Lesson-1

Evolution of Organizational Behavior

Nature of Organizational Behavior

Learning Objectives
• To define organizational behavior
• To identify major challenges and opportunities for managers to use OB
concepts
• To identify the contributions made by major behavioral science disciplines to
OB
• To explain various approaches to the study of OB
• To identify and explain the OB model
Evolution of Organizational Behavior
Let us try to understand term organizational behavior. Organizational behavior-- it is
made out of two words “organization” and “behavior.”
What is an organization?
We can define the term organization as two or more individuals who are interacting
with each other within a deliberately structured set up and working in an
interdependent way to achieve some common objective/s.
Organizations play a major role in our lives. We possibly cannot think of a single
moment in our lives when we are not depending on organizations in some form or the
other. Right from the public transport that you use to come to your institute, the
institutes itself, the class you are attending at this moment, are all examples of
organizations.

What is Behavior?
Is it the behavior of Organization or the Behavior of the people who are working in
the organization?
It is the behavior of the people working in an organization to achieve common goals
or objectives. Organization comprises of people with different attitudes, cultures,
beliefs, norms and values.
So let us understand organizational behavior and what it exactly it means.
“Organizational Behavior” can be defined as the study of what people think, feel, and
do in and around organizations. The study of Organizational Behavior facilitates the
process of explaining, understanding, predicting, maintaining, and changing employee
behavior in an organizational setting.
The value of organizational behavior is that it isolates important aspects of the
manager’s job and offers specific perspective on the human side of management:
• People as organizations,
• People as resources,
• People as people
In other words, it involves the understanding, prediction and control of human
behavior and factors affecting their performance and interaction among the
organizational members. And because organizational behavior is concerned
specifically with employment – related situations, you should not be surprised to find

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that it emphasizes behavior as related to concerns such as jobs, work, absenteeism,
employment turnover, productivity, human performance and management

Nature of Organizational Behavior (OB)

Organizational behavior is an applied behavioral science that is built on contributions
from a number of behavioral disciplines such as psychology, sociology, social
psychology, anthropology and economics.
So now students lets see how these disciplines are related to organizational behavior,
• 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.
• 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.
• Social psychology
Social psychology is the study of human behavior 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.
• Anthropology
Anthropology is the science of mankind and the study of human behavior 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 behavior 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.
• Economics
Any organization to survive and sustain must be aware of the economic viability of
their effort. This applies even to the non-profit and voluntary organizations as well.
• 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.
The following figure depicts to highlight the interdisciplinary nature of organizational
behavior.

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Lesson:-2
Personality and its theories
Welcome students to your today’s lesson on Personality. In our earlier section we have
appreciated the need for understanding the individual factors like personality to appreciate and
comprehend one’s behaviour in the context of organizations. In the following section we will
learn the nature of personality, the determinants of personality, and will review various theories
of personality.
In organizations, does personality matter? Ask that question of anybody who has spent any time in
organizations or teams, and, intuitively, most will respond in the affirmative. Frequently, people will be
more than willing to cite examples of how personalities have affected team performances or how
personalities made life in an organization unbearable (or, an enjoyable experience). Personalities, in a
study of organizational behavior do matter.
So, what is personality? The word personality comes from the Latin root persona, meaning "mask."
According to this root, personality is the impression we make on others; the mask we present to the
world
Personality is defined as "a unique set of traits and characteristics, relatively stable over time." Clearly,
personality is unique insofar as each of us has our own personality, different from any other person's.
The definition further suggests that personality does not change from day to day. Over the short-term,
our personalities are relatively set or stable. However, definition does not suggest that personality is
somehow rigid, unchangeable, and cast in concrete. Definition recognizes that, over a longer term,
personality may change.
To examine whether this change is indeed consistent with most peoples' reality, we ought to examine
"where personality comes from"; what are the origins of personality?

THE ORIGINS OF PERSONALITY: THE NATURE-NURTURE DEBATE

For psychologists studying the development of personality, "nature vs. nurture" was a central debate.
"Nature vs. nurture" suggests that biology (a person's genes) and society (the environment in which a
person grows up) are competing developmental forces. In the past, the debate sought to find whether
one may be more important than the other. Today most psychologists would concede both nature and
nurture are necessary for personality development. Both help to make us who we are.
Determinants of Personality Several factors influence the shaping of our personality. Major among
these are
1. Heredity,
2. Culture,
3. Family Background,
4. Our Experiences through Life,
5. And The People we interact with.

There are some genetic factors that play a part in determining certain aspects of what we tend to
become. Whether we are tall or short, experience good health or ill health, are quickly irritable or
patient, are all characteristics which can, in many cases, be traced to heredity. How we learn to handle
others' reactions to us (eg.our appearance) and the inherited traits can also influence how our
personality is shaped.

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Culture:
The culture and the values we are surrounded by significantly tend to shape our personal values and
inclination. Thus, people born in different cultures tend to develop different types of personalities
which in turn significantly influence their behaviours. India being a vast country with a rich diversity of
cultural background provides a good study on this. For example, we have seen that people in Gujarat
are more enterprising than people from other states, Punjabees are more diligent and hardworking,
people from Bengal are more creative and with an intellectual bend and the likes.
Family Background:
The socio-economic status of the family, the number of children in the family and birth order, and the
background and education of the parents and extended members of the family such as uncles and aunts,
influence the shaping of personality to a considerable extent.
First-borns usually have different experiences, during childhood than those born later; Members in the
family mould the character of all children, almost from birth, in several ways -by expressing and
expecting their children to conform to their own values, through role modeling, and through various
reinforcement strategies such as rewards and punishments which are judiciously dispensed. Think of
how your own personality has been shaped by your family background and parental or sibling
influences!
Experiences in Life: Whether one trusts or mistrusts others, is miserly or generous, have a high or low
self esteem and the like, is at least partially related to the past experiences the individual has had.
Imagine if someone came to you and pleaded with you to lend him Rs. 100 which he promised to return
in a week's time, and you gave it to him even though it was the last note you had in your pocket to
cover the expenses for the rest of that month. Suppose that the individual never again showed his face
to you and you have not been able to get hold of him for the past three months. Suppose also that three
such incidents happened to you with three different individuals in the past few months. What is the
probability that you would trust another person who comes and asks you for a loan tomorrow? Rather
low, one would think. Thus, certain personality characteristics are moulded by frequently occurring
positive or negative experiences in life.
People We Interact With
"A Person is known by the company he or she keeps" is a common adage. The implication is that
people persuade each other and tends to associate with members who are more like them in their
attitudes and values. Beginning childhood, the people we interact with influence us. Primarily our,
parents and siblings, then our teachers and class mates, later our friends and colleagues, and so on. The
influence of these various individuals and groups shapes our personality. For. Instance, if we are to be
accepted as members of our work group, we have to conform to the values of that group which mayor
may not always be palatable to us; if we don't, we will not be treated as valued members of the group.
Our desire to be a part of the group and belong to it as its member, will compel many of us to change
certain aspects of our personality (for instance, we may have to become less aggressive, more
cooperative, etc.). Thus, our personality becomes shaped throughout our lives by at least some of the
people and groups we interact with.
In summary, our personality is a function of both heredity and other external factors that shape it. It is
important to know what specific personality predispositions influence work behaviors.

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PERSONALITY THEORIES

Traits Theory The traditional approach of understanding personality was to identify and describe
personality in terms of traits. In other words, it viewed personality as revolving around attempts to
identify and label permanent characteristics that describe an individual's behavior.
Popular characteristics or traits include shyness, aggressiveness, submissiveness, laziness, ambition,
loyalty, and timidity. This distinctiveness, when they are exhibited in a large number of situations, are
called personality traits. The more consistent the characteristic and the more frequently it occurs in
diverse situations, the more important that trait is in describing the individual.
Early Search for Primary Traits
Efforts to isolate traits have been stuck because there are so many of them. In one study, as many as
17,953 individual traits were identified. It is virtually impossible to predict behavior when such a large
number of traits must be taken into account. As a result, attention has been directed toward reducing
these thousands to a more manageable number. One researcher isolated 171 traits but concluded that
they were superficial and lacking in descriptive power. What he sought was a reduced set of traits that
would identify underlying patterns. The result was the identification of 16 personality factors by
Cattell, which he called the source, or primary, traits. These 16 traits have been found to be generally
steady and constant sources of behavior, allowing prediction of an individual's behavior in specific
situations by weighing the characteristics for their situational relevance. Based on the answers
individual gave they have been classified as n the basis of the answers individuals give to the test, they
are classified as:
o
1. Extroverted Or Introverted (E Or I),
2. Sensing Or Intuitive (S Or N),
3. Thinking Or Feeling (T Or F), And
4. Perceiving Or Judging (P Or J).

These classifications are then combined into 16 personality types.

To illustrate, let's take several examples.
Measures of Personality
Can Personality be measured?
If we wish to measure the current in a electric circuit, we can insert an ammeter into the circuit. If we
wish to measure the weight of some substance, we simply place that substance on scales designed to
measure weight. What about personality? Unfortunately, we cannot directly "measure" personality. But
if we cannot directly observe the seemingly unconscious, how do we know it exists?
The answer to the question lies in the fact that we can, in fact, directly observe behaviors. As students
of human behavior, we are then left to infer personality from the behaviors it manifests.
Psychologists thus use behavioral indicators in constructing projective tests. These tests are designed to
draw conclusions about personality from observed behaviors.
There are various standard tests and scales available to measure personality. In the following section
we will be describing a few of these.
Thematic Apperception Test (TAT) :It is a projective test that offers more validity. The TAT consists
of drawings or photographs of real-life situations. People taking the test are instructed to construct
stories based on these images, and trained raters then score the recorded story for predefined themes.
Psychologists assume that the stories people tell reflect the unconscious.
Myers-Briggs Types Indicator (MBTI) was originally developed by a mother & daughter team which
have the following components.
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INTJs are visionaries.
They usually have original minds and great drive for their own ideas and purposes. They are
characterized as skeptical, critical, independent, determined, and often stubborn.
ESTJs are organizers. They are realistic, logical, analytical, decisive, and have a natural head for
business or mechanics.
They like to organize and run activities.
The ENTP type is conceptualizer.
He or she is pioneering, individualistic, versatile, and attracted to entrepreneurial ideas. This person
tends to be resourceful in solving challenging problems but may neglect routine assignments. A recent
book that profiled 13 contemporary businesspeople who created super successful firms including Apple
Computer, Federal Express, Honda Motors, Microsoft and Sony found that all 13 are intuitive thinkers
(NTS).lZ
This result is predominantly interesting because intuitive thinkers represent only about 5 percent of the
population. More than 2 million people a year take the MBTI in the United States alone. Organizations
using the MBTI include Apple Computer, AT&T, Citicorp, Exxon, GE, 3M Co., plus many hospitals,
educational institutions, and even the U.S. Armed Forces.
The Big Five Model
MBTI may be deficient in valid supporting evidence, but that can't be said for the five-factor model of
personality 'more typically called the Big Five.
In contemporary, an impressive body of research supports that five basic dimensions. motivate all
others and encompass most of the significant variation in human personality .
The Big Five factors are:
• Extraversion. This dimension captures one's comfort level with relation ships. Extraverts tend to
be gregarious, assertive, and sociable. Introverts tend to be reserved, timid, and quiet.
• Agreeableness. This dimension refers to an individual's tendency to defer to others. Highly
agreeable people are cooperative, affectionate, and trusting. People who score low on
agreeableness are cold, disagreeable, and antagonistic.
• Conscientiousness. This dimension is a measure of reliability. A highly conscientious person is
responsible, organized, dependable, and persistent. Those who score low on this dimension are
easily distracted, disorganized, and unreliable.
• Emotional stability. This dimension taps a person's ability to bear up stress. People with positive
emotional stability tend to be calm, self-confident, and secure. Those with highly negative
scores tend to be nervous, anxious,

Depressed, and insecure.

• Openness to experience. The final dimension addresses an individual's range of interests and
fascination with novelty. Extremely open people are creative, curious, and artistically sensitive.
Those at the other end of the open- ness category are conventional and find comfort in the
familiar.

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Lesson:-3

Perception and Person perception

Learning Objectives
Dear students after going through this chapter, you are expected to be able to understand and interpret
the following:
􀀹The Nature and Importance of Perception

􀀹Perceptual process

􀀹Factors affecting Perception

􀀹Social perception

Attribution theory 􀀹

Perception refers to the way we try to understand the world around us. We gather information through
our five sense organs, but perception adds meaning to these sensory inputs. The process of perception
is essentially subjective in nature, as it is never an exact recording of the event or the situation.

Perception is the process by which we organize and interpret our sensory impressions in order to give
meaning to the environment. As pointed out, a situation may be the same but the interpretation of that
situation by two individuals may be immensely different.

Definition: Perception is the set of processes by which an individual becomes aware of and interprets
information about the environment.

The perceptual process can be depicted simplistically in the following way :

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 Interpretation

S
e

Consequences

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The model of perception helps one to understand the basic processes involved in human perception in
a rather simplistic way. At a point of time, we are flooded with a myriad of stimuli impinging on our
sense organs, like now as you are reading this particular page in front of you, light rays from the page
are reaching your eyes. But these are, by no means, all. Light rays from every possible direction are
also impinging on your retina as well. At the same time you are also receiving a host of auditory
stimuli --- the humming of the air conditioner, some body talking out aloud outside, the rustling of
the papers on your table, etc. Similarly, every sense organs of your body are bombarded with a
number of different stimuli simultaneously. But our brain and the nervous system are not capable of
processing so many pieces of information all together. As it is now happening with you, you are, in
all probability, hardly aware of all these sensory inputs reaching you. Thus what happens is that we
only selectively choose from among a host of stimuli and process only those. If we examine the
model above we will find that only those stimuli are given entry to the process of ‘registration’ which
have got adequate attention or have aroused our interest.
Factors affecting perception

Internal Factors
􀀹Sensory Limits and Thresholds : Our sensory organs have specialized nerves which respond
differently to the various forms of energy they receive. For instance, our eyes receive and convert
light waves into electrical energy which are transmitted to the visual cortex of the brain to create
the sensation of vision and subsequently leading to perception. But each sense receptor requires a
minimum level of energy to excite it before perception can take place. The minimum level is
called the absolute threshold – a point below which we do not perceive energy. The differential
threshold is the smallest amount by which two similar stimuli must be different in order to be
perceived as different.

􀀹Psychological Factors : Psychological factors such as personality, past experiences and learning
and motives affect an individual’s perceptual process to considerable extent. The internal set or
the inclination to perceive certain stimuli in a particular way also influences one’s perception.
These largely determine why people select and attend to a particular stimulus or situation over
other. Things compatible to one’s learning, interest, attitude and personality are likely to get more
attention than others. As you must have noticed, a person who is sitting aloof from your group in
a far away corner, automatically turn to your direction the moment you utter his name. Similarly,
if you happen to hear the word ‘management’ or ‘organizational behaviour’ while traveling in a
public transport, your attention is surely going to the conversation. This happens because of one’s
strong association (with one’s own name) or the current interest in the topics. Likewise, one’s
expectancy can affect and even distort one’s perception. We hardly rely too much on pure
sensory inputs and perceive the reality in our own subjective way. While hearing a droning sound
high in the sky we point to a fleeting dot and say, ‘Oh! See, that’s an aero plane up there’ where
we virtually see nothing! But on the basis of our past experience, we correctly assume the dot for
an

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aero plane. Sometimes we commit errors in the process as well. Our past learning also affects the
perceptual process and lends a typical orientation in what we perceive. The accountant often
becomes unduly suspicious when he finds a large bill and tends to believe that as an inflated bill.

External Factors
􀀹The Target : The characteristics of the target that is being observed can affect perception. We
have earlier noted (refer to Figure 11.1 above) that a pre-requisite of perception is attention. It
has been found that there is a tendency to give more attention to stimuli which are :

1. Large in size

2. Moving

3. Intense

4. Loud

5. Bright

6. Contrasted

7. Novel

8. Repeated

9. Stand out from the background.

􀀹The Situation : The situation or the context in which we see objects or events is important to
shape our perception. The presence of a policeman near the police station hardly draws any
attention, but if one is found in your classroom will certainly be the topic of the day. The word
‘terminal’ can be perceived quite differently in the context of say, the ICU of a hospital, an
airport or the computer lab.

