Organisational BehaviourJan18 IVgCWRqzCT PDF

Organisational Behaviour
S
IM
M
N
COURSE DESIGN COMMITTEE
Dean TOC Reviewer

Dr. Vidya Naik Mr. Akinet Bais
Dean, NMIMS Global Access - Visiting Faculty, NMIMS Global
School for Continuing Education Access - School for Continuing Education.
Specialization: International
Business, Strategic Management
and Customer Relationship Management
Associate Dean Content Reviewer

Mr. Abhishek Asthana Ms. Divya Vyas
Associate Dean, NMIMS Global Assistant Professor, NMIMS Global
Access - School for Continuing Access - School of Continuing Education.
Education Specialization: Marketing and
General Management
S
Stream Leader Content Reviewer
Ms. Divya Vyas Ms. Pooja Basu
IM
Assistant Professor, NMIMS Global Assistant Professor, NMIMS Global
Access - School of Continuing Education. Access - School of Continuing Education.
Specialization: Marketing and Specialization: Operations Management
General Management
M
Author : Mr. Paramjit S. Lamba

N
Reviewed By: Ms. Divya Vyas & Ms. Pooja Basu
Copyright:
2018 Publisher
ISBN:
978-93-5119-456-9
Address:
4435/7, Ansari Road, Daryaganj, New Delhi–110002
Only for
NMIMS Global Access - School for Continuing Education School Address
V. L. Mehta Road, Vile Parle (W), Mumbai – 400 056, India.
NMIMS Global Access - School for Continuing Education

C O NTENTS
CHAPTER NO. CHAPTER NAME PAGE NO.
1 Introduction to Organisational Behaviour 1
2 Understanding Individual Behaviour 29
3 Personality 47
S
4 Perception 65
5 Learning 87
IM
6 Motivation 109
7 Leadership and People Skills 135

M
8 Groups and Teams 161

N
9 Stress Management 187
10 Conflict Management 217
11 Power and Politics in Organisations 237
12 International Organisational Behaviour 261
13 Case Studies 293

c u r r i c u l u m
Introduction to Behaviour in Organisations: Introduction to Organisational Behaviour, Definition

& Scope of Organisational Behaviour, Importance of Organisational Behaviour, Approaches to
Organisational Behaviour, Challenges & Opportunities, Organisational Behaviour & Its Behavioural
Sciences Foundation
Understanding Individual Behaviour: Introduction, Biographical Attributes, Ability, Values,

Attitudes, Job Satisfaction
S
Personality: Determinants of Personality, Process of Personality Formation, Significant Personality
Traits impacting Organisational Behaviour
IM
Perception: What is Perception? Factors that Influence Perception, Impression Management,
Perception of Self-image and Behaviour
Learning: The Concept of Learning, Theories of Learning, Learning through Reinforcement,

M
A Glance at Organisational Reward System, How to Administer Reinforcement? The Impact of

Punishment
N
Motivation: Meaning, Primary Motives, General Motives & Secondary Motives, Motivational
Approaches, Motivation in Practice
Leadership: Introduction, Behavioural Theories, Trait Theories, Contingency Theories, Current

Issues in leadership, Emotional Intelligence, Leadership Styles & their Impact on Employees
Groups Dynamics & Understanding Work Groups and Teams: What is Group Dynamics?
Formation of Groups, Types of Groups, Understanding Group Processes and Issues in Teamwork,
Issues Faced in Team Work, Creating Effective Work Teams
Stress Management: What is Stress, Stress Experience, Work Stress Model, Stressors, Sources
of Stress, Levels of Stress (Individual, Group and Organisational) Outcomes, Stress Management,
Stress and Performance

v
Conflict Management: Understanding Conflict, Functional & Dysfunctional Conflicts, Types of

Conflicts, Inter-personal Conflict, Inter-group Conflict, Conflict Resolution, Allowing Functional Conflict
for Organisational Effectiveness
Power & Politics in Organisations: Difference Between Leadership & Power, Sources of Power,
Identifying the Sources of Power in an Organisation, Power Tactics, Power In groups, Politics in
Organisations, Factors Contributing to Politics, Organisational Culture and its Responsibility in
Breeding Politics, Personality Development for Encountering Politics
International Organisational Behaviour: Trends in International Business, Cultural Differences

and Similarities, Behaviours across Countries, Hofstede Cultural Dimensions, Motivation across
Cultures, Cultural Adjustment , Interpersonal Behaviour across Cultures, Leadership across Cultures,
S
Multicultural Team, Communicating across Cultures, Environment across Cultures, Technology and
International Business
IM
M
N

N
M
IM
S
C h a
1 p t e r
INTRODUCTION TO ORGANISATIONAL BEHAVIOUR
CONTENTS
S
1.1 Introduction
1.2 Defining Organisational Behaviour
1.2.1 History of Organisational Behaviour
1.2.2
IM
Scope of Organisational Behaviour
1.2.3 Importance of Organisational Behaviour
1.2.4 Features of Organisational Behaviour
Self Assessment Questions
Activity
1.3 Approaches to Organisational Behaviour
M
1.3.1 Classical Approach

1.3.2 Neo-Classical Approach
1.3.3 Modern Approach
N
Activity
1.4 Opportunities and Challenges of Organisational Behaviour
Activity
1.5 Scientific Aspects of Organisational Behaviour
Activity
1.6 Summary
1.7 Descriptive Questions
1.8 Answers and Hints
1.9 Suggested Readings & References

2 Organisational Behaviour
Introductory Caselet
n o t e s
THE PRIMARY CARE CRISIS – APPLYING

ORGANISATIONAL BEHAVIOUR THEORY
INTRODUCTION
The medical sector in the U.S. is considered to be facing a serious

a crisis in Primary Care. Primary care refers to the day-to-day
healthcare provided by a health care provider who also acts as
the first contact and principal point of continuing care for patients
within a health care system. This case study looks at the crisis
from the perspective of Organisational Behaviour (OB) Theory.
Can an OB theory present a solution for the looming crisis?
BACKGROUND
S
During the last two decades, significant changes have occurred
in the medical student career choice in the U.S. The trends in ca-
reer choice have a significant influence on the availability of an
IM
appropriate physician workforce for the U.S. public. The most no-
table is the drastic reduction in the percentage of the U.S. medi-
cal school graduates choosing a primary care career. As more and
more medical students choose sub-specialities, there is a growing
undersupply of primary care physicians (PCP) and an overabun-
dance of subspecialists.
M
Studies show that almost half of all medical students indicate

their interest in primary care during the initial few years. But as
the students approach the beginning of their fourth year and be-
gin to make definite career choices, the number of those who pre-
N
fer PCP drop to about 15%. The Association of American Medical

Colleges is projecting a shortage of as many as 65,000 PCPs by
year 2025; clearly indicating that primary care workforce is in a
deficit crisis.
The problem can become more acute with the recent regulations
passed in the U.S. like Affordable Care Act, 2010 and Medicare
Access and CHIP Reauthorization Act, 2015. These regulations
envision a healthcare system where PCPs are supposed to play a
central role.
WHY PRIMARY CARE LOSING ITS SHEEN?
Researchers have suggested several reasons to explain the recent

decrease in interest for PCP as a career choice by medical stu-
dents. One reason cited is that the decrease may be due to in-
crease in provision of primary care by nurse practitioners and
physician assistants in the office setting and by hospitals in the
inpatient setting. On the career side, the job market for sub-spe-

INTRODUCTION TO ORGANISATIONAL BEHAVIOUR 3
n o t e s
cialists has been improving due to increased prevalence of con-

ditions requiring specialty care and the increased use of medical
technology. The other important reasons were that the medical
students find PCP an unattractive career due to low job satisfac-
tion, declining income, and the widening gap in reimbursement
between sub-specialists and PCPs. PCPs are generally thought of
as only dealing with the simple stuff even though they are trained
to manage even complex chronic conditions such as heart failure
and diabetes.
CAN WE APPLY AN ORGANISATIONAL BEHAVIOUR

THEORY?
Organisation behaviour is a field of management science that

studies the behaviour of individuals, groups and organisations for
S
solving organisational problems. These theories can be directly
applied for designing organisational culture, structure and hu-
man resource policies. In this case, the problem is one of motivat-
ing medical students and those who work in PCP sector towards
IM
choosing and enjoying this profession. Since motivation is one of
the core components of OB theories, we can explore whether we
can apply an OB based motivational theory for identifying the
root cause of the problem and arriving at the solution. You will be
studying these theories in detail in later chapters.
An important theory of motivation propounded by OB theorists

M
is the Two Factor Hygiene Theory. Frederick Herzberg proposed

the Two Factor Hygiene theory based on his research towards an-
swering the question, What do people want from their jobs and
what gives them job satisfaction? Herzberg distinguished be-
N
tween the factors that make people satisfied and motivated on the
job (motivational factors) from those that make them dissatisfied
(hygiene factors) as separate entities altogether. He demonstrat-
ed through studying the work lives of engineers and accountants
that factors providing positive satisfaction arise from the intrinsic
nature of the work itself, such as challenging goals, increasing re-
sponsibilities, and opportunities for personal growth. As against
these factors, he found that there exists another set of factors
whose absence creates job dissatisfaction. These factors, termed
Hygiene factors, did not result in increased job satisfaction when
they are present however, though their absence created job dis-
satisfaction.
For the given problem elucidated in the case, this theory can be
stated as highly relevant for its applicability.
APPLYING HERZBERG’S THEORY TO PRIMARY CARE
As per the OB theory propounded by Herzberg, the attractiveness

of the PCP profession cannot be increased if the focus rests solely

n o t e s
on hygiene factors. This itself can be an important insight as the

immediate reaction to such a problem generally involves attack-
ing low hanging fruits which are easy to execute. The studies have
shown that the students privately fret over the lack of prestige in
primary care and resent the administrative workload and hassle
of a coordination heavy role. A further careful study of the re-
search pertaining to the trend in PCP indicates that the charges
laid against PCP are more fundamental than issues like low re-
muneration. Applying the theory, we can say improving hygiene
factors alone will not be as successful as considering how to make
the job itself more compelling.
Rather than focusing only on increasing financial remuneration

and reducing clerical and administrative burdens associated with
PCP profession – both these oft repeated solutions belong to the
S
type of hygiene factors as these solutions will only lead to reduc-
tion in job dissatisfaction but need not necessarily attract more
students and professionals to this field as per Herzberg theory
IM
– the more meaningful solutions as per the theory could be one
that strive to enrich the field and make it more attractive option
for professionals.
Two important solutions that can be suggested in this respect, in

tune with the principles of the Herzberg’s Two Factor theory, are:
M
1. Increasing the supervisory role of physicians in a

multidisciplinary practice.
2. Reducing the reliance on specialists to manage the care of
patients with chronic diseases.
N
Herzberg’s theory calls for expanding the scope of problems that

primary care offices can manage towards enriching the nature of
job for PCPs. Current data shows that more than half of specialist
visits are for routine follow-up of chronic disease management.
This can be considered as real wastage of specialist resources and
weakening of the role and capacity of PCPs.
EVIDENCE OF APPLICABILITY
Studies have shown that the solutions suggested above had provid-
ed rich dividends for organisations that had implemented them.
A Seattle based Group Health Cooperative has noted a halving of
reported rates of physician burnout, a 29% reduction in the use of
speciality consultants, and overall cost savings of $14 per member
per month. Another organisation, the SouthCentral Foundation,
based in Anchorage, Alaska, designed its practice around a med-
ical home that distributes work so that each team member oper-
ates at the highest level of their credentials. This gave physicians

n o t e s
greater bandwidth to offer up to 50% to 805 of appointments to

same-day visits for acute complaints. Over a 5 year period, the
system saw a 60% drop in visits to specialists and a 40% decrease
in hospital days and admissions.
CONCLUSIONS
The application of Herzberg’s Two Factor Theory suggests that

the solution for PCP crisis is to provide job enrichment in terms
of utilising PCPs more in a supervisory capacity. The illustrated
cases where the theory was successfully applied involved utilis-
ing PCPs in a supervisory capacity at the head of head of large,
multi-disciplinary teams, the members of which are trained and
competent to be able to see patients on their own while still re-
S
porting to the physician. This form of job enrichment is expected
to change the very nature of the work of PCPs and serve as an
important recruiting and retention tool for PCPs.
IM
M
N

n o t e s
learning objectives
After completing this chapter, you will be able to:

>> Explain the concept of organisational behaviour
>> Describe the scope and importance of organisational be-
haviour
>> Discuss the approaches to organisational behaviour
>> Identify the opportunities and challenges of organisational
behaviour
>> Explain the scientific aspects of organisational behaviour
1.1 Introduction
S
Organisational behaviour is concerned with individuals, or group of
individuals working together in an organisation. The study of organi-
sational behaviour deals with the expected behaviour of an individual
IM
in an organisation. No two individuals in an organisation react in the
same manner in a particular situation. Cause and effect relationship
plays an important role in guiding human behaviour. An incident or
event (cause) results in an individual to behave or respond (effect) in a
certain manner. The effect may be different for each individual, which
eventually decides his or her behaviour. Therefore, an understanding
M
of human behaviour is important in organisations. Several concepts

and models have been proposed in an attempt to not only understand
the human behaviour, but also to modify their attitude and promote
skills, so that they can act more effectively.
N
Every organisation needs to give importance to organisational devel-

opment and inculcating a favourable organisational culture in every
employee. Organisations focus on fostering team spirit and motivation
to achieve organisational objectives. Organisations are composed of a
number of individuals working collectively in teams to attain the or-
ganisational objectives. It is thus, essential for all employees to have a
positive attitude towards work. Delegation of powers to subordinates,
division of labour, efficient communication, benchmarking, re-engi-
neering, job re-design and empowerment are some of the important
aspects of organisational behaviour.
This chapter starts by discussing the concept of organisational be-

haviour, its scope and importance. Next, it explains the different
approaches to organisational behaviour. Further, it tells about the
opportunities and challenges of organisational behaviour. The chap-
ter concludes by explaining the scientific aspects of organisational
behaviour.

n o t e s
DEFINING ORGANISATIONAL
1.2
BEHAVIOUR
Stephen P. Robins defines “Organisational behaviour as a system-
atic study of the actions and attitudes that people exhibit within
organisations.”
In simple words, organisational behaviour (OB) is the study of human

behaviour at work. It examines the human behaviour in an organi-
sation with regard to the interactions among individuals and group
of individuals. It assesses the political, psychological and commercial
conditions that affect the performance of an employee in an organisa-
tion. It provides a humanistic approach to an organisation by focusing
on the human processes within the organisation rather than restrict-
ing the focus to the functional or structural aspects of the organisation.
S
There are broadly three levels of organisational behaviour, which
define the unique set of roles, responsibilities, and goals of people at
each level of the organisation. These levels are depicted in Figure 1.1:
IM
Organisational
level
Group level
M
Individual level
N
Figure 1.1: Three Levels of Organisational Behaviour
Let us discuss these levels in the following section:

Individual Level: This level forms the base of the organisational
behaviour and is related to the individuals working in an organi-
sation. It includes the study of organisational behaviour at the in-
dividual level and deals with the perception, personality, learning,
motivation and attitudes of the employees in an organisation.
Group Level: The next level in organisational behaviour is the
group level, which includes the study of group formation, team con-
flict, leadership, power and politics. It helps in gaining information
on how to improve the team work, motivate the employees, etc.
Organisational Level: The third level in organisational behaviour
is the organisational level, which includes the changes in organ-
isation’s culture, management and their effect on the group and
individuals. The working conditions and stress-management tech-
niques are also discussed at this level.

n o t e s
1.2.1 HISTORY OF ORGANISATIONAL BEHAVIOUR
Organisational behaviour is a key concept that is considered as fun-

damentally new practice in the field of management, but is rather an
adaptation of existing management facts. In fact, organisational be-
haviour has its origins right from the start of human civilisation when
people began living in groups. Several scholars contributed to the
field of OB through their studies and research, such as the concept
of scientific management in organisations given by Frederick.W. Tay-
lor (1856-1915). The Scientific management theory evolved to specify
the role of managers in the Administrative management proposed by
Henri Fayol (1841-1925). Later, Max Weber (1864-1920) proposed the
Bureaucratic management, which focused on organisational struc-
ture, dividing organisations into hierarchies with clear lines of author-
ity and control.
S
However, after the industrial revolution, OB gained importance with
the development of new management concepts and practices. Elton
Mayo is considered the initiator of OB owing to the series of Haw-
IM
thorne experiments conducted by him and his team at Western Elec-
trical Works in the US, from 1924 to 1932.
The Hawthorne experiments: The first experiment was carried
out in 1924-27, to assess the effect of different levels of illumination
(lighting) on productivity of labour. The brightness of light was in-
creased and decreased to discover its effect on the productivity
M
level of the test group. It was observed that labour productivity

increased even with low levels of lighting, which meant that there
were other factors affecting the productivity apart from lighting.
These factors were identified as follows:
N
The social and psychological factors that affected the labour

productivity and job satisfaction.
The informal relations between employees that influenced the
employees’ behaviour and performance in the organisation.
The level of participation in organisational decision-making
process.
The belief amongst employees that the management was inter-
ested in their welfare.
The fact that employees were treated with respect and dignity.
Proper communication between superiors and subordinates.
Freedom of expression to workers.
The second experiment, which began in 1927, was carried out in the
relay assembly department, where electromagnetic switches for tele-
phone connections were produced. Western Electric manufactured
about 7 million relays in a year. As the speed of workers determined
the overall production levels, the effects of factors, such as rest peri-
ods and work hours, were assessed in the experiment.

n o t e s
The third experiment was carried out in a separate test room with
6 women. 1 of the women prepared parts for the remaining 5 wom-
en to assemble. The women released the finished relays into a shaft,
where a recording device punched a hole in the moving paper tape.
The number of holes revealed the production rate for each worker.
These conclusions led to the emphasis on the human factor in the at-
tainment of organisational goals and objectives. The Hawthorne exper-
iments created a Hawthorne effect in the organisations. These experi-
ments stressed on the fact that the production increased or decreased
not only due to the change in the working conditions, but also due to the
general feeling among workers that they were part of a team and that
their welfare was important to the organisation. It was in the late 1940s
that organisational behaviour emerged as a separate field of study.
Several approaches to organisational behaviour were proposed in the
S
course of time, which have been discussed later in the unit.
1.2.2 SCOPE OF ORGANISATIONAL BEHAVIOUR

IM
The scope of OB is continuously expanding owing to the rapid chang-
es in the organisational set-up and the world economy. The field of
OB is being applied to all areas that deal with human behaviour. The
study of human behaviour not only includes how an individual be-
haves in a certain situation, but also why he or she behaves so and
what would be the impact of his or her behaviour on other individu-
M
als, organisation and the society as a whole. The scope of OB could be

better explained by the contributions made by various disciplines, to
understand human behaviour, which are given as follows:
Psychology: It is the scientific study of mental functions and be-
N
haviour of human beings. Human psychology helps in understand-

ing motivation at work, interpersonal relationships, training needs
and effect of personality traits on behaviour.
Social psychology: It is the scientific study to understand and explain
how the behaviour of individuals is affected by the actual, imagined
or implied presence of other human beings around them. Social psy-
chology helps to gain an understanding of group behaviour, social
perception, prejudices, leadership, conflict, etc., in a group.
Industrial psychology: It is the study of human behaviour as em-
ployees. Industrial psychology helps in investigating workplace
issues, such as employee selection, employee performance and
employee productivity.
Sociology: It is the scientific study of the development, structure
and functioning of human society. Sociology helps in understand-
ing the effect of industrialisation on social behaviour of humans,
labour as a class, etc.
Cultural anthropology: It is the study of human cultures, beliefs,
values, ideas, practices, etc., in the past and present. It is based

n o t e s
on the knowledge gained from social sciences, biological sciences,

humanities and the natural sciences. Anthropology helps in un-
derstanding the effect of culture on organisational behaviour.
Political Science: It is a social science discipline related to the
study of the state and systems of government; the scientific anal-
ysis of political activity and behaviour. Political science helps in
providing insights to the information regarding the organisational
structure, hierarchy, power and politics, individual and group con-
flicts and administration in an organisation.
Economics: It is the study of the production, consumption, and
transfer of wealth in nations. Economics helps in understanding
the process of deciding among alternatives, effect of economic pol-
icies on the growth of the organisation, allocation of resources, etc.
Semantics: It is the study of the meanings of words and or phras-
S
es used in a language. Semantics helps in understanding and im-
proving the communication process in an organisation.
Physiology: It is the study of the functions of living organisms and
IM
their body parts. It helps to understand the reasons for monotony,
boredom, lethargy among employees in an organisation.
Apart from these disciplines, several other disciplines continue to con-
tribute towards forming a general theory about human behaviour at
work, which marks the vast scope of organisational behaviour.
Figure 1.2 summarises the contribution of various disciplines to the
M
field of OB:
Various disciplines Contribution to OB

N
Psychology
Leadership, motivation, interpersonal skills,
perception, etc.
Social psychology
Industrial psychology
Behaviour, attitude, conflict, employee
performance, etc.
Sociology
Cultural anthropology Organisational culture
Organisational structure, hierarchy,

Political Science
power, politics, etc.
Growth of the organisation, allocation of
Economics
resources, etc.
Semantics Organisational communication process
Assess reasons for monotony and lethargy

Physiology
among employees
Figure 1.2: Contribution of Other Fields to OB

n o t e s
1.2.3 IMPORTANCE OF ORGANISATIONAL BEHAVIOUR
The importance of OB in organisations can be understood with the

help of OB’s major roles in an organisation. These roles of organisa-
tional behaviour are depicted in Figure 1.3:
Attaining organisational effectiveness
Sustaining changes in business environment
Overcoming competition
S
Fulfilling human need IM
Figure 1.3: Major Roles of Organisational Behaviour
Now, let us discuss these contributions in the following section:

Attaining organisational effectiveness: Organisational effective-
ness is a measure of an organisation’s performance. OB helps in
attaining organisational effectiveness by assessing the attitudes
M
and behaviour of employees in an organisation, and how fulfilling

human needs can make a significant impact on the organisation’s
overall performance.
Sustaining changes in the business environment: Organisations
N
need to adapt to the changes that occur in the business environment.

Organisational behaviour helps to understand how individuals ac-
cept the changes in policies and procedures brought about by the
management to sustain the changes in the business environment.
Overcoming competition: Organisations face fierce competition
from other organisations. It is important to develop new strategies
and policies to overcome the competitive forces. However, changes
in organisational strategies, policies and practices can be resisted
by the employees. OB helps to develop the human resource of an
organisation by moulding their behaviour for the benefit of the or-
ganisation.
Fulfilling human needs: Employees in an organisation work to
accomplish certain personal objectives, the attainment of which
motivates them further to serve the organisation. Several theories
have been laid down to establish a relationship between motiva-
tion theories and organisational behaviour. For example, an em-
ployee who has received rewards and recognition in the past may
no longer be motivated to gain individual acknowledgements for
his work, but seeks opportunities to fulfil his self-actualisation

n o t e s
needs. OB helps to apply motivational theories in the organisation

for increasing employee productivity. The following functions, of
OB help in fulfilling employee needs:
Understanding employee objectives
Encouraging coordination among employees
Imparting training for self-development
Channelising organisational objectives with employee needs to
motivate them
Communicating organisational objectives to employees
Introducing new ideas
1.2.4 FEATURES OF ORGANISATIONAL BEHAVIOUR
S
Organisational behaviour studies human behaviour at work. Most
individuals spend a significant amount of their lifetime in serving or-
ganisations. The majority of work takes place within the structured or-
ganisation where individuals work together for the attainment of organ-
IM
isational objectives. The behaviour of an individual in an organisation
cannot be understood in isolation as it is influenced by a number of oth-
er associated factors. For example, manager briefs his subordinates on
an urgent task. The briefing would specify various aspects such as the
aims and objectives, strategy to be used, delegation of duties, details of
other team members and associates, the technology to be used, etc. The
M
subordinates’ behaviour towards the task will be an outcome of a com-

bination of all these factors. Therefore, organisational behaviour focus-
es on the individuals, groups, structure, technology and environmental
elements of an organisation, which forms the basis of human behaviour
at work. The major elements of organisational behaviour are depicted in
N
Figure 1.4:
Elements of Organisational Behaviour
People Structure Technology Environment
Internal External
Environment Environment
Figure 1.4: Elements of Organisational Behaviour
Let us discuss these different elements in the following section:

People: This element includes the employees of an organisation
responsible for performing various tasks. Individuals in an organ-
isation work to fulfil organisational as well as their individual ob-
jectives. They are influenced by the organisational decisions and
in turn affect the decision making at various levels in the organi-

n o t e s
sation. The attitudes and behaviour of people affect their relation-

ships with other individuals in the organisation.
Structure: This element refers to the framework of an organisation,
which determines the different levels of hierarchy, rules, regulation
and policies. A structure serves as a reference point to coordinate
and control the activities performed within the organisation.
Technology: This element refers to the technological advance-
ments that affect the functioning of an organisation. Organisations
need to adapt to the rapid technological developments taking place
in its external environment in order to stay ahead of the competi-
tion and perform the various functions more efficiently.
Environment: This element includes the internal and external
environs of an organisation. An organisation constantly interacts
with its external environment, which includes the society, govern-
S
ment, customers, legal framework and global influences. The ex-
ternal environment affects the internal strategies and functioning
of the organisation.
IM
Let us discuss the two types of organisational environment in the fol-
lowing section:
Internal Environment: The internal environment includes the
employees, management and the corporate culture of an organi-
sation. The attitudes and behaviour, perceptions, beliefs and val-
M
ues and other attributes of employees affect the functioning of an

organisation. For example, an individual’s relationship with his
peers greatly influences his participation in team work.
External Environment: The external environment includes the
customers, suppliers, competitors, demographic factors and polit-
N
ical and legal systems surrounding an organisation. The external

environment directly or indirectly affects the functioning of an or-
ganisation. For example, promptness of suppliers in the delivery of
raw materials has a direct bearing on the production. Changes in
the economy, such as inflation, high interest rates, etc., influence
the organisation’s decision making.
self assessment Questions
1. The three level of organisational behaviour are ______________,

_________________ and ___________________.
2. Which of these led to the human revolutions movement in the
evolution of organisational behaviour?
a. Scientific management
b. Bureaucratic management
c. Administrative management
d. Hawthorne experiments

n o t e s
Activity
Compare and list the main features of scientific management, ad-

ministrative management, bureaucratic management and the hu-
man relations movement.
APPROACHES TO ORGANISATIONAL
1.3
BEHAVIOUR
Several research in the field of organisational behaviour resulted in
the development of various approaches to organisational behaviour.
These researches were based on quantifying the study about human
actions and reactions in their work environments. Most of the ap-
proaches to organisational behaviour are aimed towards motivating
S
the members of an organisation in order to optimise their productivity
and performance. There are mainly three approaches to organisation-
al behaviour, as depicted in Figure 1.5:
IM
• Scientific Management
Classical approach
• Bureaucratic Management
• Administrative Management
Neo-classical approach
• Human resource approach
M
Modern approach • Systems approach

• Contingency approach
N
Figure 1.5: Various Approaches to Organisational Behaviour
Let us study the main postulates of each of these approaches in detail

in the following section:
1.3.1 CLASSICAL APPROACH
The classical approach to organisational behaviour emphasised on the

planning of work, technical necessities of an organisation, principles
and concepts of management and the assumption of logical behaviour.
The classical approach of organisational behaviour was based on the
management theories laid down by various scholars, such as Taylor,
Fayol, Urwick, Mooney and Reiley and Brech in the early years of the
20th century. The philosophy of the classical approach is based on the
following statements:
A clear understanding of the purpose of an organisation is imper-
ative to understand the working of the organisation and assessing
ways of improvement.

n o t e s
Identificationof major objectives helps in the clarification of pur-

poses and responsibilities at all levels of the organisation.
Attention to appropriate delegation of power and division of work
is necessary for organisational effectiveness. The duties and re-
sponsibilities should be clearly defined in order to maintain spe-
cialisation and co-ordination.
Emphasis is laid on a hierarchy of management and formal organ-
isational structure and relationships.
Many classical writers gave several principles governing organisa-

tional behaviour. Of these principles, the following three (Mooney and
Reiley) apply to all types of organisations:
The principle of co-ordination: This principle emphasises on
the need for people to act together with unity of action (Esprit De
S
Corps), and the need for authority and discipline in organisations.
The scalar chain principle: This principle emphasises on the hi-
erarchical structure of an organisation and represents the line of
IM
authority at all levels of management. The scalar chain involves
the flow of communication from top to bottom level of the organi-
sational hierarchy. The principle states that information in an or-
ganisation should pass through the scalar chain.
The functional principle: This principle emphasises on the spe-
cialisation and the distinction between different kinds of duties.
M
It states that work in an organisation should be divided among

employees as per their skills and abilities in order to increase the
efficiency of employees.
The Classical approach comprises of the following management the-

N
ories:
Scientific Management: This is based on the concept of planning
of work to achieve efficiency, standardisation, specialization, and
simplification. F.W. Taylor suggested four principles of scientific
management in 1947, which are:
No rule-of-thumb at workplace
Scientific selection of the worker
Cooperation of management and labour rather than conflict
Scientific training of workers
Bureaucratic Management: This theory considers the organisa-

tion as a part of the broader society. Bureaucratic management is
based on the principles of:
Structure
Specialisation
Predictability
Stability

n o t e s
Rationality
Democracy
Administrative Management: This theory was proposed by Hen-

ry Fayol and is based on several principles of management. Some
of them are:
Division of work
Authority and responsibility
Discipline
Unity of command
Unity of direction
Subordination of individual interest
Remuneration of personnel
Centralization
S
Scalar chain
Order
IM Equity
Moreover, according to this theory, management was consid-
ered a set of planning, organising, training, commanding, and
coordinating functions.
1.3.2 NEO-CLASSICAL APPROACH
M
The Hawthorne Experiment formed the basis of the neo-classical ap-

proach to organisational behaviour. Most views of neoclassical think-
ers are human centric as against the authority centred views of the
classical organisational theory. The neo-classical approach emphasis-
N
es on the point that organisation is a social system in which individu-

als work together to achieve major objectives. This approach is peo-
ple-oriented and can be referred to as the human resource approach.
The basics of the classical approach focusing on unity and scalar chain
principles are retained in the neo-classical approach. However, the
neo-classical approach is basically a behavioural science approach
and lays emphasis on the human relations in organisations. The es-
sence of the neo-classical theory can be summarised with the help of
the following:
Organisation situation should be viewed in social as well as eco-
nomic and technical terms.
The social process of group behaviour should be understood while
organising the structure.
The neo-classical theory states that the fulfilment of employee needs

with regard to recognition, role in decision making and overall satis-
faction is essential to improve employee efficiency. The main postu-
lates of the neo-classical approach are given as follows:

n o t e s
Organisation is a social system with individuals working together to

accomplish organisational goals and objectives.
The social environment of the job affects employees, who in turn
affect the social environment.
Informal organisation exists within the formal organisation and
both affect each other.
The behaviour of human beings is not always logical and rational.
It is affected by the social and psychological factors present in the
surroundings.
Human beings have different motivational patterns, which depend
on the human needs and desires.
Organisational objectives often conflict with individual goals,
thereby increasing the need for better coordination between the
S
organisation and its employees.
Communication is an essential tool to transfer information vital for
the smooth functioning of an organisation. It serves as a medium
IM
to assess the feelings and sentiments of the employees.
Team work is important for encouraging cooperation among em-
ployees.
The neo-classical theory suggests that the organisational structure

should be developed in such a way that it helps in achieving the basic
M
propositions of the theory. According to the theory, an organisation

should have the following three elements, as depicted in Figure 1.6:
N
Decentralisation
Informal
Flat Structure
Organisation
Elements of
Neo-Classical
Theory
Figure 1.6: Elements of Neo-classical Theory
Let us discuss the significance of these elements in the following section:

Flat organisational structure: The neo-classical theory advocates
the formation of flat organisational structures over tall structures.
As against the tall organisational structure, a flat structure has rel-

n o t e s
atively less number of layers of middle management. This implies

that the chain of command from top to bottom is short, and the
span of control (number of employees under a manager) is wide.
Moreover, the flat structure is less expensive and minimises hier-
archical control.
Figure 1.7 shows the difference between tall and flat structures:
S
IM
Figure 1.7: Tall Vs. Flat structures in Organisations
(Source: http://www.bbc.co.uk/)
Decentralisation: Decentralisation refers to the conscious effort

to delegate the power of decision making to the lowest levels in the
organisation. This is contrary to the centralised system of decision
M
making where power is restricted in the hands of top management

only. It brings about a sense of belongingness and participation
among the employees, which motivates them to perform better.
Figure 1.8 shows the delegation of power in the centralised and
N
decentralised system:
Centralisation of power Decentralisation of power
Figure 1.8: Centralisation Vs. Decentralisation in Organisations

(Source: http://www.clker.com/)
Informal organisation: This element of the neo-classical theory

differentiates it from the classical theory. The neo-classical theory
suggests that an informal organisation exists within the formal or-
ganisation. The informal organisation is formed to fulfil the social
and psychological needs of the employees in an organisation. The

n o t e s
satisfaction of these needs affects the employee behaviour signifi-

cantly.
1.3.3 MODERN APPROACH
The modern approach of organisational behaviour seeks to overcome

the limitations of the traditional approaches (classical and neo-classi-
cal). The modern approach is based on the scientific explanations of
the complexities of organisational structure. The modern approach
can be further divided into two separate approaches, as depicted in
Figure 1.9:
Systems approach
S
Contingency approach
IM
Figure 1.9: Types of Modern Approach to
Let us discuss the main postulates of the two approaches in detail in

the following section:
M
The Systems Approach: This approach is also referred as the

system organisation theory. This approach was postulated in the
1950s and considered the organisation as a system of consciously
coordinated activities of various individuals in an organisation. Or-
N
ganisations are viewed as purposely unified systems consisting in-

terrelated parts or subsystems, such as the technical system, man-
agerial subsystem, production system, marketing system, social
and political system, which are mutually dependent. Each of these
systems affects the other systems and thus, shares a complex rela-
tionship with organisational functioning. For example, an incident
that affects the technical subsystem may have a significant impact
on the production subsystem of the organisation. Therefore, the
interdependency of these subsystems is critical to the accomplish-
ment of organisational objectives. There are three basic interlinks
that connect one subsystem to another. These interlinks are:
Communication process
Decision-making process
Balancing process
Figure 1.10 illustrates how each of these interlinks helps in

connecting the various subsystems in an organisation:

n o t e s
Communication process
Works as a coordination and control mechanism

Works as a medium of interaction between different subsystems
Decision-making process
Includes the selection of the right alternative

Provides uniformity in the functioning of various subsystems
Balancing process
Serves as an equilibrium mechanism for different subsystems

Harmonises relationship between individuals in subsystems
S
Figure 1.10: Interlinks between Subsystems in an Organisation
The Contingency Approach: According to the classical approach,
one best way of managing things can be applied across all organ-
IM isations under all circumstances. However, circumstances across
organisations vary in structure and complexity as they depend on
different variables. Thus, each situation must be analysed careful-
ly to determine the significant variables in order to establish the
most effective organisational practices. The contingency approach
argues that the external environment and the internal environment
of an organisation form the basis of the organisational structure. Or-
M
ganisational behaviour varies in different situations depending on

the individual and groups in the organisation, technology, structure
and the environment facing the organisation. For example, if the
employees are eager to take more responsibility, managers may give
N
freedom to their employees to encourage innovation at the work-

place. Whereas, managers may adopt the directive management
styles in case employees are unwilling of taking responsibility.
3. ___________________ principle emphasises on the hierarchical

structure of an organisation and represents the line of
authority at all levels of management.
4. Which of these approaches to organisational behaviour views
the organisation as a system of consciously coordinated
activities of various individuals in an organisation?
a. Systems approach
b. Contingency approach
c. Classical approach
d. Neo-classical approach

n o t e s
Activity
Visit the websites of five Indian organisations and categorise their

organisational structures as flat or tall.
OPPORTUNITIES AND CHALLENGES OF

1.4
ORGANISATIONAL BEHAVIOUR
OB has gained considerable importance in contemporary organisa-
tions. However, several factors and issues have posed challenges in
the field of OB. Nevertheless, challenges give birth to opportunities
for creative solution. Some of the opportunities and challenges in or-
ganisational behaviour are depicted in Figure 1.11:
S
Responding to globalisation
IM
Managing workforce diversity
Improving quality and productivity
Developing employee skills
Promoting innovation and change

M
Coping with temporariness
Empowering people
N
Encouraging ethical behaviour
Figure 1.11: Opportunities and Challenges

of Organisational Behaviour
Let us discuss these opportunities and challenges in the following

section:
Responding to globalisation: Globalisation has led to the growth
of multinational corporations (MNCs) making products and ser-
vices available all over the world. Business nowadays is strictly
driven by the market demand irrespective of the boundaries, dis-
tances created between countries. Organisations are no longer re-
stricted to trade in a particular region. An organisation’s products
or services are traded across nations using technologies, such as
mass communication, Internet, e-commerce, etc.
For example, Tata International is a leading distributor of Tata
Motors vehicles in 11 countries in Africa.

n o t e s
However, globalisation presents several issues for the organisation

such as human resource scarcity in underdeveloped nations,
increased levels of competition, scarcity of resources, etc.
Organisations need to overcome these issues to benefit from the
process of globalisation. For example, providing incentives and
fringe benefits to employees can help managers to retain the
human resource in the organisations.
Managing workforce diversity: Globalisation has resulted in hu-
man force from different countries to work jointly together result-
ing in workforce diversity. This has offered organisations the op-
portunity to recruit employees from different regions, gender and
ethnic backgrounds. Organisations are becoming more heteroge-
neous in their human resource, however, the managers are con-
fronted with the challenge to pacify the differences, retain employ-
ees and promote harmony at workplaces. For example, managers
S
prefer hiring bilingual employees who can mediate and reduce
language and communication barriers among employees from dif-
ferent cultural backgrounds.
IM
Improving quality and productivity: Increased competition has
enhanced the focus on quality and productivity in organisations.
Managers are aware that improvement in quality and productivi-
ty cannot be achieved without the involvement of the employees.
OB stresses on the importance of motivating employees to accept
changes and accomplish organisational objectives.
M
Developing employee skills: Changes in the external environment,

organisational structure and increasing competition require that
the knowledge and skill base of employees is constantly upgrad-
ed. Unless employees and executives are equipped to possess the
N
required knowledge and skills, organisational objectives cannot

be achieved. Development of skills and knowledge of employees
can be achieved through training and development programmes,
career development programmes, induction and socialisation, etc.
Promoting innovation and change: In order to overcome compe-
tition, organisations constantly improve their quality, and devel-
op innovative products and services. For example, Compaq offers
powerful personal computers, which are more affordable than
those offered by Apple. Similarly, Tata Nano brought about a rev-
olution in the automobile sector by creating the cheapest car for
the Indian middle class. OB is important to offer employees, the
freedom to showcase their knowledge and skills and present new
ideas for innovation and change.
Coping with temporariness: Various external forces, such as tech-
nological factors, political and economic factors, introduction of
e-commerce, etc., result in constant organisational change. Earlier,
organisations saw long periods of stability, interrupted by a short
period of change. However, existing organisations observe contin-
uous changes in their processes. Organisations face the problem

n o t e s
of temporariness in all areas. The challenge lies in updating the

knowledge and skills of employees to face the changes.
Empowering people: Empowerment refers to delegate powers
and responsibilities to employees by eliciting some degree of own-
ership among them. OB stresses on the fact that encouraging em-
ployees to participate in decision making enhances their commit-
ment to working, significantly. Therefore, many organisations are
promoting self-managed teams, where employees operate largely
without seniors. This reshapes the relationship between manag-
ers and the employees. Managers mainly act as coaches, advisors
and facilitators to help employees in completing their assignments
with minimal guidance.
Encouraging ethical behaviour: Employees face ethical dilemmas
at workplace with increasing complexity in the completion of the as-
S
signed activities. For example, discovering the discharge of untreat-
ed effluents into the river poses an ethical dilemma to a chemical
industry worker of whether to whistle blow or not. This may lead
to demotivated employees and dissatisfaction. Managers need to en-
IM
courage an ethically healthy climate for the employees to avoid am-
biguity regarding what constitutes right or wrong behaviour.
5. Organisations are becoming more homogeneous in their

M
human resource due to globalisation. ______________ (True/

False)
6. Constant changes leading to the problem of coping with
temporariness require organisations to continuously update
N
the knowledge and skills of employees. ______ (True/False)
Activity
Discuss in groups, the major ethical dilemma faced by employees

in contemporary organisations. Present the points discussed in a
short note.
SCIENTIFIC ASPECTS OF
1.5
ORGANISATIONAL BEHAVIOUR
Organisational behaviour is a scientific discipline with several re-
search development works adding to its knowledge base. OB is an
applied science, as the knowledge about effective ways to manage
human behaviour in one organisation is applicable to several other
organisations. The scientific aspects of organisational behaviour can
help managers to understand and manage some of the contemporary
issues. Let us discuss these issues in detail in the following section:

n o t e s
Diversity at workplace: Multinational organisations, strategic

alliances and joint ventures between global organisations have
brought people together at workplaces. This often results in
cross-cultural differences, gender biases and age gaps between
employees. Scientific approach of OB, which advocates reorgani-
sation, readjustments and employee training to enhance compati-
bility among employees and managers, can overcome diversity at
the workplace. Managers must be able to utilise the knowledge of
OB to address diversity issues in order to benefit from the consid-
erable opportunities that a diverse workforce affords.
Employee trust on organisation: Downsizing, restructuring and
reengineering techniques to overcome global competition and
technological change decrease the trust, morale, job satisfaction
and organisational commitment and loyalties of employees. The
scientific approach of OB offers many possible solutions to these
S
issues, thereby gaining the trust of the employees and establishing
positive and employee-organisation relationships. For example,
keeping employees informed of the possible changes in organisa-
IM tional structure, technology, etc., helps them in preparing them-
selves and increases employees’ trust on the organisation.
Quality and flexibility at work: To overcome competition, organ-
isations attempt to focus on quality for continuous improvement
of products and services. Apart from quality, organisations also
promote flexibility to adapt to constant changes in the external
M
and internal environments. The scientific approach of OB helps

to attain quality and flexibility through continuous involvement of
employees and teamwork. For example, several IT organisations
like Infosys, Tata Consultancy Services sponsor their employees to
attain knowledge about the latest technologies from study centres
N
or international workshops.
Employee selection and retention: The scientific approach of OB
assists organisations to improve their recruitment and retention
procedures. For example, good job design, appropriate training of
the workers, opportunities for learning, recognition and incentives
help in the effective selection and retention of employees. Various
scientific researches on OB suggest that proper job design, employee
selection, training and incentives increase employee productivity.
7. Reorganisation, readjustments and employee training to

enhance compatibility among employees help managers to
overcome which of these issues?
a. Employee selection and retention
b. Employees’ trust on organisation
c. Diversity at workplace
d. Quality and flexibility at work

n o t e s
Activity
List down the problems arising due to workforce diversity in a mul-

tinational organisation.
1.6 SUMMARY
Organisational behaviour is the study of human behaviour at work.
There are broadly three levels of organisational behaviour; indi-

vidual level, group level and organisational level.
The Hawthorne experiments conducted by Elton Mayo and his
team emphasised on the human factor in the attainment of organ-
isational goals and objectives.
S
The scope of OB could be understood by contributions made by
various disciplines, such as psychology, social psychology, indus-
trial psychology, sociology, cultural anthropology, political science,
IM
economics, semantics and physiology.
Organisational behaviour helps in attaining organisational effec-
tiveness, sustaining changes in business environment, overcoming
competition and fulfilling human needs.
Organisational behaviour focuses on the individuals, groups, struc-
ture, technology and environmental elements of an organisation,
M
which form the basis of human behaviour at work.

There are mainly three approaches to organisational behaviour;
classical approach, neo-classical approach and modern approach.
N
Classical approach is based on three main principles; the prin-

ciple of coordination, scalar chain principle and the functional
principle.
The neo- classical approach emphasises on the point that organ-
isation is a social system in which individuals work together to
achieve major objectives.
The modern approach is based on scientific explanations of the
complexities of organisational structure and can be divided into
two separate approaches; systems approach and contingency ap-
proach.
Various opportunities and challenges in OB are managing work-
force diversity, improving quality and productivity, developing peo-
ple skills, promoting innovation and change, coping with tempo-
rariness, empowering people and encouraging ethical behaviour.
The scientific aspects of organisational behaviour can help man-
agers in addressing issues, such as diversity at workplace, employ-
ee’s trust on organisation, quality and flexibility at work and em-
ployee selection and retention.

n o t e s
key words
Scalar chain: It is the formal line of authority where informa-

tion moves in a straight line from the highest to the lowest ranks
in an organisation.
Contingency: It is an event that is possible, but cannot be antic-
ipated with certainty.
Workforce diversity: It is the existence of a wide variety of peo-
ple with different backgrounds, nationalities and age groups in
the workforce of an organisation.
Ethical dilemma: It is a situation where moral principles of an
individual are unable to decide which course of action is right
or wrong.
S
Employee retention: It is the effort of an organisation to with-
hold its existing staff by creating favourable working conditions.
Globalisation: It is the process through which diverse countries
in the world are interconnecting with each other as a result of
IM
trade and cultural exchange.
1.7 DESCRIPTIVE QUESTIONS

1. Define organisational behaviour and describe its various
approaches.
M
2. Discuss the opportunities and challenges of organisational

behaviour.
3. How do the scientific aspects of organisational behaviour help in
overcoming problems at workplaces?
N
1.8 ANSWERS and hints

answers for Self Assessment Questions
Topic Q. No. Answers

Defining Organisational 1. Individual, group and organisa-
Behaviour tional levels
2. Hawthorne experiments
Approaches to Organisa- 3. Scalar chain
tional Behaviour
4. a. Systems approach
Opportunities and Chal- 5. False
lenges of Organisational
Behaviour
6. True
Scientific Aspects of Or- 7. c. Diversity at workplace
ganisational Behaviour

n o t e s
hints for Descriptive Questions

1. Organisational behaviour is the study of human behaviour at
work. There are mainly three approaches to organisational
behaviour; classical approach, neo-classical approach, and
modern approach. Refer to Sections 1.4 Defining Organisational
Behaviour and 1.5 Approaches to Organisational Behaviour.
2. Various opportunities and challenges of OB are managing
workforce diversity, improving quality and productivity,
developing people skills, promoting innovation and change,
coping with temporariness, empowering people and encouraging
ethical behaviour. Refer to Section 1.6 Opportunities and
Challenges of Organisational Behaviour.
3. The scientific aspects of organisational behaviour can help
managers in addressing issues, such as diversity at workplace,
S
employee trust on organisation, quality and flexibility at work,
and employee selection and retention. Refer to section 1.7
Scientific Aspects of Organisational Behaviour.
IM
Suggested Readings
Fox,
W. (2006). Managing organisational behaviour (1st ed.). Cape
M
Town, South Africa: Juta.

French, R. (2011). Organisational behaviour (1st ed.). Hoboken,
N.J.: Wiley.
McKenna, E. (1994). Business psychology and organisational be-
N
haviour (1st ed.). Hove, UK: Lawrence Erlbaum.
E-references
Education Portal,. (2014). Contingency Approach of Management:
Definition, Example & Quiz | Education Portal. Retrieved 23 May
2014, from http://education-portal.com/academy/lesson/contingen-
cy-approach-of-management-definition-example-quiz.html#les-
son
Strategicleadershipinstitute.net,. (2014). SLI offers a range of lead-
ership development, corporate training, as well as individual and
team coaching services. Retrieved 23 May 2014, from http://www.
strategicleadershipinstitute.net/
Studymode.com,. (2014). Free Term Papers, Research Papers, Es-
says, Book Notes | StudyMode.com. Retrieved 23 May 2014, from
http://www.studymode.com

N
M
IM
S
C h a
2 p t e r
UNDERSTANDING INDIVIDUAL BEHAVIOUR
CONTENTS
S
2.1 Introduction
2.2 Individual Behaviour
Activity
IM
2.3 Biographical Attributes
Activity
2.4 Ability
M
Activity
2.5 Values
Activity
N
2.6 Attitudes
Activity
2.7 Job Satisfaction
Activity
2.8 Summary

n o t e s
Attitude Problem at Phoenix Electronics
Phoenix Electronics, established in 1970, was run by Ramesh Pa-

tel till 1991. After his death, his 25-year old son, Kiran Patel, a
graduate in business administration from the US, took charge of
the organisation. Within a few days of joining, Kiran Patel decided
that the General Manager, Ramesh Dewan, was growing old and
should resign from the organisation. Kiran Patel asked Ramesh
Dewan to resign and gave him a salary for 12 months as com-
pensation. Kiran Patel hired Mayank Tiwari as the new General
Manager. Later, the marketing manager and the IT manager also
resigned, and in their places, Akhilesh Tondon and Suresh Joshi
were hired, respectively.
However, Mayank Tiwari lacked the administrative experience
S
of Ramesh Dewan. Also, he distrusted the employees in the or-
ganisation, excepting Akhilesh Tondon and Suresh Joshi because
they were his personal friends. This led to dissatisfaction among
IM
employees, and thus resulted in a high attrition rate.
Deepak Mehta, the secretary, administrator and legal advisor

of Phoenix Electronics, discovered these discrepancies and ap-
proached Kiran Patel to discuss the matter. Kiran Patel asked
him to discuss first with Mayank Tiwari and to approach him only
through a proper channel.
M
Kiran Patel’s attitude and behaviour have negatively impacted

the organisational behaviour of Phoenix Electronics.
N

UNDERSTANDING INDIVIDUAL BEHAVIOUR 31
n o t e s
learning objectives

>> Explain individual behaviour
>> Identify the biographical attributes of individual behaviour
>> Discuss the ability of an individual
>> Identify the importance of values
>> Discuss the different types of attitudes
>> Explain the importance of job satisfaction for an individual
2.1 Introduction
S
Ravi Sharma is the marketing manager in an FMCG organisation. He
heads a team of four people. Whenever a project starts, every member
of the team of Ravi reacts differently and has a different opinion about
the project. What is the reason behind such diverse opinions and re-
IM
actions? Are there any clashes among Ravi’s team members, which
account for the different opinions regarding the same topic? Probably
not; it is only the individual behaviour that creates the differences of
opinion among Ravi’s team members.
Every person in this world behaves differently due to differences in

M
the culture, upbringing, ethics, lifestyle and circumstances faced by a

person in his/her life. All these elements together form the individual
behaviour. The various aspects or components of individual behaviour
are biological attributes, ability, values, attitudes, job satisfaction, per-
sonality and perception.
N
Individual behaviour not only affects the personal life of an individu-

al, but it also impacts his/her professional life. For example, if an in-
dividual has a positive attitude, he/she tries to seek the solution for
an organisational problem. On the other hand, an individual with a
negative attitude focuses only on the severity of the problem instead
of identifying the solution. Thus, it is important for organisations to
understand the individual behaviour of its employees to manage its
impact on the organisational behaviour.
In this chapter, you will study the concept of individual behaviour.

Further, the chapter will focus on the biological attributes of an indi-
vidual. Later, ability, values and attitudes of different types of individ-
uals will be discussed. In the end, the job satisfaction of an individual
will also be discussed in the chapter.
2.2 INDIVIDUAL BEHAVIOUR

Individual behaviour is the response of an individual towards an ac-
tion, environment, person or stimulus. It not only affects the way an

n o t e s
individual behaves at the workplace, but also impacts his/her work.

For example, an individual who does not take things seriously also
takes deadlines at the workplace casually and does not put the re-
quired amount of effort to meet them.
Thus, it is important for the manager of an organisation to understand

the individual behaviour of the employees working with him/her to
delegate job responsibilities so as to obtain the best outcome. In ad-
dition, it also helps managers develop a positive and result-oriented
work attitude among individuals/employees. This can be done by pro-
viding training, rewards, recognition and involving employees in de-
cision making.
To understand individual behaviour, organisations need to first identi-

fy the factors that affect and build individual behaviour. Some of these
factors are shown in Figure 2.1:
S
Factors Affecting
IM Individual
Behaviour
Environmental Organisational
Personal Factors
Factors Behaviour
M
Figure 2.1: Different Factors Affecting Individual Behaviour
The different factors affecting individual behaviour are discussed as

follows:
N
Personal Factors: These factors are either inherited in an indi-

vidual or acquired during his/her life. Thus, these factors include
biographical attributes and learned attributes.
Environmental Factors: The environment around an individual
also plays a major role in building his/her behaviour. Some of the
environmental factors affecting individual behaviour are as fol-
lows:
Economic Factors: These include the economic conditions
prevalent in a state or a country, which may positively or nega-
tively affect the behaviour of an individual. Some of these con-
ditions are:
99 Employment Level: A situation where employment oppor-
tunities are less in a state or a country can lead to negative
thoughts in the minds of individuals. Such negative thoughts
further reflect in the behaviour of individuals at the work-
place. This can lead to reduction in their confidence, their
ability to take risks and their innovation capabilities because
their main focus remains on the security of jobs.

n o t e s
99 Wage Rates: If wage rates are low in a state or a country,

individuals either start migrating from the place or do not
perform their best (if they work at the same place).
99 Technological Development: It is observed that ambitious
people always try to work at a place where they can gain new
knowledge. The technology automates business processes
and thus, helps organisations to work smoothly. If an organ-
isation does not have the required technology, its employees
find it difficult to work effectively. This further reduces the
confidence level of employees and increases irritation and
frustration among them.
Socio-cultural Factors: Socio-cultural environment includes
the family or society in which an individual resides, and the
culture followed in that society. The socio-cultural environ-
ment has a direct impact on the behaviour of an individual. For
S
example, an individual belonging to an educated family and a
high society is likely to behave formally with command over
his/her words and activities, at the workplace. On the other
hand, an individual from an uneducated background is likely
IM
to behave in a different manner.
Political Factors: The political conditions of a country affect
individual behaviour, because they impact the employment
level, wage rates, and investment options in the country.
Organisational Behaviour: Individual behaviour is also impact-
M
ed by the internal environment of an organisation. This environ-

ment includes the policies, physical facilities (such as ventilation,
noise level, furnishing, light and the number of people), the flow of
communication, the reporting system and the reward system of an
organisation. All these aspects have a considerable impact on the
N
individual behaviour. If these aspects are not favourable to indi-

viduals, they may become irritated and unsatisfied, which in turn
affects the performance of the individuals negatively.
1. What are factors that are either inherited or acquired by an

individual during his/her life called?
2. A high employment level in a state enhances the risk-taking
and innovative capabilities of individuals, because they do not
have the fear of losing the job. (True/False)
Activity
Visit a mall in your locality and list your observations on the

behaviour of the people working in it.

n o t e s
2.3 BIOGRAPHICAL ATTRIBUTES

Akhil Sharma is a tall, handsome, and married man with a work expe-
rience of five years as a sales executive. The attributes stated for Akh-
il, i.e., tall, handsome, and married, are the biographical attributes of
an individual. Such attributes are inherited and generic in nature, and
information about these attributes can easily be obtained from per-
sonal records.
The different types of biographical attributes are shown in Figure 2.2:
Physical Characteristics
Age
S
Gender
Religion
IM
Marital Status
Experience
Intelligence
M
Ability
Figure 2.2: Biographical Attributes
Let us discuss these biographical attributes as follows:

N
Physical Characteristics: These characteristics include the

height, weight, skin, shape, vision and complexion of an individ-
ual. These characteristics also impact the individual behaviour at
the workplace. If an individual has an inferiority or a superiority
complex about his/her characteristics, the individual’s behaviour
at the workplace is impacted. For example, an individual having
excess weight is not able to perform a field job as effectively as an
individual with less weight and a fitter body. This affects the per-
formance of the individual having more weight, thereby impacting
his/her behaviour at the workplace.
Age: The age and performance of an individual are closely related
with each other. It is assumed that young people are energetic,
innovative, ambitious and risk taking; while older people are as-
sumed to be more conservative, prone to work on a defined prin-
ciple and less adaptive in nature. However, these characteristics
cannot be generalised because some people’s energy level and en-
thusiasm do not decrease with age.

n o t e s
Gender: In today’s times, it is not appropriate to assume differ-

ences between men and women with respect to work and perfor-
mance. Women are employed in every field and are performing
every job that men perform. However, the frequency of women
performing the jobs considered specific to men, such as the mili-
tary and other field jobs, is less. In such types of jobs, women are
still not considered appropriate. Thus, women in such professions
face discrimination, which not only affects their behaviour towards
work, colleagues and seniors, but also impacts their performance.
Religion: Religion-based bias exists in some professions, especial-
ly in India, which further affects the behaviour of individuals in
the workplace. For example, in India, people at higher positions
in organisations build good relationships with the individuals of
their own caste or religion and favour them in professional issues
without analysing the situation. This further affects the behaviour
S
of other individuals at the workplace.
Marital Status: Although there are no studies that show a direct
relationship between marital status and performance of an indi-
IM
vidual at the work place, the behaviour of individuals can be im-
pacted by their marriage. It is found that married people are more
responsible and have a long-term perspective for any decision or
topic. This has a positive impact on their performance.
Experience: An individual’s experience affects his/her perfor-
mance as well as behaviour at the workplace. An experienced
M
person performs his/her work more effectively as compared to an

inexperienced person. This is because the experienced person is
aware of the cause and effect of every activity and every step taken
while performing a job, as he/she has repeated it several times.
N
Thus, experienced people are more confident and have a positive

attitude towards work, while inexperienced people tend to be ner-
vous and might avoid taking risks at work.
Intelligence: Intelligence is the capability of an individual with
respect to his/her emotional knowledge, memory, logic, prob-
lem-solving ability, learning and abstract thought. It directly af-
fects the performance of an individual. An intelligent individual
can easily learn and can identify new and creative ways to perform
a task. Thus, the performance of such individuals is often high, and
they persist in positive, problem-solving, and creative behaviour.
Let us discuss the last factor affecting individual behaviour, that is,
ability (as shown in Figure 2.2), in the next section.
3. Biographical attributes of an individual are learned and

cultivated. (True/False)

n o t e s
Activity
Observe your friends and determine the biographical characteris-

tics of each of them.
2.4 ABILITY
Ability is the capacity of a person to perform a job, handle a situation,
or innovate. It can be broadly categorised into the following types:
Intellectual Ability: It is the ability of an individual to perform
jobs involving mental capabilities. It includes:
Number aptitude: It is the ability of an individual to perform
arithmetic problems quickly and with accuracy.
S
Verbal comprehension: It is the ability of an individual to un-
derstand the meaning of what is read or heard by him/her.
Perceptual speed: It is the ability of an individual to determine
IM
the similarities and differences between different events accu-
rately and rapidly.
Inductive reasoning: It is the ability of determining a logical
sequence in a problem and then solving it accordingly.
Deductive reasoning: It is the ability of an individual to apply
M
and measure the outcome of an argument.

Spatial visualisation: It is the ability of an individual to imag-
ine the appearance of an object if its position is changed in
space.
N
Memory: It is the ability of an individual to retain and recall

his/her past experiences and events.
Physical Ability: It is the ability of an individual to perform jobs
involving physical capabilities. It includes:
Dynamic strength: It is the ability of an individual to exert
muscular force repeatedly and rapidly.
Trunk strength: It is the ability of an individual to exert mus-
cular force repeatedly and rapidly using the trunk muscles.
Static strength: It is the ability of an individual to exert force
against external objects.
Explosive strength: It is the ability of an individual to exert
and expand force in one or a series of explosive acts.
Extent flexibility: It is the ability of an individual to bend the
trunk and back muscles as much as possible.
Dynamic flexibility: It is the ability of an individual to perform
flexible movements repeatedly and rapidly.

n o t e s
Body coordination: It is the ability of an individual to coordi-

nate the simultaneous movements of different body parts.
Stamina: It is the ability of an individual to continue putting in
maximum effort over long periods of time.
Balance: It is the ability of an individual to maintain equilibri-
um against external forces.
The ability of an individual directly impacts his/her behaviour at the

workplace. For example, if an individual is involved in mental work
and has better intellectual abilities as compared to other people work-
ing at the same profile, then he/she might try to dominate others.
However, it can also positively affect the behaviour of the individual
because he/she might not only perform his/her job with perfection,
but also help others to perform it.
S
Ability-Job Fit
The abilities of an employee should match the job requirements to

IM
perform the job effectively. For example, if an individual, hired as an
accountant, has a low number aptitude ability, then he/she cannot per-
form his/her job effectively.
There should be a proper balance between the abilities of an employ-

ee and the job requirements. If the abilities are less than what are
required for performing the job effectively, the employee performance
M
will be low. On the other hand, if the abilities of an employee are more
than the job requirements, the employee may feel dissatisfied, leading
to organisational inefficiency.
Table 2.1 shows examples of different jobs and the abilities required
N
for performing these jobs:
Table 2.1: Jobs and the Required Abilities

Jobs Abilities Required
Accountant Number aptitude
Investigator Perceptual speed
Market researcher Inductive reasoning
Supervisor Deductive reasoning
Interior Designer Spatial visualisation
Sales Executive Memory
High-rise construction worker Balance
Beach lifeguard Spatial-visualisation abilities and
body coordination
Dancer and gymnast Extent and dynamic flexibility
Soldier Reasoning and body coordination

n o t e s
4. Which of the following abilities does an architect require

most?
a. Static strength
b. Spatial visualisation
c. Number aptitude
d. Balance
Activity
Identify and list the intellectual abilities required for a sales exec-
S
utive’s job.
2.5 VALUES
IM
Rajesh Nagar and Amar Joshi are two sales executives of a car manufac-
turing organisation, which offers free maintenance services on the pur-
chase of a car, but only during the office hours. When a customer asks
Rajesh about the free maintenance services, he replies that the services
are only available during office hours. However, when any customer
asks Amar about these services, he replies that the services are available
M
whenever needed (or 24*7), as such a reply attracts more customers.

