you to trim down your tasks so that you can concentrate on the
major areas of your business. Now the question is: What is delegation?

MEANING OF DELEGATION:

Delegation is the process by which the manager assigns a portion of his total workload to
others. Effective delegation permits managers to tackle higher-priority duties while helping to
train and develop lower-level managers. Thus delegation is a process whereby a superior
passes to a subordinate part of his or her own authority to make decisions.

Delegation is necessary because:

1. Managers have limited workload capacity.
2. Managers need to be free for higher-level tasks.
3. Delegation can enhance employee satisfaction, flexibility, responsiveness to customers.
Features of Delegation:

A manager alone cannot perform all the tasks assigned to him. In order to meet the targets,
the manager should delegate some tasks or duties to subordinates, since management means
getting work done through others. Delegation of Authority means division of authority and
powers downwards to the subordinate. Delegation is about entrusting someone else to do
parts of your job. Delegation of authority can be defined as subdivision and sub-allocation of
powers to the subordinates in order to achieve effective results. Some of the important
features of delegation may be listed thus:

1. A co-operative relationship: Delegation is a co-operative relationship. It is a demanding

function; it requires sacrifices from both, the delegator and the one to whom the
responsibitlity/task has been delegated to.
2. Act of mutual reliance: Delegation is an act of mutual reliance, an expression of
dependence and trust on another person's abilities. This also involves an assumption on the
part of the one who is delegating the authority that the individual to whom duties have been
delegated possesses the necessary skill and strength to be able to discharge those tasks or
duties.
3. Freedom of thought and action: Delegation means freedom of action sufficient to get the
tasks accomplished. It means freedom to make decisions, permission to make mistakes and
freedom to use one's full capacities. This does not mean that the manager leaves the
subordinate on his own to sink or swim. It simply means that the one who has delegated the
authority guides the one to whom the delegation has been done, so as to let the latter learn the
nuances and succeed by trial and error method.
4. A courageous act: Delegation of authority or responsibilities is quite a challenging act.
The fear of being ultimately responsible compels many managers to indulge in
underdelegation. In fact, delegation poses an interesting paradox; the delegator gives and
retains authority simultaneously and creates responsibility, yet does not escape ultimate
authority. On the other hand, the manager is expected to adopt an attitude of hands off, once
the grant of authority is made. Additionally the manager must create such an administrative
structure where the freedom of different persons does not clash and where orderly
relationships prosper. On the other hand, authority delegation is not responsibility delegation;
it is impossible for the manager ever to surrender his ultimate responsibilities. Thus,
delegating duties seems to be an easy concept to grasp, but a difficult one to put into practice.
'Delegation demands expression of some positive human traits. To delegate effectively, a
manager must be prepared to give off
his time, his interest and his effort with no promise of immediate return.' Delegation of
authority, inevitably, is a risky proposition and the manager who is not willing to accept the
risk of poor subordinate performance is really not qualified for managerial berth in the
organisation. Delegation, thus, is a challenging task, it is, in fact, a skill that separates the
men from the boys in management.
5. Forward-thinking principle: Delegation, from a behavioural point of view, is the 'most
forward-thinking principle'. It opens a new unit in superior subordinate relationships. The
granting of freedom to act by the superior is evidence of confidence in the subordinate. The
subordinate responds by developing a constructive sense of responsibility. He is cognizant of
the fact that he is an end in himself, and not simply a means towards the ends of his superior.
The acceptance of responsibility by the subordinate means changed responsibilities for the
superior, and each finds himself playing a new dynamic role.

DECENTRALIZATION:

Decentralization means extensive delegation. It means the delegation and distribution of

authority from the superior to lower levels. There is a dispersal of decision making authority.
It indicates flat organization structure.
Decentralization is the systematic effort to delegate to the lower levels, all authority except
that which can be exercises at central points. In decentralization, communication lines are
shorter and span of control is wider. As management levels are few, top executives are less
burdened and so employees’ morale is high. When an organization is large and complex and
where the work is not standardized or routine decentralization is suitable.

Complete decentralization is not possible because a manager cannot delegate all his authority
without surrendering his position as a manager whereas, complete centralization is also not
possible except in one man enterprise.

Factors Influencing Decentralization:

1. Philosophy of Top Management: The leadership style, attitudes, values and beliefs of the
top management team have a bearing on the degree of decentralization. Some firms are
highly centralized, whereas others are highly decentralized because of the character and
philosophy
of the top management. For instance, if Tata Group Companies have registered a phenomenal
growth over the years, it is partly because of the operational freedom and autonomy the
various units in the group enjoy. TATAs provide only the direction and spell out the major
policies.

2. Attitude of Subordinate Managers: The Attitude of subordinate managers is another

important factor that influences decentralization because they can both encourage or
discourage decentralization.
If subordinates want decentralization, top management can not hold every thing in their hands
for too long a period. The desire by subordinates for independence and the willingness to
assume increased responsibilities may make them think of decentralization. As against this,
shortage of lower level managers who are willing to assume responsibility may encourage top
management to maintain a centralized structure.
Now-a-days, in most large-scale organization, the trend is towards decentralization. This is in
line with greater employee empowerment. Pushing authority down the line to lower levels in
an organization results in an environment of freedom and experimentation. Employee
empowerment helps in fostering an entrepreneurial spirit in the organization, by encouraging
employees at lower levels to accept responsibility, to unleash their full potential, and most
important, to think and innovate. The benefits of decentralization are clear. However, the
extent of decentralization depends on the unique requirements of an organization. It normally
varies from organization to organization.

3. The cost and Impact of the Decisions: Managers may not be willing for decentralization
where the commitment involved in the decisions is very high. As a rule of thumb, the greater
the cost involved, the more likely it is that the decision will be made at the upper levels. We
often find situation in organizations where managers seek the approval of superiors when the
expenditure involved exceeds a certain limit.

4. Company Size and Rate of Growth: It is very difficult to manage a large organization
efficiently with decision-making authority concentrated in one or few people/levels at the top.
Further, as an organization grows in size and complexity, the need for decentralization is
obviously felt. Top management cannot continue to hold a tight grip over the several aspects
of the growing organization. This is the principal reason why organizations often engage in
reorganizing their units and operations as they grow in size. The necessary autonomy is given
to the units or departments so that top management can concentrate itself with more
important tasks such as strategic planning and policy formulation.

EMPOWERMENT:
Jay Conger defines empowerment as "creating conditions for heightened motivation through
the development of a strong sense of personal self-efficacy". This means sharing power in
such a way that individuals learn to believe in their ability to do the job. When people share
power in this way, they may empower others—that is, transfer power to them. Empowerment
is easy to advocate but difficult to put into practice. Conger offers some guidelines:
1. Managers should express confidence in employees and set high performance
expectations.
2. Managers should create opportunities for employees to participate in decision making.
3. Managers should remove bureaucratic constraints that stifle autonomy.
4. Managers should set inspirational or meaningful goals.
 UNIT -02
CONTROLLING

Controlling: Meaning, importance of controlling, controlling process, types of control, factors

influencing control effectiveness.

INTRODUCTION:

The concept of control is often confused with lack of freedom. The opposite of control is not
freedom but chaos or anarchy. Control is fully consistent with freedom. In fact, they are
interdependent.Without control, freedom cannot be sustained for long. Without freedom,
control becomes ineffective. Both freedom and accountability are embedded in the concept of
control.

MEANING OF CONTROL:

Control is the process through which managers assure that actual activities conform to
planned activities. According to Breach, "Control is checking current performance against
predetermined standards contained in the plans, with a view to ensuring adequate progress
and satisfactory performance."

According to George R. Terry, "Controlling is determining what is being accomplished i.e.,

evaluating the performance and if necessary, applying corrective measures so that the
performance takes place according to plans."

According to Billy E. Goetz, "Management control seeks to compel events to conform plans".
According to Robert N. Anthony, "Management control is the process by which managers
assure that resources are obtained and used effectively and efficiently."

In the words of Koontz and O'Donnell, "Managerial control implies measurement of

accomplishment against the standard and the correction of deviations to assure attainment of
objectives according to plans."

In the words of Haynes and Massie, "Fundamentally, control is any process that guides
activity towards some predetermined goal. The essence of the concept is in determining
whether the activity is achieving the desired results".

In the words of J. L. Massie, "Control is the process that measures current performance and
guides it towards some predetermined goals."

In the words of Henry Fayol, "Control consists in verifying whether everything occurs in
conformity with the plan adopted, the instructions issued and the principles established. Its
object is to find out the weakness and errors in order to rectify them and prevent recurrence.
It operates on everything, i.e., things, people and actions".

From the above definitions it is clear that the managerial function of control consists in a
comparison of the actual performance with the planned performance with the object of
discovering whether all is going on well according to plans and if not why. Remedial action
arising from a study of deviations of the actual performance with the standard or planned
performance will serve to correct the plans and make suitable changes. Controlling is the
nature of follow-up to the other three fundamental functions of management. There can, in
fact, be not controlling without previous planning, organising and directing. Controlling
cannot take place in a vacuum.

IMPORTANCE OF CONTROLLING:
Importance of Controlling Control is an indispensable function of management. Without
control the best of plans can go awry. A good control system helps an organisation in the
following ways:
1. Accomplishing organisational goals: The controlling function measures progress
towards the organisational goals and brings to light the deviations, if any, and
indicates corrective action. It, thus, guides the organisation and keeps it on the right
track so that organisational goals might be achieved.
 2. Judging accuracy of standards: A good control system enables management to
verify whether the standards set are accurate and objective. An efficient control
system keeps a careful check on the changes taking place in the organisation and in
the environment and helps to review and revise the standards in light of such changes.
3. Making efficient use o f resources: By exercising control, a manager seeks to reduce
wastage and spoilage of resources. Each activity is performed in accordance with
predetermined standards and norms. This ensures that resources are used in the most
effective and efficient manner.
4. Improving employee motivation: A good control system ensures that employees
know well in advance what they are expected to do and what are the standards of
performance on the basis of which they will be appraised. It, thus, motivates them and
helps them to give better performance.
5. Ensuring order and discipline: Controlling creates an atmosphere of order and
discipline in the organisation. It helps to minimise dishonest behaviour on the part of
the employees by keeping a close check on their activities. The box explains how an
importexport company was able to track dishonest employees by using computer
monitoring as a part of their control system.
6. Facilitating coordination in action: Controlling provides direction to all activities
and efforts for achieving organisational goals. Each department and employee is
governed by predetermined standards which are well coordinated with one another.
This ensures that overall organisational objectives are accomplished.

STEPS IN CONTROLLING PROCESS:

1. Establishing standards.
2. Measuring and comparing actual results against standards.
3. Taking corrective action.

Establishing Standards:

The first step in the control process is to establish standards against which results can be
measured. The standards the managers desire to obtain in each key area should be defined as
far as possible in quantitative terms. Standards expressed in general terms should be avoided.
Standards need to be flexible in order to adapt to changing conditions. The standard should
emphasis the achievement of results more than the conformity to rules and methods. If they
do not do so, then people will start giving more importance to rules and methods than to the
final results. While setting the standards, the following points have to be borne in mind:

 The standards must be clear and intelligible. If the standards are clear and are
understood by the persons concerned, they themselves will be able to check their
performance.
 Standards should be accurate, precise, acceptable and workable.
 Standards are used as the criteria or benchmarks by which performance is measured in
the control process. It should not be either too high or too low. They should be
realistic and attainable.
 Standards should be flexible i.e., capable of being changed when the circumstances
require so.

Measuring and Comparing Actual Results against Standards:

The second step in the control process is to measure the performance and compare it with the
predetermined standards. Measurement of performance can be done by personal observation,
by reports, charts and statements. If the control system is well organised, quick comparison of
these with the standard figure is quite possible. This will reveal variations.
After the measurement of the actual performance, the actual performance should be
compared with the standards fixed quickly. A quick comparison of actual performance with
the standard performance is possible, if the control system is well organised. While
comparing the actual performance with the standards fixed, the manager has to find out not
only the extent of variations but also the causes of variations. This is necessary, because some
of the variations may be unimportant, while others may be important and need immediate
corrective action by the manager.

Taking Corrective Action:

After comparing the actual performance with the prescribed standards and finding the
deviations, the next step that should be taken by the manager is to correct these deviations.
Corrective action should be taken without wasting of time so that the normal position can be
restored quickly. The manager should also determine the correct cause for deviation. Taking
corrective action can be achieved in the following way:
 The manager should try to influence environmental conditions and external situations
in such a way as to facilitate the achievement of goals.
 He should review with his subordinates the instructions given earlier so that he may be
 able to give clear, complete and reasonable instructions in future.
 There are many external forces which cannot be adjusted by the manager. They have
to be accepted as the facts of the situation, and the executives should revise their plans
in the light of these changing forces.

TYPES OF CONTROL:
Most control methods can be grouped into one of the two basic types:
1. Past-oriented controls.
2. Future-oriented controls.
3. Concurrent Control.

1. Past-oriented Controls: These are also known as post-action controls and measure
results after the process. They examine what has happened in a particular period in the
past. These controls can be used to plan future behaviour in the light of past errors or
successes.
2. Future-oriented Controls: These are also known as steering controls or feed-forward
controls and are designed to measure results during the process so that action can be
taken before the job is done or the period is over. They serve as warning-posts
principally to direct attention rather than to evaluate, e.g., Cash flow analysis, funds
flow analysis, network planning etc.
3. Concurrent Control: 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.
Concurrent controls monitor ongoing employee activity to ensureconsistency with
quality standards. These controls rely on performance standards, rules, and
regulations for guiding employee tasks and behaviors.
Their purpose is to ensure that work activities produce the desired results. As an
example, many manufacturing operations include devices that measure whether the
items being produced meet quality standards. Employees monitor the measurements;
if they see that standards are not being met in some area, they make a correction
themselves or let a manager know that a problem is occurring.
Since concurrent control involves regulating ongoing tasks, it requires a thorough
understanding of the specific tasks involved and their relationship to the desired and
product. Concurrent control sometimes is called screening or yes-no control, because
it often involves checkpoints at which determinations are made about whether to
continue progress, take corrective action, or stop work altogether on products or
services.

RESISTANCE to CONTROLLING IN MANAGEMENT – PROBLEMS

1. Planning- The perfect plan could be outlined if every possible variation of input
could be anticipated and if the system would operate as predicted. But it is neither
realistic, economical, nor feasible for most business systems.

2. If it were feasible, planning requirements would be so complex that the system

would be out of date before it could be operated. Therefore, we design control into
systems.

3. This requires more thought in the systems design but allows more flexibility of
operations and makes it possible to operate a system using unpredictable components
and undetermined input. Still, the design and effective operation of control are not
without problems.

4. The objective of the system is to perform some specified function. The purpose of
organizational control is to see that the specified function is achieved; the objective of
operational control is to ensure that variations in output are maintained within
prescribed limits. It is difficult thing to design a system that contains all of the
elements of control.

5. Measurement of Output- When objectives are not quantified, the measurement of

system effectiveness is difficult to make.

6. Many of the characteristics pertaining to output do not lend themselves to

quantitative measurement. This is true when inputs of human energy cannot be related
directly to output.

7. The same problem applies to machines and equipments associated with human
involvement, when output is not in specific units.

8. In evaluating man-machine or human-oriented systems, psychological and

sociological factors obviously do not easily translate into quantifiable terms. For
example, how does mental fatigue affect the quality or quantity of output? And, if it
does, is mental fatigue a function of the lack of a challenging assignment or the fear
of a potential injury?

9. Subjective inputs may be transferred into numerical data, but there is always the
danger of an incorrect appraisal and transfer, and the danger that the analyst may
assume undue confidence in such data after they have been quantified.

Let us suppose, for example, that the decisions made by an executive are rated from 1
to 10, 10 being the perfect decision. After determining the ranking for each decision,
adding these, and dividing by the total number of decisions made, the average’
ranking would indicate a particular executive’s score in his decision-making role. On
the basis of this score, judgments—which could be quite erroneous— might be made
about his decision-making effectiveness.