Person Perception
Our perceptions of people differ from the perceptions of inanimate objects like tables, chairs, books,
pencil, etc. mainly because we are prone to make inferences regarding the intentions of people and
thus form judgment about them. The perceptions and judgments regarding a person’s actions are
often significantly influenced by the assumptions we make about the person’s internal state.
Attribution theory refers to the ways in which we judge people differently, depending on what
meaning we attribute to a given behaviour. Whenever we observe the behaviour of an individual, we
attempt to determine whether it was internally or externally caused. Internally caused behaviours are
those that are believed to be under the personal control of the individual or have been done
deliberately by him. Externally caused behaviour is seen as resulting from outside causes, that is the
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person is seen as having been compelled to behave in a particular way by the force of the situation,
and not because of his own choice. When after repeated requests your friend failed to turn up at the
special old school boys’ meet you might ascribe his absence as a deliberate move on his part, and you
will feel hurt since it appeared that he is quite unconcerned and careless about your feeling. But if
someone now points out about his recent increased responsibilities in the business after his father’s
untimely death and acute time shortage, you tend to condone him as you are now ascribing his
absence to the external factors.
The determination of internally or externally caused behaviour depends chiefly on the following
three factors :
♦ Distinctiveness which refers to whether an individual displays different behaviour at different
situations. If the behaviour (say being late in the class on a particular day) is unusual, we tend to
give the behaviour an external attribution; and if it usual, the reverse.
♦ Consensus refers to the uniformity of the behaviour shown by all the concerned people. If every
one reports late on a particular morning, it is easily assumed that there must be a severe traffic
disruption in the city and thus the behaviour is externally attributed. But if the consensus is low,
it is internally attributed.
♦ Consistency is the reverse of distinctiveness. Thus in judging the behaviour of an individual, the
person looks at his past record. If the present behaviour is consistently found to occur in the past
as well (that is being late at least three times a week), it is attributed as internally caused. In other
words, the more consistent the behaviour, the more the observer is inclined to attribute it to
external causes.

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Figure 11.3 below depicts the attribution theory in short. Observation Interpretation Attribution of
Cause

There are often some errors or biases in our judgment about others. When we make judgment about
other people’s behaviour, we tend to underestimate the influence of external factors and overestimate
the influence of internal or personal factors. This is called fundamental attribution error. Another
noticeable tendency, called self-serving bias, refers to the inclination for individuals to attribute their
own successes to internal factors while putting the blame for failures on external factors.
Self-fulfilling Prophecy or Pygmalion Effect : An interesting aspect of people perception is the fact
that people’s expectations are often found to determine the actual performance level. If a manager
expects an excellent level of performance from his subordinates, chances are quite high that they will
actually reach up to his expectation and will make impossible possible. Surely the contrary is also
true. If you feel your subordinates are a worthless bunch of people, they will only prove the same.
Attributions are found to strongly affect various functions in an organization, e.g. the process of
employee performance evaluations, nature of supervision or guidance or the general attitude towards
the organization in general. As mentioned earlier, we also tend to make various types of errors while
judging others. A few of the frequently committed mistakes are given below :
♦ Selective Perception : People have a tendency to selectively interpret what they see on the basis of
their interests, background, experiences and attitudes. We hardly have either time or inclination
to process all the relevant inputs and we automatically select a few. Naturally chances are there to
miss some important cues in the process. Ex
♦ Halo Effect : It refers to the tendency of forming a general impression about an individual on the
basis of a single characteristic. The smartly dressed guy who is very fluent in English often tends
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 to create a favourable impression on the interviewer even when the job is of an accountant or
engineer, requiring little or no verbal fluency.
♦ Contrast Effect : It refers to the process of rating individuals in the light of other people’s
performance which are close in time frame. You might be rated excellent in your project
presentation if your predecessor makes a mess in his presentation. The case would have been just
the reverse if you were to present just after a superb presentation!
♦ Stereotyping : It is the process of judging someone on the basis of one’s perception of the group to
which that perception belongs to. Common examples include the debate regarding the
effectiveness of a lady doctor or manager or MBA’S from prestigious B’schools.

Lesson:-4
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MOTIVATION & ITS THEORIES
Welcome to today’s lesson on motivation. We have appreciated earlier the importance of
motivation in determining human behaviour . In today’s module we will review the concept of
motivation and various theories of motivation.
Motivation is a process that starts with a physiological or psychological need that activates a
behavior or a drive that is aimed at a goal.
Every employee is expected to show increased and qualitative productivity by the manager. To
achieve this the behavior of the employee is very important. The behavior of the employees is
influenced by the environment in which they find themselves. Finally, an employee's behavior will
be a function of that employee's innate drives or felt needs and the opportunities he or she has to
satisfy those drives or needs in the workplace

If employees are never given opportunities to utilize all of their skills, then the employer may never
have the benefit of their total performance. Work performance is also contingent upon employee
abilities. If employees lack the learned skills or innate talents to do a particular job, then performance
will be less than optimal. A third dimension of performance is motivation.

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“Motivation is the act of stimulating someone or oneself to get desired course of action, to push right
button to get desired reactions.”
The following are the features of motivation :

• Motivation is an act of managers

• Motivation is a continuous process

• Motivation can be positive or negative

• Motivation is goal oriented

• Motivation is complex in nature

• Motivation is an art

• Motivation is system-oriented

• Motivation is different from job satisfaction

MOTIVATIONAL FACTORS
There are several factors that motivate a person to work. The motivational factors can be broadly
divided into two groups:

I. MONETARY FACTORS:

􀂙Salaries or wages: Salaries or wages is one of the most important motivational

factors. Reasonable salaries must be paid on time. While fixing salaries the
organization must consider such as : • Cost of living
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 • Company ability to pay

• Capability of company to pay etc,

􀂙Bonus: It refers to extra payment to employee over and above salary given as an
incentive. The employees must be given adequate rate of bonus.

􀂙Incentives:The organization may also provide additional incentives such as medical

allowance, educational allowance, hra ,allowance, etc.

􀂙Special individual incentives: The company may provide special individual

incentives. Such incentives are to be given to deserving employees for giving
valuable suggestions.

II. NON MONETARY FACTORS:

􀂙Status or job title: By providing a higher status or designations the employee must be
motivated. Employees prefer and proud of higher designations.

􀂙Appreciation and recognition: Employees must be appreciated for their services. The
praise should not come from immediate superior but also from higher authorities.

􀂙Delegation of authority: Delegation of authority motivates a subordinate to perform

the tasks with dedication and commitment. When authority is delegated, the
subordinate knows that his superior has placed faith and trust in him.

􀂙Working conditions : Provision for better working conditions such as air-conditioned

rooms, proper plant layout, proper sanitation, equipment, machines etc, motivates the
employees.

􀂙Job security: Guarantee of job security or lack of fear dismissal, etc can also be a
good way to motivate the employees. Employees who are kept temporarily for a long
time may be frustrated and may leave the organization.

􀂙Job enrichment: Job enrichment involves more challenging tasks and responsibilities.
For instance an executive who is involved in preparing and presenting reports of
performance, may also asked to frame plans.

􀂙Workers participation: Inviting the employee to be a member of quality circle, or a

committee, or some other form of employee participation can also motivate the work-
force.

􀂙Cordial relations: Good and healthy relations must exist throughout the organization.
This would definitely motivates the employees.

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 􀂙Good superiors: Subordinates want their superiors to be intelligent, experienced,
matured, and having a good personality. In fact, the superior needs to have superior
knowledge and skills than that of his subordinates. The very presence of superiors
can motivate the subordinates.

􀂙Other factors: There are several other factors of motivating the employees:

• Providing training to the employees.

• Proper job placements.

• Proper promotions and transfers.

• Proper performance feed back.

• Proper welfare facilities.

• Flexible working hours.

Need and importance of motivation

Motivation offers several importance to he organization and to the employees:

􀂙Higher efficiency

􀂙Reduce absenteeism.

􀂙Reduces employee turn over.

􀂙Improves a corporate image.

􀂙Good relations.

􀂙Improved morale.

􀂙Reduced wastages and breakages.

􀂙Reduced accidents.

􀂙Facilitates initiative and innovation.

Money as a motivator
It is normally believed that money acts as a motivator. In general the role of money as a motivator
depends upon certain factors:

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 􀂙Money fails to motivate people, when there is no direct relationship between reward and
effort.

􀂙Economic conditions of people influence the Importance of money. For poor person, the
value of certain amount of money is quite high as compared to rich.

􀂙Money is a significant motivator at lower level of employees level however money may not
be a significant factor for senior executives who have already fulfilled their lower level
needs.

􀂙Employees are concerned not only wih the amount of money paid to them, but it should be
fair and equitable as paid to that of othe employees of same level or status.

􀂙Social attitudes towards money and wealth also decides the motivation to earn more and
more.

Motivational Theories:

Maslow’s-Hierarchy of Needs Theory: This theory was proposed by Abraham Maslow and is based
on the assumption that people are motivated by a series of five universal needs. These needs are
ranked, according to the order in which they influence human behavior, in hierarchical fashion
• Physiological needs are deemed to be the lowest- level needs. These needs include the needs
such as food & water .
o So long as physiological needs are unsatisfied, they exist as a driving or motivating
force in a person's life. A hungry person has a felt need. This felt need sets up both
psychological and physical tensions that manifest themselves in overt behaviors
directed at reducing those tensions (getting something to eat). Once the hunger is
sated, the tension is reduced, and the need for food ceases to motivate. At this point
(assuming that other physiological requirements are also satisfied) the next higher
order need becomes the motivating need.
• Thus, safety needs -- the needs for shelter and security -- become the motivators of human
behavior.
o Safety needs include a desire for security, stability, dependency, protection, freedom
from fear and anxiety, and a need for structure, order, and law.. In the workplace this
needs translates into a need for at least a minimal degree of employment security; the
knowledge that we cannot be fired on a whim and that appropriate levels of effort and
productivity will ensure continued employment.
• Social needs include the need for belongingness and love.

o Generally, as gregarious creatures, human have a need to belong. In the workplace, this
need may be satisfied by an ability to interact with one's coworkers and perhaps to be
able to work collaboratively with these colleagues.
• After social needs have been satisfied, ego and esteem needs become the motivating needs.

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 o Esteem needs include the desire for self-respect, self-esteem, and the esteem of others.
When focused externally, these needs also include the desire for reputation, prestige,
status, fame, glory, dominance, recognition, attention, importance, and appreciation. •

The highest need in Maslow's hierarchy is that of self-actualization; the need for self-
realization, continuous self-development, and the process of becoming all that a person is
capable of becoming.

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Alderfer's Hierarchy of Motivational Needs : Clayton Alderfer reworked Maslow's Need
Hierarchy to align it more closely with empirical research. Alderfer's theory is called the ERG
theory -- Existence, Relatedness, and Growth.
• Existence refers to our concern with basic material existence requirements; what Maslow called
physiological and safety needs.
• Relatedness refers to the desire we have for maintaining interpersonal relationships; similar to

Maslow's social/love need, and the external component of his esteem need .
• Growth refers to an intrinsic desire for personal development; the intrinsic component of
Maslow's esteem need, and self-actualization

Alderfer's ERG theory differs from Maslow's Need Hierarchy insofar as ERG theory demonstrates
that more than one need may be operative at the same time. ERG theory does not assume a rigid
hierarchy where a lower need must be substantially satisfied before one can move on.
Alderfer also deals with frustration-regression. That is, if a higher-order need is frustrated, an
individual then seeks to increase the satisfaction of a lower-order need.
According to Maslow an individual would stay at a certain need level until that need was satisfied.
ERG theory counters by noting that when a higher- order need level is frustrated the individual’s
desire to increase a lower- level need takes place. Inability to satisfy a need for social interaction, for
instance, might increase the desire for more money or better working conditions. So frustration can
lead to a regression to a lower need.
In summary, ERG theory argues, like Maslow, that satisfied lower- order needs lead to the desire to
satisfy higher-order needs; but multiple needs can be operating as motivators at the same time, and
frustration in attempting to satisfy a higher- level need can result in regression to a lower- level need.

21
22
Two-factor Theory: Herzberg's Two Factor Theory, also known as the Motivation-Hygiene
Theory, was derived from a study designed to test the concept that people have two sets of needs:
1. their needs as animals to avoid pain
2. their needs as humans to grow psychologically

Herzberg’ study

Herzberg's study consisted of a series of interviews that sought to elicit responses to the questions:

(1) Recall a time when you felt exceptionally good about your job. Why did you feel that way
about the job? Did this feeling affect your job performance in any way? Did this feeling have an
impact on your personal relationships or your well- being?
(2) Recall a time on the job that resulted in negative feelings? Describe the sequence of events
that resulted in these negative feelings.

23
Research Resultlts : it appeared from the research, that the things making people happy on the job
and those making them unhappy had two separate themes.
1)SATISFACTION (MOTIVATION): Five factors stood out as strong determiners of job
satisfaction:
• achievement

• recognition

• work itself

• responsibility

• advancement

The last three factors were found to be most important for bringing about lasting changes of attitude.
It should be noted, that recognition refers to recognition for achievement as opposed to recognition in
the human relations sense.
2)DISSATISFACTION (HYGIENE): The determinants of job dissatisfaction were found to be:

• company policy

• administrative policies

• supervision

• salary

• interpersonal relations

• working conditions

From the results Herzberg concluded that the replies people gave when they felt good
about their jobs were significantly different from the replies given when they felt bad.
Certain characteristics tend to be consistently related to job satisfaction and others to
job dissatisfaction. Intrinsic factors, such as work itself , responsibility and
achievement seem to be related to job satisfaction. Respondents who felt good about
their work tended to attribute these factors to themselves. On the other dissatisfied
respondents tended to cite extrinsic factors such as supervision, pay, company
policies and working condition. Herzberg proposed that his findings indicated the
existence of a dual continuum: the opposite of “satisfaction” is “ No satisfaction” and
the opposite of “Dissatisfaction” is “No Dissatisfaction.

According to Herzberg, the factors leading to Job satisfaction are separate and distinct form
those that lead to job dissatisfaction. Therefore, managers who seek to eliminate factors that
can create job dissatisfaction may bring about peace but not necessarily motivation. They will
be placating their workforce rather than motivating them. As a result, conditions surrounding
the job such as quality of supervision, pay , company policies, physical working conditions

24
relations with others and job security were characterized by Herzberg as hygiene factors,
when they’re adequate, people will not be dissatisfied ; neither will they be satisfied. If we
want to motivate people on their jobs, Herzberg suggested emphasizing factors associated
with the work itself or to outcomes directly derived form it, such as promotional
opportunities, opportunities for personal growth, recognition, responsibility and achievement.
These are the characteristics that people find intrinsically rewarding.

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Expectancy Theory
In recent years, probably the most popular motivational theory has been the Expectancy Theory (also
known as the Valence-Instrumentality- Expectancy Theory). Although there are a number of theories
found with this general title, they all have their roots in Victor Vroom's 1964 work on motivation.

ALTERNATIVES AND CHOICES:

Vroom's theory assumes that behavior results from conscious choices among alternatives whose
purpose it is to maximize pleasure and minimize pain. The key elements to this theory are referred
to as Expectancy (E), Instrumentality (I), and Valence (V). Critical to the understanding of the theory
is the understanding that each of these factors represents a belief.

ALTERNATIVES AND C

Vroom's theory suggests that the individual will consider the outcomes associated with various levels
of performance (from an entire spectrum of performance possibilities), and elect to pursue the level
that generates the greatest reward for him or her.

Expectancy: "What's the probability that, if I work very hard, I'll be able to do a good job?"

Expectancy refers to the strength of a person's belief about whether or not a particular job
performance is attainable. Assuming all other things are equal, an employee will be motivated to try
a task, if he or she believes that it can be done. This expectancy of performance may be thought of in
terms of probabilities ranging from zero (a case of "I can't do it!") to 1.0 ("I have no doubt
whatsoever that I can do this job!")

A number of factors can contribute to an employee's expectancy perceptions:

• the level of confidence in the skills required for the task

• the amount of support that may be expected from superiors and subordinates

• the quality of the materials and equipment

• the availability of pertinent information

Previous success at the task has also been shown to strengthen expectancy beliefs.
Instrumentality: "What's the probability that, if I do a good job, that there will be some kind of
outcome in it for me?"
If an employee believes that a high level of performance will be instrumental for the acquisition of
outcomes which may be gratifying, then the employee will place a high value on performing well.
Vroom defines Instrumentality as a probability belief

26
linking one outcome (a high level of performance, for example) to another outcome (a reward).
Instrumentality may range from a probability of 1.0 (meaning that the attainment of the second
outcome -- the reward -- is certain if the first outcome -- excellent job performance -- is attained)
through zero (meaning there is no likely relationship between the first outcome and the second). An
example of zero instrumentality would be exam grades that were distributed randomly (as opposed to
be awarded on the basis of excellent exam performance). Commission pay schemes are designed to
make employees perceive that performance is positively instrumental for the acquisition of money.
For management to ensure high levels of performance, it must tie desired outcomes (positive
valence) to high performance, and ensure that the connection is communicated to employees.
The VIE theory holds that people have preferences among various outcomes. These preferences tend
to reflect a person's underlying need state.
Valence: "Is the outcome I get of any value to me?"
The term Valence refers to the emotional orientations people hold with respect to outcomes
(rewards). An outcome is positively valent if an employee would prefer having it to not having it. An
outcome that the employee would rather avoid ( fatigue, stress, noise, layoffs) is negatively valent.
Outcomes towards which the employee appears indifferent are said to have zero valence.

