BPA - 208 Organisational Behaviour Module

About this Degree in Public Administration (PA) 208 Organisational Behaviour
(OB) Module This Organizational Behaviour (OB) Module has been produced by the
National Institute of Public Administration (NIPA). All modules produced by the
Institute are structured in the same way, as outlined below.
How this Organisational Behaviour (OB) Module is structured.
The Module overview

The module overview gives you a general introduction to the module. Information
contained in the module overview will help you determine:
 What you can expect from the course.

 How much time you will need to invest to complete the course.
The overview also provides guidance on:
 Study skills
 Where to get help
 Assignments and assessments
 Activity icons
 Units
We strongly recommend that you read the overview carefully before starting your
study.
The Module content

The Module is broken down into 8 units. Each unit comprises:
 An introduction to the unit content
 Unit outcomes
 New terminology
 Core content of the unit
 A unit summary
 Learning activities
 Assignments and/or assessments, as applicable
For those interested in learning more on this subject, we provide you with a list of
additional resources at the end of the module; these may be books, articles or web sites.
National Institute of Public Administration – Outreach Programmes Division 1
Your comments
After completing this module, we would appreciate it if you would take a few moments to
give us your feedback on any aspect of this course. Your feedback might include
comments on:
 Content and structure.
 Reading materials and resources.
 Assignments and Assessments.
 Duration.
 Support (assigned tutors, technical help, etc.)
Your constructive feedback will help us to improve and enhance this module.
Welcome to this Organisational Behaviour Module

This Organisational Behaviour Module gives an in-depth knowledge of the contents or
topics outlined in the module. It aims to provide an understanding of the practical issues
associated with organizational behaviour and how these relate to effective management
practice.
Module Learning Outcomes
Upon completion of this Module, you will be able to:
1. Explain how the study of Organization Behaviour can influence
organisational effectiveness.
2. Analyse the foundations that influence individual behaviour and their
impact on performance.
3. Discuss group and interpersonal behaviour and its impact on organisational
effectiveness.
4. Explain the influence of power, conflict on the organisation
5. Evaluate motivation theories and how they can be applied to influence
organisational performance.
6. Evaluate leadership theories and how they can be applied to influence
organisational performance.
7. Describe the organisational processes and their impact.
8. Discuss the influences of emerging challenges in organisational behaviour.
Units in this module
This module is divided in eight (8) units as outlined below:-
Unit 1: Introduction to Organizational Behaviour (OB)

Unit 2: Foundations of Individual Behaviour
Unit 3: Group and Interpersonal Behaviour
Unit 4: Conflict, Power and politics
Unit 5: Motivation theories
Unit 6: Leadership theories
Unit 7 Organisational Processes
Unit 8: Emerging Challenges for Organisational Behaviour

Time Frame Expected duration of this Module is one semester (6) months
Formal study time required is 2 weeks at the beginning of the
semester
Study skills Self-study time recommended is 4 hours per week

As an adult learner your approach to learning will be different to that
from your school days: you will choose what you want to study, you
will have professional and/or personal motivation for doing so and you
will most likely be fitting your study activities around other
professional or domestic responsibilities.
Essentially you will be taking control of your learning environment.
As a consequence, you will need to consider performance issues
related to time management, goal setting, stress management, etc.
Perhaps you will also need to reacquaint yourself in areas such as
essay planning, coping with exams and using the web as a learning
resource.
Your most significant considerations will be time and space i.e. the
time you dedicate to your learning and the environment in which you
engage in that learning.
We recommend that you take time now—before starting your self-
study—to familiarize yourself with these issues. There are a number of
excellent resources on the web. A few suggested links are:
 http://www.how-to-study.com/
The “How to study” web site is dedicated to study skills resources.
You will find links to study preparation (a list of nine essentials for
a good study place), taking notes, strategies for reading text books,
using reference sources, test anxiety.
 http://www.ucc.vt.edu/stdysk/stdyhlp.html
This is the web site of the Virginia Tech, Division of Student
Affairs. You will find links to time scheduling (including a “where
does time go?” link), a study skill checklist, basic concentration
techniques, control of the study environment, note taking, how to
read essays for analysis, memory skills (“remembering”).
 http://www.howtostudy.org/resources.php
Another “How to study” web site with useful links to time
management, efficient reading, questioning/listening/observing
skills, getting the most out of doing (“hands-on” learning), memory
building, tips for staying motivated, developing a learning plan.
The above links are our suggestions to start you on your way. At the
time of writing these web links were active. If you want to look for
more go to www.google.com and type “self-study basics”, “self-
study tips”, “self-study skills” or similar.
Need Help? In case you need help, you can contact NIPA at the following website,
phone number or you can email.
www.nipa.ac.zm
NIPA-Main Campus – Outreach Programmes Division
Phone Numbers:+260-211-228802-4
Fax:+260-211-227213
e-mail address: [email protected]
The teaching assistant for routine enquiries can be located from the
Outreach Division from 08:00 to 17:00 during weekdays or can be
contacted on the numbers and email address indicated above.
Library
There is a library located at the main campus along Dushanbe Road. The
library opens Monday to Friday from 08:00 to 17:00.
Assignments There shall be two assignments given for this module.

The assignment will be written during residential school and should be
handed in before the end of residential school.
Assignments should be submitted to Outreach Programmes Division
Registry.
Assessments There shall be a minimum of three (03) assessments given to the
students undertaking this subject
These assessments shall be teacher marked assessments.
The assessments shall be determined and given by the course tutors
after you have covered a number of topics
The lecturer/tutor shall ensure that the assessments are marked and
dispatched to the student within a period of two weeks.