In the above scenario, how will you interpret the behaviour of Amar
from his reply?
N
In our day-to-day life, individuals come across various situations

where they have to decide between moral and immoral courses of ac-
tion. This decision depends on the values possessed by an individual.
Values refer to an individual’s inherent principles, which pre-deter-
mine his/her reaction in a particular situation. Thus, in the scenario,
Amar Joshi’s values lean towards immorality, which prompt him to lie
in the given professional situation.
The values of an individual are built on the basis of his/her family
background, culture, past experiences, and ethical standards. They
form the base of an individual’s attitude, perception, and behaviour.
According to the Rokeach Value Survey (RVS), values can be broad-
ly classified into two types, namely, terminal values and instrumental
values. Each of these two types of values includes 18 more values.
The different types of values as per the RVS are as follows:

Terminal Values: These values represent the end-state of an in-
dividual’s efforts. Such values consist of goals that individuals set
for themselves in their lives. For example, being a top performer

n o t e s
can be an individual’s terminal value. The 18 values included in

terminal values are:
True friendship (close companionship)
Mature love (sexual and spiritual intimacy)
Self-respect (self-esteem)
Happiness (contentedness)
Inner harmony (freedom from inner conflict)
Equality (brotherhood, equal opportunity for all)
Freedom (independence, free choice)
Pleasure (an enjoyable, leisurely life)
Social recognition (respect, admiration)
Wisdom (a mature understanding of life)
Salvation (saved, eternal life)
S
Family security (taking care of loved ones)
National security (protection from attack)
A sense of accomplishment (lasting contribution)
IM
A world of beauty (beauty of nature and the arts)
A world at peace (free of war and conflict)
A comfortable life (a prosperous life)
An exciting life (a stimulated, active life)
Instrumental Values: These values work as a means to achieve

M
terminal values. For example, to achieve the terminal value of be-

ing a top performer, a person requires instrumental values such as
ambition, intellect and capability. The 18 instrumental values are:
Cheerfulness (light-hearted, joyful)
N
Ambition (hard-working, aspiring)

Love (affectionate, tender)
Cleanliness (neat, tidy)
Self-control (restrained, self-disciplined)
Capability (competent, effective)
Courage (standing up for your beliefs)
Politeness (courteous, well-mannered)
Honesty (sincere, truthful)
Imagination (daring, creative)
Independence (self-reliant, self-sufficient)
Intellect (intelligent, reflective)
Broad-mindedness (accepting, open-minded)
Logical (consistent, rational)
Obedience (dutiful, respectful)
Helpfulness (working for the welfare of others)

n o t e s
Responsibility(dependable, reliable)
Forgiveness (willing to pardon others)
Thus, terminal values represent the overall goals of an individual’s life

that he/she wants to achieve through his/her behaviour. On the other
hand, instrumental values are the methods an individual adopts to
achieve the terminal values. In addition, terminal values are change-
able, while instrumental values are permanent in nature, because
they are the personal characteristics of an individual. Some examples
for terminal and instrumental values are as follows:
If the terminal value of an individual’s life is ‘a comfortable life’,
the instrumental values used for achieving this terminal value are
‘ambition’, ‘intellect’, and ‘capablity’.
The terminal value of ‘wisdom’ can be achieved using the ‘logical’,
‘honesty’, and ‘intellect’ instrumental values.
S
If the terminal value is ‘a world at peace’, it can be attained using
the instrumental values of being ‘forgiving’, ‘helpful’, and ‘polite’.
IM
Apart from the above classification, values can also be categorised on
the basis of different types of generations. These values are also called
generation values. In an organisational setting, it is necessary to com-
prehend how employees of different generations perceive the world,
what motivates them and how they learn. Knowledge of generational
values facilitates better understanding of an individual’s behaviour in
an organisation.
M
The different types of generations and the values followed by them are
discussed as follows:
The Builders: This generation includes people born before 1945.
N
These people faced the World War II, and thus valued financial
security, togetherness (teamwork), close family ties, long marital
commitments, hard work, conservatism and loyalty for their re-
spective organisations.
The Baby Boomers: This generation includes people born be-
tween 1946 and1964.This was the time period after the World War
II, when people were starting their life again after the disaster.
Thus, these people valued success and ambition in their lives.
The X Generation: This generation includes people who were
born between 1965 and1980. These people faced difficult financial
and social times, thus, they focused on materialism. They valued
material success, meaningful relationships, team orientation and
work-life balance.
The Y Generation: This generation includes people born during
1981-2000. These people were familiar with the Internet and had a
huge reservoir of information. Thus, the dominant values of such
people are self-reliance, financial success and synergy.

n o t e s
The Z Generation: This generation includes people born after 2000.

These times experienced immense advancement in technology and
science, and a different approach to socialisation and life-style de-
veloped. Thus, the values of these people include technological
skills, ability to multitask, flexibility, confidence and diversity.
5. Which of the following are a basis for the values of an

individual?
a. Genetics
b. Biological factors
c. Past experiences
d. Perceptual standards
S
Activity
IM
Identify the generation to which you belong. Also, analyse whether
the values mostly followed in that generation are inherited by you
or not.
2.6 ATTITUDES
M
Attitude refers to the tendency of an individual to respond in a spe-

cific set of situations. It plays an important role in framing individual
behaviour. According to various social psychologists, the attitude of an
individual includes three main components, which are:
N
Cognitive Component: It is an evaluative component that is devel-

oped in an individual on the basis of his/her past experiences and
memories. This component plays an important role in developing
a perception about an incident before it happens. For example,
a person who has been betrayed by his/her friends and relatives
may not trust anyone easily in future.
Affective Component: It is a component that is responsible for
building up the emotional set-up of an individual. The affective
component expresses an individual’s likes or dislikes. For exam-
ple, individuals may like their superior so much that it might be a
motivating factor for them to work hard.
Behavioural Component: It is a component that changes the way
a person behaves in a situation. For example, individuals having
feelings of hatred and dislike for their organisation may show irri-
tation and frustration on others.
The attitude of an individual depicted at his/her workplace is known

as job attitude. There are three major types of job attitudes, which are
shown in Figure 2.3:

n o t e s
Job Satisfaction
Job Involvement
Organisational Commitment
Figure 2.3: Types of Job Attitudes
The different types of job attitude are discussed as follows:

Job Satisfaction: It is a positive feeling that employees acquire in
their jobs. An employee with high levels of job satisfaction feels
happy to work in an organisation. The productivity of such an em-
S
ployee is also high.
Job Involvement: It is the degree to which an individual finds
himself associated with a particular job. Individuals generally re-
IM late their self-worth with the degree to which they are involved
with their jobs.
Organisational Commitment: It is a situation wherein employees
become associated with a particular organisation and accept its vi-
sion, mission, philosophy, and goals. In such an organisation, em-
ployees want to fulfil their duties in a very dedicated way to main-
M
tain a healthy relationship with the organisation. Organisational

commitment is of three types, which are explained as follows:
Affective Commitment: It indicates that an employee is emotion-
ally very attached to an organisation. For example, an employee
may be highly attached to an employer or his/her colleagues, and
N
thus wishes to serve the organisation in a better way.

Normative Commitment: This indicates that employees work
in an organisation due to their priority towards ethics and
morals. For example, a philanthropic person joins an NGO and
feels great to serve it, because he/she loves to help the needy.
Continuance Commitment: This indicates that employees
wish to work in an organisation because they feel that it is bet-
ter to stay in an organisation rather than leaving it. Employees
may do it because of monetary satisfaction, job profile, or any
other reason.
6. Which of the following elements account for the affective

component in an individual’s attitude?
a. Past experiences b. Emotional thoughts
c. Memories d. None of the above

n o t e s
Activity
Visit a retail store, and list your observations on the attitudes of

people working there.
DEFINITION
According to Zimbardo, “An attitude can be defined as a positive or

negative evaluation of people, objects, events, activities, ideas, or just
about anything in your environment”.
As per Jung, “Attitude is the readiness of the psyche to act or react in
a certain way”.
2.7 JOB SATISFACTION
S
Job satisfaction is the positive attitude of an individual towards the
different aspects of his/her job. Job satisfaction directly affects the
IM
behaviour of an individual at the workplace. A satisfied individual
remains in a positive mood and improves in areas of brainstorming,
decision making, and problem solving at the workplace. This not only
improves his/her performance, but also reduces stress and conflicts
among the individuals in the organisation.
Some factors that affect the satisfaction and dissatisfaction level of an
individual are shown in Figure 2.4:
M
N
Fulfilment
Employee Employee
Commitment
Dissatisfaction Satisfaction
Engagement
Factors leading to dis satisfaction:

Factors leading to dis satisfaction:
Good leadership practices
Poor pay
Good manager relationship
Poor compensation
Recognition
Poor work conditions
Advancement
Lack of promotions
Personal growth
Poor benefits offering
Feedback and support
Lack of job security
Clear direction and objectives
When these conditions are optimal,

job dis satisfaction will be eliminated. When these factors are optimal, job
However, these factors do not increase satisfaction will be increased.
job satisfaction.
Figure 2.4: Factors Affecting Satisfaction and Dissatisfaction Level

Source: http://talentedapps.wordpress.com/2008/04/11/job-satisfaction-model-for-retention/

n o t e s
7. Which of the following can job satisfaction lead to at the

workplace?
a. Improved brainstorming
b. Better decision making
c. Improved problem solving
d. All of the above
Activity
Ask your parents, friends or people around you whether they are
S
satisfied with their jobs. Find out and list the reasons for their sat-
isfaction and dissatisfaction.
IM
DEFINITION
According to Pool, “Job satisfaction is an attitude that individuals

maintain about their jobs. This attitude is developed from the percep-
tions of their jobs”.
As per Judge, Heller and Mount, “Job satisfaction is one of the most
M
widely researched concepts within organisational behaviour, much of

which is aimed at enhancing operations within the world of business”.
2.8 SUMMARY
N
Individual behaviour refers to the reaction of an individual to-

wards an action, environment, person or stimulus.
The different factors that affect individual behaviour are personal
factors, environmental factors and organisational behaviour.
Biographical attributes are inherited and generic in nature. These
attributes include physical characteristics, age, gender, religion,
marital status, experience, intelligence and ability.
Ability refers to the capacity of a person to perform a job, handle a
situation or innovate.
Values are the principles that are inherent in an individual and
affect his/her reaction in a particular situation.
Attitude refers to the way in which an individual generally reacts
in a particular situation.
Job satisfaction refers to the positive attitude of an individual to-
wards the different aspects of his/her job.

n o t e s
key words
Individual behaviour: The response of an individual towards

an action, situation, person or stimulus.
Ability: The capacity of an individual to perform a job, handle a
situation or innovate.
Values: The principles inherent in an individual, which impact
his/her reaction in a particular situation.
Attitude: The tendency of an individual to behave in a particu-
lar situation.
Job satisfaction: The positive feeling of an individual towards
his/her job.
S
1. How do you define individual behaviour? What are the factors
IM
that affect an individual’s behaviour?
2. What are the different types of abilities in individuals?
3. What are generational values?

M
Answers for SELF ASSESSMENT QUESTIONS

N
Individual Behaviour 1. Personal factors

Biographical Attributes 2. True
Ability 3. False
4. b. Spatial visualisation
Values 5. c. Past experiences
Attitudes 6. b. Emotional thoughts
Job Satisfaction 7. d. All of the above
Hints for DESCRIPTIVE QUESTIONS

1. Individual behaviour is the reaction of an individual in a
particular situation. Refer to Section 2.2 Individual Behaviour.
2. The different types of abilities of an individual include physical
ability and intellectual ability. Refer to Section 2.4 Ability.
3. Categorisation of individual values based on the generation is
called generational values. Refer to Section 2.5 Values.

n o t e s
SUGGESTED READINGS
Robbins, S.P., Judge, T.A., Sanghi, S. (2010). Essentials Of Organi-

zational Behavior. Panchsheel Park, New Delhi: Dorling Kinders-
ley (India) Pvt. Ltd.
Luthans, F. (2008). Organizational Behavior. New York: Mc-
Graw-Hill Education.
Aswathappa, K. (2010). Organizational Behaviour. Mumbai: Hima-
laya Publishing House.
Brooks, I. (2007). Organisational Behaviour. Panchsheel Park, New
Delhi: Dorling Kindersley (India) Pvt. Ltd.
S
Singh, K. (2010). Organizational Behaviour: Text and Cases.
Panchsheel Park, New Delhi: Dorling Kindersley (India) Pvt. Ltd.
Ahmad, S. F., Gilkar, N. A., Darzi, J. A. (2008). Organisational Be-
IM
haviour. Rajouri Garden, New Delhi: Atlantic Publishers and Dis-
tributors (P) Ltd.
E-REFERENCES
Individual Behavior in Organization. Retrieved from http://practi-
cal-management.com/Organization-Development/Individual-Be-
M
havior-in-Organization.html.
Understanding and Managing Individual Behaviour. Retrieved
from http://nptel.ac.in/courses/110105034/SM_Web/module%20
two-lec-4-12.pdf.
N
Individual Characteristics and Behaviours. Retrieved from http://

ftp.rta.nato.int/public/PubFullText/RTO/TR/RTO-TR-SAS-050/
TR-SAS-050-05.pdf.

C h a
3 p t e r
Personality
CONTENTS
S
3.1 Introduction
3.2 Definition of Personality
Activity
IM
3.3 Stages of Personality Development
3.3.1 Freudian Stages
3.3.2 Erikson Stages (Neo-Freudian Stages)
3.3.3 Adult Life Stages
M
Activity
3.4 Determinants of Personality
3.4.1 Locus of Control and Personality
N
Activity
3.5 Theories of Personality
3.5.1 Psychoanalytic Theory
3.5.2 Neo-Freudian Theories
3.5.3 Trait Theory
3.5.4 Social Learning Theory
3.5.5 Self Theory
Activity
3.6 Significant Personality Traits Affecting Organisational Behaviour
Activity
3.7 Summary

n o t e s
Personality Traits of Steve Jobs
S
There are a number of personality traits that helped Steve Jobs
become one of the most successful entrepreneurs of our time. En-
trepreneurs can learn a lot from him. Many entrepreneurs all over
the world follow several of Jobs’ principles and personality traits.
IM
One of the most important personality traits of Steve Jobs was
his creativity, which was born from his imagination. His creativity
helped Apple to grow as a company, winning market share from
other competitors. Jobs’ far-sightedness helped him envision that
the company’s products and services will change the way people
M
communicate, work, and live their lives. He built his company

with the vision that Apple`s products and services would change
the world.
Another important aspect of Steve Job’s persoanlity was his

N
adaptibility. This trait led him to emphasise innovation. Jobs be-

lieved innovation can make the difference between a leader and
a follower. He was successful in inculcating innovation in the cul-
ture of Apple. Today, Apple’s products stand for innovation.
Jobs had tremendous focus. He focused on designs, and insisted

that they should be absolutely perfect. This is the reason Apple
could develop technological products with excellent designs.
In addition, Jobs was extremely passionate and fearless when it

came to growing Apple as a company. He took many controversial
decisions and, at certain points, risked the future of the company.
As a leader, he was capable of pushing his company and employ-
ees to the limits without pushing them over the edge. Moreover,
he was very persuasive, which made him an efficient salesperson.
He could sell his ideas and products to millions of customers.

Personality 49
n o t e s
learning objectives
After completing the chapter, you will be able to:

>> Define personality
>> Describe the stages of personality development
>> Discuss the determinants of personality
>> Explain the theories of personality
>> Describe the personality traits that affect organisational
behaviour
3.1 Introduction
S
In simple words, personality refers to a set of traits possessed by an
individual that makes him/her distinct from others. Personality de-
termines the behaviour of an individual. In an organisation, a person
requires certain skills and character traits to successfully execute his/
IM
her roles and responsibilities. Therefore, personality plays a crucial
role in determining whether an individual is capable of executing or-
ganisational activities or not. For example, individuals with leadership
and interpersonal skills are able to lead better and thus, are able to
work with others. This is the reason why the study of personality is
important in Organisational Behaviour (OB).
M
In this chapter, you will study the definition of personality. Next, you
will get acquainted with the stages of personality development in an
individual. In addition, the chapter will describe the determinants of
personality. Towards the end, you will study the theories of personality.
N
3.2 DEFINITION OF PERSONALITY

Consider the following statements as answers of interviewees:
“I like to interact with people”.

“I can stay calm in difficult situations”.
These types of answers can determine whether you can acquire a

job or not, because these answers reflect your personality. In simple
words, personality refers to the inherent traits in an individual that
determine the way he/she adjusts to the environment. Personality is
a very important factor considered by organisations while recruiting
employees. This is because personality traits determine the level of
adaptability, performance and team-bonding ability of an individual.
According to a recent survey, over 30% of employers use a personality

test to hire employees. Employers are no more concerned about only
attractive resumes and years of experience. For them, personality and
attitude of the employees in carrying out the jobs and their adaptabil-

n o t e s
ity to the organisation’s work culture are more important. Generally,

the traits that employers desire include conscientiousness, stress-han-
dling ability, ability to work with others, leadership skills, ability to
solve problems and service orientation. According to Karen Schoh,
who recruits employees for the Women and Infants Hospital in Rhode
Island, “A person must be qualified to do the job, but they also require the
right personality. We`re a hospital that puts a premium on patient care,
and we want people who can deliver the concept”.
Now, let us discuss some of the definitions of personality.
McClelland views personality as “the most adequate conceptualisa-

tion of an individual’s behaviour in all its details, which the scientist
can provide at a moment in time”.
Webster’s New American Dictionary defines personality as “the as-
S
semblage of qualities, physical, mental and moral that set apart one
individual from another”.
S.R. Maddi sees personality as “a set of characteristics and tendencies

IM
that determine those commonalities and differences in the behaviour
(thoughts, feelings, and actions) of people that have continuity in time
and that may not be easily understood as the sole result of the social
and biological pressures of the moment”.
The most comprehensive effort to explain personality came from Carl

M
Jung, who was a psychotherapist and proponent of analytical psychol-

ogy. In his words, “Personality is the supreme realisation of the innate
idiosyncrasy of a living being. It is an act of high courage flung in the
face of life, the absolute affirmation of all that constitutes the individual,
the most successful adaptation to the universal condition of existence
N
coupled with the greatest possible freedom for self-determination.”
From these definitions, we can conclude that personality can be de-

fined as a combination of physical, mental and moral qualities of indi-
viduals that are reflected in their unique behaviour. For a better un-
derstanding of the concept of personality, we first need to explore its
essential elements. Figure 3.1 shows the elements of personality:
Personality
Physical, Mental Adaptability

Psychological
Freedom Behaviour Peculiarity and Moral to the Habits
Systems
Qualities Environment
Figure 3.1: Elements of Personality
These elements are briefly explained as follows:

Freedom: It is the state of being free and able to act according
to one’s own wishes. A free individual does not experience any

Personality 51
n o t e s
constraints or restrictions in expressing emotions, feelings, ideas

and desires.
Behaviour: It refers to the way an individual reacts in response to
external or internal stimuli in the environment.
Peculiarity: It refers to the uniqueness of each individual. Each in-
dividual possesses varied characteristics and wishes. For example,
the manner in which an individual talks, reacts or behaves may be
entirely different from any other individual’s manner.
Physical, Mental and Moral Qualities: These imply that every
individual has unique physical, mental and moral orientations.
Some people may be fair, tall and intelligent, whereas others may
be different. Mental qualities deal with intelligence and logic,
while moral qualities refer to trustworthiness, honesty and other
abstract qualities.
S
Adaptability to the Environment: This refers to the varied capa-
bilities of individuals to adjust in different environments. It has
been observed that different individuals behave differently in dif-
IM
ferent situations. They also have varied capabilities of adjusting
with different social groups.
Psychological Systems: These refer to the set of components or
parts of the body that help in thinking, analysing and reacting. The
psychological system determines the kind of personality an indi-
vidual may have.
M
Habits: They are the unconscious and recurring behavioural pat-

terns that an individual acquires through continuous and repeti-
tive processes, for example, the habit of smoking.
N
1. According to a recent survey, over 30% of employers use a

personality _________ to hire employees.
Activity
Study the elements of personality discussed in the chapter. Make a

list of habits you have.
STAGES OF PERSONALITY
3.3
DEVELOPMENT
Personality development refers to the process of development of an
organised pattern of behaviours and attitudes that makes a person
unique. The personality of a person is developed as a continuous in-

n o t e s
teraction of the temperament, character and environment. Through

experimentation and observation, psychologists have established pat-
terns in the development of personalities that help us determine or
predict the behaviour of most individuals. Such patterns are often cat-
egorised into logical developmental stages. Let us study the various
stages of personality development in the next section.
3.3.1 FREUDIAN STAGES
Sigmund Freud was an Austrian neurologist who became known as

the founding father of psychoanalysis. Freud believed that personali-
ty development happens through a number of stages. In addition, he
proposed that childhood experiences have a deep impact on the per-
sonality of an individual.
S
Following are the Freudian stages of personality development:
The Oral Stage: This stage pertains to infancy. In this stage, the
prime source of interaction for an infant is through the mouth.
IM Thus, sucking reflexes are especially important at this stage. In
addition, because an infant is entirely dependent on a caretaker
at this stage, he/she develops a sense of trust and comfort through
oral stimulation.
The Anal Stage: The age range in this stage is 1 to 3 years. In this
stage, the primary focus of the libido is the control of bladder and
M
bowel movements. Toilet training is a major conflict at this stage.

The child has to learn and control his/her bodily needs. Develop-
ment of this control leads to a sense of accomplishment and inde-
pendence.
The Phallic Stage: The age range of this stage is 3 to 6 years. In
N
this stage, the primary focus of the libido is on the genitals, and the
child begins to discover the difference between males and females.
The Latent Stage: This stage begins at the age of 6 and lasts till
puberty. In this period, the libido interest is suppressed. This stage
begins when the child enters the school and becomes concerned
with peer relationships, hobbies and interests.
The Genital Stage: This stage begins in puberty and lasts till
death. In this age, the individual develops a strong sexual interest
in the opposite sex.
3.3.2 ERIKOSN STAGES (NEO-FREUDIAN STAGES)
Erik Erikson was a German-born American developmental psychol-

ogist and psychoanalyst, famous for his theory on the psychosocial
development of human beings. His theory of personal development is
one of the most well-known theories on personality. Similar to Freud,
Erikson believed that the development of personality happens in a

Personality 53
n o t e s
number of stages. Following are the Erikson`s stages of personality

development:
Stage 1: Trust vs. Mistrust: This stage occurs between birth and
one year of age. According to Erikson, this is the most fundamen-
tal stage in life. In this stage, a child is completely dependent on a
caretaker; thus, the development of trust is based on the depend-
ability and quality of the child`s caretaker(s).
Stage 2: Autonomy vs. Shame and Doubt: This stage occurs in
early childhood. In this stage, the focus is on developing a sense of
personal control.
Stage 3: Initiative vs. Guilt: In the preschool years, the child
starts asserting his/her power and control over the world through
social interactions. He/she takes various initiatives while playing
and seeks the approval of caretakers. If the caretaker stifles such
S
an initiative, the child develops a sense of guilt.
Stage 4: Industry vs. Inferiority: This stage covers children from
the age group of 5 to 11 years. In this stage, children develop a
IM
sense of pride and accomplishment in their abilities through social
interactions.
Stage 5: Identity vs. Confusion: This stage occurs during adoles-
cence when children explore their independence and develop a
sense of self. Children receiving proper encouragement and en-
forcement through personal exploration emerge with a strong
M
sense of self and feeling of independence and control, after this

stage.
Stage 6: Intimacy vs. Isolation: This stage covers early adulthood
when people start exploring personal relationships. According to
N
Erikson, it is vital for people to develop close and committed rela-

tionships with other individuals. A person who has a strong sense
of self forms committed and secure relationships at this stage.
Stage 7: Generativity vs. Stagnation: This stage takes place
during adulthood when people focus on career and family. Those
who are successful at this stage have a sense of contribution to the
community as a whole. People who fail to attain this feel unpro-
ductive and uninvolved in the world.
Stage 8: Integrity vs. Despair: This stage occurs towards the last
stage of life when people reflect back on life. People who are un-
successful at this stage feel that their life has been wasted and ex-
perience regrets.
3.3.3 ADULT LIFE STAGES
Psychologist Daniel Levinson was the proponent of these stages. He

made a remarkable contribution in the field of psychology. His works
mainly involved personality development in adults, which gained con-

n o t e s
siderable attention in academic literature. He identified the following

four stable stages of adult personality development:
1. Entering into adulthood (ages 22 to 28)
2. Settling down (ages 33 to 40)
3. Entering into middle adulthood (ages 50 to 55)
4. End of middle adulthood (ages 55 to 60)
In addition to these stable periods, he also identified the following

four transactional periods:
1. Age thirty transition (ages 28 to 30)
2. Mid-life transition (ages 40 to 45)
3. Age fifty transition (ages 50 to 55)
4. Late adult transition (ages 60 to 65)
S
According to Levinson, personality develops in an orderly sequence
throughout the adult life.

IM
2. The Freudian stages of personality development include
______stages.
3. Erikson’s stages of personality development include 5 stages.

(True/False)
M
Activity
Study the behaviour of a child in the anal stage. Make a list of the
important behaviour patterns that you observe.
N
3.4 DETERMINANTS OF PERSONALITY

Personality is formed through a continuous personal quality develop-
ment process. Factors such as heredity, situations and environment
help to influence, mold, develop and determine the personality of an
individual. Generally, such factors are known as determinants of per-
sonality. Figure 3.2 shows the various factors that influence the per-
sonality of an individual:
Determinants of
Personality
Heredity Environment Other Factors
Cultural Social Situational Family
Figure 3.2: Personality Determinants

Personality 55
n o t e s
The determinants of personality are briefly explained as follows:

Heredity: This factor is inherited by individuals from their biolog-
ical parents. The heredity factors, also known as biological factors,
determine the nature and characteristics of a person. Some of the
examples of heredity factors include stature, height, temperament
and muscle composition of a person.
Environment: This factor consists of various factors, which are
mentioned as follows:
Cultural Factor: This refers to the social, religious and intel-
lectual beliefs of an individual. Cultural factors affect the be-
haviour of an individual to a great extent. For example, an indi-
vidual interested in any form of art behaves in a more elegant
way as compared to those who do not have any interest in art.
S
Family Factor: It contributes to one’s ethics and moral values.
The principles and ideologies of family members are influ-
enced by the family to a great extent.
IM
Social Factor: This includes the religious and social associa-
tions of an individual. Naturally, society influences the person-
ality of an individual. For example, an individual`s personality
gets affected by the peer group he/she belongs to.
Situational Factor: The behavioural pattern of an individual
depends on the situation he/she is in at a particular point of
M
time. In addition, the behaviour of a person in a particular sit-

uation also influences his/her behaviour in similar situations
in the future. For example, if a person successfully handles a
stressful situation, he/she is in a better position to handle simi-
N
lar situations in the future.

Other Factors: These refer to factors such as law, condition of the
economy, influence of information and published literature that
can influence the personality of an individual. For example, a dete-
riorating economic condition of the country causes the situation of
unemployment. Sometimes, such a situation persuades educated
but unemployed individuals to indulge in certain criminal or un-
ethical activities that change their personalities altogether.
3.4.1 LOCUS OF CONTROL AND PERSONALITY
Locus of control is one of the significant aspects of personality. The

concept was developed by Julian Rotter in the 1950s. It refers to the
extent to which people believe that they can control the outcomes of
the events in their lives. In other words, locus of control represents the
degree to which people perceive that reinforcements are controlled by
their own behaviour or by outside forces, such as luck or fate.

n o t e s
Rotter conducted various experiments to understand whether or not

people learn new things and perform differently when they consid-
er reinforcements as related or unrelated to their behaviour. During
his experiments, Rotter developed an assessment tool, called I-E scale
that he used to measure an individual’s perception of control. Inter-
nally controlled individuals (I) perceive that their behaviour/action is
responsible for the outcomes of the events in their lives. For example,
after receiving exam results, an internally controlled student would
praise/blame him/her for success/failure. On the other hand, external-
ly controlled people (E) believe that control is out of their hands and
is purely based on fate or luck. For example, an externally controlled
student may praise/blame his/her luck for success/failure in the ex-
ams.
People with internal locus of control trust their own abilities and be-
S
lieve that their actions/behaviour may lead them to gain positive re-
sults. They perceive that outcomes of events are under their own con-
trol. Moreover, these people accept that every action has its outcome
and it depends on them whether they could control it or not. Accord-
IM
ing to Rotter, internally controlled people exhibit two major character-
istics: high achievement motivation and low outer-directedness. Due
to their locating control on themselves, internally controlled people
tend to have more control over their lives.
People with external locus of control relate the outcome of events to

external factors and believe that things that happen in their lives are
M
out of their own control. Moreover, they perceive that their own ac-
tion/behaviour is result of external factors, which they cannot control.
These people perceive that the world is so complex and full of ele-
ments that makes the events of their lives uncontrollable. Externally
N
controlled people are vulnerable to a variety of stress symptoms, such

as emotional distress, burn-out, job dissatisfaction and low self-es-
teem. These people suffer from such symptoms due to frequent or
excessive negative life events. They tend to blame others rather than
themselves for the happenings of their lives.
4. Heredity factors are also known as biological factors. (True/

False)
5. The __________ factor includes the social and religious
associations of an individual.
Activity
Make a list of some of the cultural factors that have shaped your
personality.

Personality 57
n o t e s
3.5 THEORIES OF PERSONALITY

The thought pattern, feelings and behaviour of an individual are im-
bibed in his/her personality. Various aspects of the personality of indi-
viduals are explained by various personality theories. These theories
organise all the available information about personality in a logical
manner. In addition, the theories laid the foundation for further re-
search in the field of personality.
They also mention the specific common characteristics of people with

similar personalities in a clear fashion. This section will discuss the major
theories of personality, including the psychoanalytic theory, neo-Freud-
ian theories, trait theory, social learning theory and self theory.
3.5.1 PSYCHOANALYTIC THEORY
S
This theory originated with the work of Sigmund Freud. From his clin-
ical work with patients suffering from mental illness, Freud came to
the conclusion that childhood experiences and unconscious desires
IM
influenced the behaviour of individuals. On the basis of this observa-
tion, he developed a personality theory, describing personality devel-
opment in terms of a series of psychosexual stages. We have already
discussed these stages earlier in the chapter. According to Freud, con-
flicts occurring during each of these stages can influence the person-
ality and behaviour of an individual throughout life.
M
3.5.2 NEO-FREUDIAN THEORIES
These theories are the brain work of psychologists who agreed with
the basis of Freud’s psychoanalytic theory but changed and adapted
N
the theory to incorporate their own ideas, beliefs and theories. Some
of the major neo-Freudian psychologists include Carl Jung, Alfred Ad-
ler, Erik Erikson, Karen Homey and Erich Fromm.
Sigmund Freud proposed a number of highly controversial ideas.

However, these ideas attracted a number of followers as well. Many of
these followers agreed with Freud’s concept of the unconscious mind
and the role of early childhood in the personality of an individual.
However, there are a number of points that other thinkers directly
rejected. These thinkers went on to propose their own theories of per-
sonality. These theories are known as neo-Freudian theories.
There are a number of points of disagreement between these

neo-Freudian thinkers and Freud. For instance, according to Erik
Erikson, Freud was incorrect to suggest that personality is entirely
shaped by childhood events. Some of the other major points of dis-
agreement are as follows:
Freud’s emphasis on sexual urges as a primary motivator
Freud’s view of human nature

n o t e s
Freud’s proposal that personality is entirely influenced by early

childhood experiences
Freud’s lack of emphasis on the impact of social and cultural fac-
tors on behaviour and personality
3.5.3 TRAIT THEORy
A personality trait refers to a long-lasting attribute of a person that

emerges in different situations. We can differentiate the personality
of an individual from the personality of another person through traits.
According to the trait theory, every person has a specific and unique
set of features. Following are some of the other assumptions of the
theory:
It allows variations in traits of different individuals.
S
It presumes traits to be relatively stable.
It measures traits by using behaviour indicators.
In addition, according to the trait theory, learning is perpetual in na-

IM
ture, and it brings changes in the personality of an individual from
one time to another. Moreover, it attempts to establish a relationship
between a set of personality characteristics and the behaviour of an
individual. This theory is descriptive in nature, and it elaborates the
traits and characteristics of an individual. However, the theory lacks
an analytical framework, because it does not elaborate the reason why
M
and how particular traits affect an individual’s personality.
3.5.4 SOCIAL LEARNING THEORY
“Learning would be exceedingly laborious, not to mention hazardous, if

N
people had to rely solely on the effects of their own actions to inform them
what to do. Fortunately, most human behaviour is learned observational-
ly through modeling: from observing others one forms an idea of how new
behaviours are performed, and on later occasions this coded information
serves as a guide for action.”
-Albert Bandura, Social Learning Theory, 1977
This theory was proposed by Albert Bandura. This is one of the most
influential theories of personality. The basis of this theory is that peo-
ple can learn new information and behaviour by watching other peo-
ple. This theory is used to explain a wide variety of behaviours.
There are three core concepts of the social learning theory. These are
as follows:
People can learn by observing others.
The internal mental condition of an individual is an essential part
of the learning process.
An individual’s learning does not necessarily result in a change in
his/her behaviour.

Personality 59
n o t e s
3.5.5 SELF THEORY
Carl Rogers (1902-1987), an influential American psychologist, is the

proponent of this theory. There are nineteen propositions in Rogers’
theory of personality development. However, the central focus of the
theory is the concept of ‘self’. According to Rogers, ‘self’ is central to
human personality. He believed that when a child is born, the concept
of self is present in him like a tiny dot that grows bigger as the child
grows. The concept of self can be defined as an organised and com-
plex system of learned beliefs that each person holds to be true about
his/her personal existence. According to Rogers, self is a social prod-
uct that develops from social and interpersonal relationships.
S
6. Alfred Adler was one of the proponents of the neo-Freudian
theories. (True/False)
IM
Activity
Make a group of friends and discuss the core concepts of the social
learning theory.
SIGNIFICANT PERSONALITY TRAITS

M
3.6 AFFECTING ORGANISATIONAL

BEHAVIOUR
There are numerous traits that can be used to describe the behaviour
N
of a person. However, all the traits are not equally important in an or-
ganisational setup. Only a few traits correspond to positive behaviour
in a workplace. There is a consensus among researchers on five ma-
jor traits that correspond to meaningful behavioural tendencies in a
workplace. Collectively, these traits are called Big Five. These traits
are elaborated as follows:
Extroversion: Some of the major psychologists involved in the re-
search of this trait include Carl Jung, Hans Eysenck and Raymond
Cattel. Extroversion refers to the degree to which a person is out-
going and derives energy from being around other people. In other
words, it refers to the degree to which an individual:
Enjoys being with others
Is warm to others
Opens up in a group setting
Stays cheerful and likes excitement
Maintains a vigorous pace

n o t e s
Researches show that extroversion is positively correlated to job

satisfaction at a workplace. Extroversion is very important in jobs
related to customer services and client servicing.
Conscientiousness: It refers to the goal-orientation of an individu-
al. In other words, it refers to the degree to which a person:
Feels capable of achieving goals
Is organised
Is reliable and possesses a drive for success
Is an effective thinker and focuses on completing tasks
Research shows that individuals with high levels of conscientious-
ness perform better in most jobs and are effective team players.
This personality trait is important for top level managers and em-
ployees working in leadership positions.
S
Agreeableness: It refers to the extent to which a person is outgo-
ing and tolerant. In other words, it refers to the degree to which
an individual:
IM
Is honest and straightforward
Believes in the honesty of others
Is helpful
Tends to yield under pressure
Exhibits humility and sensitivity to others
M
Agreeableness is especially important in jobs where team work is

involved.
Emotional Stability: It relates to how a person reacts in a stressful
or demanding situation. Some of the specific features of this trait
N
include the degree to which a person:

Is relaxed and capable of handling stressful situations
Maintains calm and does not exhibit anger
Becomes embarrassed and discouraged
Handles difficult situations
Emotional stability is important in all levels of jobs in an
organisation.
Openness to Experience: It refers to the degree to which a person
seeks new experiences and thinks creatively about the future. To
be more specific, openness refers to the degree to which a person:
Is imaginative
Appreciates art and beauty
Values and respects others` emotions
Is curious
Is open to change

Personality 61
n o t e s
Individuals who are more open to new experiences perform well at cre-
ative jobs, for example, fashion designing, advertising, and media. In ad-
dition, this trait can help managers and leaders understand people better.
7. There is a consensus among researchers on five major traits

that correspond to meaningful behavioural tendencies in a
workplace. Collectively, these traits are called ________.
Activity
Study the Big Five personality traits. Which traits do you have and
to what degree? Rate yourself on a scale of 1 to 10 for each trait.
S
3.7 SUMMARY
Personalityrefers to the set of traits possessed by an individual
that makes him/her distinct from others. Personality determines
IM
the behaviour of an individual.
Personalitycan also be defined as a combination of physical, men-
tal and moral qualities of individuals that are reflected in their
unique behaviour.
The elements of personality are behaviour; freedom; peculiarity;
M
physical, mental and moral qualities; adaptability to the environ-

ment; psychological systems and habits.
The Freudian stages of personality development include the oral
stage, anal stage, phallic stage, latent stage and genital stage.
N
Erikson`s stages of personality development include trust vs. mis-

trust, autonomy vs. shame and doubt, initiative vs. guilt, industry
vs. inferiority, identity vs. confusion, intimacy vs. isolation, gener-
ativity vs. stagnation and integrity vs. despair.
The main determinants of personality are heredity and environment.
The psychoanalytic theory states that childhood experiences and
unconscious desires influence the behaviour of individuals.
Neo-Freudian theories are the brain work of psychologists who
agreed with the basis of Freud`s psychoanalytic theory but
changed and adapted the theory to incorporate their own ideas,
beliefs and theories.
The trait theory states that every person has a specific and unique
set of features.
The basis of the social learning theory is that people can learn new
information and behaviour by watching other people.
The Big Five traits are extroversion, conscientiousness, agreeable-
ness, emotional stability and openness to experience.

n o t e s
key words
Recruitment: It refers to the process of hiring new employees

in an organisation.
Unconscious mind: It refers to the processes in mind that occur
automatically and are not available for introspection.
Libido: In psychology, it refers to a person`s overall desire or
driving force for any behaviour. This is different from the usual
term that means sexual desire.
Peer Group: It refers to a group of people with approximately
the same age, status and interests.
S
1. What do you mean by personality? Mention its elements.
2. Discuss the Freudian stages of personality development.
IM
3. Describe the Big Five traits.
answers for SELF ASSESSMENT QUESTIONS

M
Topic Q.No. Answers

Definition of Personality 1. Test
Stages of Personality 2. 5
N
Development
3. False
Determinants of Personality 4. True
5. Cultural
Theories of Personality 6. True
Significant Personality Traits 7. Big Five
Affecting Organisational
Behaviour
hints for DESCRIPTIVE QUESTIONS

1. Personality refers to a set of traits possessed by an individual
that makes him/her distinct from others. Refer to Section 3.4 for
details.

Personality 63
n o t e s
2. The Freudian stages of personality development include the oral

stage, anal stage, phallic stage, latent stage and genital stage.
Refer to Section 3.5.1 for details.
3. The Big Five traits are extroversion, conscientiousness,
agreeableness, emotional stability and openness to experience.
Refer to Section 3.8 for details.
SUGGESTED READINGS
Hitt,M., Miller, C. and Colella, A. (2006). Organizational behavior.
1st ed. Hoboken, N.J.: Wiley.
Luthans,F. (1977). Organizational behavior. 1st ed. New York: Mc-
S
Graw-Hill.
E-References
IM
Cherry, K. (2014). Psychoanalytic Theories of Development. [on-
line] About.com Psychology. Available at: http://psychology.about.
com/od/developmentecourse/a/dev_psychoanaly.htm
Cherry,K. (2014). Who Were the Neo-Freudians?. [online] About.
com Psychology. Available at: http://psychology.about.com/od/psy-
M
choanalytictheories/f/neo-freudian.htm
Cherry, K. (2014). What Is Personality and Why Does It Matter?.
[online] About.com Psychology. Available at: http://psychology.
about.com/od/overviewofpersonality/a/persondef.htm
N

N
M
IM
S
C h a
4 p t e r
PERCEPTION
CONTENTS
S
4.1 Introduction
4.2 Definition of Perception
4.2.1 Importance of Perception
4.2.2
IM
Perception Process
4.2.3 Perceptual Selectivity
Activity
4.3 Factors Influencing Perception
M
Activity
4.4 Impression Management
Activity
N
4.5 Perception of Self Image and Behaviour

Activity
4.6 Managerial Implications of Perception
Activity
4.7 Managing the Perception Process
Activity
4.8 Summary

n o t e s
PERCEPTION IN U.K. ELECTIONS
The United Kingdom general election, 2010 saw the broadcast-

ing of the first live debates between the leaders of the three main
parties; Gordon Brown, the Prime Minister and leader of the La-
bour Party; David Cameron, Leader of the Opposition and Con-
servative Party, and Nick Clegg, leader of the Liberal Democrats
Party. They were the first such debates to be broadcast live in
the run-up to a UK election. This was a widely anticipated forum
in the media circle with a significant impact on the outcome of
the elections. On 15th April, 2010, these debates were broadcast
without a break for 90 minutes by ITV, BSkyB and the BBC. Two
opinion polls conducted after the debate by YouGov and ComRes
declared Nick Clegg as a clear winner of the debate.
S
It was analysed further that the viewers formed positive percep-
tions of Nick Clegg due to his effective projection to the audience.
He talked directly at the camera facing him and addressed the
IM
questioners by their names. The debate resulted in a 14% rise in
the people intending to vote for the Liberal Democrats party as
against a 3% drop in the votes of Labour and Conservative par-
ties. This incident signifies the role of perception in the attitude
and behaviour of people.
M
N

PERCEPTION 67
n o t e s
learning objectives

>> Explain the concept of perception
>> Describe the perceptual process and selectivity
>> Discuss the factors influencing perception
>> Explain the concept of impression management inorganisations
>> Describe the perception of self-image and behaviour
>> Explain the managerial implications of perception
>> Discuss the management of perception process
4.1 Introduction
S
“We see the world, not as it is, but as we are”
– Talmud (central text of Rabbinic Judaism)
IM
Take a glance at your surroundings and notice the objects. You would
notice many objects such as computers, desks, tables, chairs, people
walking by, cars, books among many other objects. What you just per-
formed was the act of cognitively speaking, which refers to the act of
thinking. Perception involves cognitive functions to process informa-
tion. This implies absorbing sensory input from the surroundings and
M
interpreting it meaningfully, in a process known as perception. For

instance, recognising the face of a friend or detecting a familiar scent,
both involve cognitive functions.
N
Psychologists and researchers have often emphasised on perception

being a complicated process. Every individual perceives the world
around him or her in different ways. Perception characterises human
behaviour and forms some objective understanding of external reality
inside human minds. For example, a painting in an exhibition may
hold different meanings to different people viewing it. The vast sub-
ject of perception can be further divided into visual (sight) perception,
auditory (hear) perception, olfactory (smell) perception, haptic (touch)
perception, and gustatory (taste) perception. However, to understand
the importance of perception in organisational behaviour, the chapter
focuses mainly on the visual and auditory perception.
This chapter starts by explaining the concept of perception, its impor-

tance and significance in affecting human behaviour and attitudes.
Further, it explains the process of perception and perceptual selec-
tivity. Further ahead, the chapter covers factors affecting perception,
impression management, perception of self-image and behaviour, and
the managerial implications of perception. Towards the end, the topic
of managing the perception process has been explained.

n o t e s
4.2 DEFINITION OF PERCEPTION

Before defining perception, let us first understand the meaning
of stimulus. Stimulus is a thing or an event that arouses a specific
functional reaction in a human being. Humans perceive the stimulus
through the senses of touch, taste, sight, hearing, and smell. Percep-
tion is a process of interpretation of stimuli perceived through the sen-
sory organs of individuals.
In other words, perception helps people organise and interpret their

sensory impressions in order to give meaning to their environment.
Information from the environment is selected, received, organised,
and interpreted to make meaningful inferences that affect human be-
haviour and attitudes. The meaningful inferences results in decisions
and actions. Perception can be divided into two types; visual percep-
S
tion and auditory perception.
Visual perception: Visual perception is a process through which
a naked eye detects light, depth, etc. around a stimulus and inter-
IM
prets it. Vision has a specific sensory system, the visual system. The
objects and events in the human surroundings act as distal stimuli.
In visual perception, an individual initially receives the informa-
tion about the distal stimulus through the visual system. After this,
the cognitive process starts where the individual processes infor-
mation about the stimulus. The interpretation of information and
its registration by the visual system forms the proximal stimulus.
M
Figure 4.1 illustrates the process of visual perception:

N
Percept (recognition
of object as a book)
Distal stimulus
(book) Proximal stimulus
(retinal image of book)
Figure 4.1: Visual Perception Process

(Source: Cognitive psychology in and out of the laboratory)
The same stimulus may be perceived differently by different

individuals. For example: Consider the two lines (A) and (B) as
depicted in Figure 4.2 and visualise which of these two lines is
longer:

PERCEPTION 69
n o t e s
Line A
Line B
Figure 4.2: Visual Perception

(Source: http://theboundsofcognition.blogspot.in/2012/08/hass-on-muller-lyer.html)
At first, most people perceive the vertical line B as longer although

both the lines are equal in length (3.5 cm). The two lines appear
to have different lengths owing to the placement of the arrows,
inwards in Line A while outwards in Line B. However, there are
still some people who are able to make out at the first glance
that both lines actually have the same length. Therefore, visual
perception may vary among individuals.
AuditoMry perception: Auditory perception is the process by which
the brain interprets what an individual hears. Sounds around an
S
individual, exist in the form of vibrations that travel through the
air (medium). Ears detect these sound vibrations and convert them
into nerve impulses. These impulses are directed to the brain where
they are interpreted. The brain interprets the incoming noise into
IM
something useful and comprehensible. It also discriminates the var-
ious sounds in an individual’s environment, referred to as auditory
discrimination. Auditory discrimination is the process whereby an
individual differentiates between sounds around him or her. For ex-
ample, in a music concert, an individual is able to distinguish the
sound of guitars from those of the piano and so on.
M
The subsequent sections illustrate the importance of perception, the

perception process, perceptual selectivity, and the various factors that
influence perception.
N
4.2.1 IMPORTANCE OF PERCEPTION
Perception is a cognitive process, which involves the interpretation of
stimuli in the environment and comprehending its meaning. Percep-
tion guides human behaviour in general. The importance of percep-
tion can be explained with the help of the SOBC (Stimulus-Organism-
Behaviour-Consequence) Model of organisational behaviour given by
Fred Luthans. The SOBC model helps to understand, predict, and
control organisational behaviour on the basis of managing the contin-
gent environment.
Let us briefly discuss the elements of the SOBC model in the following
section:
Stimulus: An organism perceives a stimulus from the environ-
ment. A stimulus potentially influences behaviour. There are two
types of stimuli:
Overt Stimuli: These are signals in the environment that are
observable. For example, other individuals, and objects in the
environment are overt stimuli.

n o t e s
Covert Stimuli: These are signals in the environment that are

not consciously observed. For example, cold weather stimulat-
ing an individual to light a fire is a covert stimulus.
Organism: The organism uses his senses (sight, hear, touch, smell,
and taste) to perceive the stimulus.
Behaviour: The sensory data is interpreted in the human brain
which marks the human behaviour towards the stimulus. The re-
sponse to a stimulus is a particular instance of behaviour. The be-
haviour can be of the following types:
Overt behaviour: It is an open and observable behaviour.
Covert behaviour: It is a hidden, concealed, or secretive be-
haviour.
For example, when you play chess with your friend, the act of
S
moving a piece in response to your friend’s move is overt behaviour.
However, thinking and analysing that go in your mind before
making the move is covert behaviour.
IM
Consequence: All types of behaviours result in an outcome. These
outcomes can be of two types based on the effect they produce on
an individual:
Positive Consequence: A positive consequence results in satis-
faction and a desire to repeat the behaviour. For example, get-
ting recognition for efficiency motivates an employee to contin-
M
ue to deliver good work.

Negative Consequence: A negative consequence results in dis-
satisfaction and a desire to not repeat the behaviour. For ex-
ample, being punished for disturbing the class discourages a
N
student from doing so in the future.
Figure 4.3 shows the SOBC model of organisational behaviour:
STIMULUS ORGANISM BEHAVIOUR CONSEQUANCE
Figure 4.3: SOBC Model of Organisational Behaviour

(Source: http://www.trueinfos.com/images/ebooks/hr/sobc-new.pdf)
The SOBC model, when applied to organisations implies that the

events, individuals, teams, etc. act as stimuli for the employee which
determines his behaviour and the organisational behaviour on the
whole. The behaviour of each individual in the organisation has a cer-
tain consequence which could be positive or negative depending on
his or her experience.

PERCEPTION 71
n o t e s
note
Fred Luthans, born on June 28, 1939 in Clinton, Iowa is a professor

(Management Studies) at the University of Nebraska and has au-
thored several books on Organisational Behaviour.
4.2.2 PERCEPTION PROCESS
The process of perception is multifaceted and includes several

sub-processes. These sub-processes are the cognitive processes oc-
curring within an individual and can be classified into four parts as
depicted in Figure 4.4:
S
Perception Process
IM
Stimulus Registration Interpretation Reaction
Figure 4.4: Perceptual Process
Let us discuss each sub-process in detail in the following section:

Stimulus: The process of perception begins when an individual
M
is confronted with a stimulus. For example, personal interaction

with the manager works as stimulus for employees to work more
efficiently.
Registration: The stimulus is perceived by individuals using their
N
sensory organs. This is referred to as registration of stimulus. In

the above example, the employee registers the advice of his man-
ager using his ears.
Interpretation: Interpretation involves attaching a certain mean-
ing to the registered stimulus. Individual’s attitude, personality,
values and beliefs play a major role in interpreting a stimulus. In
the above example, the employee interprets the advice of his man-
ager by attaching some meaning to it.
Reaction: The final sub-process is the resultant behaviour of an in-
dividual after interpreting a stimulus. The response may be overt
in nature such as an action, or it may be covert in nature such as a
change in the attitude.
Let us understand the process of perception with the help of Rubin’s

vase (shown in Figure 4.5), a well-known object for an optical illusion.

n o t e s
Figure 4.5: Rubin’s Vase

(Source: http://www.progressfocused.com/2008/06/variation-on-rubins-vase.html)
S
At first, the image stimulates the individual to focus on it while block-
ing the rest of its surroundings. Then, the individual registers the
image using his vision. The brain interprets the image which varies
IM
between individuals. Some individuals organise the dark parts of the
image as the foreground, and the light parts as the background while
some interpret the image vice-versa. Depending on the interpreta-
tion, the result varies for individuals. Thus, some individuals may see
a vase while others may see two faces on the image. Most individuals
are able to see both, but only one at a time.
M
Exhibit
Perception is a cognitive task involving

object-background organisation
N
The image presented is a clever, modern illustration of a revers-

ible figure: When an individual sees the baby, the branches become
background whereas when the individual sees the tree and people,
the baby disappears into the background.
(Source: Cognitive psychology in and out of the laboratory)

PERCEPTION 73
n o t e s
4.2.3 PERCEPTUAL SELECTIVITY
An individual in an organisation is exposed to various stimuli such as

the ringing phone, tapping of keys on a computer key board, sound of
other employee`s chatting and other different sounds, etc. However,
the individual’s brain only responds to the stimuli that he is interested
in. How does the individual decide which stimulus to respond to and
which ones to ignore? The answer lies in perceptual selectivity.
Perceptual selectivity refers to the tendency of an individual to select

certain objects in the environment and disregard the others. Without
the ability to select among different stimuli, an individual cannot in-
terpret the information required to initiate behaviour.
Perceptual selectivity is mainly governed by two aspects.
S
1. An individual’s senses are activated by certain stimuli in the
environment while others are unnoticed by human senses. For
example, the light from a bulb might not catch the attention of an
individual, but if a torch light is flashed directly over him or her,
IM
the individual would blink his or her eyes.
2. The second point is concerned with individuals’ ability to adapt
to certain stimuli to which they are constantly exposed referred
to as sensory adaptation. For example, an individual who has just
shifted near the railway line will get disturbed by the constant
noise of passing trains. On the other hand an individual who has
M
been living there for long might not be bothered by the noise of
passing trains. Perceptual selectivity is affected by a number of
factors which can be classified as follows:
External factors: External factors affect the individual’s per-
N
ceptual selectivity by accentuating the stimuli. These can be

further classified as follows:
99 Intensity: Intensity accentuates the stimuli making it more
noticeable. For example, a loud noise is more noticeable.
99 Size: The larger the object, the more noticeable it is. For
example, a full page advertisement in a newspaper catches
more attention.
99 Contrast: The stimulus is made more noticeable in con-
trasts with its background. For example, bold text is more
noticeable in a document.
99 Repetition: The more a stimulus is repeated, the more no-
ticeable it becomes. For example, repetitive alarms help to
wake people up in the mornings.
99 Motion: A moving object gains more attention that the one
which is static. For example, a moving car is more notice-
able over the static trees in its background.

n o t e s
99 Status: The status of the people also influences the per-

ception of an individual. For example, employees are able
to easily remember the names of the Heads of the Depart-
ment than their co-workers.
Internal factors: These factors are based on the psychological
make-up of an individual. These can be further classified as
follows:
99 Personality: The personality of an individual affects the
way they perceive things. Generally, optimistic people per-
ceive things more favourably than pessimistic individuals.
99 Learning and experience: Learning and experience affects
what an individual expects from the stimuli. This is depen-
dent on the cognitive awareness of an individual. Managers
delegate responsibilities to employees based on their past
S
performances.
99 Motivation: Individuals generally prefer to perceive things
that would satisfy their needs and desires. Therefore, mo-
IM tivation influences selectivity. An employee tends to recall
the praises rather than the negative feedback provided by
the manager.
1. Which of these sub-processes involves attaching a certain

M
meaning to the registered stimulus

a. Stimulus
b. Registration
N
c. Interpretation
d. Reaction
2. ______________ refers to the tendency of an individual to select
certain objects in the environment and ignore the others.
Activity
Identify and list ways in which advertisements creatively use stim-

ulus factors to attract e attention of individuals in newspapers,
magazines, billboards, and television.
4.3 FACTORS INFLUENCING PERCEPTION

Certain factors shape or distort the process of perception in individu-
als. These factors can be broadly categorised as depicted in Figure 4.6:

PERCEPTION 75
n o t e s
Perceiver
External factors Target
Situation
Factors Affecting
Perception
Sensory limits and

thresholds
Internal factors
Psychological
factors
S
Figure 4.6: Factors Affecting Perception
IM
Let us discuss the effect of each of these factors in detail in the follow-
ing section:
External factors affecting perception:

Perceiver: When an individual perceives stimuli and attempts to
interpret it, the interpretation is heavily influenced by the individu-
M
al’s personal characteristics. These characteristics include an indi-

vidual’s attitudes, personality, motives, interests, past experiences,
and expectations. For example, if an individual expects youngsters
to be lazy, policemen to be authoritative, he or she would perceive
N
them as such without paying heed to their actual traits.

Target: The characteristics of the stimuli also affect how an indi-
vidual perceives it. For example, vocal employees are more like-
ly to be noticed in a team meeting than the non-vocal employees.
Uniqueness, motion, sound, size, and other characteristics of a tar-
get affect the way in which it is perceived by individuals. This is
because individuals don’t observe targets (stimuli) in isolation. The
relationship of a target to its background influences perception.
Moreover, individuals tend to group together persons, objects, or
events that are similar to each other. The more similarity between
the targets, the more an individual tends to perceive them as a
collective group. For example, individuals tend to perceive people
belonging to a nation as alike in more than one category, irrespec-
tive of their individual characteristics being clearly distinguish-
able from one another.
Situation: The situation or context related to the stimuli also af-
fects its perception. The time or location, at which an individual

n o t e s
sees an object or event, influences the attention he or she gives to

the object or event. Similarly, light, heat, background and a num-
ber of other situational factors affect the perception of an object
or event. For example, an individual might not notice a particu-
lar dancer in a group performance. However, the same individual
might notice the same dancer in a solo performance. Neither the
perceiver nor the object changed, but the situation is very differ-
ent each time.
Internal factors affecting perception:

Sensory limits and thresholds: The human sensory organs have
nerves, which respond to different forms of energy they receive in
different ways. For instance, the eyes receive light rays and convert
them into electrical energy. The electrical energy is transmitted to
the brain creating the sensation of vision leading to perception.
S
Each sense receptor needs a minimum level of energy for percep-
tion to take place. This level is called the absolute threshold, which
refers to the point below which sensory organs do not perceive en-
IM ergy. The differential threshold is the minimum amount by which
two like stimuli should differ in order to be perceived as distinct.
Therefore, sensory limits and differential threshold affect the per-
ception process.
Psychological factors: Psychological factors include personality
traits, past experiences, learning and motivation that affect an in-
M
dividual’s perceptual process considerably. These factors increase

an individual’s sensitivity to the stimuli which he or she consid-
ers as relevant. Psychological factors determine why individuals
select and respond to a particular stimulus or situation over the
others. Objects, events, etc. compatible to an individual’s learning,
N
interest, needs, attitude and personality are likely to gain more at-
tention over others. For example, while traveling, people convers-
ing over a topic that interests a person is surely gong to gain his
or her attention. This happens because of an individual’s strong
association to a particular thing, or event. Similarly, an individu-
al’s past experiences and learning affect the perception process
considerably. Individuals are often able to perceive things subjec-
tively. For example, on hearing a droning sound, individuals infer
that there is an aeroplane up in the sky. However, individuals may
commit errors in their perception of things based on learning and
experience.
3. Uniqueness, motion, sound, size, and other characteristics

of a target do not affect the way in which it is perceived by
individuals.(True/False)

PERCEPTION 77
n o t e s
Activity
Discover your own stereotypes by completing each of the follow-

ing sentences with two adjectives that you think describe the con-
cerned:
University lecturers are ___________________
Engineers are ____________________________
Nurses are _______________________________
Pilots are ________________________________
Poets are ________________________________
4.4 IMPRESSION MANAGEMENT
S
“Impression management is an active self-presentation of a person aim-
ing to enhance his image in the eyes of others”.
- Jai B. P. Sinha, Culture and Organisational Behaviour
IM
Impression management involves representing oneself in a way an
individual wants others to see him or her. Individuals tend to control
the perceptions that others form of them. People have a tendency to
present themselves in a socially desirable way in order to impress oth-
ers. For example, in a formal set-up, individuals would restrict to wear
M
formal attires, keep the conversations serious and to the point, and
exchange formal greetings.
Individuals generally manage the impression to either gain something

they want from other individuals or to establish an independent iden-
N
tity, usually favourable. There are many ways of managing impression

such as controlling the flow of information in a relationship, imitating
others, and concealing one’s body language. Impression management
may also be called self-presentation.
There are three types of selves individuals use to represent them-

selves, which are as follows:
Authentic self: The image of an individual that is consistent with
the way an individual views himself or herself is called the authen-
tic self. This may also be referred to as an individual’s real self.
Ideal self: This is the public image of an individual that is con-
sistent with the way an individual desires to be. This may also be
referred to as an individual’s ideal self.
Tactical self: This is the public image of an individual is portrayed
to get to a certain end, mostly favorable and positive outcomes. It
is often created out of what other individuals expect an individual
to be.

n o t e s
Individuals employ several techniques to manage an impression on

others. One of the common techniques is appearance management.
For example, in order to appear professional, individuals may dress
up in suits and hold a serious expression on their faces.
In organisations, impression management has considerable implica-

tion to validate the efficiency of employees during performance ap-
praisals, team cohesiveness, etc. Impression management has many
conceptual dimensions that are constantly studied and researched by
scholars. However, two major components of impression management
are as depicted in Figure 4.7:
Impression motivation
Impression construction
S
Figure 4.7: Components of Impression Management
Let us discuss these components in detail in the following section:

IM
Impression motivation: Impression motivation can be explained
particularly in the context of organisations. It is a common obser-
vance of organisations that employees tend to impress their se-
niors and in doing so often control how their managers perceive
them. There are several factors that motivate employees to control
self-impression such as how will the impression help in the accom-
M
plishment of individual’s goals, the value of these goals, etc.

Impression construction: Individuals attempt to create an image
of themselves in front of other individuals. This is referred to as
impression construction. In other words, it relates to a specific
N
kind of impression, individuals want to create in front of others.

For example, if an individual wants to appear competitive, he or
she may participate in a sports competition in an organisation.
Particularly in organisations, where employees attempt to create
an image of themselves in the eyes of their managers for motives
such as promotions, appraisals, etc., impression construction is a
common practice.
There are two basic strategies that employees use to manage impres-
sions at workplace.
1. If employees try to lessen responsibility for an undesirable event
or to avoid trouble, they may employ a demotion-preventative
strategy. A few examples of demotion-preventative strategies are
as follows:
Employees try to excuse or justify their actions.
Employees apologise to their seniors for an undesirable event.
Employees secretly attempt to justify themselves to their se-
niors. They try to disassociate themselves from the problem or
the group at fault.

PERCEPTION 79
n o t e s
2. If employees seek to take full advantage for a positive outcome

or appear superior to the other group members, they use a
promotion-enhancing strategy. A few examples of promotion
enhancing strategies are as follows:
Employees attempt to make their managers believe that they
have not been given credit for a positive outcome.
Employees stress on the point that they put more efforts but
have received less credit.
Employees specify the personal or organisational difficulties
they had to sustain to accomplish a positive outcome.
Employees make certain that they are seen with the right peo-
ple at the right time.
S
4. When employees secretly attempt to justify themselves to
their seniors, which impression construction strategy do they
use? ________________________.
IM
Activity
Discuss the various ways employees may attempt to control their

impression on their managers at workplaces. Present your points
in a short note.
M
PERCEPTION OF SELF-IMAGE
4.5
AND BEHAVIOUR
N
Self-image can be defined as the idea, notion, or mental image that

individuals have of themselves. In other words, self-image is how an
individual perceives himself or herself. An individual’s self-image is
characterised by events or experiences that have an impact on him or
her. For example, individuals who are suffering from an eating disor-
der such as anorexia, bulimia nervosa, etc. often have distorted per-
ceptions of their bodies and personalities.
According to the social identity theory, self-image is a combination of

two key parts:
Personal identity: Personal identity includes such things as per-
sonality traits and other characteristics that make a person unique.
These traits include appearances, talents, etc. that are unique to an
individual. For example, an individual who can sing melodiously is
distinguished from the other individuals owing to his or her talent.
Social identity: Social identity includes the groups that individ-
uals associate them with. For example, the community, religion,
college, and other groups that the individual is a part of form his
or her social identity.

n o t e s
It is important to notice that self-image may not necessarily coincide

with reality. Individuals may form an inflated self-image and consid-
er that they can perform better than they actually can. For example,
an employee sets unrealistic targets for himself considering he can
achieve them. On the contrary, individuals may form negative self-im-
ages and perceive themselves as bearing several flaws or weaknesses.
For example, an employee may consider himself to be clumsy and so-
cially awkward when he is actually active and amiable.
Earlier in the chapter, it has been discussed that a perceived input

(stimulus) results in a behavioural output. Cognitive psychologists
have proved that the perception of a stimulus in the environment ac-
tivates a vast array of information in the memory. Researchers have
established that when an individual perceives a member of a social
group, information about that group is instantly activated, which in-
S
cludes attitudes and social stereotypes related to that group. For ex-
ample, on seeing an elderly person cross a busy road, an individual
may extend help due to his belief and expectancies that elderly people
are slow and forgetful. Therefore, perception of a social stimulus in-
IM
evitably activates a varied array of related knowledge in the human
brain that affects behaviour.
5. _______________ includes groups that individuals associate

M
them with.
Activity
N
Consider five famous people around you. List the personal attri-
butes that distinguish each of them from the general public.
MANAGERIAL IMPLICATIONS
4.6
OF PERCEPTION
An individual’s behaviour depends on the perception of things that
motivate him or her. The outcomes of an event or object encourage
an individual to indulge into a certain type of behaviour. There are
various managerial implications of perception in an organisation.
Some of the more common managerial implications of perception are
as follows:
Employee selection and recruitment: The selection of individu-
als as employees in an organisation widely depends on the per-
ception of the interviewer. The interviewer may have developed
certain perceptions over time for specific races, genders, etc. The
interviewer may be biased towards people from a certain commu-
nity, gender, or region. Such dispositions may lead to favourable

PERCEPTION 81
n o t e s
or unfavourable attitudes towards the applicants. For example, an

interviewer may favour an applicant from his institute and recruit
him or her. Therefore, perception may affect the selection process
in an organisation.
Employee performance appraisal: Performance appraisal is anoth-
er area that is affected by the perception of managers about their
employees. The process of performance appraisal is carried out to
judge the work of employees in an organisation annually or bi-annu-
ally. The objective of the performance appraisal is to determine the
incentive, promotion or training needs of an employee. However, the
process of performance appraisal is inherently biased and suscepti-
ble to perceptual distortion. Here are few ways in which perception
affects the process of performance appraisal in organisations:
Comparing employees: Comparison between employees in a
S
team may affect the appraisal process in an organisation. For
example, three out of five employees under a manager have per-
formed better than the other two. The appraisal of the two em-
IM
ployees is based on the performance of the other three and not
on the improvement shown by the two from the previous year.
In such a case, the performance appraisal of the two employees
was based on the perception formed due to comparison.
Favouring employees: A manager who holds a favourable im-
pression of a certain employee of his or her team may overlook
M
incidences of poor performance shown by the employee. The

manager may appraise him on the basis of the perceptions he
has about the employee. For example, a manger rates an em-
ployee, belonging to his native place, as good in spite of his
frequent failures and underperformance.
N
Stereotyping and Halo effect: Stereotyping refers to the process

of judging objects, people, etc. based on popular impressions about
them with little heed to reality. For example, ‘women are bad driv-
ers’ is a stereotype where it is wrongly assumed that no woman can
drive. On the other hand, Halo effect refers to the process of judging
an individual, event or object based on a single trait or characteris-
tic such as sociability, intelligence, or appearance. Stereotyping and
Halo effect can deeply influence the judgement of managers about
their subordinates during performance appraisals.
Meeting initial expectations: Managers tend to judge their subor-
dinates based on the extent to which the employees have met the
initial expectations of the managers. For example, a bank manager
had assumed his employee to sell 200 credit cards over the year.
The employee was able to sell 170, apart from being regular and ef-
ficient at work. The manager may not give him due credit only be-
cause his initial expectation from the employee was not met with.
Forming a similar-to-me effect: Individuals tend to form favour-
able notions of people who are believed to be similar to themselves

n o t e s
in one way or the other such as work habits, values, beliefs, demo-
graphics, etc. This is called the similar-to-me effect. Managers may
tend to favour employees whom they perceive as similar.
Forming a projection bias: Projection bias is a process where in-
dividuals perceive that other individuals have similar behaviour,
values, or beliefs as them. For example, if a manager is dedicated
to his job, he may perceive that all the other employees are com-
mitted to their jobs as well. Similarly, an employee quitting his job
may perceive that the others are also unsatisfied with their jobs.
Projection bias is a form of perceptual error an individual tends to
make. It can affect the judgemental process of an individual about
other individuals. Managers often conduct employee performance
appraisals with a projection bias.
Judging based on Primacy effect: People tend to judge future
S
behaviour based on their first impression of a person, object, or
event. This is referred to as the Primacy effect. Primacy effect is
also a perceptual error where people quickly form opinions about
others based on the first information they perceive from the oth-
IM
ers. Managers may tend to judge employees based on the Primacy
effect ignoring their actual performances.
Judging based on Recency effect: When certain time lapse oc-
curs between the first impression and the recent impression of a
person, the Recency effect may be observed. The most recent im-
pression of an individual is so strong that it completely changes
M
the perception other individuals have of him or her from the first
impression. It may affect the performance appraisal of an employ-
ee in an organisation. For example, a manager judges the perfor-
mance of an employee based on previous year’s performance (not
N
meeting the expectations) which conflicts with his recent perfor-

mance (successful completion of work).
6. Halo effect is the process of judging objects, people, etc. based

on popular impressions about them with little heed to reality.
(True/False)
Activity
Give two examples each for stereotyping and Halo effect, from your
experience.
4.7 MANAGING THE PERCEPTION PROCESS

Perception management at the workplace holds increasing impor-
tance as organisations worldwide are becoming more employee ori-
ented. With regular feedbacks, peer reviews, performance appraisals,

PERCEPTION 83
n o t e s
rewards and recognition, etc. employees and managers need to man-

age the perception process to avoid perceptual errors in their judge-
ment of each other.
Perception process is important as it influences individual behaviour.