One executive with a ranking of 6.75 might be considered more effective than another
who had a ranking of 6.25, and yet the two managers may have made decisions under
different circumstances and conditions. External factors over which neither executive
had any control may have influenced the difference in “effectiveness”

1. Quantifying human behavior, despite its extreme difficulty, subjectivity, and

imprecision in relation to measuring physical characteristics is the most prevalent and
important measurement made in large systems. The behavior of individuals ultimately
dictates the success or failure of every man-made system.

2. Information flow- Another problem of control is the improper timing of

information introduced into the feedback channel. Improper timing can occur either
by mistakes in measurement or in judgment. A system generating feedback
inconsistent with current need will tend to fluctuate and will not adjust in the desired
manner.

3. The most serious problem in information flow arises when the delay in feedback is
exactly one-half cycle, for then the corrective action is superimposed on a variation
from norm which, at that moment, is in the same direction as that of the correction.
This causes the system to overcorrect, and then if the reverse adjustment is made out
of cycle, to correct too much in the other direction, and so on until the system
fluctuates (“oscillates”) out of control.

4. Setting Standards- Setting the proper standards or control limits is a problem in

many systems. Parents are confronted with this dilemma in expressing what they
expect of their children, and business managers face the same issue in establishing
standards that will be acceptable to employees.

5. Standards should be as precise as possible and communicated to all persons

concerned. In human systems, standards tend to be poorly defined and the allowable
range of deviation from standard also indefinite. For example, how many hours each
day should a professor is expected to be available for student consultation? Or, what
kind of behavior should be expected by students in the classroom? Discretion and
personal judgment play a large part in such systems, to determine whether corrective
action should be taken.

6. The most difficult problem in human systems is the unresponsiveness of

individuals to indicated correction. This may take the form of opposition and
subversion to control or it may be related to the lack of defined responsibility or
authority to take action.
 ORGANIZATIONAL BEHAVIOUR

UNIT -03
INTRODUCTION

haviour: Introduction, definition, fundamental principles of OB, contributing disciplines, challenges and opportunities. Evolu

INTRODUCTION:

All organizations, be the business, educational or government, are social systems. They are
run by people. The functioning of an organization depend upon how people work or behave
in the organization. Human behaviour in organizations is highly unpredictable. It is
unpredictable because it arises from people’s deep-seated needs and value systems. However,
it can be partially understood in terms of the framework of behavioral science, management
and other disciplines. There is no idealistic solution to organizational problems. All that can
be done is to increase our understanding and skills so that human relations at work can be
enhanced.

ORGNISATIONAL BEHAVIOUR – CONCEPTS:

Organizational Behavior is concerned with the study of human behaviour at work. It is the
field of study that investigates the impact that individuals, groups and structure have
on behavior within organization. It is the study and application of knowledge about how
people act within organizations. It is a human tool for human benefit. It applies broadly to the
behavior of people in all types of organizations, such as business, government, schools
and services organizations.

It covers three determinants of behavior in organizations: individuals, groups, and structure.

OB is an applied field. It applies the knowledge gained about individuals, and the effect
of structure on behavior, in order to make organizations work more effectively.

OB covers the core topics of motivation, leadership behavior and power, interpersonal
communication, group structure and process, learning, attitude development and
perception, change process, conflict, job design and work stress.
DEFINITION:

Organisational behaviour can then be defined as: "The study of human behaviour in
organisational settings, the interface between human behaviour and the organisational
context, and the organisation itself."

According to Callahan, “Organizational behaviour is about of management activities

concerned with understanding, predicting and influencing individual behaviour in
organizational setting.”

According to Raman J. Aldag, “Organizational behaviour i a branch of social science that eek
to build theories that can be applied in predicting ,understanding and controlling behaviour
in work organization.

KEY ELEMENTS OF ORGANISATIONAL BEHAVIOUR:

There are four key elements in organizational behavior. There are people, structure,
technology and the environment. Each o f the four elements o f organizational behavior will
be considered briefly.

1. People: People make up the internal social system of the organization. They
consist of individuals and groups, and large groups as well as small ones.
People are the living, thinking, feelings beings who created the organizations.
It exists to achieve their objectives. Organizations exist to serve people.
People do not exist to serve organizations. The work force is one of the critical
resources that need to be managed. In managing human resources.
2. Structure: Structure defines the official relationships of people in
organizations. Different jobs are required to accomplish all of an
organization’s activities. There are managers and employees, accountants
and assemblers. These people have to be related in some structural way so that
their work can be effective. The main structure relates to power and to
duties. For example, one person has authority to make decisions that affect
the work of other people.
3. Technology: Organizations have technologies for transforming inputs and
outputs. These technologies consist of physical objects, activities and process,
knowledge, all of which are brought to bear on raw materials, labour and
capital inputs during a transformation process. The core technology is that
set of
 productive components most directly associated with the transformation
process.
4. Environment: All organizations operate within an external environment. A
single organization does not exist alone. It is part of a larger system that
contains thousand of other elements. All these mutually influence each other
in a complex system that becomes the life style of the people. Individual
organization, such as a factory or school cannot escape from being influenced
by this external environment. It influences the attitudes of people, affects
working conditions, and provides competition for resources and power. Every
organization interacts with other members of its environment. The
interactions allow the organization t o acquire raw material, hire employees,
secure capital, obtain knowledge, and build, lease or buy facilities and
equipment. Since the organization process a product or service for
consumption by the environment, it will also interact with its customers.

FUNDAMENTAL PRINCIPLES OF OB:

There are two fundamental concept of organizational behaviour, such as

1. The Nature of People

2. The Nature of Organization
Nature of people

 Nature vs. nurture

 The unique way in which each person sees, organizes and interprets things.
 Selective perception cause misinterpretation.

 We employ the whole person not just their brains or skills.

 Ergonomics is the science of fitting workplace conditions and job demands to the
capabilities of the working population.
  A path towards increased need fulfillment is a better approach.

 Hunger for a change to chare what they know and to learn from the experience.
 Organizations need to provide opportunities for meaningful involvement – employee
empowerment.

 Worth before the word.

 Meal before the message.
 They want to be treated differently from other factors of production.

Nature of organization:

 social structure in general refer to entities or groups in definite relation to each other,
to relatively enduring patterns of behavior and relationship within social systems, or
to social institutions and norms becoming embedded into social systems in such a way
that they shape the behavior of actors within those social systems. Social systems can
be said to be the patterns of behavior of a group of people possessing similar
characteristics due to their existence in same society.
 Formal and informal social systems.
 The idea of a social system provides a framework for analyzing organizational
behavior issues. It helps make OB problems understandable and manageable.

Mutual interest:

 Symbiotic relationship between organizations and people.

 Provides a superordinate goal – one that can attained only through the integral effort
of individuals and their employers.

 Treatment of employees in an ethical fashion.

  Establish code of ethics, publicized statements of wthical values, provide ethics
trainings, reward employees for notable ethical behaviors, set up internal procedure to
handle misconduct.

CONTRIBUTING DISCIPLINES:

Organizational behaviour is an applied behavioral science that is built on contributions from a

number of behavioral disciplines such as psychology, sociology, social psychology,
anthropology and political science.

A. Psychology: Psychology is the study of human behavior which tries to identify the
characteristics of individuals and provides an understanding why an individual
behaves in a particular way. This thus provides us with useful insight into areas such
as human motivation, perceptual processes or personality characteristics.
 B. Sociology: Sociology is the study of social behavior, relationships among social
groups and societies, and the maintenance of social order. The main focus of attention
is on the social system. This helps us to appreciate the functioning of individuals
within the organization which is essentially a socio-technical entity.
C. Social psychology: Social psychology is the study of human behaviour in the context
of social situations. This essentially addresses the problem of understanding the
typical behavioral patterns to be expected from an individual when he takes part in a
group.
D. Anthropology: Anthropology is the science of mankind and the study of human
behaviour as a whole. The main focus of attention is on the cultural system, beliefs,
customs, ideas and values within a group or society and the comparison of behaviour
among different cultures. In the context of today's organizational scenario. It is very
important to appreciate the differences that exist among people coming from different
cultural backgrounds as people are often found to work with others from the other
side of the globe.
E. Political Science: Although frequently overlooked, the contributions of political
scientists are significant to the understand arrangement in organizations. It studies
individuals and groups within specific conditions concerning the power dynamics.
Important topics under here include structuring of conflict, allocation of power and
how people manipulate power for individual self-interest etc.

CHALLENGES AND OPPORTUNITIES:

I. Improving People Skills: Technological changes, structural changes, environmental

changes are accelerated at a faster rate in business field. Unless employees and
executives are equipped to possess the required skills to adapt those changes, the
achievement of the targeted goals cannot be achieved in time. There two different
categories of skills – managerial skills and technical skills. Some of the managerial
skills include listening skills, motivating skills, planning and organizing skills,
leading skills, problem solving skill, decision making skills etc. These skills can be
enhanced by organizing a series of training and development programmes, career
development programmes, induction and socialization etc.
II. Improving Quality and Productivity: Quality is the extent to which the customers
or users believe the product or service surpasses their needs and expectations. For
example, a customer who purchases an automobile has certain expectation, one of
which is that the automobile engine will start when it is turned on. If the engine fails
to
 start, the customer’s expectations will not have been met and the customer will
perceive the quality of the car as poor. Deming defined quality as a predictable degree
of uniformity and dependability, at low cost and suited to the market. Juran defined it
as fitness for use.
III. Managing Workforce Diversity: This refers to employing different categories of
employees who are heterogeneous in terms of gender, race, ethnicity, relation,
community, physically disadvantaged, homosexuals, elderly people etc. The primary
reason to employ heterogeneous category of employees is to tap the talents and
potentialities, harnessing the innovativeness, obtaining synergetic effect among the
divorce workforce. In general, employees wanted to retain their individual and
cultural identity, values and life styles even though they are working in the same
organization with common rules and regulations. The major challenge for
organizations is to become more accommodating to diverse groups of people by
addressing their different life styles, family needs and work styles.
IV. Responding to Globalization: Today’s business is mostly market driven; wherever
the demands exist irrespective of distance, locations, climatic conditions, the business
operations are expanded to gain their market share and to remain in the top rank
etc. Business operations are no longer restricted to a particular locality or region.
Company’s products or services are spreading across the nations using mass
communication, internet, faster transportation etc. An Australian wine producer now
sells more wine through the Internet than through outlets across the country. More
than 95% of Nokia hand phones are being sold outside of their home country Finland.
Japanese cars are being sold in different parts of globe. Sri Lankan tea is
exported to many cities across the globe. Executives of Multinational Corporation are
very mobile and move from one subsidiary to another more frequently.
V. Empowering People: The main issue is delegating more power and responsibility to
the lower level cadre of employees and assigning more freedom to make choices
about their schedules, operations, procedures and the method of solving their work-
related problems. Encouraging the employees to participate in work related decision
will sizably enhance their commitment at work. Empowerment is defined as putting
employees in charge of what they do by eliciting some sort of ownership in them.
Managers are doing considerably further by allowing employees full control of
their work. An increasing number of organizations are using self-managed teams,
where workers operate largely without boss. Due to the implementation of
 empowerment concepts across all the levels, the relationship between managers and
the employees is reshaped. Managers will act as coaches, advisors, sponsors,
facilitators and help their subordinates to do their task with minimal guidance.
VI. Coping with ‘Temporariness: In recent times, the Product life cycles are
slimming, the methods of operations are improving, and fashions are changing very
fast. In those days, the managers needed to introduce major change programs once or
twice a decade. Today, change is an ongoing activity for most managers. The concept
of continuous improvement implies constant change. In yester years, there used to
be a long period of stability and occasionally interrupted by short period of change,
but at present the change process is an ongoing activity due to competitiveness in
developing new products and services with better features. Everyone in the
organization faces today is one of permanent temporariness. The actual jobs that
workers perform are in a permanent state of flux. So, workers need to continually
update their knowledge and skills to perform new job requirements.
VII. Stimulating Innovation and Change: Today’s successful organizations must foster
innovation and be proficient in the art of change; otherwise they will become
candidates for extinction in due course of time and vanished from their field of
business. Victory will go to those organizations that maintain flexibility, continually
improve their quality, and beat the competition to the market place with a constant
stream of innovative products and services. For example, Compaq succeeded by
creating more powerful personal computers for the same or less money than IBNM or
Apple, and by putting their products to market quicker than the bigger
competitors. Amazon.com is putting a lot of independent bookstores out of business
as it proves you can successfully sell books from an Internet website.
VIII. Improving Ethical behavior: The complexity in business operations is forcing the
workforce to face ethical dilemmas, where they are required to define right and
wrong conduct in order to complete their assigned activities. For example, Should
the employees of chemical company blow the whistle if they uncover the
discharging its untreated effluents into the river are polluting its water resources? Do
managers give an inflated performance evaluation to an employee they like, knowing
that such an evaluation could save that employee’s job? The ground rules governing
the constituents of good ethical behavior has not been clearly defined.
Differentiating right things from wrong behavior has become more blurred. Following
unethical practices have become a common practice such as successful executives
 who use insider information for personal financial gain, employees in competitor
business participating in massive cover-ups of defective products etc.

EVOLUTION & ORGANIZATIONAL BEHAVIOR IN INDIA:

Scientific Management Approach:

Scientific management approach was developed by F.W. Taylor at the beginning of the 20 th
century. This theory supported the use of certain steps in scientifically studying each element
of a job, selecting and training the best workers for the job arid making sure that the workers
follow the prescribed method of doing the job. It provided a scientific rationale for job
specialization and mass production. His assumption was that employees are motivated largely
by money. To increase the output, Taylor advised managers to pay monetary incentives to
efficient workers.

Yet, his theory was criticized by many employers and workers. Workers objected to the
pressure of work as being harder and faster. Critics worried that the methods took the
humanity out of labor, reducing workers to machines responding to management incentives.
Therefore, Taylor's view is now considered inadequate and narrow due to the points given by
the critics.

Bureaucratic Approach:

While scientific management was focusing on the interaction between workers and the task,
we researchers were studying how to structure the organization more effectively. Instead of
trying to make each worker more efficient, classical organization theory sought the most
effective overall organizational structure for workers and managers.

The theory's most prominent advocate, Max Weber, proposed a 'bureaucratic form' of
structure, which he thought would work for all organizations. Weber's idea! Bureaucracy
was, logical, rational and efficient. He made the naive assumption that one structure would
work best for all organizations.

Henry Ford, Henry Fayol and Frederick W. Taylor, the early management pioneers,
recognized the behavioral side of management. However, they did not emphasize the human
dimensions. Although there were varied and complex reasons for the emerging importance of
behavioral approach to management, it is generally recognized that the Hawthorne studies
mark the historical roots for the field of organizational behaviour.
Hawthorne Studies:

Even, as Taylor and Weber brought attention with their rational, logical approaches to more
efficient productivity, their views were criticized on the ground that both approaches ignored
worker's humanity.

The real beginning of applied research in the area of organizational behaviour started with
Hawthorne Experiments. In 1924, a group of professors began an enquiry into the human
aspects of work and working conditions at the Hawthorne plant of Western Electric
Company, Chicago. The findings of these studies were given a new name 'human relations'
the studies brought out a number of findings relevant to understanding human behaviour at
work. The Human element in the workplace was considerably more important. The workers
are influenced by social factors and the behaviour of the individual worker is determined by
the group.

Hawthorne studies have been criticized for their research methods and conclusions drawn.
But their impact on the emerging field of organizational behaviour was dramatic. They helped
usher in a more humanity centered approach to work.
 ORGANIZATIONAL BEHAVIOUR
Personality:Meaning, formation, determinants, traits of personality, big five and MBTI, personality attributes influencing OB
Perception:Meaning,Process of perception, factors influencing perception, link between perception and individual decision
Attitude: Meaning,Formation, components of attitudes, relation between attitude and behaviour.

PERSONALITY

INTRODUCTION:

People tend to have a general notion that personality refers to a personal appearance with
charming smile, or outlook. But psychologists view the concept as dynamic in nature
concerned with growth and development of a person’s whole psychological system.
Personality can be defined as the consistent psychological patterns within an individual
that affect the way they interact with others and the situations they encounter. Personality is
defined as relatively stable and enduring characteristics that determine our thoughts, feelings
and behavior. Personality is a complex phenomenon and there are various perspectives of
personality construct. One common and simple definition of Personality is: It is the
consistent psychological patterns within an individual that affect the way they interact with
others and the situations they encounter.