Getting around the Organizational Behaviour Module
Margin icons
While working through this organizational behaviour module, you will notice the
frequent use of margin icons. These icons serve to “signpost” a particular piece of text,
a new task or change in activity; they have been included to help you to find your way
around this module.
A complete icon set is shown below. We suggest that you familiarize yourself with the
icons and their meaning before starting your study.
Activity Assessment Assignment Case study
Discussion Group activity Help Note it!
Outcomes Reading Reflection Study skills
Summary Terminology Time Tip

UNIT 1: NATURE AND SCOPE OF ORGANISATIONAL BEHAVIOUR
1.0. INTRODUCTION
In this unit we provide you a general introduction to organizational behavior, commonly referred to as
OB in short. It starts by defining and explaining the basic concepts like organization, behavior and
organizational behavior.The unit explores the nature of organisations and organisational behaviour
(OB), its historical roots and the various approaches to the OB field.
LEARNING OUTCOMES
By the end of this Unit you should be able to:
  Describe the nature of organizations.

  Explain why organizations exist
  Organizational effectiveness,
  Analyse the nature of organizational behavior,
  Explain the foundations of OB,
  Examine the approaches to OB
1.1 NATURE OF ORGANIZATIONS
The study of organizational behavior must be framed in an understanding of organizations as work

settings. An organization is formally defined as a collection of people working together in a division
of labour to achieve a common purpose (Schermehorn et al 2011). This definition describes a wide
variety of entities, voluntary organizations, and religious bodies, as well as entities such as small and
large businesses, labor unions, schools, hospitals, and government ministries and agencies. These are
all organizations because they share three common characteristics which are:
 Teach organization has a distinct purpose and This purpose is typically expressed in terms of a
goal or a set of goals that the organization hopes to accomplish
 Teach, each organization is composed of people. One person working alone is not an
organization, and it takes people to perform the work that is necessary for the organization to
achieve its goals.
 All these organizations develop some deliberate structure so that their members can do their
work. That structure may be open and flexible, with no clear and precise delineation of job
duties or strict adherence to explicit job arrangements. Organizational structure may be defined
as the way in which the interrelated groups of an organization are constructed. From a
managerial point of view the main concerns are ensuring effective communication and
coordination.

1.2 THE NATURE OF ORGANIZATIONAL BEHAVIOR
The term organizational behavior is made out of two words “organization” and “behavior.” An
organization has alread been defered as two or more individuals who are interacting with each other
within a deliberately structured set up and working in an interdependent way to achieve some common
objective/s. Mullins (2005) defines organisational behaviour as the study and understanding of
individual and group behaviour and patterns of structure in order to help improve organisational
performance and effectiveness. Cole (1998) states that organisational behaviour is a term applied to the
systematic study of the behaviour of individuals within work groups, including an analysis of the
nature of groups, the development of structures between and within groups and the process of
implementing change. The definitions indicate that the principal issues addressed by organisational
behaviour are: -
• Individual behaviour and performance at work;

• The nature and working of people in groups;
• The nature of social structures and organisation design at work;
• The processes involved in adapting behaviour to meet changing conditions.
The variables outlined above provide parameters within which a number of interrelated dimensions can
be identified as the individual, the group, the organization and the environment which collectively
influence behaviour in work organizations.
The individual is a central feature of organisational behaviour and a necessary part of any behavioural
situation, whether acting in isolation or as part of a group, in response to expectations of the
organisation, or as a result of the influences of the external environment. Where the needs of the
individual and the demands of the organisation are incompatible, this can result in frustration and
conflict. It is the task of management to integrate the individual and the organisation, and to provide a
working environment which permits the satisfaction of individual needs as well as the attainment of
organisational goals.
The Group: Groups exist in all organisations and are essential to their working and performance. The
organisation comprises groups of people and almost everyone in a organisation will be a member of
one or more groups. Informal groups arise from the social needs of people within the organisation.
People in groups influence each other in many ways, and groups may develop their own hierarchies
and leaders. Group pressures can have a major influence over the behaviour and performance of
individual members. An understanding of group structure and behaviour complements knowledge of
individual behaviour and adds a further dimension to organisational behaviour.
The Organisation: Individuals and groups interact within the structure of the formal organisation.
Structure is created by management to establish relationships between individuals and groups, to
provide order and systems and to direct the efforts of the organisation into goal-seeking activities. It is
through the formal structure that people carry out their organisational activities in order to achieve
aims and objectives. Behaviour is affected by patterns of organisational structure, technology, styles of
leadership and systems of management through which organisational processes are planned, directed
and controlled. The focus of attention, therefore, is on the impact of organisational structure and
design, and patterns of management, on the behaviour of people within the organisation.
Organisational Behaviour focuses on five levels of analysis and they are:

• Individual behaviour
• Inter-personal behaviour
• Group behaviour and group dynamics
• Organisational issues
• Environmental issues.
Key Elements in OB
There are four key elements in the study of OB, such as people, structure, technology and the
environment in which it operates. When people join together in an organisation to accomplish an
objective or objectives, some kind of structure is required to regulate their relationships. People use
technology to help get the jobs done. These key elements are influenced by external environment in an
organisational context. These key elements and their significance in OB are discused below.
People All Organisations are made of people, who form the internal social system. They consist of
individuals, groups which may be a small group or a large one, formal or informal group. The groups
are dynamic, they form and change according to the situational need. The human organisations are not
static, but an ever changing system. The organisation exists to serve the people rather than people exist
to serve the organisation. Thus organisations are made of the people, for the people and by the people.
Above all, organisations are people; and without people there would be no organisations. Thus, if
managers are to understand the organisations in which they work, they must first understand the people
who make up the organisations.
Structure The other key element in the system of OB, defrays the official relationships of people in
organisations. The people have to perform different job to achieve the goals of the organisations.
Hence, the concept of division of labour defines the role and responsibilities of people in the
organisational life. There are managers, workers, clerical and other sub-ordinate staff performing
various duties in organisations. The organisational structure depicts their relationship such as staff and
line relationship. These relationships create complex network of OB in an Organisation.
Technology: The technology provides the resources with which people work and affects the task they
perform. With the help of technology, the workload of the people is being reduced, and their strain is
also reduced. The changing technologies often influence the working relationship. Further the
technological advancement allows people to produce more with improved quality. But at the same time
it restricts the people in many ways. Most often Technology creates a “Phobia” known as “Techno