Individuals need to be aware of the perceptual distortion coming in
their way of judging other individuals in the organisation to be able
to manage the perception process. Moreover, managers realise that
perceptual differences may exist in an organisation that may affect
employee collaboration in future. Therefore, it becomes imperative
that employees and managers are conscious of managing the percep-
tual process that eventually determines their attitudes and behaviour.
Some of the ways to manage the perception process are discussed in
the following section.
Individuals should have high levels of self-awareness: Individu-
S
als should be aware that perceptual errors such as primacy effect,
recency effect, or initial expectations can create hindrance in how
they perceive other individuals. To manage the perception pro-
IM
cess, an individual should be aware when and how he or she is in-
appropriately distorting a situation because of perceptual errors.
Individuals should support their perception through information
from different sources: It is normal for humans to form percep-
tions of the people, objects, or events around them. However, they
should attempt to confirm personal impressions before drawing a
conclusion. An individual should seek to minimise the influence of
M
personal perception by taking the views of all the people around

him. The insights gained through such information should decide
the attitudes and behaviour towards the person, object, or event.
Individuals should be empathetic: Individuals should restrain
N
from drawing conclusions about other people, objects, or events

without analysing the situation appropriately. They should at-
tempt to understand the point of view of the target so as to avoid
forming notions on the basis of how others perceive it.
Individuals should rise above personal impressions: A partic-
ular experience may develop personal impressions in the minds
of individuals about the other person, object, or event. However,
individuals should attempt to perceive the target without getting
affected by personal impressions. Similarly, individuals should
avoid influencing the perception of others based on their personal
impressions of a person, object, or event.
Individuals should avoid common perceptual distortions: Per-
ceptual distortions are incorrect or abnormal interpretations of a
perceptual experience. Perceptual distortions may create biases in
the minds of individuals and interference in a normal perceptual
process. These distortions include judging other individuals, ob-
jects or events on the basis of stereotyping and halo effects.
Individuals should avoid inappropriate attributions: Individuals
have a tendency to contemplate about why an event happened in

n o t e s
a particular way for instance, reasoning as to why people behaved

the way they did. To avoid errors of perception, individuals should
be able to establish the actual reason behind a particular event,
incident or behaviour.
7. ______________ create biases in the minds of individuals and

interference in a normal perceptual process.
Activity
Discuss with your friends how personal impressions affect your

judgement of an object, event or individual.
S
4.8 SUMMARY
Perception is a process of interpretation of stimuli perceived
IM
through the sensory organs of individuals.
Visual perception is a process through which a naked eye detects
light, depth, etc. around a stimulus and interprets it while auditory
perception is the process by which the brain interprets what an
individual hears.
According to the SOBC model, an organism perceives a stimulus
M
from the environment which is interpreted in human brain and

marks the human behaviour towards the stimulus. Behaviour has
a certain consequence.
The process of perception is multifaceted and includes four
N
sub-processes; stimulus, registration, interpretation, and reaction.

Perceptual selectivity refers to the tendency of an individual to se-
lect certain objects in the environment and ignore the others.
Several factors affect perception such as external factors including
perceiver, target, and situation. Internal factors affecting percep-
tion are sensory limits and thresholds and psychological factors.
Impression management involves representing oneself in a way an
individual wants others to see him or her. Individuals generally man-
age the impression to either gain something they want from other in-
dividuals or to establish an independent identity, usually favourable.
There are three types of selves individuals use to represent them-
selves; authentic self, ideal self, and tactical self.
The two major components of impression management are im-
pression motivation and impression construction.
Self-image can be defined as the idea, notion, or mental image that
individuals have of themselves. According to the social identity
theory, self-image is a combination of two key parts; personal iden-
tity and social identity.

PERCEPTION 85
n o t e s
Some of the more common managerial implications of perception

are in the areas of employee selection and recruitment and em-
ployee performance appraisal.
In organisations, employees and managers should be conscious
of managing the perceptual process, which eventually determines
their attitudes and behaviour.
key words
Cognitive functions: It is the logical process by which an in-

dividual becomes aware of, perceive, or comprehend objects,
events, or ideas.
Optical illusion: It is the process of visual perception charac-
terised by visually perceived images that differ from objective
S
reality.
Sensory threshold: It is the level of strength that a stimulus
must have for an individual to be able to detect it.
IM
Performance appraisal: It is a systematic assessment of an em-
ployee’s performance and his or her potential for development.
Demotion: It is a compulsory reduction in an employee’s job
title or salary as a repercussion to unsatisfactory performance.

M
1. Define perception and explain the process of perception.

2. Discuss the factors influencing perception.
3. What is impression management? Explain the managerial
N
implications of perception.
4.10 ANSWERS and Hints


Definition of Perception 1. c. Interpretation
2. Perceptual selectivity
Factors Influencing Perception 3. False
Impression Management 4. Demotion preventative
strategy
Perception of Self-Image 5. Social identity
and Behaviour
6. False
Managing the Perception Process 7. Perceptual distortions

n o t e s
Hints for Descriptive Questions

1. Perception is a process of interpretation of stimuli perceived
through the sensory organs of individuals. The process of
perception is multifaceted and includes four sub-processes;
stimulus, registration, interpretation, and reaction. Refer to
section 4.4 Definition of Perception.
2. Several factors affect perception such as external factors
including perceiver, target, and situation. The internal factors
affecting perception are sensory limits and thresholds and
psychological factors. Refer to section 4.5 Factors Influencing
Perception.
3. Impression management involves representing oneself in a
way an individual wants others to see him or her. Some of
the managerial implications of perception are in the areas of
S
employee selection and recruitment and employee performance
appraisal. Refer to sections 4.6 Impression Management and 4.8
Managerial Implications of Perception.
IM
Suggested Readings
Fox, W. (2006). Managing organisational behaviour (1st ed.). Cape
M

French, R. (2011). Organisational behaviour (1st ed.). Hoboken,
N.J.: Wiley.
N
E-references
Citeman.com,. (2014). Factors influencing Perceptions. Retrieved
27 May 2014, from http://www.citeman.com/7036-factors-influenc-
ing-perceptions.html

C h a
5 p t e r
LEARNING
CONTENTS
S
5.1 Introduction
5.2 Definition of Learning
Activity
IM
5.3 Significance of Learning
Activity
5.4 Theories of Learning
5.4.1 Classical Conditioning Theory
5.4.2 Operant or Instrumental Conditioning Theory
M
5.4.3 Cognitive Learning Theory

Activity
N
5.5 Meaning of Reinforcement

5.5.1 Learning Through Reinforcement
5.5.2 Organisational Reward System
5.5.3 Administering Reinforcement
5.5.4 Impact of Punishment
Activity
5.6 Summary

n o t e s
DISCIPLINARY ISSUE MANAGEMENT AT GE
In 2008, the Vermont Plant of General Electronics had imple-

mented a policy/programme to handle disciplinary issues. At
this plant, if an individual did not follow the organisation’s disci-
plinary policies, such as policies related to reaching the office on
time or misbehaving with other employees, the individual got an
oral reprimand. If the individual still did not change his/her be-
haviour, then a written reminder was sent to the individual. If the
employee’s behaviour still did not change, he/she was suspend-
ed for a day, and the day was termed ‘decision-making day’. The
objective of this programme was to make employees realise that
the organisation cares about them, and that an employee’s future
depends on himself/herself.
S
After this programme, it was noticed that more than 85% of the
employees at the Vermont Plant changed their behaviour. This
can be observed from the rate of drop in written warnings and
IM
reminders, which declined from 23-39 in 2008 to 12 in 2010.
M
N

LEARNING 89
n o t e s
learning objectives

>> Define learning
>> Identify the significance of learning
>> Discuss the theories of learning
>> Explain the concept of reinforcement
5.1 Introduction
Manav Aggarwal works as an accountant in a leading bank. Recently,
some new software has been installed in the bank for managing ac-
S
counts. Before using the software, Manav used to take 1 hour to com-
plete a task. While initially using the software, Manav takes 2 hours to
complete the same task, because he is unfamiliar with the functioning
of the software. However, gradually, when Manav becomes used to the
IM
software, he is able to complete the task in 30 minutes. Though Manav
has been using the same software, his time taken in performing the
task reduces gradually. Thus, Manav is able to finish his task in lesser
time by learning how the software works.
Learning happens constantly during a person’s lifetime. Every change

in a person’s life provides a memory to the person. If the person re-
M
tains the memory, he/she can be said to have learned. In the context of
an organisation, employees constantly interact with the organisation-
al policy and procedures, culture of the organisation, delivery process
of their work, etc. These constant interactions cause learning, and this
N
learning has a significant impact on the behaviour of an individual at

a workplace. For example, an employee has completed 2 projects at
an organisation, while a second one has not completed even 1 project.
Thus, the first employee has more knowledge of the processes and
steps involved in a project than the second employee.
In this chapter, you will study the concept of learning and its impor-
tance in an organisation. Further, the different theories of learning are
explained in the chapter. Some of these theories include the classical
conditioning theory and the social learning theory. Towards the end,
the chapter elaborates on the meaning of reinforcement.
5.2 Definition of Learning

Learning is a continuous process wherein an individual acquires new
skills, values, and knowledge. In other words, learning is a relatively
permanent change (including cognitive, emotional, psychological, and

n o t e s
environmental changes) in the behaviour of an individual as a result

of direct or indirect experience. The two main elements in this defini-
tion are:
The change that happens in learning should be relatively perma-
nent. This implies that there should be a change in the behaviour
of the individual after going through the learning process. The
change can be either positive or negative. For example, a newly
appointed individual in an organisation learns how to perform his/
her job. After learning, the individual is able to perform his/her job
effectively.
The change in individual behaviour should be a result of an ex-
perience or practice and not due to biological maturation (which
means the learning an individual acquires with the increase in
his/her age, for example, learning to eat or drink). For example,
S
a new manager of an organisation learns to manage the available
resources effectively to get desired results.
Thus, learning can be defined as a change in the behaviour of an in-

IM
dividual through experience. Here, note that learning is not a visible
or observable process; it is only an observable change brought in the
behaviour of an individual.
Effective learning occurs only when whatever is learned is retained

in the memory of the learner and is carried to the work place. For
example, an MBA-Finance student learns how to calculate profit and
M
loss. He/she should be able to retain the calculation process and be

successfully able to apply the same in the later stages, when he/she
starts working in an organisation.
N
1. If a permanent change occurs in the behaviour of an individual

after experience, it is called _______________.
2. Effective learning occurs only when whatever is learned is
retained in the memory of the learner and is carried to the
workplace. (True/False)
Activity
Identify and make a list of the skills you have learned in the last
two years.
DEFINITION
According to Stephen P. Robbins, “Learning is any relatively per-

manent change in behaviour that occurs as a result of experience.”

LEARNING 91
n o t e s
As per Munn N.L, “Learning is the process of having one’s be-

haviour modified, more or less permanently, by what he does and
the consequences of his action, or by what he observes.”
According to Steers and Porter, “Learning can be defined as rela-
tively permanent change in behaviour potentially that results from
reinforced practice or experience.”
5.3 Significance of Learning

Some of the quotes and facts about the importance of learning:
As per the National Adult Learning Survey, DfEE, 1998, “95% of
people think that learning about new things boosts your confidence.
S
In addition, 92% of people think that learning about new things is
enjoyable.”
According to Attitudes to Learning, Campaign for Learning/
IM
MORI, 1996, “Seven in ten adults (71%) think that learning can lead
to a better quality of life.”
According to Campaign for Learning Website, “93% of us believe
that it’s never too late to learn. 83% of us believe that learning will
become more important in the next millennium.72% of us think we
should devote more time to personal development.”
M
Mira and Sonia work for an advertising firm, Noontide Pvt. Ltd. Both
of them have been chosen to represent a product, a vacuum cleaner,
for a number of clients. Noontide assumes that both the employees
are familiar with the product, because it is a common household gad-
N
get in today’s world. However, while Mira is a regular user of a vac-

uum cleaner, Sonia has never used one at home. As a result, Mira’s
presentation provides useful information and highlights the desired
features of the product. Sonia, on the other hand, is only able to focus
on shallow information, thus, her clients reject the product.
The scenario shows how, in today’s dynamic world, it becomes im-

portant for an individual to learn new concepts continuously in their
personal as well as professional life. Today, changes are occurring at
a rapid speed whether it is technology, lifestyle, or organisational cul-
ture. To survive in such an environment, it is essential for individu-
als to learn new technology and ways of performing a job. Organisa-
tions having employees with a learning attitude are able to meet the
changing business requirements, because such employees are ready
to change their working style and pattern.
In addition, an organisation facilitates the process of learning among

employees and promotes the exchange of information among them to
develop a knowledgeable workforce. Such an organisation becomes

n o t e s
flexible and encourages people to accept and adapt to new ideas and
changes. It also lets them know their goals and objectives clearly.
Organisational learning helps employees to change their behaviour,

hence bringing efficiency in their work. Thus, an organisation as a
whole must adopt a habit of constant learning. The main objective of
organisational learning is to instill a desire among all the members of
the organisation to find new ways to improve their effectiveness.
3. An organisation facilitates learning to develop a knowledgeable

workforce. (True/False)
4. The aim of organisational learning is to instill a desire among
all the members of the organisation to determine new methods
S
IM of improving their effectiveness. (True/False)
Activity
Select the website of a software development company, and identify

how they encourage learning in their organisation.
5.4 Theories of Learning

M
How does the process of learning take place? Various psychologists

have arrived at different theories to explain the process of learning.
Some of these important theories are shown in Figure 5.1:
N
Classical Conditioning Theory
Operant or Instrumental Conditioning Theory
Cognitive Learning Theory
Social Learning Theory
Figure 5.1: Learning Theories
Let us discuss the learning theories in detail in the following sections.
5.4.1 Classical Conditioning Theory
The classical conditioning theory was provided by Ivan Pavlov. In

this theory, Pavlov studied the relationship between stimulus and re-
sponse. He wanted to study the reflex response of a particular stim-

LEARNING 93
n o t e s
ulus that characterises the behaviour of an individual or an animal.

For this purpose, he conducted an experiment with a dog to check its
reflexes when it saw bones. The experiment so conducted is shown in
Figure 5.2:
Before conditioning
FOOD SALIVATION
BELL NO RESPONSE
ding, ding!
During conditioning
S
BELL + SALIVATION
FOOD
ding, ding!
+
After conditioning
IM
BELL SALIVATION
ding, ding!
Figure 5.2: Classical Conditioning of Pavlov’s Dog

M
(Source: http://blog.lib.umn.edu/vanm0049/myblog/2011/10/classical
-conditioning-in-real-world.html)
As shown in Figure 5.2, when Pavlov observed dogs before condition-

ing them, he found that they salivated whenever they saw bones. Pav-
N
lov’s aim was to find out if he could make dogs salivate without their
even seeing the bones. That is, he wanted to generate the response of
the dogs without the actual stimulus. For this, Pavlov tried to under-
stand the events that could be linked to make dogs salivate without
even seeing the bones, with the help of an experiment.
To conduct this experiment, Pavlov, while presenting a dog to the bone,

also rang a bell. He kept repeating this stimulus. Initially, the dog would
not salivate when presented with only the bell. However, after some
time, Pavlov observed that the dog started salivating when only the bell
was rung. The dog had formed a relation between the presence of the
bell and the bone, which produced the conditioned response of saliva-
tion. The dog learned to relate the ringing of the bell with food. Thus,
Pavlov found the reason for generating a response, even when the actu-
al stimulus was not present. He also concluded that an individual or an
animal can learn reflex behaviour. A reflex is an involuntary reaction,
which is not in the conscious control of an individual. For example, if
an individual has dust in his/her eyes, he/she will blink his/her eyes au-
tomatically. However, classical conditioning is not found applicable in

n o t e s
the organisational setting, because individuals in an organisation do not

have involuntary reactions to any situation.
5.4.2 Operant or Instrumental
Conditioning Theory
The operant conditioning theory was provided by B.F. Skinner. He
defined operant conditioning as a process through which individuals
learn voluntary behaviour. It can also be defined as the behaviour of
an individual or an animal in an environment. It uses the consequenc-
es of a particular behaviour to modify that behaviour. Operant condi-
tioning is different from classical conditioning, because it deals with
the modification of voluntary behaviour. On the other hand, classical
conditioning only explains the relationship between the stimulus and
the response. The operant conditioning theory is also called the rein-
forcement theory, which you will study later in this chapter.
S
Skinner started experimentation on operant learning theories in the
1930s. He wanted to have better control over the learning process that
enabled organism to operate freely in an environment. For this pur-
IM
pose, he developed a box, which is called the Skinner box or the oper-
ant chamber. In this box, a device delivers food pellets into a tray (or
food cup) at random by pressing a lever situated inside the box.
For his experiment, Skinner left a hungry rat in the box. The rat per-
formed some random activities to explore the box. During these ac-
M
tivities, the rat pressed the lever accidentally, and a pellet of food was
delivered in the food cup. The first time the rat did not learn the con-
nection between the lever and the food pellets. However, with time,
it understood and learned that on pressing the lever, a food pellet ap-
peared in the food cup, as shown in Figure 5.3:
N
Speaker
Signal
lights
Pellet
dispenser Lever
Dispenser
tube
To shock
generator
Food cup Electric grid
Figure 5.3: The Skinner Box

(Source: http://www.appsychology.com/Book/Behavior/operant_conditioning.htm)
After his success in training rats, Skinner applied the same experi-
ment to pigeons by replacing the lever with a key. When the pigeon

LEARNING 95
n o t e s
in the Skinner box pecked the key, a food-delivery mechanism acti-

vated. When repeated pecking resulted in food, the pigeon learnt the
process.
The basic principle of operant conditioning is that the probability of

occurrence of a particular response depends on its consequence. For
example, if the rat presses the lever and does not get food, the re-
sponse rate will decrease gradually and eventually disappear.
5.4.3 Cognitive Learning Theory
The cognitive learning theory is also known as cognitivism. According

to cognitivism, learning occurs when a person’s schema (the percep-
tion of an individual about the world) is combined, extended, or al-
tered. It basically works on two key assumptions:
S
The memory system processes the information in an organised
way.
Prior knowledge plays an important role in learning.
IM
The framework of cognitivism looks beyond the behaviour-based
framework and tries to understand how human memory helps in learn-
ing. Figure 5.4 shows how information is fed into the human memory:
SHORT-TERM
M
MEMORY (STM)
SENSORY MEMORY
Temporary Working Encoding
Selection
SENSORY
Visual Memory
INPUT
Attention
auditory LONG-TERM
Tactile Pattern MEMORY (LTM)
N
Recognition Rehearsal
Chuncking
Retrieval
RESPONSES
Figure 5.4: Information Processing in Human Memory

(Source: http://www.cs.ucy.ac.cy/~nicolast/courses/cs654/lectures/LearningTheories.pdf)
The main components of information processing (shown in Figure 5.4)

are discussed as follows:
Sensory Memory: It represents the first stage of information pro-
cessing by the human brain. The information obtained from differ-
ent sense organs, such as ear and eye, is held in the sensory memo-
ry briefly till the time it is forwarded for further processing. All the
five sense organs have separate sensory memories, which function
in the same manner. For example, an employee attends a meeting
with his/her client regarding a new project. The information giv-

n o t e s
en by the client is heard as well as written down by the employee

in the form of notes. The information so obtained is stored in the
sensory memory.
Selection Attention: It is the ability of the individual to select and
process a certain part of the information in the sensory memory and
ignore irrelevant information. For example, in the above example,
the employee will retain the project-specific information, such as
start and delivery date of the project and requirements of the client,
while he/she will ignore the personal information provided by the
client such as a party that the client is planning in the future.
Pattern Recognition: It is the process in which an individual tries
to connect with the information gathered by relating it with the
information he/she already stores in his/her memory. Again, tak-
ing the above example, the employee will try to recall the previous
S
projects he/she has done with the client and the requirements stat-
ed in his/her earlier projects and in the new project.
Short-term Memory: It retains information for a short period of
IM
time. At this stage, the information is processed further to make
information ready for long term storage and response. For exam-
ple, if an employee is given an oral warning for indiscipline, it will
remain in his mind for a short period of time, unless action is taken
against him/her.
Rehearsal and Chunking: These are the two processes that help
M
in converting short term memory to long term memory by encod-

ing information. In rehearsal, the information is repeated again
and again, so that it can be stored permanently in the memory.
For example, revising a chapter again and again helps in retaining
it for a long period of time. On the other hand, chunking is the
N
grouping of ideas or bits of information to make the retention of

information easy and storable for a longer time period. For exam-
ple, two paragraphs are provided to employees stating the Do’s
and Don’ts at a workplace. Employees make bulleted points from
the given content. This helps them remember the Do’s and Don’ts
for a longer period of time.
Encoding: It is the process of relating new information from the
short-term memory with the information already existing in the
long-term memory to make the information more memorable. For
example, a newly joined employee, learning to operate a machine,
will try to recall the information given by his/her supervisor at
the time of training (information already existed in the long-term
memory) to operate the machine.
Long-term Memory: It retains information for a relatively longer
period of time. It is the permanent storehouse of information. It in-
cludes information that has been learnt throughout a lifetime. The
information that needs to be retained for a longer period of time is
transferred from the short-term memory to the long-term memory.

LEARNING 97
n o t e s
For example, a person working on the same process in the same

organisation for more than three years will have the complete pro-
cess stored in his/her long-term memory.
People observe and learn through attitudes, behaviour, and outcomes

of other people around them. According to Bandura, a renowned psy-
chologist who specialised in social cognitive theory, social learning
is defined as follows:
“Most human behaviour is learned observationally through modelling:

from observing others, one forms an idea of how new behaviours are per-
formed, and on later occasions this coded information serves as a guide
for action”.
S
The social learning theory encompasses the cognitive, behavioural,
and environmental influences. The necessary factors for effective so-
cial learning are shown in Figure 5.5:
IM
Attention
Retention
M
Reproduction
Motivation
N
Figure 5.5: Factors Influencing Social Learning
Let us discuss these factors further:

Attention: It is the interest an individual pays to factors such as
distinctiveness, simplicity, prevalence, functional value, and com-
plexity. The attention of an individual is affected by his/her experi-
ence, sensory capacities, level of arousal, perceptual set, and per-
ceptual accuracy.
Retention: It involves remembering the subject or object to which
an individual pays attention. Knowledge retention can take place
in various forms such as symbolic coding and mental images.
Reproduction: It involves reproducing or projecting the image
through physical capabilities and self-observation. For example,
Ronit is a new worker in an organisation, while Sujit has been
working in the organisation for a long time. Ronit observes Sujit
working on a particular machine. When the Ronit needs to work

n o t e s
on the same machine, he reproduces the image of the Sujit work-

ing on that machine. This guides Ronit to proceed with his work.
Motivation: It depicts the positive influence of remembering a
positive event leading to a desirable outcome. The event may have
been experienced by the individual, or the individual may have
observed it with someone else. However, the positivity of the event
ensures a positive effect on the psychological set-up of the indi-
vidual. For example, an employee observes how his/her manager
tackles a difficult situation so efficiently. This positively impacts
the behaviour of the employee and he/she also tries to handle such
situations efficiently.
Thus, social learning continuously influences an individual through-

out his/her life span.
S
5. The relationship between stimulus and response has been

IM
studied by Ivan Pavlov in the ____________ learning theory.
6. In the classical conditioning theory, __________ is used as a
stimulus to make the dog salivate without showing the bone.
7. Involuntary and uncontrolled reactions of an individual are
called _____________.
8. According to the ______________ theory, learning occurs when
M
the perception of knowledge changes.

9. Cognitive, behavioural, and environmental influences are
included in the ____________ learning theory.
10. Which of the following is not a factor influencing social
N
learning of an individual?
a. Attention
b. Reproduction
c. Read
d. Retention
Activity
Using the Internet, identify the different types of learning theories

applied in an advertising agency.
5.5 Meaning of Reinforcement

Reinforcement is a process through which a certain type of behaviour
is strengthened in an individual. The reinforcement theory was de-

LEARNING 99
n o t e s
veloped by B.F. Skinner and his associates and is applied to motivate

and retain employees. This theory seeks to explain behaviour without
relying on unobservable internal factors such as needs, thoughts, etc.
The reinforcement theory has four elements, which are shown in

Figure 5.6:
Positive Reinforcement
Negative Reinforcement
Punishment
S
Extinction
IM
Figure 5.6: Elements of Reinforcement Theory
These four elements are explained as follows:

Positive Reinforcement: It is the positive reassurance and en-
M
couragement given to employees on exhibiting desired behaviour

or delivering desired results. It increases the frequency of a par-
ticular behaviour in a person due to addition of a particular stim-
ulus. For example, in a paper manufacturing factory, a supervisor
improves a quick-return mechanism, which reduces ‘idle time’ by
N
30%. As a result, his/her salary increases by 35%. Needless to say,

he/she, as well as his/her colleagues, would try to repeat this type
of innovation because of the reward.
Negative Reinforcement: It involves encouraging good behaviour
among employees by removing the situation or stimulus that may
lead to undesirable behaviour or results. It increases the frequen-
cy of a particular behaviour due to the removal of a particular
stimulus. For example, if a manager stops punishing employees
for low performance, employees may increase the quality of their
performance and productivity.
Punishment: It involves creating circumstances that do not allow
any scope for occurrence of any undesirable behaviour or result.
For example, an employee who is suspended from work for not
performing his/her duty properly will take utmost care after re-
joining the work, because he/she will not prefer the same treat-
ment in the future.
Extinction:It is the complete absence of reinforcements (positive
and negative) for lowering the probability of occurrence of unde-

n o t e s
sirable behaviour of results. It seeks to decrease the frequency of

the behaviour by removing the consequence that reinforces it. For
example, a film director usually delivers interesting films. Howev-
er, the last two films of this director have not been very absorbing.
This prompts you to avoid any further films of this director in the
future. On the other hand, if the director simply stops delivering
films, though you do not miss the director’s films, you still have
favourable memories of the director’s work.
5.5.1 Learning Through Reinforcement
Learning through reinforcement is one of the oldest approaches

used by organisations for changing the behaviour of individuals at a
workplace. This is also called behaviour modification. According to
behaviour modification, learning is dependent on the environment.
S
It states that environment teaches an individual to change his/her be-
haviour to maximise positive consequences and minimise undesirable
behaviour.
IM
Behaviour modification involves a procedure involving three stages,
which are as follows:
Antecedents (A): Antecedents are the events that occur before the
behaviour depicted by an individual. For example, the supervisor
of an employee asked him/her to complete a particular task by
end-of-day. In this case, the employee knows that his/her action
M
will lead to a consequence.

Behaviour (B): Behaviour is the response of the individual to the
antecedent. For example, in the above example, the employee ei-
ther starts performing the task given by the supervisor immedi-
ately, or he/she may have a discussion with the supervisor that the
N
task cannot be completed by end-of-day.

Consequences (C): In behaviour modification, consequence is the
result of the response/action taken by the individual. In the exam-
ple, if the employee starts working on the given task and completes
it by end-of-day, the supervisor will be happy and may praise him/
her. On the other hand, if the employee has a discussion with the
supervisor, the supervisor may not be satisfied with the argument
given by the employee, or the supervisor may want that the task
be completed by end-of-day only. As a result, the employee may
be scolded by the supervisor or he/she may form an unfavourable
impression of the employee. This consequence leads to change in
the behaviour of the employee. If the consequence is positive, he/
she will repeat that behaviour. However, if the behaviour leads to a
negative consequence, he/she will modify his/her behaviour.
5.5.2 Organisational Reward System
Today, reward, compensation, and recognition are considered useful

motivational and retention strategies followed by different organisa-

LEARNING 101
n o t e s
tions. Reward motivates an employee to improve his/her performance

and contribution to organisational effectiveness.
Every organisation requires a strategic reward system for its employ-

ees. This system should address four important areas, namely, com-
pensation, benefits, recognition, and appreciation. The easiest way to
address a reward system is to measure the performance of the em-
ployees. Performance can be measured by initially setting goals for the
employees. The standard of the outcomes of these goals can measure
performance. Rewarding a specific behaviour often becomes a chal-
lenge than rewarding a performance. This is because the behaviour of
an employee may not be the same with everyone every time. In such
a case, it is difficult for the management to justify the reward. There
are various methods of evaluating a performance, but the changing
behaviour of a worker often leads the Human Resource (HR) unit to
S
ask, “What is the organisation compensating the employees for?”
Various organisations follow different reward systems based on the

performance of its employees. Certain organisations prefer to go for
IM
monetary rewards, whereas, a few prefer non-monetary rewards.
While motivating an employee with incentives and rewards, it is im-
portant to answer the question: Are you compensating employees for
coming early and staying late or for coming up with new ideas for
organisational effectiveness? The first part of the question indicates
behaviour, and the latter part indicates the actual involvement of the
employee in the performance.
M
Benefits, appreciation, and recognition are equally important parts of

a strategic reward system. An employee-reward system reflects the
integrated policies of an organisation, which is revealed by the desired
N
level of performance of an employee and his/her contribution towards

the organisational objectives.
A reward system executes the entire reward process in an organised

way. For developing the performance of employees and for initiating
an effective reward system, managers need to focus on the important
aspects of rewards such as performance facilitation, performance en-
couragement, and value of rewards.
A reward system has the following features that help a manager to

perform on his/her focused area:
A reward system provides a mixed element of monetary and non-mon-
etary reward to match the requirements of individual employees.
Itcommunicates the reward at the right time to encourage em-
ployees.
It connects the reward with performance, which yields positive re-
sults for both organisation and employees.

n o t e s
It reflects promotions and compensation to cover more responsi-

bilities and improve performance.
It provides the opportunity to link appraisal with the reward
system.
DEFINITION
In the words of Burack and Boldsmith, “Reward and incentive are

a plan or programme to motivate individual or group performance.
A reward programme is most frequently built on monetary rewards
(incentive pay or monetary bonus), but may also include a variety of
non-monetary rewards or prizes.”
Reward can also be defined as “anything that attracts the worker’s

attention and stimulates him/her to perform.”
S
The Free dictionary.com defines reward as, “Something given or
received in recompense for worthy behaviour or in retribution for evil
IM
acts and the return for performance of a desired behaviour.”
5.5.3 Administering Reinforcement
To administer reinforcement effectively, certain schedules of rein-

forcement are developed, because when and how reinforcement is ad-
M
ministered is significant. There are two major types of reinforcement

schedules, which are shown in Figure 5.7:
N
Continuous
Reinforcement
schedules
Intermittent
Figure 5.7: Two Types of Reinforcement Schedules
The types of reinforcement schedules are discussed as follows:

Continuous Reinforcement Schedule: In this schedule, rein-
forcement is continuous, that is, every time desirable behaviour
is demonstrated, it is encouraged or reinforced, so that the fre-
quency of its demonstration increases. For example, a chocolate
for every good presentation.
Intermittent Reinforcement Schedule: In this schedule, the ac-
ceptable or desirable behaviour is reinforced but not each and ev-

LEARNING 103
n o t e s
ery time, because the amount of reinforcement given once is often

enough to make the behaviour worth repeating. Figure 5.8 shows
the further classification of intermittent reinforcement schedules:
Fixed-ratio
Ratio
schedules
Intermittent Variable-ratio
reinforcement
schedule Fixed-interval
Interval
S
schedules
Variable-
interval
IM
Figure 5.8: Types of Intermittent Reinforcement Schedules
The different types of intermittent reinforcement schedules are dis-

cussed as follows:
Fixed Interval Schedule: When rewards are spaced at uniform or
M
pre-fixed equal time intervals, the reinforcement schedule is called

fixed-interval reinforcement schedule. For example, students’ at-
tendance is checked every six months, and those with full atten-
dance are awarded certificates. Similarly, the performance of an
employee is assessed after one year in an organisation, and based
N
on this performance, rewards are provided to the employee in the

form of a monetary increment in salary or promotion. In such a
case, the employee will try to improve and maintain his/her perfor-
mance throughout the year, so that he/she can get good rewards.
Variable Interval Schedule: If rewards are distributed in time,
so that reinforcements are unpredictable, the schedule is of the
variable-interval type. This helps an organisation to delight its em-
ployees and help in increasing their job satisfaction level. For ex-
ample, four chocolates in a year for any good performance.
Fixed-ratio Schedule: In a fixed-ratio reinforcement schedule, re-
wards are initiated after a fixed or constant number of responses
to encourage this fixed number of responses and performances.
For example, in a manufacturing organisation, employees receive
Rs.50 extra after producing every twelve boxes of product.
Variable-ratio Schedule: In the variable-ratio schedule, reward is

provided to employees after a varying number of responses instead
of the fixed number of responses. Mostly, the number of responses

n o t e s
falls around a specific average in this schedule type. This enables

an organisation to encourage its employee for high performance.
For example, bonuses provided to the sales people at a call centre
vary widely. The sales people may be rewarded after two success-
ful sale calls or might not be rewarded even after twenty successful
calls. In this case, the sales people are unaware after how many
successful sale calls they will receive the bonus, but they know
that if they keep completing their sales calls successfully, they will
receive the bonus. This encourages them to perform better at a
steady rate.
It is believed that variable schedules tend to lead to higher perfor-

mances than fixed schedules, because employees are not aware of the
timing of the reward. Thus, they keep performing better, because they
do not want their performance to be low at the time when rewards are
S
provided. In contrast, variable interval schedules generate high rates
of response and more stable and consistent behaviour because of high
correlation between performance and reward and because of the un-
certainty involved, that is, employees tend to be more alert, because
IM
there is a surprise factor involved.
5.5.4 Impact of Punishment
Punishment is given to strengthen a particular type of behaviour in an

individual. It tries to decrease the frequency of unwanted behaviour
M
and actions or an undesirable happening. Punishment can be of

two types:
Positive Punishment: A positive punishment presents a negative

consequence of a particular behaviour of an individual, so that the
N
behaviour is not repeated in the future. For example, ` 100 are

deducted from the salary of an employee, because he/she always
arrives late to the office even after many reminders. This may dis-
courage the employee’s behaviour of arriving late to the office in
the future.
Negative Punishment: A negative punishment involves the re-

moval of a stimulus due to a particular behaviour to decrease the
probability of occurrence of that behaviour in the future. For ex-
ample, in the example of salary reduction, if one day’s salary of an
employee is deducted due to arriving late to the office, he/she will
avoid such behaviour in the future.
Punishment often leads to a negative impact on employee behaviour.

Following are some negative responses resulting from punishment:
Punishment may result in undesirable emotional reactions. For
example, if a worker is reprimanded because of taking leaves fre-
quently even when the reason for leave is genuine, he/she can re-
act angrily, leading to behaviour that is detrimental to the organi-
sation.

LEARNING 105
n o t e s
Punishment can also lead to sabotage, wherein the punished

employees form a group and plan to damage the organisation’s
property, such as machines.
Most of the time, punishment leads to temporary suppression
of undesirable behaviour instead of its complete elimination.
For example, a manager punishes a team for disciplinary issues
at the workplace. In this case, the team may only remain under
discipline when the manager is present.
Punishment reduces initiative taking and ability for flexibility in
employees. This is because self-esteem of an employee decreases
when he/she is given a punishment.
S
11. Reinforcement helps in motivating and retaining employees.
(True/False)
12. A __________system executes the complete reward process in
IM
an effective manner.
13. Intermittent schedules can be classified as a ratio schedule
and a _________ schedule.
14. Punishment often impacts employee behaviour negatively.
(True/False)
M
Activity
Using the Internet, identify the type of reinforcement most com-

monly used in a sales team of an organisation.
N
5.6 Summary
Learning refers to the process of acquiring knowledge and new
skills by an individual.
Learning enables employees to change their behaviour as per the
organisation culture and working style that further brings efficien-
cy in their work.
The different learning theories, developed to understand the pro-
cess of learning, are classical conditioning theory, operant or in-
strumental conditioning theory, cognitive learning theory, and so-
cial learning theory.
Reinforcement refers to strengthening a particular behaviour in
an individual.
The four elements of reinforcement are positive reinforcement,
negative reinforcement, punishment, and extinction.

n o t e s
Reward is a form of positive reinforcement that motivates employ-

ees to improve their performance.
Reinforcement schedules can be broadly categorised as continu-
ous reinforcement and intermittent reinforcement.
Punishment tries to decrease the frequency of unwanted behaviour
and actions or an undesirable happening. Punishment can be of
two types: positive punishment and negative punishment.
key words
Learning: It is a relatively permanent change occurring in the

behaviour of an individual due to an external or internal stim-
ulus.
S
Negative Reinforcement: It involves encouraging good be-
haviour by removing the stimulus that leads to undesirable be-
haviour.
IM
Positive Reinforcement: It is the positive encouragement pro-
vided to an employee on delivering the desired performance.
Reinforcement: It is the process of strengthening a specific
type of behaviour in an individual.
Reward: It is the monetary or non-monetary encouragement
provided to an employee on his/her good performance.

M

N
1. Discuss the meaning of learning.

2. Explain the different theories of learning.
3. What are the factors that influence social learning?
4. Define reinforcement.
5. Define the term reward.
6. What is the impact of punishment?
5.8 Answers and hints
Answers for Self Assessment Questions

Definition of Learning 1. Learning
2. True

LEARNING 107
n o t e s

Significance of Learning 3. True
4. True
Theories of Learning 5. Classical Conditioning
6. Bell
7. Reflex
8. Cognitive learning theory
9. Social learning theory
10. c. Read
Meaning of 11. Operant conditioning
Reinforcement 11. True
S
12. Reward
13. Interval
IM
14. True

1. Learning is the process of acquiring knowledge and new skills
by an individual. Refer to Section 5.2 Definition of Learning.
2. The different theories of learning are classical conditioning
M
theory, operant or instrumental conditioning theory, cognitive

learning theory, and social learning theory. Refer to Section 5.4
Theories of Learning.
3. The factors that influence social learning are attention, retention,
N
reproduction, and motivation. Refer to Section 5.4 Theories of

Learning.
4. Reinforcement is the way of strengthening a particular behaviour
in individuals. Refer to Section 5.5 Meaning of Reinforcement.
5. Reward is the encouragement provided to an employee on
his/ her good performance. Refer to Section 5.5 Meaning of
Reinforcement.
6. The impact of punishment can be positive or negative, depending
upon the way of providing a punishment and the way it is taken by
the individual. Refer to Section 5.5 Meaning of Reinforcement.
Suggested Readings

n o t e s

tributors (P) Ltd.
E-References
Learning. Retrieved from http://www.arunk.com/pdf/study%20
material/Unit-6.pdf.
Organizational Behavior and the Learning Process. Retrieved
from http://www.clomedia.com/articles/organizational_behavior_
and_the_learning_process.
Reinforcement. Retrieved from http://allpsych.com/psycholo-
S
gy101/reinforcement.html.
The Effects of Punishment on Employee Behavior. Retrieved from
http://smallbusiness.chron.com/effects-punishment-employee-be-
IM
havior-14302.html.
M
N

C h a
6 p t e r
Motivation
CONTENTS
S
6.1 Introduction
6.2 Meaning of Motivation
Activity
IM
6.3 Characteristics of Motivation
Activity
6.4 Different Motives of Motivation
6.4.1 Primary Motives
6.4.2 General Motives
M
6.4.3 Secondary Motives

Activity
6.5 Motivational Approaches
N

Activity
6.6 Theories of Motivation
Activity
6.7 Content Theories
6.7.1 Maslow’s Need-Hierarchy Theory
6.7.2 Herzberg Two-factor Theory
6.7.3 Alderfer ERG Theory
6.7.4 McClelland Needs Theory
Activity
6.8 Process Theories
6.8.1 Goal Setting Theory
6.8.2 Vroom’s Expectancy Theory
6.8.3 Porter’s Performance Satisfaction Theory
6.8.4 Equity Theory

CONTENTS
6.8.5 Reinforcement theory

Activity
6.9 Motivation in Practice
Activity
6.10 Summary
S
IM
M
N

MOTIVATION 111
n o t e s
Employee Motivation in McDonald`s
Given the type of business of McDonald`s, employee motivation

is a significant part of the organisation. This case deals with em-
ployee motivation initiatives of McDonald`s in its stores in the
UK. Each of its restaurants is operating as a separate profit unit.
Thus, each employee has a vested interest in collaborating with
team members to ensure that their restaurant performs well.
Such collaborative behaviour of employees are incentivised and
supported through two bonus schemes.
Every month, mystery shoppers evaluate all the McDonald`s

restaurants in the UK. On the basis of the scores given, all the
employees in the top 10 restaurants receive a performance bonus.
In addition, restaurant managers get a quarterly bonus based on
S
three equally weighted measures: scores of mystery shoppers,
sales growth, and profitability. According to benefits and com-
pensation manager, Neal Blackshire, “The entire management
IM
team is being aligned as a team to be motivated to, and rewarded
for, achieving those business metrics. And the entire team is being
challenged to deliver the best customer service they can, because
they are never exactly sure when they’re going to be visited [by mys-
tery shoppers]”.
Moreover, company-owned restaurants, as well as franchises,

M
are also eligible for titles, such as Restaurant of the Quarter and
Restaurant of the Year, which earns them a day or night out.
N
MCDONALD'S MOTIVATION
AND RECOGNITION SCHEMES
Service awards, recognising employees'

Service at five-year intervals.
Restaurant of the quarter.
Restaurant of the year.
President' Award: global scheme
for support staff.
Ray Kroc Award: for business managers.
Champion of the month, ultimately
feeding into employee of the year scheme.
Restaurant bonus schemes: one for all
employees and one for managers,
based on restaurant performance.
These bonus schemes are part of a wider portfolio of motivation

and incentive schemes that operate across McDonald’s in the UK,

n o t e s
as well as its global business. One of the newest schemes is the

Ray Krock Awards, which recognises the best manager across
Europe. The scheme is named after the founder of McDonald`s
Corporation. It replicates the initiatives that were previously
available in the US and across Asia Pacific, the Middle East, and
Africa (APMEA).
12 winners from the UK were selected for the latest awards from
nominations by McDonald`s operations managers and directors
of franchising across company-owned and franchised restaurants.
They were the top 1% performers. The winners got the opportu-
nity to attend a two-day event in Barcelona in June, in which they
were presented with trophies in a gala awards ceremony.
“It was a full-on production, like a mini Oscars [ceremony]”, says
S
Blackshire. “There was a red carpet for them all to walk up, they
all had their names printed on stars lining that red carpet, and a
specially shot video opened the evening with some of the winners
IM
in their usual restaurant”.
He also added, “All those 12 UK managers came back to their

restaurants and will have been talking to their peers about what
a fantastic time they had. Undoubtedly, we’ll have 1,200 managers
keen to be nominated next year”.
(Source: http://www.employeebenefits.co.uk/benefits/staff-motivation/mcdonalds-restau-
M
rants-built-on-motivation/102953.article)
N

MOTIVATION 113
n o t e s
learning objectives

>> Define motivation
>> Explain the characteristics of motivation
>> Describe different motives of motivation
>> Discuss the theories of motivation
6.1 Introduction
Lalit, Sahil’s manager, notes that Sahil’s performance has fallen in the
past two months. Sahil has also taken more leaves than he normal-
S
ly does in a month. Lalit discusses the problem with Sahil and ob-
serves his performance for the next month. However, it still does not
improve. This time, Lalit tells Sahil that if he can perform well, he can
earn a sizeable incentive. In the following month, Sahil’s performance
IM
improves dramatically.
In the scenario, the incentives promised to Sahil have motivated him

to perform better. In an organisational set up, motivation refers to a
process in which the management identifies the needs of the employ-
ees and fulfils those needs to inspire them to achieve certain goals.
Motivation includes monetary as well as non-monetary benefits. Mo-
M
tivation is intended to generate a positive work attitude in employees,

so that organisational goals are achieved. The motivation level of em-
ployees is directly correlated to their productivity. A motivated work-
force is an asset to the company and provides a competitive advantage
N
to it. Companies, such as Southwest Airlines, Google, and Starbucks,

are some of the leading examples of companies that derive a competi-
tive advantage out of employee motivation. Therefore, motivation is a
very important concept in organisational behaviour.
In this chapter, you will study the meaning of motivation. Character-

istics and motives of motivation are also described. In addition, you
will study motivational approaches and theories. Towards the end, the
chapter demonstrates motivation in action.
6.2 MEANING OF MOTIVATION

Motivation is a very fundamental psychological process. The term
‘motivation’ is derived from the Latin word ‘movere’ meaning ‘to
move’. Therefore, in simple words, motivation refers to the psycho-
logical process of driving an individual to certain goals. Motivation
consists of three interacting and independent elements: needs, drives,
and incentives. Needs are created whenever there is a physical or a
psychological imbalance. For example, when the body is deprived of

n o t e s
food, there is a need for food. Drives alleviate needs. Drives provide
the energising thrust to achieve a goal. Incentives are at the end of
the motivation cycle. Incentives can be defined as factors that reduce
drive and alleviate needs. For example, the compensation paid to em-
ployees for their work is an incentive that motivates them to work.
The meaning of motivation will become clearer through the following

definitions of motivation:
According to Dale S. Beach, “motivation can be defined as a willing-

ness to expand energy to achieve a goal or a reward”.
According to Dubin, “motivation is the complex of forces starting and

keeping a person at work in organisation”.
According to Michael J. Jucius, “motivation is the act of stimulating
S
someone or oneself to get a desired course of action, to push the right
button to get a desired reaction”.
According to W.G. Scott, “motivation means a process of stimulating

IM
people to action to accomplish desired goals”.
According to Dalton E. McFarland, “the concept of motivation is main-

ly psychological. It relates to those forces operating with the individual
employee or subordinate, which impel him to act or not to act in certain
ways”.
M
According to Vance, “motivation implies any emotion or desire, which

so conditions one’s will that the individual is properly led into action”.
According to Hodge and Johnson, “motivation in organisational set-

tings refers to the willingness of an individual to react to organisational
N
requirements in the short run. The greater the magnitude of positive mo-
tivation of an individual towards the organisation, the more is the like-
lihood that he will perform effectively in his position, even if it causes
some amount of personal deprivation”.
1. The term ‘motivation’ is derived from the Latin word _________

meaning ‘to move’.
2. Motivation consists of three interacting and independent
elements. List these elements.
Activity
Think of a moment when you felt motivated. Write a note on the

needs, drives, and incentives that you experienced.

MOTIVATION 115
n o t e s
6.3 CHARACTERISTICS OF MOTIVATION

Motivation refers to an internal feeling that helps individuals in
achieving their personal and professional goals in an efficient man-
ner. Motivation generates a drive to move in a certain direction and
achieve certain goals. Following are some of the important character-
istics of motivation:
The source of motivation for different people is different; it de-
pends on their age, status, cultural background, etc.
Motivation is a psychological concept. Therefore, it comes from
within an individual. Human behaviour is influenced more by in-
ner motivation than external influences.
Motivation is a complex phenomenon, because it cannot be ob-
S
served directly. In addition, motives being dynamic, add to the
complexity of motivation.
Motivation is different from satisfaction, inspiration, and manipu-
lation.
IM
Motivation positively influences the behaviour of individuals. This
helps an organisation in achieving its goals through its employees.
Motivation strengthens employees’ interest in work, which helps
in reducing absenteeism.
M
Motivation encourages employees to fulfil their own unsatisfied

personal goals.
Motivation helps employees to achieve individual, group, and or-
ganisational goals.
N
3. Motivation leads to an urge to move in a particular direction

and reach pre-set goals. (True/False)
4. Motivation reduces absenteeism in organisations. (True/
False)”
Activity
Think of a moment when you felt motivated. On the basis of your

experience, make a list of the characteristics of motivation.
6.4 DIFFERENT MOTIVES OF MOTIVATION

Richa and Deepa are both working hard, because both want to win the
employee of the month title for that month. Richa wants to win it be-

n o t e s
cause winning this award also entails a sum of 2000 rupees, which she
needs for an extra expense at home. Deepa, on the other hand, wants
to win the award, because it will make the management take notice of
her efforts and it could mean a promotion for her.
In the scenario, the award motivates both Richa and Deepa to aim for
the same award. However, their motives for wanting it are different.
Motivation originates from underlying human motives. The cause of
doing something or exhibiting certain type of behaviour is known as
motive. In other words, motives are the fundamental functions that
regulate the behaviour of individuals. Various types of motives are
Primary Motive
S
General Motive
Secondary Motive
IM
Figure 6.1: Types of Motives
6.4.1 PRIMARY MOTIVES
There is a significant amount of disagreement among psychologists on

M
how to classify different human motives. However, almost everyone

agrees that some motives are unlearned and physiologically based.
Such motives are called physiological, biological, unlearned, and pri-
mary motives. These motives are called ‘primary’ because these are
more tangible than other motives and originate from the basic phys-
N
iological level. However, the term ‘primary’ does not mean that these
motives always take precedence over other types of motives.
For a motive to be classified as ‘primary’ it needs to meet at least two

criteria, which are as follows:
It must be unlearned. In other words, these motives are inherent
in a human being.
It must be physiologically based. In other words, these motives
originate from the biological system of a human being.
Some of the most common primary motives are hunger, thirst, avoid-
ance of pain, sleep, sex, and material concern. Primary motives have
different potential roles in the workplace. For example, material con-
cerns can motivate employees to perform better at their work.
According to Coffman and Gonzalez Molina, “What many organisa-

tions don’t see — and why many don’t want to understand — is the em-
ployee performance and its subsequent impact on customer engagement
revolve around a motivating force that is determined in the brain and

MOTIVATION 117
n o t e s
defines the specific talents and emotional mechanisms everyone brings

to their work”.
6.4.2 GENERAL MOTIVES
There are a number of motives that lie between primary and second-
ary motives. These motives are partially learned and partially biolog-
ically inherent. For example, affection is a motive that is partially bi-
ological and partially learned from the environment. These motives
are termed general motives. General motives are unlearned, but they
are not physiologically based. General motives are also called ‘stimu-
lus motives’, because they induce a person to increase the amount of
stimulation. Some examples of general motives are curiosity, manipu-
lation, and affection.
S
6.4.3 SECONDARY MOTIVES
Secondary motives are the most important of the three types of mo-
tives, because these are learned motives. As a society develops, the
IM
primary and general motives give way to secondary motives. For ex-
ample, in a primitive society, primary motives, such as hunger and
sex, were very dominant. However, as society developed, motives,
such as power and achievement, took precedence. To be classified as
a secondary motive, the motive must be learned. Some common ex-
amples of secondary motives are power, achievement, and affiliation.
M
In addition, in relation to the workplace, security and status are also

important secondary motives.

N
5. Which of the following is not a type of motive?

a. Primary
b. Tertiary
c. General
d. Secondary
6. Hunger is an example of a secondary motive. (True/False)
7. Affection is a primary motive. (True/False)
8. Primary motives are also known as biological motives. (True/
False)
Activity
With the help of the Internet, search how various secondary mo-
tives influence organisational behaviour. Make a list of the points
and discuss with your friends.

n o t e s
6.5 MOTIVATIONAL APPROACHES

Different psychologists have explained the sources of motivations in
different manners. Depending on the sources of motivation, there are
different approaches of motivation. Now, let us study some of the ap-
proaches of motivation:
Instinct Approach
According to this approach, instincts or inborn patterns of behaviour,

influence the behaviour of a person. These instincts are biological-
ly predetermined. Therefore, the approach successfully explains
food-seeking and mate-seeking behaviour of individuals, because sex
and hunger are primary instincts.
S
However, this approach cannot always explain the complex be-
havioural patterns displayed by humans. For example, the instinct to
survive does not influence the behaviour of an individual who saves a
IM
friend in a car accident. Thus, there are factors in addition to instincts
that influence human behaviour.
Drive-reduction Approach
This approach was proposed by Clark C. Hull. The approach estab-

lishes a relationship between needs and the fulfilment of needs. Ac-
M
cording to this approach, every living organism experiences certain

drives or arousals that create a feeling of anxiety and tension. Each
organism behaves in a certain manner to reduce this anxiety. This ap-
proach is similar to the instinct approach; it fails to explain complex
human behaviour.
N
Incentive Approach
According to this approach, motivation originates from the desire to

achieve external goals or incentives. Incentives can be tangible, such
as money and food, and intangible, such as love and recognition. How-
ever, this approach fails to determine how certain incentives direct
behaviour. In addition, it is not scientifically possible to determine the
value of an incentive.
Cognitive Approach
This is a relatively modern approach, and it is widely accepted by psy-

chologists. The main focus of this approach remains on the individu-
al`s thoughts, beliefs, and perceptions, as well as his/her understand-
ing of the world. According to the cognitive theory of motivation by
Edward C. Tolman, an individual`s expectation of behaviour and the
value attached to its consequences determine his/her behaviour.

MOTIVATION 119
n o t e s
9. The ____________ approach successfully explains the food-

seeking and mate-seeking behaviour of individuals.
10. The cognitive theory of motivation was given by Edward C.
Tolman. (True/False)
Activity
Make a group of your friends and discuss the approaches of moti-

vation.
6.6 THEORIES OF MOTIVATION
S
Motivation refers to encouraging individuals to direct their actions to-
wards the realisation of organisational goals. Numerous researchers
IM
and theorists, such as David Clarence McClelland, Abraham Maslow,
and Douglas M. McGregor, provided their views on motivation. Some
of the theories provided by eminent theorists are as follows:
Maslow’s Hierarchy of Needs
Theory X and Theory Y
Herzberg’s Two Factor Theory/Motivation-Hygiene Theory
M
McClelland’s Theory of Needs

Goal Setting Theory
Equity Theory
N
Vroom’s Expectancy Theory

ERG Theory
Cognitive Evaluation Theory
Cognitive Dissonance Theory
Behaviour Modification Theory
These motivational theories can be broadly classified into:

Content Theories: The “what” aspects of motivation are includ-
ed in content theories. In other words, content theories deal with
“what” motivates individuals. Therefore, content theories are con-
cerned with individual needs and goals. Maslow, Alderfer, Herz-
berg, and McClelland studied motivation from a “content” perp-
sective.
Process Theories: The process theories deal with the “how” of
motivation. In other words, the process theories deal with how
motivation occurs. Vroom, Porter and Lawler, Adams and Locke
studied motivation from a “process” perspective.

n o t e s
Motivational theories are important in OB, because they help in man-

aging people. An organisation is in a better position to motivate and
retain employees if it is aware of the process and factors of motivation.
For example, if an organisation is aware of the various factors that
motivate or demotivate its sales persons, it can take necessary steps to
create a conducive working environment for its employees.
11. Content theories deal with the “what” aspects of motivation.

(True/False)
Activity
S
Make a group of your friends and discuss the theories of motivation.
6.7 Content Theories

IM
Content theories investigate into what motivates people. Naturally,
content theories take into account the needs and goals of individuals.
Maslow, Alderfer, Herzberg, and McClelland are some of the propo-
nents of the content theories. These theories explain why an individ-
ual’s needs change with time. Moreover, these theories explain the
M
specific factors that motivate behaviour. None of these theories have

been conclusively shown to be valid. However, they provide a contex-
tual framework for dealing with individuals.
Let us discuss some of the content theories in the next section.
N
6.7.1 MASLOW’S NEED HIERARCHY THEORY
The most famous need hierarchy theory of motivation has been given
by psychologist Abraham Maslow. He classified human needs into five
categories. Following are the levels of human needs:
1. Physiological Needs: Include needs for hunger, thirst, shelter, sex,
and other physical needs
2. Safety Needs: Include need for safety and protection from physical
and emotional harm
3. Social Needs: Include need for affection, belongingness,
acceptance, and friendship
4. Esteem Needs: Include need for internal esteem factors, such
as self-respect, autonomy, and achievement; as well as external
esteem factors, including status, recognition, and attention
5. Self-actualisation Needs: Include need for the drive to realise
one’s potential, self-growth, and self-fulfilment

MOTIVATION 121
n o t e s
All these needs of an individual must be satisfied in a hierarchical manner.
The diagrammatic representation of these needs is shown in Figure 6.2:
Growth
Needs
Self-actualization Needs
Higher
Esteem Needs Order
Needs
Social Needs
Deficiency Safety Needs Lower

Needs
S
Order
Physiological Needs
IM Needs
Figure 6.2: Maslow’s Level of Needs
In Figure 6.2, the upward arrow shows that the hierarchy of needs
works upwards from the bottom of the pyramid towards the top. After
the fulfilment of one set of needs, the next one becomes dominant, so
M
individuals keep moving up in the steps of the hierarchy.
Maslow divided the five types of needs in two categories. He consid-

ered physiological and safety needs as lower-order needs; whereas
the social, esteem, and self-actualisation needs as higher-order needs.
N
Higher-order needs are satisfied by internal factors, such as growth

and development; whereas, lower-order needs are satisfied by exter-
nal factors such as salary or work tenure.
Often, the physiological, safety, and social needs are considered as de-
ficiency needs, because they are concerned with the needs that the
individual lacks. Similarly, the esteem and self-actualisation needs
are considered as the growth needs, because the individual works for
their development by satisfying these needs.
However, it should be noted that the lower-order needs should be ful-

filled for an individual to move to the higher-order needs.
For instance, if managers follow Maslow’s hierarchy for satisfying

their employees, it is essential for them to know the current state of
desire of their employees.
Maslow’s theory became popular among psychologists, but it has

some drawbacks:

n o t e s
It is now always possible to follow a hierarchy, because an individual’s

needs might fall into two levels of needs simultaneously. For example,
an individual’s physiological and social needs may be dominant at the
same time.
Measuring some needs, for example, the self-actualisation needs, re-

mains difficult.
However, in spite of the preceding drawbacks, this theory is assumed

to be the most famous one and is useful for modern managers.
6.7.2 HERZBERG TWO-FACTOR THEORY
This theory was proposed by psychologist Frederick Herzberg, who

was one of the most influential names in business management. The
Herzberg two-factor theory investigates people’s expectations from
S
their jobs. Herzberg asked people to describe the situations in their
jobs; when they felt good or bad. From the responses, Herzberg ar-
rived at the conclusion that the following two factors are related with
IM
job satisfaction and job dissatisfaction:
Intrinsic Factors/Motivators: These factors represent people’s
perception about their jobs. Some examples of intrinsic factors
are the sense of responsibility and desire for growth and advance-
ment, which increase job satisfaction of employees.
Extrinsic Factors/Hygiene Factors: These are the factors in the
M
absence of which dissatisfaction is created among employees.