MEANING:

The word personality is derived from a Greek word “persona” which means “to speak
through.” Personality is the combination of characteristics or qualities that forms a person’s
unique identity. It signifies the role which a person plays in public. Every individual has a
unique, personal and major determinant of his behavior that defines his/her personality.

Personality means how a person affects others and how he understands and views himself as
well as the pattern of inner and outer measurable traits and the person-situation interactions
(Fred Luthans).

According to Stephen P. Robbins, personality is the sum total ways in which an individual
reacts and interacts with others. It may be defined as those inner psychological characteristics
that both determine and reflect how a person responds to his environment.

By personality Ogburn means “the integration of the socio psychological behaviour of the
human being, represented by habits of action and feeling, attitudes and opinions.”

According to Linton, personality embraces the total “organised aggregate of psychological

processes and status pertaining to the individual.”

Personality can be defined as those inner psychological characteristics that both determine
and reflect how a person responds to the environment.

FORMATION:

Personality is formed by the ongoing interaction of temperament, character, and environment.

Socialization-The process by which new members of a social group are integrated in the
group. Temperament-A person's natural disposition or inborn combination of mental and
emotional traits.

In 1956, psychiatrist Erik Erikson provided an insightful description as to how personality

develops based on his extensive experience in psychotherapy with children and adolescents
from low, upper, and middle-class backgrounds. According to Erikson, the socialization
process of an individual consists of eight phases, each one accompanied by a "psychosocial
crisis" that must be solved if the person is to manage the next and subsequent phases
satisfactorily. The stages significantly influence personality development, with five of them
occurring during infancy, childhood, and adolescence.

Infancy: During the first two years of life, an infant goes through the first stage: Learning
Basic Trust or Mistrust (Hope) . Well-nurtured and loved, the infant develops trust and
security and a basic optimism. Badly handled, the infant becomes insecure and learns "basic
mistrust."

Toddlerhood: The second stage occurs during early childhood, between about 18 months to
two years and three to four years of age. It deals with Learning Autonomy or Shame (Will) .
Well-parented, the child emerges from this stage with self-confidence, elated with his or her
newly found control. The early part of this stage can also include stormy tantrums ,
stubbornness, and negativism, depending on the child's temperament.

Preschool: The third stage occurs during the "play age," or the later preschool years from
about three to entry into formal school. The developing child goes through Learning Initiative
or Guilt (Purpose) . The child learns to use imagination; to broaden skills through active play
and fantasy; to cooperate with others; and to lead as well as to follow. If unsuccessful, the
child becomes fearful, is unable to join groups, and harbors guilty feelings. The child depends
excessively on adults and is restricted both in the development of play skills and in
imagination.

School age: The fourth stage, Learning Industry or Inferiority (Competence) , occurs during
school age, up to and possibly including junior high school. The child learns to master more
formal skills:

 Relating with peers according to rules.

 Progressing from free play to play that is structured by rules and requires teamwork.
(team sports)
 Learning basic intellectual skills. (reading, arithmetic)

At this stage, the need for self-discipline increases every year. The child who, because of his
or her successful passage through earlier stages, is trusting, autonomous, and full of initiative,
will quickly learn to be industrious. However, the mistrusting child will doubt the future and
will feel inferior.

Adolescence:

The fifth stage, Learning Identity or Identity Diffusion (Fidelity) , occurs during adolescence
from age 13 or 14. Maturity starts developing during this time; the young person acquires
self- certainty as opposed to self-doubt and experiments with different constructive roles
rather than adopting a negative identity, such as delinquency. The well-adjusted adolescent
actually looks forward to achievement, and, in later adolescence, clear sexual identity is
established. The adolescent seeks leadership (someone to inspire him or her), and gradually
develops a set of ideals to live by.

DETERMINANTS:

1. Heredity : Human behaviour is partly affected by heredity. The parent's qualities are
passed on to the children through the molecular structure of genes located in the
chromosomes. In our day to day life, so many times we use the term "Like father like son" as
"Like Mother like daughter".

2. Environment : All personality traits are not determined by heredity. Environment also
plays a very important role in the development of personality of a person. Environment
comprises of culture, family, social and situational factors.

(a) Culture: Culture is sum total of learned believes, values and customs. Cultural
factors determine now a person acts whether independently or dependently. Culture
establishes norms, attitudes and values that are passed along from generation to
generation.

(b) Family: Families influence the behaviour of a person especially in the early
stages. The nature of such influence will depend upon the following factors :

 Socio-economic level of the family

 Family size
 Birth order
 Race
 Religion
 Parent's educational level and Geographic location.

(c) Social: Socialization is a process by which an infant acquires customary and

acceptable behaviour. Social life has a considerable impact on the individual's
behaviour. A man is known by the company he keeps. Social groups influence the
behaviour of the individuals.

(d) Situational: Situational factors also play a very important role in determining the
personality of a person. Life is a collection of experiences. Some of the events and
experiences can serve as important determinants of his personality.

TRAITS OF PERSONALITY:

Personality traits are the enduring features that define an individual’s behavior. A personality
trait is a unique feature in an individual. Psychologists resolved that there are five major
personality traits and every individual can be categorized into at least one of them. These five
personality traits are −

 Extrovert
 Neurotic
 Open
 Agreeable
 Conscientious
BIG FIVE AND MBTI:
 I. Openness to Experience: Openness flashes the level of intellectual curiosity,
creativity and a preference for novelty and variety within a person. It can also be
elaborated as the scope to which an individual is imaginative or independent, and
portrays a personal preference for a variety of activities over a scheduled routine.

Some debate may occur regarding how to interpret the openness factor, which is also
known as "intellect" rather than openness to experience.

It includes inventiveness or curiousness in contrast to consistency or cautiousness.

Appreciation for positive arts, emotions, inventions, adventure, unusual ideas,
curiosity, and variety of experience is invited.

It is basically the extent to which an individual is original, has immense interests, and
willingly takes risk.

II. Conscientiousness: It is the tendency of being standardized, steady, self-disciplined,

acting dutifully, focusing on achieving goals, and prioritizing planned instead of
spontaneous behavior. It contrasts efficient or organized behavior with easy-going or
careless behavior. It is the level to which a person is careful, cautious, and honest.
III. Extraversion: Positive energy, positive emotions, confidence, sociability and the
tendency to explore stimulation in the organization with others, and talkativeness is
extraversion. It contradicts outgoing or energetic behavior with solitary or reserved
behavior.
Experiencing positive emotional states and feeling good about oneself and the world
around one is extraversion.
IV. Agreeableness: Agreeableness is the tendency of being compassionate and
cooperative instead of suspicious and antagonistic towards each other. It is a method
of measuring one's trusting and helpful nature, and whether a person has a bad temper
or not.
It distinguishes friendliness or compassionate with analytical or detached nature. In
simple words, it is the tendency to get along well with others.
V. Emotional Stability: It contradicts sensitive or nervous nature with secure or
confident one. Being bias towards experiencing unpleasant emotions easily, like
anger, anxiety, depression, negativity and vulnerability. Neuroticism credits the
degree of emotional stability and impulse control, and is frequently known by its low
pole, emotional stability. The tendency to sense negative emotional states and see
oneself and the world around one negatively.
The Myers–Briggs Type Indicator is a set of psychometric questionnaire designed to weigh
psychological preferences in how people perceive the world and make decisions. The Myers
Briggs model of personality developed by Katherine Briggs and Isabel Briggs Myers, is
established on four preferences namely −

 Types of social interaction

 Preference for gathering data

 Preference for decision making

 Style of decision making

With respect to the prescribed Myers Briggs type of indicator, preferences include eight
leadership styles −

 E or I (Extraversion or Introversion)

 S or N (Sensing or iNtuition)

 T or F (Thinking or Feeling)

 J or P (Judgment or Perception)
We combine the bias to give our Myers Briggs personality type. Say for example, our
preferences is for E and S and T and J, so it leads to personality type of ESTJ. In the same
way, there are sixteen Myers Briggs personality types that can be generated by combining
these four letters together.

When we put these four letters together, we get our personality type code, and there are
sixteen combinations. For example, INTJ implies that we prefer Introversion, Intuition,
Thinking and Judging (remember, this implies preferences only - an INTJ also uses
Extraversion, Sensing, Feeling and Perception).

Types of Social Interaction:

The way a person communicates with people around and links with others socially is called
social interaction. Who are we, how do we communicate with people? In order to answer
these question we classify individuals and their preferences to direct their energy into two
types Extraversion & Extrovert, Introversion & Introvert.

 Extraversion or Extrovert: If people prefer to direct their energy to cope with

others, things, situations, or "the outer world", then their preference is for
Extraversion. An extrovert is an outgoing, socially confident person. This is denoted
by the letter "E".
 Introversion or Introvert: If people prefer to direct their energy to deal with ideas,
information, explanations, beliefs, or "the inner world", then their preference is for
Introversion. An introvert is a shy and reticent person. This is denoted by the letter
"I".

For example − Archana is a nerdy girl and takes time to mingle up with others and is
considered as an introvert while Alka is a very outgoing person and gels easily with
everyone, so she is considered as an extrovert.

Preference for Gathering Data:

Everything we see, we hear we process them in our brains. Now how do we prefer to process
information? On what basis? To answer this question, we need to understand how to we
choose to transform our information.

We can collect information in two different ways, using two different information gathering
functions − Sensing and Intuition.
  Sensing: If we choose to deal with facts, what we know, to have clarity or to describe
what we see, then our preference is for Sensing. This is denoted by the letter "S".
 Intuition: If we choose to deal with ideas, look into the unknown, to generate new
possibilities or to engage what isn't obvious, then our preference is for Intuition. This
is denoted by the letter "N" (the letter I has already been used for Introversion).
For example − If I say that I believe something good is going to happen then it is just
an intuition as I am basing my statement without any evidence rather on just a feeling.
However, when I say that according to today’s weather forecast it is going to rain,
then this is sensing as I have an evidence to support my statement.

Preference for Decision Making:

There are two main types of functions through which we prefer to make our decisions.

 Thinking: If we choose to decide on the basis of objective logic, using an analytic

and detached path, then our preference is for Thinking. This is denoted by the letter
"T".
 Feeling: If we prefer to decide using values or our personal beliefs, on the basis of
what we believe is important or what we or others care about, then our preference is
for Feeling. This is denoted by the letter "F".
For example − If I get Rs. 500 lying on the road and I think as I got it, it’s mine then it
is my thinking. However, if I think it’s not right to keep others money and decide to
donate it then it is considered as a feeling.

Style of Decision Making:

Style of decision making is nothing but the way we prefer to organize our life. It is done by
either Perceiving or by Judging.

 Perceiving: If we prefer to go with the flow, to maintain flexibility and respond to

things as they arise in the first place, then our preference is for Perception. This is
denoted by the letter "P".
 Judging: If we prefer our life to be planned, stable and organized then our preference
is for Judging (here it is not to be confused with being 'Judgmental', which is quite
different). This is denoted by the letter "J".
For example − Mona gets a job and decides since she has got a job she need not worry
about anything else. This attitude is perceiving. On the other hand, Tina aims for bank

Prof. Saritha Assistant Professor, Don Bosco Institute of Technology, Bangalore Page 103
 PO exam and plans her life where all her actions will help her achieve her dream job.
This attitude is judging.

Myers-Briggs Personality Test

After getting a brief about the personality types, let us take a look at the 16 types of personality.

1. ISTJ (Introversion-Sensing-Thinking-Judging): Individuals with this type of

personality are quiet, serious, earn success by honesty and are dependable. They are
logical, matter-of-fact, realistic, and responsible. They decide practically what should
be done and work towards it steadily, regardless of distractions. They like to keep
everything synchronized and organized - their work, their home, their life. They
prioritize traditions and loyalty.
2. ISFJ (Introversion-Sensing-Feeling-Judging): Individuals with this type of
personality are quiet, friendly, responsible, and careful. They are committed and
steady in meeting their demands. Thorough, painstaking, precise and accurate. They
are loyal, considerate, notice and remember specifics about other individuals who are
important to them, and are concerned with how others feel. They strive to create an
orderly and harmonious surrounding at work and at home.
3. INFJ (Introversion-iNtuition-Feeling-Judging): Individuals with this type of
personality always explore meaning and connection in ideas, relationships, and
material possessions. They want to understand what encourages people and are
insightful about others. Being careful in nature, they are committed to their firm
values. They have a clear vision about how best to work for the common good. These
type of individuals are organized and decisive in executing their vision.
4. INTJ (Introversion-iNtuition-Thinking-Judging): Individuals with this type of
personality have a unique mindset and great drive for executing their ideas and
achieving their goals. They quickly see patterns in external events and develop long-
range elaborative perspectives. Being committed, they start something to do and carry
it through. Doubtful and independent, they have high standards of competence and
performance - for themselves and others.
5. ISTP (Introversion-Sensing-Thinking-Perceiving): Individuals with this type of
personality are tolerant and flexible, quiet observers until a problem arises, then act
quickly to find workable solutions. The examine what makes things work and readily
get through large amounts of data to isolate the core of practical issues. They are
interested in cause and effect, organize facts using practical principles, and value
efficiency.
6. ISFP (Introversion-Sensing-Feeling-Perceiving): Individuals with this type of
personality are quiet, friendly, adaptable, sensitive, and kind. They enjoy the present
moment, and are not bothered with what is going on around them. They like to have
their own space and to work within their chosen time frame. They are loyal and
committed to their principles and to people who are important to them. These
individuals dislike disagreements and disputes, and also do not force their opinions or
values on others.
7. INFP (Introversion-iNtuition-Feeling-Perceiving): Individuals with this type of
personality are idealistic, loyal, honest to their values and to people who are important
to them. They want an external life that is compatible with their values. Anxious,
quick to see possibilities, they can be catalysts for implementing ideas. They
understand people and help them fulfill their potential. These individuals are
adaptable, flexible, and accepting in nature until a value is threatened.
8. INTP (Introversion-iNtuition-Thinking-Perceiving): Individuals with this type of
personality develop logical explanations for everything that interests them. They are
 theoretical and abstract in nature, interested more in ideas than in social
communication. They are silent, contained, flexible, and adaptable. These individuals
have unusual ability to focus in depth to solve issues in their area of interest. They are
skeptical, sometimes can be critical, and are always analytical.
9. ESTP (Extroversion-Sensing-Thinking-Perceiving): Individuals with this type of
personality are flexible and tolerant; they take a pragmatic approach determined on
getting immediate results. Theories and conceptual elaborations bore them - they want
to act energetically to solve the problem. They focus on the here-and-now, are active,
spontaneous, and enjoy each moment. These type of individuals enjoy materialistic
comfort and style. They learn only through doing.
10. ESFP (Extroversion-Sensing-Feeling-Perceiving): Individuals with this type of
personality are outgoing, friendly, free and accepting in nature. Enthusiastic lovers of
life, people, and material comforts. They love working with others to make things
happen. Bring shared sense and a realistic approach to their work, and make work fun.
They are flexible and spontaneous, adapt readily to new people and surroundings.
They learn best by trying new skills with other people.
11. ENFP (Extroversion-iNtuition-Feeling-Perceiving): Individuals with this type of
personality are warmly active and imaginative. They perceive life as full of
happenings. Make links between events and information very quickly, and confidently
proceed based on the patterns they see. They want a lot of confirmation from others,
and readily give appreciation and support. These individuals are spontaneous and
flexible, often depend on their ability to improvise and their verbal fluency.
12. ENTP (Extroversion-iNtuition-Thinking-Perceiving): Individuals with this type of
personality are quick, smart, ingenious, stimulating, alert, and outspoken. Resourceful
in solving new and challenging issues. They are adept at generating conceptual
possibilities and then testing them strategically. They are also good at reading people.
Bored by daily routine, these individuals will seldom do the same thing the same way,
and apt to turn to one new interest after another.
13. ESTJ (Extroversion-Sensing-Thinking-Judging): Individuals with this type of
personality are practical, realistic, logical, and matter-of-fact. They are decisive in
nature and quickly move to execute decisions. They organize projects and people to
get things done, target on getting results in the most efficient way possible. They
like to
 maintain routine details, have a clear set of logical standards, systematically follow
them and expect others to do so too. They are forceful in executing their plans.
14. ESFJ (Extroversion-Sensing-Feeling-Judging): Individuals with this type of
personality are warmhearted, careful, and cooperative. They want harmony in their
surrounding and work with determination to establish it. They like to work with others
to complete work accurately and on time. They are loyal and tend to follow
thoroughly even in small matters. They want to be appreciated for who they are and
for their contribution.
15. ENFJ (Extroversion-iNtuition-Feeling-Judging): Individuals with this type of
personality are warm, empathetic, responsive, active and responsible. They are highly
sensitive to the emotions, needs, and motivations of others. They find potential in
everyone and want to help others act according to their potential. Often these type of
individuals act as catalysts for a person’s or group’s growth. They are loyal, active to
praise and criticism. They are sociable and provide inspiring leadership.
16. ENTJ (Extroversion-iNtuition-Thinking-Judging): Individuals with this type of
personality are frank, decisive, smart, and assume leadership readily. They quickly see
illogical and inefficient steps and policies, and efficiently develop and implement
comprehensive systems to solve organizational problems. They enjoy long-term
planning, are usually well informed, updated, well read, enjoy expanding their
knowledge and passing it on to others. They are forceful in presenting their ideas and
views.