Phobia” among the people. It means that people develop fear over their employment and their
continuance in the organisations, if they could not cope with the
technological advancements.
Environment: The other important key element in organisation is the environment.

All organisations operate within an internal environment and influenced by external environment. No
organisation can exist alone without the influence of environment. An organisation is a larger system
which contains many sub systems and many other elements, such as family, group, leadership and so
on. The external environments such as government, political ideologies, etc have a greater influence on
the organisational life. The individual organisation such as factor or establishment cannot escape from
such influences. The environment, both the external and the internal environment has a greater impact
on the attitude of people, affects the working conditions and provides competition for resources, power
etc., often such situation leads to conflict in organisations. Hence, the significance of environment
must be considered when you study the organisation behaviour.
In other words, it involves the understanding, prediction and control of human behavior and factors
affecting their performance and interaction among the organizational members. And because
organizational behavior is concerned specifically with employment related situations, you should not
be surprised to find that it emphasizes behavior as related- to concerns such as jobs, work,
absenteeism, employment turnover, productivity, human performance and management.
1.3 IMPORTANCE OF ORGANIZATIONAL BEHAVIOUR
The study of OB is important in that it provides guidelines that help people at work to understand and
appreciate any forces that affect behavior in organizations. It allows employees at all levels in an
organization to make the right decisions about how to behave and work with other people in order to
achieve organizational goals. OB replaces intuition and gut-feeling with a well-researched body of
theories and systematic guidelines for managing behavior in organizations. The study of OB provides a
set of tools concepts and theories that help people to understand, analyze, and describe what goes on in
organizations and why. OB helps people understand, for example, why they and others are motivated
to join an organization; why they feel good or bad about their jobs or about being part of the
organization; why some people do a good job and others don’t; why some people stay with the same
organization for many years and others seem to be constantly dissatisfied and change jobs every so
often. In essence, OB concepts and theories allow people to correctly understand, describe, and analyze
how the characteristics of individuals, groups, work situations, and the organization itself affect how
members feel about and act within their organization.
The goals of organisational behaviour are to:
1. Explain individual and group behaviour: We are pursuing the explanation objective, when we
want to know why individuals or groups behaved the way they did. For example, if the turnover

rate in an organisation is very high, we want to know the reason so that action can be taken to
correct the situation in the future.
2. Predict certain behavioural response to change: Prediction seeks to determine what out comes
will result from a given action. Having a sound knowledge of OB will help the manager predict
certain behavioural responses to change. In this way, the manager can anticipate which
approaches will generate the least degree of employee resistance and use that information in
making decision.
3. Control behaviour: The knowledge of OB can be used by managers to control behaviour.

Managers frequently see the control objective as the most valuable contribution that OB makes
toward their effectiveness on the job.
1.4 INTERDISCIPLINARY FOCUS OF OB
OB is inter disciplinary and integrates social sciences and other discipline that can contribute to the
subject. We may say that OB is applied behavioural science, and it is built upon contributions from
behavioral disciplines. The predominant areas are Psychology, Sociology, Social Psychology,
Anthropology and Political Science. The contributions of the psychologists are mainly at the individual
or micro level of analysis, while the other disciplines have contributed to our understanding of macro-
concepts, such as group process and organisations. The inter-disciplinary nature of OB improves the
relationships between people and organisations. Its inter disciplinary nature is similar to that of
medicine, which applies physical, biological and social sciences into a workable medical practice.
Contributions of Psychology The field of psychology seeks to measure explain and sometimes
change the behaviour or people. The psychologists concern themselves with studying and attempting to
understand individual behaviour. The contributions of psychology to the study of OB are extended to
include learning, motivation, perception, personality, leadership, job satisfaction, decision making,
performance appraisal, attitude measurement and behaviour shaping etc. They are centered on the
individual in organisations.
Contributions of Sociology The field of sociology studies the social system in which the individuals
fill their roles. It means that the sociology studies people in relation to their fellow beings. The
Sociologists have made their contributions to the field of OB through the study of group behaviour in
organisation, particularly formal and complex organisations. Areas in OB, which received valuable
inputs from sociology, include group dynamics, norms roles, communication, status, power,
socialization, organisational change, conflict and so on.
Contributions of Social Psychology The social psychology is relatively a new field which examines
interpersonal behaviour. Whereas psychology and sociology seek to explain individual and group
behaviour respectively, social psychology attempts to explain how and why individuals behave as they
do in group activities. The important area which receives more attention of the social psychologist is
“Change” – how to implement it and how to reduce barriers to its acceptance. The Social Psychology

contributes to the study of OB in measuring understanding and changing attitudes, communication
patterns, group process etc.
Contributions of Anthropology Anthropologists study societies, specifically the primitive society, to

learn about human beings and their activities. The anthropological studies of comparative values,
comparative norms, and attitude, beside culture and climate of the organisations have made grater
influence on OB.
Contributions of Political Science The political sciences study the behaviour of individuals and
groups within a political environment. The areas of study of conflict, allocation of lower,
organisational politics have great influence upon the organisations system which in turn influences the
field of OB.
1.5 HISTORICAL ROOTS OF ORGANISATIONAL BEHAVIOUR