Valences refer to the level of satisfaction people expect to get from the outcome (as opposed to the
actual satisfaction they get once they have attained the reward).
Vroom suggests that an employee's beliefs about Expectancy, Instrumentality, and Valence interact
psychologically to create a motivational force such that the employee acts in ways that bring pleasure
and avoid pain.
People elect to pursue levels of job performance that they believe will maximize their overall best
interests (their subjective expected utility).`
There will be no motivational forces acting on an employee if any of these three conditions hold:
(1) the person does not believe that he/she can successfully perform the required task
(2) the person believes that successful task performance will not be associated with positively valent
outcomes
(3) the person believes that outcomes associated with successful task completion will be negatively
valent (have no value for that person)

27
McClelland’s Theory of Needs: According to David McClelland, regardless of culture or gender,
people are driven by three motives:
• achievement,

• affiliation, and

• influence.

Since McClelland's first experiments, over 1,000 studies relevant to achievement motivation have
been conducted. These studies strongly support the theory.
• Achievement : The need for achievement is characterized by the wish to take responsibility for
finding solutions to problems, master complex tasks, set goals, get feedback on level of success.
• Affiliation : The need for affiliation is characterized by a desire to belong, an enjoyment of
teamwork, a concern about interpersonal relationships, and a need to reduce uncertainty.
• Power :The need for power is characterized by a drive to control and influence others, a need to
win arguments, a need to persuade and prevail

According to McClelland, the presence of these motives or drives in an individual indicates a

predisposition to behave in certain ways. Therefore, from a manager's perspective, recognizing which
need is dominant in any particular individual affects the way in which that person can be motivated.
Summary: People with achievement motives are motivated by standards of excellence, delineated
roles and responsibilities and concrete, timely feedback. Those with affiliation motives are motivated
when they can accomplish things with people they know and trust. And the power motive is activated
when people are allowed to have an impact, impress those in power, or beat competitors.

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Theory of “X” and Theory of “Y”: Douglas McGregor observed two diametrically opposing view
points of managers about their employees, one is negative called “Theory of X” and one is positive
called “Theory of Y”
a) Theory of X : Following are the assumptions of managers who believe in the “Theory of X” in
regard to their employees.
• Employees dislike work; if possible avoid the same
• Employees must be coerced, controlled or threatened to do the work
• Employees avoid responsibilities and seek formal direction
• Most employees consider security of job, most important of all other factors in the job
and have very little ambition
b) Theory of Y: Following are the assumptions of managers who believe in the “Theory of Y” in
regard to their employees.

• Employees love work as play or rest

• Employees are self directed and self controlled and committed to the organizational
objectives
• Employees accept and seek responsibilities
• Innovative spirit is not confined to managers alone, some employees also possess it.

Theory of X assumes Maslow’s lower level needs dominate in employees. Whereas

Theory of Y, assumes Maslow’s higher level needs dominate in employees.
Goal Setting Theory : Edwin Locke proposed that setting specific goals will improve motivation.
Salient features of this theory are the following:
• Specific goal fixes the needs of resources and efforts
• It increases performance
• Difficult goals result higher performance than easy job
• Better feedback of results leads to better to better performance than lack of feed back.
• Participation of employees in goal has mixed result
• Participation of setting goal, however, increases acceptance of goal and involvements.
• Goal setting theory has identified two factors which influences the performance. These are
given below;
o Goal commitment
o Self efficiency
• Goal commitment: Goal setting theory presupposes that the individual is committed to the goal.
This commitment depends on the following:
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 o Goals are made public
o Individual has an internal locus of control
o Goals are self-set
• Self –Efficiency : Self Efficiency is the belief or self confidence, that he/she is capable of
performing task. Persons with high self-efficiency put up extra-efforts when they face
challenges. In the case of low self-efficiency level they will lessen or even abandon when
meeting challenges.

Reinforcement Theory: This theory focus its attention as to what controls behaviour. In contrast to
goal setting theory, which is cognitive approach focus attention on what initiates behaviour.
Behaviour, as per cognitive approach is initiated by internal events. Reinforcement theory argues that
behaviour is reinforced and controlled by external events. The classical conditioning proposed by
Pavlov which we have already studied in our earlier lessons explains this in a better way.
Equity theory: This theory of motivation centres around the principle of balance or equity. According
to this theory level of motivation in an individual is related to his or her perception of equity and
farness practiced by management. Greater the fairness perceived higher the motivation and vice
versa. In this assessment of fairness, employee makes comparison of input in the job ( in terms of
contribution) with that of outcome (in terms of compensation) and compares the same with that of
another colleague of equivalent cadre.

Lesson:-5
GROUP AND FORMATION OF GROUPS

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Welcome students to the module of Group Behaviour. Up till now we have restricted ourselves to check
the behavior of individuals within the organization. But individuals may sometimes need to work in
groups in the organization. So in this lesson we shall try to understand about group and the influence of
behavior of individuals while working in a group .
So students Consider a collection of people waiting at a bus stop for a series of buses. Do these people
constitute a group?
No! These people are simply that; a collection of people. As a collection of people waiting for buses, they
probably do not interact , they lack cohesion (as they may be heading off in different directions), and,
unless they are somehow huddled together against the rain, they are unlikely to see any commonality of
interest between them.
Defining a group : Two or more people constitute a group if...
1. they have some common purpose or goal...
2. there exists a relatively stable structure -- a hierarchy (perhaps a leader), an established set
of roles, or a standardized pattern of interaction...
3. this collection of people see themselves as being part of that group

So students "Why do groups form?", There are a number of general tendencies within us such as:
The similarity-attraction effect: we like people who are similar to us in some way
Exposure: we like people whom we have been exposed to repeatedly
Reciprocity: we like people who like us
Basking in reflected glory: we seek to associate with successful, prestigious groups
Furthermore, we also tend to avoid individuals who possess objectionable characteristics.
Further more there are number of reasons why people join groups which are as follows;
Affiliation

Humans are by nature gregarious. Groups provide a natural way for people to gather in order to satisfy
their social needs.
Goal achievement

Problems and tasks that require the utilization of knowledge tend to give groups an advantage over
individuals. There is more information in a group than in any one of its members, and groups tend to
provide a greater number of approaches to solving any particular problem

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Power

Individuals gain power in their relationship with their employers by forming unions.
Status

Membership in a particular service clubs or a political body may be seen to confer status on members. So
as to gain that status people join in such groups
Self-esteem

As suggested by Maslow, people have a basic desire for self-esteem. Group membership may nurture
self-esteem. If one belongs to a successful group, the self-esteem of all members may be boosted.
Security

Sometimes individuals need protection from other groups or more powerful individuals -- "there is safety
in numbers". These individuals may seek security in group membership. Neighbors may form a "Block
Watch" group to ensure the security and protection of their neighborhood.
The important characteristics of groups are as follows:
􀀹Social interaction. The members of a group affect each other and there is a definite pattern of
interaction among them.
􀀹Stability. Groups also must possess a stable structure. Although groups can change, which often they
do, there must be some stable relationship that keeps the group members together and functioning as
a unit.
􀀹Common interests or goals. Members of a group must share some common interests or goals that
bind the group together.
􀀹Recognition as being a group. It is not just being together would ensure the formation of a proper
group. The members of the group must also perceive themselves as a group. They must recognize
each other as a member of their group and can distinguish them from nonmembers.

Types of Groups
There can be different types of groups that might exist, which have been depicted in Figure 1 below. The
most common way of distinguishing between groups is to categorizing the groups into formal or
informal groups. Formal groups are deliberately created by the organization in order to help the
organizational members achieve some of the important the organizational goals. The informal groups, in
contrast, develop rather spontaneously among an organization’s members without any direction from the
organizational authorities.

32
There are various types of formal groups that are found in an organization. These are:
􀂙Command group which is determined by the organizational chart depicting the approved formal
connections between individuals in an organization. Examples of command group are Director and
the faculty members in a business school, school principal and teachers, production manager and
supervisors, etc.
􀂙Task groups, comprising some individuals with special interest or expertise, are created by the
organizational authorities to work together in order to complete a specific task. Task groups are often
not restricted to the organizational hierarchy and can be cross functional in nature. Examples of task
group might be people working on a particular project.
􀂙Standing committee is a permanent committee in an organization to deal with some specific types of
problems that may arise more or less on a regular basis. Examples of standing committees include the
standing committee in a university to discuss various academic and administrative issues.
􀂙Task force / ad hoc committee, in contrast, is a temporary committee formed by organizational
members from across various functional areas for a special purpose. Meetings can also come under
this category.

Various types of informal groups are:

􀂙Interest groups are formed when a group of employees band together to seek some common
objectives, like protesting some organizational policy or joining the union to achieve a higher amount
of bonus.
􀂙Friendship groups develop among the organizational members when they share some common
interest like participating in some sports activities or staging the office drama, etc.
􀂙Reference groups are the groups, with which individuals identify and compare themselves. These
could be within the organization when a middle level executive compares himself with the higher
level executive and longs for the perks and benefits enjoyed by the latter. The reference group might
exist outside the organization as well when an individual compares himself with his batch mates
working in other organizations or an ideal group of people he likes to become.

33
Figure 1: Types of Groups
How Groups Are Formed?
Formation of Groups
Two models of group development have been offered by the researchers in the field of social sciences to
explain how groups are formed. These are: a) Five-Stage Model and b) Punctuated Equilibrium Model.
According to the Five-Stage Model of group development, groups go through five distinct stages during
the process of its development. These are as follows :

􀂙Forming is the initial stage of group development when the group members first come in contact
with others and get acquainted with each other. This stage is characterized predominantly by a
feeling of uncertainty among the group members as they now try to establish ground rules and
pattern of relationship among themselves.
􀂙Storming is the next stage that is characterized by a high degree of conflict among the members.
Members often show hostility towards each other and resist the leader’s control. If these conflicts
are not adequately resolved, the group may even be disbanded.
But, usually the group eventually comes in terms with each other and accepts the leadership role at
the end of this stage.
􀂙Norming is the third stage of the group development process during which the group members
become closer to each other and the group starts functioning as a cohesive unit. The group
members now identify themselves with the group and share responsibility for achieving the
desired level of performance of the group. Norming stage is complete when the group members
can set a common target and agree on the way of achieving this.

34
 􀂙Performing is the fourth stage when the group is finally ready to start working. As the group is
now fully formed after resolving their internal conflicts of acceptance and sharing responsibility,
they can now devote energy to achieve its objectives.
􀂙Adjourning is the final stage when the group, after achieving the objectives for which it was
created, starts to gradually dissolve itself.

Many interpreters of the five-stage model have assumed that a group becomes more effective as it
progresses through the first four stages. While this assumption may be generally true, what makes a group
effective is more complex than this model acknowledges. Under some conditions, high levels of conflict
are conducive to high group performance. So we might expect to find situations in which groups in Stage
II outperform those in Stages III or IV. Similarly, groups do not always proceed clearly from one stage to
the next. Sometimes, in fact, several stages go on simultaneously, as when groups are storming and
performing at the same time. Groups even occasionally regress to previous stages. Therefore, even the
strongest proponents of this model do not assume that all groups follow its five-stage process precisely or
that Stage IV is always the most preferable.

Another problem with the five-stage model, in terms of understanding work- related behavior, is that it
ignores organizational context.4 For instance, a study of a cockpit crew in an airliner found that, within
10 minutes, three strangers as- signed to fly together for the first time had become a high-performing
group. What allowed for this speedy group development was the strong organizational context
surrounding th~ tasks of the cockpit crew. This context provided the rules, task definitions, information,
and resources needed for the group to per- form. They didn't need to develop plans, assign roles,
determine and allocate re- sources, resolve conflicts, and set norms the way the five-stage model predicts.

An Alternative Model: For Temporary Groups With Deadlines

Temporary groups with deadlines don't seem to follow the previous model. Studies indicate that they have
their own unique sequencing of actions (or inaction): (1) Their first meeting sets the group's direction; (2)
this first phase of group activity is one of inertia; (3) a transition takes place at the end of this first phase,
which occurs exactly when the group has used up half its allotted time; (4) a transition initiates major
changes; (5) a second phase of inertia follows the transition; and (6) the group's last meeting is
characterized by markedly accelerated activity . This pattern is called the punctuated equilibrium model
and is shown below.

35
Figure: Punctuated equilibrium Model

The first meeting sets the group's direction. A framework of behavioral pat- terns and assumptions
through which the group will approach its project emerges in this first meeting. These lasting patterns can
appear as early as the first few seconds of the group's life.

Once set, the group's direction becomes "written in stone" and is unlikely to be reexamined throughout
the first half of the group's life. This is a period of inertia that is, the group tends to stand still or become
locked into a fixed course of action. Even if it gains new insights that challenge initial patterns and
assumptions, the group is incapable of acting on these new insights in Phase 1.

One of the more interesting discoveries made in these studies was that each group experienced its
transition at the same point in its calendar-precisely halfway between its first meeting and its official
deadline-despite the fact that some groups spent as little as an hour on their project while others spent six
months. It was as if the groups universally experienced a midlife crisis at this point. The midpoint appears
to work like an alarm clock, heightening members' awareness that their time is limited and that they need
to "get moving."

This transition ends Phase 1 and is characterized by a concentrated burst of changes in which old patterns
are dropped and new perspectives are adopted. The transition sets a revised direction for Phase 2.

Phase 2 is a new equilibrium or period of inertia. In this phase, the group executes plans created during
the transition period.

The group's last meeting is characterized by a final burst of activity to finish its work.

36
In summary, the punctuated-equilibrium model characterizes groups as exhibiting long periods of inertia
interspersed with brief revolutionary changes triggered primarily by their members' awareness of time and
deadlines. Keep in mind, however, that this model doesn't apply to all groups. It's essentially limited to
temporary task groups that are working under a time-constrained completion deadline.

Group Structure refers to the pattern of interrelationship that exists among the group members, and
makes the group functioning orderly and predictable. Four important aspects of group’s structure are:

􀂙Role or the typical part played by an individual group member in accordance with the
expectations of other members from him. Role expectations refer to the behaviours that are
expected from the person playing the role. The person holding the role is known as the role
incumbent. Role ambiguity takes place when the person holding the role feels confused and does
not know what is being expected from him. The role incumbent is said to suffer from the problem
role identity when he faces difficulty in accepting the assigned role.
􀂙Norms or the rules and mutual expectations that develop within the group. This refers to the
generally agreed upon rules that guide the group members’ behaviour. Norms have profound
effect on members’ behaviour as it ensures conformity among them. Norms can be of two types:
prescriptive when it dictates behaviours that should be performed and proscriptive when it
dictates specific behaviours that should be avoided by the group members.
􀂙Status or the relative prestige or social position given to groups or individuals by others . People
often join the core group or a renowned club because of the prestige associated with these
groups.
􀂙Group cohesiveness referring to the strength of group members’ desires to remain a part of the
group. This also refers to the degree of attraction of the group members for each other and the
‘we-feeling’ among the members. The degree of cohesiveness has been found to depend on
external threats, the difficulty in getting included in the group, the amount of time spent by the
group members with each other and the success of the group.

Individual’s Performance in Groups

Groups are formed with individuals, but the output of the groups is not just the sum-total of
individual’s contribution towards the group. The term group synergy refers to the fact the action of
two or more group members result in an effect that is different from the individual summation of
their contributions. This occurs because of the social facilitation effect which refers to the tendency
for performance of an individual group member to improve in response to the presence of other
members. However, the group performance is not always guaranteed to improve as often group
members are found to exert less individual effort. This is known as social loafing when members are
found to enjoy a ‘free ride’ which tends to increase with group’s size.
Groups and Teams
Do you still remember the excitement during the last world cup and the way the Indian team
performed? No matter what they could finally achieve or not, we all used to comment on spirit of the

37
Indian team. A team can be defined as a special type of group whose members have complementary
skills and are committed to a common purpose or set of goals for which they hold themselves
mutually accountable. In the recent times, a lot of emphasis is being given on developing teams. The
importance of teams has long been appreciated in the world of sports, and now it is being used
increasingly in the realm of business and industry as well. Though there are similarities between
groups and teams and these two terms are often used interchangeably, there are in fact a few striking
differences between the two. The following table will help to summarize this.
Work Groups Work Teams
Table 1: Groups and Teams

38
Demands of management

The recognition of the existence of both formal and informal groups in any organization and an
understanding of the basic processes involved have created a profound effect on the functioning and
outlook of the managers in today’s workplace. Understandably, there is now a great deal of concern
in developing groups and effective teams as there is ample evidence to support the view that
organizational performance improved when the employees are encouraged to work in groups rather
than working as an individual member.