PERSONALITY ATTRIBUTES INFLUENCING OB.

Following are the five major personality attributes that influence OB −

1. Locus of Control: Locus of control is the center of control of an individual’s code of

conduct. People can be grouped into two categories i.e., internals and externals
respectively.
People who consider themselves as the masters of their own fates are known as
internals, while, those who affirm that their lives are controlled by outside forces
known as externals.
Before making any decision, internals actively search for information, they are
achievement driven, and want to command their environment. Thus, internals do well
 on jobs that craves complex information processing, taking initiative and independent
action.
Externals, on the other hand, are more compliant, more willing to follow instructions,
so, they do well in structured, routine jobs.
2. Machiavellianism: Machiavellianism is being practical, emotionally distant, and
believing that ends justify means.
Machiavellians are always wanting to win and are great persuaders. Here are the
significant features of a high-mach individuals −
 High-Machs prefer precise interactions rather than beating about the bush.
 High-Machs tend to improvise; they do not necessarily abide by rules and
regulations all the time.
 High-Machs get distracted by emotional details that are irrelevant to the outcome
of a project.
3. Self-esteem: It is the extent up to which people either like or dislike themselves. Self-
Esteem is directly related to the expectations of success and on-the-job satisfaction.
Individuals with high self-esteem think that they have what it takes to succeed. So,
they take more challenges while selecting a job.
On the other hand, individuals with low self-esteem are more susceptible to external
distractions. So, they are more likely to seek the approval of others and to adapt the
beliefs and behaviors of those they respect.
4. Self-monitoring: Self-monitoring is the capability of regulating one’s behavior
according to social situations. Individuals with high self-monitoring skill easily adjust
their behavior according to external, situational factors. Their impulsive talents allow
them to present public personae which are completely different from their private
personalities.
However, people with low self-monitoring skills cannot cover themselves. Regardless
of any situation, they are always themselves. They have an attitude of, “what you see
is what you get.”
5. Risk taking: Generally, managers are reluctant on taking risks. However, individual
risk-taking inclination affects the bulk of information required by the managers and
how long it takes them to make decisions.
Thus, it is very important to recognize these differences and align risk-taking
propensity with precise job demands that can make sense.
 PERCEPTION

MEANING:

Perception is an intellectual process of transforming sensory stimuli to meaningful

information. It is the process of interpreting something that we see or hear in our mind and
use it later to judge and give a verdict on a situation, person, group etc.

According to S. P. Robbins, perception can be defined as “the process by which individuals

organize and interpret their sensory impressions in order to give meaning to their
environments.”

It can be divided into six types −

 Of sound − The ability to receive sound by identifying vibrations.

 Of speech − The competence of interpreting and understanding the sounds of

language heard.

 Touch − Identifying objects through patterns of its surface by touching it.

 Taste − The ability to receive flavor of substances by tasting it through sensory

organs known as taste buds.

 Other senses − They approve perception through body, like balance, acceleration,
pain, time, sensation felt in throat and lungs etc.

 Of the social world − It permits people to understand other individuals and groups of
their social world. Example − Priya goes to a restaurant and likes their customer
service, so she will perceive that it is a good place to hang out and will recommend it
to her friends, who may or may not like it. Priya’s perception about the restaurant is
good.

PROCESS OF PERCEPTION:

Perceptual process are the different stages of perception we go through. The different stages
are :

 Receiving
 Selecting
  Organizing
 Interpreting

Receiving: Receiving is the first and most important stage in the process of perception. It is
the initial stage in which a person collects all information and receives the information
through the sense organs.

Selecting: Selecting is the second stage in the process. Here a person doesn’t receive the data
randomly but selectively. A person selects some information out of all in accordance with his
interest or needs. The selection of data is dominated by various external and internal factors.

 External factors − The factors that influence the perception of an individual

externally are intensity, size, contrast, movement, repetition, familiarity, and novelty.

 Internal factors − The factors that influence the perception of an individual internally
are psychological requirements, learning, background, experience, self-acceptance,
and interest.

Organizing: Keeping things in order or say in a synchronized way is organizing. In order to

make sense of the data received, it is important to organize them.

We can organize the data by :

 Grouping them on the basis of their similarity, proximity, closure, continuity.

 Establishing a figure ground is the basic process in perception. Here by figure we

mean what is kept as main focus and by ground we mean background stimuli, which
are not given attention.

 Perceptual constancy that is the tendency to stabilize perception so that contextual

changes don’t affect them.

Interpreting: Finally, we have the process of interpreting which means forming an idea
about a particular object depending upon the need or interest. Interpretation means that the
information we have sensed and organized, is finally given a meaning by turning it into
something that can be categorized. It includes stereotyping, halo effect etc.
FACTORS INFLUENCING PERCEPTION:

Factors Related The Perceiver:

i) Projection: The perceiver tries to project his personality attributes in others is known
as projection. For e.g. if the perceiver is a, then he treats the perceived to be a talkative
though this may not be true.

ii) Mental makeup: Sometimes the perceiver has pre set notion in his mind about certain
objects, events and people. The moment he has to deal or act upon those events, he already
knows how to act or react as he has made his mental set up to deal with such situations.

iii) Stereotyping: It is a tendency to judge people based on the perception of the group to
which he belongs. We tend to attribute favorable or unfavorable characteristics to the
individual based on upon widely held generalization about the group. For instance, we
perceive that Japanese in general are hard working, quality conscious and industrious, and
based on that we generalize that all Japanese are like that, but in reality it may not be so.
There are some Japanese who may not possess the above mentioned characteristics.

iv) Halo Effect: It is tendency to draw a general overall impression about an individual based
on single striking characteristics. For instance, if a person speaks English fluently, we
tend to assume that that person is very knowledgeable, intelligent, smart, clever etc. hard
working, smart etc.

v) First Impression:The perceiver forms an impression about the perceived when he

meets him for the first time. First impression is normally difficult to change, as is said-First
impression is the last impression.

vi) Recency Effect: Recency effect is the effect that the recent event has on the
perceiver. During performance appraisal, the employees are rated on the basis of their latest
performance. The earlier performance is ignored. This is not the satisfactory method so
it leads to error in perceptual error.

Factors Related To The Perceieved:

 Status of the perceived: Generally status overpowers the actual characteristic. When
perception is made about a person who has high status in terms of position or
wealth, he is generally perceived to be high on ranking than a person with low
status.
  Closeness with the perceived: If a person is close to another person in
relationship, the perceived will be ranked high because of this relationship even
though, in a particular situation, he may have behaved negatively.
 Factors related to the situation: Situation plays an important role in forming
perception about a person. A person sitting in a five star hotel is perceived differently
than a person sitting in a small hotel.

LINK BETWEEN PERCEPTION AND INDIVIDUAL DECISION-MAKING:

 Decision making occurs as a reaction to a perceived problem.

 Perception influences:
 Awareness that a problem exists
 The interpretation and evaluation of information
 Bias of analysis and conclusions

Rational Decision-Making Model:

1. Define the problem

2. Identify the decision criteria
3. Allocate weights to the criteria
4. Develop the alternatives
5. Evaluate the alternatives
6. Select the best alternative

This model is seldom actually used: it’s more of a goal than a practical method.

Bounded Rationality:

 The limited information-processing capability of human beings makes it impossible to

assimilate and understand all the information necessary to optimize.
 People seek solutions that are satisfactory and sufficient, rather than optimal (they
“satisfice”)
 Bounded rationality is constructing simplified models that extract the essential
features from problems without capturing all their complexity.

Intuitive Decision Making:

A non-conscious process created out of distilled experience.

  Increases with experience.
 Can be a powerful complement to rational analysis in decision making.

Common Biases and Errors:

 Overconfidence Bias: As managers and employees become more knowledgeable

about an issue, the less likely they are to display overconfidence.
 Anchoring Bias: A tendency to fixate on initial information and fail to adequately
adjust for subsequent information.
 Confirmation Bias: Seeking out information that reaffirms our past choices and
discounting information that contradicts past judgments.
 Randomness Error: Believing that we can predict the outcome of random events
 Availability Bias: Basing judgments on information that is readily available
 Escalation of Commitment: Staying with a decision even when there is clear
evidence that it is wrong.
 Risk Aversion: Preferring a sure thing over a risky outcome.
 Hindsight Bias: Believing falsely that we could have predicted the outcome of an
event after that outcome is already known.

Ethical Frameworks for Decision Making:

 Utilitarian: Provide the greatest good for the greatest number.

 Rights: Make decisions consistent with fundamental liberties and privileges.
 Justice: Impose and enforce rules fairly and impartially so that there is equal
distribution of benefits and costs.

Creativity in Decision Making:

 The ability to produce novel and useful ideas

 Helps people to:
 See problems others can’t see.
 Better understand the problem.
 Identify all viable alternatives.
 Identify alternatives that aren’t readily apparent.
 ATTITUDE

MEANING:

Viewing attitudes as made up of three components - cognition, affect and behaviour– is

helpful toward understanding their complexity and the potential relationship between attitude
and behaviour. The object of an attitude is represented as a prototype in a person's memory.
Then an individual uses an attitude as a schema for evaluating an object. The person may
assess the object as good or bad, positive or negative, favoured or not; then the person
determines the strategy to take toward it. The accessibility of an attitude, or ease with which
it is activated, affects its implementation. Personal experience with the object and the
repeated expression of the attitude increases it accessibility.

In simple words, an "attitude" is an individual's point of view or an individual's way of

looking at something. To be more explicit, an "attitude" may be explained as the mental state
of an individual, which prepares him to react or make him behave in a particular pre-
determined way. It is actually acquired feeling.

An attitude is defined as, "a learned pre-disposition to respond in a consistently favourable or

unfavorable manner with respect to a given object".(Katz and Scotland) Attitude is the
combination of beliefs and feelings that people have about specific ideas, situations or other
people. Attitude is important because it is the mechanism through which most people express
their feelings.

FORMATION:

The formation of Attitudes are learned. Individuals acquire attitudes from several sources but
the point to be stressed is that the attitudes are acquired but not in herited. Our responses to
people and issues evolve over time. Two major influences on attitudes are direct experience
and social learning.

1. Direct Experience: Attitudes can develop from a personally rewarding or punishing

experience with an object. Direct experience with an object or person is a powerful
influence on attitudes. Research has shown that attitudes that are derived from direct
experience are stronger, are held more confidently and are more resistant to change
than are attitudes formed through indirect experience. One reason that attitudes
derived from direct experience are so powerful is because of their availability. This
means that the
 attitudes are easily accessed and are active in our cognitive processes. When attitudes
are available, we can call them quickly into consciousness. Attitudes that are not
learned from direct experience are not as available, and therefore we do not recall
them easily.

 Classical Conditioning: One of the basic processes underlying attitude formation

can be explained on the basis of learning principles. People develop associations
between various objects and the emotional reactions that accompany them.
 Operant Conditioning: Attitudes that are reinforced, either verbally or non
verbally, tends to be maintained. Conversely, a person who states an attitude that
elicits ridicule from others may modify or abandon the attitude.
 Vicarious Learning: In which a person learns something through the observance
of others can also account for attitude development particularly when the
individual has no direct experience with the object about which the attitude is
held. It is through vicarious learning processes that children pick up the prejudices
of their parents.

2. Social Learning: In social learning, the family, peer groups and culture shape an
individual's attitudes in an indirect manner. Substantial social learning occurs through
modelling, in which individuals acquire attitudes by merely observing others. For an
individual to learn from observing a model, four processes must take place:
 The learner must focus attention on the model.
 The learner must retain what was observed from the model.
 Behavioural reproduction must occur; that is, the learner must practise the
behaviour.
 The learner must be motivated to learn from the model.

COMPONENTS OF ATTITUDES:

The three components of attitudes are:

1. Cognitive component;
2. Affective component; and
3. Behavioural component.

 Cognitive Component: This component includes the beliefs an individual has about
a certain person, object, or situation. The belief that "discrimination is wrong" is a
value
 statement. Such an opinion is the cognitive component of an attitude. Learned beliefs,
such as "you need to work long hours to get a head in this job", lead to attitudes that
have an impact on behaviour in the work place. The cognition component of an
attitude, reflects a persons perceptions or beliefs. Cognitive elements are evaluative
beliefs and are measured by attitude scales or by asking about thoughts. The statement
"I believe Japanese workers are industrious, "reflect the cognitive component of an
attitude. The cognitive component sets the stage for the more critical part of attitude -
its affective component.
 Affective Component: This component refers to the person's feelings that result from
his or her beliefs about a person, object or situation. A person who believes hard work
earns promotions may feel anger or frustration when he or she works hard but is not
promoted. The affective component becomes stronger as an individual has more
frequent and direct experience with a focal object, person or situation. Affect is the
emotional component of an attitude.
It refers to an individual's feeling about something or someone. Statements such as "I
like this" or "I prefer that" reflect the affective component of an attitude. Affect is
measured by physiological indicators such as galvanic skin response (changes in
electrical resistance of skin which indicate emotional arousal) and blood pressure.
These indicators show changes in emotions by measuring physiological arousal. If an
individual is trying to hide his or her feelings, this might be shown by a change in
arousal.
 Behavioural Component: This component refers to the individual's behaviour that
occurs as a result of his or her feeling about the focal person, object or situation. An
individual may complain, request a transfer, or be less productive because he or she
feels dissatisfied with work. The behavioural component of an attitude refers to an
intention to behave in a certain way toward someone or something.
 For example, our attitudes towards women in management may be inferred from an
observation of the way we behave toward a female supervisor. We may be supportive,
passive or hostile depending on our attitude. The behavioural component of an
attitude is measured by observing behaviour or by asking a person about behaviour or
intentions.
RELATION BETWEEN ATTITUDE AND BEHAVIOUR:

1. Attitude is defined as a person’s mental tendency, which is responsible for the way he
thinks or feels for someone or something. Behavior implies the actions, moves,
conduct or functions or an individual or group towards other persons.

2. A person’s attitude is mainly based on the experiences gained by him during the
course of his life and observations. On the other hand, the behavior of a person relies
on the situation.

3. Attitude is a person’s inner thoughts and feelings. As opposed to, behavior expresses a
person’s attitude.

4. The way of thinking or feeling is reflected by a person’s attitude. On the contrary, a

person’s conduct is reflected by his behavior.

5. Attitude is defined by the way we perceive things whereas behavior is ruled by social
norms.

6. Attitude is a human trait but behavior is an inborn attribute.

 MOTIVATION

INTRODUCTION:

Motivation originally comes from the Latin root word ‘movere’ which means to move. It is
derived from the word motive. Motive may be defined as an inner state of our mind that
activates and directs our behaviour. Motivation may be defined as the process that motivates
a person and induces him to continue the course of action for the achievement of goal.