The definition of management emphasizes the achievement of organisational objects through working
with and through people. By implication, management is about, managing people to achieve
organisational objectives. However, management is about managing people to achieve organisational
objectives. However, management has evolved over the years parallel to the developments in
organisations. It is therefore important to understand the various management theories and their
impact on OB. In this section we shall briefly review the various management theories that have
impacted management of people and OB.
The various schools of thought include:
Scientific Management (F.W.Taylor): Scientific management was developed by at the beginning of

the 20th century. This theory supported the use of certain steps in scientifically studying each element
of a job, selecting and training the best workers for the job arid making sure that the workers follow the
prescribed method of doing the job. It provided a scientific rationale for job specialization and mass
production. The school of thought emphasised the efficient division of labour into small, specialised
jobs that matched with the capacities of workers. This made it possible to research the best way to do
jobs. The ultimate aim was to develop workers’ abilities and to convey the cooperation between
capital and labour resulted in organisational success.
The main concern for Taylorism was the proper design of the job and the preparation of the worker.
The ideal manager determined the goals to be accomplished divided work in most efficient way,
trained workers to do the job, and rewarded them by wage incentives. The foremen were seen as the
“brains” and the workers “a pair of hands” workers were seen as one of the resources just like
machines. To increase the output, Taylor advised managers to pay monetary incentives to efficient
workers. Yet, his theory was criticized by many employers and workers. Workers objected to the
pressure of work as being harder and faster. Critics worried that the methods took the humanity out of
labor, reducing workers to machines responding to management incentives. Therefore, Taylor’s view
is now considered inadequate and narrow due to the points given by the critics.
Administrative Theory (Henry Fayol): the school of thought answered the problem of organising large
organisations and defining the emerging role of professional managers. Managerial functions were
defines as – planning, organising, controlling, and commanding. This theory advocated the study of
management as a discipline that can be taught and be learned. Bureaucracy (Max Weber): the
approach contributed to the understanding of the “ideal” bureaucracy which was seen as the answer to
greater organisational efficiency. The administrative theory suggests that if managers properly
designed the organisation and followed the proven principles of management, the organisation would
succeed.
Human Relations School (Mayo and others): Even, as Taylor and Weber brought attention with their
rational, logical approaches to more efficient productivity, their views were criticized on the ground
that both approaches ignored worker’s humanity.
The work of Elton Mayo and F.J. Roethlisberger in 1920s and 1930s at Harvard University gave
academic stature to the study of Human Behaviour at work. Their experiments at the Hawthorne Plant
revealed that an organisation is a social system and the workers are indeed that an organisation is a
social system and the workers and indeed the most important element in it. Also, the study reveals that
the worker is not a simple tool but a complex personality interacting in a group situation that often is
difficult to understand. To recapitulate, we may say that Taylor and his contemporaries perceived that
human problems stood in the way of production and so should be minimized. To Mayo, human
problems became a broad new field of study and provided an opportunity for progress. He was
recognized as the father of what was then called Human Relations and later known as OB. In 1940s
and 1950s other major research projects developed in Western countries, which stimulated new interest
in the behaviour of people at work place.
The studies revealed that workers should be considered and regarded as more than “hands” workers
had feelings and attitudes that affected productivity. Norms and rules of the work group to which they
belonged profoundly affected productivity. An effective manager therefore, was expected to pay
attention to people’s social needs and elicit their ideas about work.
Decision-Making School (March and Simon): The school of thought described organisations as social
systems in which individual decisions are the basis of human behaviour. Employees made decision to
join an organisation. They also decide whether or not to participate and work as hard as they can. The
results of workers’ decisions depend on the workers’ rational analysis of situation and the rewards
involved. Managers at this point in time had to take into account workers “minds”. Effective
managers relied upon workers’ rationality to make choices that would be best for both themselves and
the organisation.
Contingency Theory (Luthans): The gist of the theory is that effectiveness varies according to the
particular situation. Individuals, groups, cultural groups, industries, managing styles etc can all vary
enormously. As long as the various aspects of organisation fit together, an organisation seems to work.
The building blocks of organisations are referred to as the 7S’s: strategy, structure, systems styles
skills and super ordinate goals.
Open Systems (Chester I Barnard): the systems theory maintains that organisations and all
subdivisions in them take in resources and transform them into a service or product that is purchased or
utilised by a larger system. A knowledge interdependence of subsystems and a whole unit interacts
with the external environment. The systems theory implies that organisational effectiveness is
governed by three factors: i) individuals in the organisation, ii) the organisation itself and iii) the
environment in which an organisation exists. The effective management of the interfaces between the
three factors is central to organisational success.
1.5.1 Models of Organisational Behaviour
Organizations differ in the quality of organizational behaviour that they develop. These
differences are substantially caused by different models of organizational behaviour that dominant
management's thought in each organization. The model that a manager holds usually begins with
certain assumptions about people and thereby leads to certain interpretations of organizational
events. Models are possible explanations which explain how things work in an organization. Models
are guides to understanding owners and management behavior in particular. Top managers can and do
influence the whole organization. However, these models may be in use within a department or branch
or in the whole organization. No model can explain everything. Managers choose models based on
people, technology, environment and structure. Models can change over time depending on
circumstances.
Autocratic Model: Deep rooted in history, this model claims ‘power’ as its managerial orientation.
The people who are in command must have the power to demand. Authority is the only tool by which
the manager gets things done. The employees have to follow the order and have to depend highly on
boss attitude for work climate. McGregor’s theory states that human beings are inherently distasteful to
work and try to avoid responsibility. The autocratic model is based on McGregor’s theory. Better
performance is ensured through fear, threats, punishment and occasional rewards. Communication is
mostly one way i.e., downward (communication flowing from the superior to the subordinate) and
there is little interaction between managers and employees. This model is useful for accomplishing
work where the employees can be motivated through physiological needs.
2. Custodial Model: This approach depends on economic resources. If an organization does not have
the wealth to provide pensions and pay other benefits, it can’t follow a custodial approach. The
resulting managerial orientation is towards money to pay the cost of benefits. Since the employee’s
physical needs are already satisfied, he looks to second level security needs as a motivating force. The
employee’s dependence on the organization is prominent in custodial approach. Since the employees
are safe for their bread, they now look for welfare measures from their employer. Their organizational