Some examples of extrinsic factors are rules and regulations and
supervision.
According to Herzberg, people feel good about their jobs because of

N
intrinsic factors; whereas, they feel bad about their jobs because of ex-
trinsic factors. Thus, Herzberg named the intrinsic factors ‘motivators’
and the extrinsic factors ‘hygiene factors’. Extrinsic factors should be
regulated to keep employees motivated. An appropriate combination
of motivators and hygiene factors leads to better employee satisfac-
tion. The limitations of Hertzberg’s two-factor theory are as follows:
Determining the reliability of the two-factor theory is difficult due
to lack of clear understanding about intrinsic and extrinsic factors.
Using the two-factor theory is inflexible.
In spite of all the criticism, the Herzberg two-factor theory is an exten-

sively used and well-known theory of motivation.
6.7.3 Alderfer ERG Theory
This theory was proposed by Clayton Alderfer to address some of the

limitations of Maslow’s need hierarchy theory. The letters ERG stand
for three levels of needs, which are explained as follows:

MOTIVATION 123
n o t e s
Existence: Existence needs correspond to the physiological and

safety needs of Maslow’s hierarchy. Existence needs include the
physiological and physical needs of individuals, such as needs for
food, shelter, and safe working conditions.
Relatedness: Relatedness needs correspond to Maslow’s belong-
ingness needs. Relatedness needs include a person’s needs to mix
and interact with other people, be publicly recognised, and feel
secure among people.
Growth: Growth needs correspond to Maslow’s esteem and self-ac-
tualisation needs. Growth needs involve a person’s self-esteem
through personal achievement as well as the concept of self-actu-
alisation presented in Maslow’s model.
The ERG theory says that, unlike Maslow’s theory, every individual
S
has multiple needs to satisfy simultaneously. Therefore, one may try
to satisfy the growth needs even though the relatedness needs are not
completely satisfied.
IM
This theory is an extension of Maslow’s theory, thus, it has many things
in common with the latter. One of the similarities between these two
theories is that both follow the satisfaction-progression process. Thus,
a need level dominates the motivation of a person more than other
needs levels. However, there are a number of differences as well. Un-
like Maslow’s model, the ERG theory includes a frustration-regression
process, in which individuals being unable to satisfy a higher need
M
become frustrated and regress to the next lower need level. For ex-
ample, if an individual is able to satisfy the existance and relatedness
needs, but the growth need fulfiment has been blocked, the individual
becomes frustrated and the relatedness needs start dominating his/
N
her motivation.
6.7.4 Mcclelland needs theory
David McClelland was the proponent of this theory. According to this

theory, every individual is driven by the following three motivators:
Achievement
Power
Affiliation
These three motivators exist in all individuals in varying degree. How-

ever, most people are not aware of what drives them. Let us discuss
these motivators as follows:
Achievement: People who are driven by achievement are driven
by complex challenges, and they want to find solutions of prob-
lems. In addition, they are goal oriented and desire feedback to
improve further. These people are motivated by standards of ex-
cellence, precise goals, and clear roles. They are concerned about
achieving excellence through individual efforts.

n o t e s
Power: These people want to have control over a situation, and

they are very influential. It has been observed that executives are
strongly motivated by power. Power motivation is also strong in
case of influential leaders.
Affiliation: Affiliation-oriented people have a strong desire to
belong. They are deeply concerned about relationships, and they
strive to reduce uncertainty. In addition, they are good team play-
ers. Affiliation-oriented people tend to be less assertive and de-
pend on others. These people are motivated by what they can ac-
complish with people they know and trust.
12. According to McClelland’s needs theory, which of the following
S
is not a motivator?
a. Achievement
b. Power
IM
c. Affiliation
d. Incentive
Activity
M
Make a group of your friends and discuss the content theories of

motivation.
6.8 PROCESS THEORIES

N
Process theories explain the mechanism through which human needs

change. Process theories address the limitations of the content the-
ories. One of the major weaknesses of the content theories is the as-
sumption that motivation can be explained by one or two factors, such
as job atmosphere or the content of a job. However, human motivation
is a much more complex phenomenon. In most cases, motivation is a
result of the interaction of a number of factors. Process theories take
these complex aspects of motivation into consideration. The focus
of the process theories remains on the cognitive processes in which
people engage to influence the direction, intensity, and persistence of
their behaviour.
Let us study some of the process theories.
6.8.1 GOAL SETTING THEORY
The goal setting theory, propounded by Edwin Locke, explains that

specific and difficult goals lead to higher performance. It constantly

MOTIVATION 125
n o t e s
motivates employees by helping them to keep their goals in mind and

improve their performance. According to this theory, feedback and
commitment lead to higher performance and bridge the gap between
the actual and expected performance of individuals. In addition, it
suggests that for self-improvement, an individual should have goals
that are specific (S), measurable (M), attainable (A), relevant (R), and
time-bound (T), known as SMART goals. The goal setting theory is
based on five basic principles, which are as follows:
Clarity:Implies that goals of individuals should be measurable
and unambiguous. Goals should also be communicated clearly, so
that employees know what is expected from them.
Challenge: Implies that goals should be somewhat difficult to at-
tain. However, goals must not be so challenging that they sound
unrealistic. Goals should also not be non-challenging, because that
S
can demotivate employees. Therefore, an optimum level of chal-
lenge is required in goals.
Commitment: Refers to the dedication of employees to achieve
IM
their goals. When goals are challenging, they increase the commit-
ment of employees. High commitment levels ensure improvement
in the performance of employees.
Feedback: Helps employees understand goals clearly and over-
come the obstacles in achieving these goals.
Task Complexity: Refers to the level of difficulty involved in a
M
task. A challenging task keeps employees motivated. However, a

highly-challenging task may be burdensome for employees.
6.8.2 VROOM’S EXPECTANCY THEORY

N
This theory is one of the most widely-accepted theories of motiva-

tion. It was given by Victor Vroom, who has studied organisational
behaviour with a focus on motivation, decision making, and leader-
ship. The expectancy theory suggests that employees are motivated to
apply effort when they believe that their efforts will result in perfor-
mance appraisals and rewards such as bonus, incentives, and promo-
tion. The theory focuses on the following three relationships:
Effort-Performance Relationship (Expectancy): Refers to the
perception of an individual that a particular amount of effort will
lead to a certain level of performance. For example, an individual
may expect that working extra hours in office may increase his/her
performance by a significant margin.
Performance-Reward Relationship (Instrumentality): Refers to
the perception of individuals that if they perform in a particular
way, they might get certain rewards. For example, an employee
may expect that he/she may have a batter salary increment if he/
she increases the performance level.

n o t e s
Rewards-Personal Goals Relationship (Valence): Refers to the

perception of individuals regarding whether the rewards provided
by the organisation are able to fulfil their personal goals or not.
For example, the personal goal of an employee is to increase his/
her wealth. Thus, if the employer rewards him/her with some
cash, then the award will be able to fulfil his/her personal goals.
All three relationships are shown in Figure 6.3:
Individual
effort
Effort-
Performance
Relationship
Individual
S
Performance
Performance
Rewards
Relationship
IM
Organisational
Rewards
Rewards-
Personal Goals
Relationship
Personal
Goals
M
Figure 6.3: Relationships of the Vroom’s Expectancy Theory
6.8.3 PORTER’S PERFORMANCE SATISFACTION THEORY

N
Since the very beginning of the study of organisational behaviour,

there has been significant amount of debate regarding the relation-
ship between performance and satisfaction. It has generally been
accepted by the content theorists that satisfaction leads to a better
performance. However, Herzberg`s theory of job satisfaction does not
provide any explanation of the relationship between satisfaction and
performance. In addition, the Vroom`s model also does not explain
the relation. Lyman Porter`s performance satisfaction theory is an ex-
tension of the Vroom`s expectancy theory. The theory postulates that
motivation does not equate with satisfaction and performance. In oth-
er words, motivation, satisfaction, and performance are all separate
variables. In addition, the theory states that effort does not directly
lead to performance. However, performance is mediated by abilities
and role perceptions. According to this theory, the reward that is fol-
lowed by performance determines satisfaction. Therefore, this theory
is a multi-variate model. It is based on the following four assumptions:

MOTIVATION 127
n o t e s
Multiplefactors in the individual and in the environment deter-

mine behaviour.
Individualsmake conscious decisions about how they are going to
behave in an organisational set up.
Different individuals have different needs, desires, and goals.
The behaviour of an individual depends on the expectation that
the behaviour will bring certain rewards.
The various elements of the theory are shown in Figure 6.4:
Value of Reward
Perceived Equitable
Reward
S
Abilities
& Traits
Intrinsic
Reward
Porformance
Effort Accomplishment Satisfaction
IM
Role Extrinsic
Perception Reward
Perceived Effort
Reward Probability
Figure 6.4: Elements of the Porter’s

M
Performance Satisfaction Theory
The elements are explained as follows:

Efforts: It refers to the amount of energy put by a person into his/
her job.
N
Value of Reward: It refers to the worth of the rewards received by

an individual because of his/her efforts.
Perceived Effort-Reward Probability: It refers to the perception of
an individual regarding the rewards associated with a level of effort.
Performance: It indicates that efforts lead to performance.
Reward: It refers to the benefits received because of the efforts put
into work. Intrinsic rewards lead to self-actualisation, and extrinsic
rewards lead to working conditions and other tangible benefits.
6.8.4 EQUITY THEORY
This theory was proposed by John Stacey Adams. The theory calls for
a fair balance to be struck between the inputs of an employee, such as
hard work, skills, tolerance, and enthusiasm, and the outputs such as
compensation, benefits, and recognition. According to this theory, a
balance between the inputs and outputs creates a strong and produc-
tive relationship between the employees and employers.

n o t e s
Following are some of the inputs considered in this theory:

1. Hard work
2. Commitment
3. Loyalty
4. Effort
5. Adaptability
6. Skill
7. Flexibility
8. Ability
9. Tolerance
10. Determination
S
11. Enthusiasm
12. Trust in superiors and colleagues
13. Personal sacrifice
IM
14. Trust
Some of the outputs considered in this theory are:

1. Salary
2. Benefits
M
3. Reputation
4. Recognition
5. Praise
N
6. Sense of achievement
7. Responsibility
8. Job security
The theory recognises that various factors influence the perceptions

of individuals about their employers. If employees think that their in-
puts are greater than their outputs, the employees feel demotivated.
In such cases, employees may start putting fewer efforts into work.
On the other hand, if employees feel that their inputs are lesser than
their outputs, they feel motivated and start putting in more efforts into
their work.
6.8.5 REINFORCEMENT THEORY
This theory was proposed by B.F. Skinner and his associates. This the-
ory proposes that an individual’s behaviour is a function of its conse-
quences. In other words, an individual’s behaviour follows a “law of

MOTIVATION 129
n o t e s
effect”, i.e, behaviours with positive consequences are repeated, and

behaviours with negative consequences tend not to be repeated.
This theory overlooks the internal state of an individual, i.e., the inner
feelings and drives. The main focus of this theory remains on what
happens to an individual when he/she takes some action. According
to Skinner, the external environment of an organisation should be de-
signed in a way that motivates employees. This theory does not focus
on the causes of individual behaviour.
This theory proposes the following methods for controlling behaviour

of employees:
Positive Reinforcement: It implies giving a positive response
when an individual shows positive and required behaviour. For ex-
ample, if an employee is immediately praised for arriving early to
S
a job, the probability of the employee repeating the behaviour will
increase.
Negative Reinforcement: This involves rewarding an employee
IM
by removing negative or undesirable consequences. This method
can be applied to increase the frequency of a desired behaviour.
Punishment: It involves removing positive consequences to lower
the probability of repeating undesirable behaviour in the future.
In other words, punishment involves applying undesirable con-
sequences for undesirable behaviour. For example, deducting an
M
employee’s salary for late coming.

Extinction: It is the absence of any kind of reinforcement. In oth-
er words, it involves lowering the probability of undesirable be-
haviour by removing rewards for that kind of behaviour.
N
13. Porter’s performance satisfaction theory is an extension of

_______________.
Activity
Make a group of your friends and discuss the various theories of

motivation.
6.9 MOTIVATION IN PRACTICE

An organisation finds it a complex and challenging task to keep its
employees motivated. In an organisational set up, multiple techniques
are used to keep employees motivated in their respective jobs. Some

n o t e s
of the common motivational techniques in practice are shown in

Figure 6.5:
Job
Enrichment
Upgrading the Goal

Skills of Setting
Employees
Motivation
Techniques
S
Alternative
Flexi-hours Working
Schedules
IM
Monetary and
Non-Monetary
Benefits
M
Figure 6.5: Motivational Techniques Used in an Organisation
The following points explain these motivational techniques further:

Monetary and Non-monetary Benefits: Refer to salary compo-
N
nents, which include money and other fringe benefits (non-mone-

tary benefits) provided to the employees as compensation for their
work. Some examples of monetary benefits are incentives, com-
missions, and bonus, while examples of non-monetary benefits are
gift vouchers and electronic gadgets. It is commonly accepted that
monetary motivational tools have better results in comparison to
non-monetary ones. However, we cannot ignore the importance of
non-monetary measures, because certain needs cannot be fulfilled
by money.
Job Enrichment: This technique involves making a job more
competitive by asking employees to share responsibilities of their
superiors. When employees are given additional responsibilities,
they feel themselves to be an integral part of the organisation.
In addition, this increases the confidence level of employees and
maintains their interest in work, which in turn leads to increase in
productivity.
Job Rotation: Refers to assigning different roles and responsi-
bilities to employees at different times to increase their interest

MOTIVATION 131
n o t e s
in their jobs. It enhances the performance level of employees by

keeping them motivated. In addition, it reduces the monotony of
work. However, this practice should be followed for employees
who have covered a particular tenure in the organisation, because
if an employee without experience keeps getting assigned to new
roles, he/she will not be able to gain expertise in any role.
Goal Setting: In this technique, certain goals are assigned to em-
ployees to invoke their participation. If employee participation is
invoked while setting goals, they feel more committed towards the
attainment of goals.
Alternative Working Schedule: Refers to flexible work timings of-
fered by various organisations to help their employees select the
desired shift of work. This way, employees can work as per their
convenience to strike a work-life balance in their lives. Alternative
S
working schedules motivate employees to give better performance.
Employees’ Skills Up-gradation: Refers to improving skills of em-
ployees from time to time and providing them training to increase
IM
their competency.
14. __________involves making a job more competitive by asking

employees to share some responsibilities of their superiors.
M

15. Job rotation refers to assigning different roles and
responsibilities to employees at different times to increase
their interest in their jobs. (True/False)
N
Activity
With the help of the Internet, search and discuss the motivational
techniques followed by the organisation.
6.10 SUMMARY
Motivation is a fundamental psychological process. The term ‘mo-
tivation’ is derived from the Latin word ‘movere’, meaning ‘to
move’.
Motivation refers to an internal feeling that helps individuals in
achieving their personal and professional goals in an efficient
manner.
Motivation originates from underlying human motives. The cause
of doing something or exhibiting a certain type of behaviour is
known as a motive.

n o t e s
Different types of motives are primary motives, general motives,

and secondary motives.
Different psychologists have explained the sources of motiva-
tions in different manners. Depending on the sources of motiva-
tion, there are different approaches of motivation. Some of the
approaches of motivation are instinct approach, drive-reduction
approach, incentive approach, and cognitive approach.
Motivation refers to encouraging individuals to direct their ac-
tions towards the realisation of organisational goals. Numerous
researchers and theorists, such as David Clarence McClelland,
Abraham Maslow, and Douglas M. McGregor, provided their views
on motivation.
Some of the theories provided by eminent theorists are Maslow’s
hierarchy of needs, Theory X and Theory Y, Herzberg’s two-factor
S
theory/motivation-hygiene theory, McClelland’s theory of needs,
goal setting theory, equity theory, Vroom’s expectancy theory, ERG
Theory, and Cognitive Evaluation Theory.
IM
key words
Mystery shoppers: Refers to shoppers who shop in an outlet to

collect information regarding the outlet.
Franchising: Refers to a type of business deal in which an organ-
M
isation gives the rights of using its trademarks and other intellec-
tual properties to another organisation at a mutually-decided fee.
Franchises: Refers to the organisation that buys the right to use
the business model and other intellectual property of another
N
organisation.
Incentive: It refers to the various tangible and intangible bene-
fits provided to employees to motivate them.
Multi-variate Model: It refers to a model that involves more
than two variables.

1. Describe the concept of motivation.
2. Mention the main characteristics of motivation.
3. What do you mean by the primary motives of motivation?
4. Elaborate on the different approaches of motivation.
5. Describe the goal setting theory of motivation.
6. Describe various motivational techniques used in organisations.

MOTIVATION 133
n o t e s
6.12 Answers and hints

Answers for Self Assessment Questions

Meaning of 1. Movere
Motivation
2 Needs, drives, and
incentives.
Characteristics of 3. True
Motivation
4. True
Different Motives of 5. b
S
Motivation
6. False
7. False
IM
8. True
Motivational 9. Instinct Approach
Approaches
Theories of 10. True
Motivation
Theories of 11. True
M
Motivation
Content Theories 12. d
Process 13. Vroom’s expectancy
Theories theory
N
Motivation in Practice 14. Job Enrichment

15. True

1. Motivation refers to the psychological process of driving an
individual to certain goals. Refer to section 6.4 for details.
2. Motivation refers to an internal feeling that helps individuals in
achieving their personal and professional goals in an efficient
manner. Refer to section 6.5 for details.
3. The unlearned and biological motives are known as primary
motives. Refer to section 6.6.1 for details.
4. The different approaches of motivation are instinct approach,
drive-reduction approach, incentive approach, and cognitive
approach. Refer to section 6.7 for details.

n o t e s
5. The goal setting theory, propounded by Edwin Locke, explains

that specific and difficult goals lead to higher performance. Refer
to section 6.8.4 for details.
6. Some of the important motivational techniques are monetary
and non-monetary benefits, job enrichment, job rotation, goal
setting, alternative working schedule, and employees’ skills up-
gradation. Refer to section 6.9 for details.
SUGGESTED READINGS
Singh, H. (2010). Organisational Behaviour. 1st ed. New Delhi: V.
K. (India) Enterprises
S
E-REFERENCES
Analytictech.com, (2014). Motivation. [online] Available at: http://
www.analytictech.com/mb021/motivation.htm
IM
ndiana.edu, (2014). Approaches to Motivation. [online] Available
at: http://www.indiana.edu/~p1013447/dictionary/mot.htm
Tutor2u.net, (2014). Motivation Theory - Herzberg. [online] Avail-
able at: http://www.tutor2u.net/business/people/motivation_theo-
ry_herzberg.asp
M
N

C h a
7 p t e r
LEADERSHIP AND PEOPLE SKILLS
CONTENTS
S
7.1 Introduction
7.2 Definition of Leadership
7.2.1 Significance of Leadership
7.2.2
IM
Managers vs. Leaders
Activity
7.3 Leadership Theories
7.3.1 Trait Theories
7.3.2 Behavioural Theories
M
7.3.3 Contingency Theories

Activity
7.4 Pitfalls in Leadership
N

Activity
7.5 Emotional Intelligence
Activity
7.6 Styles of Leadership and Their Impact on Employees
Activity
7.7 Summary

n o t e s
LEADERSHIP AT HCL TECHNOLOGIES
Vineet Nayar is the former Chief Executive Officer (CEO) of HCL.

He headed the initiative that gave rise to the organisation’s mot-
to, “employee first, customer second”. Nayar encouraged his em-
ployees to evaluate all their managers and presented his own re-
view on the organisation’s intranet, so that everyone could read it.
He urged employees to follow his lead. The reason he cited for the
initiative was to seek enough transparency and empowerment in
the organisation.
Nayar intended to make certain that organisational decisions

would be made by employees, because it is the employees of an
organisation who interact with clients. He dissolved the office of
the CEO stating, “the organisation would be inverted, where the
S
top is accountable to the bottom, and therefore, the CEO’s office will
become irrelevant.”
HCL, at present, has an employee strength of about 55,000 and a

IM
market share of $24 billion. Nayar’s leadership approach is very
different from that of the organisational heads of India’s other
big organisations, but by investing in people, the HCL leader has
proven his point. He takes a long-term, internally-focused view
of his organisation and works to create a sense of social responsi-
bility among employees along with meeting organisational objec-
M
tives.
Nayar has made aggressive investments in employee develop-

ment, despite tight labour markets and widespread attrition. His
leadership approach focuses on high levels of work engagement
N
and sincerity among employees.

LEADERSHIP AND PEOPLE SKILLS 137
n o t e s
learning objectives

>> Explain the concept and significance of leadership
>> Identify the differences between managers and leaders
>> Discuss the leadership theories
>> Discuss the pitfalls in leadership
>> Explain the concept of emotional intelligence
>> Discuss the styles of leadership and their impact on employees
7.1 Introduction
S
The management of Dilliwala Carpets Pvt. Ltd. need to promote an
employee in the sales team to head the sales of rugs. The manage-
ment is considering Alok and Vivek for the post. Alok has slightly
more experience in sales and marketing than Vivek. However, Vivek
IM
has displayed skills such as motivating his team mates, remaining re-
sourceful and calm in volatile situations, and taking initiatives. Thus,
the management selects Vivek for the post.
The scenario shows that leadership is a highly sought after and val-
ued quality in organisations. It is a process through which an individ-
M
ual enlists the support of other individuals for the accomplishment

of a common objective. Researchers, philosophers, and practitioners
have conducted several studies on leadership and suggested various
traits of effective leaders, environmental and personal contingencies,
leadership styles, and leadership theories. Traits of leaders have been
N
studied to identify the work and personal characteristics of leaders,

and skill traits associated with leader effectiveness.
Leaders possess certain leadership traits and personality traits, which

when combined with leadership skills, help to influence the other in-
dividuals. Leadership traits include perseverance, inclination to take
responsibility, determination, tolerance etc. Personality traits of a
leader include dominance, self-confidence, high energy, etc. while the
leadership skills include assertive skills, communication skills, inter-
personal skills, and adaptive skills.
There are certain differences between leaders and managers, though

the two terms are often used interchangeable. The manager-ver-
sus-leader argument is a never ending discussion about the difference
between the two and the vital functions that each role plays in an or-
ganisation. Managers usually have a basic practical approach towards
accomplishing a task and are oriented to achieve pre-determined tar-
gets. On the other hand, leaders act as visionaries, conceptualisers,
and catalysts to influence and inspire other individuals.

n o t e s
Leaders are prime agents in an organisation, who inspire and guide

other individuals to achieve shared goals. They plan, delegate, coordi-
nate, and motivate employees to accomplish organisational objectives.
Leaders attempt to develop employee potential and align the objec-
tives of employees with those of the organisation.
This chapter starts by discussing the concept of leadership, its signif-

icance, and explains how leadership differs from management. Next,
it discusses the different leadership theories and the various pitfalls
in leadership. The chapter also explains the significance of emotional
intelligence in becoming an efficient leader. The chapter concludes
by discussing the various styles of leadership and their impact on em-
ployees.
7.2 DEFINITION OF LEADERSHIP
S
"Leaders are individuals who establish direction for a working group
of individuals who gain commitment from these group of members to
IM
this direction and who then motivate these members to achieve the
direction's outcomes.”
- Conger, J.A. ‘Learning to Lead’ San Francisco: Jossey-Bass (1992, p18)
Leadership is the ability of an individual to persuade other individuals

to behave in a particular way, willingly. It is the process of influencing
individuals to work to achieve a desired result. Leadership involves
M
developing and communicating a vision for the unforeseen future,

encouraging other individuals and assuring their involvement in the
achievement of an objective.
N
Leaders are able to define and achieve challenging targets by motivat-

ing others for their accomplishment. He/she is able to take immediate
yet effective decisions in difficult situations. Leaders attempt to out-
perform their competitors, take calculated risks, and persist during
times of failure. Also, leaders are futuristic, have strong communica-
tion skills, confidence, an ability to manage others, and a willingness
to embrace changes.
In organisations, leadership entails motivating employees to do their

jobs using the skills and commitment that is required for the attain-
ment of desired results. This requires leaders to have efficient people
skills, so that they can cope with other individuals. People skills refer
to the various attributes and competencies that enable an individual
to work with other individuals. Leaders should possess certain people
skills for efficient leadership. These skills are as shown in Figure 7.1:

n o t e s
Assertive Skills
Communication Skills
Motivation Skills
Adaptive Skills
Figure 7.1: Leadership and the Required People Skills
S
Let us discuss the people skills leaders should possess:
Assertive Skills: Effective leadership requires the ability to assert
IM
how individuals behave in certain situations as objectively as pos-
sible. Leaders should be able to use their assertive skills to identify
the reasons for individual behaviour in a particular situation to in-
teract with them, empathetically. A leader’s assertive skill not only
helps in emphasising his/her rights but also helps in maintaining
a positive professional relationship with other individuals. For ex-
ample, an employee who habitually arrives late to the office needs
M
to be communicated the same. An assertive manager would tend

to empathise by saying, "We are supposed to be at work by 9:00
A.M. and it is already 10:50 A.M. Was there some problem?" in-
stead of being rude and using words such as, “You’re always late!”
N
Communication Skills: Leaders should develop strategies to com-

municate their ideas and views effectively. Communication skills
help in exchange of ideas that lead to problem solving and decision
making, both of which are required for efficient leadership. For
example, while introducing a new idea to followers, leaders should
communicate the benefits that favour the followers to persuade
them.
Motivation Skills: Communication alone may not encourage peo-
ple to follow a leader. Individuals are interested in knowing the
benefits that a certain decision or strategy offers to them. That is
when the motivational skills of a leader are required to highlight
the incentives of accomplishing a task. For example, a captain of a
cricket team motivates his/her teammates to introspect their per-
formance in case of failures, so that they can play and perform
better in the future.

n o t e s
Adaptive Skills: An efficient leader is aware that no two individu-

als are the same, and they do not have the same needs. Therefore,
leadership requires having adaptive skills to adjust the commu-
nication and motivation techniques while meeting an individual’s
needs. For example, two team members in a manager’s team are
completely different in nature. While one is an aggressive career
person, the other is a sensitive family-oriented person. Here, the
manager has to use different approaches to motivate or communi-
cate with both the team members.
7.2.1 SIGNIFICANCE OF LEADERSHIP
Effective leaders constantly motivate employees to work towards the

accomplishment of immediate goals as well as innovation through
new ideas. A good leader should be able to set an example for others
S
to follow. He/she must be able to inspire, motivate, and provide clear
directions to other individuals. Leadership provides many advantages
to an organisation, leading to the achievement of success and stability.
The absence of effective leadership often slows down the growth of an
IM
organisation, because employees tend to lose direction and competi-
tiveness. Some reasons why leadership is important to organisational
development are as follows:
Leadership Provides Clear Vision: Leaders communicate a clear
vision to employees of an organisation by presenting the bigger
picture. They are the connection between the organisation and the
M
employee. Thus, employees remain focused regarding the organ-

isational direction and do not stray from their roles and respon-
sibilities. For example, before starting a new project, a manager
presents the goals and organisational benefits of the project to his/
N
her team members.

Leadership Leads to Effective Planning: Leaders provide a
structured approach to generate a plan of action to achieve organ-
isational goals. Planning helps employees to identify, contribute
to, and understand their roles in achieving defined objectives. For
example, when a new project starts, a manager defines the role of
each team member.
Leaders Inspire and Motivate: If a leader shows commitment and
enthusiasm towards organisational goals, he/she provides inspira-
tion and motivation for employees to perform at a high level. For
example, a manager always reaches work on time to set an exam-
ple of punctuality.
Leaders Build Employee Morale: High-employee morale signifies
wilful dedication of employees towards their work. Leaders build
employee morale to maintain that dedication. This helps in encour-
aging employees to perform with perseverance as they work to
achieve the goals. For example, a manager constantly participates in

n o t e s
the team’s activities and is involved in every problem, which sends

the message that he/she is always there for his/her team members.
Leaders Encourage New Ideas: Leaders encourage employees
to contribute and discuss new ideas and innovative techniques by
creating a positive environment. This helps in using employees’
diverse experiences and ideas to improve business. For example, a
manger holds brainstorming sessions with his/her team members
before launching a new project.
Leaders Improve Employee-organisation Relationship: An ef-
fective relationship between a leader and the employees in an or-
ganisation validates that employees are considered valuable and
integral to the organisation. This creates a sense of ownership
among employees and builds a favourable relationship between
employees and the organisation. For example, a manager gives due
S
credit to team members who have put in extra efforts in a project.
Leaders Help in Management of Crisis: Leadership helps in mo-
tivating employees to remain focused during a crisis. During dif-
IM
ficult times, leaders can remind employees of their achievements
and encourage them to define achievable goals. For example,
during unforeseen project delays, a manager discusses a new de-
livery plan with his/her team members.
7.2.2 MANAGERS VS. LEADERS

M
“Great managers discover what is unique about each person and then
capitalise on it. This is the exact opposite of what great leaders do. Great
leaders discover what is universal and capitalise on it”.
- Marcus Buckingham, author of ‘First, Break All the Rules: What the
N
World's Greatest Managers Do Differently’
Leadership and management work hand in hand. To be an efficient

manager, an individual requires leadership skills. Similarly, an effec-
tive leader relies on applying his/her management skills to inspire oth-
ers to achieve a mission.
There are several functions of management that are consistent with

the attributes of leadership. Leadership requires influencing other in-
dividuals, which is also true for management. Similarly, both leader-
ship and management entail working with other individuals. Both are
concerned with the accomplishment of goals and objectives through
the involvement of people. However, there are certain factors that dif-
ferentiate leadership from management. Let us discuss the main dif-
ferences between the two:
Managers Influence While Leaders Inspire: Management com-
prises controlling individuals to accomplish a goal, whereas
leadership involves influencing, motivating, and enabling other
individuals to contribute in the attainment of an objective. For ex-

n o t e s
ample, a leader inspires millions of individuals to participate in a

revolution, but the person who arranges the tasks involved in the
revolution, handles the media, etc. is the manager.
Managers Create Circles of Power While Leaders Create Circles
of Influence: Managers have subordinates who help in carrying
out the instructions laid down by the manager. On the other hand,
leaders usually have followers, who are motivated by the leader to
perform. For example, Nelson Mandela created a powerful position
through his relentless pursuit of racial equality and economic pros-
perity. He influenced millions of people with the help of this power.
Managers Work to Achieve a Given Objective, While Leaders
Create Targets for the Future: Managers influence subordinates
to accomplish an identified target. However, leaders are futuris-
tic in their approach and inspire individuals to accomplish revo-
S
lutionary ideas. For example, Tata Nano, the cheapest car in the
world is an example of Ratan Tata’s revolutionary and futuristic
thinking. It is his managers, however, who would have carried out
this vision by planning tasks, defining roles, and communicating
IM
with the employees involved.
Therefore, leaders direct, encourage, motivate, and inspire individ-

uals to achieve organisational success. On the other hand, managers
coordinate individuals’ efforts and allocate resources to maximise ef-
ficiency in achieving identified goals. Table 7.1 shows the main points
M
of differences in the characteristics of leadership and management:
Table 7.1: Difference between Leadership

and Management
Leadership Characteristics Management Characteristics
N
Strategic and people-oriented focus Tactical and organisational focus

Setting of organisational direction Planning coordinated activities
and goals
Motivating and inspiring people Administering and maintaining
systems
Establishing principles Formulating policies
Building a team and development Allocating and supporting human
of talent resources
Developing new opportunities Solving logistical problems
Promoting innovation and invention Ensuring conformance to standards
and procedures
Empowering and mentoring people Instructing and directing people
Risk engagement and instigation of Management and containment of
change risks
Long-term, high-level perspective Short-term, detailed perspective
(Source: http://toolkit.smallbiz.nsw.gov.au/part/8/39/188)

n o t e s
1. Match the following:

1. Assertive skills a.
Ability to assert how indi-
viduals behave
2. Communication skills b. Help in exchange of ideas
3. Motivation skills c. Help in highlighting the in-
centives of a task
4. Adaptive skills d. Adjust according to employ-
ee behaviour
2. Leaders work to achieve a given objective, while managers
create targets for the future. (True/False)
S
Activity
Identify an individual among your friends who possesses excellent

IM
motivational skills. Relate two incidences when he/she used his mo-
tivational skills to encourage your group.
7.3 LEADERSHIP THEORIES

Research and studies have been conducted to identify the most pre-
M
ferred leadership style. However, there is no research that confirms

one leadership style as the most effective and preferable. Rather, a
combination of leadership styles, depending on the situation, is con-
sidered more appropriate leadership behaviour. To understand the
evolution of the leadership theory, let us discuss the progress of lead-
N
ership theories.
The three main leadership theories are shown in Figure 7.2:
Trait Theories
Behavioural Theories
Contingency Theories
Figure 7.2: Theories of Leadership
Let us discuss these theories further.
7.3.1 TRAIT THEORIES
Popular in the 1940s and 1950s, the trait theories of leadership are
based on the assumption that individuals inherit certain traits that
make them suitable for leadership. In other words, these theories as-
sert that leaders are born, not made. Several scholars and researchers,

n o t e s
such as Stogdill, McCall and Lombardo, Bennis and Thomas, have

studied the trait theories to understand the qualities and abilities of a
leader. According to the trait theories, leaders have common personal-
ities or behavioural characteristics. These theories attempt to explain
the distinctive characteristics accounting for leadership effectiveness.
Much research has been conducted to identify the physiological and
psychological qualities common to leaders. For example, high level of
energy, aggressiveness, self-reliance, pleasant appearance, persua-
siveness, and dominance were identified as traits common for suc-
cessful leadership. Leaders were considered different from their com-
mon counterparts in their drive, desire to lead, morality and integrity,
knowledge, awareness, and cognitive ability.
However, the theory failed to explain how certain leaders, who are ef-
fective, lack one or more of the qualities mentioned in these theories.
S
Also, the theory failed to explain that leaders require certain skills
and the ability to implement their vision. These skills are necessary
to transform leadership traits into leadership behaviour. For example,
an individual may be persuasive but may lack the ability to gain the
IM
attention of the people.
The trait theory has more historical than practical relevance for ad-
ministrators and managers in an organisation. The trait theorists be-
lieve that to understand both a leader and leadership in a better way,
the individual and the situation need to be considered more than the
traits. From an organisational point of view, there are certain qualities
M
that managers are expected to possess, such as vast knowledge about

the organisation and its competitors, good interpersonal relations, ex-
cellent reputation in the industry, integrity, high energy, and dedica-
tion, among others. However, these qualities alone do not make for an
efficient manager. Rather, the making of an efficient manager depends
N
on how these traits are transformed while decision making, handling

situations, and motivating employees.
7.3.2 BEHAVIOURAL THEORIES

The limited scope of the trait theory to predict leadership behaviour
led researchers to shift their focus to the behavioural theories of lead-
ership, during the 1950s. Several studies and researches have been
conducted on behavioural theories by Kurt Lewin and his colleagues,
Dr Rensis Likert, etc., to assert the behavioural traits of leaders. Be-
havioural theories of leadership are based upon the belief that it is not
the personal traits of an individual but his/her behaviour that makes
him/her an effective leader.
Contrary to the trait theory, behavioural theories support the ideol-
ogy that great leaders are made, not born. The theory focuses on the
actions of leaders and not their cognitive abilities or personal attri-
butes. According to the theory, individuals can learn to become lead-
ers through learning, experience, and observation. As per behavioural
theories, leadership behaviour can be categorised into the following
two types:

n o t e s
Production-oriented: This leadership behaviour is also referred

to as concern for production, initiating structure, or task-focused
leadership. Production-oriented behaviour typically involves act-
ing to get a task done. Such leaders focus on completing a task,
irrespective of personal consequences. For example, a school prin-
cipal who commands teachers to prepare the course curriculum in
a day without considering their limitations is a product-oriented
leader. Such leaders are usually autocratic and fail to involve em-
ployees in the decision-making process.
Employee-oriented: This leadership behaviour is also referred to
as concern-for-people leadership. Employee-oriented leadership
behaviour focuses on supporting employees in getting their tasks
done. Such a leader empathises towards his employees’ needs and
involves them in the decision-making process. For example, if the
school principal considers the problems of teachers and supports
S
them in the preparation of the course curriculum, he/she demon-
strates employee-oriented leadership.
Therefore, behavioural theories attempt to explain the distinctive

IM
styles of behaviour used by effective leaders or to define the nature of
their work.
Exhibit
Mintzberg’s Ten Management Roles

M
According to management expert and professor, Henry Mintzberg,

managers’ work behaviour can be categorised into three types of
roles: informational (managing through information), interperson-
al (managing through people), and decisional (managing through
action). These roles are further divided into ten common roles,
N
which are shown in the following figure:
In reality, these management roles overlap, and a manager should

be able to balance between them to manage effectively. As per
Mintzberg, “The manager who only communicates or only conceives
never gets anything done, while the manager who only ‘does’ ends up
doing it all alone”.
• Figurehead
Provide
Interpersonal • Leader
Information
• Liaison
• Monitor
Process
Feedback Informational • Disseminator
Information
• Spokesperson
• Entrepreneur
• Disturbance Handler Use
Decisional • Resource Allocator Information
• Negotiator
(Source: Flat World Knowledge, Inc. )

n o t e s
7.3.3 CONTINGENCY THEORIES
According to the contingency theories, no leadership style is suited

for all situations. Successful leadership depends upon particular vari-
ables, such as the leadership style, abilities of the followers, and the
situation.
In the 1960s, Fred Fielder proposed the first theory using the contin-
gency theory of leadership. The theory states that leadership effec-
tiveness is a function of two variables:
The tasks or interpersonal relationships that motivate a leader
The situation
The tasks or interpersonal relationships that motivate a leader can be

assessed with the help of a Least Preferred Co-worker (LPC) scale. The
S
LPC scale is used by managers to rate the least preferred co-worker in
the organisation. To use this scale, the leaders recall a co-worker they
work with, to rate him/her on a series of eight-point bipolar adjectives,
such as friendly-unfriendly, pleasant-unpleasant, and so on. Higher
IM
LPC scores signify more positive descriptions of the least preferred
co-worker, while low LPC scores signify more negative description of
the co-worker. Fielder stated that workers with high LPC scores are
motivated to maintain harmonious interpersonal relationships, while
workers with low LPC scores are driven to perform better and focus
on interpersonal skills. The LPC scale used in organisations is shown
M
in Table 7.2:
Table 7.2: LPC Scale

Unfriendly 1 2 3 4 5 6 7 8 Friendly
N
Unpleasant 1 2 3 4 5 6 7 8 Pleasant

Rejecting 1 2 3 4 5 6 7 8 Accepting
Tense 1 2 3 4 5 6 7 8 Relaxed
Cold 1 2 3 4 5 6 7 8 Warm
Boring 1 2 3 4 5 6 7 8 Interesting
Backbiting 1 2 3 4 5 6 7 8 Loyal
Uncooperative 1 2 3 4 5 6 7 8 Cooperative
Hostile 1 2 3 4 5 6 7 8 Supportive
Guarded 1 2 3 4 5 6 7 8 Open
Insincere 1 2 3 4 5 6 7 8 Sincere
Unkind 1 2 3 4 5 6 7 8 Kind
Inconsiderate 1 2 3 4 5 6 7 8 Considerate
Untrustworthy 1 2 3 4 5 6 7 8 Trustworthy
Gloomy 1 2 3 4 5 6 7 8 Cheerful
Quarrelsome 1 2 3 4 5 6 7 8 Harmonious

n o t e s
According to the contingency theory, there are two types of leaders:

Task-oriented Leaders: These leaders usually see their LPCs
more negatively, resulting in lower scores. Task-oriented leaders
were referred to as low-LPC leaders by Fiedler. Low-LPC leaders
are effective in organising a group to get tasks and projects done.
However, building interpersonal relationships is a low priority for
such leaders.
Relationship-oriented Leaders: These leaders usually see their
LPCs more positively, resulting in higher scores. Relationship-ori-
ented leaders were referred to as high-LPC leaders. High-LPC
leaders focus on building interpersonal relationships, while avoid-
ing and managing conflict.
S
3. Behavioural theories of leadership are based upon the belief
that it is not the personal traits of an individual but his/her
behaviour that makes him/her an effective leader. (True/False)
IM
4. Employee-oriented leadership behaviour focuses on
supporting employees in getting their tasks done. (True/False)
5. _____________________ scale is used by managers to rate the
least preferred co-worker in the organisation.
6. ___________________ leaders usually see their LPCs more
M
negatively, resulting in lower scores.

7. Lower LPC scores signify more positive descriptions of the
least preferred co-worker, while higher LPC scores signify
more negative description of the co-worker. (True/False)
N
Activity
Search the Internet and list some of the important events in the
evolution of leadership theories.
7.4 PITFALLS IN LEADERSHIP

Leadership is similar to navigating a boat rather than steering it. It re-
quires determining the direction and speed of the boat, asserting the
weather, monitoring the depth of the sea, planning the halts, and the
final destination. Even with the most planned courses of action, the
captain of a boat requires to make midcourse adjustments because of
unforeseen circumstances. Leadership requires similar actions. An ef-
fective leader is aware that pitfalls appear midcourse and needs to be
prepared to overcome them. Pitfalls in leadership can be categorised
as shown in Figure 7.3:

n o t e s
Personal Pitfalls
Pitfalls in Leadership
Organisational Pitfalls Environmental Pitfalls
Figure 7.3: Leadership Pitfalls
Let us discuss the pitfalls in leadership:
Personal Pitfalls: Several obstacles may appear in the way of ini-

tiatives taken by a leader. For example, individuals in disagree-
ment may cause obstructions for a leader. A leader should be pre-
S
pared to face difficult times and continue to persuade and motivate
others. A leader can face or be involved in the following personal
pitfalls:
IM
Criticism: This is one of the major personal pitfalls faced by a lead-
er. For example, a leader works to direct an organisation by taking
several initiatives. However, in the midst of new initiatives, prior
initiatives are left behind. In such a situation, people associated
with the prior initiatives experience a sense of loss and attempt
to make it a personal issue for the leader. Leaders need to be pre-
pared to face such situations. Criticism should be handled by the
M
leader keeping in view the role he/she has without being personal.
Dictatorship: A personal pitfall in leadership may also arise if

leaders become dictatorial in their approach rather than being
collaborative. Such leaders may tend to keep their personal ob-
N
jectives above those of the followers and lay unrealistic targets for
them. A leader should collaborate with one and all to yield the out-
comes of an initiative.
Role Confusion: A leader’s role is to serve others and work for

their welfare. However, in their passion to accomplish a task, lead-
ers often ignore the other individuals associated with him/her. For
example, a manager who neglects his employees’ work capacities
in his passion to be the top performer is a leader who confuses
passion with purpose.
Organisational Pitfalls: Sometimes, leaders do not understand

the culture of the organisation he/she is associated with, thereby
not realising the goals and objectives of the organisation. The rules
and principles driving an organisation should be well versed by a
leader to understand the ramifications of not abiding by them. A
leader who misses to comprehend the cultural clues may face ob-
structions in leading the organisation towards a new direction. For
example, an organisation that focusses on Corporate Social Re-
sponsibility (CSR) hires a new manager who tends to ignore CSR

n o t e s
in his decisions. Such a manager may not be able to lead employ-

ees in the long run.
Another common organisational pitfall is experiencing chang-

es in leadership. It can be challenging when an organisation’s
founding leader changes. People in the organisation are commit-
ted to the previous leader and may resist the new leader. The new
leader should view this as a developmental process and attempt
to win the trust of the people. Consider an organisation whose
CEO has been replaced with a new one. Employees may not be
inclined towards the new CEO owing to their faith and liking for
the former CEO.
Environmental Pitfalls: Organisations and their external envi-
ronment change constantly. These changes can be legislative, so-
cial and political, economic, etc. Organisations need to respond to
S
these changes by adopting new policies and plans. New services or
products may need to be developed to overcome competition. Bud-
get restructuring, merging of departments, etc. are a few examples
of organisational response to external influences. Depending on
IM
the external influence, a leader needs to bring about changes in
his/her strategies and work procedures. It can be challenging to
keep employees motivated during times of crisis or change. A lead-
er should set an example by leading the team through the change
and inspire others to follow suit.
M
8. Pitfalls in leadership can be categorised into ________________,

______________________, and ________________________.
N
Activity
Discuss in groups how environmental pitfalls affect the strategies

and work procedures of a leader. List five such probabilities.
7.5 EMOTIONAL INTELLIGENCE

Emotional intelligence is also called Emotional Quotient (EQ). Emo-
tions are organised responses that typically arise in response to an
event, internal or external, which bears a positive or negative mean-
ing for an individual. Intelligence can be defined as the ability of an in-
dividual to act purposefully, think rationally, and cope effectively with
changes around him/her.
Emotional intelligence is an individual’s ability to identify, understand,

and manage emotions to relieve stress; communicate and empathise
with other individuals; and overcome challenges and conflict. Emo-
tional intelligence affects several aspects of an individual’s daily life

n o t e s
such as the way he/she behaves and interacts with other individuals. It
is the capacity of an individual to identify and manage the emotions of
others, apart from managing his/her own emotions. Emotional intelli-
gence has four main aspects, which are shown in Figure 7.4:
Self-awareness
Relationship Emotional Self-

Management Intelligence management
S
Social
Awareness
IM
Figure 7.4: Four Aspects of Emotional Intelligence
Let us discuss these aspects of emotional intelligence further:

M
Self-awareness: It is the ability of individuals to recognise their

emotions and the way they affect their thoughts and behaviour. It
also includes the ability of individuals to identify their strengths
and weaknesses and develop self-confidence.
N
Self-management: It is the ability of individuals to control impul-

sive feelings and behaviours, manage emotions, take initiatives,
adhere to commitments, and adapt to changing situations.
Social Awareness: It is the ability of individuals to understand the
emotions, needs, and apprehensions of other individuals. It also
includes the ability to be socially acceptable and recognise the dy-
namics of a group or organisation.
Relationship Management: It is the ability of individuals to devel-
op and maintain good relationships with others and to communi-
cate and inspire others in a team to work in collaboration, thereby,
avoiding conflicts.
Emotional Intelligence At Workplace
Consider the following work situations:

Working with an employee who steals a colleague’s ideas and pres-
ents them as his/her own
Working with a rude co-worker

n o t e s
A poor work review

Co-workers who share a racist joke or a sexually explicit joke
Such situations can be emotionally stressful. To deal with such in-

stances, individuals require high emotional intelligence. Emotional
intelligence helps individuals understand the social complexities of
the workplace. Nowadays, several organisations conduct emotional
intelligence tests for candidates before hiring them. Emotional intel-
ligence gives leaders a competitive edge over others. Even in well-
known organisational set-ups, the most valued and productive leaders
are those who have strong traits of emotional intelligence.
The concept of emotional intelligence was first introduced by Peter Sa-

lovey and John Mayer in 1990. However, Daniel Goleman was the first
to highlight the importance of emotional intelligence in the workplace
S
through his book, ‘Emotional Intelligence’, in 1995. Goleman conclud-
ed that although qualities, such as intelligence, determination, and vi-
sion, are required in a leader, they may not be sufficient for effective
leadership. Effective leaders are distinguished by appreciable degrees
IM
of emotional intelligence, which includes qualities such as self-aware-
ness, self-regulation, motivation, empathy, and social skills. Emotional
intelligence in leadership gives birth to resonant leadership. Resonant
leaders possess higher degrees of emotional intelligence and the ability
to connect with their followers. They empathise with employees strug-
gling with a personal crisis. Resonant leaders attempt to create harmo-
M
ny in a group and motivate employees in unfavourable situations.
9. Who introduced the concept of emotional intelligence?

N

1. Self-awareness a. Ability to understand
emotions
2. Self-management b. Ability to develop and
maintain relationships
3. Social awareness c. Ability to control impul-
sive feelings
4. Relationship management d. Ability to recognise one’s
emotions
11. _________________ possesses higher degrees of emotional
intelligence and the ability to connect with their followers.
Activity
Consider an individual, who, you think, has excellent interpersonal

relationships. Identify the attitudes, values, skills, and knowledge
that contribute to his/her high emotional intelligence.

n o t e s
STYLES OF LEADERSHIP AND THEIR

7.6
IMPACT ON EMPLOYEES
“Leadership style is defined as the pattern of behaviours that leaders
display during their work with and through others”.
-Hersey and Blanchard, 1993
A leadership style includes the techniques and methods used by lead-
ers to motivate other individuals to follow their instructions. There
are basically three factors that influence the kind of leadership an in-
dividual follows:
Characteristics of the leader
Characteristics of the subordinates
Characteristics of the organisational environment
S
Moreover, the personal background of leaders and employees both af-
fects the style of leadership followed. These factors include personal-
ity, knowledge, values, and experiences and learning, which shape an
IM
individual’s feelings. For example, employees who are knowledgeable
and experienced may perform well under a democratic leadership
style, whereas employees with lesser experience and expectations
may require an autocratic leadership style.
Leadership has a direct impact upon employees and organisational
success. Leaders determine the organisational values, culture, and
M
work ethics, which reflect the work style, behaviour, and motivation
of the employees. A broad classification of leadership styles has been
N
Autocratic Leadership
Bureaucratic Leadership
Democratic Leadership
Leadership Styles
Charismatic Leadership
Situational Leadership
Transactional Leadership
Transformational Leadership
Laissez Faire Leadership
Resonant Leadership
Figure 7.5: Types of Leadership Styles
Let us discuss the different leadership styles and their impact on em-
ployees:
Autocratic Leadership: This leadership style is also referred to
as authoritarian leadership. Autocratic leaders make decisions

n o t e s
with little or no involvement of employees. Leaders who follow the

autocratic style are extremely confident of their decision-making
abilities, organising abilities, and capacity to formulate strategies
and plans. Although this leadership style works well when deci-
sions need to be taken promptly, autocratic leaders are generally
less creative as compared to other leaders. Employees may feel
disassociated with the leader and his/her decisions in this style of
leadership. There is a lack of shared vision and motivation among
employees. Autocratic leadership eliminates commitment, creativ-
ity, and innovation on the part of employees.
Steve Jobs, co-founder and former CEO of Apple Inc., is an ex-
ample of this leadership style. Jobs was expelled from Apple af-
ter a power struggle with the-then top management. Later, he was
asked to join back, and today, Jobs is the best example of how total
control and innovation can transform an organisation.
S
Bureaucratic Leadership: Leaders following this style rely on a
stated policy to meet organisational goals. Bureaucratic leaders
believe that policy dictates direction. They are strongly commit-
IM
ted to procedures and processes instead of employees’ needs and
objectives. The disadvantage of this style of leadership is that the
most important characteristics of leadership, such as motivation
and development of employees, are generally ignored. Policies are
not always adequate to motivate and seek commitment from peo-
ple. Bureaucratic leaders often do not empathise with people and
M
lack creativity and innovation at work, which often results in re-

sistance or disinterest from employees. Joseph Stalin, the leader
of the erstwhile USSR, is one of the many bureaucratic leaders
in history. He helped to transform communism in the USSR from
an egalitarian, revolutionary movement into an authoritarian, bu-
N
reaucratic governmental system.

Democratic Leadership: This style of leadership is also referred
to as participative style of leadership. Contrary to autocratic lead-
ership, the democratic leadership style emphasises that leaders of-
fer guidance to people and accept inputs from individuals to make
decisions. Democratic leaders reserve the right to make the final
decision, but they encourage feedback, ideas, and suggestions
from all employees. Democratic leaders usually have more satis-
fied followers. However, this leadership style has certain limita-
tions, for example, increased chances of poor decision-making and
implementation, slow processing of strategies, and greater efforts
to bring out workable results. One of the best examples of a dem-
ocratic leader is Dwight D. Eisenhower, the 34th President of the
US, who was also a military leader. He was faced with the difficult
task of convincing the Alliance forces to agree on a common strate-
gy. Eisenhower worked hard to motivate everyone to work togeth-
er to achieve a common understanding.

n o t e s
Charismatic Leadership: Leaders following charismatic style of

leadership have a vision and personality that motivate people to
execute the vision. Charismatic leadership offers opportunities for
creativity and innovation, because it is highly motivational. Em-
ployees tend to follow such leaders and are usually content with
their roles and tasks in the achievement of organisational objec-
tives. However, there is a significant issue with charismatic lead-
ership. If the leader leaves, a replacement is hard to find, because
charismatic leadership is based upon an individual’s strong per-
sonality. In the absence of such a leader, employees may feel demo-
tivated, disoriented, and without direction. One of the most char-
ismatic leaders in history is John F. Kennedy, the 35th President of
the US, who hailed from a powerful family and was blessed with
pleasant looks, which added to his personal charisma.
Situational Leadership: The situational leadership theory states
S
that there is no ideal style of leadership to suit every situation. Ac-
cordingly, an effective leader constantly adapts to different styles
of leadership for different situations or outcomes. Experienced and
IM
seasoned leaders, who are aware of organisational and employee
needs, tend to adopt the situational leadership style. Employees
are content, because there is freedom to choose the best strate-
gy for every situation, which offers scope for innovation, develop-
ment, and learning. Situational leadership provides leaders with
the opportunity to test and develop different styles for various sit-
uations, resulting in learning and experience for both leaders and
M
employees. An example of situational leadership is George Bush,

the 43rd President of the US, who responded and took decisions
after the suicide bomb attacks at the World Trade Center, Wash-
ington D.C. on September 11, 2001 (9-11 Tragedy).
N
Transactional Leadership: This style of leadership is also referred

to as managerial leadership. Leaders following this style tend to
adopt a system of rewards and punishments for employees. For
example, when employees are successful, they are rewarded, and
when employees fail, they are reprimanded or punished. Rules,
policies, procedures, and standards are strictly followed in trans-
actional leadership. An example of transactional leadership is In-
dra Nooyi, CEO of PepsiCo Inc. She quoted, “You give a team of
people a set of objectives and goals and get them all to buy into it,
and they can move mountains”. Nooyi topped the Fortune’s 2009
list of Most Powerful Women in Business. However, employees
may not feel content in this style of leadership, because they are
not encouraged to be creative or to find new solutions to problems.
Moreover, employees may feel less motivated to work towards a
goal, if the rewards and compensation do not appeal to them.
Transformational Leadership: Leaders following the transfor-
mational leadership style attempt to transform their followers.
These leaders are usually energetic, enthusiastic, and passionate
towards employees. Transformational leaders represent the most

n o t e s
valuable form of leadership, because employees are offered fair

opportunities to change, transform, and develop themselves as
contributors. Structurally, this style results in the best leadership
outcome, because transformational leaders develop people. Such
a leadership style is most suitable for modern organisations, facing
constant external changes that demand creative problem solving
and employee commitment. Mahatma Gandhi was a transforma-
tional leader, who led by example and empowered his followers to
gain Indian independence, following the principle of non-violence.
Laissez Faire Leadership: Leaders following this style believe
that people excel when they are left alone to respond to their re-
sponsibilities and obligations on their own. Therefore, Laissez
faire leaders extend the least possible guidance to employees and
attempt to control them through less obvious means. The laissez
faire leadership style is suitable for organisations where employ-
S
ees are highly skilled and motivated to work on their own. This
leadership style offers enough opportunity to employees to devel-
op their problem-solving skills and exhibit their creativity. Warren
IM
Buffett, the CEO of Berkshire Hathaway, employs the laissez faire
leadership style, allowing his managers full autonomy. However, in
situations where employees are unable to accomplish tasks with-
out guidance, laissez faire leadership may lead to delays in work
and disoriented employees.
Resonant Leadership: When leaders fail to empathise with the
M
emotions of group; they create collective distress. The group mem-

bers may feel off-balance and thus perform poorly, which may fur-
ther affect the achievement of organisational mission. Thus, it is
important for a leader to accommodate with the feelings of the
people and spread positive emotional direction.
N
Resonance is a drive that encourages people to achieve higher

productivity, creativity, accord and results. Leaders with resonant
leadership quality show high level of emotional intelligence and
possess the skills of self-awareness, emotional intelligence and em-
pathy for others. Such leaders have a tremendous ability to con-
nect with their followers and their challenges. These leaders have
better ability to create harmony in a team and motivate employ-
ees to follow direction, even in a stressful working-environment.
Basically, resonant leaders apply emotional and social intelligence
skills to create positive relationships and engage others to achieve
a common goal.
Late Akio Morita, former Chairman and CEO of Sony Corp., can
be cited as an excellent example of resonant leader. Morita played
an important role in establishing, nurturing and growing Sony
Corp. through his outstanding leadership qualities. He was said to
be a leader of exceptional energy level and an appealing person-
ality. He was a visionary leader and used to share his vision with
all his employees. This helped in developing family feeling among

n o t e s
the employees. It was because of the Morita’s work style that the
employees of Sony always worked in harmony and felt pride in
contributing their talent to the achievement of Morita’s vision.
note
Dr Paul Hersey, author of ‘The Situational Leader’, and Ken

Blanchard, author of ‘One-Minute Manager’, proposed the Hersey-
Blanchard situational leadership theory, which states that success-
ful leaders should change their leadership styles according to the
maturity of the individuals they lead and the situational aspects.
S
12. Experienced and seasoned leaders, who are aware of
organisational and employee needs, tend to adopt which of
the following leadership styles?
IM a. Situational
b. Transactional
c. Transformational
d. Charismatic
13. Bureaucratic leaders often do not empathise with people and
M
lack creativity and innovation at work, which often results in

resistance or disinterest from employees. (True/False)
14. Leaders following the _________________ leadership style
extend the least possible guidance to employees and attempt
N
to control them through less obvious means.
Activity
Through the Internet, find out the type of leadership that is preva-
lent in one of the following industries:
Advertising
Manufacturing
Software
7.7 SUMMARY
Leadership is the ability of an individual to persuade other indi-
viduals to behave in a particular way, willingly.
Leaders are futuristic, have strong communication skills, confi-
dence, an ability to manage others, and a willingness to embrace
changes.

n o t e s
Leaders should possess certain people skills for efficient lead-

ership such as assertive skills, communication skills, motivation
skills, and adaptive skills.
Leadership is important to organisational development, because
leadership provides a clear vision, leads to effective planning, in-
spires and motivates individuals, builds employee morale, encour-
ages new ideas, improves employee-organisation relationship, and
helps in management of crisis.
The main differences between leaders and managers are that
managers influence while leaders inspire, managers create circles
of power while leaders create circles of influence, and managers
work to achieve a given objective, while leaders create targets for
the future.
The three main leadership theories are trait theories, behavioural
S
theories, and contingency theories.
Pitfalls in leadership involve personal pitfalls, organisational pit-
falls, and environmental pitfalls.
IM
Emotional intelligence is an individual’s ability to identify, under-
stand, and manage emotions to relieve stress, communicate, and
empathise with other individuals, overcome challenges and conflict.
The four aspects of emotional intelligence are self-awareness,
self-management, social awareness, and relationship management.
M
The three factors that influence the kind of leadership are char-
acteristics of the leader, characteristics of the subordinates, and
characteristics of the organisational environment.
Leadership style can be categorised into autocratic leadership, bu-
N
reaucratic leadership, democratic leadership, charismatic leader-

ship, situational leadership, transactional leadership, transforma-
tional leadership, and laissez faire leadership.
key words
Corporate Social Responsibility (CSR): It is an organisation’s

sense of responsibility towards the community and environ-
ment.
Emotional Quotient: It is an individual’s ability to sense, un-
derstand, and apply his/her wisdom of emotions to facilitate
high levels of collaboration and productivity.
Interpersonal Relations: It is the association between two or
more people ranging from brief to long periods of time.
Laissez Faire: It is the policy of letting events to take their own
course without much intervention.

n o t e s
Least Preferred Co-worker (LPC) Scale: It is a scale used by

managers to rate the least preferred co-worker in the organisa-
tion.
Resonance Leadership: It is the leadership style followed by
leaders who possess higher degrees of emotional intelligence.

1. Identify the differences between managers and leaders.
2. Explain the concept of leadership based on trait theories.
3. Discuss the contingency leadership theories in detail.
4. Discuss the pitfalls in leadership.
S
5. Explain the concept of emotional intelligence. Explain its
significance in the workplace.
6. Discuss the styles of leadership and how they impact employees.
IM

M
Topic Q.No. Answers

Definition of Leadership 1. 1(a), 2(b), 3(c), 4(d)
2. False
Leadership Theories 3. True
N
4. True
5. Least Preferred Co-worker scale
(LPC) 6 a. Trait theories
6. Task-oriented leaders
7. False
Pitfalls in Leadership 8. Personal, organisational and envi-
ronmental
Emotional Intelligence 9. Peter Salovey and John Mayer
10. 1(d), 2(c), 3(a), 4(b)
11. Resonant leaders
Styles of Leadership and 13 Peter Salovey and John Mayer
their Impact on Employees 12. Situational
13. True
14. Laissez faire leadership

n o t e s

1. The main differences between leaders and managers are that
managers influence while leaders inspire, managers create circles
of power while leaders create circles of influence, and managers
work to achieve a given objective while leaders create targets for
the future. Refer to Section 7.2 Definition of Leadership.
2. According to the trait theories, leaders have common personalities
or behavioural characteristics. Refer to Section 7.3 Leadership
Theories.
3. The contingency theory states that leadership effectiveness is a
function of two variables: the tasks or interpersonal relationships
that motivate a leader and the situation he/she has to deal with.
Refer to Section 7.3 Leadership Theories.
S
4. Pitfalls in leadership involve personal pitfalls, organisational
pitfalls, and environmental pitfalls. Refer to Section 7.4 Pitfalls
in Leadership.
IM
5. Emotional intelligence is an individual’s ability to identify,
understand, and manage emotions to relieve stress, communicate
and empathise with other individuals, and overcome challenges
and conflict. Emotional intelligence helps individuals understand
the social complexities of the workplace. Refer to Section 7.5
Emotional Intelligence.
M
6. Leadership style can be categorised into autocratic leadership,

bureaucratic leadership, democratic leadership, charismatic
leadership, situational leadership, transactional leadership,
transformational leadership, and laissez faire leadership. Refer
to Section 7.6 Styles of Leadership and Their Impact on
N
Employees.
Suggested Readings
Fox,
W. (2006). Managing organisational behaviour (1st ed.). Cape
French, R. (2011). Organizational behaviour (1st ed.). Hoboken,
N.J.: Wiley.
E-References
Mindtools.com,. (2014). Fiedler's Contingency Model: Matching
Leadership Style to a Situation. Retrieved 5 June 2014, from http://
www.mindtools.com/pages/article/fiedler.htm

n o t e s
Utwente.nl,. (2014). Contingency Theories. Retrieved 5 June 2014,

from http://www.utwente.nl/cw/theorieenoverzicht/Theory clus-
ters/Organizational Communication/Contingency_Theories/
S
IM
M
N

C h a
8 p t e r
Groups and Teams
CONTENTS
S
8.1 Introduction
8.2 Group Dynamics
8.2.1 Features of Groups
8.2.2
IM
Importance of Groups
Activity
8.3 Types of Groups
8.3.1 Formal Groups
8.3.2 Informal Groups
M

Activity
8.4 Understanding Group Processes
N
Activity
8.5 Formation of Groups
Activity
8.6 Theories of Group Formation
8.6.1 Propinquity Theory
8.6.2 Homan’s Theory
8.6.3 Balance Theory
8.6.4 Exchange Theory
Activity
8.7 Concept of Teams
8.7.1 Difference between Groups and Teams
8.7.2 Problems in Teamwork
8.7.3 Creating Effective Teams in the workplace
Activity

CONTENTS
8.8 Summary
S
IM
M
N

Groups and Teams 163
n o t e s
Managing the Team Problems
Mr. Rajat is working as a team leader in a leading Business Pro-

cess Outsourcing (BPO). He is hardworking and dedicated and
efficient in his work. However, Rajat observed that from the past
two months, his team’s productivity has shown a steep decline. In
addition, his team received warnings from the compliance team
for infringing various quality issues pertaining to work. Rajat
checked with his team and found that most of the team members
had little interest in working in a BPO. In addition, the team had
some internal conflicts and coordination issues amongst mem-
bers.
Rajat, realising the gravity of the situation started taking steps

to resolve the issues. First he interacted individually with each
S
team member enquiring about their work and non-work related
problems. He tried to motivate them by explaining the benefits
in terms of money, promotion they can achieve in that compa-
IM
ny and a career they can carve in a BPO industry. Then he kept
a track on the performance of his team members. The members
who showed interest in their work were rewarded. On the other
hand, the team members who were still not interested to work
were asked to leave the organisation.
Further Rajat, tried to resolve the conflicts among the team mem-
M
bers by communicating with them and identifying the root cause

of the problem. Beside this, he also conducted team activities and
games on a weekly basis in order to build a healthy relationship
among the team members.
N
Within a period of two months, the performance of the team im-

proved and they also received positive feedback from the quality
team.

n o t e s
learning objectives

>> Explain the concept of group dynamics
>> Identify the different types of groups
>> Explain the different group processes
>> Describe the formation of groups
>> Discuss the theories of group formation
>> Explain the concept of teams
8.1 Introduction
S
The word ‘group’ or a ‘team’ is often used for one another. Is there a
difference between the two? Consider this example. What would you
call a bunch of people gathered together in the evening kicking a foot-
IM
ball in a parking lot? It can be called a group, as there is no format or
structure to the activity; it is just some people behaving in an unorgan-
ised, uncoordinated manner. This bunch of people might be together
for a simple reason that they are friends and like spending time to-
gether after office hours.
However, taking the same bunch of individuals and turning them into
M
a football team would be a challenging task. Once they are made into
a team, then their tasks would have to clearly defined, and as a team
they will have a well-defined objective, for instance, winning 5 out of
7matches. This team will have to perform in an organised and coor-
dinated manner and will have to be trained for achieving the team
N
objectives. Thus, a team is a group of individuals, which are united

towards achieving a common goal.
In simple words, a group refers to a collection of two or more indi-

viduals who come together to accomplish their common objectives.
For example, in an organisation, people eating lunch together form a
group to fulfill their social need of interaction. On the other hand, a
team refers to a set of two or more individuals who come together to
realise their pre-determined goals. For example, in an organisation,
people belonging to a particular department form a team, such as all
the members of the quality department form a quality assurance team.
The success and failure of an organisation depends on how effectively
it manages its groups and teams to optimise the output.
The formation of groups and teams plays an important role in the

decision-making process of an organisation. It helps in maintaining
co-ordination among various activities of an organisation and carry-

n o t e s
ing out day-to-day operations. In addition, group behaviour and team

culture influence the overall environment of an organisation.
This chapter begins with defining group dynamics. Further, the chap-
ter explains different types of groups. Further ahead, the chapter dis-
cusses group processes and the formation of groups. In addition, dif-
ferent theories of group formation have been explained in the chapter.
Towards the end, the concept of the team has been explained in the
chapter.
8.2 Group Dynamics

In general, a group is described as a gathering of people at a particular
place and time. For example, people travelling in a bus or employ-
ees gathered in a training programme organised by the organisation
S
will be considered as a group. However, in organisational settings, the
definition of a group is quite different.
Organisational behaviour, defines a group as the collection of two or

IM
more independent individuals interacting with each other to achieve
a common goal. For example, heads of different departments of an or-
ganisation gathered in a meeting with the CEO to identify the causes
of the problem faced by the organisation.
Group dynamics is a social process by which people interact face-to-

M
face in small groups. It describes how a group should be organised

and operated. The features of group dynamics are as follows:
It outlines the interaction model within the group.
It estimates the pressure of other groups.
N
It estimates the pressure exerted by members of the group.