39
 Lesson:-6

What is Organization Design?

A process for improving the probability that an organization will be successful.

More specifically, Organization Design is a formal, guided process for integrating the people, information
and technology of an organization. It is used to match the form of the organization as closely as possible
to the purpose(s) the organization seeks to achieve. Through the design process, organizations act to
improve the probability that the collective efforts of members will be successful.

Typically, design is approached as an internal change under the guidance of an external facilitator.
Managers and members work together to define the needs of the organization then create systems to meet
those needs most effectively. The facilitator assures that a systematic process is followed and encourages
creative thinking.

Hierarchical Systems
Western organizations have been heavily influenced by the command and control structure of ancient
military organizations, and by the turn of the century introduction of Scientific Management. Most
organizations today are designed as a bureaucracy in which authority and responsibility are arranged in a
hierarchy. Within the hierarchy rules, policies, and procedures are uniformly and impersonally applied to
exert control over member behaviors. Activity is organized within sub-units (bureaus, or departments) in
which people perform specialized functions such as manufacturing, sales, or accounting. People who
perform similar tasks are clustered together.

The same basic organizational form is assumed to be appropriate for any organization, be it a
government, school, business, church, or fraternity. It is familiar, predictable, and rational. It is what
comes immediately to mind when we discover that ...we really have to get organized!

As familiar and rational as the functional hierarchy may be, there are distinct disadvantages to blindly
applying the same form of organization to all purposeful groups. To understand the problem, begin by
observing that different groups wish to achieve different outcomes. Second, observe that different groups
have different members, and that each group possesses a different culture. These differences in desired
outcomes, and in people, should alert us to the danger of assuming there is any single best way of
organizing. To be complete, however, also observe that different groups will likely choose different

40
methods through which they will achieve their purpose. Service groups will choose different methods
than manufacturing groups, and both will choose different methods than groups whose purpose is
primarily social. One structure cannot possibly fit all.

Organizing on Purpose

The purpose for which a group exists should be the foundation for everything its members do —
including the choice of an appropriate way to organize. The idea is to create a way of organizing that best
suits the purpose to be accomplished, regardless of the way in which other, dissimilar groups are
organized.

Only when there are close similarities in desired outcomes, culture, and methods should the basic form of
one organization be applied to another. And even then, only with careful fine tuning. The danger is that
the patterns of activity that help one group to be successful may be dysfunctional for another group, and
actually inhibit group effectiveness. To optimize effectiveness, the form of organization must be matched
to the purpose it seeks to achieve.

The Design Process

Organization design begins with the creation of a strategy — a set of decision guidelines by which
members will choose appropriate actions. The strategy is derived from clear, concise statements of
purpose, and vision, and from the organization’s basic philosophy. Strategy unifies the intent of the
organization and focuses members toward actions designed to accomplish desired outcomes. The strategy
encourages actions that support the purpose and discourages those that do not.

Creating a strategy is planning, not organizing. To organize we must connect people with each other in
meaningful and purposeful ways. Further, we must connect people with the information and technology
necessary for them to be successful. Organization structure defines the formal relationships among people
and specifies both their roles and their responsibilities. Administrative systems govern the organization
through guidelines, procedures and policies. Information and technology define the process(es) through
which members achieve outcomes. Each element must support each of the others and together they must
support the organization’s purpose.

Exercising Choice

Organizations are an invention of man. They are contrived social systems through which groups seek to
exert influence or achieve a stated purpose. People choose to organize when they recognize that by acting
alone they are limited in their ability to achieve. We sense that by acting in concert we may overcome our
individual limitations.

When we organize we seek to direct, or pattern, the activities of a group of people toward a common
outcome. How this pattern is designed and implemented greatly influences effectiveness. Patterns of
activity that are complementary and interdependent are more likely to result in the achievement of

41
intended outcomes. In contrast, activity patterns that are unrelated and independent are more likely to
produce unpredictable, and often unintended results.

The process of organization design matches people, information, and technology to the purpose, vision,
and strategy of the organization. Structure is designed to enhance communication and information flow
among people. Systems are designed to encourage individual responsibility and decision making.
Technology is used to enhance human capabilities to accomplish meaningful work. The end product is an
integrated system of people and resources, tailored to the specific direction of the organization.

Lesson:-7

Leadership
Introduction

Leadership is a process by which a person influences others to accomplish an objective and

directs the organization in a way that makes it more cohesive and coherent. Leaders carry out
this process by applying their leadership attributes, such as beliefs, values, ethics, character,
knowledge, and skills. Although your position as a manager, supervisor, lead, etc. gives you the
authority to accomplish certain tasks and objectives in the organization, this p o w e r does not
make you a leader, it simply makes you the b o s s . Leadership differs in that it makes the
followers w a n t to achieve high goals, rather than simply b o s s i n g p e o p l e a r o u n d .
Factors of leadership

There are four major factors in leadership:

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Follower
Different people require different styles of leadership. For example, a new hire requires more
supervision than an experienced employee. A person who lacks motivation requires a different
approach than one with a high degree of motivation. You must know your people! The
fundamental starting point is having a good understanding of human nature, such as needs,
emotions, and motivation. You must come to know your employees' b e , k n o w , and d o
attributes.
Leader
You must have an honest understanding of who you are, what you know, and what you can do.
Also, note that it is the followers, not the leader who determines if a leader is successful. If they
do not trust or lack confidence in their leader, then they will be uninspired. To be successful you
have to convince your followers, not yourself or your superiors, that you are worthy of being
followed.
Communication
You lead through two-way communication. Much of it is nonverbal. For instance, when you "set
the example," that communicates to your people that you would not ask them to perform
anything that you would not be willing to do. What and how you communicate either builds or
harms the relationship between you and your employees.
Situation
All are different. What you do in one situation will not always work in another. You must use
your judgment to decide the best course of action and the leadership style needed for each
situation. For example, you may need to confront an employee for inappropriate behavior, but if
the confrontation is too late or too early, too harsh or too weak, then the results may prove
ineffective.
Leadership skills

mark of a good leader is to be able to provide consistent motivation to his team encouraging
them to attain excellence and quality in their performance. A good leader is always looking for
ways to improve production and standards. Here are six management skills you can develop as
a leader in working to create a quality effective team.

1. Observation

This is an important aspect that often gets neglected due the demands on a leader’s time and
schedule. Observation and regular visits to the work environment are a priority and should be
scheduled into the calendar. Observing employees at work, the procedures, interaction and
work flow is foundational to implementing adjustments to improve results. To have credibility, a
leader needs to be seen and be known to be up to date with what is happening in the work
place.

2. Monitor Employee Performance

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Employee performance needs to be monitored in mutually accepted ways. Policies and
procedures need to be clear. Conferencing should be on a regular basis and not just when there
is a problem. Assessments and evaluations should not be merely all formality or viewed a
necessary paperwork to be done and filed away. Individual and group conferencing should be
undertaken not only to monitor performance, but with the expectation of on going professional
development and support. There should be frequent encouragement and clear criteria for on
going goals both for the group and individual.

3. Implementation of Professional Development Programs

A good leader evaluates weaknesses and provides training and development strategies to
strengthen the weaker skills in the team.

4. Demonstrates Working Knowledge and Expertise

Good leadership comes from a place of strong knowledge and experience of the production and
process leading to results. If a leader does not possess all the expertise and knowledge
personally, then regular consultations with experts involved in the departments should be held.
This is important in order to maintain an accurate and informed overall picture.

5. Good Decision Making

Good leadership is characterized by the ability to make good decisions. A leader considers all
the different factors before making a decision. Clear firm decisions, combined with the
willingness and flexibility to adapt and adjust decisions when necessary, create confidence in
the leadership.

6. Ability to Conduct and Evaluate Research

On going review and research is vital in order to keep on the cutting edge in business. While
managing the present to ensure on going excellence in product and performance, a good leader
is also able to look towards the future. Conducting and evaluating research is an important way
of planning and being prepared for the future.

Excellent leadership is always pro active rather than reactive. By developing these six
managerial skills builds a solid foundation for success.

Informal and Formal Leaders

Leaders arise in many situations. Even informal social groups have leaders. When groups
endure and become formal, the persons are elected as leaders. Normally, the persons elected’
to offices are the ones who are the natural leaders of the groups. Their views get attention from
the members even without formal election, but with election, those natural leaders are
consciously acknowledged. Researches, on small groups show that those persons who emerge
as informal leaders are perceived

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by other group members as being the best able to satisfy the group needs and that the leaders,
therefore, are enabled to influence other members. A leader derives his influence from the
members’ feeling or intuition that he can help to satisfy their needs; consequently, they are
willing to submit, within the limits, to his guidance.

When a person, either such informal leader or some one else, is appointed in a superior
capacity, the natural leadership relations change. Such change occurs in two respects. First,
when a person is appointed in superior capacity, he gets authority from the organisation. This
authority enables him to increase or decrease the satisfaction of his subordinates. Second,
because of appointment, he has the obligation of achieving organizational objectives besides an
obligation to provide satisfaction to his subordinates. However, an appointed (formal) leader
cannot solely rely upon the use of authority for getting desired results from his subordinates
because, as discussed earlier, subordinates seldom put maximum effort under the pressure of
authority. Thus, a chief executive having more authority, but lacking leadership qualities, may be
less effective as compared to a foreman with less authority but high degree of leadership
qualities. Regardless of these differences between formal and informal leaders, however, a
leader is able to direct the actions of his followers because they believe he can provide rewards
(or prevent penalties) that satisfy their needs.

Importance of Leadership

Leadership is an important factor for making any type of organisations successful. Throughout
the history, it has been recognised that the difference between success and failure, whether in a
war, a political movement, a business, or a team game, can be attributed largely to leadership.

Here we are more concerned about manager as a leader. Without a good leader, organisation
cannot function efficiently and effectively. Since the organisation is basically a deliberate
creation of human beings for certain specified objectives, the activities of its members need to
be directed in a certain way. Any departure from this way will lead to inefficiency in the
organisation. Direction of activities in the organisation is affected by the leader. The importance
of good leadership can be discussed as follows:

1. Motivating employees As discussed earlier, motivation is necessary for work performance.

Higher the motivation, better would be the performance. A good leader, by exercising his
leadership, motivates the employees for high performance. Good leadership in the organisation
itself is a motivating factor for the individuals.

2. Creating confidence

A good leader may create confidence in his followers by directing them, giving them advice and
getting through them good results in the organisation. Once an individual, with the help of a
leader, puts high efficiency, he tries to maintain it as he acquires certain level of confidence
towards his capacity. Sometimes, individuals fail to recognise their qualities and capabilities to
work in the absence of good direction.

3. Building morale

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Morale is expressed as attitudes of employees towards organisation, management and
voluntary cooperation to offer their ability to the organisation. High morale leads to high
productivity and organisational stability. Through providing good leadership in the organisation,
employees’ morale can be raised high ensuring high productivity and stability in the
organisation. Thus, good leadership is essential in all aspects of managerial functions whether it
be motivation, communication or direction. Good leadership ensures success in the
organisation, and unsatisfactory human performance in any organisation can be primarily
attributed to poor leadership. Let us now look at some of the Leadership Theories

Leadership has probably been written about, formally researched, and informally discussed
more than any other single topic. Despite all the attention given to it, leadership still remains
pretty much of ‘black box’ or unexplainable phenomenon. It is known to exist and to have
tremendous influence on human performance, but its inner workings and specific dimensions
cannot be precisely spelled out.

Many of the research studies, particularly by behavioural scientists, have been carried on to find
out the answer of the question: What makes a leader effective? Is his success due to his
personality, or his behaviour, or the types of followers he has, or the situation in which he works,
or a combination of all these? These researchers, however, could not give a satisfactory answer
of the question. Instead, their researches have resulted in various theories or approaches on
leadership, the prominent among these being trait theory, behavioural theory, and situational
theory. Besides, age-old theory of leadership known as ‘great man theory’ or ‘charismatic
leadership theory’, which was discarded long back by behavioural scientists, has started
attracting attention recently. Each of these theories has its own contributions, limitations,
assumptions, and framework of analysis. In this section, we shall discuss these theories so that
a background can be provided to the study of leadership styles which leaders may adopt to
influence the behaviour of their followers.

Charismatic Leadership Theory

Charismatic leadership theory, also called great man theory by some, can be traced back to
ancient times. Plato’s Republic and Confucius’ Analects dealt with leadership. They provided
some insights of leadership. Subsequent studies based on these insights have suggested that
‘a leader is born and is not made.’ A leader has some charisma which acts as influencer.
Charisma is a Greek word meaning gift. Thus, charisma is a God-gifted attribute in a person
which makes him a leader irrespective of the situations in which he works. Charismatic leaders
are those who inspire followers and have a major impact on their organisations through their
personal vision and energy. Occasionally, a leader emerges whose high visibility and personal
charisma catch the public consciousness.

Robert House, who proposed a relook on charismatic theory, suggests that charismatic leaders
have very high levels of referent power and that some of that power comes from their need to
influence others. According to him, “the charismatic leader has extremely high levels of self-
confidence, dominance, and a strong conviction in the normal righteousness of his/her beliefs,
or at least the ability to convince the followers that he/ she possesses such confidence and
conviction.” He suggests further that charismatic leaders communicate a vision or higher level

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goal (transcendent) that captures the commitment and energy of followers. The basic
assumptions and implications of charismatic leadership theory are as follows:

1. Leaders in general, and great leaders in particular, have some exceptional inborn leadership
qualities which are bestowed upon them by the divine power.

2. These inborn qualities are sufficient for a leader to be successful.

3. Since these qualities are inborn, these cannot be enhanced through education and training.
Further, since these qualities are of personal nature, these cannot be shared by others.

4. These leadership qualities make a leader effective and situational factors do not have any influence.

Implications of the Theory

Charismatic leadership theory has re-emerged basically for two reasons. First, many large companies in
USA have embarked on organisational transformation programmes of extensive changes that must be
accomplished in short period of time. Such transformations, it has been argued, require
transformational leaders. Second, many feel that by concentrating on traits, behaviours, and situations,
leadership theories have lost sight of the leaders. These theories discuss more about transactional
leaders and not about transformational leaders. A transactional leader determines what subordinates
need to do to achieve objectives, classifies those requirements, and helps subordinates become
confident that they can reach their objectives. A transformational leader inspires his followers through
vision and energy. Trait, behavioural, and situational leadership theories fail to explain the reasons
behind the deeds of great political leaders like Mahatma Gandhi, Lenin, etc. who transformed their
nations, or our great industrialists like JRD Tata, GD Birla, Dhirubhai Ambani, who created vast industrial
empires because of their vision, energy, and entrepreneurship. Charismatic leadership theory does that.
However, there are two basic limitations of this theory. First, if we assume that there are certain inborn
qualities of a great leader, it implies that nothing can be done to develop leaders in the organisations. In
fact, its opposite is also true. Through various training and development programmes, leaders, though
not the great leaders, can be developed in the organisations.

Second, a charismatic leader may fail in the changed situation. For example, Winston Churchill, the late
prime minister of Great Britain, was very effective during the Word War II, but he flopped afterwards.
Thus, we can derive that the situational variables play their own role in determining leadership
effectiveness.

Trait Theory

The weaknesses of charismatic leadership theory gave way to a more realistic approach to leadership.
Under the influence of the behaviouristic psychological thought, researchers accepted the fact that
leadership traits are not completely inborn but can also be acquired through learning and experience.
Trait is defined as relatively enduring quality of an individual. The trait approach seeks to determine
‘what makes a successful leader’ from the leader’s own personal characteristics. From the very

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beginning, people have emphasised that a particular individual was a successful leader because of his
certain qualities or characteristics.

Trait approach leadership studies were quite popular between 1930 and 1950. The method of study was
to select leaders of eminence and their characteristics were studied. It was the hypothesis that the
persons having certain traits could become successful leaders. Various research studies have given
intelligence, attitudes, personality and biological factors as ingredients for effective leaders. A review of
various research studies has been presented by Stogdill. According to him, various trait theories have
suggested these traits in a successful leader:

i. physical and constitutional factors (height, weight, physique, energy, health, appearance);

ii. intelligence;

iii. self-confidence;

iv. sociability;

v. will (initiative, persistence, ambition);

vi. dominance; and

vii.surgency (talkative, cheerfulness, geniality, enthusiasm, pressiveness, alertness, and originality). In a

later study, Ghiselli has found supervisory ability, achievement motivation, self actualising, intelligence,
selfassurance, and decisiveness as the qualities related with leadership success.