dependence is augmented and personal dependence on boss gets reduced to a considerable extent.
Especially in case of senior employees, they can’t quit even if the grass looks greener somewhere else.
In a custodial environment, the employees are maintained, happy and contented but they are not
strongly motivated. The result is that they extend only passive co-operation. The employer can’t erase
the reservations of the employees over his boss attitude by the perks he gives then and there. Though
satisfied and feel secure, most employees are not producing anywhere near their capacities and they are
not motivated to work to greater capacity of which they are capable. The employees are happy but they
do not feel fulfilled or self actualized. Thus, custodial approach though looks for economic resources
of keeping the employees happy with perks; it also met with fiasco in bringing about a self-actualized
work force with motivation to achieve the desired result.
3. Supportive Model: The supportive model of organizational behavior depends on managerial

leadership than its dependence on power or money. The focal point of this model is on participation
making process. This model is based on the assumption that workers move to the maturity level and
they expect supportive measures like communication, leadership, decision-making interaction, control
and influence to fulfill their higher order needs such as, esteem and self actualization. Supportive
model which gives more importance to human aspects rather than economic resources of the
organization crystallizes the role of managers to help employees to achieve their work rather than
supervising them very closely. Institutions with sophisticated technology and employing professional
people can also apply this model for getting the best out of their human resources. This model best
suits for managerial levels rather than operative levels.
4. Collegial Model: This is an extension of the supportive model. This concept is based on team work
that relates to a body of persons having a common purpose. This model tends to be more useful with
unprogrammed work and intellectual environment and considerable job freedom. The management,
under this model should develop a feeling of partnership with the employees. Managers contribute
rather than extending an autocratic boss attitude. Since team work is the main motto of this model it
brings both the management and workers under a single roof with mutual trust. The employees
produce with quality, not because of their fear of the inspector or the management’s word to do so but
out of their in-built obligation to produce goods with quality. With high responsibility, employees
discipline themselves for performance and feel some degree of fulfillment and self actualization which
will lead to moderate enthusiasm in performance. As far as supportive model is concerned, the
maintenance cost of human resource will gradually come down. Since the worker gets the optimistic
feeling to work for his organization with pleasure, there is no need for any additional expenditure on
keeping the morale of the workers.
5. System Model: An emerging model of organizational behavior is the system model. This model is
based on trust, self-motivation, and the performance results will be more than expected, because
employees will be committed to do their tasks as expected, and as well as organizational goals. It is the
result of a strong search for higher meaning at work by many of today employees. They want more
than a pay-check and job security from their job. This model helps in gowning sense of community

among co-worker. Under the system model manager try to convey to each other that you are an
important part of your whole system.
1.6 APPROACHES TO OB
Organizational behavior, relates to the relationship between employees and the employers in an
organization. Both are working towards the realization of the goals and objectives of any organization,
and a close and fruitful coordination between the two is one of the major factors towards this
realization. Organizational behavior approaches are a result of the research done by experts in this
field. These experts studied and attempted to quantify research done about actions and reactions of
employees, with regard to their work environments. It is a field that has begun developing only
recently and new approaches and results are being expounded everyday, as more and more data comes
to the forefront. There are various aspects of these theories, since each one deals with complex human
behavior. The most important ones are the approaches about motivation. All of them are aimed
towards motivating the members of the organization into optimizing their performance and thereby
resulting in better and more improved performances. There are mainly six approaches to organizational
behaviour. They are:
1) Human resources approach

2) Contingency approach
3) Productivity approach
4) Systems approach
5) Interdisciplinary Approach
6) Scientific Management Approach
Human Resources Approach: The human resources approach is concerned with the growth and
development of people towards higher levels of competency, creativity and fulfillment, because people
are the central resource in any organization. This approach help employees become better in terms of
work and responsibility and then it tries to create a climate in which they can contribute to the best of
their improved abilities. Work satisfaction will be a direct result when employees make fuller use of
their capabilities. Essentially, the human resources approach means that better people achieve better
results.
Productivity Approach: Almost all organisation have an objective of productivity, so this idea is a
common thread woven through OB. What do you mean by Productivity? We may say that productivity
is improved. So to say that better Productivity is a valuable measure of how well resources are used in
society. It cannot that there should be less waste and better conservation of resources. Human beings
are the important resources in organisations. If the OB is study of people and organisation, naturally
what is to be studied in a productivity approach to ensure better productivity in organizations?
Contingency Approach: The contingency approach to OB means that different environment require
different behavioural practices for effectiveness. The traditional management principles cannot be
applied in all situations. As a result of industrial revolution, the situation in organisation is more
complex than first perceived, which warrants contingency approach to deal with the changing
requirements. No longer is there a one best way. Each situation is to be analyzed in a separate and
distinctive way which is known as “Contingency Approach” or “Situational Approach” in OB.
Systematic Approach: The term system implies that there are multitudes of variables in organisations
and that each of them affect all the other in a complex relationship. All organisations influence their
members by means of control system that reflects combination of forces of formal organisations,
informal, organisations and social environment. Like the human body has nervous system, digestive
system, respiratory system, circulatory systems to control, mould and modify the behaviour of
individuals and group in organisations. Thus the systematic approach on OB envisages a cost benefit
analysis to determine whether an action will produce a net profit or net negative effect in organisations.
Scientific Management Approach: The fundamental concern of the scientific management school
was to increase the efficiency of the worker basically through good job design and appropriate training
of the workers. Taylor is the father of the scientific management movement and he developed many
ideas to increase organizational efficiency. Taylor showed that through proper job design, worker
selection, employee training and incentives, productivity can be increased. The scientific management
school advocated that efficiency can be attained by finding the right methods to get the job done,
through specialization on the job, by planning and scheduling, by using standard operating
mechanisms, establishing standard times to do the job, by proper selection and training of personnel
and through wage incentives.
Interdisciplinary approach: Organizational behavior is a modern interdisciplinary field. It draws