MEANING:

According to Steer & Porter, “Motivation is the force that energizes behaviour, gives
direction to behaviour and underlies the tendency to persist.”

According to George R. Terry, "Motivation is the desire within an individual that stimulates
him or her to action”.

In the words of Robert Dublin, it is "the complex of forces starting and keeping a person at
work in an organization". Viteles defines motivation as "an unsatisfied need which creates a
state of tension or disequilibrium, causing the individual to move in a goal directed pattern
towards restoring a state of equilibrium, by satisfying the need."

On the basis of above definitions, the following observations can be made regarding
motivation:

• Motivation is an inner psychological force, which activates and compels the

person to behave in a particular manner.
 • The motivation process is influenced by personality traits, learning abilities,
perception and competence of an individual.
• A highly motivated employee works more efficiently and his level of
production tends to be higher than others.
• Motivation originates from the-needs and wants of an individual. It is a
tension of lacking something in his mind, which forces him to work more
efficiently.
• Motivation is also a process of stimulating and channelising the energy of an
individual for achieving set goals.
• Motivation also plays a crucial role in determining the level of performance.
Highly motivated employees get higher satisfaction, which may lead to higher
efficiency.
• Motivating force and its degree, may differ from individual to individual
depending on his personality, needs, competence and other factors.

THEORIES OF MOTIVATION-NEEDS THEORY:

Maslow’s Hierarchy of Needs Theory

This theory was produced in order to answer the question “What motivates an individual”.
Every second need comes to force when the first need is satisfied completely. Maslow
explained the hierarchy of needs by grouping them into two: deficiency needs and growth
needs.
 Physiological Needs: Every individual needs to take care of the basic requirements
required to sustain. These requirements include food to eat, clothing to wear and
shelter to live in. These necessities are relatively independent of each other but are
finite.

 Safety Needs: Everybody wants to stay in a protected environment with minimal

danger so that they can have a peaceful life. Safety needs basically includes protection
from physiological danger like accident and having economic security like bank
accounts, health insurance. In an enterprise, it includes job security, salary increment,
etc. The managerial practice to satisfy this involves offering pension scheme,
provident fund, gratuity etc.

 Social Needs: We have all heard that man is a social animal, we want to be there with
those people where we are loved and we are accepted as we are; nobody wants to be
judged. This is a common requirement every human desires.

This theory helps managers to think about encouraging their employees by identifying
employee needs. In short, it presents motivation as constantly changing force,
expressing itself to the constant need for fulfilment of new and higher levels of needs.

 Esteem: Esteem means the typical human desire to be accepted and valued by others.
People often involve in a profession or hobby to gain recognition, earn fame and
respect. According to Maslow, the needs of humans have strict guidelines - the
hierarchies rather than being sharply separated, are interrelated. This means that
esteem and the consequent levels are not strictly separated but are closely related.

 Self-Actualization: Self-actualization means realizing one’s full potential. Maslow

describes this as a desire to complete everything that one can, to become the most that
one can be.
This theory has a lot of implication for managers. As a manager if you want to
motivate an employee, first try to understand what level that person is on in the
hierarchy and focus on satisfying those needs at or just above the level.
ERG Theory of Motivation:

Clayton Alderfer has proposed an alternative hierarchy of needs - called the ERG Theory of
Motivation. The letters E, R and G stand for Existence, Relatedness and Growth.

 Existence Needs: These needs are all the various forms of physiological and material
desires, such as hunger, thirst and shelter. In organizational settings, the need for
pay, benefits, and physical working conditions are also included in this category.
This category is comparable to Maslow’s physiological and certain safety needs.

 Relatedness Needs: These needs include all those that involve interpersonal
relationships with others in the workplace. This types of need in individuals depends
on the process of sharing and mutuality of feelings between others to attain
satisfaction. This category is similar to Maslow’s safety, social and certain ego-
esteem needs.

 Growth Needs: These needs involve a person’s efforts toward creative or personal
growth on the job. Satisfaction of growth needs results from an individual engaging
in tasks that not only require the person’s full use of his or her capabilities, but
also may require the development of new capabilities. Maslow’s self-actualization
and certain of his ego esteem needs are comparable to those growth needs.
ERG theory is based upon three major propositions:

i) The less each level of need has been satisfied, the more it will be desired (need
satisfaction). For example, the less existence needs (pay) have been satisfied on
the job, the more they will be desired.

ii) The more lower level needs have been satisfied, the greater the desire for higher
level needs (i.e., desire strength) For example, the more existence needs have
been satisfied for the individual worker (pay), the greater the desire for
relatedness needs (satisfying interpersonal relationships)

iii) The less the higher level need have been satisfied, the more the lower level
needs will be desired (i.e., need frustration) for example, the less growth
needs have been satisfied (challenging work), the more relatedness needs will
be desired (satisfying interpersonal relationships).

Difference between Alderfer’s ERG and Maslow’s Need Hierarchy:

ERG theory differs from Maslow’s need hierarchy in two aspects.

(a) Alderfer highlighted that once an individual’s higher level need is not fully
satisfied or encounters difficulty in fulfilling these needs resulting in frustrations
and disappointment, the person will exhibit a strong desire to regress to a
lower level needs where he/she finds more comfort and satisfaction.

(b) Alderfer further stated that an individual may have an intention to fulfill more than
one need at the same time. In other words, individuals may be working towards
fulfilling both their relatedness needs and growth needs or their existence and
related needs simultaneously.

TWO FACTOR THEORY:

Another popular need-based approach to motivation is the dual-structure approach developed

by Frederick Herzberg. This is also known as Two-factor Theory. Herzberg developed this
approach after interviewing 200 accountants and engineers in Pittsburg. He asked them to
recall such occasions when they had been dissatisfied and less motivated. He found that
entirely different sets of factors were associated with satisfaction and dissatisfaction. For
instance, an
individual who identified 'low pay' as causing dissatisfaction did not necessarily mention
'high pay' as a cause of satisfaction. Instead, several other factors, such as recognition or
accomplishment, were cited as causing satisfaction.

This finding suggests that satisfaction and dissatisfaction are at opposite ends of a single
scale. Employees would, therefore, be satisfied, dissatisfied or somewhere in between.

Herzberg identified two sets of factors responsible for causing either satisfaction or
dissatisfaction. The factors influencing satisfaction are called motivation factors or
motivators, which are related specifically to the job itself and the factors causing
dissatisfaction, are called hygiene factors, which are related to the work environment in
which the job is performed.

Motivator:

• Achievement
• Recognition
• Advancement
• The work itself
• The possibility of personal growth
• Responsibility

Hygiene or Maintenance Factors:

• Company policies
• Technical supervision
• Interpersonal relations with supervisor
• Interpersonal relations with peers
• Interpersonal relations with subordinates
• Salary • Job security
• Personal life
• Work conditions
• Status

Based on these findings, Herzberg recommended that managers seeking to motivate

employees should first make sure that hygiene factors are taken care of and that employees
are not dissatisfied with pay, security and working conditions. Once a manager has
eliminated employee dissatisfaction, Hertzberg recommends focusing on a different set
of factors to
increase motivation, by improving opportunities for advancement, recognition, advancement
and growth. Specifically, he recommends job enrichment as a means of enhancing the

Motivating Factors:

The presence of motivating factors always ensures job satisfaction and happiness among
the employees. They are: achievement, recognition, responsibility, advancement, growth
and the work itself. These motivating factors are relating to the work content factors.
availability of motivation factors.

Hygiene Factors:

The other set, which leads to dissatisfaction, is the hygiene factors such as salary,
company policy, supervision, status, security and working conditions. These hygiene factors
are relating to the work contextual factors. Herzberg argued that improvement in the
hygiene factors would only minimize dissatisfaction but not increase satisfaction and
motivation.

THEORY X AND Y:

Our management style is firmly influenced by our beliefs and assumptions about what
encourages members of our team like: If we believe that our team members dislike work,
then we tend towards an authoritarian style of management. However, if we assume that
employees take pride in doing a good job, we tend to adopt a more participative style.

Douglas McGregor, the eminent social psychologist, divides management style into
two contrasting theories −

 Theory X
 Theory Y
Theory X:

This theory believes that employees are naturally unmotivated and dislike working, and this
encourages an authoritarian style of management. According to this theory, management
must firmly intervene to get things done. This style of management concludes that workers −

 Disfavor working.
 Abstain responsibility and the need to be directed.
 Need to be controlled, forced, and warned to deliver what's needed.
 Demand to be supervised at each and every step, with controls put in place.
 Require to be attracted to produce results, else they have no ambition or
incentive to work.

McGregor observed that X-type workers are in fact mostly in minority, and yet in mass
organizations, such as large scale production environment, X Theory management may be
needed and can be unavoidable.

Theory Y:

This theory explains a participative style of management, that is, distributive in nature. It
concludes that employees are happy to work, are self-motivated and creative, and enjoy
working with greater responsibility. It estimates that workers −

 Take responsibility willingly and are encouraged to fulfill the goals they are given.
 Explore and accept responsibility and do not need much guidance.
 Assume work as a natural part of life and solve work issues imaginatively.

In Y-type organizations, people at lower levels are engaged in decision making and have
more responsibility.

Comparing Theory X & Theory Y

Let us now compare both the theories −

Motivation:

Theory X considers that people dislike work, they want to avoid it and do not take
responsibilities willingly. While, Theory Y considers that people are self-motivated, and
sportingly take responsibilities.
Management Style and Control:

In Theory X-type organization, management is authoritarian, and centralized control is

maintained. While in Theory Y-type organization, the management style is participative,
employees are involved decision making, but the power retains to implement decisions.

Work Organization:

Theory X employees are specialized and the same work cycle continues. In Theory Y, the
work tends to be coordinated around wider areas of skill or knowledge. Employees are also
motivated to develop expertise, and make suggestions and improvements.

Rewards and Appraisals:

Theory X-type organizations work on a ‘carrot and stick’ basis, and performance assessment
is part of the overall mechanism of control and compensation. Coming to Theory Y-type
organizations, appraisal is also regular and crucial, but is usually a separate mechanism from
organizational controls. Theory Y-type organizations provide employees frequent
opportunities for promotion.

Application:

Admitting the fact that Theory X management style is widely accepted as inferior to others, it
has its place in large scale production procedure and unskilled production-line work. Many of
the principles of Theory Y are widely accepted by different types of organization that value
and motivate active participation.

Theory Y-style management is appropriate for knowledge work and licensed services.
Licensed service organizations naturally develop Theory Y-type practices by the nature of
their work, even high structure knowledge framework, like call center operations, benefit
from its principles to motivate knowledge sharing and continuous improvement.

APPLICATION OF MOTIVATIONAL THEORIES:

Motivating by changing the work environment: (JCM)

The Job Characteristics Model( J. Richard Hackman & Greg Oldham) - jobs are described in
terms of five core dimensions:
 Skill variety: Degree to which a job requires a variety of different activities so
the worker can use a number of skills and talent.

Task identity: Degree to which a job requires completion of whole work and
identifiable piece of work.

Task significance: Degree to which a job affects the lives or work of other people.

Autonomy: Degree to which a job provides worker freedom , independence and

discretion in scheduling work and determining the procedures in carrying it out.

Feedback: Degree to which carrying out work activities generates direct and
clear information about your own performance.

Alternate work Arranagements:

Flextime:

 Some discretion over when worker starts and leaves

 Allow people to choose their work hours by adjusting a standard work schedule.

Flextime Benefits include.

 Reduced absenteeism.
 Increased productivity.
 Reduced overtime expenses.
 Lessening in hostility toward management.
 Reduced traffic congestion around work sites, elimination of tardiness.
 Increased autonomy and responsibility for employees that may increase
employee job satisfaction.

Job Sharing:

 Allows two or more individuals to split a traditional 40-hour-a-week job

Telecommuting:

 Work remotely at least two days per week Employees who do their work at home
at least two days a week on a computer that is linked to their office.

DRM Software Review

 Module -4 Managing Human at Work 7 hours
Group Dynamics

Meaning of Group, Group Characteristics, Classification of Groups, Models of Group Development,

Meaning of Group Dynamics, Group Behaviour, Impact of Group on Individual’s Behaviour, Impact
of External Factors on Group Behaviour.
Teamwork- Nature of Teams, Team Characteristics, Teams Versus Groups, Teamwork, Processes of
Teamwork, Types of Teams, Reasons for Team Failure, Creating Effective Teams.

INTRODUCTION
Man is by nature a social animal. It is impossible for him to work in isolation of all the other people
around him. Moreover, in the world today, it has become almost imperative for a professional to
work in consonance with other professionals around.
Organisations are nothing but a group of many professionals working together to achieve a common
goal. Different departments comprise of smaller groups to work over a project/goal/ objective.
Thus it is quite obvious that the organisations are existent and successful only because of the
existence and success of the various task groups and project teams existing inside them.
4.1 Group Meaning or definition
We define "group" as more than two employees who have an ongoing relationship in which they
interact and influence one another's behaviour and performance.
4.2 Group Behaviour
The behaviour of individuals in groups is something more than the sum total of each acting in his or
her own way. In other words, when individuals are in groups, they act differently than they do when
they are alone.
4.3 Types of Groups
Groups can be either formal or informal.
1. Formal Groups: A formal group is set up by the organisation to carry out work in support of
the organisation's goals. In formal groups, the behaviours that one should engage in are stipulated by
– and directed toward – organisational goals. Examples include a book- keeping department, an
executive committee, and a product development team. Formal groups may be command groups or
task groups.
(a) Command Group: A command group consists of a manager and the employees who report
to him or her. Thus, it is defined in terms of the organisation's hierarchy. Membership in the group
arises from each employee's position on the organisational chart.
(b) Task Group: A task group is made up of employees who work together to complete a
particular task or project. A task group's boundaries are not limited to its immediate hierarchical
superior.
It can cross command relationships. A employee's membership in the group arises from the
responsibilities delegated to the employee – that is, the employee's responsibility to carry out
particular activities. Task group may be temporary with an established life span, or they may be open
ended.
2. Informal Groups: An organisation's informal groups are groups that evolve to meet social or
affiliation needs by bringing people together based on shared interests or friendship. Thus, informal
groups are alliances that are neither formally structured nor organisationally determined. These
groups are natural formations in the work environment that appear in response to the need for social
contact. Many factors explain why people are attracted to one another. One explanation is simply
proximity; when people work near one another every day, they are likely to form friendships. That
likelihood is even greater when people also share similar attitudes, personalities, or economic status.
(a) Friendship Groups: Groups often develop because the individual members have one or more
common characteristics. We call these formations 'friendship groups'. Social alliances, which

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 frequently extend outside the work situation, can be based on similar age, same political view,
attended the same college, etc.
(b) Interest Groups: People who may or may not be aligned into common command or task
groups may affiliate to attain a specific objective with which each is concerned. This is an interest
group.
(c) Reference Groups: Sometimes, people use a group as a basis for comparison in making
decisions or forming opinions. When a group is used in this way, it is a reference group. Employees
have reference groups inside or outside the organisation where they work. For most people, the
family is the most important reference groups. Other important reference groups typically include co-
workers, friends, and members of the person's religious organisation. The employee need not admire
a group for it to serve as a reference group. Some reference groups serve as a negative reference; the
employee tries to be unlike members of these groups.
(d) Membership Groups: When a person does belong to a group (formal and informal groups to
which employees actually belong) the group is called a membership group (or affiliation group) for
that person. Members of a group have some collection of benefits and responsibilities that go beyond
the group serving as a reference point. In a membership group, each member would be expected to
contribute to the group's well being and would enjoy the benefits arising from the group members'
friendship.
4.4 Stages of Group Development

In interpreting behaviour of a particular group, it is important to recognize not only a broad pattern of
development but also the unique characteristics of the particular group and the circumstances that
contribute to (or detract from) its development. The way in which a particular group develops,
depends in part on such variables as the frequency with which group members interact and personal
characteristics of group members. However, it is generally believed that groups pass through a
standard sequence of five stages.
1. Forming: When a group is initially formed, its members cannot accomplish much until they
agree on what their purpose is, how they will work together and so on. Answering such questions
brings group members face to face with the first obstacle to maturity: uncertainty, anxiety, and

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 disagreement over power and authority. In this stage, the focus is on the interpersonal relations
among the members. Members assess one another with regard to trustworthiness, emotional comfort,
and evaluative acceptance. Thus, the forming stage is characterized by a great deal of uncertainty
about the group's purpose, structure and leadership. Members are testing the waters to determine the
type of behaviour that is acceptable. This stage is complete when members have begun to think of
themselves as part of a group.
2. Storming: The storming stage is one of inter-group conflict. Members accept the existence of
the group, but resist the constraints the group imposes on individuality. Further, there is conflict over
who will control the group. After a group leader has emerged, the remaining group members must
sort out where they fit in the group. Even if all the group members accept the leader, the group enters
a phase of conflict and challenge. One or more followers may test the leader. The group may split
into factions supporting and opposing the leader. If the group gets stuck in this phase of development,
group members may engage in battles over turf and expend their energies on a variety of political
tactics. When this stage is complete, a relatively clear hierarchy of leadership exists within the group.
3. Norming: In this stage, close relationships develop and the group demonstrates cohesiveness.
Entering and conducting the cohesion phase requires intervention by a group member who is
emotionally unaffected by power and authority issues. Typically, such a person encourages group
members to confront these issues openly. If the group engages in this process, the cohesion phase
usually passes quickly. Group members recognize where they fit in, and the group agrees on how it
will operate. A new leader may emerge, or the existing leader may become more aware of how much
others in the group contribute. The norming stage is complete when the group structure solidifies and
the group has assimilated a common set of expectations of what defines correct member behaviour.
4. Performing: The fourth stage is performing. The structure at this point is fully functional and
accepted. Group energy has moved from getting to know and understand each other to performing the
task at hand. Members' attention is directed to self-motivation and the motivation of other group
members for task accomplishment. Notes the task function of initiating activity and ensure that the
work of the group really gets moving. Other members contribute to motivation and commitment
within the group through maintenance functions such as supporting, encouraging and recognizing the
contributions of members or through establishing the standards that the group may use in evaluating
its performance.