The current research on leadership traits suggests that some factors do help differentiate leaders from
non-leaders: The most important traits are a high level personal drive, desire to lead, personal integrity,
and self-confidence. Cognitive (analytical) ability, business knowledge, charisma, creativity, flexibility,
and personal warmths are also frequently desired. Anderson Consulting (a management consultancy
firm) conducted a study of 90 global chief executives to find out the ablities required for an ideal chief
executive in the present era of globalised economy. The study highlighted 14 qualities.

Accordingly, a chief executive thinks globally, anticipates opportunity, creates a shared vision, develops
and empowers people, appreciates cultural diversity, builds teamwork and partnership, embraces
change, shows technological savvy, encourages constructive challenge, ensures customer satisfaction,
achieves a competitive advantage, demonstrates personal mastery, shares leadership, and lives the
values. The various studies show wide variations in leadership traits. The various traits can be classified
into innate and acquirable traits, on the basis of their source. Innate qualities are those which are
possessed by various individuals since their birth. These qualities are natural and often known as God-
gifted. On the basis of 11 qualities, it is said that ‘leaders are born and not made.’ These qualities cannot
acquired by the individuals. The following are the major innate qualities in a successful leader:

1.Physical Features --Physical features of a man are determined by heredity factors. Heredity is the
transmission of the qualities from ancestor to descendant through a mechanism lying primarily in the

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chromosomes of the germ cells. Physical characteristics and rate of maturation determine the
personality formation which is important factor in determining leadership success. To some extent,
height, weight, physique, health and appearance are important for leadership.

2. Intelligence For leadership, higher level of intelligence is required. Intelligence is generally expressed
in terms of mental ability. Intelligence, to a very great extent, is a natural quality in the

individuals because it is directly related with brain. The composition of brain is a natural factor, though
many psychologists claim that the level of intelligence in an individual can be increased through various
training methods. Acquirable qualities of leadership are those which can be acquired and increased
through various processes. In fact, when a child is born, he learns many of behavioural patterns through
socialisation and identification processes. Such behavioural patterns are developed among the child as
various traits over a period time. Many of these traits can be increased through training programmes.
Following are the major qualities essential for leadership:

1. Emotional Stability

A leader should have high level of emotional stability. He should be free from bias, is consistent in
action, and refrains from anger. He is well-adjusted, and has no anti-social attitudes. He is self confident
and believes that he can meet most situations successfully.

2. Human Relations

A successful leader should have adequate knowledge of human relations, that is, how he should deal
with human beings. Since an important part of a leader’s job is to develop people and get their
voluntary cooperation for achieving work, he should have intimate knowledge of people and their
relationship to each other. The knowledge of how human beings behave and how they react to various
situations is quite meaningful to a leader.

3. Empathy

Empathy relates to observing the things or situations from others’ points of view. The ability to look at
things objectively and understanding them from others’ point of view is an important aspect of
successful leadership. When one is empathetic, he knows what makes the other fellows think as

they do, even though he does not necessarily agree with others’ thoughts. Empathy requires respect for
the other persons, their rights, beliefs, values and feelings.

4. Objectivity

Objectivity implies that what a leader does should be based on relevant facts and information. He must
assess these without any bias or prejudice. The leader must base his relationship on his objectivity. He is
objective and does not permit himself to get emotionally involved to the extent that he finds it difficult
to make an objective diagnosis and implement the action required. .

5. Motivating Skills

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Not only a leader is self-motivated but he has requisite quality to motivate his followers. Though there
are many external forces which motivate a person for higher performance, there is inner drive in people
also for motivation to work. The leader can play active role in stimulating these inner drives of his
followers. Thus, a leader must understand his people to the extent that he knows how he can activate
them.

6. Technical Skills

The leading of people requires adherence to definite principles which must be understood and followed
for greater success. The ability to plan, organise, delegate, analyse, seek advice, make decision, control,
and win cooperation requires the use of important abilities which constitute technical competence of
leadership. The technical competence of leader may win support from the followers.

7. Communicative Skills

A successful leader knows how to communicate effectively. Communication has great force in getting
the acceptance from the receivers of communication. A leader uses communication skillfully for
persuasive, informative, and stimulating purposes. Normally, a successful leader is extrovert as
compared to introvert.

8. Social Skills

A successful leader has social skills. He understands people and knows their strengths and weaknesses.
He has the ability to work with people and conducts himself so that he gains their

confidence and loyalty, and people cooperate willingly with him. Though all these qualities contribute to
the success of leadership, but it cannot be said for certain about the relative contributions of these
qualities. Moreover, it is not necessary that all these qualities are possessed by a successful leader in
equal quantity. The list of qualities may be only suggestive and not comprehensive. Leadership is too
nebulous a concept to be definitely identified by listing of its important attributes.

Implications of the Theory

This theory has two very important implications. First, the theory emphasises that a leader requires
some traits and qualities to be effective. Second, many of these qualities may be developed in
individuals through training and development programmes. However, the theory suffers from two sets
of limitations: generalisation of traits and applicability of traits.

Generalisation of Traits

There are problems in identification of traits which may be relevant for a leader to be effective in all
situations. For example, Jennings has concluded that, “fifty years of study has failed to

produce a one-personality trait or set of qualities that can be used to discriminate leaders and non-
leaders”. A similar comment comes from House and Baetz when they have concluded that the various
studies on traits have failed to uncover any traits that clearly and consistently distinguish leaders and

50
followers. Many other behavioural scientists hold similar views. From this point of view, the theory
suffers from the following limitations:

There cannot be generalisation of traits for a successful leader. This was evident by various researches
conducted on leadership traits.

No evidence has been given about the degree of the various traits because people have various traits
with different degrees. There is a problem of measuring the traits. Though there are various tests to
measure the personality traits, however, no definite conclusion can be drawn.

Applicability of Traits

Another set of problems that hinders the full application of trait theory in practice, is that leadership as
a process of influence reflects in leader’s behaviour and not in his traits. There have been many persons
with traits specified for a leader, but actually they could not become effective leaders. The reason for
this phenomenon is that there is no direct cause-effect relationship between a trait of a person and his
behaviour. The trait may be only one of the factors shaping behaviour; the other factors, sometimes
even more important, are situational variables. These situational variables are not incorporated in trait
theory.

Behavioural Theory

Behavioural theory of leadership emphasises that strong leadership is the result of effective role
behaviour. Leadership is shown by a person’s acts more than by his traits. Researchers exploring
leadership role have come to the conclusion that to operate effectively, groups need someone to
perform two major functions: task-related functions and group maintenant functions. Task-related
functions, or problem solving functions, relate to providing solutions to the problems faced by the

groups, in performing jobs and activities. Group maintenance functions, or social functions, relate to
actions of mediating disputes and ensuring that individuals feel valued by the group. An individual who
is able to perform both roles successfully would be an effective leader. These two roles may require two
different sets of behaviour from the leader, known as leadership styles.

Leadership behaviour may be viewed in two ways: functional and dysfunctional. Functional behaviour
influences followers positively and includes such functions as setting clear goals, motivating employees
for achieving goals, raising le level of morale, building team spirit, effective two-way communication,
etc. Dysfunctional behaviour is unfavourable to the followers and denotes ineffective leadership. Such a
behaviour may be inability to accept employees ideas, display of motional immaturity, poor human
relations, etc.

Implications of the Theory

Behavioural theory of leadership has some important implications for managers. They can shape their
behaviour which appears to be functional and discard the behaviour which appears to be dysfunctional.
Researchers who have taken behavioural theory for analysing leadership behaviour (known as

51
leadership style) have prescribed various leadership styles which may be applied in managing the people
in organisations. We shall discuss these styles a little later. This theory suffers from two basic limitations
First, a particular behaviour may be functional at a point of time but it may be dysfunctional at another
point of time. Thus, the time element will be a

decider of the effectiveness of the behaviour and not the behaviour itself. Second, effectiveness of
leadership behaviour depends on various factors which are not in the leader but external to him like
nature of followers (subordinates) and the situations under which the leader’s behaviour takes place.
These factors have not been given adequate consideration. To that extent, the theory does not explain
leadership phenomenon fully.

Situational Theory

Situational leadership approach was applied, for the first time, in 1920 in the armed forces of Germany
with the objective to get good generals under different situations. In the business organisations, much
emphasis on the leadership researches was placed on the situations that surrounded the exercise of
leadership since early 1950s. The prime attention in situational theory of leadership (also known as
contingency theory) is given to the situation in which leadership is exercised. Therefore, effectiveness of
leadership will be affected by the factors associated with the leader and factors associated with the
situation. The various factors affecting leadership effectiveness may broadly be classified into two major
categories: leader’s behaviour and situational factors. The combination of both these factors determines
leadership effectiveness. Let us discuss these factors and their impact on leadership effectiveness.

Leader’s Behaviour

Leader’s behaviour is affected by two variables: leader’s characteristics and his hierarchical position in
the organisation.

1. Leader’s Characteristics

An individual’s behaviour is influenced by intelligence and ability, his characteristics like his personality
characteristics, attitudes, interest, motivation, and physical characteristics such as age, sex, and physical
features. Thus, the behaviour of the leader is also influenced by all these factors. All these factors are
internal to the leader.

2. Leader’s Hierarchical Position

Leader’s hierarchical position in the organisation is important because persons at different levels face
different kind of problems which affect the degree of participation between the superior and his
subordinates in arriving at decisions to solve the problems. Managers at higher levels are more
concerned with long-run complex problems which require more participation in decision making.
Managers at lower levels are more concerned with short-run problems involving the daily operations
which may not require high level of participation. The degree of this participation affects the leader’s
behaviour.

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Situational Factors

Besides the leader’s related factors, leadership effectiveness is affected by situational factors as these
factors affect the leader’s behaviour. To the extent, a leader matches the requirement of these factors,
his leadership will be effective. The various situational factors may be grouped into four categories:
subordinate’s characteristics, leader’s situation, group factors, and organisational factors.

1. Subordinate’s Characteristics

Various factors which affect an individual’s behaviour, as discussed in the case of the leader, are
relevant for the subordinate too.

2. Leader’s Situation

The leader’s situation in respect to his subordinate is an important factor affecting leadership
effectiveness. There are two “main variables which determine the leader’s situation: leader’s

position power and leader-subordinate relations. Leader’s position power helps or hinders in influencing
others. Thus, high-position power simplifies the leader’s task of influencing others, while low-position
power makes the leader’s task more difficult. Another factor, that is, leader subordinate relation is
based on the classic exchange theory which suggests that there is two-way influence in a social
relationship. Thus, good followers need to succeed in their own jobs with the help of the leader while
helping their leaders to succeed at theirs. Thus, if the leader has good subordinates, and good relations
with them, he is likely to be more effective.

3. Group Factors

Various group factors like task design, group composition, group norms, group cohesiveness, and peer-
group relationship affect leadership effectiveness and performance. If these factors are favourable, the
leader will be effective.

4. Organisational Factors

Organisational factors like organisational climate and organisational culture affect leadership
effectiveness. If these are conducive, the leader will be effective.

Implications of the Theory

Situational theory has wide implications for managers in the sense that it offers clues why a manager
who is successful in one situation, fails when there is change in the situation. Therefore,

the managers may do better by adopting management practices including leadership which match with
the situational variables. In fact, the systems and contingency approach has become the way of thinking
in management and leadership is no exception. This theory, however, should not be taken as the final
word in leadership. The theory appears to be good on the surface but becomes quite complex in
practice because of the presence of numerous contingent factors. However, managers can overcome

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this problem by diagnosing these factors suitably. This is not necessarily provided by the theory but
experience has its role. There appears to be one more important lacuna in this theory. The theory loses
the insight of leadership and the leader is overwhelmed by the contingent factors. Now let us discuss
the different leadership styles.

Leadership Styles

Leadership styles are the patterns of behaviour which a leader adopts in influencing the behaviour of his
followers (subordinates in the organisational context). These patterns emerge in the leader as he begins
to respond in the same fashion under similar conditions; he develops habits of actions that become
somewhat predictable to those who work with him. Various researchers have proposed different
leadership styles. These styles are either based on behavioural approach or

situational approach of leadership. Some of the important theories/models prescribing leadership styles
are given below.

Based on behavioural approach

1. Power orientation

2. Leadership as a continuum

3. Employee-production orientation

4. Likert’s management system

5. Managerial grid

6. Tri-dimensional grid

Based on situational approach

1. Fiedler’s contingency model

2. Hursey and Blanchard’s situational model

3. . Path-goal model

Such a classification does not necessarily mean that a particular theory/model grouped under one
particular approach of leadership does not consider the tenets of the other approach; it may consider.
However,such a consideration is secondary and the theory has not been built on such a consideration.

Power Orientation

Power orientation approach of leadership styles is based on the degree of authority which a leader uses
in influencing the behaviour of his subordinates. Based on ‘the degree of use of power, there are three
leadership styles:

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1. Autocratic leadership

2. Participative leadership

3. Free-rein leadership.

Autocratic Leadership

Autocratic Leadership is also known as authoritarian, directive or monothetic style. In autocratic

leadership style, a manager centralises decision-making power in himself: He structures the

complete situation for his employees and they do what they are told. Here the leadership may be
negative because followers are uninformed, insecure, and afraid of the leader’s authority. There

are three categories of autocratic leaders:

1. Strict Autocrat

He follows autocratic styles in a very strict sense. His method of influencing subordinates’ behaviour is
through negative motivation, that is, by criticising subordinates, imposing penalty, etc.

2. Benevolent Autocrat

He also centralises decision-making power in him, but his motivation style is positive. He can be effective
in getting efficiency in many situations. Some people like to work under strong authority structure and
they derive satisfaction by this leadership.

3. Incompetent Autocrat

Sometimes, superiors adopt autocratic leadership style just to hide their incompetence, because in
other styles they may be exposed before their subordinates. However, this cannot be used for a long
time.

The main advantages of autocratic technique are as follows:

1. There are many subordinates in the organisation who prefer to work under centralised authority
structure and strict discipline. They get satisfaction from this style.

2. It provides strong motivation and reward to a manager exercising this style.

3. It permits very quick decisions as most of the decisions are taken by a single person.

4. Less competent subordinates also have scope to work in the organisation under his leadership style as
they do negligible planning, organising and decision making. There are many disadvantages of autocratic
leadership which are as follows:

1. People in the organisation dislike it specially when it is strict and the motivational style is negative.

55
2. Employees lack motivation. Frustration, low morale, and conflict develop in the organisation
jeopardising the organisational efficiency.

3. There is more dependence and less individuality in the organisation. As such, future leaders in the
organisation do not develop. Considering the organisational efficiency and employee’s satisfaction,
autocratic style generally is not suitable.

Participative Leadership

This style is also called democratic, consultative or ideographic. A participation is defined as mental and
emotional involvement of a person in a group situation which encourages him to contribute to group
goals and share responsibility in them. A participative manager decentralises his decision-making
process. Instead of taking unilateral decision, he emphasises on consultation and participation of his
subordinates. Subordinates are broadly informed about the conditions affecting them and their jobs.
This process emerges from the suggestions and ideas on which decisions are based. The participation
may be either real or pseudo. In the case of former, a superior gives credit to subordinates’ suggestions
and ideas in taking the decisions while in the case of latter, the superior preaches participation in theory,
but really he does not prefer it in practice. There are various benefits in real participative management.
These are as follows:

1. It is a highly motivating technique to employees as they feel elevated when their ideas and
suggestions are given weight in decision making.

2. The employees’ productivity is high because they are party to the decision. Thus, they implement the
decisions wholeheartedly.

3. They share the responsibility with the superior and try to safeguard him also. As someone has
remarked, ‘the fellow in the boat with you never bores a hole in it’ is quite applicable in this case too.

4. It provides organisational stability by raising morale and attitudes of employees high and favourable.
Further, leaders are also prepared to take organisational positions.

Keeping in view these advantages, management makes attempts for effective participation. The
common methods adopted are democratic supervision, committees, suggestion programmes and

multiple management. However, this style is not free from certain limitations which are as

follows:

1. Complex nature of organisation requires a thorough understanding of its problems which lower level
employees may not be able to do. As such, participation does not remain meaningful. .

2. Some people in the organisation want minimum interaction with their superiors or associates. For
them, participation technique is discouraging instead of encouraging. .

56
3. Participation can be used covertly to manipulate employees. Thus, some employees may prefer the
open tyranny of an autocrat as compared to covert tyranny of a group.