most heavily from the psychological and sociological sciences and it also looks to other scientific
fields. The interdisciplinary approach is used because the field of organizational behavior involves
multiple levels of analysis, which are necessary to understand behavior within organizations as people
influence their environment as well as people are influenced by their environment.
1.7 ORGANISATIONAL EFFECTIVENESS
The primary objective of OB is to contribute to organisational effectiveness. Actions of individuals and

groups in organisations and organisation structures themselves must result in organisational efficiency.
What is this organisational effectiveness? What contributes to effectiveness? These and other related
issues deserve careful consideration are under discussion under this topic.
The term organisational effectiveness may be understood as the ability of organisational to obtain and
use resources efficiently to realize stated objectives. Three levels of effectiveness can be identified. At
the basic level is individual effectiveness, which emphasizes the task performance of specific
employees or members of the organisation. The tasks to be performed are contained in job
descriptions. Managers assess effectiveness of individuals through performance appraisals. Individuals
seldom work alone. They usually work in groups, necessitating an other level, viz., group
effectiveness. In some instances, group effectiveness is simply the sum of the combinations of all its
members. For example, a group of scientists working on unrelated projects would be effective to the
extent that each individual is effective. In other instances, group effectiveness is more than the sum of
the individual contributions for example; an assembly line that produces a finished product is the result
of the contributions of each individual. The third phase is that of organisational effectiveness.
Organisations consist of individuals and groups; therefore, organisational effectiveness consists of
individual and group effectiveness. However, organisation effectiveness is more than the sum of
individual and group effectiveness. Through synergetic effects, organisations are able to achieve higher
levels of performance than the sum of their parts. In fact, the rationale for organisations as means for
doing the work of society is that they can do more work than is possible through individual effort.
There is close relationship among the three levels of effectiveness in that group effectiveness depends
on individual effectiveness and that organisational effectiveness depends on group effectiveness. The
exact relationships among the three views vary depending on such factors as the type of the
organisation, the work it does, and the technology used in doing that work.
Approaches to Organisational Effectiveness: The discussion on effectiveness till now is based on

the premises that there is one definite meaning of organisational effectiveness. This is not true. There is
no universal agreement as to what effectiveness means, in either a theoretical or practical sense. Three
different views are expressed by experts. They are; goal approach, systems theory approach and
multiple constituency approach.
Goal Approch
The Goal Approach is also called rational – attainment approach, it has its origins in the
mechainistic view of the organisation. This approach assumes that rogainisations are planned, logical,
goal – seeking entities and they are meant to accomplish one or more predetermined goals. Goal
approach is worried with the output side and whether or not the organisation attains its goals with
respect to preferred levels of out put. It sees effectiveness with respect to its internal organisational
objectives and performance. Typical goal – attainment factors include profit and efficiaency
maximization.
The key constraint of this approach pertains to the content comparability of organisation goals. The
dependable identifiacation of comparable and practically appropriate goals within groups of
organisations is thus a serious problem. What a company declares as its formal goals don’t always
echo the organisations actual goals. Therefore, an organization’s formal goals are typically dependent
upon its standards of social desirability. As goals are dynamic, hence they ill probably change as time
passes, simply because of the political make – up of an organisation. An organisation short – term
goals are usually not the same as their long term goals. The goal approach presumes consensus on
goals. Considering the fact that there are numerous goals and varied interests inside an organisation,
consensus, is probably not possible.
Internal – Process Approach

This approach has been developed in response to a fixed out view of the goal approach. It looks at the
internal activites. Organisational effectincess is assessed as internal organisational health and
effectivness. According to Internal – Process Approach effectiveness is the capability to get better at
internal efficiency, commitment and staff satisfaction. This aproach assesses effort as opposed to the
attained effect.some experts have criticized the internal – approach, like the system – resource
approach, cannot lead to legitimate indicators of organisational effectiveness itself. Rather, it is
accepted as an approach for studying its assumed predictoors. Similar to the system – resource
approach, the outcomes can hardly be assessed accurately.
Systems Theory Approach The alternative to the goal approach is the systems theory approach. This
theory may be defined as the capacity of the organisation to survive, adapt maintain itself and grow,
regardless of the particular functions it performs. Systems theory enables us to describe the behaviour
of organisations both internally and externally. Internally, we can see how and why people inside the
organisations perform their individual and group tasks. Externally, we can relate the transactions of
organisations with other organisations and institutions. All organisations acquire resources from the
larger environment of which, each is a part and, in turn, provide goods and services demanded by that
larger environment. Managers must deal simultaneously with the internal and external aspects of
organizational behaviour.
Systems approach to organisational effectives involves multiple criteria. The questions that the
approach seeks to answer are: How does an organisation draw its inputs from its environment? How
can does the organisation cope with its environment? Are the internal operations flexible enough to
cope with changes? How can the organisations‟ capacity to cope, be improved.