Note: For permanent groups performing is the last stage where as for temporary groups
adjourning is the last stage.

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 5. Adjourning: For permanent work groups, performing is the last stage in their development.
However for temporary groups, there is an adjourning stage.
 In this stage, the group prepares for its disbandment.
 High task performance is no longer the group's top priority.
 Instead, attention is directed toward wrapping up activities

Group Dynamics
Definition:
Group Dynamics can be understood as a process, wherein the attitude and behaviour of a member
influence the behaviour of another or other members of the group, either by choice or circumstances.
Factors such as individual personality, cultural traditions and social situations, often affect the group
dynamics.
Group Dynamics is associated with groups, which means that if there exists a group, the members of
such group tend to interact, change and adjust themselves according to the changing circumstances
and their relationship with one another.
Changes occur continuously in a group, i.e. entry and exit of members, change in leadership,
type of task assigned, etc.
Group dynamics are affected by rigidity or flexibility.
Group organization leads to group effectiveness, participation, cooperation and coordination of
members, as well as boosts morale.
Groups tend to continuously restructure, adjust and readjust members, so as to release stress,
eliminating conflicts, better decision making and problem-solving, which affects the group members.
4.4 What is Group Behavior?
Therefore, group behavior in organizations tends to follow the organizational norms and rules
wherein the employees are expected to be disciplined, follow orders, and work to the requirements of
the organization rather than their own whims and fancies.
On the other hand, organizations such as Google and Facebook are less hierarchical and less

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 structured with employees being allowed to work on their pet projects for a certain period every
week.
4.5 Effect of Group on the Individual Behaviour
• Impact of Group on the Change of Individual Attitude
• Impact of Group on the Individual’s Productivity
• Impact of Groups on the Decision-Making Process
• Impact of Group on the Performance (Social Acceleration)
• Negative Results of Group Membership
• Impact of Group on the Performance (Social Acceleration)

Impact of Group on the Change of Individual Attitude

Considering the group’s internal structure, we know that there are status (position) differences
between the members in all groups.
The “conformity behavior” to the group norm was mostly observed in the persons at the medium
level who suppose that they are recognized “partially” among the bottom, medium, and upper status
levels.
Impact of Group on the Change of Individual Attitude
This is the result of which the agreement in the group plays the supportive role in order to protect the
individual’s attitude in direction of the group norm.
The group decision is taken as a result of group discussion and the members find an agreement
(norm) in the group.
Impact of Group on the Individual’s Productivity
During the analyses carried out on the group, it is mentioned that the individual does more than what
he/she does by himself/herself within the group.
This fact was observed from the first experimental researches executed with the groups and called
“Social Acceleration”
Impact of Groups on the Decision-Making Process
As the individual acts more deliberately and controlled while he/she is alone, he/she is affected by the
group’s thoughts in the decisions passed by the group
Impact of Group on the Performance (Social Acceleration)
The experiments on the animals showed the acceleration of individual’s behaviors within the group.
The fact, which we call social acceleration, is that the individual is affected by the existence of other
individuals, carries out the work faster and has the performance
Negative Results of Group Membership
Even though the groups provide some advantages and benefits to their members, they may have some
banning and pressures on the group members.
Since the individual must observe some principles and ideals due to the group membership, he/she
must regulate his/her actions and behaviors and change them based on the group’s desires and
requirements.
4.6 External Factors that can Impact the Performance of your Team

1. Organizational Culture
2. Availability of Talent
3. Workplace Environment
4. Tools and Resources
5. Market Trends and Forces

As a project manager, one of your most important concerns will be how to guide your team to
achieve set goals. To achieve those goals, you’ll be expected to demonstrate strong leadership skills,
carefully manage the dynamics of your team, organize and motivate them, and ensure important

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 milestones are reached on time.
Yet, despite your best efforts, there are always external factors that can interfere with your team’s
performance. These are things that you don’t have much control over. However, because they may be
beyond your control doesn’t mean you can’t adapt. In fact, your ability to identify, prepare, and
respond to these influences may determine the stability and progress of your team.
1. Organizational Culture
Your team is a subset of a larger organization. This organization has its unique cultures, procedures,
and policies that affect what happens in your unit. You may be a great project manager, but if there
are negative practices in the organization as a whole, they can affect your team’s productivity.
For example, where the overall culture of a company encourages friendliness and professionalism in
top management’s conduct with staff, customers, and suppliers, it encourages an environment of
productivity, increased feedback, and progress. On the other hand, a negative and punitive culture
leads to employee dissatisfaction, high employee churn, and absenteeism. This is the reality as
confirmed by several studies including this one by the Harvard Business Review.
Availability of Talent
Workforce shortages are becoming a challenge in several industries including engineering,
manufacturing, and construction. According to the reports from the Bureau of Labor Statistics (BLS)
and the Society for Human Resource Management (SHRM), recruiters are having a harder time than
ever finding qualified applicants.
If you operate in an industry that is experiencing talent gaps, it can have a significant effect on your
entire team in the following ways:
Qualified team members frequently leaving your company to seek better opportunities elsewhere.
Project delays due to a longer recruiting process.
Increased risk of employing less qualified staff than intended.
Spending time to train new entries from scratch.
Workplace Environment
The workplace environment has a major effect on the performance and productivity of any employee
as team morale and health can be directly affected (both positively or negatively) by the workplace
environment.
Factors like temperature, air quality, lighting, cleanliness, hygiene, and noise in the office will
certainly affect their ability to focus on the tasks at hand and deliver the required results.
Tools and Resources
It’s one thing to require superior work from staff but do you know if they have what they need to get
the job done? Most of our work today happens with the aid of machines and gadgets. If your team
doesn’t have the tools and equipment required for their respective jobs, it will negatively impact
overall performance.
Here are a few key things you can check:
Physical tools such as machines, instruments, spare parts, and consumable supplies.
Safety protocols, work procedure manuals, job aids, and record-keeping tools.
Internet connectivity, computers, and communication systems.
The quality of your software solutions.
Market Trends and Forces
Whatever industry you operate in, your activities are influenced by certain market forces and trends.
They include new technology, government policies, economic conditions, consumer demand and
supply, etc.
For example, new regulations may require that you make significant changes to your team’s
workflow. Or improvements in technology may require that you deploy more modern and agile
methodologies, tools, and techniques all within a specified period.

4.2 TEAMS

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 4.2.1 What is Team?
A team becomes more than just a collection of people when a strong sense of mutual commitment
creates synergy, thus generating performance greater than the sum of the performance of its
individual members.
4.2.2 Nature and Characteristics of a good team –
Everyone participates actively and positively in meetings and projects.
- Team goals are understood by everyone.
- Individual members have thought hard about creative solutions to the problem.
- Members are carefully listened to and receive thoughtful feedback.
- Everyone takes initiative to get things done.
- Each teammate trusts the judgment of the others.
- The team is willing to take risks.
- Everyone is supportive of the project and of others.
- There is plenty of communication between team members. –
- Team decisions are made using organized, logical methods.
- Full team acceptance is expected as decisions are made. - Dissenting opinions are recorded, and
may be revisited if future situations dictate.
- Team goals are given realistic time frames.
- Everyone is focused on the ultimate goal of the project, while also digging into the underlying
details.

4.2.3 Understanding Work Teams

A team is a relatively permanent work group whose members must coordinate their activities to
achieve one or more common objectives. The objectives might include advising others in the
organisation, producing goods or services, and carrying out a project. Because achievement of the
team's objectives requires coordination, team members depend on one another and must interact
regularly. A work team generates positive synergy through coordinated effort. Their individual
efforts result in a level of performance that is greater than the sum of those individual inputs. Teams
have far-reaching impact in today's workplace. They have become an essential part of the way
business is being done.
Teams imply a high degree of coordination among their members, along with a shared belief that
winning (achieving team goals) is not only desirable but the very reason for the team's existence. Any
team is therefore a group, but unfortunately, not all groups have the high degree of interdependence
and commitment to success that we traditionally associate with the concept of a team. Although the
desire to achieve high levels of commitment and coordination is common among organisations using
teamwork, the nature of specific teams varies considerably. Two major dimensions along which
teams differ are differentiation of team roles and integration into the organisation.
1. Differentiation is the extent to which team members are specialized relative to others in
the organisation.
2. Integration is the degree to which the team must coordinate with managers, employees,
suppliers and customers outside the team.
4.2.4 What is teamwork?
Teamwork is about working together as a group toward a common goal. We all know it has a huge
impact on success. Even small improvements can produce dramatically better outcomes. But how do
you make those improvements? If you have ever looked at the research you will know that the
conventional advice is a laundry list of things to do:
 Establish clear goals
 Ensure there is a good balance of the necessary skills and resources
 Communicate well
 Develop trust

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  Manage conflict
 Hold people accountable

4.2.5 Creating Effective Teams

The four possible combination – high or low differentiation plus high or low integration – are
associated with creation of effective teams.
1. Advice/Involvement,
2. Production/Service,
3. Project/Development, and
4. Action/Negotiation.
1. Advice and Involvement: An advice/involvement team is a team formed to generate input
from a broad base of employees. They are low in differentiation. Team members
Notes meet only long enough to generate ideas or develop proposals. The work group takes on
problem solving as one of its daily activities. Because this team has a limited scope of control, the use
of teamwork has essentially no impact on the organisation's management structure.
Advice/involvement teams the routinely handle quality issues are often called quality circles. Such
teams typically meet about an hour each week to generate ideas for improving quality in a given area.
2. Production and Service: Production/service teams, are charged with the activities related to
producing and selling goods and services. Production/service teams, draw their membership from a
broad base and often are formed as a way to empower first-line employees. They are low on
differentiation and high in integration. They must coordinate their work extensively with suppliers,
customers, and other groups in the organisation.
3. Project and Development: A project/development team is charged with planning,
investigating, analyzing and reporting, often with the objective of creating outputs that are complex
and unique. Project/development teams are highly differentiated because they require employees with
expertise in particular areas. They tend not to be highly integrated because team members generally
face internal deadlines, and coordination is primarily among group members.
4. Action and Negotiation: Action/negotiation team are usually comprised mainly of experts
with specialized skills. Owing to their expertise, the team is highly differentiated; it is also highly
integrated with the organisation. It must closely coordinate its efforts with the work of support
personnel or with other action/negotiation teams.
4.2.6 Differences between Groups and Teams

Groups Teams
Individual accountability.
Individual and mutual accountability.
Read More: What is Group?
Come together to share information and Frequently come together for discussion, decision
perspectives. making, problem-solving, and planning.
Focus on individual goals. Focus on team goals.
Produce individual work products. Produce collective work products.
Define individual roles, responsibilities, and tasks to
Define individual roles, responsibilities,
help the team do its work; often share and rotate
and tasks.
them.

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 Concerned with one’s own outcome and Concerned with the outcomes of everyone and
challenges. challenges the team faces.
Purpose, goals, approach to work shaped Purpose, goals, approach to work shaped by the
by the manager. team leader with team members.
The leader dominates and controls the
The leader acts as a facilitator.
group.
The leader is apparent and will conduct the The members have active participation in the
meeting. discussions and eventual outcome.
The leader usually assigns work to the The team members decide on the disbursements of
members. work assignments.

Groups do not need to focus on specific Teams require the coordination of tasks and
outcomes or a common purpose. activities to achieve a shared aim.

Individuals in a group can be entirely Team members are interdependent since they bring
disconnected from one another and not to bear a set of resources to produce a common
rely upon the fellow members at all. outcome.

Groups are generally much more

Team members’ individual roles and duties are
informal; roles do not need to be assigned
specified and their ways of working together are
and norms of behavior do not need to
defined.
develop.

4.2.7 Types of teams

Teams can be divided into four main groups:
• Project teams,
• self-managed teams,
• virtual teams, and
• operational teams.
• What type of team you have depends on its
• purpose, • location, and • Organizational structure.
• Each type of team comes with its unique set of strengths and weaknesses.
Project Teams
• Project teams are groups of employees who work collectively toward shared goals.
• This type of team allows you to structure work in a specific, measurable, and time-constrained way.
You can assign clear roles, responsibilities, and deadlines. • Also, by selecting both experienced and
inexperienced workers, you enable them to do informal coaching and mentoring.

Project Teams

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 • Functional Teams
• Cross-functional Teams
• Matrix Teams
• Contract Teams

• Advantages and Disadvantages of Functional Teams Advantages:

• Handles routine work
• Line management has control of projects
• Pools technical and professional expertise
• Disadvantages:
• Difficult communication across areas
• Pushing the decision-making process upwards • Inflexible

Advantages and Disadvantages of Cross-functional Teams Advantages:

• Greater speed of task completion • Can handle a wide array of projects • Source of unconventional
ideas
Disadvantages:
• Takes long to develop cohesion
• Management can prove to be challenging
• Diversity can cause conflict
• Matrix Teams
• These teams are characterized by a “two-boss system”, where an individual report to a different

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 manager for various aspects of his work. This type of team is the product of Matrix management
approach.

• Advantages:
• Acceptable to traditional managers • Flexibility for assigned personnel • Top management
controls projects, stays out of daily activities • Disadvantages: • Dual reporting • The team leader is
usually unable to choose who will be on the project • Difficult performance appraisal
• Contract Teams • Contract teams are outsourced teams that are tied down by a contract and
brought in to complete a part of a project. After the project is completed and the contract has ended,
the client can cut all ties to the team, no questions asked.