Free Rein

Free rein or laissez-faire technique means giving complete freedom to subordinates. In this style,
manager once determines policy, programmes and limitations for action and the entire process is left to
subordinates.. Group members perform everything and the manager usually maintains contacts with
outside persons to bring the information and materials which the group needs. This type of style is
suitable to certain situations where the manager can leave a choice to his group. This helps subordinates
to develop independent personality. However, the contribution of manager is almost nil. It tends to
permit different units of an organisation to proceed at cross-purposes and can degenerate into chaos.
Hence, this style is used very rarely in business organisations. There are, in fact, a variety of styles of
leadership behaviour between two extremes of autocratic and free rein. Tannenbaum and Schmidt have
depicted a broad range of styles on a continuum moving from authoritarian leadership behaviour at one
end to free-rein behaviour at the other end as shown in

Figure21-1

Leadership System 1 System 2 System 3 System 4

variable
Trust and Has no trust and Has Substantial but Complete
confidence in confidence in condescending not complete confidence &
subordinaties subordinaties confidence and confidence and trust in all
trust. such as trust still wishes matters.
master has to to keep control
a servant of decisions
Subordinates’ bordinates do not Subordinates do Subordinates feel
feeling.of feel at about the not feel very free rather free to Subordinates feel
freedom job with their to discuss things discuss things compeletely free
superior. about job with about the job to discuss things
their superior.. with their about the job
superior with their
Superior seeking. Seldom gets Sometimes gets superior
and involvement ideas and opinion ideas and Usually gets
subordinates. of subordinates opinions of. ideas and
Always gets
in subordinates in opinions and
ideas & with
solving job solving job usually tries to
opinion and
problems problems make always tries to
constructive use
make
of them constructive use
of
The figure presents a range of leadership behaviour available to a manager. Each type of action
represents the degree of authority used by a leader and the degree of freedom which a

subordinate enjoys in relationship to his superior. The left side shows a style where control is
maintained by a manager and the right side shows the release of control. However, neither

57
extreme is absolute and authority and freedom are never without their limitations. Thus, a question is
pertinent: at which point along with the continuum should a manager adopt his behaviour? In fact,
there is no readymade answer, but it depends upon three particulars:

1. Forces in manager, that is, his value system, his confidence in his subordinates, his own leadership
inclinations, and his feeling of security in an uncertain situation.

2. Forces in subordinates, that is, their need for independence, readiness to assume responsibility for
decision-making, level of tolerance for ambiguity, understanding and identifying organisational goals,
interest in the problem, knowledge and experience to deal with the problems and learning to expect to
share in decision making.

3. Forces in the situation, that is, type of organisation, group effectiveness, the problem itself and the
pressure of time. In 1973, Tannenbaum and Schmidt developed another pattern of choosing leadership
behaviour. They feel that because of changes in social system, organisational environment, the old
continuum pattern is no longer valid. Organisations do not exist in vacuum, but are affected by changes
that occur in the society. Thus, there would be more factors in situational variables affecting the
leadership pattern. These forces lie outside the organisation interacting continuously with the
organisational environment. Thus, new continuum of leadership pattern is more complex as compared
to previous one. In this pattern, the total area of freedom shared by Likert’s four systems of
management in terms of leadership styles may be referred to as exploitative autocratic (system
I),benevolent autocratic (system 2), participative (system 3), and manager and non-manager is
constantly redefined by interaction between them and the forces in the environment. There is continual
flow of interdependent influence among systems and people. The points on the continuum designate
the types of manager and manager’s behaviour that become possible with any given amount of freedom
available to each. This continuum is more complex and dynamic reflecting the organisational and social
realities.

A successful leader is one who is keenly aware of those forces which are more relevant to his
behaviour at any given time. He accurately understands himself, the individuals and the group

he is dealing with, and the organisation and the broader social environment in which he operates.

However, merely understanding these factors correctly is not enough but he can be successful only
when he is able to behave appropriately in the light of these perceptions and understanding. Thus, the
authors have observed, “the successful manager of men can be primarily characterized neither as a
strong leader nor as a permissive one. Rather he is one who maintains a high batting average in
accurately assessing the forces that determine what his more appropriate behaviour at any given time
should be and in actually being able to behave accordingly. Being both insightful and flexible, he is less
likely to see the problem of leadership as a dilemma”.

Likert’s Management System

58
Rensis Likert and his associates of University of Michigan, USA, have studied the patterns and styles of
managers for three decades and have developed certain concepts and approaches important to
understanding leadership behaviour. He has given a continuum of four systems of management as
presented in Table. 21.1. In his management systems Likert has taken seven variables of different
management systems. These variables include leadership, motivation, communication, interaction -

influence, decision-making process, goal-setting and control process. democratic (system 4). Likert, on
the basis of intensive research, has shown that high producing departments in several

organisations studied are marked by system 4 (democratic). He ascribes this mainly to the extent of
participation in management and the extent to which the practice of supportive relationship is
maintained. He states that leadership and other processes of the organisation must be such as to ensure
a maximum probability that in all interactions and in all relationships within the organisation, each
member in the light of his background, values, desires, and expectations, will view the experience as
supportive ,and one which builds and maintains the sense of his personal worth and importance. Likert
has also isolated three variables which are representative of the total concept of system 4. These are:

i. the use of supportive relationship by managers;

ii. the use of group decision-making and group methods of supervision; and

iii. the high performance goals.

Employee-production Orientation

In the studies of the Survey Research Centre at the University of Michigan, USA, an attempt was made to
study the leadership behaviour by locating clusters of characteristics that seemed to be related to each
other and various indicators of effectiveness. The studies identified two concepts which were called
employee-orientation and- production-orientation. The employee-orientation stresses the relationship
aspects of employees’ jobs. It emphasises that every individual is important and takes interest in
everyone, accepting their individuality and personal needs. This is parallel to democratic concept of
leadership behaviour. Production-orientation emphasises production and technical aspects of jobs and
employees are taken as tools for accomplishing the jobs. This is parallel to the authoritarian concept of
leadership behaviour. Almost at the same time, the leadership studies initiated by the Bureau of
Research at Ohio State University attempted to identify various dimensions of leader behaviour. Such
studies identified two dimensions: initiating structure and consideration. Initiating structure refers to
the leader’s behaviour in delineating the relationship between himself and members of the work group
and in endeavouring to establish well-defined patterns of organisation, channels of communications,
and methods and procedures. Consideration refers to behaviour indicative of friendship, mutual trust,\
respect and warmth in the relationship between the leader and the members of his staff. The research
studies also show that initiating structure and consideration are two separate distinct dimensions and
not mutually exclusive. A low score on one does not necessitate high score on the other. Thus,
leadership behaviour can be plotted on two separate axes rather than on a single continuum as shown
in Figure 21-2.

59
The four quadrants show various combinations of initiating structure and consideration. In each
quadrant, there is a relative mixture of initiating structure and consideration and a manager

can adopt anyone style.

High consideration High structure and

and Low sturcture High consideration

High structure and High consideration

and Low sturcture Low consideration

Leadership Quadrants

Managerial Grid

One of the most widely known approaches of leadership styles is the managerial grid developed by
Blake and Mouton. They emphasise that leadership style consists of factors of both task orientedand
relation-oriented behaviour in varying degrees. Their ‘concern for’ phrase has been used to convey how
managers are concerned for people or production, rather than ‘how much’ production getting out of
group. Thus, it does not represent real production or the extent to which humanrelationship needs are
being satisfied. Concern for production means the attitudes of superiors towards a variety of things,
such as, quality of decisions, procedures and processes, creativeness of research, quality of staff
services, work efficiency, and volume of output. Concern for people includes degree of personal
commitment toward goal achievement, maintaining the self-esteem of workers, responsibility based on
trust, and satisfying inter-personal relations. The managerial grid identifies five leadership styles based
upon these two factors found in organisations, as shown in Figure 21-3

Managerial Grid Figure 21-3

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Blake and Mouton have described the five styles as follows

1,1Exertion of minimum effort is required to get work done and sustain organisational morale;

1,9Thoughtful attention to needs of people leads to a friendly and comfortable organisational

atmosphere and work tempo; 9,1Efficiency results from arranging work in such a way that human
elements have little effect; 5,5. Adequate performance through balance of work requirements and
maintaining satisfactory morale; 9,9. Work accomplished is from committed people with
interdependence through a common stake in organizational purpose and with trust and respect. Each
style points out the relative contents of concern for production or people and implies that the most
desirable leader’s behaviour is 9,9 (maximum concern for production and people). In fact, Blake and
Mouton have developed training programmes that attempt to change managers towards 9, 9
management style. Managerial grid is very much similar to production-people orientation style as given
by Ohio State University. However, there is one basic difference between the two. In managerial grid
‘concern for’ is a predisposition about something or an attitudinal model that measures the
predisposition of a manager, while Ohio State framework tends to be a behavioural model that
examines how leader’s actions are perceived by others.

Managerial grid is a useful device to a manager for identifying and classifying managerial styles. It helps
him understand why he gets the reaction that he does from his subordinates. It can

also suggest some alternative styles that may be available to him. However, it does not tell why a
manager falls in one part or the other of the grid. What a manager’s style is will be influenced by many
factors, including the superior, the kind of subordinates he supervises, and the situation in which he
finds himself. In managerial grid, although the four comers and the mid-point of the grid are
emphasised, these extreme positions are rarely found in their pure form in working conditions. In other
words, a manager would more likely have a style of 8, 2 or 4, 6 or some such thing. Nevertheless,
managerial grid is widely used throughout the world as a means of managerial training and of identifying
various combinations of leadership styles. We have now seen some of the leadership styles

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POWER & POLITICS IN ORGANIZATIONS
THE CONCEPTS OF POWER AND ORGANIZATIONAL POLITICS John Gardner, writing about
leadership and power in organizations, notes, "Of course leaders are preoccupied with power! The
significant questions are: What means do they use to gain it? How much do they exercise it?" To what
ends do they exercise it? He further states, "Power is the basic energy needed to initiate and sustain action
or, to put it another way, the capacity to translate intention into reality and sustain it." In a similar vein,
Richard Nixon wrote, "The great leader needs . . . the capacity to achieve. . . . Power is the opportunity to
build, to create, to nudge history in a different direction." Dahl writing about the pervasiveness of the
concept of power states, "The concept of power is as ancient and ubiquitous as any that social theory can
boast." He defined power "as a relation among social actors in which one actor A, can get another social
actor B, to do something that B would not otherwise have done." Hence, power is recognized as "the
ability of those who possess power to bring about the outcomes they desire"
The concept of organizational politics can be linked to Harold Lasswell's (1936) definition of politics as
who gets what, when and how. If power involves the employment of stored influence by which events,
ac- tions and behaviors are affected, then politics involves the exercise of power to get something done, as
well as to enhance and protect the vested interests of individuals or groups. Thus, the use of
organizational politics suggests that political activity is used to overcome resistance and implies a
conscious effort to organize activity to challenge opposition in a priority decision situation. The preceding
discussion indicates that the concepts of power and organizational politics are related. Thus, in this
chapter, we define organizational politics as the use of power, with power viewed as a source of
potential energy to manage relationships.

 THE POLITICAL FRAME As discussed earlier, Bolman and Deal describe four "frames" for viewing
the world: structural, human resources, political, and symbolic. The political frame is an
excellent tool for examining the concept of organizational politics and makes a number of
assumptions about organizations and what most Organizations are coalitions of individuals and
interest groups, which form because the members need each others' support. Through a
negotiation process, members combine forces to produce common objectives and agreed upon
ways to utilize resources thus aggregating their power. Power bases are developed that can
accomplish more than individual forces alone.
 There are enduring differences among individuals and groups in values, preferences, beliefs,
information, and perception of reality. Such differences change slowly, if at all.
 Most of the important decisions in organizations involve allocation of scarce resources: they
are decisions about who gets what. Scarcity exacerbates political behavior. In government at
present, the competition is for personnel spaces and funding. Mission is the means to gain both,
because resources tend to follow mission. For this reason, the Services compete for strategic
mission (e.g., the omnipresent roles and missions debate), and thus make the job of the
Chairman of the Joint Chiefs more challenging. In the government as a whole, agencies compete
for significance in the national/international picture, because significance means public approval
and that means resources. (The two dominant political parties also attempt to present the
American public with different views of what is significant.)
 Because of scarce resources and enduring differences, conflict is central to organizational
dynamics and power is the most important resource. Conflict is more likely in under-bounded
systems (less regulation and control). In an over-bounded system with power concentrated at
the top (e.g., pre-Glasnost Russia), politics remains, but underground. Jefferies makes the point
that organizations play the political game within the broader governmental context, but those
individuals also play politics within organizations. So both influences are at work. And power is
key in both cases, because it confers the ability both to allocate resources- in itself a way to

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 increase power-and to consolidate power by bringing others with similar goals and objectives
into the inner decision making core.
 Organizational goals and decisions emerge from bargaining, negotiating, and jockeying for
position among members of different coalitions. Bolman and Deal offer the space shuttle
program as an example of a strategic effort backed by a complex coalition consisting of NASA,
contractors, Congress, the White House, the military, the media, and even portions of the
public. The difficulty in the Challenger disaster was that different members of the coalition were
in disagreement about how to balance technical and political concerns. These became
increasingly salient as the enormously expensive shuttle program encountered one delay after
another for safety-related technical reasons. At the time of the Challenger shuttle disaster, both
Thiokol and NASA were under increasing pressure to produce on schedule at programmed cost.
The decision to launch on that fateful day was made when political forces overcame technical
considerations. But, of course, this only illustrates the decision maker's difficulty in weighing one
kind of consideration against another-subjective assessment of constituency demands versus
rational data that may nonetheless lack substantiated cause-and-effect relationships with
downside outcomes-under conditions of great time pressure.

The five propositions of the political frame do not attribute organizational politics to negative,
dysfunctional or aggrandizing behavior. They assert that organization diversity, interdependence, resource
scarcity, and power dynamics will inevitably generate political forces, regardless of the players.
Organizational politics cannot be eliminated or fantasized away. Leaders, however, with a healthy power
motive can learn to understand and manage political processes
.POWER AS A MOTIVE . Power is attractive because it confers the ability to influence decisions, about
who gets what resources, what goals are pursued, what philosophy the organization adopts, what actions
are taken, who succeeds and who fails. Power also gives a sense of control over outcomes, and may in
fact convey such enhanced control. Particularly as decision issues become more complex and outcomes
become more uncertain, power becomes more attractive as a tool for reducing uncertainty.
Power and the ability to use it are essential to effective leadership. Strategic leaders who are
uncomfortable with either the presence of great power in others or its use by themselves are probably
going to fail their organizations at some point. The critical issue is why the leader seeks power and how it
is used. Some see power as a tool to enhance their ability to facilitate the work of their organizations and
groups. Others value power for its own sake, and exercise power for the personal satisfaction it brings.
There can be good and bad in both cases. However, the leader who uses power in the service of his/her
organization is using power in the most constructive sense. The leader who seeks power for its own sake
and for personal satisfaction is at a level of personal maturity that will compromise his/her ethical
position, risk his/her organization's effectiveness, and perhaps even jeopardize the long-term viability of
the organization
LEADING WITH POWER
The acquisition and use of strategic leader power involves managing a sequential process that is described
below:
1. The first task is to decide what it is the leader is trying to achieve that necessitates the use of power.
2. With the goal in mind, the leader must assess the patterns of dependence and interdependence
among the key players and determine to what extent he or she will be successful in influencing their
behavior. It is critical that the leader develop power and influence when the key players have expressed a
differing point of view. It is important to remember there is more interdependence at the strategic level of
the organization where task accomplishment is more complex.
3. Getting things done means the leader should "draw" a political map of the terrain that shows the
relative power of the various players to fully understand the patterns of dependence and
interdependence. This involves mapping the critical organization units and sub-units and assessing their
power bases. This step is very important because a leader needs to

63
 determine how much power these units have to leverage
influence either in support or opposition to their effort. For
example, if a leader is proposing to introduce a consensus team
decision making process in a joint interdependent environment,
this implementation decision could change power relationships
among the players. In this case, the leader needs to know the
opposing players and the depth of their power bases. This move
will likely require the mobilization of allies and the
neutralization of resisters.
4. Developing multiple power bases is a process connected to those personal attributes and skills
previously discussed and to structural sources of power. Structural sources of power comes from the
leader's creation and control over resources, location in communication and information networks,
interpersonal connections with influential others, reputation for being powerful, allies or supporters, and
the importance of leading the "right" organization.
6. Recognizing the need for multiple power bases and developing them is not enough. The strategic
leader must have an arsenal of influence strategies and tactics that convert power and influence
into concrete and visible results. Research on strategies and tactics for employing power effectively
suggests the following range of influence tactics:

 Framing/Reframing tactics establishes the context for analyzing both the decision and the
action taken. By framing the context early in the process, the strategic leader is positioned to
influence what looks reasonable or inappropriate in terms of language and the overall process
for generating the decision itself. Framing and reframing decision making is an important tactic
for influencing organizational behavior. This process sensitizes the leader to the context of
organizational decision making by increasing his or her self-awareness of history-the history of
past relationships and past choices. Framing and reframing tactics thus give the leader the
ability to set a context within which present and possible future decisions are evaluated, and
an important perceptual lens that provides leverage for producing innovative ideas for getting
things done.
 Interpersonal influence tactics recognizes that power and influence tactics are fundamental to
living and operating in a world where organizations are characterized as interdependent social
systems that require getting things done with the help of other people. A leader employing
interpersonal influence tactics typically demonstrate behaviors that include: understanding the
needs and concerns of the other person, managing constructive relationships with superiors,
peers and subordinates, using active listening skills, asking probing questions to understand a
countervailing power position, anticipating how individuals may respond to ideas or
information, thinking about the most effective means to influence the individual and crafting
appropriate tactics to the needs and concerns of the other person, and maintaining a broad
network of individual contacts.