It facilitates decision-making process of the group.
It measures and increases satisfaction level of group members.
Group dynamics affects the productivity and performance of group

members. Thus, the importance of understanding group dynamics is
as follows:
It
enables managers to manage the groups effectively and pro-
motes effective working of the organisation.
It helps managers to harness the synergy of the group for any con-
tingent business need.
It prepares the groups for better future performance.

n o t e s
DEFINITION
According to D. H. Smith, “a group is the largest set of two or more

individuals who are jointly characterised by a network of relevant
communications and shared sense of collective identity and one or
more shared dispositions with associated normative strength.”
According to Edgar H. Schien, “a group may be defined as a social

phenomenon in which two or more persons decide to interact with one
another, share common ideology and perceive themselves as a group.”
8.2.1 Features of Groups
Have you ever noticed, that employees going on a vacation trip organ-
ised by their organisation are considered as a group and not a team
S
even when they belong to the same organisation.
A number of people gathered together or working together will only

IM
be considered as a group. However, this bunch of people must have
the features of a group.
Some of the features of a group are as follows:

Groups’emphasise on the development and accomplishment of
common goals of the group members rather than individual goals.
M
In groups, full participation of all the members is expected.

Groups mainly focus on behavioural changes instead of personal-
ity changes.
Groups’ emphasise on the impact of behaviours, rather than their
N
intent.
Groups help in determining the reasons for less participation by
the members in a group activity.
Groups facilitate the efforts of people to establish reasonable
boundaries with colleagues.
In groups, power or authority is not used for resolving the prob-
lems.
In groups, all the members feel vulnerable despite of their posi-
tions in the organisation.
8.2.2 Importance of Groups
Groups are important for an organisation as they provide an opportu-

nity for the employees to interact freely with other employees having
similar goals.

n o t e s
In addition, groups help the organisation in the following ways:

Groups provide a sense of becomingness among the employees:
Employees feel satisfied if they get a common platform where they
can share their views, ideas, and feelings. Thus, they feel comfort-
able in their group as it satisfies their urge of becomingness as well
as the need for affiliation.
Groups act as a source of warmth and support for the employ-
ees: It means that no individual can live in isolation and it has been
observed that individuals perform better in a group. According to
Elton Mayo, “employees who are isolated from each other because of
plant layout find their jobs less satisfying than those group members
who are able to socialise on the job.”
Groups provide a power/authority to the group members: Power
is the result of authority provided to group members. On the other
S
hand, group itself can be so powerful that its association provides
power to its members.
Groups provide security to the employees: An individual feels se-
IM
cure after being a part of a group.
Groups offer recognition and status to the employees: If individ-
uals enjoy high status within the group, they get respect and rec-
ognition from their group members. In addition, if a group enjoys
superior status in the society, it provides social status, recognition,
and appreciation to its members.
M
1. People watching a movie in a PVR will be considered as a

N
group. (True/False)
2. Which of the following is not an advantage of a group for an
organisation?
a. Group provides a sense of becomingness to the employees.
b. Group helps in increasing the productivity of employees.
c. Group helps in getting a competitive advantage over com-
petitors.
d. Group helps in developing feeling of security among the
employees.
3. Groups focus on personality changes instead of behavioural
changes. (True/False)
Activity
Identify the groups in your class and social circle. Present your find-
ings in a short note, providing reasons why you consider them a group.

n o t e s
8.3 Types of Groups

Various types of group exist within an organisation depending upon
their nature and purpose. Some of the groups found most commonly
in the organisations are depicted in Figure 8.1:
Secondary
Group
Command
Group
Formal
Task Group
Group
Committee
S
Membership
Types of Group
Groups
IM Primary
Group
Interest
Informal Group
Group Friendship
Group
Reference
M
Group
Figure 8.1: Different Types of Group

N
Formal and informal groups are discussed in the next sections.
8.3.1 Formal Groups
Formal groups are the groups formed by the organisation for accom-
plishing a particular task. For example, a group is formed for organ-
ising an event on a particular occasion in the organisation. Formal
groups can be further categorised as follows:
Secondary Group: It is a formal, general, and remote group. The
members of this group do not form personal associations. They
are more concerned with formal communication and relationship.
The members of these groups may not necessarily have a face-to-
face interaction with each other.
Command Group: It is a group where subordinates directly re-
port to one superior only. The organisational chart provides detail
about the reporting relationships that exist in an organisation. For
example, departmental heads are clearly mentioned in the chart,
making it easy for a subordinate to know about his/her reporting

n o t e s
head. The size of the command group increases with increase in

the span of control of departmental heads.
Task group: It is a group of employees who work together to com-
plete a particular task, project, or job. In a task group, employees
work in coordination with each other to get the work done.
Committee: It is a group of individuals working together to solve
certain problems. This group explores, analyses, and discusses
various problems to find their solutions.
Different types of models are used for communicating in formal

groups. Some of these models are discussed as follows:
Chain Model: In this model, the hierarchy of an organisation needs
to be followed for communication. The chain model is followed in
traditional or bureaucratic organisations. Figure 8.2 shows the
S
chain model: IM
M
Figure 8.2: Chain Model

Wheel Model: It is a model wherein group members report to a
single superior. In this model the team members are not allowed
N
to communicate amongst themselves; all communication is done

by the superior. In such a model coordination amongst the group
members becomes a challenging task. Figure 8.3 shows the wheel
model:
Figure 8.3: Wheel Model

n o t e s
Circular Model: In this model, information flows from one group

member to another. In the circular model, generally the commu-
nication among the group takes a lot of time. Figure 8.4 shows the
circular model:
S
IM
Figure 8.4: Circular Model
Free Flow Model: It is a model in which each group member is
free to communicate with other members. The free flow model
facilitates faster communication; however, coordination amongst
the group may be a problem in this type of model. Figure 8.5 shows
M
the free flow model:

N
Figure 8.5: Free Flow Model

Inverted V Model: It is a model that facilitates the communication
of a group member, not only with his/ her own superior, but also
with his/her superior’s superior. In the inverted V model, commu-
nication takes place at a much faster pace among group members.
Figure 8.6 shows the inverted V model:

n o t e s
Figure 8.6: Inverted V Model
8.3.2 Informal Groups
S
Informal groups are the groups that people form to satisfy their social
needs. People belonging to informal group have a common interest.
Informal groups are classified as follows:
IM
Primary Group: It is a group wherein intimate interaction, infor-
mal communication, and cooperation among members take place.
For example, a group of friends is a primary group.
Interest Group: It consists of members who have some common
interests, such as sports, social awareness and politics.
FriendshipGroup: It is a group of individuals who share some
M
common characteristics, such as age or religion.

Reference Group: It is a more influential group that shapes the
behaviour of its members; therefore, it has great significance in
the study of organisational behaviour. It is a group with which the
N
individual identifies or draws a feeling of becomingness.
The communication models followed in the informal groups are dis-

cussed as follows:
Single Strand Model: It is an informal group model in which one
individual communicates with another individual through other
individuals. Figure 8.7 shows single strand model:
Figure 8.7: Single Strand Model

n o t e s
Gossip Model: In a gossip model a person transfers a piece of in-

formation about a person to as many people as possible.
Figure 8.8: Gossip Model

Probability Model: In this model, an individual communicates
S
with others in a random manner. Figure 8.9 shows probability
model:
IM
M
N
Figure 8.9: Probability Model

Cluster Model: It is a model wherein the individuals communicate
only with the individuals, who are trustworthy according to them.
Figure 8.10 shows cluster model:
Figure 8.10: Cluster Model

n o t e s
4. Which of the following is not a type of formal group?

a. Primary Group
b. Secondary Group
c. Task Group
d. Committee
5. Name the model wherein an individual communicates with
others in a random manner.
6. Name the model that facilitates the communication of a group
member, not only with his/ her own superior, but also with his/
her superior’s superior.
S
Activity
IM
Using the Internet, identify different types of formal groups found in
a manufacturing organisation. Present your findings in a short note.
8.4 Understanding Group Processes

In every group, there are certain inherent processes, which are called
M
group processes. After the formation of a group, it is assumed that

stable relationships, bonds of intimacy, appropriate behaviours for
individual members have been established. This results in a definite
structure of the group along with some important processes, which
characterise the dynamics within groups. Some of the important dy-
N
namics of the group are as follows:

Roles: It is the positions assigned to different members of a group.
There are various other dimensions of roles, which are discussed
as follows:
Identity: It is the different attitudes or behaviours that are spe-
cific to a role. The identity of an individual may change accord-
ing to the role. For example, a peon would have an attitude
change, when he/she is promoted to a clerical level in a govern-
ment organisation.
Expectation: It is the level of achievement that an individual
aspires to reach to fulfill his/her roles and responsibilities. For
example, creative head in an organisation needs to have an ar-
tistic bend of mind, to fulfill his/her responsibilities effectively.
Perception: It is the pre-assumed way of thoughts of an indi-
vidual about how he/she should react in a particular situation.
An individual’s perception might be different from the actual
roles and responsibilities that he/she has to perform.

n o t e s
Conflict: It represents the difference in perceived and actual

role. An individual has preconceived notions about his/her role
in the organisation, which may not be in synchronisation with
his/her actual roles and responsibilities. In such a situation, the
conflict of role occurs in the group.
Ambiguity: It is the confusion between the perceived role and
actual role of any member of the group.
Norms: These are the acceptable standards or expectations shared
by group members. The norms may differ from one group to an-
other.
Status: It indicates a prestige grading, position, or rank of mem-
bers within a group. It refers to the respect and recognition that is
associated with a group.
S
Free Rider Tendency: It is a group phenomenon in which individ-
ual members reduce their individual efforts and contributions as
the group expands.
IM
Group Cohesiveness: It is the degree to which group members feel
connected to one another and be a part of the group as a whole.
7. Identity of an individual may change according to

M
the__________.
8. The degree to which group members feel connected to
one another and be a part of the group as a whole is called
_________________.
N
Activity
Ask your parents/relatives/friends about the social groups they are

attached with and identify their roles within these groups. Present
your findings in a short note.
8.5 Formation of Groups

You might imagine that forming a group is as simple as asking some
friends to meet and complete a task. However, when people work in
a group task, the relationship of each member of a group has to be
professional. Although, it takes time for a group of people to work in
a coordinated, professional manner to complete a common task ef-
fectively. Thus, before a group reaches a stage where it can function
effectively, it has to go through various stages of development.

n o t e s
These stages of development are depicted in Figure 8.11:
Forming Storming Norming Performing Adjourning
Figure 8.11: Stages of Group Development
The stages of group development are explained as follows:
S
1. Forming: In this stage, the group members are introduced to
each other. It is the initial stage where group members behave
very cautiously and try to understand each other.
IM
2. Storming: It is a stage wherein group members start interacting
and enquiring about each other. The feelings, such as
disagreements, resentment, and anxiety, develop as members
start interacting with each other. In this stage, power struggle
can also occur wherein the members decide the informal leader
of the group. This stage is also known as the confrontation stage.
M
3. Norming: In this stage, all the disagreements are worked out

within the group. The group members set norms, try to attain
cohesiveness, and understand their goals.
4. Performing: It is the stage wherein group members’ performance
N
is at the maximum and they trust each other completely. In this

stage, the performance of group members are evaluated as well
as communicated to them.
5. Adjourning: It is the final stage of group development in which
the group dissolves after accomplishing desired goals.
9. Identifying is one of the stages in the group formation process.

(True/False)
10. What is the name of the final stage of a group formation
process?
Activity
Using the Internet, identify how groups are formed on a facebook,

Twitter, and LinkedIn account. Also, determine the similarities and
differences in the group formation process.

n o t e s
8.6 Theories of Group Formation

The functioning of a group depends on its member’s ability to ex-
change ideas and communicate effectively. Also individual roles and
responsibilities of members are established for an effective function-
ing of a group. Thus, management of the organisation needs to have a
theoretical understanding of how a group functions and what are the
reasons for the formation of groups. Various theories have developed
that explain the formation of these groups.
Some of these theories are shown in Figure 8.12:
Propinquity Theory
S
Homan’s Theory
IM
Balance Theory
Exchange Theory
M
Figure 8.12: Theories for Formation of Groups
Let us discuss these theories for the formation of groups in the follow-
ing sections.
N
8.6.1 Propinquity Theory
The word propinquity is derived from the Latin word propinquitas,

which means nearness. Thus, propinquity theory states that people
who are affiliated to each other either due to spatial or geographical
proximity form informal groups. For example, workers tend to form
groups with the people who are working on the same process or same
areas of a plant or office rather than with the people who are working
at a distant place in the plant or office.
However, propinquity theory has ignored the factors that lead to the
formation of groups, which are much complex factors than nearness.
Nearness can only be the facilitating factor to form a group and not
the reason for its formation.
8.6.2 Homan’s Theory
Homan’s theory is based on three main principles, namely activities,

interactions, and sentiments. According to Homan, the more activities

n o t e s
an individual share with one another in a group, interaction among

them increases. This enables these individuals to perform the shared
activities of a group, together and effectively. Consequently, individ-
uals develop sentiments for each other, which help them to further
perform the group activities more effectively, thereby achieving the
group goals and objectives easily.
Thus, the key element in the formation of group is interaction that

helps in developing common sentiments for one another. This is one
of the basic ideas for forming the informal groups. Interaction among
the group members not only helps in achieving the objectives of the
group but also helps in solving problems, reduce tension, and facili-
tate coordination among the members.
8.6.3 Balance Theory
S
Theodore M. Newcomb has proposed the Balance theory. Accord-
ing to him, “Persons are attracted towards one another on the basis of
similar attitudes towards commonly relevant objects and goals. Once a
IM
relationship is formed, it strives to maintain a symmetrical balance be-
tween the attraction and the common attitudes. If an imbalance occurs,
attempts are made to restore the balance, if the balance cannot be re-
stored, the relationship dissolves.”
This theory states that similarity in attitudes of individual towards ob-

jects and goals is the basis for the formation of groups.
M
In Balance theory, both propinquity theory and Homan’s theory plays

an important role. This is because propinquity or nearness and inter-
action play a significant role in maintaining a balance in the relation-
N
ship of the group members. For example, Mr. Ajay and Mr. Vijay are
working in the same organisation. When they interact with each other,
they found that they have similar attitudes, values, working style, and
culture. Thus, they constitute a group.
8.6.4 Exchange Theory
The exchange theory was proposed by John W. Thaibaut and Harold

H. Kelley. This theory is based on the social exchange theory, which
states that people get involve into social exchange based on the per-
ceived reward-cost of the interactions. For example, an individual will
join a group based on what he/she will get after joining it. Reward will
be in terms of the gratifying the needs while the cost is in terms of anx-
iety, frustration, embarrassment, and fatigue. If the reward is equal or
more than the cost, the individual will join the group. However, if the
rewards are lower than the cost, the individual will not join the group.
The reasons given for the formation of groups in propinquity theory,
Homan’s theory, and Balance theory are applicable in this theory.

n o t e s
11. In which theory of group formation, proximity of individuals

is suggested as a reason for the formation of group?
12. ________ theory is based on the social exchange theory.
Activity
Suppose your friend is a member of a group and he/she asked you

to join the group. Identify and list the criteria based on which you
will join or not join the group.
8.7 Concept of Teams
S
Team can be defined as a formal group comprising interdependent
individuals who are responsible for the attainment of common goals.
Quality assessment team, testing team, and production team are some
IM
of the examples of teams in an organisation. In the organisation, teams
play a very crucial role in completing the work within the deadlines.
A team has following features:

In a team the members interact freely with each other.
In a team, the members depend on each other to complete tasks.
M
A team provides support to all its team members willingly.

A team encourages collective decision-making.
A team creates an environment of trust and support among team
N
members.
A team provides opportunity to the team members to give sugges-
tions.
In teams, regular feedback is provided to members for improving
their performance by the leader or supervisor.
It requires commitment from team members for the achievement
of organisational goals
In contemporary organisations most of the work project-based, where-

in forming a team and allocating tasks among the members helps in
completing the project on-time and with accuracy. Project completion
would have been a difficult proposition if a single employee was han-
dling the entire work.
For building a strong team, it is important to carefully study the be-

havioural patterns of individuals and create the right blend of team mem-
bers. For example, in a project requiring six individuals, two people can
be selected for their creative skills, two people for analytical skills, and
the remaining two for their entrepreneurship or leadership skills.

n o t e s
Teams help organisations in the following ways:

Team makes the members loyal to each other when they unite to
accomplish common organisational objectives.
Team increases the performance of individual members by utilis-
ing the collective knowledge, skills, and ideas of team members.
This further helps in enhancing the overall performance of an or-
ganisation.
Team provides an opportunity to team members to show their po-
tentials by delegation of work. This will further encourage team
members to bring innovation and creativity to their work, which
ultimately helps organisation to get excellence in performing cer-
tain tasks.
Team increases flexibility among the members of the team. This
S
is due to the fact that when people in a team come together from
different background for a common purpose then they become
more tolerant, open for discussions, and eager to learn. This fur-
ther helps the organisation to use its workforce in diverse fields.
IM
Teams can be of various types depending on their purpose, structure,
membership, and duration. The different types of teams are discussed
as follows:
Functional Team: It involves a manager and his/her subordinate
who belongs to the same functional area, such as the finance de-
M
partment or the marketing department.

Cross Functional Team: It comprises employees from the same
hierarchical level, but different work areas or departments. These
teams are formed for special purposes and after the completion of
N
the task, they get disbanded. For example, when an organisation

wishes to enter to enter a new market, the heads of the different
departments of the organisation, such as production, marketing,
and finance, work together in order to identify the feasibility of the
organisation in that market.
Self-Managed Team: It is a team that is considered capable enough
to handle routine problems; therefore, does not require reporting
to its team leader on a daily basis.
Supervised Team: It is a team that works under direct supervision
of a manager.
Virtual Team: It may not exist physically, yet works with the help
of teleconferencing and videoconferencing. Such teams gained im-
portance due to globalisation where the team members located at
different places were not able to physically gather at a single place.
Problem-Solving Team: It is a team formed by a few employees of
the same department who meets once a week to solve the work-re-
lated problems, such as quality issues.

n o t e s
DEFINITION
According to Katzenbach and Smith, “a team is a small number of

people with complementary skills who are committed to a common
purpose, performance goals, and approach for which they hold
themselves mutually accountable.”
8.7.1 Difference between Groups and Teams
In the preceding section we have studied that groups and teams are
different. There are certain defined points based on which we can
differentiate between the two. Some of these points are depicted in
Table 8.1:
S
Table 8.1: Points of Difference between Group
and Team
Group Team
IM
The group focuses on individual’s Team focuses on mutual account-
accountability. ability.
The group emphasises on sharing of Team emphasises on taking deci-
ideas, information, and perspectives sions, discussing various issues,
of the members. solving problems, or planning for
the future.
It focuses on the goals of individuals. It focuses on the collective and com-
M
mon goals of the entire team.

Group produces the outcomes, such Team produces collective outcome
as individual projects or assign- that is achieved by the entire team.
ments.
N
It encompasses individual roles, re- It encompasses shared roles, respon-

sponsibilities, tasks, procedures, or sibilities, tasks, and assignments.
assignments.
Group shows individual concern of Team shows no individual concerns;
every member of the work group to the entire team is responsible for the
his/her own work. work as a whole.
8.7.2 Problems in Teamwork
A team is like a chain which can only remain strong and effective if
all of its links (i.e. team members) are strong (i.e. equipped with the
required skills, knowledge, and expertise). If any of the link (or team
member) is weak, then it may lead to major problems for the entire
team. Some of these problems are discussed as follows:
Communication: This implies that if there are gaps and barriers
in communication among team members, it will hamper the team-
work.

n o t e s
Personal Variables: This refers to variables, such as personality

and the value system of an employee. Personal variables may lead
to individual differences that may act as a source of conflict.
Unrealistic Expectations: This refers to impractical expecta-
tions of managers from employees. Unrealistic expectations may
de-motivate employees and create conflict between managers and
employees.
Change: It indicates that individuals or groups might be resistant
to adapt to any new change in an organisation, thus, giving rise to
conflict.
Goal Conflict: It indicates that the goals of two or more individuals
or groups collide with one another, leading to conflict.
Difference in Values: It indicates that people have a different val-
S
ue system to which they are emotionally attached and uncompro-
mising. In such a scenario, the values of one individual may collide
with another that may lead to conflict in a team.
Behaviour:
IM
It indicates that any extreme action of an individual,
whether defensive or offensive, can be a cause of conflict in a team
environment.
A manager needs to resolve the abovementioned problems in team-

work to accomplish the given projects on time and with efficacy. Most
of these problems are related with the behaviour and self-focused at-
M
titude of the team members. Thus, while forming a team, a manager

needs to identify and involve only those people in the team who are
passionate about the team goal and wish to work as a team member.
For example, if a team member is not interested in the goals of the
team or rather did not believe that the team is accomplishing anything
N
useful; he/she will never work effectively and can also discourage oth-
er members from working hard.
In addition, the manager should also work on reducing too much of

competition among the team members as it will destroy the team’s
ability to work as a unit. For example, if the team members compete
with each other for getting a promotion or hike, it might hamper the
team objective. Such actions will spread distrust among the team
members and the team will not be able to accomplish as much as it
could have in the case of a trusting environment.
Moreover, the manager can organise some team games or activities

in order to build healthy and strong relationships among the team
members.
8.7.3 Creating Effective Teams in the workplace
Teams have the power of exponentially empowering the organisation

by creating synergy, which is the interaction of team members to pro-

n o t e s
duce an outcome which is greater than the sum of the outcome pro-
duced through their individual contributions.
Synergy is the element that differentiates an effective team from a

common team. An effective team is the one that achieves the target or
objective of forming the team. It is a team that provides a competitive
advantage to the organisation over a period of time.
However, forming and managing effective teams is not an easy task as

it involves individuals from different backgrounds and perspectives.
In such a case, if the team members are not compatible with each
other, the motive for which the team is created will suffer. For creating
effective teams, an organisation needs to take into account the follow-
ing factors:
Clear Goals: Organisational goals should be clear and discrete for
S
all the team members so that they clearly know their job respon-
sibilities.
Relevant Skills: While forming a team certain relevant skills
IMshould be kept in mind so that it becomes easier to attain team
goals.
Mutual Trust: It ensures the success of the team as a whole.
When team members trust each other, then they coordinate well
to achieve team goals.
Unified Commitment: All the team members should be commit-
M
ted and dedicated towards the achievement of the team as well as

organisational goals together.
Good Communication: An organisation should provide an effec-
tive communication channel such that team members can express
N
themselves openly. The organisation should also promote healthy

communication among team members and avoid any communica-
tion gap or miscommunication among them.
Negotiation Skills: The team members should have good negoti-
ating and bargaining skills so that they can demand required re-
sources from the management to work efficiently.
Appropriate Leader: Leaders should be selected according to the
requirement of the situation.
Internal Support: All the team members should support each oth-
er. This can be done if all the team members possess good inter-
personal skills.
External Support: The team should get appropriate support from
non-members so that there is no hindrance in attaining the as-
signed goal in stipulated time.

n o t e s
Apart from the abovementioned factors, a manager needs to avoid the

following unwanted characteristics to manage and create effective
teams:
Minimise group pressure and dominance of members of a team as
it will reduce free thought and expression subduing great possible
ideas of the team members.
Avoid control of one member over the entire team
Avoid politics in the team as the compromises made by the team
members due to political power will affect the overall team objec-
tives and effectiveness
Avoid distraction of team members from the main goals and objec-
tives of the team
Avoid group thinking in the teams as it leads to unwanted solu-
S
tions and will harm the organisation.

IM
13. In a team, all the members should interact with each other.
(True/False)
14. Which of the following is not a problem in teamwork?
a. Communication gap
M
b. Unrealistic goals and expectations

c. Team members sitting in different locations
d. Goal conflict
N
Activity
Using the Internet, identify the different types of teams which are
formed in a restaurant.
8.8 Summary
The group is the collection of two or more independent individuals
to achieve a common goal.
Group dynamics refers to a social process through which people
interact face-to-face in small groups.
Groups provide a sense of becomingness to the employees, source
of warmth and support for the employees, power/authority to the
group members, security to the employees, and recognition and
status of the employees.

n o t e s
Formal groups are the groups formed by the organisation for ac-
complishing a particular task.
Informal groups are the groups that people form to satisfy their
social needs.
After group formation, bond of intimacy and stable relationships
are developed among the group members, which provide a struc-
ture for the group along with some important processes, which
characterises the dynamics within groups.
Various stages involved in the group formation are forming, storm-
ing, norming, performing, and adjourning.
Different theories for group formation are propinquity theory, Ho-
man’s theory, Balance theory, and exchange theory.
Team is the formal group that includes interdependent individuals
S
responsible for the attainment of common goals.
Some of the factors important for creating effective teams are clear
goals, relevant skills, mutual trust, unified commitment, good com-
IM
munication, negotiation skills, appropriate leader, internal and ex-
ternal support from the organisation.
key words
Group: Two or more individuals working together for a com-

M
mon goal.
Formal Groups: The groups formed by an organisation for a
common task.
Informal Groups: The group formed due to the common inter-
N
ests of the members of that group.

Norms: A set of acceptable standards and expectations from a
person belonging to a particular group.
Structure: A particular pattern of relationships amongst the
members of a group.
Teams: The group formed by an organisation involving interde-
pendent individuals who are responsible for the attainment of
common goals.
Groupthink: A process wherein an individual tends to compro-
mise on his/ her idea and agrees to the idea of the group.

1. What do you mean by groups? What is the significance of groups
in an organisation?
2. Discuss the different types of groups in detail.

n o t e s
3. Elaborate on the group processes.

4. What are the different stages of group formation?
5. Explain the theories of group formation.
6. Define teams. How you will differentiate between groups and
teams?

Group Dynamics 1 False
S
2 c. Group helps in getting a com-
petitive advantage over com-
petitors.
IM
3 False
Types of Groups 4 a. Primary Group
5 Probability model
6 Inverted V Model
Understanding Group 7 Role
M
Processes
8 Group cohesiveness
Formation of Groups 9 False
10 Adjourning
N
Theories of Group 11 Propinquity theory

Formation
12 Exchange
Concept of Teams 13 True
14 c. Team members sitting in dif-
ferent locations

1. Group refers to two or more individuals gathered together to
attain a common goal. Refer to section 8.4 for details.
2. Groups can be categorised as formal groups and informal groups.
Refer to section 8.5 for details.
3. Group processes involve roles, norms, status, free rider tendency,
and group cohesiveness. Refer to section 8.6 for details.

n o t e s
4. The different stages of group formation are forming, storming,

norming, performing, and adjourning. Refer to section 8.7 for
details.
5. The theories developed for group formation include propinquity
theory, Homan’s theory, Balance theory, and exchange theory.
6. Team is a group having interdependent individuals who need to
achieve the common goals. Refer to section 8.9 for details.
Suggested Readings
Robbins, S.P., Judge, T.A., Sanghi, S. (2010). Essentials Of Organi-
S
zational Behavior. Panchsheel Park, New Delhi: Dorling Kinders-
ley (India) Pvt. Ltd.
Luthans, F. (2008). Organizational Behavior. New York: Mc-
IM
Graw-Hill Education.
Aswathappa, K. (2010). Organizational Behaviour. Mumbai: Hima-
laya Publishing House.
M

N
tributors (P) Ltd.
E-References
Groups and Teamwork. Retrieved from http://highered.mc-
graw-hill.com/sites/dl/free/007091091x/79496/KreitnerSmapleCh.
pdf
Team as a Concept. Retrieved from http://pathways-egypt.com/
subpages/downloads/Teams_Chapter_1.pdf.
Problems that Destroy Teamwork. Retrieved from http://www.
practicalmanliness.com/5-problems-that-destroy-teamwork-and-
how-to-solve-them/.

C h a
9 p t e r
STRESS MANAGEMENT
CONTENTS
S
9.1 Introduction
9.2 Defining Stress
IM
9.2.1 Basic Schools of Thought on Stress
9.2.2 Defining Workplace Stress
9.2.3 The Stress Experience
Activity
9.3 Work Stress Model
M

Activity
9.4 Stressors
N
Activity
9.5 Sources of Stress
Activity
9.6 Levels of Stress
9.6.1 Individual Stress
9.6.2 Group Stress
9.6.3 Organisational Stress
Activity
9.7 Outcomes of Stress
Activity
9.8 Stress-Performance Relationship
Activity

CONTENTS
9.9 Stress Management

Activity
9.10 Summary
S
IM
M
N

STRESS MANAGEMENT 189
n o t e s
HOW COACHING HELPED IN MANAGING STRESS
Stephen Larke was a vice president at the IT consultancy firm

Cap Gemini. He was 47 years old with no history of any mental
health issues. As a busy and successful executive, he was accus-
tomed to pressures of targets, long hours, challenging clients and
significant global travel while at the same time juggling with the
priorities of family life for many years. In 2005, Larke was shocked
when diagnosed with clinical depression. It came as a shock to
him even though the diagnosis was an unsurprising confirmation
of a pattern of feelings and behaviour that had built up over a pe-
riod of time and that was not normal and healthy.
In the past, Larke had experienced periods of stress and fleet-

ing periods of feeling low about work. But over a period of time,
S
these experiences morphed into a more constant and pervasive
feeling of anxiety, stress, and sadness. This was exacerbated by
poor sleep as he tended to wake up early in the morning.
IM
When diagnosed to be suffering from clinical depression, Larke
was still able to function very well when involved in high prior-
ity activities. However, for non-urgent but important activities
requiring strategic thought or creative energy, he found himself
empty. He used to spend a lot of time staring at the computer
screen, feeling emotional and very low. He had a nagging feeling
M
that he was unable to effectively deal with everything that was on

his plate.
Five months before the diagnosis, Larke started on a programme

of employer-funded coaching. The coaching helped him unpack
N
his emotions and acted as a gateway to getting the additional help

he needed. He was able to better understand his own feelings and
frequent anxieties and lows. The programme also provided strat-
egies for putting work stress into a context and tackling specific
stressful challenges. He was able to put his career in a context
and reflect on where he is headed in life and what he was trying
to achieve in life. Finally, he realised that he required a treatment
from a professional psychiatrist and trained therapist.
With the right support, it was possible for Larke to make a rap-
id recovery and emerge as a stronger and high-performing em-
ployee. He was sure that he became stronger, more resilient and
wiser within a year of recovery. If he had left the problem unad-
dressed or lacked the required employer support, the workplace
stress-driven depression he was suffering from could have driven
him spiralling downwards and could even have led to suicide.

n o t e s
learning objectives

>> Define stress
>> Discuss work stress model
>> Explain stressors
>> Discuss the sources of stress
>> Describe the various levels of stress
>> Explain the outcomes of stress
>> Discuss the stress-performance relationship
>> Explain stress management
S
9.1 INTRODUCTION
All of us have heard and experienced stress. But do you know that
it is one of the terms that researchers have found it hard to define?
IM
The concept of stress has been a subject of scientific research ever
since Walter Cannon in 1932 began researching stress and tried to
define and explain its causes and impact. Cannon focused on what
stress means to our body and conceptualised it as the fight-or-flight
response. When confronted by a threat, generally our instinctive re-
sponse is to either stand ground and fight or run away. This response
M
is due to the bodily changes that include external manifestations like

increased heart rate, respiration, blood pressure, etc. After Cannon,
several researchers over the years studied the concept of stress with
regard to how and why it manifests and what steps one should take
for managing it.
N
Apart from defining stress, explaining the process of stress manifes-

tation and its causes, researchers also delved into techniques of stress
management. Techniques like deep meditation, progressive relax-
ation, autogenic training, etc were the result of these research efforts.
In this regard, it is pertinent to note that stress is universal and it can
manifest in any part of our life sphere. For example, family stress re-
sulting out of family and personal problems, stress on students owing
to academic burden, stress on elderly people, social stress due to poli-
tics, economics, and environment, etc.
In this chapter, we are going to focus on a specific area of stress and its
management, viz. occupational stress or workplace stress. It is import-
ant to differentiate this stress from generic stress as the concepts and
theories involved in workplace stress are different from those related
to generic stress. For example, the fight or flight response is a generic
way of describing the generic stress phenomenon while occupation-
al stress is much more sophisticated in conceptual terms. The com-

n o t e s
mon denominator in both types of stress are the physiological effects

caused by them.
The concept of workplace stress is an important subject area of re-

search in the field of organisational behaviour. Workplace stress in-
volves several factors which are different from those involved in the
stress which we experience in other parts of our life. Workplace stress
has a bearing not only on our personal well being but also on the or-
ganisational success.
Researchers have found that personal well-being of the workforce is

directly related to the organisational success. A noteworthy statement
in this regard is “Good health equal good business, and the line man-
ager is the key agent of change.” If you want proof, consider the UK's
leading magazine Sunday Times' survey of "Best Companies to work
for in the UK". The survey found that the companies that had focused
S
on employee engagement by instituting employee well-being mea-
sures were found to have 13% lower staff turnover which was less than
half the UK average. Not only that. These companies were found to
IM
have consistently outperformed the Financial Times Stock Exchange
(FTSE) 100 Index compared to other companies which focused only
on corporate profit and growth. Similarly, an analysis of "The Best
companies to work for in America" found that there is a positive rela-
tionship between employee satisfaction and share value. They found
that these organisations gave double the market return compared to
the other companies during the research period of 1998 to 2005. Do we
M
require any further proof to underline the importance of the concept

of stress management in the field of organisational behaviour?
In this chapter, we will study the various models of work-stress that

N
would allow us to better understand the phenomenon of stress. We

will study the stressors that are supposedly responsible for stress cre-
ation, sources of these stressors, outcomes of stress and their impact
on individuals and the organisation, the relationship between stress
and organisational performance, and how to manage stress for organ-
isational success.
9.2 Defining Stress

As stated in the introduction, the companies that had put in conscious
efforts for employee well-being and stress management were found to
be more successful in wealth creation than others. So, in the current
world of continuous competitive changes, workplace stress manage-
ment has become an issue that needs to be tackled by every organisa-
tion. According to an ILO (International Labour Organisation) report,
workplace stress is now recognised worldwide as a major challenge to
workers’ health and the health of their organisations. Though stress is
believed to be associated only with white collar workers and manage-
ment executives, in reality stress affects every employee of the organi-
sation. The ILO report says that blue collar workers, who are stressed,

n o t e s
are more likely to be unhealthy, poorly motivated, less productive and

less safe at work. Their organisations are less likely to be successful
while competing with other organisations.
Before discuss how organisations should tackle workplace stress, we

should first define what is meant by stress. Unless we understand
what stress is, we cannot really take steps to prevent or manage prob-
lems arising out of workplace stress.
9.2.1 Basic schools of thought on stress
Stress is actually an ambiguous term. It means different things to dif-

ferent people depending on the perspective taken. For example, stress
definition given in a general English dictionary is different from the
one given in a medical dictionary. While the English dictionary may use
S
terms like hardship, adversity, strain, pressure, etc. to define stress, a
medical dictionary definition goes like this "stress is the reactions of
the body to forces of a deleterious nature, infections, and various ab-
normal states that tend to disturb its normal physiologic equilibrium".
IM
This definition is different from the psychological definition of stress.
According to the psychological definition, stress is a physical or psy-
chological stimulus which, when impinging upon certain individuals,
produces psychological strain or disequilibrium.
As our focus is occupational stress, we will give importance to defi-

nitions pertaining to this domain. In this regard, we need to consid-
M
er two important schools of thought. The first school propounds “a

response-based model of stress”. The second school advocates “a
stimulus-based model of stress”. To understand the difference be-
tween these two schools, consider any event in your life where you
N
felt stressed. Do you think that the stress you had experienced did not
arise externally, and you felt stressed only due to your personal dis-
position and internal factors? Or, do you think that the stress was en-
tirely due to external stimulators and that anybody who got exposed
to similar stimulators would have felt exactly the same way as you had
felt? If you answered the first question in the affirmative, then you
subscribe to the response-based model of stress. But if you answered
the second question in the affirmative, then you are a votary of the
stimulus-based model of stress.
These two schools define stress differently—one defines stress as an

independent variable and the other defines it as a dependent variable.
The response-based model of stress views stress as a dependent vari-
able. In other words, it views stress as an outcome of external factors
or as a response to external factors. It means the response of differ-
ent people to similar external factors could be different, depending
on their personal characteristics. Some people may feel stressed be-
cause of these factors and others may not be affected at all. The re-
sponse-based model of stress had its origin in the field of medicine.

n o t e s
Hans Selye in 1956 described stress as a dependent variable, which

involves three concepts:
1. Stress is a defensive mechanism.
2. Stress follows the three stages of alarm, resistance, and
exhaustion.
3. A prolonged stress could result in diseases.
The response-based model of stress defines stress as the nonspecific

response to any noxious external stimulus. The physiological response
is always same regardless of stimulus. This model assumes that each
person is born with a finite amount of energy and that each stress en-
counter depletes the person’s energy store that cannot be rejuvenat-
ed. It proposes that stress causes wear and tear on the body that can
result in various diseases.
S
A theory of stress as stimulus came in the 1960s that viewed stress
as a significant life event or change that demands response, adjust-
ment, or adaptation. This model has its roots in the definition of stress
IM
from the fields of physics and engineering. The analogy is that stress
is considered as a force exerted externally that results in a demand or
load reaction that causes strain. In other words, stress is considered
an independent external variable that causes its effect on the person
who is stressed. The term stress according to this model is synony-
mous with a "life event". Such life events can be termed "stress" that
M
require adaptation efforts. The physiological effects of stress are ex-

plained as a result of summative accumulation of adaptation efforts
over a threshold level that makes the person vulnerable to physical
or mental illness. The three important tenets of the stimulus-based
model of stress are:
N
1. Change is inherently stressful.

2. Life events demand the same level of response across the
population.
3. There is a common threshold beyond which illness can result.
Though the two models might not look very different, they are in-
deed based on totally different theories. The stress management pro-
gramme to be adopted by an organization depends on the stress man-
agement model it subscribes to. If your organisation believes in the
response-based model, it would view stress as something inherent to
a person and would transfer larger responsibility for stress manage-
ment to the individual employee. The organisation might introduce a
programme to help the employee cope with a stress situation but will
never recognise or acknowledge the possibility that stress could be
caused by the organisational environment about which it will not do
anything. While the employee might think that stress is due to organ-
isational factors, managers might do nothing to remove or eliminate
the factors which the employee considers responsible for his stress.

n o t e s
The situation gets compounded by the fact that some employees might
be able to cope with stress while others may not.
If your organisation believes in the stimulus-based model of stress, it

may institute organisational programmes or redesign organisational
structure, that impacts every employee of the organisation, to mitigate
stress-causing environmental factors but may never take into account
the needs of the individuals concerned. Thus, both the models have
their strengths and weaknesses.
There is also a third model of stress called the transaction-based mod-

el of stress. This model incorporates both the response-based and the
stimulus-based models of stress. It acknowledges that situations are
not inherently stressful but are potentially stressful, and it is neces-
sary to take into account the source of stress, the moderators of stress
response and the manifestation of stress. The term stress, as per this
S
model, is a rubric for a complex series of subjective phenomena, in-
cluding cognitive appraisals in the form of threats and challenges,
stress emotions, coping responses, and reappraisals. Stress is consid-
IM
ered to be experienced when the demands of a situation exceed a per-
son’s resources and some type of harm or loss is anticipated. Coping
is conceptualised as efforts to ameliorate the perceived threat or to
manage stress.
9.2.2 defining Workplace stress

M
Having understood some basic models of stress, we can now focus on

some definitions of workplace stress from the perspective of organ-
isational behaviour. Experts differ in their definitions of workplace
stress and there is no definition that is accepted by all. Given below
N
are some important definitions which together convey all the dimen-
sions of workplace stress.
1. Work-related stress is the response people may have when
presented with work demands and pressures that are not
matched to their knowledge and abilities and which challenge
their ability to cope. (WHO, 2003 )
2. Stress is a dynamic condition in which an individual is confronted
with an opportunity, demand, or resource related to what the
individual desires and for which the outcome is perceived to be
both uncertain and important. (Robbins, 2009)
3. An adaptive response moderated by individual differences and/
or psychological processes that is a consequence of any external
environmental action, situation, or event that places excessive
psychological and/or physical demands on a person. (Ivancevich
and Matterson, 1990)

n o t e s
4. Stress is the unpleasant tension that occurs within an employee

when he perceives a situation that is about to exceed his ability to
cope and consequently endanger his well being. The workplace
stress is the feeling that one's capabilities, resources, or
needs do not match with the demands of the job. (Hitt, Miller,
Colella, 2006)
Note that the above definitions include the concepts of basic stress
models discussed in the previous sub-section. Stress is considered an
unpleasant psychological process that occurs in an organisational par-
ticipant in response to external environmental conditions. Thus it is
an adaptive response leading to physical and psychological deviations
owing to external stimulators. What kind of stimulators cause the
adaptive response? The external stimulators that cause the stress re-
sponse pertain to the ability of the individual to cope up with demand.
S
As the first definition says, the stimulator may pertain to an external
demand that that the employee finds difficult to cope with using his
knowledge and abilities.
IM
9.2.3 The Stress Experience
The stress definitions given above provide a holistic explanation of

the concept of stress. This is important to note because some people
may consider a simple anxiety as stress. Anxiety pertains only to the
emotional and psychological sphere whereas stress also impacts the
M
physiological sphere. Stress might involve anxiety, but anxiety by it-

self cannot be termed as stress. Similarly, stress may be associated
with nervous tension but nervous tension may also result from other
factors. Another point some researchers emphasise is that stress may
also result in positive developments and it need not always be nega-
N
tive and damaging. They use the term Eustress to denote stress with
positive implications.
The stress experience may be a combination of three complex set of

responses:
1. Physiological response
2. Emotional response
3. Cognitive or problem-solving response
The physiological response is the basic understanding of stress which

was termed as the fight or flight response which we referred in the in-
troduction. The autonomic nervous system of the human brain func-
tions as two systems viz. sympathetic nervous system and parasym-
pathetic nervous system. The sympathetic nervous system is active
in conditions of stress, whereas parasympathetic nervous system is
active when a person is calm and relaxed. Under stressful conditions,

n o t e s
the physiological response begins with an individual's perception of

stress. The autonomic nervous system enables the body to mobilise its
resources to face the emotional or emergency situation. The body's re-
sources are mobilised first through the activation of sympathetic ner-
vous system and then through the anterior pituitary gland. The sym-
pathetic nervous system triggers discharge of two hormones called
adrenaline and noradrenaline. These hormones enter the blood-
stream and circulate to all parts of the body. When adrenaline reaches
liver, it helps mobilise glucose into the bloodstream. The extra glucose
provides the required extra energy to muscles and brain.
The second set of physiological responses is through the pituitary

gland. The stress experience causes increased activity in the limbic
system. This activates the hypothalamus to secrete corticotrophin re-
leasing hormone (CRH). The CRH stimulates the pituitary gland to se-
S
crete the adrenocorticotrophic hormone (ACTH). This, in turn, causes
the adrenal cortex to release cortisol and other corticosteroids. These
bodily reactions continue and ultimately allow the body to mobilise
energy during the time of stress. However continuance of such hor-
IM
monal activities for prolonged periods could be detrimental to health.
The physiological response described above is mostly relevant only

for stress experience that involves life-endangering events and hence
is fully applicable for workplace stress. The other two aspects of stress
experience—emotional response and cognitive response—are more
relevant from the organisational behaviour perspective. While the
M
physiological response may be same in different individuals for the

same stress-causing event, their emotional and cognitive experience
could differ. The emotional response involves feelings involving fear,
anxiety, depression, anger, irritability, hostility, frustration, etc. Cog-
N
nitive responses could involve confusion, difficulty in understand-

ing, problems in concentration, trouble in learning new information,
problem in decision making, forgetfulness, disorientation, etc. These
responses will be mediated by factors like perception and cognition
of the individual concerned. For example, emotional and cognitive
responses could be different depending on whether the person is
achievement-oriented or affiliation-oriented.
Workplace stress could lead to aggressive feelings and behaviour, de-

creased concern with punctuality, obsessive/compulsive behaviour,
reduced work efficiency or productivity, lying or making excuses to
cover up poor work, excessive defensiveness or suspiciousness, prob-
lems in communication, social withdrawal and isolation and impulsiv-
ity. Prolonged workplace stress can even lead to depression and other
related psychiatric conditions. The introductory caselet explains how
even a seemingly successful senior executive can become the victim of
a serious mental problem like clinical depression.

n o t e s
1. Which of the following statements is correct?

a. As per the response-based model of stress, stress is an
independent variable as its impact is uniform across all
employees.
b. As per the stimulus-based model of stress, stress is a
dependent variable as it depends on how the individual
reacts to an external situation or event.
c. As per the transaction-based model of stress, situations are
not inherently stressful but only potentially stressful.
d. All of the above.
2. As per the stimulus-based model of stress, life events demand
S
the same level of response across a population. (True/False)
3. Which of the following is not a component of the definition of
workplace stress?
IM
a. Stress is related to the matching of demands placed on the
employee and his knowledge and abilities to cope up with
those demands.
b. Stress is related to uncertainty faced by an individual when
confronted with an opportunity or demand.
c. Stress is related to psychological processes that result as a
M
consequence of external environmental threats.

d. Workplace stress has nothing to do with the abilities of
an employee in undertaking a job. It only depends on his
perception of an external threat.
N
4. Which of the following may not be a stress response experienced

by an employee when faced with a stressful experience?
a. The parasympathetic nervous system is highly active.
b. The job performance of the employee deteriorates.
c. The employee shows cognitive problems.
d. The employee shows withdrawal symptoms.
Activity
Using the Internet, identify any Indian company that has recently
been awarded/identified as one of the best places to work for. Write
a report on various measures the company has taken in tackling
workplace stress.

n o t e s
9.3 Work Stress Model

In the previous section, we defined stress and understood what it
means in the occupational context. In this section, we will study some
models on workplace stress. Work-stress models allow us to under-
stand the various factors involved in the phenomenon of occupational
stress and hence can help in devising organisational stress manage-
ment programmes. Figure 9.1 shows the three important models on
workplace stress:
Job Demands-Resources (JD-R)

Model
Demand Control Model
S
Effort-Reward Imbalance Model
IM
Figure 9.1: Work Stress Models
Let us discuss these models in detail:

1. Job Demands-Resources (JD-R) Model: As per this model,
M
the factors responsible for stress can be classified into two

broad categories of demands and resources. By classifying the
risk factors associated with job stress into two categories of
demands and resources, workplace stress can be analysed for
any occupational setting – only the risk factors, i.e. particular
N
demands and resources, vary between different occupations.

Stress depends on the particular demands and resources
involved. Job demands refer to those physical, psychological,
social or organisational aspects of a job that require sustained
physical, cognitive and emotional effort or skills. These include
job responsibilities, pressures, obligations, and uncertainties
involved in the workplace. These may also include high work
pressure, unfavourable work environment or an emotionally
demanding client. Note that job demands need not always be
negative but when meeting these demands requires a higher
effort, they may give rise to job stressors.
Job resources refer to those physical, psychological, social, or
organisational aspects of a job that are functional for achieving
work goals, and reduce job demands and the associated
physiological and psychological costs or stimulate personal
growth and learning. Resources are things within an individual’s
control that he can use to cope with demands. To the extent, an
employee can apply resources to the demands placed on him to
lessen job stress.

n o t e s
The JD-R Model propounds that there are two different

underlying psychological processes that play a role in workplace
stress. The first process, termed health impairment process,
involves job demands that may lead to job strain. The health
impairment process involves poorly designed jobs or chronic
job demands like work overload that exhaust employees' mental
and physical resources leading to depletion of energy and
health problems. According to the model, employees would use
performance protection strategies under the influence of job
demands that may involve mobilisation of sympathetic activation
(similar to biological processes explained earlier) that leads
to increased subjective effort. Greater the activation of these
efforts, greater will be the physiological costs for the individual
concerned, eventually leading to burnout or breakdown.
The second process proposed in the JD-R Model is the
S
motivational process that is associated with job resources. The
model assumes that job resources have motivational potential
and can lead to higher work engagement, low cynicism, and
IM
excellent performance.
The JD-R Model proposes that the interaction between job
demands and job resources is important for the development
of job strain and also motivation. The model proposes that
job resources may buffer the impact of job demands on job
strain, including burnout. The final stress and achievement of
M
organisational goals depend on the interaction between these

two processes. Figure 9.2 depicts the processes involved in the
JD-R Model:
N
Job Demands Job Strain
Organisational
Outcomes
Job
Motivation
Resources
Figure 9.2: The Job Demands–Resources Model

The JD-R Model concludes that job resources particularly
influence motivation and work engagement when job demands
are high. Hence, job stress experienced by individuals can be
understood in relation to the potential or actual loss of resources.
The JD-R Model also suggests the following:
Individuals must bring in resources to prevent loss of re-
sources.
Individuals with a greater pool of resources are less suscepti-
ble to resource loss.

n o t e s
Those individuals who do not have access to strong resources

pools are more likely to experience increased loss.
Strong resource pools lead to a greater likelihood that indi-
viduals will seek opportunities to risk resources for increased
resource gains.
2. Demand-Control Model: As per the Demand-Control Model, job
strain is a function of the following two factors:
1. Workplace demands faced by an employee
2. The control that the employee has in meeting those demands
The Demand-Control Model suggests that job stress is a function
of both job demands and job control. The stress encountered by
an employee will be greatest when job demands faced by him
are high but he has little control over the situation. Job demands
S
involve job responsibilities and work pressure. Job control
refers to the extent to which individuals are able to or perceive
themselves as able to affect the state of job demands. In other
words, it refers to the amount of control they have in making
IM
decisions pertaining to job demands.
Using these two dimensions of demands and control, there could
be four workplace stress types that are faced by an employee
in the work environment. These four workplace stress types are
termed as passive, low strain, active and high strain depending
on the high or low of demands and control. Figure 9.3 depicts
M
the Demand-Control Model of workplace stress in terms of these

four types. Employees facing low strain and passive situations
may not encounter any stress. Employees facing high strain
situation will experience stress that could be detrimental to the
N
individual and the organisation in the long term. The active

quadrant in Figure 9.3 refers to a positive environment where
the stress is expected to boost the performance of the individual.
This is the quadrant organisations should actively design for as
per this model.
Low
High
Active
Strain
Job Control
Low
Low
High
Passive
Strain
Low High
Job Demands
Figure 9.3: The Demand-Control Model of Stress

n o t e s
3. Effort-Reward Imbalance Model: This model considers the

following two factors relevant for workplace stress:
1. The effort required by the employee
2. The rewards received by the employee
The effort refers to the performance demands and obligations of
the job. It is similar to the job demands referred in the previous
two models. But it is more narrowly defined in this model from
the perspective of particular jobs. Rewards refer to extrinsic and
intrinsic outcomes of the job. These include factors like salary,
performance pay, recognition, esteem, etc.
The Effort-Reward Imbalance Model proposes that organisations
that have jobs that require strong efforts but low rewards violate
the principle of reciprocity and hence face a stressful work
S
environment. The individuals facing such an environment may
exit the company or may stay put hoping for changes in the
work environment or due to limited opportunities in the job
market. They may also resort to excessive work-related over-
IM
commitment that is driven by achievement motivation and
approval motivation. Though the model is simple, empirical
research has yielded supportive results in terms of predictability
of the model, as indicated by a study on hospital workers where
the model predicted musculoskeletal injury.
M
5. The two processes that are considered important in the JD-R

Model are:
a. Health impairment process and resource utilisation
N
b. Health impairment process and job control process

c. Motivational process and job demands process
d. Health impairment process and motivational process
6. An employee is working in an organisation with the
responsibility of selling its products. Each employee is
assigned a particular product for selling to customers with
an associated sales target. An employee finds that he has no
discretion in deciding on which product to sell to his customer
though he is quantitatively monitored on sales calls and sales
conversion leading to high work stress. Which work-stress
model can explain this situation of stress better?
a. Job Demands-Resources Model
b. Demand-Control Model
c. Efforts-Rewards Imbalance Model
d. None of the above

n o t e s
7. An employee believes in hard work and sincerity and is fully

committed to organisational goals. He works overtime on his
own and is generally termed as workaholic due to his over-
commitment. Over a period of time, however, the employee is
found to be lacking motivation and job dissatisfaction. Which
of the following work-stress models can rightly explain his
workplace stress?
c. Efforts-Rewards Imbalance Model
8. Compare two employees who are heading their respective sales
teams in two different organisations. Both the organisations
S
allow team leaders to set their own sales targets every year. The
sales team sizes are determined by other factors including HR
policies. The employee in the first organisation accepts sales
IM
targets as per organisational targets which steadily increase
every year. However, the employee in the second organisation
does not have constantly increasing sales performance
targets. It was found that over a period of time, the employee
of the first organisation suffered more job-related stress as
compared to the employee of the second organisation. Which
of the following models can explain this stress phenomenon?
M

c. Efforts-Rewards imbalance Model
N
Activity
An OB researcher claims that the JD-R model is more comprehen-

sive in explaining workplace stress than the Demand-control Model.
However, another researcher, countering this claim, says the JD-R
model ignores the control that can be exercised by the employee
which is a major factor in workplace stress. Who do you think is
more correct? Analyse these two models of workplace stress and
explain how these two models differ from each other.
9.4 Stressors
Researchers have tried to find out the factors that are supposed to
promote workplace stress. These factors are termed stressors. Stress-
ors are the environmental conditions that cause employees to experi-
ence stress. Stressors could be challenge stressors like those associ-

n o t e s
ated with workload, pressure to perform, etc. or hindrance stressors

that might keep employees from performing like red tape, politics, etc.
Some important stressors are described below:

Role conflict: A situation in which different roles lead to conflict-
ing expectations.
Role ambiguity: A situation in which goals, expectations, and/or
basic job requirements are unclear.
Work overload: It could be in terms of quantity of work involved
which could be too much or quality of work in terms of the com-
plex nature of work.
Resource inadequacy: Lack of adequate resources can lead to
workplace stress as it can make it difficult to accomplish job tasks
efficiently and effectively.
S
Working conditions: These include the job environment consisting
of physical surroundings like lighting and psychological aspects
like peer and supervisor relationships. Unpleasant working condi-
IM
tions and the unfriendly, closed and ambiguous work environment
may lead to workplace stress that affects overall performance.
Organisational culture and management style: The culture and
leadership style of organisations can lead to workplace stress. Open
and merit-based organisational culture where the management is
transparent and friendly with employees can lead to a high-per-
M
forming organisational environment in contrast to that organisa-

tional culture where leaders managing through fear and control.
Organisational monitoring: Work-related and non-work-related
monitoring of employees by management can lead to a stressful
N
work environment. Employees might feel that they don't have suf-
ficient discretion and control over their work environment and
lack privacy and freedom.
Job insecurity: Job insecurity can result from organisational cul-
ture or due to corporate phenomena like mergers, downsizing,
re-engineering, etc. The resulting job insecurity can lead to a
stressful workplace environment.
9. Which of the following is not a stressor?

a. Role ambiguity
b. Organisational culture
c. Management style
d. Personality type of an individual

n o t e s
Activity
Your friend says job insecurity has become a normal feature of the
current work environment and hence it can no more be termed as
a job stressor to tackle which a company can take stress mitiga-
tion steps. He says since it is a normal feature, it should not lead
to workplace stress anymore. Another friend says as per the stim-
ulus-based stress model, stress will anyway be created when faced
with job insecurity and the consequent deterioration of job perfor-
mance and hence organisations should consider it as a stress man-
agement issue. Which of these two assertions do you agree with?
Why? Prepare a presentation on it.
9.5 Sources of Stress
S
The stressors discussed in the previous section can arise due to sev-
eral sources. The three important sources of stress are shown in
Figure 9.4:
IM
Environmental Factors
Organisational Factors
M
Personal Factors
N
Figure 9.4: Sources of Stress
Let us discuss these sources of stress in detail:

Environmental factors: Environmental factors refer to uncertain-
ty in the political, technological and economic environment. Po-
litical uncertainty refers to the uncertainty arising from unstable
political systems. For example, a survey in America in 2017 during
the US presidential election showed that occupational stress sig-
nificantly increased among Americans due to political uncertainty.
Changes in the business cycle can lead to period of recession which
creates economic uncertainty. The period of recession makes em-
ployees anxious about their job security as during a recession or-
ganisations resort to strategies like downsizing. Technological un-
certainty refers to technological obsolescence which can have a
bearing on the viability of a company's operations and profitability.
Organisational factors: Organisational factors refer to stressors
like work pressures, work overload, unfriendly management, de-
manding boss, unpleasant co-workers, etc. Organisational struc-

n o t e s
ture and job design can also serve as stressors. Organisational

structure and job design can lead to tasks that lack required de-
gree of autonomy, task variety, etc. The job environment might in-
volve poor work conditions, difficult work layout, poor organisa-
tional and work policies, etc. Job design may involve insensitivity
to workers’ needs that give rise to constant anxiety and stress. Role
demands may put undue pressures on employees and may also
lead to role conflicts. Apart from role conflict and role overload,
poorly defined job specifications and organisational culture may
result in role ambiguity that is a sure recipe for workplace stress.
Personal factors: Personal factors are mostly related to workload
and work-family balance. Family issues and personal economic
problems can lead to high work stress. Organisations that con-
sciously and deliberately take into account work-family life bal-
ance and personal problems of employees tend to perform better
S
by providing the stress-free organisational environment.
Along with the above factors, we should also count individual dif-
ferences among sources of stress. Some people are said to thrive on
IM
stressful situations while others get overwhelmed when faced with the
same job demands. Researchers have tried to find out what differenti-
ates people in terms of their ability to handle stress. Some factors that
work at the level of individuals are:
Perception: Organisational behaviour theories propound that em-
ployees react in response to their perception of reality rather to
M
the reality itself. Hence, perception can moderate the relationship

between a potential stress condition and the employee’s reaction
to it. The stress potential may not lie always in the objective con-
ditions but may lie in the employee’s interpretation of those con-
N
ditions.
Job experience: The amount of experience on the job is found to
be negatively related to work stress. Employees who remain with
an organisation longer are found to have more stress-resistant
traits. In other words, they are resistant to the stress sources of the
organisation. They generally are found to have developed coping
mechanisms to deal with stress.
Social support: If the organisational environment is friendly, pro-
fessional and transparent with collegial relationships between
co-workers and supervisors, then stress factors are easily man-
aged as social support tends to buffer the impact of stress.
Personality traits: The people with Type A personality are com-
petitive, aggressive and impatient, and they are found to be more
susceptible to stress-induced illness. Type B personalities tend to
be less competitive, less aggressive and more patient, and they
found to be less susceptible to organisational stress as they do not
tend to overload themselves unlike Type A personalities who are
driven by achievement orientation

n o t e s
Self-esteem: Researchers say that people with high self-esteem

suffer fewer incidences of stress as compared to people with lower
self-esteem. People with higher self-esteem tend to engage in ac-
tive coping behaviours when faced with stressful demands. They
have higher control over the environment than people with lower
self-esteem.
10. In a highly stress-prone organisation, when faced with the

same organisational development, one employee finds himself
highly stressed while another is least perturbed. Which of the
following sources of stress can be the stressor at the individual
level for the employee who feels stressed?

a. Job experience
Perception b.
S
c. Personality trait d. All of the above
IM Activity
Social support is considered to be a good buffer to the stress-caus-

ing events in organisations. Consider an organisation in any indus-
try and suggest various social support measures that can be consid-
ered as part of stress management programme of the organisation.
Write a short note on it.
M
9.6 Levels of Stress

Workplace stress can be dealt at different levels. Figure 9.5 shows the
various levels of stress:
N
Individual Stress
Group Stress
Organisational Stress
Figure 9.5: Levels of Stress
Let us discuss these levels of stress in detail.
9.6.1 Individual Stress
Workplace stress may originate at the organisational level or group

level but it may ultimately affect the individual. At the individual

n o t e s
level, its impact would be moderated by the personality traits and dis-
position of the individual. Personality traits are the factors that we
discussed earlier like perception, self-esteem, Type A or B personal-
ity, work commitment and dedication, etc. At the individual level, a
stress factor that looks like a threat for one individual could become
an opportunity for another depending on his personality, experience,
perception and social support.
9.6.2 Group Stress
Employees invariably form part of some team or group in the organ-

isational setting. Group characteristics and the relationship of the in-
dividual with the group can lead to stress for an individual. In gen-
eral, group stressors can be categorised into two areas: lack of group
cohesiveness and lack of social support. Stressors like interpersonal
S
conflicts, group politics, individual interests, group rejection, etc., can
act as group-based stressors for employees arising out of lack of group
cohesiveness.
IM
Social support has been recognised as a major buffer in handling
workplace stress by researchers. A group that is cohesive and that
offers social support to its members can provide a stress-free environ-
ment. If social support is lacking within the group, this could lead to
increased stress level for group members. The group leader should
take note of group stressors and provide a positive climate for group
M
members to ensure a stress-free work environment.
9.6.3 Organisational Stress
We have already discussed the organisational factors that could lead

N
to workplace stress. These factors like poor organisational structure,

inefficient job design and specification, role ambiguity, role overload,
role conflict, job insecurity, red tape, nepotism, politics, etc can affect
the work environment and lead to organisational stressors that affect
many employees of the organisation.
11. Group stress can be categorised into two areas: __________

and ________.
Activity
A manager uses group-level stressors like group politics, role ambi-

guity and group rejections to manage and control a large team and
to promote job performance. He says that this keeps the team at
peak performance. Do you agree? Write an essay on why or why not
the manager is wrong in his understanding of theories of workplace
stress. Write a short note on it.

n o t e s
9.7 Outcomes of Stress

The outcomes of workplace stress have to be analysed both from the
perspective of the individual and the organisation. The consequences
of workplace stress can be classified into the following types:
Psychological: Psychological outcomes on individuals include
anxiety, depression, low self-esteem, anger, frustration, insom-
nia, etc. An important psychological problem that has major con-
sequences is the problem of burnout. Burnout is a condition of
physical or emotional exhaustion brought out by stress that might
show various symptoms like constant fatigue, lack of enthusiasm
and withdrawal or isolation from others. It is a major concern for
organisations as it could lead to serious productivity issues and
loss of talent.
S
Behavioural: Behavioural outcomes include changes in activity
levels, decreased efficiency, communication problems, smoking,
accident proneness, inability to rest or relax, change in eating and
IMsleeping habits, etc. Serious behavioural consequences include
substance abuse and violence. Employees with chronic stress
tend to resort to alcoholism and drug abuse as means of handling
stress. As per the US Department of Health and Human Services,
US business loses over $100 billion over problems related to drug
abuse, alcoholism, tobacco, etc.
M
Physiological: Physiological reactions to workplace stress could

manifest in terms of high blood pressure, increased heart rate,
muffled hearing, tunnel vision, headaches, lack of coordination,
etc. According to some studies, more than 75 per cent of all med-
ical problems are directly attributable to stress. These outcomes
N
also lead to lower productivity for organisations.