• Advantages: • Easy employment of experts • A team can use the existing management structure •
No need for client training • Disadvantages: • Difficult assessment of project progress for the client •
Difficult to resolve political and organizational issues • The client is the only judge of success
• Self-managed Teams • Typically, members of self-managed teams are employees of the same
organization who work together, and even though they have a wide array of objectives, their aim is to
reach a common goal. • There is no manager nor authority figure, so it is up to members to determine

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 rules and expectations, to solve problems when they arise, and to carry shared responsibility for the
results.
• When setting up a self-managed team, you have to define two parameters: • Levels of
responsibility • Autonomy that is given to the self-managed team • Research has shown that
employees in self- managed teams feel more useful on the job and find their jobs more challenging,
although there is no proof that they are actually more productive.
• Advantages: • Autonomy improves employee motivation; • Team members can manage their own
time and handle tasks when it suits them; • You don’t have to pay for an office; • Shared
responsibility instills pride in team accomplishments. • Disadvantages: • The lack of hierarchical
authority can put personal relationships over good judgment; • It can lead to conformity that
suppresses creativity and critical thinking; • An added layer of responsibility is time-consuming and
requires skills that some people simply don’t have; • Training time and costs are higher due to a
broader scope of duties.
• Virtual Teams • Virtual teams are made up of people who work in different physical locations and
who rely heavily on collaboration tools to get things done together. • Virtual teams provide members
with better life- work balance and allow business owners to employ the best experts in the field,
regardless of the fact that they live on another continent.

For Example Organizations that had the most success with its virtual teams is Automattic, best
known by their company, WordPress. Over 100 employees in 43 different countries use Wordpress
plugin P2 that enables them to communicate with each other in real-time. Also, when a new
employee gets on board he receives $2.000 stipend to improve his home office, gets the latest
Macbook, and an open “time off” policy to use take free time whenever they need. • It may seem a
little farfetched, but this policy is one of the key factors behind Automatic’s success: Wordpress is
now used by 27.5% websites globally.
• According to the Manager’s guide to virtual teams, virtual teams are characterized by three

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 dimensions:
• Time
Space - WHERE people work.
• Culture – To WHOM
. • Operational teams
• Operational teams support other types of teams. They are formed to make sure that all back office
processes go smoothly.

For instance, if accounting department received a task to make an annual financial report by a certain
date, they will most likely devise a timeline, delegate tasks, and keep track of deadline just like any
other project team.
4.2.8 Reasons for Team failure :
In spite of the best intentions of the organization, as well as the best efforts put in by the team
members, teams still fail. Team failure is due to various reasons.
These reasons can be further divided into broadly five categories:
Environmental Influences
 Goals
 Roles
 Processes
 Relationships

Environmental Influences:
The team members may be placed at different location making it difficult for them to meet
frequently. Hence a solution needs to be found to resolve this issue. Communication is vital for any
team to work well. Physical distances can always be overcome with the use of technology.
The team is not given adequate resources in order to do its job. You cannot expect an employee to
work with his hands tied, can you?
Team efforts can be recognized. This is a key human trait. Appreciation is a big morale booster for

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 any employee.
A lack of recognition by the organization or its leaders about the existence of a team can also lead a
team to its failure.
Goals:
No participation from members in setting goals. This takes away the ownership from the team. It
reduces the commitment of the team members.
Team is not clear about the goals. Communication is vital, whether to a team or to an organization.
Goals are not effectively communicated. Everybody is doing his own thing with no attention to team
goals. Working in silos leads to duplication of work as well as ruining the organization culture.
Roles:
Responsibilities of the team members are poorly defined. This leads to ambiguity as well as lack of
commitment.
No clear leader identified. Leadership is vital to any team. A good leader outlines the strategy and
charts the path to reach the goal.
There is buck-passing of responsibility, which shows lack of commitment.
Members indulge in power plays for authority and control. This is a problem of attitudes which needs
to be managed accordingly by the leader and the organization. Members refuse to recognize their
interdependence and act as if they were independent. This will lead to the failure of the team.
Processes:
Lack of processes makes decisions always a crisis situation. A case of decision-making being
dominated by one person leads to poor commitment of the team
Communications are one way: top down and channeled through the leader. This is not the feature of a
team. Negligible points are debated continuously. This leads to waste of time as well as energy.
Meetings are unproductive with the issues unresolved implies that poor planning has been done.
Meetings cover trivia versus significant issues as the way to achieve goals is not clear.
In case, actions are taken without planning, the team will fail.
Relationships:
Members are unwilling to be identified with the team. There is disguised conflict between the team
members as well as severe personality conflicts. Relationships are competitive.
Most of the issues mentioned above can be resolved. All that is required is planning, processes and
performance appraisal, which will be covered in detail in another article. Teams are vital for any
organization. Their failure leads to the failure of the organization as a whole.

Module-5

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 Organizational Power, Politics and Culture 7 hours
Power and Politics- Nature of Power and Politics, Early Voices, Questioning Power and
Authority, Sources of Power for Individuals, Managing Organisational Politics.

Culture- Definitions of Organisational Culture, Strong Versus Weak Culture,

Characteristics, Types, Levels, Dimensions, Creating Organisational Culture, Changing
Organisational Culture.

Organizational Power
German sociologist, Max Weber defined power as "the probability that one actor within a social
relationship will be in a position to carry out his own will despite resistance.“
Along similar lines, Emerson suggests that "The power of actor A over actor B is the amount of
resistance on the part of B which can be potentially overcome by A.
" Power appears to involve one person changing the behavior of one or more other individuals –
particularly if that behavior would not have taken place otherwise.

Meaning of Power

Power is the potential ability to influence the behaviour of others. It is, in other words, "the capacity
that A has, to influence the behaviour of B, so B does something he would not otherwise do"
(Robbins).
It is the ability to make things happen or get things done the way you want. Power may involve use
of one's potential that need not be actualised to be effective.

Example: A football coach has the power to bench a player who is not performing up to par. The
coach seldom has to use this power because players recognise that the power exists and work hard to
keep their starting positions.
Power also represents one's dependency. The greater B's dependence on A, the greater is A's power in
the relationship. A person can have power over you only if he controls something you desire. Where
an employee is not dependent on the supervisor for receiving rewards then, truly speaking, the
supervisor has no power over such employee.

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 Definition: A capacity that A has to influence the behavior of B, so that B acts in accordance
with A’s wishes.
 The definition implies a potential that need not be actualized to be effective and
a dependency relationship.  Power may exist but not be used. It is, therefore, a capacity or potential.

Contrasting Leadership and Power

Essentially, leaders achieve goals, and power is a means of facilitating their achievement
Leadership involves the goals of the leaders and followers - Power does not
Leadership focuses on downward influence (leader - subordinate) - Power does not

Bases of Power

Formal Power

Coercive Power
Power that is based on fear.

Reward Power
Compliance achieved based on the ability to distribute rewards that others view as valuable.

Legitmate Power
The power a person receives as a result of his or her position in the formal hierarchy of an
organization.
Information Power
Power that comes from access to and control over information

Personal Power
Expert Power
Influence based on special skills or knowledge.

Referent Power
Influence based on possession by an individual or desirable resources or personal traits.

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 Charismatic Power
An extension of referent power stemming from an individual’s personality and interpersonal style.
 
Sources of Power in Organisations

There is much more to managing than simply taking charge. Even if employees settled for being
ordered around, attaining a competitive advantage depends on manager's skills at bringing out the
best in their employees.
This enlightened view of management implies that power comes not only from having a job that
gives you the right to issue orders, but from other sources as well.
Managers therefore need to recognize multiple sources of power. These sources may be interpersonal
or structural.

Structural Sources of Power

The degree of power wielded by a particular group/individual also depends on the structure of
work activities and communications in the organisation.
individual's power base on three variables:
 ability to reduce uncertainty,
 lack of substitutes and
 centrality of activities to achieve organisation's objectives.

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 Uncertainty Reduction: Organisations must operate in the face of uncertainty about their

key resources: Human capital, raw materials, supplies and equipment, money and technology.
Those who are able to reduce uncertainty have power in the organisation.
Basic ways of reducing uncertainty are:

(a) Resource Control: Groups or individuals gain resource control when they acquire hard-to-get
resources and maintain access to them.
In these cases, groups that have resource control can reduce uncertainty for other groups by
providing access to the necessary resources.

(b) Information Control: The organisation members who can provide needed information
have power because they can reduce uncertainty for others. Changes in technology
and organisational structures are intensifying the importance of information power.
Hence a person's power may be more closely related to his or her ability and willingness to share
information with those who can apply it toward maintaining a competitive advantage.

(c) Decision-making Control: The groups and individuals who make decisions about the
use of resources also have relatively great power. Logically, the decision makers
can reduce uncertainty by making and communicating decisions affecting others in
the organisation. Those who gain the power from decision-making control are the
ones who make decisions about basic policies and practices such as, what the
organisation will produce and who its target market will be.

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 Substitutability: The power of an individual or group is inversely related to the person‘s or group's
substitutability.

People are powerful because they cannot easily be replaced.

In other words, organisations cannot find a substitute for their skills or knowledge. Being a hard-to-
replace employee is not always advantageous. If a manager views an employee as indispensable for a
particular job, that employee may miss opportunities for promotion
or career development. And if the employee becomes associated with a particular job or
way of doing things, changes in the organisation can render him or her highly dispensable.
Centrality:
Central groups are those that have many connections with other groups and a large effect on work
flow.

Thus, groups and individuals in a central position are generally more powerful than those at the
periphery.
These people have command of key information
and other resources, and others in the organisation are likely to be aware of what they
control and how they affect the organisation.

Politics: Power in action

 
Political behavior are those activities that are not required as part of one’s formal role in the
organization, but that influence, or attempt to influence, the distribution of advantages and
disadvantages within the organization.
 
Legitimate and illegitimate political behaviors are common in organizations.  Politics is a fact of life
in organizations.
Factors contributing to Political Behavior

Individual factors (e.g., personality traits, needs)

Organizational factors (e.g., when organizational resources decline, resources change, low trust
exists, high performance pressures, and the opportunity of promotion exists = political behavior
is likely)

How do People Respond to Organizational Politics?

Decreased job satisfaction, increased anxiety, increased turnover, and reduced performance        
 
Defensive Actions: Reactive and protective behaviors to avoid action, blame, or change

Impression Management
    The process by which individuals attempt to control the impression others form of them.
Techniques include conformity, excuses, apologies, self-promotion, flattery, favors, and association.

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 Many organisational conditions encourage political activity. Among them are:
1. Unclear Goals
2. Autocratic decision making
3. Ambiguous lines of authority
4. Scarce resources, and
5. Uncertainty
Individuals who use power in organisations are organisational politicians. Political behaviour
is actions not officially sanctioned by an organisation that are taken to influence others in order
to meet one's personal goals

Legitimate Political Behaviour

Political behaviour may be legitimate or illegitimate.

Legitimate Political Behaviour refers to normal everyday politics
1. Complaining to your supervisor.
2. Bypassing the chain of command.
3. Forming coalitions.
4. Obstructing organisational policies.
5. Excessive adherence to rules, and
6. Developing contacts outside the organisation through one's professional activities.
Illegitimate Political Behaviours are those activities that violate the implied rules of the game.

UNIT 5 Contd.
Organizational Culture -Definitions of Organisational Culture, Strong Versus Weak Culture,
Characteristics, Types, Levels, Dimensions, Creating Organizational Culture, Changing
Organizational Culture.

Organisational culture

Organizational culture is the set of assumptions, beliefs, values and norms that are shared by the
members of an organization.
It may be consciously created by its key members, or it may have simply evolved overtime.
It represents a key element of the work environment in which employees perform their jobs.

Definitions

It can also be defined as the specific collection of values and norms that are shared by people and
groups in an organisation and that control the way they interact with each other and with stakeholders
outside the organisation.

Types of Organisational Culture

There are different types of organisational culture in the corporate world. This depends on the way of
working, strategy formulated by an organisation, and also its core values.
Very widely known are two categories namely – strong and weak.
But here, we pertain to different classification. While different theorists and different companies even

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 might have differing opinions on the types of organisational cultures out there, there is a general
consensus on four different types of organisational culture.

Most companies or corporations in their style or plan can fall into one of these four general types, viz.

Clan Culture
Hierarchy Culture
Adhocracy Culture
Market Culture

Clan Culture: This type of culture is visible in those organisations which are very friendly place to
work where people share a lot of themselves.
It is like an extended family.

Hierarchy Culture: This type of culture is visible in those organisations which are much formalized
structured place to work. Procedures govern what people do.

Adhocracy Culture: This type of culture is visible in those organisations which are dynamic
entrepreneurial and creative places to work. People stick their necks out and take risks.

Market Culture: This type of culture is visible in those organisations which are results oriented
organisations whose major concern is with getting the job done. People are competitive and goal-
oriented.

Effects of Organisational Culture

The organisations world over require a strong organisational culture. This happens because a strong
organisational culture:

 The first is thickness of culture which is measured by the number of important shared
assumptions.
 The second dimension is extent of sharing. In strong cultures, layers and layers of beliefs are
shared.
 The third determinant of the cultural strength of an organisation is clarity of ordering.

One of the most important factors that affect the strength of an organisational culture are:

 Number of employees, and

 Geographic dispersion.

Characteristics of organizational cultures

-- Distinctive
-- Stable
-- Implicit
-- Symbolic
-- Integrated
-- Accepted
-- A reflection of top management

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 Openness and humility from top to bottom of the organisation: As we know that the arrogance kills
learning and growth by blinding us to our own weaknesses.
Obviously, strength comes out of receptivity and the willingness to learn from others.

An environment of accountability and personal responsibility: Weak organisations show signs of

denial, blame, and excuses hardened relationships and intensify conflict. Successful teams on the
other side, hold each other accountable and willingly accept personal responsibility.

Freedom for risk-taking within appropriate limits: Both the extremes–an excessive, reckless risk-
taking and a stifling, fearful control have the potential to threaten any organisation. Freedom to risk
new ideas flourishes best within appropriate limits.
Courage and persistence in the face of difficulty: The playing field is not always level, or life fair, but
healthy cultures remain both realistic about the challenges they face and unintimidated and
undeterred by difficulty

A fierce commitment to "do it right": Mediocrity is easy; excellence is hard work, and there are many
temptations for shortcuts. A search for excellence always inspires both inside and outside an
organisation.
Unquestioned integrity and consistency: Dishonesty and inconsistency undermine trust.
Organisations and relationships thrive on clarity, transparency, honesty, and reliable follow-through.

A willingness to tolerate and learn from mistakes: Punishing honest mistakes stifles creativity.
Learning from mistakes encourages healthy experimentation and converts negatives into positives.
Pursuit of collaboration, integration, and holistic thinking: Turf wars and narrow thinking are deadly.
Drawing together the best ideas and practices, integrating the best people into collaborative teams,
multiplies organisational strength.
Importance

Schein suggests that organisational culture is even more important today than it was in the past.
Increased competition, globalization, mergers, acquisitions, alliances, and various workforce
developments have created a greater need for:

Coordination and integration across organisational units in order to improve efficiency, quality, and
speed of designing, manufacturing, and delivering products and services.
Product innovation
Strategy innovation
Process innovation

Effective management of dispersed work units and increasing workforce diversity

Cross-cultural management of global enterprises
Construction and management of hybrid-cultures
Facilitation and support of teamwork.

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 Module - 6 Change and Stress Management 7 hours

Change- Nature, Characteristics, Process, Forces Responsible for Change in Organizations,

Resistance to Change, Managing Resistance to Change. Stress Management-Definitions,
Understanding Stress, Relation between Stress and Performance, Level, Signs and
Symptoms of Stress, Types of Stress, Causes of Stress, Managing Stress.

Changing Organisational Culture

If organisations are to consciously create and manage their cultures, they must be able to take their
employees into consideration.
There are problems that managers face when they go about the business of changing organisational
culture.
Changing organisational culture takes patience, vigilance, and a focus on changing the parts of an
organisational culture that managers can control:

Behaviours: One way of changing a corporate culture is to use behavioural addition or behavioural
substitution to establish new patterns of behaviour among employees.

Behavioural Addition: Behavioural Addition is the process of having managers and employees
perform new behaviours that are central to and symbolic of the new organisational culture that a
company wants to create.
Behavioural Substitution: Behavioural substitution is the process of having managers and
employees perform new behaviours central to the "new" organisational culture in place of behaviours
that used to be central to the "old" organisational culture.

Visible Artifacts: These need to change keeping the new corporate culture in mind.
Forces for Change in Organisations

Change has become the norm in most organisations.

Plant closing, business failures, mergers and acquisitions, and downsizing have become
common experiences for most organisations.