64
 Timing tactics involve determining not only what to do but when to move out. These types of
action include: initiating action first to catch your adversary unprepared, thereby establishing
possible advantage in framing a context for action, using delay tactics to erode the confidence
of proponents or opponents as it relates to setting priorities, allocating resources and
establishing deadlines, controlling the agenda and order of agenda items to affect how
decisions are made. The sequencing of agenda items is very critical where decisions are
interdependent.
 Empowerment tactics create conditions where subordinates can feel powerful, especially those
who have a high need for power. Leaders empower their followers and subordinates through a
process that provides direction, intellectual stimulation, emotional energy, developmental
opportunities and appropriate rewards. Typical behaviors of a leader using these tactics include:
high involvement and participation in the decision making process, modifying and adapting
one's ideas to include suggestions from others, involving others in the strategy formulation
and implementation process, looking for creative and innovative solutions that will benefit
the total organization, and instilling confidence in those who will implement the solutions.
 Structural tactics can be employed to divide and dominate the opposition. They can be used to
consolidate power by putting a leader or his or her subordinates and allies in a position to
exercise more control over resources, information, and formal authority. Re-aligning
organizational structure can also be used to co-op others to support a leader's ideas,
initiatives and decisions. Effective employment of structural tactics is accomplished when
leaders aggressively use their formal power to consolidate, expand and control the
organizational landscape.
 Logical persuasion tactics requires using logical reasons, facts, and data to influence others.
Employment of a leader's expert power base can be used to support logical persuasion. Effective
use of these tactics include the following behaviors: persuading others by emphasizing the
strengths and advantages of their ideas, developing more than one reason to support one's
position, using systems thinking to demonstrate the advantages of their approach, and
preparing arguments to support their case.
 Bargaining tactics involve leader behaviors that attempt to gain influence by offering to
exchange favors or resources, by making concessions, or by negotiating a decision that
mutually advances the interests of all participants. These influence tactics are typically
effective in a political environment involving opposing or resisting forces; when a leader is in a
position to do something for another individual or group; or when the collective interests of all
can be served.
 Organizational mapping tactics focus the leader's sight on possible power-dependent and
interdependent relationships. The critical task is to identify and secure the support of important
people who can influence others in the organization. Leaders using these tactics will employ
behaviors that include: determining which actors are likely to influence a decision, getting
things done by identifying existing coalitions and working through them, garnering support by
bringing together individuals from different areas of the organization, isolating key individuals
to build support for a decision, linking the reputations of important players to the decision
context and working outside formal organization channels to get the support of key decision
makers.
 Impact leadership tactics include thinking carefully about the most profound, interesting or
dramatic means to structure a decision situation to gain the support of others. Behaviors
include: presenting ideas that create an emotional bond with others, using innovative and
creative ways to present information or ideas, finding and presenting examples that are
embedded in the political and cultural frames such as language, ceremonies and propitious

65
 events, and lastly, consistently demonstrating high energy and physical stamina in getting the
job done.
 Visioning tactics demonstrate how a leader's ideas and values support the organization's
strategic goals, beliefs and values. Leader behaviors in executing these tactics include:
articulating ideas that connect the organization's membership to an inspiring vision of what
the organization can become, appealing to organization core values or principles, linking the
work of the organization to the leader's vision and broader goals, creating and using cultural
symbols to develop both individual pride and team identity.
 Information and analysis tactics suggest that leaders in control of the facts and analysis can
exercise substantial influence. Leaders will use unobtrusive behaviors to disguise their true
intention, which is to effectively employ influence tactics that seemingly appear rational and
analytical. Facts and data are manipulated and presented to appear rational and help to make
the use of power and influence less obvious. Another ploy used by leaders is to mobilize power
by bringing in credible outside experts who can be relied on to support a given strategy and
provide the answers they are expected to give. Lastly, under conditions of VUCA which
characterizes strategic decision making, leaders will selectively advocate decision criteria that
support their own interests and organizations. In these cases, leaders typically do what works
best and make decisions based on criteria that are most familiar to them.
 Coercive tactics are the least effective in influencing strategic decisions. These tactics involve
employing threats, punishment, or pressure to get others to do what a leader wants done.
Typical leader behaviors include: using position power to demand obedient compliance or
blind loyalty, making perfectly clear the costs and consequences of not "playing the game",
publicly abusing and reprimanding people for not performing, and punishing individuals who
do not implement the leader's requests, orders or instructions.

Lesson:-7

ORGANIZATIONAL DEVELOPMENT
Organizational development (OD) is a planned, ongoing effort by organizations to change in order to
become more effective. The need for organizational change becomes apparent when a gap exists between
what an organization is trying to do and what is actually being accomplished. OD processes include using
a knowledge of behavioral science to encourage an organizational culture of continual examination and
readiness for change. In that culture, emphasis is placed on interpersonal and group processes. The fact
that OD links human processes such as leadership, decision making, and communication with
organizational outcomes such as productivity and efficiency distinguishes it from other change strategies
that may rely solely on the principles of accounting or finance.
The fact that OD is planned distinguishes it from the routine changes that occur in the organization,
particularly through a more effective and collaborative management or organization culture with special
emphasis on forming work teams. The focus on interpersonal and group processes to improve

66
performance recognizes that organizational change affects all members and that their cooperation is
necessary to implement change.
The forces compelling an organization to change can be found both inside and outside the organization.
Internal forces toward change can affect changes in job technology, composition of the work force,
organization structure, organizational culture, and goals of the organization. There are a variety of
external forces that may require managerial action: changes in market conditions, changes in
manufacturing technology, changes in laws governing current products or practices, and changes in
resource availability.
An organization can focus OD change efforts in several areas: changes to structure, technology, and
people using a variety of strategies for development. Some of the more common techniques for changing
an organization's structure include changes in work design to permit more specialization or enrichment,
clarification of job descriptions and job expectations, increase or decrease of the span of control,
modification of policies or procedures, and changes in the power or authority structure. Another general
approach to planned change involves modifications in the technology used as tools to accomplish work.
The assumption behind enhancing technology is that improved technology or work methods will lead to
more efficient operations, increased productivity, or improved working conditions. Examples of
technological approaches to change include changing processes for doing work, introducing or updating
computers or software, and modifying production methods. The third general approach to change focuses
on the people in the organization. This approach is intended to improve employee skills, attitudes, or
motivation and can take many forms, such as introducing training programs to enhance work skills,
increasing communication effectiveness, developing decision-making skills, or modifying attitudes to
increase work motivation.

ORGANIZATIONAL DEVELOPMENT STRATEGIES

Choosing the appropriate approach to organizational change depends on the nature of the problem, the
objectives of the change, the people implementing the change, the people affected by the change, and the
resources available. Several strategies are often thought of as effective techniques for organization
development: reengineering, team building, total quality management, job enrichment, and survey
feedback.
Reengineering is the sweeping redesign of organizational processes to achieve major improvements in
efficiency, productivity, and quality. What makes reengineering so far-reaching is that it goes beyond just
modifying and altering existing jobs, structures, technology, or policies. This approach asks fundamental
questions, such as: What is the purpose of our business? If this organization were being created today,
what would it look like? Jobs, structure, technology, and policies are then redesigned according to the
answers to these questions.
As part of the OD process, teams are used as a way of responding quickly to changing work processes
and environments; they are encouraged and motivated to take the initiative in making suggestions for
improving work processes and products. The term team can refer to intact work groups, new work units,
or people from different parts of an organization who must work together to achieve a common goal.
Often team building begins with a diagnostic session, held away from the workplace, where the team's
members examine their strengths and weaknesses. The goal of team building is to improve the
effectiveness of work teams by refining interpersonal interactions, improving communication, and
clarifying goals and tasks in order to improve overall effectiveness in accomplishing goals. In ideal
circumstances, team building is a continual process that includes periodic self-examination and
development exercises. Managers must continually develop and maintain strategies for effective team
performance by building trust and keeping lines of communication open.

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Effective teams are generally attractive to others and cohesive. The extent to which people want to belong
to the team makes the team more attractive to others. If others see the team as cooperative and successful,
they are more willing to belong. Teams are seen as less appealing if the group's members feel that
unreasonable demands are made on them, if the group is dominated by a few members, or if competition
exits within the group. A cohesive team exhibits strong interpersonal interaction among its members as
well as, increased performance and goal accomplishments.
Reengineering efforts place a strong emphasis on teamwork with the intent of fostering collaboration to
accomplish a goal, to resolve problems, and to explore alternatives. These teams can be traditionally
managed by an appointed leader or manager or self-managed. Self-managed teams work without an
official leader and therefore share responsibility for managing the work team. Managers continue to coach
the team, develop strategies for improving performance, and provide resources even though they may not
direct the daily activities of the team.
Total quality management (TQM) is the term used to describe comprehensive efforts to monitor and
improve all aspects of quality within a firm. Teamwork plays a major role in quality improvement. Total
quality management efforts could include employee training, identification and measurement of
indicators of quality, increased attention to work processes, and an emphasis on preventing errors in
production and service. What is the connection between TQM and OD? Both require a high degree of
employee commitment, involvement, and teamwork. Many decisions must be made at the level where the
work is accomplished, and managers must be willing to give employees this power. Managers empower
employees to make decisions and take responsibility for their outcomes.
Job enrichment is often thought of as a technique of OD. It involves changing a job by adding additional
tasks and by adding more responsibility. The widespread use of self-managed teams results in significant
job enrichment. By the mere definition of self-managed teams, employees are now being asked to
perform new tasks and exercise responsibilities within the team that they haven't had to perform before.
Survey feedback involves collecting data from organizational members; these data are then shared with
the members during meetings. In these meetings suggestions for formulating change are made based on
the trends that emerge from the data. Survey feedback is similar to team building; however, the survey
strategy places more emphasis on collecting valid data than on the interpersonal processes of work teams.
OD EFFORTS AND CHANGE

The success or failure of planned change depends not only on the correct identification of the problem but
also on recognition of possible resistance to change. It is critical to the successful achievement of
organizational development efforts for the manager to recognize the need for change, diagnose the extent
of the problems that create this need, and implement the most effective change strategy. Successful OD
efforts require an accurate analysis of the needed changes and an identification of the potential resistance
to the proposed changes. Two critical points should be addressed concerning the areas in which
organizations can introduce change. First, changes made in one area often trigger changes in other areas
as well. Managers and those proposing the change must be aware of this systemic nature of change.
Second, changes in goals, strategies, technology, structure, process, and job design require that people
change. Serious attention must be given to the reactions of employees and possible resistance to changes
in these areas.
People may be resistant to change for a number of reasons. They may feel that they will lose status,
power, or even their jobs. People react differently to change; even if no obvious threat to their jobs exist,
some people's personalities make them more uncomfortable than others with changes in established
routines. The reasons for the change or the exact change that will take place may not be understood.
However, even if the reasons for the change are understood, employees may not have a high level of trust
in the motives of those proposing the change. Also, those who are the targets of the change may
genuinely feel that the proposed change is not necessary.
Organizational culture could also influence people's reactions to OD efforts. Organizational culture can be
thought of as the organization's personality. The culture is defined by the shared beliefs, values, and
patterns behaviors that exist in the organization—in other words, "the way we do things around here."

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Some organizational cultures may even reward stability and tradition while treating those who advocate
change as outsiders. Sometimes the definition and strength of an organization's culture aren't evident until
it undergoes change.
How can managers deal with resistance to change? An individual's low tolerance for change is largely a
personal matter and can often be overcome with support and patience. Open communication can go a long
way toward overcoming resistance to change based on misunderstanding, lack of trust, or different
viewpoints. Those who will be affected by the change must be identified, and the reasons for and details
about the change must be conveyed accurately to them. Keeping this information "secret" is bound to
cause resistance. Also, the people who are the targets of the change should be involved in the change
process. This is particularly important when true commitment to, or "ownership" of, the change is critical
and those affected have unique knowledge about the processes or jobs that may be altered.
DOES ORGANIZATION DEVELOPMENT WORK?

Genuine efforts at organizational development require an investment of time, human effort, and money.
Do the benefits of OD outweigh these costs? Reviews of a wide variety of OD techniques indicate that
they tend to have a positive impact on productivity, job satisfaction, and other work attitudes. These
reviews have also pointed out that OD efforts seem to work better for supervisors and managers than for
blue-collar workers and that changes that use more than one technique seem to have more impact. There
are several factors exist that increase the likelihood of successful OD efforts:

 Recognition of organization problems and influences. Before changes can be proposed, correct
identification of the gaps between what an organization is trying to do and what is actually being
accomplished must be made.
 Strong support from top-level managers. If managers at the higher levels in the organization do
not provide obvious and open support for the OD efforts, the program is likely to fail.
 Action research that provides facts, not opinions, for decision-making. Action research includes
an identification of the attitudes and behaviors of employees and is part of an ongoing
assessment of organizational behavior.
 Communication of what OD is and is not and awareness of why it is being used. The culture of
the organization should be such that employees are aware of what organizational development
is and is not so that it is not seen as a threat.

To thrive in tomorrow's business environment—characterized by a dynamic work force, rapid

changes in technology, and the increasing volatility of the global environment— organizational
development must be an ongoing effort; encouraging continual examination and readiness for
change must be part of the organization's culture

ORGANIZATIONAL CHANGE
Dear students, today we shall learn about change and its impact of change on organizations.
Perhaps the only thing constant within organisations is now change.
Traditionally, analysis of organisational change has been built around the organism metaphor in
which organisations are analyzed as if they were living organisms operating in an environment to
which they need to adapt to ensure survival.
For an organisation, its environment may be broken down into:
* Societal factors
* Environment factors and

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* Internal factors.
This is an era of globalization and the organizations need to cope up with the dynamic and
inevitable changes which take place very often. Because of this changes the competition among firms
is becoming intense and every organization should be flexible enough to implement the changes
whenever required for its survival.
There are two basic forms of change in organizations. Planned change is change resulting from a
deliberate decision to alter the organization. Companies that wish to move from a traditional
hierarchical structure to one that facilitates self-managed teams must use a proactive, carefully
orchestrated approach. Not all change is planned, however. Unplanned change is imposed on the
organization and is often unforeseen. Changes in government regulations and changes in the
economy, for example, are often unplanned. Responsiveness to unplanned change requires
tremendous flexibility and adaptability on the part of the organizations. Managers must be prepared
to handle both planned and unplanned forms of change in organizations.

Forces for Change

Forces for change can come from many sources. Some of these are external, arising from outside the
company, whereas others are internal, arising from sources within the organization.

External forces-

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The four major external forces for change are globalization, workforce diversity, technological
change, and managing ethical behavior are challenges that precipitate change in organizations.
Internal Forces

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

Declining effectiveness is a pressure to change. A company that experiences its third quarterly loss
within a fiscal year is undoubtedly motivated to do something about it. Some companies react by
instituting layoffs and massive cost – cutting programs, whereas others look at the bigger picture,
view the loss as symptomatic of an underlying problem, and seek the cause of the problem.

A crisis also may stimulate change in an organization. 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 organization. A
much-publicized crisis that led to change with Exxon was the oil spill accident with Exxon’s Valdez
oil tanker. The accident brought about many changes in Exxon’s environmental policies.

Changes in employee expectations also can trigger change in organizations. A company that hires a
group of young newcomers may be met with a set of expectations very different from those
expressed by older workers. The work force is more educated than ever before. Although this has its
advantages, workers with more education demand more of employers. Today’s workforce is also
concerned with career and family balance issues, such as dependent care. The many sources of
workforce diversity hold potential for a host of differing expectations among employees

Changes in the work climate at an organization can also stimulate change. A workforce that seems
lethargic, unmotivated, and dissatisfied is a symptom that must be addressed. This symptom is
common in organizations that have experienced layoffs. Workers who have escaped a layoff may
grieve for those who have lost their jobs and may find it hard to continue to be productive. They may
fear that they will be laid off as well, and many feel insecure in their jobs.

Resistance to Change

People often resist change in a rational response based on self – interest. However, there are
countless other reasons people resist change. Many of these center around the notion of reactance –
that is, a negative reaction that occurs when individuals feel that their personal freedom is threatened.
Some of the major reasons for resisting change follow.