Organisational: Workplace stress also has serious consequences
for the organisation. Due to workplace stress, employees lose mo-
tivation and end up with several problems that are detrimental to
organisational goals. These problems include lack of job satisfac-
tion, lower productivity, reduced job performance, increased ab-
senteeism, higher health costs, increased turnover and lower qual-
ity of overall social well-being in the organisation. Stress-related
illnesses are said to cost millions of dollars for companies in terms
of insurance and workers’ compensation claims. As per research,
employees who report high levels of stress are expected to lead to
higher health care expenditures for the organisation, which is 50
per cent higher than those reporting lower stress levels.
12. Outcomes of workplace stress can be of following two types:

_________ and ________.

n o t e s
Activity
Workplace stress can have both individual and organisational con-

sequences. Surveys point out that organisational consequences can
cost a company millions of dollars. Explain how organisational out-
comes of workplace stress can have monetary impact for an organ-
isation.
9.8 Stress-Performance Relationship

Researchers have tried to understand the relationship between stress
and work performance. What kind of relationship exists between stress
and work performance? Does work performance decrease linearly
with increased stress? Researchers say that a certain level of stimulus
S
is needed for optimal performance. In other words, they claim that
a healthy level of stress could lead to higher job performance. While
high workload can lead to productivity issues, the same could be true
with the below-median workload. Stress is found to be a significant
IM
source of concern only when the level of stress arousal exceeds the
ability of the employee to meet the demand placed on him. This is in
accordance with the work-stress models discussed earlier.
A significant amount of research has been dedicated to investigating

the stress-performance relationship. One proposed relationship sug-
gests an inverted U between stress and job performance as shown in
M
Figure 9.6. As per this theory, low to moderate levels of stress stimu-
late the body and increase its ability to react. But when stress crosses
a certain level, the work performance of the employee starts deterio-
rating. In accordance with the work-stress models, when the demand
N
placed on the employee is disproportionate to the resources at his dis-

posal and the control he can exert on the job environment, his work
performance gets adversely affected.
HIGH
P
E
R
F
O
R
M
A
N
C
E
LOW HIGH
STRESS
Figure 9.6: Inverted U Relationship between

Stress and Job Performance

n o t e s
Figure 9.6 explains the relationship between stress and job perfor-
mance. The low level of stress indicates that jobs are interesting but
not challenging. As the stress level increases, the performance en-
hances till a certain point. Moderate to high levels of stress stimu-
late the person to put more efforts in his/ her job to increase his/her
performance. High level of stress may have a negative impact on the
performance of an individual in the long term. The intensity of stress
brings down a person’s energy, resources, and enthusiasm to work.
Thus, we can see that stress can be either helpful or harmful for job
performance depending upon its quantum.
13. Researchers claim that the relationship between stress and

job performance is:
S
a. Directly related
b. Inversely related
c. Depicted by a U-shaped curve
IM
d. Depicted by an inverted U-shaped curve
Activity
The inverted U-shaped curve has not found much empirical sup-
port when it comes to analysing the relationship between stress
M
and job performance. Why or why not the inverted U curve can
explain the relationship. Read the relevant literature and empirical
studies and present your viewpoint in a report.
N
9.9 Stress Management

Stress management in organisations aims at identifying and eliminat-
ing stressful situations, teaching individuals to cope with stress and
helping employees who have become victims of stress.
A tripartite model of stress management is suggested for implement-

ing stress management programmes in organisations. The tripartite
approach consists of primary level stress management, secondary lev-
el stress management, and tertiary level stress management. Let us
discuss these in detail.
Primary level stress management: This type of stress manage-
ment is stressor-directed. The objective is to eliminate, reduce or
control the sources of stress. The main goal is prevention of work-
place stress. For managing the primary level stress, organisational
level interventions are taken. These interventions can take any of
the following three forms:
Organisational changes at the macro level: Here the stressors
that are targeted are related to organisational culture, manage-

n o t e s
ment style, work conditions, workload, organisational struc-

ture, career development and work culture. Organisational
level programmes might focus on changing organisational
culture, providing management coaching, designing coping
strategies and programmes, designing career development
programmes keeping in mind the goals related to stress man-
agement and designing organisational structure for providing
a stress-free organisational work environment.
Micro environment-level strategies: These strategies target
the stressors related to job design, task specifications, alterna-
tive work arrangements, working shifts, work communication,
role conflicts, etc. Stress management programmes involve re-
design of organisational systems and practices for improving
worker morale, motivation, and job performance. The job re-
design might focus on improving skill and task variety, provid-
S
ing higher job autonomy, facilitating greater task feedback, job
rotation, job enrichment, creation of semi-autonomous work
groups, flexible and family-friendly work arrangements, etc.
IM
Employee level strategies: These strategies work for improv-
ing the perception of worker control, increasing career oppor-
tunities, improving decision-making methodologies etc. The
strategies at this level may aim to reduce role-related stress, in-
crease worker participation in decision making, initiate health
programmes at the organisational level that provide stress
M
therapies, creation of health circles, etc.

Secondary level of stress management: These are organisational
interventions that are response-directed. The objective is to help
individual employees and groups of workers recognise their re-
N
sponse to stress and the symptoms of stress. The goal is to develop

stress resistance and adaptive coping strategies through employee
education and training.
Secondary level stress management programmes recognise that it
is not possible to completely prevent workplace stress by devising
stressor-directed organisational interventions. These programmes
aim at minimising the effects of stress exposure using techniques
that rely on coping processes. The secondary-level prevention fo-
cuses on prompt detection and management of potentially stressful
conditions by increasing employee awareness and improving the
stress management skills of employees. These programmes may
cater to addressing psychological, physiological and behavioural
impacts of stressors. They may take the form of instituting stress
management training programmes, stress coping workshops like
meditation, stress relaxation techniques, and related skills train-
ing programmes like social skills training, time management, etc.
Many leading corporates have launched wellness programmes, ex-
ercise and fitness programmes, etc. as part of the secondary-level
stress prevention and management.

n o t e s
Tertiary level stress management: Here, interventions are symp-

tom-directed. The objective is to assist the employees who are ex-
posed to stress in terms of health care programmes and stress re-
habilitation. At this level, the focus shifts from prevention of stress
to the curative approach to stress problems. The programmes at
this level focus on rehabilitation and recovery of individuals who
are already affected by workplace related chronic stress. Some
important interventions are providing counselling services, insti-
tuting employee assistance programmes, building social support
networks and offering career sabbatical to burnt-out employees.
In the introductory caselet, it was explained how the employer sup-

port and coaching programme turned out to be a major factor in the
recovery from clinical depression of a senior management executive
of the IT industry. Such programmes are necessary components of the
S
tertiary level stress management in organisations.

IM
14. A call centre company decided to launch an organisation-wide
stress management programme that included a consultation
with a leading clinical psychologist. This organisational
intervention falls under which of the following stress
management levels?
a. Primary level stress management
M
b. Secondary level stress management

c. Tertiary level stress management
N
Activity
Consider an Indian company that is listed among the top ten best
places to work for during the current year by employee surveys.
Study the company and present the various programmes instituted
by the company towards stress management. Categorise them in
terms of the tripartite approach to stress management and present
your report.
9.10 Summary
There are three basic schools of thought on the concept of stress.
The response-based model of stress, the stimulus based model of
stress and the transaction-based model of stress. The major differ-
ence in these models is how stress is viewed—as an independent
variable or a dependent variable.
Stress can be defined as the unpleasant tension that occurs within
an employee when he perceives a situation that is about to exceed

n o t e s
his ability to cope. The definitions of stress focus on the gap be-
tween the demands placed on an employee and his capability to
cope with them, and the resulting physiological and psychological
reactions.
Stress experience can involve reactions in three areas— the phys-
iology, emotions and cognitive response of the employee. The re-
action to stress can manifest through several symptoms in each of
these three areas.
Researchers have tried to analyse the concept of workplace stress
and the factors responsible for it. Three important models have
been proposed, which are: the Job Demands-Resources Model, the
Demand-Control Model, and the Effort-Reward Imbalance Model.
Stress arises due to factors called stressors which are environmen-
tal conditions that cause employees to experience stress. These
S
could be classified into challenge and hindrance stressors.
Sources of stress could be environmental factors, organisational
factors, and personal factors.
IM
Workplace stress can be dealt at three different levels of individual
stress, group stress, and organisational stress.
The outcomes of stress have consequences for both the individ-
ual and the organisation. The individual might face symptoms
pertaining to physiological, psychological, behavioural or social
M
aspects. Organisational outcomes involve loss of productivity, lack

of job satisfaction, higher health costs, etc.
One research claims that the relationship between stress and work
performance can be depicted through an inverted U relationship.
N
As per this theory, the stress at lower levels can boost performance
but after reaching a peak, further stress may lead to deterioration
in work performance.
Stress management programmes in an organisation can take a
tripartite approach—primary level stress management that fo-
cuses on stress prevention at the organisational level; secondary
level stress management which consists of programmes that are
response-directed and aim at minimising stress exposure; and ter-
tiary level stress management which comprises programmes that
take a curative approach in terms of employee welfare and health-
care programmes.
key words
Burnout: A feeling of physical and mental fatigue that can oc-

cur from working under difficult and demanding conditions.
Conflict: Disagreements among managers and /or colleagues
causing significant amount of stress that may result in burnout.

n o t e s
Motivation: An internal feeling that helps individuals in attain-

ing their personal and professional goals in an efficient manner.
Productivity: A measure of how efficiently an input is used to
produce output.
Role ambiguity: Situation of indecisiveness that an employee
faces about a particular assigned role.

1. Discuss how the response-based model of stress differs from the
stimulus-based model of stress. Give any two accepted definitions
of stress.
2. Explain the three work-stress models of workplace stress.
S
3. What is meant by stressors? What are the important stressors
applicable in the organisational context?
4. List and explain how personal sources of stress can affect the
IM
stress phenomenon.
5. Describe the various outcomes of workplace stress.
6. Explain the tripartite model for stress management in
organisations.
M
9.12 ANSWERS AND HINTS
ANSWERS FOR SELF ASSESSMENT QUESTIONS

N

Defining Stress 1. c. As per the transaction-based
model of stress, situations are not
inherently stressful but only poten-
tially stressful.
2. False
3. d. Workplace stress has nothing to do
with the abilities of an employee in
undertaking a job. It only depends
on his perception of an external
threat.
4. a. The parasympathetic nervous sys-
tem is highly active.
Work-Stress Model 5. d. Health impairment process and
motivational process
6. b. Demand-Control Model
7. c. Efforts-Rewards Imbalance Model
8. a. Job Demands-Resources Model
Stressors 9. d. Personality type of an individual

n o t e s

Sources of Stress 10. d. All of the above
Levels of Stress 11. Lack of group cohesiveness; lack of
social support
Outcomes of Stress 12. Individual; organisational
Stress-Performance 13. d. Depicted by an inverted U shaped
Relationship curve
Stress management 14. c. Tertiary level stress management
HINTS FOR DESCRIPTIVE QUESTIONS

1. The response-based model and the stimulus-based model differ
in terms of how they treat stress—whether as an independent or
as a dependent variable. Refer to Section 9.2 Defining Stress.
S
2. The three work-stress models are: the Job Demands-Resources
Model, the Demand-Control Model, and the Effort-Rewards
Imbalance Model. Refer to Section 9.3 Work-Stress Models.
IM
3. Stressors are environmental conditions that promote
occupational stress. Refer to Section 9.4 Stressors.
4. Personal sources of stress moderate how an individual may react
to stressors. Refer to Section 9.5 Sources of Stress.
5. The outcomes of workplace stress involve both individual and
M
organisational consequences. Refer to Section 9.7. Outcomes of

Stress.
6. The tripartite model of stress involves primary, secondary and
tertiary levels of stress management. The first two focus on stress
prevention while the third adopts a curative approach to stress
N
management. Refer to Section 9.9 Stress Management.
9.13 SUGGESTED READINGS & REFERENCES
SUGGESTED READINGS
Hitt, M. A., Miller, C. C., & Colella, A. (2006). Organizational behav-
ior a strategic approach. John Wiley & Sons.
Ivancevich, J. M., Matteson, M. T., & Konopaske, R. (1990). Organi-
zational behavior and management.
Luthans, F., Luthans, B. C., & Luthans, K. W. (2015). Organization-
al behavior: An evidence-based approach. IAP.
Robbins, S. P. (2009). Organizational Behavior, 13/E. Pearson Edu-
cation India.
Weinberg, A., Cooper, C., Bond, F., & Sutherland, V. (2010). Orga-
nizational stress management: A strategic approach. Palgrave Mac-
millan.

n o t e s
E-REFERENCES
How does Stress Affect Performance? - The Inverted-U. (2017). Ex-
plorable.com. Retrieved 10 November 2017, from https://explor-
able.com/how-does-stress-affect-performance
Managing Stress - Create Calm in Your Career: Create Calm in Your
Career. (2017). Mindtools.com. Retrieved 10 November 2017, from
https://www.mindtools.com/pages/article/managing-stress.htm
Sources of Stress. (2017). Saylordotorg.github.io. Retrieved 10 No-
vember 2017, from https://saylordotorg.github.io/text_human-rela-
tions/s07-03-sources-of-stress.html
STRESS SOURCES IN YOUR LIFE | Global Organization for
Stress. (2017). Gostress.com. Retrieved 10 November 2017, from
http://www.gostress.com/stress-sources/
S
The Inverted-U Model: Balancing Pressure and Performance.
(2017). Mindtools.com. Retrieved 10 November 2017, from https://
www.mindtools.com/pages/article/inverted-u.htm
IM
M
N

C h
10 a p t e r
Conflict Management
CONTENTS
S
10.1 Introduction
10.2 Understanding Conflicts
10.2.1 Sources of Conflicts
10.2.2
IM
Positive and Negative Aspects of Conflicts
Activity
10.3 Functional Conflicts
Activity
M
10.4 Dysfunctional Conflicts

Activity
10.5 Types of Conflicts
N
10.5.1 Inter-personal Conflicts

10.5.2 Inter-group Conflicts
10.5.3 Intra-individual Conflicts
Activity
10.6 Conflict Resolution and Management
Activity
10.7 Encouraging Functional Conflict for Organisational Effectiveness
Activity
10.8 Summary

n o t e s
Conflict in Project Team
Anamika and Robin work for a software development company

based in Bangalore. Recently, a new product division was start-
ed in the company. Robin was hired by the manager of the new
division, who was originally the leader of the project team. Robin
was also interviewed by Anamika. However, she strongly opposed
hiring him, because according to her, Robin was not competent
for the job.
Six months after the hiring of Robin, the project manager left
the organisation to start his own business. He recommended the
names of Anamika and Robin to jointly serve as project leader.
Anamika reluctantly agreed to the proposal with the stipulation
that it needs to be made sure that she will not be working for Rob-
S
in. The General Manager gave consent for Anamika and Robin
sharing the project leadership. Within a few weeks, conflicts start-
ed developing between Anamika and Robin, because Robin was
IM
representing himself as the leader of the entire project, giving
an impression that Anamika was working for him. The two ap-
proached the Human Resource (HR) manager for resolving the
conflict. Following is Anamika`s account of the events as commu-
nicated to the HR manager:
“Right after being given the responsibility of the joint project

M
manager, Robin called a meeting with the team without consult-

ing me about the time and content. He just informed me when it is
going to be held and asked me to be present there. In the meeting,
Robin reviewed everyone`s tasks, including mine, treating me as
N
just another team member working for him. While sending out
letters, he signs as the project director, which obviously implies
that I am working for him”.
Following is Robin`s version of the events as communicated to

the HR manager:
“Anamika is only concerned about power and titles. Just because

I sign as the project manager does not imply that she is working
under me? This does not excite me and does not make any differ-
ence. She should not be so sensitive about everything. Can`t I call
a meeting myself? Right away, she should not think that I am try-
ing to run everything. She mostly lets things slide, but whenever I
take an initiative, she starts reacting like that”.

Conflict Management 219
n o t e s
learning objectives

>> Explain the concept of conflict
>> Describe the sources of conflict
>> Discuss the positive and negative aspects of conflict
>> Explain functional and dysfunctional conflict
>> Describe the types of conflict
>> Discuss conflict resolution and management
>> Explain the role of functional conflict in increasing organisa-
tional effectiveness
S
10.1 INTRODUCTION
The success of a business organisation depends on team work. How-
IM
ever, where there is a team, conflict is bound to arise. In simple words,
conflict refers to the actual and perceived disagreement among needs,
values, and interests of individuals and groups. It is an unavoidable
phenomenon occurring in every facet of life. In an organisational set-
up, conflict occurs because of a number of reasons, including opin-
ions, attitudes, and perceptions of employees.
M
The productivity of employees can be influenced by conflicts in a neg-

ative way. For example, an employee may feel a sense of injustice and
decide to change his/her job. Therefore, it is crucial for organisations
to reduce conflicts through conflict management. Conflict manage-
ment can be successfully implemented by the management if it is well
N
aware of the behaviour of employees. Therefore, conflict management

is a powerful tool in organisational behaviour, which manages and
controls the behaviour of employees. It can be implemented through
negotiations that aim at resolving conflicts in a constructive way and
through mediation and arbitration.
The chapter starts with a discussion on the meaning and sources of

conflict. Further, the positive and negative aspects of conflicts have
been discussed in the chapter. In addition, the chapter elaborates on
functional and dysfunctional conflicts. Further ahead, the chapter de-
scribes various types of conflicts, such as inter-personal conflict and
intergroup conflict. Towards the end, conflict resolution and manage-
ment and encouraging functional conflict for organisational effective-
ness is discussed in the chapter.
10.2 UNDERSTANDING CONFLICTS

To understand the concept of conflict, let us first define the term. Follow-
ing are some of the definitions of conflict as provided by different authors:

n o t e s
According to Chung and Meggison, “Conflict is the struggle between

incompatible or opposing needs, wishes, ideas, interests, or people.” Ac-
cording to them conflict arises when individuals or groups encounter
goals that both parties cannot attain satisfactorily.
According to Pondy, conflict has been defined as “the condition of ob-
jective incompatibility between values and goals; as the behaviour of
deliberately interfering with another’s goal achievement; and as emo-
tionally in terms of hostility.”
Descriptive theorists have explained conflict behaviour in terms of
objective conflict of interest, personal styles, reactions to threats, and
cognitive distortions. Therefore, conflict can be defined as the friction,
which results from perceived or actual differences that exist among in-
dividuals or groups. Conflict is perceived in many different and unique
ways, three of them being the most significant. They are as follows:
S
Traditional View: According to this view, all types of conflicts are
harmful to an organisation. Therefore, conflicts should be avoided
at any cost. According to this view, managers should try to sup-
IM
press all types of conflicts within the organisation.
Human Relations View of Conflict: In this view, conflict is a natu-
ral phenomenon. This view states that conflict is essential for suc-
cess and progress in an organisation. This is because conflicts help
individuals in overcoming obstacles and performing duties more
effectively.
M
Interactionist View of Conflict: According to this view, conflict is

necessary for a group to perform efficiently. This is because con-
flicts lead to positive results.
According to Stephen P. Robbins, “the harmonious, passive groups

N
are prone to become stagnant and non-responsive towards the needs

for change and innovation, which can be a major hindrance in the
progress of the organisation.”
Following are some of the main characteristics of conflict:

It occurs when two or more individuals pursue incompatible goals.
In a conflict, individuals try to prevent others from attaining their
goals.
It arises due to a dilemma within an individual to select the right
course of action.
It occurs when there is a mismatch between the actual and expect-
ed role.
It arises when the goals of one individual or department clashes
with the goals of another individual or department.
10.2.1 SOURCES OF CONFLICTS
In an organisational setting, individuals from diverse backgrounds,
cultures, and personalities integrate to form teams. These diversities

n o t e s
give rise to numerous situations or factors that in turn give rise to

conflicts. Following are some of the major sources of conflicts in or-
ganisations:
Communication: Conflict arises because of ineffective communi-
cation or lack of communication. If the employees of an organisa-
tion do not have the correct information, there may be conflict. For
example, a manager forgets to inform a team member of a meeting
taking place. The team member may feel that he/she is being omit-
ted on purpose.
Personal Variables: Personality and value system of different em-
ployees are diverse. This diversity in individuals leads to conflicts.
For example, an outspoken individual may appear rude to his/her
colleagues.
Unrealistic Expectations: It refers to the impractical expectations
S
that management bears from employees. Employees may feel de-
motivated due to unrealistic expectations. This may lead to con-
flict between managers and employees. For example, a manager
IM
asks a team member to complete an entire day`s task within cou-
ple of hours.
Change: It is a common tendency of employees to resist organisa-
tional change. Resistance to change leads to conflict. For example,
introduction of new machines in a manufacturing company lead
to feelings of insecurity among the workforce regarding their jobs.
M
Goal: Goals of two or more individuals or departments may col-

lide and lead to conflicts. For instance, the aim of a production
department is on-time delivery, while the quality department aims
at flawlessness of the product.
N
Difference in Values: These indicate that people have different

value systems, to which they are emotionally attached and uncom-
promising. In such a scenario, the values of one individual may
collide with another that may lead to conflict. For example, two
salespersons are selling a product. One salesperson believes that it
is acceptable to lie while persuading a customer to buy a product.
However, the other only believes in using honest means.
Behaviour: This indicates that an extreme action of an individual,
whether defensive or offensive, can be a reason for conflict. For
example, on receiving negative feedback from a superior, an em-
ployee aggressively accuses his superior of bias.
10.2.2 POSITIVE AND NEGATIVE ASPECTS OF CONFLICTS
Organisational conflict arises due to differences in opinions among

individuals or groups. However, the consequences of conflicts can be
negative as well as positive. Following are some of the negative conse-
quences of conflicts:

n o t e s
Performance Degradation: Conflicts consume significant energy

of the individuals involved as well as the organisation. These lead
to degradation in performance. For example, an employee who
spends time arguing with a colleague is not able to deliver tasks
within time.
Low Employee Retention: Conflicts create demotivation among
employees. This increases employee turnover and leads to low re-
tention. For example, employees who think they are the victims
of conflicts may bear negative perceptions about the organisation
and try to find opportunities in other organisations.
Some of the positive consequences of conflict are as follows:

Change in Organisational Culture: Conflicts help in identifying
the potential problem areas in an organisation. Dealing with the
S
problems leads to change in organisational culture. For example,
after an employee raises an issue of bias in an HR policy, the policy
is changed, benefitting all other employees.
IM
Competition: Conflict may induce healthy competition in an or-
ganisation. This helps in increasing productivity and quality. For
example, competition to deliver better among two departments
leads to both departments performing well.
Creativity: Increasing competition due to conflicts may spur cre-
ativity among employees. For example, an employee tries to show
M
that he/she is better than a colleague and thus forms profitable

ideas for the entire team.

N
1. ________ can be defined as the friction, which results from

perceived or actual differences that exist among individuals
or groups.
2. According to the _______ view, all types of conflicts are harmful
to an organisation.
3. According to the interactionist view of conflict, conflict is
necessary for a group to perform efficiently. (True/False)
4. Conflicts lead to low employee retention. (True/False)
Activity
Utilising Internet, find out about various sources of conflicts occur-

ring in a project team. Present your findings in a short note.
10.3 FUNCTIONAL CONFLICTS

Gayatri and Neeraj work in an advertising company. In a brain storm-
ing session for a client’s product, Gayatri and Neeraj both come up

n o t e s
with good ideas. Their supervisor is unable to decide which idea is

better. He gives them a week’s time to improve further and declares
that the idea that is better will be presented to the client. Gayatri and
Neeraj start competing with each other aggressively, causing several
conflicts between them. A week later, however, their supervisor is still
unable to decide the better idea. Both Gayatri and Neeraj are asked to
present their ideas to the client. The client is very pleased and decides
to accept both the ideas for separate products. This leads to double
profits for the company.
The conflict between Gayatri and Neeraj is called a functional conflict.

Here, two employees have a difference of opinions regarding new ideas
and they strive to generate better ideas for fulfilling organisational goals.
Functional conflicts refer to constructive conflicts that support the goals
of the organisations and improve its performance. Functional conflicts
S
involve people genuinely interested in solving problems and listening to
one another. A great way to improve a team’s performance is stimulating
functional conflicts and hence generating innovative ideas. Stimulating
functional conflicts involves leading team members to defend or criticise
IM
ideas on the basis of relevant facts rather than personal preferences. Fol-
lowing are the two methods of stimulating functional conflicts:
Devil’s Advocacy: It involves assigning a team member the role of
a critic. This person will always criticise an idea that the team may
have. This helps in creating an environment of critical thinking.
However, the role of the critic should be revolved in the team, so that
M
no particular individual develops the reputation of being negative.

Dialectic Method: It involves conducting a debate of opposite views
before taking any decision. After hearing the pros and cons of differ-
ent ideas, the team has greater success in making sound decisions.
N
5. ____________conflicts refer to constructive conflicts that

support the goals of the organisations and improve its
performance.
6. __________ method involves conducting a debate of opposing
views before taking any decision.
7. Devil’s advocacy involves assigning a team member the role of
a critic. (True/False)
Activity
Make a group of your friends and discuss various benefits of func-

tional conflicts.

n o t e s
10.4 DYSFUNCTIONAL CONFLICTS

In a software company, the development team, headed by Mayank,
and the testing team, headed by Rohit, are always in conflict. The de-
livery head, Sheetal, has been encouraging this functional conflict.
However, after some time, some members in the development team
start picking fights with members in the testing team. The fights dis-
rupt work, spread rumours, and lead to a few resignations.
In the scenario, a functional conflict has turned into a dysfunctional

conflict. A dysfunctional conflict consists of various disputes and dis-
agreements that hinder the performance of the company. It involves
people unwilling to work for a common goal and solve a particular
problem. In a workplace, there are various methods of dealing with
dysfunctional conflicts. Some of these methods are as follows:
S
Integrating: This method is also known as the problem-solving
method. It involves encouraging opposing parties to face the issue
IMcollectively, generate a solution, and select the most appropriate
action. Various misunderstandings can be resolved with the help
of this method. For example, in the scenario, Sheetal calls a meet-
ing of both the teams in which both teams realise that they were
fighting over a non-issue or a misunderstanding.
Obliging: In this approach, a party neglects their own concern to

M
satisfy the concern of the opposing party. It emphasises common-

alities and plays down differences. For example, in the scenario,
Mayank’s team realises that the conflict has gone too far, and they
agree to apologise to Rohit’s team.
N
Dominating: People with an I-win-you-lose mentality follow this

approach. It involves relying upon formal authority to force com-
pliance. It is also used when unpopular but necessary solutions
need to be implemented. For example, suppose conflict between
the joint project managers of a project is hampering the project. In
such cases, the General Manager needs to get involved and make
one of the project managers accept the position of the other.
8. In obliging, a party neglects their own concern to satisfy the

concern of the opposing party. (True/False)
9. A ____________conflict consists of various disputes and
disagreements that hinder the performance of the company.
Activity
Utilising Internet, list various aspects of dysfunctional conflicts.

n o t e s
10.5 TYPES OF CONFLICTS

Conflict may arise at any level in an organisation, starting from the
individual level to the organisational level. Depending on the level of
conflict, there are mainly two types of conflicts: inter-personal con-
flicts and inter-group conflict. Let us discuss these types of conflicts
in detail.
10.5.1 INTER-PERSONAL CONFLICTS
Individual-level conflict indicates that human behaviour is directed

by needs, which guide the activities of an individual. Before joining an
organisation, individuals try to match their needs with the organisa-
tion’s offerings in terms of salary packages or other benefits. However,
if they observe any inequity with their colleagues in the organisation,
S
it may result in a conflict at the individual level. Such a conflict may
lead to tension, frustration, and unpleasant behaviour in individuals.
For example, an employee who believes he/she is paid less than a col-
IM
league tries to load her work on the colleague.
Inter-personal conflict occurs between two individuals. Generally, this

conflict arises due to availability of scarce resources or rewards. It can
also occur, because different people have different opinions, attitudes,
value systems, and style of working. In simple words, in inter-person-
al conflict, a person is in conflict with another individual. Inter-per-
M
sonal conflict is considered to be a major-level conflict that can occur

between co-workers, siblings, spouses, roommates, and neighbours.
This is the form of conflict most people have in mind when they think
about being in conflict.
N
Following are two important concepts in the context of inter-personal

conflicts:
Transactional Analysis: It refers to a model of people and rela-
tionships that was devolped by Dr. Eric Berne in the 1960s. It is
based on two notions:
First, we have three ‘ego-states’ in our personality. These states
are parent, adult, and child.
Second, these states converse with one another in ‘transac-
tions’.
In simple words, transactional analysis is a social psychological
method for improving communication. It outlines how we develop
and treat ourselves, how we relate to others, and how we commu-
nicate with others. In addition, it deals with how we offer and ac-
cept suggestions that help us change and grow. The undermining
philosophies in transactional analysis are that:
People can change
All of us have a right to be in the world and be accepted

n o t e s
Johari Window: It refers to a communication model used to im-

prove understanding among individuals. The word “Johari” is
derived from the names of Joseph Luft and Harry Ingham, who
developed this model in 1955. The following two ideas are behind
the tool:
One can build trust with others by disclosing information about
oneself.
An individual can learn about himself/herself with the help of
feedback from others. This helps the individual come to terms
with personal issues.
Thus, basically, the Johari window emphasises the role of self-disclo-

sure and construtive feedback. This can help people in building better
and more trusting relationships with one another, solve issues, and
work more effectively as a team.
S
The Johari window is a four quadrant grid, as shown in Figure 10.1:
IM Known by Self Unknown by Self
Ask
Known by Others 1: Open 2: Blind

Area Area
Feedback
M
Shared Discovery
Tell
Self-Disclosure
N
Self-Disclosure
Self-Discovery
3: Hidden 4: Unknown
Unknown by Others Area Area
Figure 10.1: Johari Window
The four quadrants are explained as follows:

1. Quadrant 1: Open Area
Quadrant 1 represents the information that we know about
ourselves and others know about us. Therefore, this quadrant
includes behaviour, knowledge, skills, attitudes, and "public" history.
2. Quadrant 2: Blind Area
This quadrant includes information that we are not aware of
ourselves but others know about us. This can involve simple issues
that are unknown to us and complex issues (for example, feelings
of inadequacy, incompetence, unworthiness, or rejection), which

n o t e s
are often difficult for individuals to face directly but can be seen
by others.
3. Quadrant 3: Hidden Area
This quadrant represents information that we know about
ourselves, but others do not know about us.
4. Quadrant 4: Unknown Area
This last quadrant represents information that is unknown by us
and others.
The main goal of the Johari window is to expand the open area
without disclosing information that is too personal in nature. The
model considers Open Area to be the most important quadrant,
because generally the more people know about each other, the
more productive, cooperative, and effective they become while
S
working together. The process of expanding the Open Area is
called “self-disclosure”. It is a give-and-take process that takes
place between an individual and the people that the individual is
interacting with.
IM
Resolution of inter-personal conflict is a very important issue in OB.
An organisation needs to put considerable amount of time and re-
sources to resolve inter-personal conflicts. This is because inter-per-
sonal conflict is the most common type of conflict in organisations.
Following are the six generic steps in resolving inter-personal con-

M
flicts, as shown in Figure 10.2:
1. Defining the problem in terms of needs

N
2. Brainstorming possible solutions
3. Selecting the solution(s) that best meet both parties’ needs
4. Planning who will do what, where, and by when
5. Implementing the plan
6. Evaluating the process and the outcomes
Figure 10.2: Generic Conflict Resolution Steps
10.5.2 INTER-GROUP CONFLICTS
Conflicts that occur between two or more groups are called inter-group
conflicts. These are frequently seen within an organisation when two
departments are in conflict with each other to acquire scarce resourc-

n o t e s
es. For example, the marketing and the finance department may be
in conflict owing to difference in man power. In addition, two sepa-
rate departments can be in conflict regarding their contribution in the
company. Intergroup conflict is minimised when different divisions
work for common organisational goals. It may be helpful to an organ-
isation by increasing healthy competition.
One of the most prominent reasons of inter-group conflict is the nature
of the group. Some of the other reasons include work independence,
goal variances, differences in perception, and increased demand for
specialists. In addition, the individual members of a group also play
a prominent role in initiating an inter-group conflict. When groups
share some interests and their directions seem parallel, there may be
a positive relationship within each group. However, when the goals
and activities of groups differ, each group may view the other in a neg-
ative manner. While trying to prevent or resolve inter-group conflict,
S
we should consider the history of relations between the groups in con-
flict. History repeats itself if left to its own devices.
There are a number of techniques to resolve inter-group conflicts.
IM
Some of these techniques are:
1. Avoidance where possible
2. Problem solving
3. Changing certain variables
4. Constituting a dispute resolution system
M
The conflict resolution method should be selected on the basis of why

the conflict occurs and the seriousness of the conflict. A face-to-face
meeting as in problem solving is a very effective way of resolving mis-
understanding or language barriers.
N
10.5.3 INTRA-INDIVIDUAL CONFLICTs
This type of conflict is also known as intrapsychic conflict. It occurs
within an individual when an individual argues with himself/herself
about an issue. For example, an individual wants to buy a new pair of
shoes but knows that he/she should not spend money on them. Thus,
intra-individual conflict occurs when there is inconsistancy among
an individual`s cognitive elements. This type of conflict can occur in
thoughts, ideas, values, emotions, and predispositions.
Conflict at the intra-individual level involves:
Frustration: It occurs when goal-directed behaviour is blocked.
For example, when the career growth of an individual is blocked
because of various reasons.
Goal-conflict: It can arise out of approach-approach, ap-
proach-avoidance, and avoidance-avoidance situations. Ap-
proach-approach conflict occurs when an individual has to choose
between two equally attractive alternatives. For example, a situ-
ation in which a manager needs to recruit one out of two equally

n o t e s
competent candidates. Approach-avoidance conflict occurs when

an alternative has both positive and negative consequences. For
example, a person wants to join an MNC in which the compensa-
tion is attractive but job security is less. An avoidance-avoidance
situation occurs when a person has to choose between competing
alternatives, both of which have negative consequences. For exam-
ple, a choice between low compensation and low job security.
Role-conflict: Role-conflict occurs because of clashes among ex-
pectations of various roles possessed by an individual. For exam-
ple, this type of conflict occurs when an individual is asked to per-
form two or more incompatible roles.
10. ________________conflict occurs when an alternative has both
S
positive and negative consequences.
Activity
IM
Make a group of your friends and discuss about inter-personal and
inter-group conflicts.
CONFLICT RESOLUTION AND

10.6
MANAGEMENT
M
Conflict plays both functional and dysfunctional roles, depending

upon the impact it has on the performance of employees. In case a
conflict improves performance, it needs to be stimulated. However, if a
conflict hampers performance, it needs to be controlled and resolved.
N
A conflict has to be resolved especially when it reaches the optimal

level. Figure 10.3 shows some of the conflict resolution techniques:
Avoidance
Increasing
Compromise
Resources
Super-
Authoritative
Ordinate
Command
Goals
Conflict Altering
Problem
Resolution the Human
Solving
Technique Variable
Figure 10.3: Techniques of Conflict Resolution

n o t e s
The following points explain the techniques of conflict resolution:

Problem Solving: This is a direct approach of resolving conflict in
which the source of the conflict is removed. In this approach, the
main cause of the conflict is identified and removed to resolve the
conflict. For instance, a conflict may arise between the employees
and the management regarding compensation. The management
resolves the conflict by increasing the compensation.
Super-ordinate Goals: When various parties work for the fulfil-
ment of the same goals, there is less chance of conflict. Therefore,
management should set super-ordinate goals to eliminate conflicts.
For example, the super-ordinate goals in a project can be deliver-
ing a specific set of project deliverables within a given time. This
may help in reducing conflict in a team regarding personal goals.
Increasing Resources: At times, lack of resources can be a cause
S
for conflict. In such cases, increasing the availability of resources
can help in removing conflicts. For example, conflict may arise in a
project because of allocation of fewer resources than required. In
IM
such cases, conflict can be avoided by deploying more resources.
Avoidance: It is an indirect approach of resolving conflicts. In this
approach, the cause of conflict is avoided. For example, two mu-
tually incompatible individuals may be asked to work in separate
groups to avoid any circumstance of face-off.
Compromise: This refers to a technique in which both the con-
M
flicting parties are required to give up their personal motives and

think collectively to resolve a conflict.
Authoritative Command: Indicates that by the use of formal au-
thority, managers can resolve the conflict. For example, a manager
N
warns two conflicting team members that if they do not resolve

their inter-personal problems, action will be taken against them.
Altering the Human Variable: It involves various techniques,
such as training to change the human behaviour or attitude to deal
with conflict in a better manner. On the other hand, the individual
involved in the conflict can be transferred to another place to help
resolve the conflict. For example, a team member who does not
approve of a manager is transferred to another manager’s team.
11. ___________is a direct approach of resolving conflict in which

the source of the conflict is removed.
12. Compromise refers to a technique in which both the conflicting
parties are required to give up their personal motives and
think collectively to resolve a conflict. (True/False)

n o t e s
Activity
Make a group of students and discuss about various means of con-

flict resolution. Present your discussion points in a short note.
ENCOURAGING FUNCTIONAL CONFLICT

10.7
FOR ORGANISATIONAL EFFECTIVENESS
Earlier we discussed that functional conflicts are beneficial for an or-
ganisation. These types of conflicts can bring positive outcomes by
improving the performance of employees. Therefore, an organisation
needs to stimulate these types of conflicts to promote healthy compe-
tition and increased creativity. There are a number of techniques for
stimulating the functional conflicts as depicted in Figure 10.4:
S
Restructuring
IM
the Group
Restructuring Restructuring
the Group the Group
Conflict
Stimulation
Technique
M
Figure 10.4: Techniques of Conflict Stimulation

N
The following points explain the conflict resolution techniques:

Bringing in Outsiders: Means that a manager can stimulate con-
flict by including an employee whose working style, personality,
and way of thinking is different from existing employees.
Restructuring the Group: It refers to reshuffle between two or
more groups to exchange their members. In such a case, all the
concerned groups would have a combination of some old and some
new members. The new members will bring the new, creative, and
useful ideas along with them. Their ideas may be different from
the ideas of older members, which may create conflict among the
group.
Appointing the Devil’s Advocate: This refers to an act of appoint-
ing a manager, who can initiate arguments and oppose the already
set-ideas to induce the conflict in the organisation. Such a person
helps in bringing the attention of other members to certain con-
flicting points that can later be resolved.

n o t e s
13. Organisation needs to stimulate functional conflicts to

promote healthy competition and increased creativity. (True/
False)
14. The manager, who can initiate arguments and oppose the
already set-ideas to induce the conflict in the organisation is
known as ____________.
Activity
Make a group of fellow students to discuss about various means

of stimulating functional conflicts. Present your findings in a short
note.
S
10.8 SUMMARY
IM
The success of a business organisation depends on team work.
However, where there is a team, conflict is bound to arise.
In simple words, conflict refers to the actual and perceived dis-
agreement among needs, values, and interests of individuals and
groups.
M
Some of the major sources of conflicts in organisations are com-

munication, personal variables, unrealistic expectations, change,
goal, the difference in values, and behaviour.
Some of the negative results of conflicts are performance degrada-
N
tion and low employee retention.

Some of the positive consequences of conflict are change in organ-
isational culture, competition, and creativity.
Functional conflicts refer to constructive conflicts that support the
goals of the organisations and improve its performance. Functional
conflicts involve people genuinely interested in solving problems
and listening to one another.
Methods of stimulating functional conflicts are devil`s advocacy
and dialectic method.
A dysfunctional conflict consists of various disputes and disagree-
ments that hinder the performance of the company. It involves
people unwilling to work for a common goal and solve a particular
problem.
Individual-levelconflict indicates that human behaviour is led by
needs, which guide the activities of an individual.

n o t e s
Transactional analysis refers to a model of people and relation-

ships that was developed by Dr. Eric Berne in the 1960s.
The Johari window refers to a communication model used to im-
prove understanding among individuals.
Intra-personal conflict occurs within an individual.
Intra-personal conflict involves frustration, goal-conflict, and
role-conflict.
Conflicts that occur between two or more groups are called in-
ter-group conflicts.
Some of the techniques of conflict resolution are problem solving,
super-ordinate goals, increasing resources, avoidance, compro-
mise, authoritative command, and altering human variable.
S
key words
Needs: It refers to a motivating force that compels actions for

IM
satisfaction.
Cognitive: It is the process by which the sensory input is trans-
formed, reduced, elaborated, stored, recovered, and used.
Values: It refers to the moral basis of the actions of individuals.
Employee Retention: It refers to the rate of employees staying
M
in the same organisation.

Dialectic:It refers to a method of argument for resolving dis-
agreement.
Dispute Resolution System: It refers to an organisational
N
framework that is developed to resolve inter-group and in-

ter-personal conflicts.

1. What do you mean by conflicts?
2. What do you mean by functional conflicts?
3. What is a dysfunctional conflict?
4. What are the different types of conflict? Discuss.
5. Elaborate some of the techniques of conflict resolution.
6. What are the different methods of stimulating functional conflict
for organisational effectiveness?

n o t e s

Understanding Conflicts 1. Conflict
2. Traditional
3. True
4. True
Functional Conflicts 5. Functional
6. Dialectic
S
7. True
Dysfunctional Conflicts 8. True
9. Dysfunctional
IM
Types of Conflicts 10. Approach-avoidance
Conflict Resolution and Man- 11. Problem Solving
agement
12. True
Encouraging Functional Con- 13. True
M
flict for Organisational Effec-

tiveness
14. Devil’s Advocate
N

1. Conflict refers to the actual and perceived disagreement among
needs, values, and interests of individuals and groups. Refer to
Section 10.2 Understanding Conflicts.
2. Functional conflicts refer to constructive conflicts that support
the goals of the organisations and improve its performance.
Refer to Section 10.3 Functional Conflicts.
3. A dysfunctional conflict consists of various disputes and
disagreements that hinder the performance of the company.
Refer to Section 10.4 Dysfunctional Conflicts.
4. Different types of conflict are inter-personal conflict and
intergroup conflicts. Refer to Section 10.5 Types of Conflicts.
5. Some of the techniques of conflict resolution are problem
solving, super-ordinate goals, increasing resources, avoidance,
compromise, authoritative command, and altering human
variable. Refer to Section 10.6 Conflict Resolution and
Management.

n o t e s
6. Methods of stimulating functional conflicts are devil`s advocacy,

dialectic method, bringing in outsiders, and restructuring the
group. Refer to Section 10.7 Encouraging Functional Conflict
for Organisational Effectiveness.
Suggested Readings &

10.11
References
Suggested Readings
Singh, H. (2010). Organisational Behaviour. 1st ed. New Delhi: V.
K. (India) Enterprises
E-references
S
Small Business - Chron.com, (2014). Positive & Negative Conflicts
in the Workplace. [online] Available at: http://smallbusiness.chron.
com/positive-negative-conflicts-workplace-11422.html
IM
Small Business - Chron.com, (2014). Positive & Negative Conse-
quences of Conflict in Organisations. [online] Available at: http://
smallbusiness.chron.com/positive-negative-consequences-con-
flict-organisations-10254.html
M
N

N
M
IM
S
C h
11 a p t e r
POWER AND POLITICS IN ORGANISATIONS
CONTENTS
S
11.1 Introduction
11.2 Understanding Power
11.2.1 Difference between Leadership and Power
11.2.2
IM
Sources of Power
11.2.3 Identifying the Sources of Power in Organisations
11.2.4 Power Tactics
11.2.5 Power in Groups
Activity
M
11.3 Politics within Organisations

11.3.1 Factors Contributing to Existence of Politics
11.3.2 Role of Politics in Determining Organisational Culture
N
Activity
11.4 Importance of Personality Development for Encountering Politics
Activity
11.5 Summary

n o t e s
Political Conflict
Between Julie Roehm and Walmart
Walmart is a multinational retail corporation running discount de-

partment stores and warehouse stores. In early 2006, Julie Roehm
was hired by Walmart in the newly created position of Senior Vice
President of Marketing Communication. This was viewed by some
analysts as Walmart’s big move to improve its marketing depart-
ment, owing to the fact that Roehm had earned a name for herself
due to her edgy advertising tactics.
However, in late 2006, Roehm was dismissed from the organisa-

tion amidst rumours of her violating Walmart’s ethics and gra-
tuity policy. After this incident, Roehm filed a civil case against
S
Walmart for unlawfully sacking her job, invading her compensa-
tion agreements, and for maligning her in the press. As a reper-
cussion, Walmart accused her of violating the organisation’s em-
ployment policies.
IM
The conflict between Julie Roehm and Walmart increased to the
extent of Roehm accusing Walmart’s top management of violat-
ing its ethical code of conduct and exhibiting excessive power.
This incident was considered as a learning lesson by various an-
alysts, because it provided an insight to an organisation’s culture,
change, workplace politics, organisational communication, ethics,
M
and managerial and employee misconduct.

N

POWER AND POLITICS IN ORGANISATIONS 239
n o t e s
learning objectives

> Explain the concept of power and the difference between
power and leadership
> Discuss the sources of power and the use of power tactics by
individuals
> Discuss the existence of power in groups
> Discuss the existence of politics and factors contributing to
politics within organisations
> Explain the role of politics in determining organisational
culture
> Discuss the importance of personality development for en-
S
countering politics
11.1 Introduction
IM
Janaki Sharma is the Chief Executive Officer (CEO) of Chand Indus-
tries Pvt. Ltd. One of Sharma’s trusted Vice Presidents (VPs) of the
organisation, Prakash Seth, has been maligning the name of the CEO
by introducing unfavourable policies in her name to gain favour with
the Board of Directors. Employees have lost faith in their CEO, and the
M
attrition rate is high. On discovering Prakash Seth’s actions, the CEO

and the Board of Directors replace him with Madhav Singh. After his
appointment, Singh studies the damage done by Seth and reverses the
unfavourable policies. This also helps clear Sharma’s name. The faith of
employees is restored and the organisation is back on track again.
N
Organisations run by following certain formal and informal rules to

coordinate the actions of individuals. However, organisations com-
prise people with different backgrounds, interests, and understand-
ing. Then, how can organisations assure that people with such diver-
sities comply with these rules?
The scenario shows that power and politics are among the most im-
portant concepts in the study of organisational behaviour. Both power
and politics are dynamic concepts and are a function of the interaction
between different elements in organisations. Power is an individual’s
ability to influence and control anything that is of value to others. In an
organisational setting, it is the ability to influence the behaviour of other
individuals in the organisation to make them accomplish tasks that they
otherwise would not endeavour. Power in organisations may or may
not be legitimate, which implies that power may not always correspond
with an individual’s organisational position. The power sanctioned by
the organisation is often the source of power for most individuals.
Organisational politics is often referred to as power in action. Politics
may be legitimate if contained within sanctioned organisational lim-

n o t e s
its, whereas, if it exceeds sanctioned organisational limits, organisa-

tional politics becomes illegitimate in nature. Organisational politics
is a function of culture, objectives, roles, and attitudes of the top man-
agement in organisations.
Power and politics play a significant role in organisations right from

decision making to how employees interact with each other. Irrespec-
tive of the type and size of organisations, the impact of power is con-
tingent upon the type of power employees use to influence others in
the workplace: positive power or negative power. Politics has a direct
effect on the delegation of power within organisations and determines
whether the organisational culture encourages productivity.
This chapter starts by discussing the concept of power and how power
differs from leadership. Further, it describes the sources of power and
the identification of sources of power in organisations. Next, the chap-
S
ter describes the power tactics in organisations and the role of power in
groups. It explains the significance of politics in organisations, factors
contributing to the existence of politics, and the role of politics in deter-
IM
mining organisational culture. The chapter concludes by discussing the
significance of personality development to encounter politics.
11.2 UNDERSTANDING POWER

“Power is the probability that one actor within a social relationship will
be in a position to carry out his own will despite resistance”.
M
Max Weber, a principal architect of modern sociology
Power is the potential ability to influence the behaviour of others.

The term power may be applied to people, groups, divisions, organ-
N
isations, and nations. For example, a particular department in an or-

ganisation may be considered powerful, implying that it has the ability
to influence the behaviour of individuals in other departments in the
organisation. Power within organisations affects decision making for
resource allocation, goals and objectives setting, hiring of individuals,
structural and employment decisions, etc.
Power has a social context and is relational in nature. An individual may

exhibit power in relation to other people who are influenced by him/her.
Similarly, a group may exhibit power in relation to other groups, and
so on. Therefore, the idea of power symbolises interactions among in-
dividuals, where one individual influences and the other is influenced.
Moreover, power is dynamic and changes as situations and individuals
change. For example, a manager of a particular department in an or-
ganisation may influence the behaviour of his/her subordinate but only
marginally influence individuals from other departments.
Leaders also influence and inspire other individuals. However, power

and leadership differ from each other in more than one way. Let us dis-
cuss the difference between leadership and power in the next section.

n o t e s
11.2.1 DIFFERENCE BETWEEN LEADERSHIP AND POWER
“If you want to test a man’s character, give him power”.
Abraham Lincoln
John F. Kennedy, 35th U.S. President is well-known for his democrat-

ic leadership style. He made a proposal to The National Aeronautics
and Space Administration (NASA) for sending a human on the moon.
Amidst much resistance, Kennedy opted not to exhibit undue power
but through his leadership style, managed to convince and motivate
the staff to make it happen.
Leadership refers to influencing people with or without the advantage

of a formal position or role, whereas power refers to getting people to
do things owing to the formal platform or charter an individual holds
S
in an organisation. For example, a person with the personality traits
of a leader can influence a colleague’s action, whereas a manager can
simply dictate the action. Evidently, power aids to the demonstration
of leadership by an individual, whether or not leadership is required.
IM
On the contrary, leadership is destabilised when demonstration of
power is used to exert leadership. In simple words, power grows from
the position an individual has in a group, whereas leadership may or
may not be corresponding to one’s position in the group. For example,
Mahatma Gandhi inspired millions of individuals to fight for freedom,
and he participated with them equally. People followed him because
M
of his inspirational personality.
Leaders are people who can influence the behaviour of other individ-
uals owing to certain personality or behavioural traits and not neces-
sarily because of the position of the leader. Leaders help other individ-
N
uals in the group to work in coordination with one another, establish

their goals, and accomplish them for the success of the group.
Power enables an individual to make other individuals act even when

they resist, while leaders influence individuals to accomplish common
goals, at the same time, enabling them to accomplish these goals.
Considering Abraham Maslow’s theory of hierarchy of needs, (basic

needs, safety needs, social needs, self-esteem needs, and self-actualisa-
tion needs), an individual who craves for power is fixed at the second
level, or safety needs. On the contrary, an effective leader strives for
self-actualisation without craving for power to earn his/her dignity. An
effective leader is motivated to achieve the common objectives for the
welfare of the whole group and not focus on his/her individual gains.
There is a thin line that differentiates leadership from power. Lead-

ership is naturally endowed with power, and power has the potential
to corrupt a leader’s actions and thoughts. Power provides a leader
with control over organisational resources, which affords him/her the
ability to influence other individuals by conferring or concealing these

n o t e s
resources. After gaining power, several leaders are motivated to en-

hance their personal capacity for domination. Subsequently, leaders
may tend to behave in unacceptable ways to protect their power with-
out considering that their actions may harm the group’s well-being.
11.2.2 SOURCES OF POWER
Sources of power are based on the interpersonal relationships be-

tween supervisors and subordinates in an organisation. One of the
most distinguished studies on power and its sources was conducted
by social psychologists, John French and Bertram Raven, in 1959.
They identified five sources of power as shown in Figure 11.1:
Reward power
S
Coercive power
IM
Sources of power Legitimate power
Expert power
Referent power
M
Figure 11.1: Sources of Power
Let us discuss the various sources of power further:
Reward Power: It is influencing behaviour by rewarding desirable be-

N
haviours. For example, praise, promotions, bonus, etc. are rewarded to

employees in an organisation as a result of their performance, which
motivates them to continue to exhibit that behaviour. Reward power
results from an individual’s ability to compensate other individuals for
compliance with a particular or desirable behaviour.
Coercive Power: It is influencing behaviour by punishing undesirable

behaviours. For example, subordinates may comply with a particular
behaviour for fear of getting punished for not adhering to supervisory
directives. Punishment may be in the form of reprimands, undesir-
able work assignments, strict work rules, pay-cuts, or suspension.
Legitimate Power: It is influencing behaviour owing to the indi-
vidual’s formal position in the organisation. Individuals respond to
this influence to acknowledge the supervisor’s legitimate right to
commend certain behaviours. For example, in an organisation, a
manager is authorised to make decisions related to a specific area
of responsibility, such as production, quality control, marketing,
accounting, or customer service. The area of responsibility han-

n o t e s
dled by a manager defines the extent to which the manager may

exercise legitimate power to influence behaviour. Sometimes, sub-
ordinates may also exhibit legitimate power. For example, a safe-
ty inspector in an organisation has the legitimate power to halt
the production process in the case of a safety violation, even if the
plant manager objects.
Expert Power: Expert power is an individual’s ability to influence
the behaviour of other individuals owing to his/her competencies,
talents, or specialised knowledge and skills. To demonstrate profi-
ciency in implementing, analysing, evaluating, and controlling the
tasks of employees, managers acquire expert power. Expert power
may however not be significant in the case of new employees and
managers in an organisation. For example, in spite of possessing
expert knowledge about accounting theory and practices, a new
manager has to demonstrate his/her expertise over time to be rec-
S
ognised and accepted in the organisation. Only after recognition
among seniors, a new manager will be able to exhibit expert power.
Referent Power: Referent power is an individual’s ability to influ-
IM
ence the behaviour of other individuals as a consequence of being
respected, admired, or liked by others. For example, an employ-
ee’s desire to imitate an old, experienced or skilled manager may
cause him/her to copy the same managerial style. Often, senior
managers have some referent ability to influence the behaviour of
younger managers in an organisation. Referent power is generally
M
associated with people possessing admirable personality, charac-

teristics, charisma, or reputation. Therefore, it is often linked with
political leaders, movie stars, sports personalities, or other famous
people.
N
11.2.3 IDENTIFYING THE SOURCES OF

POWER IN ORGANISATIONS
Organisational power focuses on the power of managers over subor-

dinates in an organisation. However, a significant aspect in organisa-
tional power is that characteristics of each situation affect or deter-
mine the power within the organisation. For example, the head of the
Human Resource (HR) department of an organisation has more pow-
er when salaries and compensations of employees are to be decided,
whereas he/she may lack the power to delegate work responsibilities
to employees in case of a new project.
Situational characteristics refer to the structure of the organisation, the

opportunity to influence others, access to influential people and critical
resources, the kind of position an individual holds, etc. Structural and sit-
uational sources of power in organisations may result in unequal access
to information, resources, and decision making within different depart-
ments in an organisation. For example, HR personnel have access to the

n o t e s
personal details of all employees. The structural and situational sources

of power in organisations are categorised as shown in Figure 11.2:
Knowledge as power
Resources as power
Structural and situational
sources of power
Decision making as
power
Networks as power
Figure 11.2: Structural and Situational Sources of Power
Let us discuss the various structural and situational sources of power
S
in organisations:
Knowledge as Power: This implies that individuals, groups, or de-
partments in an organisation, which possess knowledge critical in
IM
the attainment of organisation’s objectives, have certain power. In-
dividuals, who can control information about existing operations,
develop information regarding alternatives, or acquire knowledge
about future events, possess massive power to influence the be-
haviour of other individuals in the organisation.
Resources as Power: Organisations require various resources, in-
M
cluding man, material, and money, to carry out their operations.

The significance of particular resources for an organisation’s suc-
cess increases with respect to the difficulty in obtaining these
resources. For example, if a manufacturing organisation needs a
particular machine for production, which is unavailable with the
N
supplier, the machine’s significance as a resource in this organ-

isation increases. Thus, the idea of resources as power implies
that the individuals, groups, or departments in an organisation,
which provide essential or scarce resources, possess power within
the organisation. Resources that are the most crucial to an organ-
isation depend on the situation, the organisation’s objectives, the
economic conditions, and the products or services being offered by
the organisation. For example, software engineers can be the most
crucial resources in a software company.
Decision Making as Power: Decisions in organisations are made
with the consent of several participating individuals and groups.
The idea of decision making as a power in organisations implies
that individuals, groups, or departments possess power to the ex-
tent that they can affect the decision-making process. For example,
the market research department in an organisation can change the
decision of the senior management to launch a particular product.
Individuals, groups, and departments may influence the strategies,

n o t e s
policies, or objectives being developed, the various alternatives be-

ing considered, and the potential outcomes being discussed.
Networks as Power: It is a common observation that managers in
an organisation possess greater power if they have links with other
influential individuals in the organisation. Traditionally, superior–
subordinate vertical relationships are important aspects of power,
but these linkages are not enough for exhibiting power in organi-
sations. Horizontal linkages, with both internal as well as external
networks, play an important role in the possession of power within
organisations. For example, a project manager in an organisation
is able to get funds sanctioned easily owing to his/her good rela-
tions with the head of the finance department of the organisation.
The idea of networks as power implies that affiliations and coali-
tions, both inside and outside the organisation, act as sources of
power within organisations.
S
11.2.4 POWER TACTICS
IM
Individuals use certain strategies to gain power and manipulate the
bases of power for specific actions such as influencing the behaviour
of other individuals, gaining a particular advantage, etc. These strat-
egies are referred to as power tactics. Power tactics are used by in-
dividuals on their own (individual), within a group (intra-group) and
between groups (inter- group).
M
Power tactics used by individuals can be categorised as shown in

Figure 11.3:
N
Assertiveness
Friendliness
Rationality
Individual and intra-
Sanctions
group tactics
Higher authority
Bargaining
Power tactics
Coalition
Uncertainty absorption
Inter-group tactics Substitutability
Integrative importance
Figure 11.3: Types of Power Tactics

n o t e s
Let us discuss these power tactics further:

Individual and Intra-group Tactics: On the basis of how manag-
ers influence their subordinates, co-workers, and superiors, seven
power tactics have been identified, which are as follows:
Assertiveness: This implies setting a deadline for the others to
comply with a request, commanding others to do what they were
expected to do, and emphasising on the importance of complying
with the request and repeatedly reminding others of their obliga-
tions. For example, a manager frequently goes to a subordinate’s
desk to check if a task is finished.
Friendliness: This implies moulding a person in a way that he
willingly accepts to fulfil the request. The individual tends to flat-
ter other individuals prior to making a request, exaggerating on
the importance of complying with the request and being friendly
S
with others when requesting their cooperation. For example, an
employee praises a colleague’s speed in completing work and then
requests him/her to help out with a task.
IM
Rationality: This implies using facts and figures in a logical man-
ner such that the request being made is detailed and prepared well.
The rationale for the request is presented to individuals, along with
a list of duties and expectations from the individuals. This clearly
highlights the importance of the request and the individuals’ role
in accomplishing a task. For example, a manager maintains a sheet
M
regarding the project that clearly states each team member’s role,
date of delivery for each task, etc. Team members are assigned
work according to the sheet.
Sanctions: This implies making requests, along with a promise
N
of rewards, on the completion of work. Managers may promise a

promotion or increment to individuals on accomplishing a task or
threaten to withhold promotion and rule out salary increments on
non-completion of tasks.
Higher Authority: This implies taking the support of individuals
holding higher ranks in the organisational hierarchy while re-
questing subordinates to accomplish a task. Higher officials infor-
mally back managers in their projects or assignments to expand
the importance of the task. For example, a delivery head addresses
a whole team, along with the manager, emphasising the signifi-
cance of the project.
Bargaining: This implies exchanging favours and benefits through
a process of negotiation. The individual seeking a favour may re-
mind the other individual of the favours the former has bestowed
on the latter in the past. This obliges the other individual to favour
the individual in the completion of a task. For example, a manager
lends a resource from his/her team to another because of having
received such help in the past from the same team.

n o t e s
Coalition: This implies getting help from other individuals in the

organisation through alliances and coalitions with co-workers and
subordinates. Coalitions are more prominent in the case of inter-
dependent departments in organisations, where the support of one
team is necessary to accomplish the objectives of the other team.
For example, in a software company, a software development team
has to coordinate with the testing team to accomplish deliveries.
Inter-group Tactics: When one group in an organisation influences
the other, the former exerts power on the latter. Based on this, three
factors of power tactics have been identified, which are as follows:
Uncertainty Absorption: There are specialised groups within or-
ganisations that perform a variety of functions such as industrial
relationships, bargaining, vendor decisions, etc. At times, when
complex situations arise in an organisation, the guidance and ad-
S
vice of specialised groups are sought by other departments. In
such situations, specialised groups exert certain amount of power
on the other departments and individuals. For example, in a man-
ufacturing organisation, the production department is not cleared
IM
of a delivery unless the quality department approves of the final
product. Here, the quality department exerts some power over the
production department.
Substitutability: When organisations have to deal with complex
situations, if the guidance of the specialised group is substituted
with the guidance and advice of an external agency or consultant,
M
the power of the specialised group is reduced or eliminated. For

example, in the manufacturing organisation example, if a group
from the client organisation approves of the final product, the
quality department loses power over the production department.
N
Integrative Importance: When a department’s services are required

consistently by other departments in an organisation for smooth
functioning, integrative importance comes into play. This implies
that the department may exert power over other departments ow-
ing to its importance in the functioning of other departments. For
example, the IT support team in an organisation is required to ex-
tend its support to other departments in the organisation.
11.2.5 POWER IN GROUPS

Lata is a manager heading a team of 10 people, among which Rakhi is
appointed a temporary team leader. However, several team members
find that Rakhi dominates them, tends to be rude, and continuously
takes credit for work done by other team members when reporting
to Lata. However, owing to her team leader’s position, the other team
members do not act against her. One day, Vivek, one of the team mem-
bers, apprises Lata of the situation. After Lata is convinced, she calls
for a team reshuffle, loans Rakhi to another team, and temporarily
appoints Vivek the team leader. Vivek proves to be responsible and
the team is happy to be led by him.

n o t e s
Power is a fundamental need within groups to influence the behaviour

of other individuals and make important group decisions. Unfortu-
nately, sometimes members of a group express their need for power
in inappropriate and socially unacceptable ways. For example, in the
scenario, Rakhi’s behaviour is not appropriate.
However, there are rational and devoted members in a group, who

are promoted to positions with higher responsibility and authority.
For example, in the scenario, Vivek turns out to be a devoted leader.
Such individuals often see themselves as having greater responsibility
towards the group and not as having greater power. They view them-
selves as having greater accountability towards the group members
and the objectives of the group.
Power abusers, such as Rakhi, on the other hand, often consider them-
selves as superior to other group members in less influential positions.
S
They enjoy the feeling of being in control of the destinies of the group
and its members.
IM
Another specific observation in a group is the use of personal power.
Exercising personal power to an extent that it can have a negative im-
pact on group effectiveness is unethical use of power. For example, in
the scenario, Rakhi takes credit for someone else’s work.
Having the knowledge of ethical use of power assists individuals in cre-

ating a culture that enhances the well-being of all members in a group.
M
This helps in improving the motivation, morale, and performance of all

the members within a group. Such groups, where power is used for the
welfare of all group members, are more optimistic, confident, and dedi-
cated towards the accomplishment of overall group objectives.
N
1. Leadership refers to getting people to do things owing to

the formal platform or charter an individual holds in an
organisation. (True/False)
1. Reward power a. Influence behaviour by reward-
ing desirable behaviour
2. Coercive power b. Influence behaviour due to for-
mal position
3. Legitimate power c. Influence behaviour by punish-
ing undesirable behaviour
4. Referent power d. Influence behaviour due to be-
ing respected or admired
3. _____________ power is an individual’s ability to influence the
behaviour of other individuals, owing to his/her competencies,
talents, or specialised knowledge and skills.

n o t e s
4. Which of these sources of power in organisations result in

unequal access to information, resources, and decision making
within different departments in an organisation?
a. Reward power
b. Coercive power
c. Structural and situational power
d. Legitimate power
5. Assertiveness is an inter-group power tactic. (True/False)
6. __________________ often consider themselves as superior to
other group members in less influential positions. (True/False)
Activity
S
Identify a person in your group who has leadership qualities. Pre-
pare an assessment-list of his/her leadership qualities.
IM
11.3 POLITICS WITHIN ORGANISATIONS
The mobilisation of power in an organisation gives birth to the process
of politics. Organisational politics includes actions by individuals or
departments in an organisation for acquiring, developing, and using
power and other resources for obtaining desirable outcomes at times
M
of uncertainty or disagreement.
Political behaviour includes attempts by individuals to influence the

behaviours of other individuals as well as the course of events in the
N
organisation to guard their self-interest, needs, and goals. For example,

a manager tries to undermine the work of another manager’s team to
gain favour with his/her superiors. However, categorising behaviour as
political implies a judgment that some individuals in the organisation
gain something at the expense of other individuals. A clear understand-
ing of political behaviour and its consequences is however needed to
understand the benefits and limitations of politics in organisations.
The political system of an organisation represents how power is ap-

plied and distributed in the organisation. Comprehending the polit-
ical system of an organisation is crucial for an individual to operate
effectively and attain organisational objectives. A manager, exhibiting
power, has a strong influence on the political structure of an organi-
sation, which affects the decision making, conflict management, em-
ployee recognition, and support.
Power is crucial to the formulation of strategies in organisations. This

is because decisions regarding whether to continue with the previous
strategy or formulate a new one, are always political in nature. Such
decisions may threaten the present distribution of organisational re-

n o t e s
sources in terms of salaries, investments, recruitment, or venturing

on new businesses. For example, a member of the senior management
in an organisation may favour a certain vendor for supply of raw ma-
terial, and accordingly advises the board of directors. If the board of
directors agree, the organisation will have to buy specialised machin-
ery. The expense for buying the machinery may result in lesser invest-
ments in the future than what has been planned.
On the other hand, negative organisational politics may prove destruc-

tive for an organisation. Negative politics has been identified as one of
the major sources of stress within existing organisations. It includes the
use of destabilising methods for promoting personal agendas, which
undermine organisational objectives on a whole; distract other individ-
uals; and compromise the interests, welfare, and goals of other employ-
ees. Negative political tactics involve filtering or distortion of informa-
S
tion, non-cooperation, retaliations, dishonesty, sabotage, and coercions.
Figure 11.4 shows some common political tactics displayed by individ-

uals in an organisation:
IM
Common Political Tactics
Taking counsel The individual exercise great caution in seeking or giving advice.
Maneuverability The individual maintains flexibility and never completely commits himself to any
one position or program.
Communication The individual never communicates everything she knows. Instead she withholds
M
information and/or times its release carefully.