Strategic Constituencies Approach
This approach suggests tht an efficient organisation is one which fulfils the demands of those
constituencies in its environment from whom it needs support for its survival. It assesses the
effectiveness to satisfy multiple strategic constituencies both internal and external to the organisation.
Strategic Constituencies Approach is ideal for organisations which rely highly on response to demands.
The strategin – constituencies approach takes explicitly into consideration that organisations fulfull
multiple goals: each kind of organisational constituency (like proprietors, consumers, the local
community, etc) is supposed to have distinct interests viz a viz the corporation and they will use
different evaluation criteria.
However, the job of isolating the strategic constituencies from their envirinment within which they
function is a challenging and tricky task. Because the envirinment swiftly changes, what was a crucial
goal todau might not be so tomorrow. Individual constituents may create significantly diverse ratings
of organisation’s effectiveness. These constituents may use diverse factors or weight the same criteria
in a defferent way.
Criteria of Effectiveness
Managers use a number of criteria to assess effectiveness such as ability to adapt to a changing
environment, .productivity, job satisfaction, profitability and the acquisition of scarce and valued
resources.
Unit summary
Behaviour in an organization has become a special subject. Human behaviour in organization is
determined by the requirements of the formal organization and partly by the personal systems of the.
The behaviour that emerges from this interaction defines the field of organizational behaviour.
Organizational behaviour (frequently abbreviated as OB) is a field of study that investigates the impact
that individuals, groups, and structure have on behaviour within organizations, for the purpose of
applying such knowledge toward improving an organization's effectiveness. The Key elements are
people, structure, technology and the external environment.
OB seeks to achieve productivity by building and maintaining employee’s dignity, growth, and
satisfaction, irrespective of the limitations in organisations.

The various theories have shown difference approaches to managing people and organisations:
People as ‘a pair of hands’ or as a commodity or a machine, Management as a discipline: it practiced
implied effective management of both people and organisations. People as more than ‘a pair of hands’
and having feelings and attitudes that affect productivity, people seen as having ‘minds’ to think and
therefore needed to be involved in decision – making.
Activity Questions
1. Define OB and explain the key elements in OB
2. Trace the genesis of the concept of OB
3. Comment on the statement, “OB is an elastic concept”.
4. Examine OB as a Multi-disciplinary concept.
5. Explain the various approaches to the study of OB

UNIT 2: FOUNDATIONS OF INDIVIDUAL BEHAVIOR
2.0 INTRODUCTION
In the previous unit we have clearly established that the individuals are the important element in
organisations. No organization can exist without individuals. Human behavior, which is; considered a
complex phenomenon, is very difficult to define in absolute terms. It is primarily a combination of
responses to external and internal stimuli. Psychologist Kurt Levin has conducted considerable
research into the human behavior and its causes and he believes that people are influenced by a number
of diversified factors, which can be both genetic and environmental. The influence of these factors
determines the pattern of human behavior. Individual differences are personal attributes that vary from
one person to another. Individual differences may be physical and psychological. These differences are
examined in detail under this unit.
LEARNING OUTCOMES
By the end of this Unit you should be able to:

 1. Explain the nature of the individual-organization relationship.
2. Define personality and describe personality attributes that affect
behavior in organizations
3. Discuss individual attitudes in organizations and how they affect
behavior.
4. Describe basic perceptual processes and the role of attributions
in organizations.
5. Discuss the causes and consequences of stress and describe how
it can be managed.
2.1 PERSONALITY
The term personality has been derived from Latin word “personnare” which means to speak through.
Personality refers to how people influence others through their external appearances. Gordon Allport
defines “Personality is the dynamic organisation within an individual of those psychological systems
that determine his unique adjustment to his environment”. Personality is a complex, multi-dimensional
construct and there is no simple definition of what personality is. Maddi defines personality as, “A
stable set of characteristics and tendencies that determine those commonalities and differences in the
psychological behavior and that may not be easily understood as the sole result of the social and
biological pressures of the moment". From the above definition we can infer that all individuals have
some universally common characteristics. Some personality theorists stress the need of identifying
person-situation as interaction. This is equivalent to recognizing the social learning aspects related to
personality. Such a social learning analysis is one of the most comprehensive and meaningful ways
included in the overall study of organizational behavior. From this perspective, personality means the
way people affect others. It also involves people's understanding of themselves, as well as their pattern
of inner and outer measurable traits, and the person and situation interaction. People affect others
depending primarily upon their external appearance such as height, weight, facial features, color and
other physical aspects and traits.
Personality is an important individual characteristic, which explains why many other organisations or
companies are increasingly testing the personality traits of job applicants and employees. Personality
is the relatively enduring pattern of thoughts, emotions, and behaviors that characterize a person, along
with the psychological processes behind those characteristics. It is, in essence, the bundle of
characteristics that make us similar to or different from other people.
Personality is the consistent psychological patterns within an individual that affect the way they
interact with others and the situations they encounter. Research studies shows that individual’s
personality is more or less consistent, lasting, and can remain substantially constant across all the
situations and time. But there are individual differences, for some people, these straits may be
consistent across a number of situations, that is, they exhibit the same behavior such as shyness or
inhibitions in the entire situation at all the time. But others may vary quite a lot. Changes in personality
occur slowly over an extended period of time. Thus, if managers are able to understand certain
dimensions of personality traits exhibited by individuals, they can predict confidently to a great extent
the daily behavior of employees. There are various factors which determine the personality of an
individual. They may be categorized as Heredity, Environment and Situation.
1. Heredity
It refers to the factors that are determined at conception stage of an individual. The physical
complexity, facial attractiveness, sex, temperament, biological rhythm etc. are either completely or
partially derived from the parents, or from the ancestors. The heredity factors are determined by the
molecular structure of genes in the chromosomes and they are transmitted through the genes. There is
quite a lot of arguments that the personality of an individual is not determined by the heredity factors
alone. Among other factors responsible for the formation of personality, the environmental factors play
a crucial role in the determination of personality. Now, let examine the environmental factors.
2. Environmental Factors
The prevailing norms and culture of the society highly influence the personality of an individual. An
ideology fostered in one culture may have a tremendous influence on another. The family, peer group,
religion, caste, class, educational institution, neighbourhood, community etc., too influences the
growth of personality of an individual. When you argue either heredity or environment as the primary
determinant of personality, you may perceive that both are important.
3. Situation
The other important factor, the situation further influences the effect of heredity and environment on
personality. In general an individual’s personality which is stable and consistent does not change to
different situations. But there are particular situations which are more relevant to the behaviour of the
individual to modify the personality. According to Milgram, situation exerts an important pressure on
the individual. Also, he has demonstrated that the situation may potentially have a very big impact on
the behavioural expression of personality. From the above discussion, it is clear that the situation in
addition to environment and heredity play a crucial role in determination of personality of an
individual.
Theories on Personality
One of the most important elements of personality theory is that people possess specific personality
traits. Traits such as sociable, depressed, cautious, and talkative represent clusters of thoughts, feelings,
and behaviors that allow us to identify, differentiate, and understand people. Researchers have
developed a number of theories and no theory at the outset is complete in itself. Some of the theories
are discussed below:
Big Five-Factor Model
The most widely respected model of personality traits is the five-factor model (FFM).
 Conscientiousness: Conscientiousness characterizes people who are careful, dependable, and