FEAR OF THE UNKNOWN Change often brings with it substantial uncertainty. Employees facing
a technological change, such as the introduction of a new computer system, may resist the change
simply because it introduces ambiguity into what was once a comfortable situation for them. This is
especially a problem when there has been a lack of communication about the change.

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FEAR OF LOSS When a change is impending, some employees may fear losing their jobs,
particularly when an advanced technology like robotics is introduced. Employees also may fear
losing their status because of a change. Computer systems experts, for example, may feel threatened
when they feel their expertise is eroded by the installation of a more user – friendly networked
information system. Another common fear is that changes may diminish the positive qualities the
individual enjoys in the job. Computerizing the customer service positions at Southwestern Bell, for
example, threatened the autonomy that representatives previously enjoyed.

FEAR OF FAILURE Some employees fear changes because they fear their own failure.
Introducing computers into the workplace often arouses individuals’ self – doubts about their ability
to interact with the computer. Resistance can also stem from a fear that the change itself will not
really take place. In one large library that was undergoing a major automation effort, employees had
their doubts as to whether the vendor could really deliver the state – of – the – art system that was
promised. In this case, the implementation never became a reality – the employees’ fears were well
founded

DISRUPTION OF INTERPERSONAL RELATIONSHIPS Employees may resist change that

threatens to limit meaningful interpersonal relationships on the job Librarians facing the automation
effort described previously feared that once the computerized system was implemented, they would
not be able to interact as they did when they had to go to another floor of the library to get help
finding a resource. In the new system, with the touch of a few buttons on the computer, they would
get their information without consulting another librarian.

PERSONALITY CONFLICTS When the change agent’s personality engenders negative reactions,
employees may resist the change. A change agent who appears insensitive, to employee concerns and
feelings may meet considerable resistance, because employees perceive that their needs are not being
taken into account.

POLITICS Organizational change may also shift the existing balance of power in the organization.
Individuals or groups who hold power under the current arrangement may be threatened with losing
these political advantages in the advent of change.

CULTURAL ASSUMPTIONS AND VALUES Sometimes cultural assumptions and values can be
impediments to change, particularly if the assumptions underlying the change are alien to employees.
This form of resistance can be very difficult to overcome, because some cultural assumptions are
unconscious. As we discussed in Chapter 2, some cultures tend to avoid uncertainty may be met with
great resistance.

Some individuals are more tolerant of ambiguity. We have described several sources of resistance to
change. The reasons for resistance are as diverse as the workforce itself and vary with individuals
and organizations. The challenge for managers is introducing change in a positive manner and
managing employee resistance.

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Managing Resistance to Change

The traditional view of resistance to change treated it as something to be overcome, and many
organizational attempts to reduce the resistance have only served to intensify it. The contemporary
view holds that resistance is simply a form of feedback and this feedback can be used very
productively to manage the change process. One key to managing resistance is to plan for it and to be
ready with a variety of strategies for using the resistance as feedback and helping employees
negotiate the transition. Three key strategies for managing resistance to change are communication,
participation, and empathy and support.

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.
Employees want to know why change is needed. If there is no good reason for it, why should they
favour the change? Providing accurate and timely information about the change can help prevent
unfounded fears and potentially damaging rumours from developing. Delaying the announcement of
a change and handling information in a secretive fashion can serve to fuel the rumour mill. Open
communication in a culture of trust is a key ingredient for successful change. It is also beneficial to
inform people about the potential consequences of the change. Educating employees on new work
procedures is often helpful. Studies on the introduction of computers in the workplace indicate that
providing employees with opportunities for hands – on practice helps alleviate fears about the new
technology. Employees who have experience with computers display more positive attitudes and
greater efficacy – a sense that they can master their new tasks.

There is substantial research support underscoring the importance of participation in the change
process. Employees must be engaged and involved in order for change to work – as supported by the
notion “That which we create, we support.” GE’s Workout process that was mentioned earlier in this
chapter is a good illustration of how to get a large group together in a free – form, open – ended
meeting. The outcome is a change to which everyone is committed. The group comes together later,
after the change is implemented to see what has been learned and to look for what is happening on
the horizon. Participation by a large group can move change further along. Participation helps
employees

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ORGANISATIONAL CULTURE :
Students what do you all think Organizational Culture is ? Can you all define it in your own way….

In the 1980's, we saw an increase in the attention paid to organizational culture as an important
determinant of organizational success. Many experts began to argue that developing a strong
organizational culture is essential for success. While the link between organizational culture and
organizational effectiveness is far from certain, there is no denying that each organization has a
unique social structure and that these social structures drive much of the individual behavior
observed in organizations. We will leave the question of the relationship between culture and
effectiveness for another discussion.
What is organizational culture?
A single definition of organizational culture has proven to be very elusive. No one definition of
organizational culture has emerged in the literature. One of the issues involving culture is that it is
defined both in terms of its causes and effect. For example, these are the two ways in which cultures
often defined.
1. Outcomes- Defining culture as a manifest pattern of behavior- Many people use the term
culture to describe patterns of cross individual behavioral consistency For example, when
people say that culture is “The way we do things around here,” they are defining consistent
way is in which people perform tasks, solve problems, resolve conflicts, treat customers, and
treat employees.
2. Process- Defining culture as a set of mechanisms creating cross individual behavioral
consistency- In this case culture is defined as the informal values, norms, and beliefs that
control how individuals and groups in an organization interact with each other and with
people outside the organization.

Both of these approaches are relevant to understanding culture. It is important to know on what types
of behavior culture has greatest impact (outcomes) and how culture works to control the behavior of
organizational members. We will address these two questions later in the module.
Functions of organizational culture

1. Behavioral control

2. Encourages stability

3. Provides source of identity

Draw backs of culture

1. Barrier to change and improvement

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 2. Barrier to diversity

3. Barrier to cross departmental and cross organizational cooperation

4. Barrier to mergers and acquisitions

What Types of Behavior Does Culture Control? Using the outcome approach, cultures are described
in terms of the following variables:

• Innovation versus Stability- The degree to which organizational members are encouraged to be
innovative, creative and to take risks.

• Strategic versus Operational Focus- The degree to which the members of the management
team focus on the long term big picture versus attention to detail.

• Outcome versus Process Orientation- The degree to which management focuses on outcomes,
goals and results rather than on techniques, processes, or methods used to achieve these
results.

• Task Versus Social Focus- The relative emphasis on effect of decisions on organizational
members and relationships over task accomplishment at all costs

• Team versus Individual orientation- The degree to which work activities are organized around
teams rather than individuals

• Customer Focus versus Cost Control- The degree to which managers and employees are
concerned about customer satisfaction and Service rather than minimizing costs

• Internal verses External Orientation- The degree to which the organization focuses on and is
adaptive to changes in its environment

Cultural Control Mechanisms

How does organizational culture control the behavior of organizational members? If consistent
behavioral patterns are the outcomes or products of a culture, what is it that causes many people to
act in a similar manner? There are four basic ways in which a culture, or more accurately members of
a reference group representing a culture, creates high levels of cross individual behavioral
consistency. There are:

• Social Norms

Social norms are the most basic and most obvious of cultural control mechanisms. In its basic
form, a social norm is simply a behavioral expectation that people will act in a certain way in

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 certain situations. Norms (as opposed to rules) are enforced by other members of a reference
group by the use of social sanctions. Norms have been categorized by level.

A. Peripheral norms are general expectations that make interactions easier and
more pleasant. Because adherence of these norms is not essential to the
functioning of the group, violation of these norms general results in mild
social sanctions.

B. Relevant norms encompass behaviors that are important to group functioning.

Violation of these norms often results in non-inclusion in important group
functions and activities

C. Pivotal norms represent behaviors that are essential to effective group

functioning. Individuals violating these norms are often subject to expulsion
from the group.

• Shared Values

• As a cultural control mechanism the keyword in shared values is shared. The issue is not
whether or not a particular individual's behavior can best be explained and/or predicted by his
or her values, but rather how widely is that value shared among organizational members, and
more importantly, how responsible was the organization/culture in developing that value
within the individual. What is a value? Any phenomenon that is some degree of worth to the
members of giving groups: The conception of the desirable that establishes a general
direction of action rather than a specific objective. Values are the conscious, affective desires
or wants of people that guide their behavior

How are values formed/developed within individuals? We like to think that our values are unique to
us and an essential part of who we are. The critical question here is, how much of our values are
derived from our reference group affiliation? We find that for most people, their values are generally
consistent with the values of the reference group in which they were socialized. There are two kinds
of values:

A. Instrumental values represent the “means” an individual prefers for achieving

important “ends.”

B. Terminal values are preferences concerning “ends” to be achieved. When an

individual can no long answer the question of “

These components of culture have a well – defined linkage with each other which binds a culture and
makes change in any one of the components difficult. However, change in any one of these
components causes chain reactions amongst others. Their interrelationship is presented in Fig. 1.1

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Culture is a very powerful force at the workplace, which is consciously and deliberately cultivated
and is passed on to the incoming employees. It reflects the true nature and personality of an
organisation.
There are various myths about organisational culture. Some of them are presented here along with
the counter arguments.
1. Organisational culture is same as organisational climate : In management literature there is often
ambiguity about the two concepts – organisational culture and organisational climate. As
explained earlier, organisational culture is a macro phenomenon which refers to the patterns of
beliefs, assumptions, values, and behaviours reflecting commonality in people working together.
However, organisational climate is a micro phenomenon and reflects how employees in an
organisation feel about the characteristics and quality of culture like morale, goodwill, employee
relations, job satisfaction, commitmrnt at the organisational, department or unit level. It refers to
the psychological enviornment in which behaviour of organisational members occurs. It is a
relatively persistent set of perceptions held by organisational members about the organisational
culture. Another viewpoint about climate is that various variables get subsumed under the
concept of climate, whereas has unique indicators like symbols, rites, myths, and stories.
2. Culture is same as ‘groupthink’ : Since culture refers to shared assumptions and beliefs, it is likely
to cause confusion. Groupthink refers to group members hiding any differences in how they feel
and think and behave in a certain way. The phenomenon of groupthink is mostly used in a face –
to – face situation when dealing with small groups. Culture, on the other hand, is a much larger
phenomenon characterised by historical myths, symbols, beliefs, and artifacts.
3. Culture is same as organisation : Culture is a result of sustained interaction among people in
organisations and exists commonly in thoughts, feelings, and behaviour of people. Organisations
on the other hand, consist of a set of expectations and a system of reward and punishment
substained by rules, regulations, and norms of behaviour.
4. Culture is a social structure : Social structures in various collectives exhibit tangible and specific
ways in which people relate to one another overtly. However, culture operates on a system of
unseen, abstract, and emotionally loaded forms which guide organisational members to deal with
their physical and social needs.

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Fig. 1 Relationship among components of culture

CULTURE : CONCEPTUAL FRAMEWORK

Basic concepts and definitions

Culture has been defined differently by various scholars. According to Kroeber and
Kluckholn (1952) culture consists of patterns, explicit and implicit, of and for behaviour acquired
and transmitted by symbols, constituting the distinctive achievement of human groups, including
their embodiment in artifacts. The essential core of culture consists of traditional (i.e., historically
derived and selected) ideas and especially their attached values. Culture systems may, on the one
hand, be considered as products of action, and as conditioning elements of future action.
In the words of Hofstede (1980) culture is, “ The collective programming of the mind which
distinguishes the members of one human group from another …. The interactive aggregate of
common characteristics that influences a human group’s response to its environment.”
Anthropologist Symington (1983) has defined culture as, “… that complex whole which includes

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knowledge, belief, art, law, morals, customs and capabilities and habits acquired by a man as a
member of society.”
The Indian perspective of culture given by Sinha (2000) suggests that “Culture consists of totality of
assumptions, beliefs, values, social systems and institutions, physical artifacts and behaviour of
people, reflecting their desire to maintain continuity as well as to adapt to external demands.”
What these descriptions suggest is a set of value systems that are equally shared by all the members.
They take a long time to evolve and are sustained over a long period of time. They form a common
core which binds people together.
Work culture, on the other hand, is a totality of various levels of interaction among organisational
factors (boundaries, goals, objectives, technology, managerial practices, material and human
resources, and the constraints) and organismic factors (skills, knowledge, needs, and expectations)
interact among themselves at various levels. Over a period of time they develop roles, norms and
values focusing work and is called work culture.
NATURE OF ORGANISATIONAL CULTURE
The culture of an organisation may reflect in various forms adopted by the organisation. These could
be :
􀂃The physical infrastructure
􀂃Routine behaviour, langauge, ceremonies
􀂃Gender equality, equity in payment
􀂃Dominant values such as quality, efficiency and so on
􀂃Philosophy that guides the organisation’s policies towards it employees and customers like
‘customer first’ and ‘customer is king’, and the manner in which employees deal with customers.

Individually none of these connote organisational culture, however, together, they reflect
organisational culture. Although organisational culture has common properties, it is found that
large organisations have a dominant culture and a number of sub – cultures. The core values
shared by the majority of the organisational members constitute the dominant culture. Therefore,
whenever one refers to the culture of an organisation one actually talks about the dominant
culture of an organisation one actually talks about the dominant culture. Subcultures within an
organisation are a set of shared understandings among members of one
group/department/geographic operations. For example, the finance department of an organisation
may have a sub – culture which is unique to this department vis–a–vis other departments. This
means that this department will not only have the core values of the organisation’s dominant
culture but also some unique values. If an organisation does not have a dominant culture and is
comprised only of various sub – cultures, its effectiveness would be difficult to judge and there
will be no consistency of behaviour among departments. Hence, the aspect of common or shared
understanding is an essential component of organisational culture. Also, organisational culture
exists at various levels.

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 LEVELS OF ORGANISATIONAL CULTURE
One comes across a number of elements in the organisation which depict its culture.
Organisational culture can be viewed at three levels based on manifestations of the culture in
tangible and intangible forms. Fig. 1.2 identifies these levels.

Figure 2: Levels of organisational culture

1. At Level One the organisational culture can be observed in the form of physical objects,
technology and other visible forms of behaviour like ceremonies and rituals. Though the
culture would be visible in various forms, it would be only at the superficial level. For
example, people may interact with one another but what the underlying feelings are or
whether there is understanding among them would require probing.

2. At Level Two there is greater awareness and internalisation of cultural values. People in the
organisation try solutions of a problem in ways which have been tried and tested earlier. If
the group is successful there will be shared perception of that ‘success’, leading to cognitive
changes turning perception into values and beliefs.

3. Level Three represents a process of conversion. When the group repeatedly observes that the
method that was tried earlier works most of the time, it becomes the ‘preferred solution’ and
gets converted into underlying assumptions or dominant value orientation. The conversion
process has both advantages. The advantages are that the dominant value orientation guides
behaviour, however at the same time it may influence objective and rational thinking.

These three levels range on a scale of superficial to deeply embedded. As cultural symbols
get converted to shared assumptions, they move from a superficial level to a real
internationalised level as shown in Figure 1.3.

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PATTERNS OF ORGANISATIONALS CULTURE
Types of Organizational Culture
Organisational culture can vary in a number of ways. It is these variances that differentiate one
organisation from the others. Some of the bases of the differentiation are presented below :
1. Strong vs weak culture : Organisational culture can be labelled as strong or weak based on
sharedness of the core values among organisational members and the degree of commitment the
members have to these core values. The higher the sharedness and commitment, the stronger the
culture increases the possibility of behaviour consistency amongst its members, while a weak
culture opens avenues for each one of the members showing concerns unique to themselves.

2. Soft vs hard culture : Soft work culture can emerge in an organisation where the organisation
pursues multiple and conflicting goals. In a soft culture the employees choose to pursue a few
objectives which serve personal or sectional interests. A typical example of soft culture can be
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 found in a number of public sector organisations in India where the management feels
constrained to take action against employees to maintain high productivity. The culture is welfare
oriented; people are held accountable for their mistakes but are not rewarded for good
performance. Consequently, the employees consider work to be less important than personal and
social obligations. Sinha (1990) has presented a case study of a public sector fertilizer company
which was established in an industrially backward rural area to promote employment generation
and industrial activity. Under pressure from local communities and the government, the company
succumbed to overstaffing, converting mechanised operations into manual operations, payment
of overtime, and poor discipline. This resulted in huge financial losses (up to 60 percent of the
capital) to the company.
3. Formal vs informal culture : The work culture of an organisation, to a large extent, is influenced
by the formal components of organisational culture. Roles, responsibilities, accountability, rules
and regulations are components of formal culture. They set the expectations that the organisation
has from every member and indicates the consequences if these expectations are not fulfilled.
Table 1.1 presents some of the components of formal culture and their implication for
organisations.

4.

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