Compromising The individual accepts compromise only as a short-term tactic while continuing
to press ahead with his own agenda.
Confidence Once the individual has made a decision, he must always give the impression of
knowing what he is doing, even when he does not.
Always the boss An atmosphere of social friendship limits the power of he manager, thus the
N
manager always maintains a sense of distance and separation with his subordinates.
Figure 11.4: Common Political Tactics in Organisations

(Source: Buchanan, D., and Badham, R. Power, Politics, and
Organizational Change. London: Sage 1999,193.)
Political behaviour can thus assist in meeting legitimate individu-

al and organisational needs or bear negative outcomes. Under any
event, managers and employees need to understand the concept and
role of political behaviour within organisations, because it is an inev-
itable phenomenon. Politics in organisations cannot be avoided, but
it needs to be managed. For a detailed understanding of politics in
organisations, it is important to be aware of the factors that contrib-
ute to the existence of politics and the role of politics in determining
organisational culture.
11.3.1 FACTORS CONTRIBUTING TO EXISTENCE OF POLITICS
Several research and studies have been conducted to identify the fac-
tors that contribute to the existence of politics within organisations.

n o t e s
These factors may broadly be classified as individual factors and or-

ganisational factors. Both individual and organisational factors may
have a positive or negative impact on the organisation.
Figure 11.5 shows the factors that contribute to organisational politics:
Need for power
Machiavellianism
Individual
factors
Locus of control
Factors
contributing to Risk-seeking tendency
organisational
politics Limited resources
Organisational
Uncertainty in decision making
factors
S
Performance pressure
Figure 11.5: Factors Contributing to Organisational Politics

IM
Let us discuss these factors further:
Individual Factors: The individual factors that contribute to or-
ganisational politics are as follows:
Need for Power: The need for power is a basic motive that influ-
ences and controls other individuals and an individual’s own en-
M
vironment. Consequently, individuals with greater need for power

are more likely to engage in political behaviour within organisa-
tions. Successful managers often have greater desire for power.
The desire to impact, control, and influence others is often related
to effective managerial behaviour, equitable treatment, and higher
N
morale of subordinates.
However, the need for power may not be useful for effective man-
agement. It can be classified into the following:
Personal Power: Managers who stress on attaining personal
power attempt to dominate other individuals and demand loy-
alty for themselves instead of the organisation.
Institutional Power: Managers who stress on attaining insti-
tutional power exhibit a socially acceptable need for power.
These managers create a favourable political culture for effec-
tive work and development of subordinates.
Machiavellianism: Niccolo Machiavelli was a 16th century Italian
philosopher, whose writings include a set of propositions to obtain
and hold governmental power. His work is associated with the use
of deceit and opportunism in interpersonal relations. Accordingly,
Machiavellians are individuals who deploy unscrupulous means to
influence other individuals for their own purposes. Machiavellian-
ism is characterised by the following:

n o t e s
Use of guile and deceit in interpersonal relationships

Cynical view of the nature of other people
Lack of concern for conventional morality
Machiavellians tend to agree with the following notions:

The best way to handle individuals is to communicate only
what they expect to hear.
Individuals who trust others completely seek trouble.
Never tell others the actual intention behind a task, unless it is
beneficial to do so.
It is rewarding to flatter influential people.
Machiavellians are often able to influence other individuals and

tend to initiate and manipulate social interactions in organisations.
S
Consequently, Machiavellianism is associated with an inclination
to engage in political behaviour.
Locus of Control: Locus of control includes the extent to which
IMindividuals believe that they can control events that affect them.
There are two types of locus of control:
Internal Locus of Control: Individuals having an internal lo-
cus of control believe that events are a consequence of their
own behaviour.
External Locus of Control: Individuals having an external lo-
M
cus of control believe that other individuals, circumstances, or

fate determines the occurrence of events that affect their lives.
Individuals with internal locus of control are more likely to influ-
ence other individuals in the organisation and assume that their
N
efforts would bear results.

Risk-seeking Tendency: Individuals differ in their readiness to bear
risks or their risk-seeking tendencies and hence are classified as:
Risk Avoiders: Individuals who avoid taking risks
Risk Seekers: Individuals who like the idea of taking risk
Engaging in organisational politics is not free of risks and may have

several negative consequences such as low performance ratings, demo-
tions, lack of influence, etc. Therefore, risk seekers are more inclined to-
wards politics in organisations, whereas risk avoiders tend to avoid en-
gaging in political behaviour owing to the possible negative outcomes.
11.3.2 ROLE OF POLITICS IN DETERMINING

ORGANISATIONAL CULTURE
Organisational culture refers to the values and behaviours that con-

tribute to the distinctive social and psychological environment of an
organisation. It is a system of shared meanings and beliefs, held by
members of an organisation, which determines how they act towards

n o t e s
each other. A favourable organisational culture provides both the or-

ganisation and its employees with direction and stability.
The political environment of an organisation has a direct impact on
its culture. Positive aspects of politics, such as strategy and decision
making, conflict management, employee recognition and support,
etc., may improve the organisational culture, but negative politics
may ruin it. Negative politics, often referred to as workplace politics,
is the use of power and social networking within the organisation to
influence individuals to serve personal interests without considering
its effect on other individuals and the organisation.
According to a study conducted by Talent Scout (Surviving Office
Politics), “18% of an administrator's time (more than nine weeks out of
every year) is spent resolving conflicts among employees”. Such con-
flicts are usually caused due to workplace politics leading to problems
S
for employees to work together.
Organisational culture includes the way individuals behave with one
another, which forms the basis for teamwork. To improve the way an or-
ganisation manages information and new developments, changes need
IM
to be introduced. However, introduction of a change of any kind always
meets resistance. This tendency to resist change on the part of individ-
uals contributes as the most significant factor to workplace politics.
Workplace politics has a direct impact on group cohesiveness. Politics
gives rise to secrecy, egocentric behaviour, non-cooperation, and emo-
tional instability, all of which affect employee teamwork. Unfavour-
M
able attitudes among employees affect the organisational culture and

consequently the overall performance and success of the organisation.

N
7. ______________________ includes attempts by individuals to

influence the behaviours of other individuals as well as the
course of events in the organisation to guard their self-interest,
needs, and goals.
8. The need for power is a basic motive that influences and controls
other individuals and an individual’s own environment. (True/
False)
9. Risk avoiders are individuals who like the idea of taking risks.
(True/False)
10. Which quality defines the extent to which individuals believe
that they can control events that affect them?
11. Use of guile and deceit in interpersonal relationships is
a characteristic of which of these factors contributing to
workplace politics? _______________
12. A favourable organisational culture provides both the
organisation and its employees with __________________ and
__________________.

n o t e s
Activity
Peruse the websites of two organisations on the Internet and iden-

tify their nature of organisational culture. Compare the political en-
vironments between the two and discuss with your friends.
IMPORTANCE OF PERSONALITY
11.4 DEVELOPMENT FOR ENCOUNTERING
POLITICS
Personality can be defined as a dynamic and organised set of charac-
teristics possessed by an individual that distinctively impacts his/her
cognitions, motivations, and behaviours in different situations. Per-
S
sonality is an outcome of the basic personal values and personality
traits of an individual, which also determines the political behaviour
of the individual:
IM
Personality Traits: These refer to the characteristics or qualities
that distinguish one individual from another. For example, being
ambitious, persistent, courageous, etc. are personality traits of in-
dividuals.
Personal Values: These refer to the broad goals that act as guiding
principles for individuals such as honesty, dignity, etc. Basic values
M
differ for each individual, which explains the reason for the differ-
ent personality individuals possess.
Personal values and traits are innate, genetically influenced, and de-
velop during childhood, whereas political attitudes develop in adult-
N
hood. Based on this fact, researchers and scholars concluded that

personality traits and values affect the subsequent development of
political attitudes of an individual.
On the contrary, political attitudes emerge only after an individual be-

gins to involve in a political domain. Political attitude refers to the pos-
itive or negative evaluation of situations, individuals, objects, events,
activities, and ideas relating to politics. Therefore, the political atti-
tudes of different individuals in an organisation determine their po-
litical behaviour. Although personality traits and values build during
childhood, an organised development of personality can bring about
a change in an individual’s political attitude. For example, an employ-
ee believes people to be honest at face value and is loyal to a certain
senior manager. However, influenced by rumours in the organisation,
he/she starts doubting the senior manager and eventually his/her loy-
alty weakens.
The five-factor model of personality, often referred to as the Big Five

Model, supports that five basic dimensions trigger most of the sig-
nificant variations in an individual’s personality. Focussing on these

n o t e s
dimensions helps to reshape political attitude and thus the political

behaviour of individuals in an organisation.
Let us discuss each of the five traits, often referred by the acronym
OCEAN, further:
Openness: This dimension defines an individual’s array of inter-
ests and interest in novelty. Extremely open individuals are gen-
erally creative, inquisitive, and artistically sensitive. On the other
hand, individuals who lack openness towards novelty tend to be
conventional and find comfort in familiarity. Organisations need
to focus on developing this personality trait to increase employee
adaptability towards change. It is commonly observed in organi-
sations that the introduction of change in the way of a new prod-
uct, strategy, policy, organisational structure, etc. tend to give rise
to workplace politics. Openness amongst employees may help in
S
overcoming anxiety to change.
Conscientiousness: This dimension defines the extent of an indi-
vidual’s reliability. An individual with high conscientiousness is
IM
usually responsible, organised, dependable, and persistent. On the
other hand, individuals who score low on conscientiousness tend
to get distracted easily, and are usually disorganised and unreli-
able. Organisations need to focus on developing conscientiousness
to avoid individuals getting easily distracted, which gives rise to
workplace politics.
M
Extroversion: This dimension defines an individual’s comfort lev-

el with interpersonal relationships. Extroverts tend to be sociable,
self-confident, and friendly. On the other hand, introverts tend to
be reserved, shy, and discreet. Organisations need to focus on this
personality trait to minimise the difference between extroverts
N
and introverts to promote amiable relationships among all individ-

uals. A better relationship between individuals in an organisation
reduces conflicts that give rise to workplace politics.
Agreeableness: This dimension defines an individual’s tendency
to defer with other individuals. Highly agreeable individuals are
usually cooperative, warm, and credulous. On the other hand,
people who are less agreeable are cold, offensive, and opposed to
others. Organisations need to focus on developing this personality
trait to reduce ambiguity in opinions, thoughts, and attitudes to-
wards other individuals, objects, and events to eventually reduce
workplace politics.
Neuroticism: Also referred to as emotional stability of an indi-
vidual, this dimension defines an individual’s ability to withstand
stress. Individuals with high emotional stability tend to be calm,
self-confident, and secure. On the other hand, individuals with low
emotional stability tend to be nervous, anxious, depressed, and in-
secure. Organisations need to focus on developing this personality
trait to minimise the building up of stress and anxiety amongst its

n o t e s
employees, which may lead to insecurity and subsequent work-

place politics.
Figure 11.6 summarises the five traits and their description as per the
Big Five Model of personality:
Openness Conscientiousness Extraversion Agreeableness Neuroticism

• Curious, • Organised, • Outgoing, • Affable, • Anxious,
original, systematic, talkative, tolerant, irritable,
intellectual, punctual, sociable, sensitive, temperamental,
creative, achievement and enjoys trusting, and moody.
and open to oriented, and being in kind, and
new ideas. dependable. social warm.
situations.
S
Figure 11.6: Big Five Model of Personality
(Source: http://catalog.flatworldknowledge.com/)
IM

1. Openness a. Affable, tolerant, and sensitive
2. Agreeableness b.
Creative, inquisitive, and artisti-
cally sensitive
M
3. Neuroticism c. Irritable and temperamental

4. Extroversion d. Outgoing, talkative, and sociable

14. ________________ defines the extent of an individual’s
N
reliability. An individual with high conscientiousness is

usually responsible, organised, dependable, and persistent.
Activity
Through the Internet, list the major developments in the evolution

of the Big Five Model of personality.
11.5 SUMMARY
Power is the potential ability to influence the behaviour of others.
The term power may be applied to people, groups, divisions, or-
ganisations, and nations.
Power within organisations affects decision making for resource
allocation, goals and objectives setting, hiring of individuals, struc-
tural and employment decisions, etc.

n o t e s
Leadership refers to influencing people with or without the advan-

tage of a formal position or role, whereas power refers to getting
people to do things owing to the formal platform or charter an in-
dividual holds in an organisation.
The various sources of power are reward power, coercive power,
legitimate power, expert power, and referent power.
The various sources of power in an organisational setting can be
grouped as structural and situational sources of power, which in-
cludes knowledge as power, resources as power, decision making
as power, and networks as power.
Individuals use certain strategies to gain power and manipulate
the bases of power for specific actions, such as influencing the be-
haviour of other individuals, gaining a particular advantage, etc.,
referred to as power tactics.
S
Power tactics used by individuals can be categorised into individ-
ual and intra-group tactics and inter-group tactics.
Individual
IM
and intra-group tactics include assertiveness, friendli-
ness, rationality, sanctions, higher authority, bargaining, and coa-
lition.
Inter-group tactics include uncertainty absorption, substitutabili-
ty, and integrative importance.
Organisational politics includes actions by individuals or depart-
M
ments in an organisation for acquiring, developing, and using pow-

er and other resources for obtaining desirable outcomes at times
of uncertainty or disagreement.
Factors that contribute to organisational politics can be catego-
N
rised into individual factors and organisational factors. Individual

factors include need for power, Machiavellianism, locus of control,
and risk-seeking tendency. Organisational factors include limited
resources, uncertainty in decision making, and performance pres-
sure.
Organisational culture refers to the values and behaviours that
contribute to the distinctive social and psychological environment
of an organisation. The political environment of an organisation
has a direct impact on its culture.
Political attitude refers to the positive or negative evaluation of sit-
uations, individuals, objects, events, activities, and ideas relating
to politics. Thus, the political attitudes of different individuals in
an organisation determine their political behaviour.
Focussing on the Big Five Model of Personality helps to reshape
political attitude and thus the political behaviour of individuals in
an organisation.

n o t e s
key words
Big Five Model: It defines five factors (openness, conscientious-

ness, extroversion, agreeableness, and neuroticism), which de-
fine human personality and account for individual differences.
Locus of Control: It is the extent to which individuals believe
that they have power over the events occurring in their lives.
Self-actualisation: It is the achievement of an individual’s full
potential through creativity, independence, spontaneity, and an
understanding of the real world.
Maslow’s Theory of Hierarchy of Needs: It is a human motiva-
tional theory, which states that people aim to meet basic needs,
followed by safety needs, social needs, self-esteem needs, and
S
self-actualisation needs, in a pyramidal form.
Machiavellianism: It is a concept proposed in the political doc-
trine of Machiavelli according to which, politics is amoral and
any means (however unscrupulous) is justifiable in achieving
IM
political power.

1. Explain the concept of power and how power differs from
M
leadership.
2. Discuss the sources of power in organisations.
3. Explain the concept of power tactics that individuals use in
organisations.
N
4. Discuss the presence of politics within organisations and factors

contributing to it.
5. Explain the role of politics in determining organisational culture.
6. Discuss how personality development can help in dealing with
workplace politics.

Understanding Power 1 False
2 1(a), 2(c), 3(b), 4(d)
3 Expert
4 c.Structural and situational power

n o t e s

5 False
6 Power abusers
Politics Within Organisa- 7 Political behaviour
tions
8 True
9 False
10 Locus of control
11 Machiavellianism
12 Direction and stability
Importance of Personality 13 1(b), 2(a), 3(c), 4(d)
Development for Encoun-
S
tering Politics
14 Conscientiousness
IM
1. Power is the potential ability to influence the behaviour of others.
The term power may be applied to people, groups, divisions,
organisations, and nations. Leadership refers to influencing
people with or without the advantage of a formal position or role,
M
whereas power refers to getting people to do things owing to the

formal platform or charter an individual holds in an organisation.
2. The various sources of power in an organisational setting can
be grouped as structural and situational sources of power,
N
which include knowledge as power, resources as power, decision

making as power, and networks as power. Refer to section 11.4
for details.
3. Power tactics used by individuals can be categorised into
individual and intra-group tactics and inter-group tactics. Refer
to section 11.4 for details.
4. Organisational politics includes actions by individuals
or departments in an organisation to obtain desirable
outcomes at times of uncertainty or disagreement. Factors
contributing to organisational politics can be individual factors
(Machiavellianism, locus of control, and risk-seeking tendency)
and Organisational factors (limited resources, uncertainty in
decision making, and performance pressure). Refer to section
11.5 for details.
5. Organisational culture refers to the values and behaviours that
contribute to the distinctive social and psychological environment

n o t e s
of an organisation. The political environment of an organisation

has a direct impact on its culture. Refer to section11.5 for details.
6. Focussing on the Big Five Model of Personality helps to reshape
political attitude and thus the political behaviour of individuals
in an organisation. Refer to section 11.6 for details.
Suggested Readings
Fox,W. (2006). Managing organisational behaviour (1st ed.). Cape
French, R. (2011). Organizational behaviour (1st ed.). Hoboken,
N.J.: Wiley.
S
IM
E-References
123test.com,. (2014). Big Five personality theory. Retrieved 5 June
2014, from http://www.123test.com/big-five-personality-theory/
Harvard Business Review,. (2014). Power and Politics in Organi-
zational Life. Retrieved 5 June 2014, from http://hbr.org/1970/05/
M
power-and-politics-in-organizational-life/ar/1
Small Business - Chron.com,. (2014). The Impact of Power and Pol-
itics in Organizational Productivity. Retrieved 5 June 2014, from
http://smallbusiness.chron.com/impact-power-politics-organiza-
N
tional-productivity-35942.html
Toolkit.smallbiz.nsw.gov.au,.
(2014). Organisational Politics. Re-
trieved 5 June 2014, from http://toolkit.smallbiz.nsw.gov.au/
part/8/41/198

C h
12 a p t e r
INTERNATIONAL ORGANISATIONAL BEHAVIOUR
CONTENTS
S
12.1 Introduction
12.2 Trends in International Business
IM
12.2.1 Cultural Differences and Similarities
12.2.2 Behaviours across Countries
Activity
12.3 Hofstede Cultural Dimensions
12.3.1 GLOBE Study
M

Activity
12.4 Cultural Adjustment
12.4.1 Motivation across Cultures
N
12.4.2 Interpersonal Behaviour across Cultures

12.4.3 Leadership across Cultures
12.4.4 Communicating across Cultures
12.4.5 Environment across Cultures
12.4.6 Multicultural Team
Activity
12.5 Technology and International Business
Activity
12.6 Summary

n o t e s
HENRY FORD HEALTH SYSTEM’S EXECUTIVE DIVERSITY

RECRUITMENT STRATEGY
The Henry Ford Health System (HFHS) is a five-hospital system

in Detroit, USA, with around 30,000 employees. It is one of the
best case studies for cross-cultural diversity initiatives. Owing to
its diversity values and efforts, it has been consistently ranked
among the top 12 hospitals and health systems by Diversity Inc.
To create an inclusive culture, the HFHS continually works to im-
prove its talent pipeline, talent development practices, supplier
diversity and other such things that are essential for maintaining
cultural diversity.
S
IM
M
Source: www.henryford.com
Some great achievements of the HFHS on this front are:

The HHFS wanted to improve cross-cultural communica-
N
tion and raise awareness about disparities. It achieved this by

launching a health care equity campaign and by integrating
the required changes into the system.
It has an employee resource group for female, Hispanic/Lati-
no, Middle Eastern, African-American, and other groupings.
It created experts in health care equity for working towards
eliminating health care disparities and for bringing the re-
quired organisational changes.
It has more than 300 minority suppliers in its vendor database.
In accordance with its corporate vision and values, the HFHS de-
cided to focus on its recruitment strategy for improving diversity
in its workforce. It decided to pursue a strategy of setting goals,
identifying metrics and providing leadership commitment to the
objective of improving diversity. This required a review of the ap-
plicant pool for all executive positions. To conduct this review, an

INTERNATIONAL ORGANISATIONAL BEHAVIOUR 263
n o t e s
executive diversity recruitment committee was created. The com-

mittee was also given the responsibility for approving the hiring
offers before they were made to the job aspirants and was made
responsible for achieving targets set each year by the board of
trustees. Since the committee had to approve every senior-lev-
el recruitment, the emphasis on diversity became a part of the
recruitment, interviewing and hiring process. To ensure that the
diversity-related goals are achieved and that there is accountabil-
ity in the system with regard to these goals, the board itself got
involved by monitoring the metrics. The diversity-related goals
were tied to the senior leadership bonus programme which ac-
counts for 10% of their pay.
If the applicant pool does not meet availability, recruiters are no-
tified that more work is required. Extra effort is put to increase
S
the applicant pool. When the applicant pool does not meet the
criteria, recruiters are required to contact outreach organisations
like NAACP or the Disabled American Veterans. It also helps re-
IM
cruiters that the HFHS, owing to its diversity vision, is connected
to more than 500 minority organisations that routinely receive its
job postings. Several other similar initiatives were taken to en-
sure that all obstacles were successfully overcome. By 2016, the
HFHS exceeded its diversity goals for senior level hires as 16% of
the hires were members of a minority group and nearly 50% per
cent of them being females.
M
The success was possible owing to the long-standing commitment

of the board and its organisational culture where the value of di-
versity is found deeply embedded throughout the system.
N
For the HFHS, an opportunity to show to show its commitment

to diversity came a few years ago when its clinic in southwest De-
troit, home to many Hispanics and Latinos, was identified as a
poor performer on the diversity front and was about to be closed
as per organisational policies. But the HFHS, in tune with its
goals and vision of diversity, decided that it would not shut down
the clinic. Rather, it would turn around the clinic by putting to
practice its diversity values. Following a different approach to hir-
ing, it hired a team of Hispanic physicians and medical assistants
for the clinic, prompting neighbourhood residents to start seeking
care there. Through consistent efforts, the HFHS turned around
the clinic which now stands as a perfect example of how diversity
can improve organisational outcomes.

n o t e s
learning objectives

>> Explain the importance of culture as companies evolve into
global corporations
>> Distinguish between different national cultures in terms of
how and why they vary, and the various dimensions in which
they vary
>> Discern and appreciate the relevance of national culture to
organisational culture
>> Describe Hofstede’s research on multicultural variations
>> List and explain the six cultural dimensions identified by
Hofstede
S
>> Examine the universal applicability of Organisational Be-
haviour (OB) concepts and theories in different cultures
>> Analyse and interpret the applicability of important OB con-
IM cepts, viz. motivation, leadership, interpersonal behaviour,
communication and multicultural team in the context of In-
ternational HRM
>> Discuss the role of technology in cultural changes
12.1 INTRODUCTION
M
The phenomenon of globalisation has led to the concept of a global

economy where products, services, people, technologies, and financial
capital can move freely across national borders. In a global economy,
national borders lose relevance due to the globalisation of markets and
N
production. Globalization integrates national economies and leads to

an interdependent world economy. In this context, the emergence of
global corporations and companies operating beyond their national
borders can provide a significant challenge in human resource man-
agement. The principles and theories of human resource manage-
ment have to be studied from the perspective of globalisation and its
impact on management principles. This has given rise to the subject of
international human resource management (IHRM) to cater to these
challenges.
As is the case with traditional HRM, the underlying science and prin-
ciples of international HRM, as it deals with the individual, group and
managerial behaviour in the global context for devising organisational
strategies and HR policies, arise from the field of organisational be-
haviour. However, in the IHRM, the principles and theories of organ-
isational behaviour need to be looked at from an international per-
spective.

n o t e s
We can talk about three dimensions in which the IHRM differs from
traditional HRM owing to globalisation and international operations
of companies. The first dimension is the cross-cultural implications
due to the involvement of multiple nations and their culture; the sec-
ond dimension is the need to devise HR policies that take into account
global challenges; and the third dimension is international industrial
relations. Among these dimensions, the dimension that is the most
important from the perspective of the principles of organisational be-
haviour is the dimension of culture. It is the culture that predomi-
nantly impacts the traditional HRM theories when we take a global
approach for managing human resources for global corporations. Cul-
ture is one of the core subjects of study in the field of OB.
In this chapter, we will study cultural implications of globalisation for

the field of organisational behaviour and the various principles of or-
S
ganisational behaviour like motivation, interpersonal behaviour, lead-
ership, communication etc., from an international perspective.
12.2 TRENDS IN INTERNATIONAL BUSINESS

IM
As globalisation makes it easy for companies to expand their mar-
kets across countries, leading companies in developed and emerg-
ing markets try to grow their businesses across national boundar-
ies and create global multinational corporations (MNCs). Generally,
MNCs evolve over three phases. In the first phase, companies have
M
a multi-domestic strategy when they initially try to expand beyond

their domestic market by having operations in terms of production
and/or marketing in foreign markets. As they succeed in this phase,
they emerge as a multinational corporation with operations in several
countries, each country contributing significantly to the revenue and
N
profit of the MNC. In the final phase, companies become truly global
where their primary market of focus is the world economy itself. As
companies evolve through these phases and establish themselves as
truly global MNCs, they need to decide on some important strategic
directions. For example, as companies expand across borders, should
they develop separate products for each market? Should they pro-
duce across all countries the same standard product with which they
achieved success in the domestic market? Should they give freedom
to managers to devise their own strategies in each country?
Researchers have identified that companies tend to adopt one of the

three production strategies—multi-domestic, global and transnation-
al—while operating as MNCs. Those following the multi-domestic
strategy produce such products that are tailor-made to the needs of
each country. While following the global strategy, companies produce
and market standard products across all parts of the world. When
they adopt the transnational strategy, they try to achieve both local
responsiveness and global efficiency by tailoring standard products
to meet the needs of different countries. The differences between the
three production strategies are given in Table 12.1:

n o t e s
TABLE 12.1: DIFFERENCES BETWEEN MULTI-DOMESTIC,

GLOBAL AND TRANSNATIONAL
PRODUCTION STRATEGIES
Production Global Cultural Cultural
Strategy Revenues sensitivity perspective
Multi-domestic Marginal Somewhat Ethnocentric
important
Multinational Important Important Polycentric
Transnational or Dominant Critically Geocentric
Global important
In terms of cultural perspective, as mentioned in Table 12.1, compa-

nies are also required to expand their cultural mind-set when evolve
into global corporations. There are three terms which describe dif-
ferent types of cultural mindsets or predispositions, viz. ethnocentric,
S
polycentric and geocentric.
Ethnocentric: The belief that one’s culture is superior to others.
This attitude may prevail in the companies that concentrate all
IM
authority and power in the hands of their executives in headquar-
ters in the home country. Foreign subsidiaries may not have much
autonomy and their key positions are managed by executives
from the company headquarters. This culture may prevail in the
multi-domestic type of companies.
Polycentric: As the companies evolve into global corporations,
M
their cultural sensitivity increases. While making important stra-

tegic decisions, they take into account cultural factors. The poly-
centric predisposition represents a philosophy of management
that consciously recognises the culture of the host country. The
N
company following this philosophy makes such strategic decisions

that are tailored to suit the culture of the host country.
Geocentric: As companies become transnational, their market be-
comes global and they are required to formulate global strategies
where cultural differences become critically important. The geo-
centric philosophy of management involves an integration of glob-
al systems for decision making.
The cultural mindset or predisposition can impact every aspect of the

strategies and operations of companies. Cultural factors play a very
significant role in the way a global corporation is structured interna-
tionally and type and nature of products it manufactures and sells.
To understand, how cultural sensitivity can play a major role in the
operation of a global corporation, let’s take the example of McDon-
ald's. It has around 32,000 restaurants in 122 countries with the high-
est number in the USA. However, its restaurants in Europe contribute
more revenues than its USA restaurants. The tremendous success of
McDonald's in its international markets is attributed to the way it has
adapted itself to the cultural differences in the various foreign loca-

n o t e s
tions of its restaurants. McDonald's does not offer the same menu in
all countries where it operates. In each country, its menu is differ-
ent tailored to the needs of local customers. While formulating coun-
try-specific menus, McDonald’s gives great importance to the distinct
cultural attributes of different countries. Table 12.2 illustrates how
culture has played a major role in McDonald’s menu offering in its
international operations.
TABLE 12.2: ROLE OF CULTURE IN DETERMINING INTER-

NATIONAL OPERATIONS OF MCDONALD’S
Country Cultural aspect McDonald’s response
Europe Health conscious- Menu features salads, fruits, carrots, etc
ness
Israel Kosher law All meats served are 100% kosher. No
dairy product is served. Restaurants are
S
closed on Saturdays and on religious
holidays.
Brazil Business meals Promotes afternoon meal at midday.
IM
Egypt Cleanliness An open-door policy that invites custom-
ers to visit the kitchen. Employees should
wash hands with disinfectant soap every
30 minutes.
India Vegetarian 70% of the menu caters to domestic taste
with the introduction of products like veg
meals, viz. McPuff and McVeggie
M
12.2.1 CULTURAL DIFFERENCES AND SIMILARITIES
Culture can be defined as the acquired knowledge consisting of val-

N
ues, attitudes, and behaviours that people use to interpret experience

and generate social behaviour. Some important characteristics of cul-
ture are: it is learned, shared, trans-generational, symbolic, patterned
and adaptive (Luthans, 2018). It is the culture of an organisation that
determines important choices like centralisation vs. decentralisation,
individual vs. group emphasis, informal vs. formal structure, high vs.
low organisational loyalty, co-operation vs. competition, etc.
As companies evolve into global corporations, it is necessary for their

executives to understand the primary ways in which cultures around
the world differ. As companies within a country differ in terms of their
organisational culture, nations too differ culturally. National cultures
may differ in terms of values, beliefs, attitudes, behaviours, art, law,
morals, customs, and, in the way of life, adopted by individuals and
communities in their respective societies. Culture includes patterns
of learned behaviour which are handed down from one generation to
the next through the means of language and symbols. Cultural beliefs
and values are shared by almost all members of a given social group
and these are expected to shape the behaviour and perception of the
individuals of that group.

n o t e s
Though the basic and eternal values like truth, honesty, compassion,
etc., may be common and universal across all societies and their cul-
tures, there could be differences in other values, norms and beliefs
that define unique cultural orientations of societies. Researchers say
cultural diversity arises on the basis of the answers arrived at by the
society over the years to tackle its basic and common social prob-
lems. First, there are the basic human problems like how we decide
to clothe, feed, and house the people in the society, how we decide to
distribute justice, education, health, etc., across the members of the
society. Each society arrives at its own answers to these questions in
the process of its evolution with the passage to time.
There are problems to solve them there could be several alternatives.

Each society may decide to opt for a particular alternative in accor-
dance with the environmental forces over a period of time. In this way,
S
the society decides its own values, preferences, customs, and lifestyle
which are handed down from one generation to the next.
Let us take some dimensions of culture and see how nations can
IM
vary on them and how management philosophies could also change
in accordance with them. Consider the nature of people. Countries
like the USA have a cultural orientation that asserts that people are
a mix of good and evil, and change is possible. Such a cultural orien-
tation would translate into a management philosophy that believes
in selection, training, and development. On the other hand, if the cul-
tural orientation asserts that all people are intrinsically good, the HR
M
philosophy would endeavour to treat people equally and give greater

importance to training and development than selection and fitment.
Another major cultural aspect is the relationship of an individual to
other people. In highly individualistic societies like that of the USA,
N
companies would promote achievement orientation and individual

decision-making. On the other hand, collectivistic cultures, like Japan,
China, and India, would give more importance to team achievements
and group decisions. There are several other important cultural di-
mensions on which people, societies, and nations vary from each oth-
er. Table 12.3 gives six important basic cultural variations.
TABLE 12.3: SIX IMPORTANT BASIC CULTURAL VARIA-

TIONS OF PEOPLE AND SOCIETES
Cultural dimension / Orientation Three important variations
1. Nature of people Good, Mixture of good and evil, Evil
2. Relationship with nature Dominant, Harmony, Subjugation
3. Relationship with other people Hierarchical, Collectivistic, Individ-
ualistic
4. Modality of human activity Doing, Becoming, Being
5. Temporal focus of human activity Future, Present, Past
6. Conception of space Private, Mixed, Public

n o t e s
Cultural differences across countries and societies might be of more

interest to anthropologists than management theorists. Why should
national cultures matter for organisations that have perfected their
own culture over the years in accordance with their management
philosophies? In reality, national cultures can have a major impact
on organisational cultures and it is necessary to study them in detail.
For example, consider the following questions. All these questions re-
quire an in-depth study of the cultures of different societies and na-
tions, and the impact they can make on management philosophies and
strategies:
Can we formulate leadership theories, practices and behaviours
that can be universally applied to all cultures? Should these basic
tenets be changed to suit different cultures?
S
Is there a different set of leadership values and practices for each
different culture?
Isit possible or advisable to have a uniform organisational culture
IM
across the subsidiaries of a global corporation?
For global corporations spread across countries, how much will
be the impact of national culture on their organisational culture?
If a parent organisation considers its culture as its competitive
strength, why should it not use the same strength across all its
subsidiaries in several countries?
M
We will study some important research work on above questions in

section ‘12.3 Hofstede Cultural Dimensions’.
While formulating strategies for international forays and creating the

N
organisational culture, researchers suggest that companies keep in

mind the following principles:
Culture of every organisation will invariably reflect some assump-
tions and values of its national home culture.
When making forays abroad, organisations should remember that
their own culture, howsoever they may be successful in their home
country, need not necessarily be better or worse than the cultures
prevailing in the organisations of the other countries.
Organisations should explicitly acknowledge cultural differences
between societies and countries in which they operate and take ac-
tive steps towards utilising them in their management strategies.
Foreign subsidiaries of a global organisation may have their own
culture for managing the people following a culture that is differ-
ent from that of the host country. However, they must not consider
their culture intrinsically better or worse than the culture of the
host country. The idea should be to build a more effective culture
that takes into account the host country’s culture.

n o t e s
Promoting cross-cultural learning and finding out creative and ef-

fective ways of managing people through this learning should be
encouraged.
12.2.2 BEHAVIOUR ACROSS COUNTRIES
Culture in terms of a living style and customs varies across the coun-
tries in the world. But do these cultural differences also impact the or-
ganisational behaviour? How much do social cultures affect the work
behaviour in organisations? Is it not possible that organisations have
their own culture that is distinct from that of the society in accordance
with their leadership style and corporate goals? These questions have
led researchers to study the relationship between national and organ-
isational cultures. For long, the pioneers of management science in
the United States, where many theories of management and organisa-
S
tional behaviour originated, assumed that their research findings on
successful leadership style and work behaviour are applicable across
the world. Only when the globalisation led companies to go beyond
their national boundaries, did they realise that even organisational
IM
cultures like national cultures vary across countries around the world.
Andre Laurent, a professor at INSEAD, conducted a study with re-

gard to work culture behaviours. He surveyed managers from nine
West European countries, United States, and three Asian countries.
He took some 60 common work situations and asked the managers
M
surveyed to respond with their approaches. The result showed a dis-

tinctly different pattern for managers in each of these countries. For
many questions related to work behaviour like task orientation, the
role of managers, etc., the answers were totally different between the
countries that are individual-oriented like USA and the countries that
N
are more relationship-oriented like Japan and Latin American coun-

tries.
Consider the example of Swedish vs Italians with respect to task re-

lationship. For the statement “In order to have efficient work rela-
tionships it is often necessary to bypass the hierarchical line”, most
Swedish managers provided an affirmative answer. They did not see
any problem in going directly to the person who is most likely to have
the expertise. This was in contrast with the work philosophy of Ital-
ians who believed in the relationship oriented culture. They consid-
ered bypassing the hierarchy an act of in-subordination reflective of
a poorly designed organisation. Similarly, Laurent found that there
is little agreement across cultures on the nature of the managerial
role. For the statement "It is important for managers to have at hand
precise answers to most questions their subordinates may raise about
their work", the answers were completely divergent between the US
and French managers. While the US managers believed that the role
of a manager is problem-solving, the French managers believed that
the role of managers is to act like an expert. While a US manager is ex-

n o t e s
pected to facilitate problem-solving by helping the subordinates, the

French manager is required to provide readymade expert answers.
Apart from the impact of national cultures on organisational culture

in terms of organisational behaviour and management philosophies,
there is another important dimension in which cultural variations
can have a major impact. This pertains to business communication.
This is especially true for business people who move across cultures
and for cross-cultural business deals. The term culture shock is used
to indicate the phenomenon experienced by business persons when
they move to other countries on foreign assignments. The culture
prevailing in the new country might require too many adjustments
in a relatively short period of time that challenges the business peo-
ple frames of reference to such an extent that their sense of self may
come into question. The culture shock may also cause a psychological
S
disorientation resulting from of a breakdown in an expatriate's selec-
tive perception and effective interpretation systems. This is especially
so when even small things like nature of handshake denote different
things to different people.
IM
1. The cultural perspective that gives predominant important to

culture of the parent organisation is termed
a. Ethnocentricism
M
b. Polycentricism
c. Geocentricism
N
2. Global MNCs like McDonald's were successful because they

were able to replicate their time-tested home country culture
across their subsidiaries in different countries. (True/False)
3. Which of the following statements is correct with regard to
cultural differences?
a. Companies should focus on the best culture applicable for
all their businesses in different countries as globalisation
can, in future, lead to global cultural convergence resulting
in single universal corporate culture applicable across
several countries.
b. Companies should be sensitive to the culture of the
country they are operating in, explicitly recognising the
differences and valuing them, and incorporating them into
their corporate culture.
c. Organisational culture and national culture are different
and independent of each other. Companies should focus on
their organisational culture which is best suited for success
when making forays into different countries.

n o t e s
4. Which of the following statements best describes a cultural

difference that is relevant for global MNCs operating in
several national cultures?
a. Simple things like handshake and greetings in different
cultures can make or mar the success of business
communication.
b. Some countries have societies that value individualism
while others value collectivism.
c. In some countries, the role of the manager is seen as one
of expert while in others, a manager is only expected to
facilitate problem-solving.
d. All of the above
S
Activity
An OB researcher claims that technology is leading to a global con-

vergence of culture and hence organisations should focus on en-
IM
forcing the best organisational culture that can be applied across
different subsidiaries. He says though cultural values could be dif-
ferent in different countries, this does not imply that organisation-
al culture should also reflect them. For example, companies in the
USA have been successful because they follow values like individ-
ualism and achievement orientation, which they should not alter
M
when operating in other national cultures. Do you agree? Prepare

a presentation based on your findings.
12.3 HOFSTEDE CULTURAL DIMENSIONS

N
Geert Hofstede did a pioneering work on cultural value differences

across countries in the 1970s. He did a survey on work-related val-
ues with the IBM and its subsidiaries in 40 countries. Around 116,000
IBM employees participated in the survey. Considering that IBM has
a culture with strong organisational values, will the values of employ-
ees remain same across countries or will they be different? What kind
of impact national cultures would have on the culture of IBM across
different subsidiaries? If cultural values are different, on what dimen-
sions will they differ? Hofstede’s survey gave some breakthrough re-
sults. Even though all the employees worked within the same multina-
tional corporation, the survey found highly significant differences in
their behaviour and attitudes depending on the country in which the
subsidiary was located. He could summarise the differences in terms
of five value dimensions of national cultures. The fifth dimension was
added after a follow-up study. These five value dimensions are:
Power distance: This dimension pertains to the distribution of
power in institutions and organisations. If the power distribution
is unequal, it means power distance is high. On the other hand,

n o t e s
if the society values equality and opportunity resulting in lesser

degree of power inequality, then it means a lower power distance.
Individualism versus collectivism: Individualism refers to a cul-
ture where people prefer to act as individuals. This is in contrast to
the cultures where being a member of a group is more valued. Na-
tional cultures that value such group behaviour are characterised
by tight social frameworks. In collectivistic cultures, people expect
to protect and look after each other as members of a unified group.
Masculinity versus femininity: Masculinity is associated with the
values like achievement, power and control. Cultures that promote
such values are termed masculine. Femininity refers to a cultural
orientation that values preferences for life quality, modesty, and
interpersonal relationships.
Uncertainty avoidance: This dimension represents the extent to
S
which the members of a culture feel threatened by uncertain, un-
ambiguous and/or unstructured situations and try to avoid them.
A strong uncertainty rating of a national culture indicates that this
IM
national culture is characterised by strict beliefs and behavioural
codes and does not tolerate people and ideas that deviate from
these.
Long-term versus short-term orientation: In long-term orienta-
tion, people value thrift, persistence, and tradition. In contrast, in
the case of short-term orientation, people value the here and now
M
and accept change more readily.
Based on the above dimensions, Hofstede ranked different countries.

Many Asian countries were found to have a strong collectivist culture
that fosters a team-based approach to work. Unlike the employees in
N
countries like the USA, their counterparts in the Asian countries are
likely to consider the success of their team more important than per-
sonal success in their jobs. The countries with ratings at either end of
the scale in each of the dimensions are shown in Table 12.4:
TABLE 12.4: COUNTRIES WITH RATINGS BASED ON

HOFSTEDE CULTURAL DIMENSION
Cultural Dimension Lower Rating Higher Rating
Power distance Austria, Israel, New Malaysia, the Philippines,
Zealand Mexico
Individualism vs. United States, Great Guatemala, Venezuela,
Collectivism Britain, Australia Panama, Indonesia
Masculinity vs. Fem- Japan, Austria, Italy Sweden, Denmark, Nor-
ininity way
Uncertainty avoid- Singapore, Sweden, Greece, Japan, Portugal
ance Great Britain
Long-term vs. Short- Hong Kong, Japan, Pakistan, the Philippines,
term orientation South Korea Spain

n o t e s
12.3.1 GLOBE STUDY
Similar to Hofstede’s research, another research project was launched

in 1991 called Global Leadership and Organisational Behaviour Ef-
fectiveness (GLOBE). GLOBE was a transnational project with a re-
search team consisting of 170 researchers from around 60 countries.
The project recognises that there exist some complex relationships
between culture, leadership behaviour, organisational effectiveness,
social co-habitation and the economic success of societies in different
nations. The objective of the project was to study these relationships.
The study expanded the Hofstede five cultural dimensions into eight
dimensions, viz. institutional collectivism, in-group collectivism, un-
certainty avoidance, power distance, gender egalitarianism, asser-
tiveness, performance orientation and humane orientation. Similar to
Hofstede’s study, GLOBE researchers identified a cluster of regions
S
with affinity to specific cultural dimensions. The study also identified
both the values and practices in terms of not only identifying “how
people think things should be (values)” but also “how things actually
IM
are (practices)” in terms of various cultural dimensions.
GLOBE researchers started with the premise that different cultures

have different distinguishing attributes. Their objective was to identi-
fy these attributes so that these can be used to predict the most suit-
able, effective and acceptable organisational and leadership practices
within a culture. Based on the study results, the researchers were able
M
to reach a firm conclusion that the societal culture has a direct impact
on the organisational culture. Note that this was also one of the con-
clusions reached by Hofstede’s project. As per GLOBE study, lead-
ership acceptance is a function of interaction between culturally en-
N
dorsed implicit leadership theories (CLTs) and leadership attributes

and behaviours. Some leadership attributes may be incongruent with
CLTs while few others may not be so. Those leadership attributes that
are in consonance with CLTs will be more accepted than others. The
project identified six global CLT leadership dimensions, viz. charis-
matic/value-based leadership, team-oriented leadership, participative
leadership, human-oriented leadership, autonomous leadership and
self-protective leadership.
5. In Hofstede’s classification and definition of cultural

dimensions, lower power distance means the societies stress
equality and opportunity. (True/False)
6. Hofstede’s study found that national cultures have no
relevance to the IBM’s organisational culture in different
subsidiaries owing to its strong parent cultural values. (True/
False)

n o t e s
7. The cultural dimension of ________ refers to a cultural

orientation that values preferences for life quality, modesty
and interpersonal relationships in Hofstede’s six cultural
dimensions.
Activity
Hofstede ranked different countries based on the six dimensions he

identified through research. His research also allowed countries to
be analysed from the perspective of different dimensions like pow-
er distance vs individualism. Study the research conclusions and
prepare a report on “power distance vs individualism and uncer-
tainty avoidance” and the associated country clusters.
S
12.4 CULTURAL ADJUSTMENT
We have studied in the previous sections how different cultures can
IM
impact organisational culture and the implication of this impact for
global corporations. Regarding the three dimensions on which tradi-
tional HRM differs from IHRM, a study of cross-cultural variations
and their implications alone is not sufficient. The second dimension
on which IHRM differs is HR policies applicable to the international
settings of a global corporation. Given that HR policies are driven by
management principles and concepts from the field of organisational
M
behaviour, we now have to look whether the standard theories of or-

ganisational behaviour can be equally applied in different work cul-
tures across the world.
In this respect, it is important and interesting to note that organisa-

N
tional behaviour concepts are very closely related to organisational

culture. Since we have concluded from previous sections that national
and organisational culture can vary with significant implications for
organisational strategies, and since culture has a major bearing on OB
concepts, it is possible that the applicability of OB concepts across dif-
ferent cultures can also vary. In this section, we shall study whether
and what kind of adjustments to OB concepts will be required when
they are applied in different cultural settings. We will take each im-
portant OB concept and review its applicability.
12.4.1 MOTIVATION ACROSS CULTURES
Motivation is an important OB concept from the perspective of per-

formance of human resources. Since motivation is a psychological
process common to all human beings and since organisations all over
the world have similar goals, we may assume that the process of mo-
tivation could also be universal. This means a motivation theory that
is found valid in the USA should also be valid for companies in other
countries. However, this assumption may not necessarily be valid as

n o t e s
you would have gathered from the implications of national cultures

on organisations discussed in previous sections. While motivation is a
common process, the underlying needs and goals need not necessar-
ily be same across different cultures. A review of different motivation
theories and their applicability across different cultures is discussed
below.
Maslow’s Hierarchy of Needs Theory: This theory postulates
that employees have five basic needs that constitute a need hier-
archy. In this hierarchy, lower-level needs must be satisfied before
the fulfilment of higher-level needs. If an employee’s lower-level
needs are satisfied, these will seize to act as a motivator for him/
her. These insights can be used in designing HR policies pertain-
ing to motivation. Maslow’s theory has been empirically proved
well in countries like the USA. Will the HR policies of a compa-
ny in the USA be equally applicable for its subsidiary in Japan?
S
Do the workers in Japan have the same hierarchy of needs which
drive their motivational process? Researchers have conducted
several studies to find out the universal applicability of Maslow’s
IM
theory. Some important studies had shown that the needs and
their hierarchy are same across different cultures proving the va-
lidity of the theory across different cultures. However, other stud-
ies had shown that the need-satisfaction profile could be different
in different regions depending on the culture. For example, some
researchers have pointed out that in countries with collectivistic
cultures like Japan, social needs may acquire more importance
M
than the lower-level need of safety. This implies that MNCs should
tailor their HR policies taking into account the differences in the
relevant aspects of national cultures.
A research by Hofstede showed that the hierarchy of needs is very
N
much valid across countries. His research concludes that even

though there might be cultural differences, the needs relevant to
different job categories and levels offset the differences in culture.
In other words, as predicted by Maslow, senior executives across
companies of different cultures would value needs like self-actual-
isation and esteem higher than the lower-level needs which tend
to motivate more employees at lower job categories.
Herzberg Theory: According to this theory, the absence of what is
defined as hygiene factors would create dissatisfaction while their
presence need not give rise to job satisfaction. On the other hand,
the presence of motivational factors can lead to satisfaction. Inter-
national findings on Herzberg's theory largely support the theory
across different cultures.
Achievement Motivation Theory: This theory suggests that in-
dividuals can have a need to get ahead, to attain success and to
reach goals. International studies have provided a mixed result
with regard to this theory. For example, a study conducted in Cen-
tral European countries did not find a high need for achievement.

n o t e s
Hofstede's research analyses indicate that the countries that have

weak uncertainty index and high masculine rating tend to have
high achievement-oriented cultures where this theory is highly
relevant.
There are also another set of theories termed process theories of mo-
tivation (as against content theories discussed above). Researchers
have either found mixed results or did not find much support for the
universal applicability of these theories across different cultures.
Based on the above discussion, we can conclude that while major the-
ories of motivation have universal appeal across any culture, manag-
ers would still do well to tailor their motivational policies according to
cultural variances.
S
12.4.2 INTERPERSONAL BEHAVIOUR ACROSS CULTURES
Globalisation has made diversity a necessary cultural aspect in many

organisations. The need and presence of teams with people from
IM
different cultures have made management of multicultural teams
an important aspect of international human resource management.
Researchers say that organisations should not view teams with pro-
fessionals from diverse cultures as a problem but should recognise
their inherent potential for higher performance. Organisations should
develop a culture that values cultural differences among profession-
als and they should design appropriate organisational structure and
M
systems to facilitate the same. Cultural differences should be taken

cognizance of and suitable strategies should be devised for bridging
cultural gaps and maximising the value underlying such differences.
N
Cross-cultural interactions can take place at the individual level, at

the organisational level and during interactions external to the organ-
isation. These interactions can be classified into six areas, each level
resulting in two areas listed respectively as expatriate, multicultural
team, cross-country movements, global human resource system, rela-
tionships with external stakeholders and multilateral systems.
Expatriate refers to individual managers going to another country

to manage a business unit. Multicultural teams refer to cross-func-
tional teams formed to manage units across countries or for multi-
cultural projects. Interpersonal behaviour at this level should take
into account cultural differences, and organisational culture should
drive executives to understand and build on these differences. At the
organisational level involving cross-country professional movements
and global human resource systems, organisational systems and poli-
cies should guide interpersonal interactions in terms of resolving and
managing cultural difference for maximum performance. At the third
level of interpersonal behaviour external to the organisation, the im-
portance of cultural sensitivity will be much more pronounced as ex-
ecutives interact with people from different cultures external to the

n o t e s
organisation in terms of customers, suppliers, government organisa-

tions, etc. A strong understanding and appreciation of different cul-
tures and the impact they can make on business communications and
corporate strategies should guide such interactions.
12.4.3 LEADERSHIP ACROSS CULTURES
An important theory with regard to leadership is McGregor’s Theory

X and Y. These two leadership styles are based on different underly-
ing beliefs about subordinates. Theory X is fading out as more lead-
ership success has been found with Theory Y. However, depending
on the underlying cultural beliefs, different leadership styles could
be prevalent in different countries. Research has shown that even in
countries like China and Russia, the assumptions of Theory Y seem to
drive the leadership style.
S
Another important theory on leadership which is used for studying
leadership behaviour is based on observed leadership styles, viz. au-
thoritarian, paternalistic and participative. These leadership styles
IM
are found to be highly culture-dependent. In other words, you may
not find the same ratio of these leadership styles being practised in
two different countries like the USA and Japan. Cultural values seem
to largely influence the predominant leadership styles in different
countries. For example, in the erstwhile Communist countries, the
authoritarian leadership style seems to be more prevalent. The pa-
M
ternalistic leadership style is found to be prevalent in countries like

Latin America, China, Pakistan, Malaysia, India, Turkey, Mexico and
the United States. This is in accordance with the cultural values of
these countries. These countries highly respect hierarchical relations
and strong family and personal relationships. Participative leadership
N
is very popular in countries like the United States, Great Britain, and
other Anglo countries. Leading companies in the USA like General
Electric are known to prefer a participative leadership style. They en-
courage employees to use participative style that has a strong focus on
meeting commitments while also sharing the values of the firm.
In tune with the culture of Japan, the paternalistic approach of lead-

ership is found to be highly prevalent in that country. Research has
shown that while European managers seem to have less belief in the
capabilities and initiatives of their subordinates, Japanese managers
put greater faith in the leadership and initiative capabilities of their
subordinates. However, Japanese managers are found to be more eth-
nocentric than the US managers. They do not view themselves as in-
ternational managers when they are operating overseas and prefer to
stick to the Japanese way of doing things irrespective of the culture of
the host country. In contrast, research has shown that China, though
a collectivistic country like Japan, seems to be moving towards the
leadership styles which are similar to those of western managers.

n o t e s
Similar variations in preferred leadership style in accordance with na-

tional cultures are seen in the countries of Middle East (authoritarian)
and Latin America (combination of authoritarian and participative
styles).
The GLOBE project discussed in the previous section had explored

the relationship between leadership styles and cultural variations.
Based on the analysis, six culturally endorsed implicit leadership
styles have been found, which are charismatic/value-based, team-ori-
ented, participative, human-oriented, autonomous and self protective
leadership styles. The mapping of cultural values, countries and lead-
ership styles is shown in Table 12.5:
TABLE 12.5: MAPPING OF CULTURAL VALUES, COUNTRIES

AND LEADERSHIP STYLES
S
Cultural Dimension Countries Leadership Style
Institutional collec- Sweden, Nordic and Participative and self-pro-
tivism Scandinavian coun- tective
tries
IM
In-group collectivism The Philippines, East Charismatic/value-based
Asian countries leadership, team oriented
leadership
Gender egalitarian- Hungary, Russia, and Participative and charis-
ism Poland matic
Performance orien- Switzerland, Singa- Participative, charismatic
M
tation pore, Hong Kong

Future orientation Singapore Self-protective, hu-
man-oriented
Societal uncertainty Germany, Denmark, Team-oriented, Hu-
avoidance China mane-oriented and
N
self-protective
Societal humane Zambia, the Philip- Participative
orientation values pines, Ireland
Societal assertive The United States, Humane-oriented
values Germany, and Austria
Social power dis- Morocco, Nigeria, and Self-protective, hu-
tance values Argentina man-oriented
12.4.4 COMMUNICATING ACROSS CULTURES
Communication is often the most focused and known areas of OB when

it comes to the international dimension of OB. Researchers have iden-
tified different communication styles that are prevalent in different
cultures. Context plays a major role in distinguishing differences be-
tween different cultures. The term context refers to information that
surrounds a communication that conveys the message. For example,
in high-context societies like Japan and Arab countries, messages are
found to be often coded and implicit. In these societies, communica-
tion is done with an implicit understanding that it is the receiver’s job

n o t e s
to interpret the message by filtering through what is being conveyed.

This is in sharp contrast to low-context societies like USA and Canada
where explicit communication of messages is preferred. In practical
terms, this means when marketing and promotional messages are de-
signed in countries like Japan; it is ensured that they should convey
a sense of community in order to make the desirable impact success-
fully. Table 12.6 gives various communication verbal styles and the
cultures in which the particular communication styles are found:
TABLE 12.6: COMMUNICATION VERBAL STYLES

AND CULTURES
Verbal style Major variation Interaction focus Cultures in which
and content characteristic is
found
Indirect vs Indirect Implicit messages Collective,
S
Direct high-context
Direct Explicit messages Individualistic,
low-context
IM
Succinct vs Elaborate High quantity of Moderate uncer-
Elaborate talk tainty avoidance,
high-context
Exacting Moderate amount Low uncertain-
of talk ty avoidance,
low-context
Succinct Low amount of High uncertain-
M
talk ty avoidance,
high-context
Contextual vs Contextual Focus on the High power dis-
Personal speaker and role tance, collective,
high-context
N
Personal Focus on the Low power dis-

speaker and tance, individual-
personal relation- istic, low-context
ships
Affective vs Affective Process-oriented Collective,
Instrumental and receiver-fo- high-context
cused language
Instrumental Goal-oriented and Individualist,
sender-focused low-context
language
The above classification is an important finding as it can help under-

stand and facilitate communication between managers of different
cultures. For example, consider two countries Australia and Saudi
Arabia. These two countries follow entirely different sets of verbal
styles making communication between managers of these two cul-
tures difficult. So is the case of the managers from the USA and Japan.
This is explained in Table 12.7 – the verbal styles do not match in any
context for the pairs of countries listed in this table, making commu-
nication difficult.

n o t e s
TABLE 12.7: COMMUNICATION BETWEEN MANAGERS OF

DIFFERENT CULTURES
Country Indirect vs Elaborate vs Contextual Affective vs
Direct Succinct vs Personal Instrumental
Australia, Direct Exacting Personal Instrumental
Canada,
Denmark,
Sweden, US
Saudi Ara- Indirect Elaborate Contextual Affective
bia, Egypt
Japan, Ko- Indirect Succinct Contextual Affective
rea,
Researchers talk about “cultural distance” that separates interactions

of business people from different countries instead of geographical
S
distance. Though English may be the most or frequently used lan-
guage of international communication, MNCs prefer executives to be
fluent with more than one language. There are several cultural bar-
IM
riers that may prevent perfect business communication. Table 12.8
shows some examples of cultural variations with respect to language
and communication.
TABLE 12.8: EXAMPLES OF CULTURAL VARIATIONS WITH

RESPECT TO LANGUAGE AND COMMUNICATION
Cultural Variations
M
component
Language Different and opposing cultural messages are car-
ried by different languages with regard to values
and attitudes.
N
Some languages like those of the Indo-European

group require communicators to specify the tense
(past, present or future). This may not be the case
with other languages.
Direct style of communication is the tradition with
some cultures. They prefer explicit verbal commu-
nication. In contrast, some cultures prefer indirect
style of communication.
Some cultures encourage person-cantered com-
munication that frequently use “I” references. But
other cultures may prefer role-cantered communi-
cation that does not focus on the person communi-
cating.
Words, when translated, may have positive or neg-
ative connotations in different languages owing to
differences in the meaning implied.
Languages differ in the method of addressing
people

n o t e s
Cultural Variations
component
Non-Verbal Com- Gestures, facial expressions, and postures may car-
munication ry different meanings in different cultures.
Some cultures like those of China, Indonesia, and
India may proscribe touching another person while
communicating. But in Arab countries or in some
European countries, touch may be allowed with
less inhibition.
Numerous conventions govern handshakes. Rus-
sians prefer firm handshakes while the French
prefer gentle ones. Chinese prefer a handshake ac-
companied by a slight bow.
Bowing, smiles, head nodding, facial expressions,
S
etc. all can have different meanings in different cul-
tures. Some cultures prefer gestures to accompany
verbal communication (e.g. Italian, British, etc.)
while it may not matter much with others.
IM
Proxemics The way people use space as part of interpersonal
communication differs.
There are different ways in which people relate
to one another spatially depending on the culture
they belong to.
For example, Arabs and Europeans differ on dis-
M
tance – Arabs stand very close when conversing.
Apart from the language used, related interpretations and non-verbal

communications involved including gestures and customs, there are
also perceptual barriers that may prevent effective communication.
N
Companies have learned that failure to understand home-country

perceptions can result in carefully designed marketing and advertis-
ing programmes going awry. When brewing company Coors launched
its product with the slogan, “Turn it Loose”, it dismayed the Spanish
who thought it would cause intestinal problems. There are numerous
incidences of advertising blunders made by MNCs due to their inabil-
ity to understand perception-based barriers related to culture.
12.4.5 ENVIRONMENT ACROSS CULTURES
While managing international operations, it is important to under-

stand and respond to different environments prevailing in different
cultures. Organisations should take into consideration economic,
political and legal environments apart from the ethical environment
across cultures. Some important factors to be considered in relation to
these environments are given below.
Economic environment: Globalisation has led to economic inte-
gration both at the national and organisational levels. Several eco-
nomic and trade partnerships between countries through trade

n o t e s
agreements like NAFTA, CAFTA, and TPP can pose significant

challenges as well as provide opportunities to global MNCs. Sim-
ilarly, economic growth rates, shifting demographics and chang-
ing market environment across different nations and cultures can
also present a significant challenge to the managements of global
organisations. For example, depending on economic systems pre-
vailing in countries, viz. market, and command or mixed, the busi-
ness environment and culture could vary which can have major
implications for organisational design and management approach
adopted in different cultures.
Political environment: Political systems of countries are driven by
their respective national cultures. Social and cultural values like
individualism and collectivism can have direct implications for po-
litical systems in different countries. Political ideologies followed
in different countries like democracy, totalitarianism and social-
S
ism can have significance for organisational culture and business
strategies.
Ethical environment: Global corporations have ethical obliga-
IM
tions and responsibility in the countries they operate. Ethical con-
cerns like environmental pollution, human rights, cheap labour,
worker conditions, etc., can make or mar major opportunities for
global corporations. Ethical differences and dilemmas can arise
from conflicts between ethical standards of different cultures and
the corporate code on business ethics. MNCs generally devise and
M
adhere to a code of ethical conduct while doing business around

the world. However, they may also be required to make some
adjustments to respond to local norms and values. Such cultur-
al adjustments should be carefully evaluated and adopted to en-
sure that they do not deviate from the accepted code of corporate
N
ethics. Similarly, it has become necessary for global corporations

to explicitly demonstrate their commitment to corporate social
responsibility and sustainability goals. These may again need to
be carefully developed and implemented in accordance with local
cultural values.
12.4.6 MULTICULTURAL TEAMS
Globalisation has made diverse and multicultural workforce a reality.