Adaptiveness, flexibility and responsiveness are terms used to describe organisations that will
succeed in meeting the competitive challenges that businesses face.

In the past, organisations could succeed by claiming excellence in one area — quality, reliability or
cost. But this is not the case today. The current environment demands excellence in all areas.
Some of these are external, arising from outside the company, whereas others are internal arising
from sources within the organisation.

External Forces:

When the organisation's general or task environment changes, the organisation's success often rides
on its ability and willingness to change as well.

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 The modern manager is change-conscious and operating in the constantly changing environment.
Many external changes bombard the modern organisations and make change inevitable.
The general environment has social, economic, legal, political and technological dimensions.
Any of these can introduce the need for change.

Technological Change:

Rapid technological innovation is a major force for change in organisations, and those who fail to
keep pace can quickly fall behind.
It is perhaps the greatest factor that organisations reckon with.

According to C. Handy, "the rate of technological changes is greater today than any time in the past
and technological changes are responsible for changing the nature of jobs performed at all levels in
the organisation".

For example, the substitution of computer control for direct supervision is resulting in wider spans of
control for managers and flatter organisations.

Globalization:
The global economy means competitors are likely to come from across the ocean.
The power players in the global market are the multinational and trans- national organisations.
This has led companies to think globally.
There are no longer any mental distinctions between domestic and foreign operations.

Globalization of an organisation means rethinking the most efficient ways to use resources,
disseminate and gather information and develop people.

Social and Political Changes: A firm's fate is also influenced by such environmental pressures as
social and political changes.

Many new legal provisions in the corporate sector get introduced every time that affects
organisations.

Workforce Diversity: Related to globalization is the challenge of workforce diversity. Workforce

diversity is a powerful force for change in organisations. The demographic trends contributing to
workforce diversity are
The workforce will see increased participation from females, as the majority of new workers will be
female.
The workforce will be more culturally diverse than ever (part of this is attributable to globalization).
The workforce is aging. There will be fewer young workers and more middle aged workers.

Managing Ethical Behaviour:

Employees face ethical dilemmas in their daily work lives. The need to manage ethical behaviour has
brought about several changes in organisations. Most centre on the idea that an organisation must
create a culture that encourages ethical behaviour.

Society expects organisations to maintain ethical behaviour both internally and in relationship with
other organisations. Ethical behaviour is expected in relationships with customers, environment and
society. These expectations may be informal or they may come in the form of increased legal

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 requirements

Example: For Tata Iron and Steel Company, foreign investors (suppliers of capital) are a new force
for change. In the past, Tata emphasized the creation of jobs in its community of Jamshedpur, a city
in eastern India.

Tata’s 78,000 workers receive lifetime employment, along with free housing, education and medical
care. The company, in turn has benefited from a complete lack of strikes in 60 years.
But investors interested in Tata have asked how the company might improve its profit margin of only
3.7 percent. (Note: Tata’s managing director Jamshed Irani, “We will now be forced to balance
loyalty against productivity).

Internal Forces: Besides reacting to or anticipating changes on the outside, an organisation may
change because someone on the inside thinks a new way of doing things will be beneficial or even
necessary.

Pressures for change that originate inside the organisation are generally recognizable in the form of
signals indicating that something needs to be altered.

These internal forces are discussed below:

Changes in Managerial Personnel:

One of the most frequent reasons for major changes in an organisation is the change of executives at
the top. No two managers have the same styles, skills or managerial philosophies.

Managerial behaviour is always selective so that a newly appointed manager might favour different
organisational design, objectives procedures and policies than a predecessor. Changes in the
managerial personnel are thus a constant pressure for change.

Declining Effectiveness:

Declining effectiveness is a pressure to change. A company that experiences losses is undoubtedly

motivated to do something about it.

Some companies react by instituting layoffs and massive cost cutting programmes, whereas others
view the loss as symptomatic of an underlying problem, and seek out the cause of the problem.

Changes in work climate:

Changes in the work climate at an organisation can also stimulate change.

A workforce that seems lethargic, unmotivated, and dissatisfied is a symptom that must be addressed.
This symptom is common in organisations that have experienced layoffs. Workers who have escaped
a layoff may find it hard to continue to be productive. They may fear that they will be laid off as well
and may feel insecure in their jobs.

Deficiencies in the Existing System: Another internal pressure for organisational change is the
loopholes in the system. These loopholes may be unmanageable spans of control, lack of

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 coordination between departments, lack of uniformity in politics, non-cooperation between line and
staff etc.
Crisis: A crisis also may stimulate change in an organisation; strikes or walkouts may lead
management to change the wage structure.

The resignation of a key decision maker is one crisis that causes the company to rethink the
composition of its management team and its role in the organisation.

Employee Expectations:
Changes in employee expectations also can trigger change in organisations. These forces may be:
Employees' desire to share in decision-making.
Employees' demand for effective organisational mechanism.
Higher employee expectation for satisfying jobs and work environment.
Employees' desire for higher wages.

Forms of Change
Change has become the norm in most organisations. Adaptiveness, flexibility and responsiveness are
terms used to describe the organisations that will succeed in two basic forms of change in
organisations that will succeed in meeting the competitive challenges that businesses face.

There are two basic forms of change in organizations:

Planned change and unplanned change

Planned Change: Planned change is change resulting from a deliberate decision to alter the
organisation.
It is an intentional, goal-oriented activity. The goals of planned change are:
First, it seeks to improve the ability of the organisation to adapt to changes in its environment.
Second, it seeks to change the behaviour of its employees.
The Role of Change Agents: Change in organisations is inevitable, but change is a process that can be
managed.
The individual or group that undertakes the task of introducing and managing a change in an
organisation is known as a change agent. Change agents can be of two types:
Internal Change Agents: Change agents can be internal, such as managers or employees who are
appointed to oversee the change process.

Internal change agents have certain advantages in managing the change process. They are:
They know the organisation's past history, its political system, and its culture.
Internal change agents are likely to be very careful about managing change because they must live
with the results of their change efforts.
There are also disadvantages of using internal change agents. They are:
They may be associated with certain factions within the organisation and may easily be accused of
favouritism.
Internal change agents may be too close to the situation to have an objective view of what needs to be
done.

External Change Agents: Change agents can also be external, such as outside consultants. They
bring an outsider's objective view to the organisation.
External change agents have certain advantages:

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 They may be preferred by employees because of their impartiality.
They have more power in directing changes if employees perceive the change agents as being
trustworthy, possessing important expertise, and having a track record that establishes credibility.
There are also disadvantages of using external change agents. They are:
External change agents face certain problems, including their limited knowledge of the organisation's
history.
They may be viewed with suspicion by organisation members.

Resistance to Change
As the manager contemplates and initiates change in the organisation, one phenomenon that is quite
likely to emerge anytime in the change process is the resistance to change. People often resist change
in a rational response based on self-interest.
Resistance to change doesn't necessarily surface in standardized ways. Resistance can be overt,
implicit, immediate, or deferred. It is easiest for management to deal with resistance when it is overt
and immediate. The greater challenge is managing resistance that is implicit or deferred

Education and Communication: Communication about impending change is essential if employees

are to adjust effectively. The details of the change should be provided, but equally important is the
rationale behind the change

Participation: It is difficult for individuals to resist a change decision in which they participated.
Prior to making a change, those opposed can be brought into the decision process. When employees
are allowed to participate, they are more committed to the change.
Empathy and Support: Another strategy for managing resistance is providing empathy and support to
employees who have trouble dealing with the change. Active listening is an excellent tool for
identifying the reasons behind resistance and for uncovering fears. An expression of concerns about
the change

Negotiation: Another way to deal with potential resistance to change is to exchange something of
value for a lessening of the resistance. Where some persons in a group clearly lose out in a change,
and where groups have considerable power to resist, negotiation and agreements are helpful. It
becomes relatively easy to avoid major resistance through negotiation. Negotiation as a tactic may be
necessary when resistance comes from a powerful source.

Manipulation and Co-optation: Manipulation refers to covert influence attempts. Twisting and
distorting facts to make them appear more attractive, withholding undesirable information and
creating false rumours to get employees to accept a change are all examples of manipulation. It
involves giving individuals a desirable role in design or implementation of change.

Task
Suggest three measures to handle resistance to change in an organisation which employs people
usually in their 40s.

Coercion: Coercion is the application of direct threats or force on the resisters. They essentially force
people to accept a change by explicitly or implicitly threatening them with the loss of their jobs,
promotion possibilities and transferring them. Coercion is mostly applied where speed is essential in
implementing change and the change initiator possesses considerable power.

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 Steps in the Change Process
 Unfreezing: The process begins with unfreezing, which is a crucial first hurdle in the change
process.
 'Unfreezing' means melting resistance to change; the people who will be affected by the
change come to accept the need for it.
 People tend to resist change because it increases anxiety and stress, and it may threaten their
self-interests.
 Unfreezing involves encouraging individuals to discard old behaviours by shaking up the
equilibrium state that maintains the status quo.
 Change or moving: If unfreezing succeeds, people want to make a change, but they still need
to see a path to a better state. In the moving stage, new attitudes, values and behaviours are
substituted for old ones.
 Organisations accomplish moving by initiating new options and explaining the rationale for
the change, as well as by providing training to help employees develop the new skills needed.
 The transformation stage requires altering one or more characteristics of the work setting:
 The structure and systems of the organisation;
 Social factors – characteristics of employees, the way they interact, the organisational
culture;

 (c) The organisation's technology and/or

 (d) The physical setting.

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  The implication is that changes in the work setting will lead to changes in individual
behaviour, which in turn will improve the organisation's outcomes.
 Refreezing: For the change to endure, it must be reinforced as part of a new system. Lewin
calls this step 'refreezing'. Refreezing is the final step in the change process. In this step, new
attitudes, values and behaviours are established as the new status quo. In some cases, the
people affected by the change will clearly benefit from it

Stress Management

Definitions, Understanding Stress, Relation between Stress and Performance, Level, Signs and
Symptoms of Stress, Types of Stress, Causes of Stress, Managing Stress.

Ivancevich and Matteson define stress simply as “the interaction of the individual with the
environment”.

They give a more detailed definition of stress as “an adaptive response, motivated by individual
differences and/or psychological processes that are a consequence of any external (environmental)
action, situation, or event that places excessive psychological and/or physical demands on a person”.
Causes of Stress
Let us examine the causes of stress now. The factors contributing to stress are called stressors.
Stressors exist in the environment and they make a physical or emotional demand on the person.
Stressors emanate from both within the organization and outside which can be classified as external
stressors, organizational stressors, group stressors and individual stressors

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 External Stressors

In the analysis of job stress, we tend to ignore outside forces or events.

In fact, they have a greater impact on stress. Quite often, we experience plenty of stress situations
outside the organizational settings.
External stressors stem from societal changes, globalization, family economic conditions, relocation,
race, religion and community conditions.

Organizational Stressors
In the physical environment of an organization, you find stressors
in the form of high temperature, excessive noise, lack of privacy, poor
lighting, safety hazards and poor quality of air. A study observed that in a
noisy plant, level of stress significantly decreased when they were supplied with ear protectors.

Group Stressors

As you are aware, within an organization, there are several groups that function at different levels.
A number of stressors arise at group levels which are discussed below.
Lack of Group Cohesiveness:

Cohesiveness means “togetherness”. Employees should remain a cohesive group.

If the cohesiveness does not exist among employees, it may lead to job stress. Cohesiveness of the
group may be lost because of the task
design, or animosities of group members, or the supervisor trying to limit it.
Lack of Social Support:

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 Employees have different social groups for different purposes.
These play an important role in extending support to an employee.
By sharing their joy and sorrow with others, they feel comfortable and happy. In the
absence of this kind of mutual social support, the situations prove to be very stressful.

Interpersonal Stressors
Interpersonal stressors like group competition, ineffective supervision, office politics, and other
conflicts are many in the organizations.
The more an employee is required to interact with other people, the more is the scope for stress.
As you are aware, in banks and call centers, the employees experience a lot of stress because of the
uncooperative customers and high targets to be achieved

Individual Stressors
At individual level, there are many factors that contribute
to stress, most of which are role related. Role related stressors include
conditions where employees have difficulty in understanding, reconciling,
or performing the various roles in their lives. The four main role-related
stressors are role conflict, role ambiguity, workload, and task control

Role Conflict
Role conflict occurs when people face competing demands. Interrole
conflict exists when employees have two roles to play which are
conflicting. For example, people in supervisory cadre in organizations face
this kind of conflict as they have to meet the expectations of management
on the one hand and the expectations of workers on the other

Role Ambiguity
Role ambiguity exists when employees are uncertain about their
job duties, performance expectations, level of authority, and other job conditions.
This ambiguity tends to occur when people enter new situations like joining as a manager in an
organization accepting a foreign assignment.
This is because they are uncertain about task and social expectations that go with the new positions.
Workload
Workload is a well-known job stressor.
But you remember that work under-load, receiving too little work or having tasks that do not
sufficiently use your talents, is also a possible stressor.
Now -a-days, employees have either too much to do in too little time, or they work too many hours
on the job. Long work hours may lead to unhealthy lifestyles, which, in turn, cause heart disease,
back pain or eye sight.
For instance, work overload is a problem in most of the software organizations in India

Occupational Differences and Stress

Several studies have attempted to identify which jobs have more

stressors than others. You may note that one problem with rating
occupations in terms of their stress levels is that a particular occupation
may have considerably different tasks and job environments in different
organizations and societies. The job of a police officer may be less stressful

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 in a small town than in a large city where crime rates are higher and the
organizational hierarchy is more formal.

Individual Differences and Stress

You have already understood that individuals differ in their personality characteristics.

These differences determine the stress levels experienced by the people.

Two people may be exposed to the same sources of stress like meeting a deadline for achieving a
goal.
However, in terms of stress levels they may be different

Individual Differences and Stress

You have already understood that individuals differ in their
personality characteristics. These differences determine the stress levels
experienced by the people. Two people may be exposed to the same sources
of stress like meeting a deadline for achieving a goal. However, in terms of
stress levels they may be different

Psychological Consequences
Stress results in various psychological consequences like job
dissatisfaction, moodiness, and depression. Emotional fatigue is another psychological consequence
of stress which is called job burnout.

Job Burnout
Burnout is the process of emotional exhaustion, depersonalization,
and reduced personal accomplishment resulting from prolonged exposure
to stress. The term “job burnout” was not known 50 years ago; but it’s a much talked about
phenomenon these days.

Managing Work-Related Stress

In managing work related stress, both the organization and the
employees have joint responsibility. Stress management often includes
several strategies. These are shown in the following diagram

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 Remove the Stressor

• An important way companies can effectively manage stress is by

• removing the stressors that cause unnecessary tension and job burnout.

• Other stress management strategies may keep employees. “Stress-fit”, but

• they don’t solve the fundamental causes of stress

Family-Friendly and Work-Life initiatives

• The most common work-life balance initiatives are flexible work

• time, job sharing, telecommuting, personal leave programs, and childcare

• support. Many firms have flexible timings with regard to the hours, days,

• and amount of time employees want to work

Withdraw from the stressor

• Removing the stressor may be an ideal solution, but that is not always possible.

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 • An alternative strategy is to permanently or temporarily take employees away
from the stressor.

• Permanent withdrawal occurs when employees are transferred to other jobs.

Change stress perceptions

• You have earlier learnt that employees experience different levels

• of stress in the same situation because of their perceptual differences.

• Therefore, changing perceptions of the situation can minimize stress

Control the consequences of stress

• Managing workplace stress also involves controlling its

• consequences. Research studies show that physical exercise reduces the

• physiological consequences of stress by helping employees lower their

• respiration, muscle tension, heartbeat and stomach acidity.

Employee Assistance Programmes

• Now-a-days many large firms offer employee assistance

• programs in the form of counseling services that help employees

• overcome personal or organizational stressors and adopt more effective

• coping mechanisms. Personal problems and family problems are solved

• through these programs

Receive Social Support

• Receiving social support from co-workers, supervisors, family,

• friends, and others is one of the more effective stress management

• strategies. Social support refers to the person’s interpersonal transactions

• with others and involves providing either emotional or informational

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 • support to buffer the stress experience.

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