While global and multinational firms always have to deal with multi-
cultural teams, this is increasingly becoming a feature even in domes-
tic firms. While the general perception is that multicultural teams are
difficult to manage, researchers have found that a properly managed
multicultural team can be made much more productive than a ho-
mogeneous team. Owing to their very nature of diversity, multicultur-
al teams have a higher potential for achieving their goals effectively.
However, if not managed properly, such teams can lead to problems
and loss of productivity. Table 12.9 shows the advantages and disad-
vantages of multicultural teams.

n o t e s
TABLE 12.9: ADVANTAGES AND DISADVANTAGES OF MUL-

TICULTURAL TEAMS
Advantages Disadvantages
Enhanced creativity Stereotyping
Different and varied Ambiguity
perspectives Lack of cohesion
Better ideas Mistrust
Less groupthink Interpersonal problems
Higher focus Miscommunication
Better problem definitions Perception-related problems
Greater alternatives Higher level of stress
Better solutions
S
Members of a multicultural team may find functioning in such a team
challenging due to cultural differences which may make understand-
ing of issues and their resolution problematic. Problems like mis-
IM
communication, misperception, and misinterpretation resulting out
of cultural diversity may prevent the team from optimal functioning.
Diversity may also increase ambiguity and complexity in team pro-
cesses.
Multicultural teams can be effective when the nature of the team task
is innovative that requires creative solutions and wider perspectives.
M
Such teams can make major contributions to the given goal when the
cultural differences of individual members are recognised, valued
and respected. In contrast, multicultural teams can become ineffec-
tive when the nature of task involved is routine, members are selected
based on ethnicity, ethnocentrism and cultural dominance drive team
N
processes, and cultural differences are not valued.
The team processes should explicitly recognise cultural diversity and

incorporate appropriate techniques to manage diversity. During the
team formation process, efforts should be made towards building
trust among members and improving team cohesion. At this stage,
cultural similarities should be emphasised and conscious efforts to
understand cultural differences should be made. As the team moves
towards the problem-solving phase, cultural differences should be
used as strength to generate more ideas and perspectives. Cultural
differences among members should be valued, respected and lever-
aged. In the final phase, conscious efforts towards consensus building
should be initiated keeping in mind the additional difficulty that may
arise due to the diverse nature of the team. As mentioned before, the
potential for higher performance can be increased by following the
best practices viz. task-based team selection, recognising and valu-
ing differences, creating mutual respect, facilitating greater feedback
mechanism and efficient communication, establishing a group vision,
ensuring team cohesion, avoiding cultural dominance, and encourag-
ing wider group participation.

n o t e s
8. Research shows that content theories of motivation like

Maslow’s hierarchy of needs theory can generally be
considered universally applicable across different cultures.
(True/False)
9. When dealing with interpersonal behaviours in a multicultural
setting, it is advisable to promote a unique organisational
culture based on similarities. (True/False)
10. With respect to OB theories on leadership, which of the
following statements is correct?
a. Cultural values largely influence the predominant
leadership styles in different national cultures.
S
b. In western countries like the USA, authoritarian leadership
is highly preferred in tune with the value of individualism.
c. National culture could be different from leadership styles
followed in different national cultures.
IM
d. None of the above.

11. The reason for difficulties in communication between
professionals from countries like the USA and Japan can be
attributed to the following:
a. Verbal styles do not match in any context between the US
M
and Japan.
b. Verbal styles do not matter in business communication.
c. Different countries follow different verbal styles and
interaction focus.
N
d. Both (a) and (c)

12. Which of the following statements is true with regard to
multicultural teams?
a. Multicultural teams are difficult to manage due to cultural
diversity.
b. Multicultural teams can lead to productivity loss if not
properly managed.
c. Multicultural teams have potential to provide superior
performance compared to homogeneous teams.
13. While managing multicultural teams, the best way to tackle
cultural differences is to
a. Emphasise the similarities between cultures and ignore
the differences

n o t e s
b. Recognise the differences and value them

c. Leverage the differences and ignore the similarities
Activity
Perceptual barriers can lead to major problems in business commu-

nications when dealing with multiple cultures. Research and pro-
vide three examples of incidences where global MNCs have failed
to take cognizance of cultural barriers in their marketing strategies.
TECHNOLOGY AND INTERNATIONAL

12.5
BUSINESS
S
The technological environment has been changing rapidly during the
last few decades. This is facilitating developing countries to leapfrog
IM
into the 21st century. New innovations and products are creating new
markets that are global in nature.
Researchers point out that technological development can become

key determinants of cultural changes. While leading to a convergence
of global culture, this development provides means for promotion and
diffusion of culture. As different cultures adopt new technologies,
M
the result could either be one of cultural convergence or divergence.

Sometimes adoption of new technologies lead to cultural convergence
but it is also possible for cultures to use technology to maintain or
even further accentuate cultural differences.
N
Companies, who can leverage their understanding of different coun-

tries and their cultures and have an idea how technology is shaping
their future, can acquire a long-term competitive advantage.
14. Technology can be a great driver for global convergence of

national cultures. (True/False)
Activity
Some OB researchers believe that technology is enabling the global

convergence of cultures, and a detailed study of individual cultures
and related strategies will not be of much use in future. Do you
agree? Present your viewpoints in a report with regard to why or
why not do you consider that multicultural differences will contin-
ue or cease to matter.

n o t e s
12.6 SUMMARY
Companies with global operations need to go beyond traditional
HRM concepts in order to effectively manage their global oper-
ations. International HRM has additional three dimensions, viz.
cross-cultural dimension, international HRM policies and interna-
tional industrial relations.
Since IHRM is largely differentiated by cross-cultural aspects, the
field of organisational behaviour in its international perspective
becomes crucial.
The trend of globalisation has made domestic companies to evolve
from multi-domestic to multinational to transnational or global
firms as their focus expands beyond domestic markets. This evolu-
tion is closely related to the importance and sensitivity they attach
S
to cultural differences
Cultural perspectives evolve from ethnocentricism to polycentri-
cism to geocentricism as companies transform into global corpo-
rations.
IM
Culture plays an important role in organisational strategies. As
companies move beyond their countries, they need to understand
cultural variations across countries starting from basic social val-
ues to leadership styles.
National cultures can vary in every basic aspect of cultural dimen-
M
sions and these differences could be of great importance to corpo-

rate strategies of MNCs.
One of the major and path-breaking researches on multicultural
variations was carried out by Hofstede who could identify six cul-
N
tural dimensions based on which different cultures can be differ-

entiated.
Hofstede's research showed that national cultures can have a ma-
jor impact on organisational cultures even for companies like IBM
who are founded on strong and unique foundational values. An-
other study was done by GLOBE researchers who expanded Hof-
stede's research conclusions.
It is important for HR managers to understand the significance of
national cultures when implementing HR policies. These HR pol-
icies should take into account the international aspects of OB. OB
theories and concepts should be evaluated from an international
perspective for their universal applicability.
Content theories of motivation like Maslow’s theory have been
found to have universal applicability though the need profile could
vary between countries. Process theories of motivation were found
to attract mixed results or no support.

n o t e s
Leadership styles are found to be different in different countries.

Leadership styles dominant in a country can be predicted based
on the cultural values espoused by it. GLOBE researchers could
classify leadership styles applicable for different cultural dimen-
sions adopted by different countries.
Communication is the most visible differentiator in terms of the
impact of cross-cultural variations on OB concepts. Communica-
tion barriers increase in international transactions due to cultural
variations starting from the use of language, verbal style, non-ver-
bal communication, and perception-based on cultural values, etc.
Multicultural teams have become a normal feature with global cor-
porations. These teams are difficult to manage but offer higher po-
tential for superior performance if properly managed.
Technological developments can lead to global convergence of cul-
S
tures. Technology can be used to reinforce cultural values lead-
ing to divergence of cultures or to promote convergence towards
a global culture. Organisations should take cognizance of such im-
IM
plications of technology in their international strategies.
key words
Collectivism: A social orientation or cultural value where the

emphasis is on the good of the group, community or society
rather than the good of the individual.
M
Content theories: The type of motivation theories that are based

on what actuates, energises or initiates the worker behaviour.
Expatriate: An employee who is working and temporarily re-
N
siding in a foreign country.

Host country: The country where an MNC is operating and has
established a foreign subsidiary.
Individualism: The extent to which the individual initiative
and caring for oneself is preferred by society.
Low-context communication: A type of communication style
where players tend to communicate more to the point and ver-
balise all important information.
Paternalistic: The manner of managing or governing individ-
uals, groups, or businesses that characterises a fatherly and
sometimes intrusive attitude that may restrict the freedom and
responsibilities of the dependents or subordinates in their sup-
posed larger interest.
Power distance: The degree of expectation of members of a so-
ciety with regard to equal distribution of power within the soci-
ety’s institutions and organisations.

n o t e s
Values: Principles and standards of behaviour that are based on

the judgement of what is important in one’s life and that shapes
one’s priorities in life.

1. As the companies expand globally, what kind of challenges
they face with regard to organisational culture? Explain how
companies tend to evolve and give an example of an MNC with
operations across different nations.
2. What are the cultural dimensions identified by Hofstede that
separate different cultures? Explain with examples. What are
the conclusions reached by Hofstede’s study?
3. Discuss the applicability of motivation theories in different
S
national cultures.
4. Explain the relevance and applicability of different leadership
styles across different cultures.
IM
5. Discuss the problems associated with communication in a
multicultural setting. Give examples of cultural variations
in language and non-verbal communication. Write a note on
different verbal styles applicable in different countries.
6. What are the important points to consider when managing
M
multicultural teams?
12.8 ANSWERS AND HINTS

N
ANSWERS FOR SELF ASSESSMENT QUESTIONS

Trends in International 1. a. Ethnocentricism
Business
2. False
3. b. Companies should be sensitive
to the culture of the country they
are operating in, explicitly recog-
nising the differences and valuing
them, and incorporating them into
their corporate culture.
4. d. All of the above
Hofstede Cultural Di- 5. True
mensions
6. False
7. Femininity
Cultural Adjustment 8. True

n o t e s

9. False
10. a. Cultural values largely influence
the predominant leadership styles
in different national cultures.
11. d. Both (a) and (c)
12. d. All of the above.
13. b. Recognise the differences and
value them
Technology and 14. True
Interpersonal Business
HINTS FOR DESCRIPTIVE QUESTIONS
S
1. Companies have to evolve in terms of their cultural sensitivity as
global revenues become increasingly dominant. They should take
into account cultural similarities and differences, and cultural
behaviours prevalent in the countries where they operate. Refer
IM
to Section 12.2 Trends in International Business.
2. Power distance, individualism versus collectivism, masculinity
versus femininity, uncertainty avoidance and long-term versus
short-term orientation are five cultural dimensions, identified by
Hofstede. These dimensions can be used to differentiate cultures
of different nations. Refer to Section 12.3 Hofstede’s Cultural
M
Dimensions.
3. Content theories of motivation are found to have universal
applicability while this is not the case with process theories
as per some research studies. Refer to Section 12.4 Cultural
N
Adjustment.
4. Different leadership styles are found to be prevalent in different
nations in accordance with their cultural values. Refer to Section
12.4 Cultural Adjustment.
5. Communication barriers become more pronounced in a
multicultural setting. Examples are verbal styles, nonverbal
communication, barriers to perception due to cultural differences,
etc. Refer to Section 12.4 Cultural Adjustment.
6. Multicultural teams, though difficult to manage, have the
potential for providing superior performance. Refer to Section
12.4 Cultural Adjustment.
SUGGESTED READINGS
Hitt, M. A., Miller, C. C., & Colella, A. (2006). Organizational behav-
ior a strategic approach. John Wiley & Sons.

n o t e s
Ivancevich, J. M., Matteson, M. T., & Konopaske, R. (1990). Organi-

zational behavior and management.
Luthans, F., Luthans, B. C., & Luthans, K. W. (2015). Organization-
al behavior: An evidence-based approach. IAP.
Robbins, S. P. (2009). Organizational Behavior, 13/E. Pearson Edu-
cation India.
Weinberg, A., Cooper, C., Bond, F., & Sutherland, V. (2010). Orga-
nizational stress management: A strategic approach. Palgrave Mac-
millan.
E-REFERENCES
Case Study: Henry Ford Health System’s Executive Diversity Recruit-
ment Strategy. (2017). Hhnmag.com. Retrieved 24 November 2017,
S
from http://www.hhnmag.com/articles/8515-henry-ford-health-sys-
tems-executive-diversity-recruitment-strategy
Hofstede's Cultural Dimensions: Understanding Different Coun-
IM
tries. (2017). Mindtools.com. Retrieved 24 November 2017, from
https://www.mindtools.com/pages/article/newLDR_66.htm
Managing Multicultural Teams. (2017). Harvard Business Review.
Retrieved 24 November 2017, from https://hbr.org/2006/11/manag-
ing-multicultural-teams
National Culture – Hofstede Insights. (2017). Hofstede Insights. Re-
M
trieved 24 November 2017, from https://www.hofstede-insights.

com/models/national-culture/
N

N
M
IM
S
C h
13 a p t e r
CASE STUDIES
CONTENTS
S
Case Study 1 The Organisation-Employee Relations at Wegmans
Case Study 2 Behaviour of a CMD
Case Study 3 It is All About Personality
Case Study 4
IM
Interpersonal Relationships and Perception at Beta Inc.
Case Study 5 Learning Needed by Vice Chancellor
Case Study 6 Reinforcement at Sears Department Store
Case Study 7 Employee Motivation in Starbucks
Case Study 8 Indra Nooyi’s “Performance with Purpose”
Case Study 9 Mumbai Dabbawalas
M
Case Study 10 Workplace Conflict due to Promotion

Case Study 11 Departmental Conflict in an Organisation
Case Study 12 Struggle for Power at Apple Inc.
N

Case study 1
n o t e s
THE ORGANISATION-EMPLOYEE
RELATIONS AT WEGMANS
This Case Study discusses about the organisation-employee

relations at Wegmans Food Markets, Inc. It is with respect to
Chapter 1 of the book.
Wegmans Food Markets, Inc. is a family-owned American re-

gional supermarket chain, with headquarters in Gates, New
York. Daniel Wegman, its present Chief Executive Officer
(CEO), is the grandson of the organisation’s cofounder. Dan-
iel’s daughter, Colleen Wegman, is the president of the com-
pany.
By the 1970s, Wegmans had established 40,000 square feet
S
of stores to introduce the “mall in a store” concept. These
stores dealt in gift cards, floral products, and pharmaceuti-
cal departments, which remained open for 24 hours. Apart
IM from this, Wegmans became the third chain in the US to use
electronic cash registers by installing an optical scanner sys-
tem in 1972. In 1974, Wegmans acquired Bilt-Rite Chase-Pit-
kin, Inc., a retail operation that dealt in hardware, millwork,
garden and landscape materials, and building supplies. We-
gmans expanded this chain by building Chase-Pitkin stores
adjacent to the existing Wegmans stores.
M
However, the organisation faced a number of challenges as

well. The organisation faced opposition for its use of electron-
ic scanner pricing that violated the state’s item pricing laws.
Wegmans argued that item pricing increased consumer costs,
N
because of the expense of pricing each item and continued to

stand by its electronic scanner pricing, because it was more
accurate than using price stickers. The organisation won the
Attorney General’s lawsuit, and the item pricing law eventu-
ally expired in 1991.
Wegmans also faced protests against its campaign for use of

plastic bags instead of paper bags. Wegmans argued that pa-
per bags did not disintegrate in the dumps faster than plastic,
and production of plastic was energy and resource efficient.
The organisation eventually allowed customers to decide the
baggage they preferred. Wegmans established several dumps
for customers to deposit plastic bags for recycling and began
using paper bags made from recycled paper.

Case study 1: THE ORGANISATION-EMPLOYEE RELATIONS AT WEGMANS 295
Case study 1
n o t e s
Wegmans received the Food Network’s award for being America’s

top supermarket, in 2007. Wegmans has been consistently ranked
among the top 10 companies in the Fortune magazine’s list of ‘100
best Companies to Work For’.
The magazine’s ranking came as a surprise to others in the gro-

cery industry, because Wegmans is categorised by low profit
margins, under paying and tiresome jobs, and arduous custom-
er interactions. In spite of cumbersome and extensive customer
interactions, modest salaries, etc., Wegmans has a low-employee
turnover rate. It has a turnover rate of only 8% for their 35,000
employees (compared to the industry average, which is closer to
50%). Wegmans’ employees practice job sharing and a compact
work-week. Wegmans offers telecommuting to some of its employ-
ees. Wegmans has formed a work culture that values employees
S
and their contributions. The organisation’s motto, “Employees
first, Customers second”, supports the belief that when employ-
ees are cared for, they express concern towards the customers
IM
they serve.
On being ranked the third best organisation in the US to work

for in 2008, Wegmans’ CEO Daniel Wegman quoted, “Every one
of our employees and customers should stand up and take a bow,
because together they make Wegmans a special place”.
M
Wegmans has constantly introduced new ideas in the fairly tradi-

tional food industry. For example, in 1996, Wegmans launched a
website with details on health and recipes, along with other help-
ful information. Customers often refer to it as Wegmans “Food
Theatre”. With the organic food industry earning a business of
N
about $17 billion, Wegmans started its own 50-acre organic re-
search farm. Wegmans organic farm aims to develop best practic-
es in health and efficiency, share them with hundreds of farmers
supplying fresh fruits and vegetables to Wegmans. Wegmans has
demonstrated that being socially and environmentally responsi-
ble helps in increasing employee trust, and subsequent growth,
making it a win–win story for the organisation, stakeholders, and
the communities where stores are located.

Case study 1
n o t e s
questions
1. What are the various reasons for Wegmans’ low employee

turnover and its being ranked as one of the best
organisations to work for, by Fortune magazine?
(Hint: The reasons are: Wegmans’ job sharing, compact
work-week, telecommuting facilities for employees,
favourable work culture and the organisation’s motto,
“Employees first, Customers second”.)
2. What were the various opportunities and challenges faced
by Wegmans Food Markets, Inc.?
(Hint: The initiative of the “mall in a store” concept,
acquisition of Bilt-Rite Chase-Pitkin Inc., use of electronic
cash registers presented Wegmans with opportunities.
S
The challenges faced were protests against its electronic
scanner pricing and use of plastic bags.)
3. Do you think valuing employees leads to organisational
IM
growth and success?
(Hint: Wegmans has demonstrated that being socially
and environmentally responsible helps in increasing
employee trust, and subsequent growth, making it a
win–win story for the organisation, stakeholders, and the
communities where stores are located.)
M
N

Case study 2
n o t e s
BEHAVIOUR OF A CMD
This Case Study talks about the individual behaviour and ethical
values followed at Nagesh Iron and Steel Company Ltd. It is with
respect to Chapter 2 of the book.
Nagesh Samuel was a 42 year old qualified engineer from the US.
His core values were Indian, but he preferred the working style
of the US, governing people and keeping a tight hold on them. He
believed in his own opinions and took quick decisions based on
them only.
Nagesh Samuel established Nagesh Iron and Steel Company Ltd.

in 1980 with its headquarters in Delhi. He became the Chairman
and Managing Director (CMD) of the organisation. The organ-
S
isation had four plants, which were situated in a 400-acre area
at Bilaspur, Madhya Pradesh. Its total workforce was 3000, com-
prising 1200 workers on the company’s pay roll, while the rest of
them were affiliated to the Indian National Trade Union Congress
IM
(INTUC).
The literacy rate was low among most workers. As a result, local
anti-social elements often influenced the activities of the union.
Nagesh Samuel used to operate his Bilaspur factory from his Del-
hi head office with the support of a President, a Vice President
M
(VP) for Commercial and Administration, and three more VPs in

finance, marketing, and technical fields, respectively. At Bilaspur,
various General Managers (GMs) were appointed for the respec-
tive plants and divisions. Nagesh Samuel occasionally visited his
N
factory at Bilaspur.
The CMD did not have a defined procedure for recruitment of se-
nior officials. This led to nepotism, so that senior positions at the
organisation were offered to relatives of the CMD. The relation-
ship between the management of the organisation and its union
were bitter since its incorporation.
Though the market where Nagesh Iron and Steel Company Ltd.
ventured was domestic, it faced competition from Jindal, Nova,
and Special Steels. Thus, the CMD was involved in the daily ac-
tivities of the organisation with the President reporting directly
to him. The per-day working capital of the organisation was 30
lakhs. Thus, the CMD wanted that production should continue at
any cost. The union members took undue advantage of this ap-
proach of the CMD and often threatened to go on strike. They also
became aggressive while interacting with the management.

Case study 2
n o t e s
In addition, the union started making some minor demands from

the management in the form of a fresh charter of demands pre-
sented to the VP of Commercial and Administration, Pratap Ver-
ma. To resolve the matter, Verma, along with other managers,
held meetings with the union members to build a harmonious re-
lationship with them.
On 2nd December 1996, the President of the organisation received

a fax from the CMD, including information about the immediate
termination of 12 employees, including the GM, Quality control,
and other officers. When the President called the CMD and asked
the reason for the same, he replied that these people had close
links with the union leaders.
The President of the company held an immediate meeting with
S
Pratap Verma, VP (Technical) Manager, and the HR Manager. In
the meeting, it was decided that all the 12 employees need to be
terminated but gradually and in phases. This is because a sud-
IM
den termination of all of them may result in unfavourable con-
sequences for the organization, providing an opportunity to the
union to create a new issue.
This opinion was presented to the CMD, but he did not agree with
it and asked for an immediate termination of all of them. As a re-
sult, the president called the 12 employees one by one and asked
M
for their resignations. The reasons given were lack of confidence

and other similar reasons. Some of the employees resigned im-
mediately, while some asked for time to think. Later, all of these
employees met the union leaders on the evening of the same day
to discuss the issue.
N
When the news of this termination spread in the company, an en-

vironment of discontent and tension formed. Consequently, on
3rd December 1996, at 6.30 A.M., all the workers went on a strike
at the request of the union leaders. All the workers came out of
the factory to the main gate. In addition, the night-shift workers
were not allowed to start their machines. Thus, half of the plant
was running without any attendant and the remaining was closed
at 8.30 A.M. Moreover, the staff members collaborated with the
labour union, and the charter of demands was revised and pre-
sented to the management, stating the reinstatement of the ter-
minated employees.
The management refused to accept the demands of the revised

charter. Consequently, the situation became violent, and tele-
phone and electricity supply were disconnected. Nagesh Samuel
arrived from Delhi. The police was called to handle the situation
for the protection of executives.

Case study 2: BEHAVIOUR OF A CMD 299
Case study 2
n o t e s
Only six managers were representing the management, and they

were locked up for twenty four hours inside the plant without
food and water. The local management, the police, and the union
leaders held a meeting to provide food and water to the officers
inside the plant from their houses. This strike continued for the
next eight days, and even after several rounds of negotiations, no
results were obtained.
Later, the local management, with the help of advocates and advi-
sors, submitted an application to the labour court. The court de-
clared the strike as an illegal action. However, the strike was still
not stopped, and the union members stopped listening and inter-
acting with the management. Thus, the local management and
the CMD (who was in direct conversation with the union leaders)
became powerless.
S
As the strike had started in the first week of the month, salaries
were not distributed. Thus, restlessness spread among the work-
ers as well as the management. They had a meeting and reached
IM
the conclusion that the strike might be called off within a day or
two if the terminated employees were reinstated. However, when
this was communicated to the CMD, he refused even though the
strike was causing him a financial loss of 300-400 crores.
Ultimately, on 9th December 1996, the CMD himself reinstated all

M
the terminated employees and accepted the charter of demands.

Within the next six months, the President was called back to the
Delhi office, the HR Manager and the VP (Technical) had resigned,
and the VP (Commercial and Administration) was transferred to
another unit of Nagesh Iron and Steel Company Ltd. at Jabalpur.
N

Case study 2
n o t e s
questions
1. Describe the behaviour of the CMD of Nagesh Iron and

Steel Company Ltd. Do you think his behaviour has any
impact on his business? Provide answers based on the
above case study.
(Hint: The CMD takes decisions based on his own
opinions and perceptions. In addition, he is rigid and
does not easily accept advice or suggestions. Thus, he
had to face the strike that took place at his Bilaspur plant.
If he had accepted the opinion of the President and the
managers to terminate the employees one by one and
with a valid reason, the chances of a strike would have
been minimum.)
S
2. Had you been in the place of the CMD, what would have
been your decision?
IM
(Hint: In my opinion, the reasons for the differences
among the union and the management should be identified
and accordingly steps should be taken to fill these gaps.
The behaviour of the 12 employees should be changed in
a manner that they start supporting the management.)
3. What should be the ability-job fit for the post of a CMD?
M
(Hint: A CMD should have the ability of inductive and

deductive reasoning, perceptual speed, and verbal
comprehension.)
N

Case study 3
n o t e s
It is All About Personality
This Case Study talks about various personality traits for success in
business. It is with respect to Chapter 3 of the book.
For people who have the personality traits of self-motivation,

adaptability, and emotional stability, work is highly enjoyable.
Such people do not mind a highly demanding work environment
and enjoy competition. People who are self-motivated, flexible,
and emotionally stable, work hard and for longer hours. Such
people not only survive situations, such as downsizing, but also
thrive on it. In contrast, people, who are given to anxiety and are
not self-reliant and flexible, get burned out and stressed. For ex-
ample, in Apple Computers, development teams are well known
for wearing T-shirts proclaiming, “90 Hours a Week and Loving it!”
S
IM
M
N
Take the example of entrepreneur Wayne Huizenga. He is a self-

made billionaire. He started a garbage collection business, confi-
dent that his firm will eventually outperform other garbage com-
panies and get their businesses. He had high confidence in his
own ability, was self-motivated, perseverant, and had the ability
to lead others. Very soon, his plans started working. By the end of
1984, the market value of his firm’s stocks was USD 3 billion. Hui-
zenga’s next move was into blockbuster entertainment. He was
confident that the movie rental business was the business of the
future, and he was proved right again. By the time he sold out to
Viacom in 1994, Huizenga had already put another billion dollars
in his pocket.
One of Huizenga’s most important personality traits is his uncan-

ny ability of picking fragmented industry, ripe for consolidation,
and creating a company that dominates the industry quickly. Hui-

Case study 3
n o t e s
zenga is one of the richest men in the world. However, money is

not very important to him. He does not even take any salary from
AutoNation. The one-to-one competition between himself and his
rivals thrills him. That is the reason that when most people at
his age consider retirement, Huizenga functions on and promis-
es to remain one of the most successful entrepreneurs into the
next century.
The same can be said about the personality traits of Steve Wynn of
Mirage Resorts. Mirage Resorts was listed as one of Fortune’s 10
most admired firms in America. This position was a reflection of
Wynn’s own personality. Wynn is highly optimistic, and he wants
his employees to be optimistic as well. His main strategy is to keep
everyone happy. If anyone is not happy, Wynn’s employees must
fix it. He has told his people, “If you see a hotel guest with the tini-
S
est frown on her face, do not ask a supervisor, take care of it. Erase
the charge, send the dinner back, do not charge for the room”. In
addition, he is a witty story teller, who can mimic anyone’s accent.
IM
Also, he possesses a taste for good things. He is also very intuitive,
which helps him in making business decisions.
questions
1. What motivates employees of high-tech companies, such

M
as Apple, to put long hours at work?

(Hint: The motivational level of employees depends on
personality traits.)
2. Why is Steve Wynn able to keep employees happy in
N
Mirage Resorts?
(Hint: People with certain personality traits, such as
confidence and the urge to keep others happy, are able to
better manage employees.)

Case study 4
n o t e s
INTERPERSONAL RELATIONSHIPS AND

PERCEPTION AT BETA INC.
This Case Study discusses about the issues at Beta Inc., owing to
the change in attitude caused due to errors of perception. It is with
respect to Chapter 4 of the book.
Beta Inc. is an automobile parts manufacturer, established in the

year 1972. The Vice-President (Engineering Department) of the
organisation Prateek Sharma is an IIT graduate, who joined the
organisation at the age of 26 years. He had hopes of taking the
organisation to greater heights. However, Beta Inc. is currently
palpable in tension. The Managing Director (MD) of the organisa-
tion, Tapan Sen, had initially been quite appreciative of Sharma’s
contribution towards the organisation. However, currently, both
S
Sen and Sharma are at conflict and do not seem to hold consen-
sus on any matter.
IM
Tapan took over the organisation from his father after his sudden
death. Back in the 1980s, the organisation depended on tradition-
al methods and faced little competition. However, with liberalisa-
tion in 1991, the organisation started facing stiff competition and
came across several challenges. The only business mantra to save
the organisation could be ‘to change or perish’. Tapan decided to
change, and in this attempt, took several initiatives such as chang-
M
es in technology, work culture, systems, and procedures. Under

Tapan’ leadership, Beta Inc. grew gradually and made consistent
profits. In the year 2001, Tapan decided to make his organisation
public, and in this way, made high profits for the organisation as
N
well as its shareholders.
Back in the year 1990, Tapan hired Prateek, who proved to be an

asset to the organisation. With the demise of the senior engineer,
Prateek was promoted as the Senior Engineer of Beta Inc. Cur-
rently, Prateek is the Vice-President (engineering department) of
the organisation.
Earlier, Prateek and Tapan had very few interactions, and their
conversations were limited. However, with the new roles, both had
to interact more often and discuss important issues. Eventually,
Prateek developed a dislike for his boss with the ever increasing
interactions. Moreover, Prateek perceived that Tapan did not like
him either. This was because of their differences in opinion about
the organisation’s existing advertising and promotional activities.
While Tapan believed that advertising is necessary to increase

sales, Prateek disagreed and considered that the quality of the
product would speak for itself. Prateek advised Tapan to cut down

Case study 4
n o t e s
the expenditure on advertising and focus on improving the prod-

uct quality. This was not taken well by Tapan, who became further
disappointed in Prateek’s strong conviction about product quality
over investing on advertising campaigns. Tapan considered Pra-
teek’s opinions to be illogical and immature.
Tapan clearly dictated to all his employees that being the owner
of the organisation, he had complete authority to take major de-
cisions. He continued with the advertising campaigns and paid
no heed to Prateek’s suggestions. This demotivated Prateek, who
started avoiding any discussion with Tapan on any matter. Prateek
continued to focus on his work but soon found it uncomfortable
to continue working in the department, which involved frequent
interventions by Tapan. On the other hand, Tapan became con-
cerned about Prateek’s ignorance towards improving the product
S
and the organisation’s image and only focussed on improving the
technology.
IM
Both of them agreed to meet regarding these issues to curtail
the growing tensions between them. However, both of them have
already made up their minds about not being able to work with
each other.
questions
M
1. In your opinion, how do Prateek and Tapan perceive each

other and themselves?
(Hint: Prateek developed a dislike for his boss with the
ever increasing interactions. Moreover, Prateek perceived
N
that Tapan did not like him either. Tapan considered

Prateek’s opinions to be illogical and immature.)
2. If you were in Tapan’s place, what would you have
discussed in the meeting to improve things?
(Hint: Tapan should listen to Prateek’s interpretation
about him. Tapan should let him know what he thinks
of Prateek. This way, the misconceptions can be cleared.
Moreover, Tapan should consider including Prateek’s
suggestions, clarify to him why a certain point was
discarded, and interact amiably.)

Case study 5
n o t e s
LEARNING NEEDED BY VICE CHANCELLOR
This Case Study shows that learning is required at every stage and
level. It is with respect to Chapter 5 of the book.
In a Central University of the North-Eastern region of India, a

new Vice Chancellor is appointed, who has his own mission and
vision for the University. From the first day of his work, he started
thinking and working on achieving his mission and vision. To put
his ideas into effect, he formed an informal advisory committee,
comprising 20 professors of the University. This committee needs
to monitor the activities taking place in the University and check
whether they are done in the right manner and direction. A mo-
dus operandi was also formed for the advisory committee by the
Vice Chancellor.
S
The Vice Chancellor held a meeting with the advisory committee
on every second and fourth Saturday of the month at 3.00 P.M. In
IM
these meetings, the Vice Chancellor informed and instructed mem-
bers of the committee about any changes in the policies and proce-
dures of the government and the University Grants Commission,
which can affect their work. In addition, he discussed their priori-
ties and assignments. Moreover, the problems and concerns of the
members are also discussed and resolved in the meetings.
M
When these meetings began, classes had not started. Thus, ini-
tially, all the members were able to reach on time. However, when
classes started, the professors started getting busy. The time for
starting the meeting gradually shifted from 3.00 P.M. to 4.00 P.M.
After a few weeks, when classes started in full swing, the meeting
N
would not even start at 4.00 P.M., because all the members were
not present. This disturbed the Vice Chancellor, and he was un-
able to understand the reason for the same.
The Vice Chancellor was unaware of various facts related to the

University. Some of these were:
Missinga single class in the semester system costed a lot, and
most professors, who were members of the committee, were
working as Deans of Schools as well as Heads of Departments.
Transport was not available after 5.00 P.M. from the University
Campus to the city, which was 20 kms away from the campus.
Thus, after the meeting, the professors faced difficulties while
returning home.
The Vice Chancellor was only concerned with holding meetings

on time. However, he could not force any of the members to at-
tend the meeting and reach on time, because the meetings were

Case study 5
n o t e s
informal and voluntary. In addition, the members in the meeting

were not less qualified than the Vice Chancellor, and the meetings
do not come under their official duties or jobs. Thus, they did not
take these meetings seriously.
questions
1. What do you think the Vice Chancellor should do in the

present case?
(Hint: The Vice Chancellor should first understand the
system of the University and the various factors that can
affect his work. Based on this understanding, he should
take required action. He should plan the meetings at a
time when the professors are not busy, i.e., when classes
S
are not being held. Also, the timing of the meeting should
be scheduled such that the meeting gets over before
5.00 P.M. In addition, the Vice Chancellor can motivate
IM the members to attend the meeting by introducing some
reward or recognition system.)
2. In terms of the reinforcement theory, explain what is
happening in the University?
(Hint: The professors are giving negative reinforcement
to the Vice Chancellor by not attending the meeting.)
M
N

Case study 6
n o t e s
Reinforcement at Sears Department Store
This Case Study discusses about the application of reinforcement in

organisations. It is with respect to Chapter 5 of the book.
In 2006, branch manager at Sears Department Store in Altoona,

Pennsylvania held a meeting with all the employees of the store
and introduced a new credit card application. In the meeting, he
explained the benefits of the credit card for the customers and the
store. Moreover, he told the employees that he wanted to be the
number one store for credit card applications. After the meeting,
the credit card applications had increased in the store. However,
this continued only for a short period of a few weeks and then
there was a decline in credit card applications.
S
When the manager observed this, he called a meeting of all the
employees to discuss the issue. However, in this meeting, he had
shifted his focus from store benefits to the employee benefits.
IM
During the meeting, he found that employees were reluctant to
promote the credit cards because most of the customers declined
to take the card. In addition, employees were not getting any ben-
efits on promoting these cards.
To overcome the situation, he revised the job description of the

employees. Further, he developed a set of questions that employ-
M
ees were to ask customers while promoting the credit card. Some
of these questions were:
“Do you have a Sears credit card with you?

N
“Would you like to open a Sears credit card today to save ten dollars
off on your purchase?”
The manager believed that if the customers were offered ten

dollars off on their current purchase, they might be tempted to
buy the credit card. Also, this will further increase the number of
credit card applications at the store.
Apart from this, the manager started offering all employees an

extra two dollars along with their salary for each credit card appli-
cation. To get two dollars per credit card application, the employ-
ees had to submit five credit card applications per month. If the
number of applications is below five, they would not receive any
money. After ninety days, the total number of credit card applica-
tions would be counted and the employee who had submitted the
maximum number of applications would get recognition by hav-
ing his/her picture hung on the bulletin board in the staff lounge.
In addition, he would also receive a twenty five dollar Sears gift
card and his name would be announced at the morning meetings.

Case study 6
n o t e s
On the other hand, if an employee was unable to obtain five credit

card applications per month for ninety days, he/she was required
to attend a training for raising his/her credit card applications
numbers. If the employee after attending the training is still not
able to increase his/her credit card applications in the next ninety
days, the employee would be suspended for three days. Further, if
the employee still did not show improvement, then he/she would
be terminated. However, employees were to be provided adequate
time and training for improving their credit card applications.
This reinforcement enabled the manager at Sears Department

Store to raise the rate of credit card applications. Consequently,
the store became the number one store for credit card applica-
tions in the state of Pennsylvania.
S
questions
1. Which elements of reinforcement are used in the above

IM
case study?
(Hint: Positive reinforcement and punishment are used
in the case study by the manager.)
2. Were the employees happy with this type of reinforcement?
(Hint: Employees were happy because they are earning
M
extra money and recognition out of this reinforcement.

Also, they are getting adequate time and training for
increasing their number of credit card applications.)
N

Case study 7
n o t e s
EMPLOYEE MOTIVATION IN STARBUCKS
This Case Study discusses about the employee motivational practic-

es followed at Starbucks. It is with respect to Chapter 6 of the book.
S
IM
Increased globalisation has intensified competition in different
industries. This is especially true for the service industry with
similar products. In the service industry, the first-line staff is in
direct contact with customers and understands the needs of the
customer. It is essential for companies to train, motivate, and re-
ward these employees to sustain the best quality.
M
Starbucks Corporation, the largest chain of retail coffee shops in

the world, sells coffee beans and various types of coffee and tea
drinks. It owns more than 4000 outlets in the world. In addition,
it is one of the fastest growing corporations in the US. The rea-
N
sons behind the popularity and success of Starbucks are not only
quality of their coffee but also customer service and a cosy envi-
ronment. The competitive advantages of the company are quality,
service, ambiance, and culture.
In the service industry, it is always a challenge to maintain qual-

ity. However, the task of managing quality is easier in Starbucks,
because it has a highly motivated work force. The main motive
of the workers is to create a free atmosphere in which customers
feel comfortable. In addition, workers work for their personal sat-
isfaction as well as the satisfaction of the customers. Thus, they
provide efficient service to customers. The staff feels that satisfied
customers are a reward of their work.
One of the challenges faced by Starbucks is keeping the work-

force motivated. The company provides different benefits to their
employees to take care of their needs. Thus, the staff works, keep-
ing in mind that customer satisfaction is their main motive.

Case study 7
n o t e s
The company establishes a comfortable environment for people

to socialise, which attracts consumers of all ages to the restaurant.
However, one of the most important factors behind the success of
Starbucks is a highly-motivated workforce. According to Michelli
(2006), the turnover rate in Starbucks is 65% for employees and
25% for managers as compared to 150% to 400% and 50% respec-
tively in other retail chains in the US. Starbucks has one of the
best business models for employee motivation, customer satisfac-
tion, and cooperation and teamwork.
Employees need to be adequately motivated to maintain their

passion for work. Let us see the main aspects of motivation for
employees in Starbucks.
Equal treatment
S
All staff in Starbucks are called partners and are treated equal-
ly. The supervisors for each branch are also called partners. To
narrow the gap between managers and other employees, manag-
IM
ers also co-work with the basic-level staff in the front line. Such
equal treatment motivates employees at all levels to be a part of
the Starbucks team.
Listening to employees
Starbucks has a very organised communication channel for its

M
employees. Labours of the employees are given high importance.

Managers decide the work schedule and breaks for workers ac-
cording to their requirements. Also, there are weekly interviews
to check the needs of employees. In addition, a special survey
N
called ‘Partner View Survey’ is conducted every two years.
Good welfare measures
All levels of employees, including the informal personnel, are

offered many welfare policies such as commodities discounts,
medical insurance, stock dividends, and vacations. Owing to the
stock dividends offered, employees are motivated to increase the
sales of the company to earn more profits. In addition, partners
who have been working over 20 hours in a week are entitled to
extra benefits.
Team work
Team work helps in constructing a small social structure within

the organisation, which helps employees socialise and share their
skills with one another. Every employee plays an important role
in team work. Therefore, anyone’s need for getting acquainted
with other team members is fulfilled at Starbucks.

Case study 7: EMPLOYEE MOTIVATION IN STARBUCKS 311
Case study 7
n o t e s
In addition to the benefits, several motives drive the behaviour of

the staff such as the need to satisfy customers, need of belonging
to a team, and the need for creating a cosy and free environment.
questions
1. What made it possible for Starbucks to build an efficient

team that meets customer needs effectively?
(Hint: Starbucks takes a number of initiatives to motivate
its employees. A motivated workforce can fulfil the needs
of employees in an effective manner.)
2. Link motives with employee behaviour in Starbucks.
(Hint: Motives drive the behaviour of the staff. In
S
Starbucks, the motives of the employees are in accordance
to the goals of the company.)
IM
M
N

N
M
IM
S
Case study 8
n o t e s
INDRA NOOYI’S “PERFORMANCE WITH PURPOSE”
This Case Study discusses about the leadership and futuristic think-
ing of PepsiCo Inc.’s Chief Executive Officer (CEO), Indra Nooyi. It
is with respect to Chapter 7 of the book.
PepsiCo Inc. is an American multinational food and beverage cor-

poration that manufactures, markets, and distributes grain-based
snack foods, beverages, and other products. The organisation was
formed in 1965 through the merger of Pepsi-Cola Company and
Frito-Lay, Inc.
Indra Nooyi is the current CEO of PepsiCo Inc. She was born in
Chennai, India and graduated from Yale’s School of Management,
USA. She has worked with organisations such as the Boston Con-
S
sulting Group Inc., Motorola Inc., and ABB Inc. She is considered
one of the top leaders in the business world today.
PepsiCo faced the issue of declining demands of its soda beverag-

IM
es and snacks owing to the growing nutritional awareness among
consumers and changes in consumer preferences and tastes. The
organisation needed to come up with a new strategy to innovate
and market its products effectively.
Indra Nooyi’s leadership

M
Indra Nooyi gave a clear vision for PepsiCo, framed under the
term, “Performance with Purpose”, which strives to balance “the
profit motive with making healthier snacks, striving for a net-ze-
ro impact on the environment, and taking care of your workforce”.
N
Nooyi has been instrumental in Pepsi’s acquisition of the food

conglomerate Quaker Oats Company and the juice maker Trop-
icana Products Inc., both of which have health-based product
lines. Nooyi has reduced Pepsi’s reliance on high-sugar, high-cal-
orie beverages, and trans-fats from all its products.
Environmentally, Nooyi promoted the use of biodegradable packag-

ing for PepsiCo products. Nooyi has been constantly following the
footsteps of her competitor, Coke, and belives in evolving through
innovation. She recently announced the launch of the “Spire”,
which is a digital, create-your-own beverage fountain. The Spire
is intended to offer direct competition to Coke’s similar Freestyle
machine, which has already been on the market for four years.
Indra Nooyi uses her communication skills to conquer her subor-

dinates and competitors. She listens to her employees’ suggestions
and incorporates them if they are relevant. She is also believed to
take prompt decisions and work until a task is accomplished.

Case study 8
n o t e s
Nooyi quoted in ‘A Learning CEO Can Power Through Tough

Times: Indra Nooyi’, Forbes India, “As a CEO, I am finding that I
have to become a learning CEO. I have to go to school all the time,
because I am learning new skills that I need to run this company
and I am realising that I am not equipped to just coast, I have to
constantly renew my skills”.
Nooyi’s teammates are often challenged by her high performance

standards and expectation of excellence. For example, Nooyi re-
quired an alternative to the expensive palm oil and kept urging
her team mates until they found the alternative in rice bran oil.
Nooyi is liked and respected, because she is democratic in her
approach and listens to her subordinates’ ideas and suggestions.
She is a role model to other business leaders around the world.
S
However, Nooyi is believed to maintain a perfect work-person-
al life balance and emphasises the same for her employees. She
stated in the ‘Sun Tzu for Women: The Art of War for Winning in
IM
Business’, “At the end of the day, do not forget that you are a person,
do not forget you are a mother, do not forget you are a wife, do not
forget you are a daughter. Because in the end, no matter how much
money you make and how much success you create, What you are
left is family, friends and faith”.
M
questions
1. What style of leadership does Indra Nooyi follow?

(Hint: Nooyi is liked and respected, because she
is democratic in her approach and listens to her
N
subordinates’ ideas and suggestions.)

2. Do you think Nooyi’s initiative ‘Performance with Purpose’
reflects her revolutionary and futuristic thinking?
(Hint: PepsiCo faces the issue of declining demands
of its soda beverages and snacks owing to the growing
nutritional awareness among consumers, and such a
strategy is an excellent attempt to sustain its growth.)
3. Describe the changes incorporated by Nooyi that have
helped PepsiCo to grow stronger in the market.
(Hint: Acquisition of the food conglomerate, Quaker Oats
Company, and the juice maker, Tropicana Products Inc.,
launch of the “Spire”, effective communication skills.)

Case study 9
n o t e s
MUMBAI DABBAWALAS
This Case Study shows how teams work efficiently. It is with respect
to Chapter 8 of the book.
Mumbai Dabbawalas provide lunch delivery services in Mum-

bai, India. Dabbawalas have been in this business for the past
100 years. Today, most of the working population of Mumbai avail
the services of Dabbawalas to have access to home-cooked food.
Mumbai Dabbawalas got a Six Sigma rating for their teamwork
and efficiency from Forbes Global Magazine in 1998.
The organizational structure of Dabbawalas is simple. Each em-

ployee is a shareholder and an entrepreneur. The organization
follows a flat structure of business hierarchy with only three lay-
S
ers for better communication. Other than the top-level manage-
ment, the middle layer is the governing body, while the bottom
layer contains people involved in transportation of lunch boxes.
IM
The Dabbawalas are divided into groups of 15 to 25, and each
group is supervised by 4 experienced supervisors. These supervi-
sors are familiar with the colour coding that is used in the complex
logistic process. Their role is to sort the lunch boxes, maintain re-
ceipts and payments, acquire new customers, solve disputes, and
train junior employees.
M
The entire system depends on teamwork and meticulous timing.

Tiffin boxes are collected from homes between 7.00 A.M. and 9.00
A.M. and taken to the nearest railway station. At various interme-
diary stations, they are hauled onto platforms and sorted out for
N
area-wise distribution, so that a single tiffin box changes hands 3

to 4 times in the course of its daily journey. At Mumbai’s city sta-
tions, the last link in the chain, a final relay of Dabbawalas reach
out to the tiffin owners. After lunch hour is over, the whole pro-
cess moves into reverse, and the tiffin boxes return to their sub-
urban homes by 6.00 P.M.
To better understand the complex sorting process, let us take an

example. At Vile Parle Station, there are 4 groups of Dabbawalas.
Each has 20 members, and each member services 40 customers.
That makes 3,200 tiffin boxes in all. These 3,200 boxes are col-
lected by 9.00 A.M. After reaching the station, they are sorted ac-
cording to their destinations by 10.00 A.M., when the ‘Dabbawala
Special’ train arrives.
The railway provides sorting areas on platforms as well as special

compartments on trains travelling south between 10.00 A.M. and
11.30 A.M.

Case study 9
n o t e s
During the journey, the Dabbawalas regroup according to the

number of boxes to be delivered in a particular area, and not ac-
cording to the groups they actually belong to. If 150 tiffin boxes
are to be delivered in the Grant Road Station area, then 4 peo-
ple are assigned to that station, keeping in mind that 1 person
can carry no more than 35-40 boxes. During the earlier sorting
process, each Dabbawala would have concentrated on locating
only those 40 boxes under his charge, wherever they come from,
and this specialization makes the entire system efficient and er-
ror-free. Typically, it takes about 10 to 15 minutes to search, as-
semble, and arrange 40 tiffin boxes onto a crate, and by 12.30 P.M.
they are delivered to the offices.
questions
S
1. Why is it said that the Mumbai Dabbawalas are known for
their teamwork and not their group work?
IM
(Hint: Mumbai Dabbawalas form a formal group that
comes together from different backgrounds to accomplish
a common and defined goal of delivering the right tiffin
box at the right place and time. In addition, these groups
focus on collective goals instead of individual objectives.
Thus, they are called teams.)
M
2. What is the unique feature of the teamwork of Mumbai

Dabbawalas?
(Hint: The Dabbawalas are result-oriented, that is, they
focus on completing their task in the given time. In
N
addition, they trust that their team members will reach

their destinations on the right time and place, with the
right tiffin boxes.)

Case study 10
n o t e s
WORKPLACE CONFLICT DUE TO PROMOTION
This Case Study discusses about workplace conflict due to promo-

tion in a media company. It is with respect to Chapter 9 of the book.
S
IM
Both Jasmine and Ryan have been working alongside for many
years in a local magazine. After the exit of the existing manager,
M
Ryan is promoted to the post of the manager. However, he still

shares the office with his previous team. Conflict arises when
Ryan decides to introduce a new policy, which is not acceptable to
the rest of the team, because the policy will increase their already
heavy workload.
N
Jasmine and Ryan have been close friends and professional work
colleagues for many years. Thus, it is challenging for the man-
agement to identify the ‘spark’ that ignited the disagreement
between the two and to find out the most appropriate course of
action to restore their previous friendship. The General Manag-
er approaches both Jasmine and Ryan to find a solution for the
conflict. Following is the position of Jasmine as communicated by
her to the General Manager:
“I have been working for the magazine for a long time. Thus, I have
been a witness to the initiatives that worked well and the ones that
caused problems. I was sure that the new policy would fail, because
it is going to increase the workload of each individual. I am aware
of the fact the Ryan took the consent of higher management before
implementing the policy. However, I feel the decision should not
have been taken in the first place. I strongly disagree with the new
policy. I think Ryan, as a person, lacks self-confidence and he be-

Case study 10
n o t e s
came overly strict with the team members to show that he is the boss.
Also, team meetings conducted by Ryan are a waste of time, because
he takes a while to get started and gets distracted very easily. This
adds to the mounting frustration of the team”.
Following is the account of Ryan as communicated to the General

Manager: “I am very happy to work for the organisation, because it
has given due credit to my work ethics and performance. The pro-
motion boosted my confidence, and I am looking forward to manag-
ing my colleagues with whom I previously worked. However, I think
there is a split in the team dynamic. As I was a member of this team,
half of the team continues to treat me in the same way as they treat-
ed me earlier. The other half is somewhat manageable and listens to
me. However, I find it difficult to work with Jasmine, because she
is jealous of my promotion. She thinks she deserved the promotion
S
more than me. She thinks so because she has more experience than
me in the organisation. Thus, she wants to sabotage my attempts to
become a successful manager. Also, she does not make any remark
IM
in the team meetings”.
Both Jasmine and Ryan are skilled employees, who are assets
to the company. The company does not wish to lose any of the
employees. If they can work together and apply their energy to
achieve the goals of the company, they can bring forth wonderful
results. Thus, it is a difficult situation for the company to resolve
M
the conflict. Healthy competition between the two can be good for
the company, because they can try to put their energy to outper-
form each other. This will help the company in achieving its goals.
N
questions
1. Suppose you are the General Manager in the organisation.

Find out the cause of conflict and suggest a solution.
(Hint: A conflict can be resolved with the help of a number
of techniques, such as mediation, debate, and appointing
a devil`s advocate.)
2. Can you use the conflict as an opportunity for the
company?
(Hint: The conflict can be turned into a functional conflict).

Case study 11
n o t e s
DEPARTMENTAL CONFLICT IN AN ORGANISATION
This Case Study discusses about workplace conflict within a depart-

ment in a company. It is with respect to Chapter 9 of the book.
The case deals with a departmental conflict involving a team of 12

people. The relationship between the team leader and the depart-
ment manager was so damaged that they always spoke to each
other through third parties. The entire department was split into
two warring factions: one group with the team leader and the oth-
er group supporting the department manager. Only a few team
members remained neutral. There was clearly a case of favourit-
ism with respect to approval of leave, training, and allowances. In
addition, no performance appraisal took place in 2 years. Two of
S
the staff members had been on stress leave for the last 5 weeks.
The senior management investigated and discussed the prob-

lem. However, there was no satisfactory solution to the problem.
IM
Therefore, an independent conflict resolution agency was hired
to conduct a conference to try and get into the root of the prob-
lem, develop an action plan to remedy the situation, and over-
see the implementation of the plan. Before conducting the con-
ference, the agency conducted face-to-face, voluntary interviews
with each of the 12 team members. The objective was to identify
the key underlying issues and the nature of conflict among the
M
team members. The interviews revealed that all the 12 members

were involved in the conflict to some extent.
The attendance at the conference of the agency was voluntary.

The participants were invited, however, they were not compelled
N
to attend the conference. Still, all the 12 members chose to attend

the day-long conference. Each member showed full cooperation
by providing comments and perspectives. It was evident that var-
ious reasons for the conflict were the leave-approval procedures,
which resulted in one member being sanctioned significantly
more leaves than others. Other issues included the manager’s
style of interacting with the department members and malicious
e-mails and gossip.
By the end of the conference, a detailed agreement was signed by

each member of the team. The agreement included a commitment
to provide individual staff needs analysis, training, and coaching;
a commitment that workplace policies would be adhered to; and
a feedback would be collected at regular intervals. In addition, it
was decided that the responsibilities of the department manag-
er, team leader, and the team members would be formalised, and
performance would be measured at regular intervals.

Case study 11
n o t e s
After the confirmation, the agreed-upon steps were implemented

for the next 3 months. Individual needs assessment and training
sessions were conducted regularly. In addition, one-to-one feed-
back sessions were conducted once a month. Workplace policies
were revised and agreed upon by all members of the team.
The impact was felt immediately. No one took stress leaves in the
6 months followed by the conference, and employee turnover in
the team also declined. This resulted in annual savings of more
than USD 160,000 to the company. The involvement of the senior
management was no more required in conflict resolution.
questions
Questions:
S
1. What type of conflict occurred in the department?
Elaborate.
IM
(Hint: The three main types of conflicts are inter-group
conflict, inter-personal conflict, and intra-personal
conflict)
2. Critically evaluate the conflict resolution approach of the
agency.
(Hint: The effectiveness of conflict resolution is reflected
M
in the changed behaviour of the team.)

N

Case study 12
n o t e s
STRUGGLE FOR POWER AT APPLE INC.
This Case Study discusses about the power play and politics that
went around at Apple Inc., leading to the dismissal of Steve Jobs. It
is with respect to Chapter 10 of the book.
On November 27, 2007, Steve Jobs, Co-founder, Chairman and ex-
CEO of Apple Inc. was named the most powerful person in the
corporate world. Jobs transformed five different sectors name-
ly, computers, Hollywood movies, music, retailing, and wireless
phones. Apple II, which was introduced in the year 1977, set the
standard for other personal computers. He funded the organisa-
tion Pixar, which is an American computer animation film stu-
dio based in Emeryville, California. The iPod, iTunes, and iPhone
created by Jobs have revolutionised the way people listen to mu-
S
sic, pay for and receive various types of digital content, and ex-
pect from their mobile phones. Steve Jobs exhibited all of the five
types of power: expert, legitimate, reward, referent, and coercive.
IM
His vision and strong will aided him to succeed in his endeavours.
But the same determination that helped him succeed has a shad-
ier angle as well. Steve’s autocracy and determination for perfec-
tion may be tagged as being slightly tyrannical.
What others said about Steve Jobs
Roderick Kramer, the William R. Kimball Professor of Organisa-
M
tional Behaviour refers to Jobs as one of the ‘great intimidators’.

Kramer says, ‘forcefulness is helpful when tackling large, intrac-
table problems’. Referring to Job he says, “Jobs has been known
to berate people to the point of tears, but at the same time, he
N
inspires astounding effort and creativity from his people.”

Andy Hertzfeld, member of the original Apple Macintosh devel-
opment team says, “Jobs imbues employees with a “messianic
zeal” (fervent or passionate) and can make them feel that they’re
working on the greatest product in the world. But at the same
time, Jobs is very hard to please, so Apple employees work hard
to win his approval.” Hertzfeld describes Jobs’ leadership style
as “a confounding mélange of a charismatic rhetorical style, an
indomitable will, and an eagerness to bend any fact to fit the pur-
pose at hand. The influence works even when you’re aware of it,
and it works even on “enemies”. Hertzfeld says, “No other high-
tech impresario could walk into the annual sales meeting of one
of his fiercest rivals and get a standing ovation,” referring to the
applaud Jobs got in 2002 from Intel Corporation, partner of Ap-
ple’s arch rival, Microsoft (Wintel: Windows + Intel).
Another co-worker of Steve Jobs, Cordell Ratzlaff who worked
with him on OS X for 18 months speaks about Jobs as, “He has
the ability to pull the best out of people,” says who worked closely
with Jobs. I learned a tremendous amount from him.”

Case study 12
n o t e s
Bud Tribble, Vice President of Software Technology, Apple Inc.

refers to Jobs and says, “In his (Jobs) presence, reality is mallea-
ble. He can convince anyone of practically anything.”
Politics and power at Apple Inc.
Steve Jobs was expelled from his own organisation in 1987 by

John Sculley, the man who Jobs had hired to help him run it. In
1984, to enhance the potentiality of Apple, John Sculley the presi-
dent of Pepsi Cola was hired as the CEO. Soon, tension developed
between Steve Jobs and John Sculley. Steve was extremely con-
fused of Sculley’s modus operandi and planned to take back the
control by sending Sculley on a business trip to China. However,
Sculley realised Jobs’ intentions and on his return back from the
trip, Sculley requested the Board of Directors (BOD) at Apple Inc.
S
to vote against Steve for his power play. Steve was expelled from
Apple but hired back in the year 1997. Andy Hertzfeld stated “Ap-
ple never recovered from losing Steve. Steve was the heart and
IM
soul and driving force. It would be quite a different place today.
They lost their soul.”
Later, Steve established NeXT Computers with the determina-

tion to devastate the operations and brand name of the Apple.
Steve developed an outstanding operating system, NeXTStep,
widely adored by contemporary technocrats. However, NeXT
M
failed to outgrow Apple Inc. In the year 1996, Apple announced

to buy NeXT for $429 million. This deal marked the come-back of
Jobs to the organisation he co-founded.
Steve Jobs died on October 5, 2011 after a long battle with pan-
N
creatic cancer, leaving behind a legacy of pioneering efforts in the

fields of entertainment, from the Mac to Pixar to the iPad.
questions
1. Discuss how power play by Steve led to his dismissal as

Chairman of Apple Inc.
(Hint: Tension developed between Steve Jobs and John
Sculley. Steve was not pleased by Scully’s modus operandi
and planned to take back the control by sending Sculley
on a business trip to China. However, Scully gained the
trust of the Board of Directors who voted against Steve)
2. List the characteristics of Steve Jobs and his interpersonal
relationship with his colleagues and employees.
(Hint: The things that Steve’s colleagues and employees
said about him highlight his qualities and leadership
characteristics.)

Organisational BehaviourJan18 IVgCWRqzCT PDF

Uploaded by

Copyright:

Available Formats

Organisational BehaviourJan18 IVgCWRqzCT PDF

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Organisational BehaviourJan18 IVgCWRqzCT PDF

Uploaded by

Copyright:

Available Formats

How did Steve Jobs' power play lead to his dismissal from Apple Inc.?

How did Steve Jobs' power play lead to his dismissal from Apple Inc.?

What are some of the characteristics of Steve Jobs' leadership style according to his colleagues?

What are some of the characteristics of Steve Jobs' leadership style according to his colleagues?

Organisational Behaviour

Dean TOC Reviewer

Associate Dean Content Reviewer

Author : Mr. Paramjit S. Lamba

Reviewed By: Ms. Divya Vyas & Ms. Pooja Basu

NMIMS Global Access - School for Continuing Education

CHAPTER NO. CHAPTER NAME PAGE NO.

1 Introduction to Organisational Behaviour 1

2 Understanding Individual Behaviour 29

7 Leadership and People Skills 135

8 Groups and Teams 161

9 Stress Management 187

10 Conflict Management 217

11 Power and Politics in Organisations 237

12 International Organisational Behaviour 261

13 Case Studies 293

NMIMS Global Access - School for Continuing Education

Introduction to Behaviour in Organisations: Introduction to Organisational Behaviour, Definition

Understanding Individual Behaviour: Introduction, Biographical Attributes, Ability, Values,

Learning: The Concept of Learning, Theories of Learning, Learning through Reinforcement,

A Glance at Organisational Reward System, How to Administer Reinforcement? The Impact of

Leadership: Introduction, Behavioural Theories, Trait Theories, Contingency Theories, Current

NMIMS Global Access - School for Continuing Education

Conflict Management: Understanding Conflict, Functional & Dysfunctional Conflicts, Types of

International Organisational Behaviour: Trends in International Business, Cultural Differences

NMIMS Global Access - School for Continuing Education

INTRODUCTION TO ORGANISATIONAL BEHAVIOUR

1.3.1 Classical Approach

NMIMS Global Access - School for Continuing Education

THE PRIMARY CARE CRISIS – APPLYING

The medical sector in the U.S. is considered to be facing a serious

Studies show that almost half of all medical students indicate

fer PCP drop to about 15%. The Association of American Medical

WHY PRIMARY CARE LOSING ITS SHEEN?

Researchers have suggested several reasons to explain the recent

NMIMS Global Access - School for Continuing Education

cialists has been improving due to increased prevalence of con-

CAN WE APPLY AN ORGANISATIONAL BEHAVIOUR

Organisation behaviour is a field of management science that

An important theory of motivation propounded by OB theorists

is the Two Factor Hygiene Theory. Frederick Herzberg proposed

APPLYING HERZBERG’S THEORY TO PRIMARY CARE

As per the OB theory propounded by Herzberg, the attractiveness

NMIMS Global Access - School for Continuing Education

on hygiene factors. This itself can be an important insight as the

Rather than focusing only on increasing financial remuneration

Two important solutions that can be suggested in this respect, in

1. Increasing the supervisory role of physicians in a

Herzberg’s theory calls for expanding the scope of problems that

NMIMS Global Access - School for Continuing Education

greater bandwidth to offer up to 50% to 805 of appointments to

The application of Herzberg’s Two Factor Theory suggests that

NMIMS Global Access - School for Continuing Education

After completing this chapter, you will be able to:

of human behaviour is important in organisations. Several concepts

The social and psychological factors that affected the labour

Identificationof major objectives helps in the clarification of pur-

Bureaucratic Management: This theory considers the organisa-

Administrative Management: This theory was proposed by Hen-