self-disciplined. Some scholars argue that this dimension also includes the will to achieve.
People with low conscientiousness tend to be careless, less thorough, more disorganized, and
irresponsible.
 Agreeableness: This dimension includes the traits of being courteous, good-natured, empathic,
and caring. Some scholars prefer the label “friendly compliance” for this dimension, with its
opposite being “hostile noncompliance.” People with low agreeableness tend to be
uncooperative, short-tempered, and irritable.
 Neuroticism: Neuroticism characterizes people with high levels of anxiety, hostility,

depression, and self-consciousness. In contrast, people with low neuroticism (high emotional
stability) are poised, secure, and calm.
 Openness to experience: This dimension is the most complex and has the least agreement
among scholars. It generally refers to the extent to which people are imaginative, creative,
curious, and aesthetically sensitive. Those who score low on this dimension tend to be more
resistant to change, less open to new ideas, and more conventional and fixed in their ways.
 Extroversion: Extroversion characterizes people who are outgoing, talkative, sociable, and
assertive. The opposite is introversion, which characterizes those who are quiet, shy, and
cautious. Extroverts get their energy from the outer world (people and things around them),
whereas introverts get their energy from the internal world, such as personal reflection on
concepts and ideas. Introverts do not necessarily lack social skills. Rather, they are more

inclined to direct their interests to ideas than to social events. Introverts feel quite comfortable
being alone, whereas extroverts do not.
Personality Types (MBTI)

MBTI describes four dimensions of Personality Types:
(a) Extroversion versus Introversion: (The ways in which people relate to the world)
(b) Sensing versus Intuition: (Becoming aware of and perceiving information)
(c) Thinking versus feeling: (Ways of deciding and prefer to make judgments)
(d) Judging and Perception: (The amount of control exercising and organizing people)
Extroversion and Introversion:

This deals with whether the focus of attention is directed towards outwardly or inwardly.
Extroversion: Extroverted attention flows outward to the world of objects and people or external
ideas. They are interacting more with people. Characteristics associated with people who prefer
Extraversion are attuned to external environment, prefer to communicate by talking work out ideas
by talking them through, Have broad interests, sociable and expressive, readily take initiative in work
and relationships. Extroverts are usually active, sociable, like variety and stimulation, and are often
good speakers, sales people or public relations professionals.
Introversion:
Introverted attention focused on the subjective, inner world of thoughts, feelings and ideas. Introverts
like quit reflection, can concentrate on one idea or thought for longer than an extrovert, and are less
active and prone to change. Characteristics associated with people who prefer Introversion are drawn
to their inner world, prefer to communicate in writing, work out ideas by reflecting on them, learn
best by reflection, mental “practice” and are Private and contained.
Sensing Versus Intuition:

This aspect deals with the ways of collecting information and ideas.
Sensing: A person with a sensing preferences focuses on the specific, practical and tangible. The
sensing person relies more on the physical or material reality of the world of the five senses: touch,
sight, sound, taste or smell. Sensing managers take in information through their senses and attend to
the details of the problem. They like to solve problems in standard ways. They are patient with
routine details and are precise in their work. They distrust creative inspirations and usually work all
the way through to reach conclusions. They emphasize action, urgency and bottom-line results.
People who prefer Sensing are oriented to present realities, factual and concrete, precise and
practical, focus on what is real and actual observe and remember specifics, build carefully and
thoroughly toward conclusions and understand ideas and theories through.
Sensation Feelers (SF) deal with concrete problems in a methodical way. They have astute powers
of observation regarding the details of how an organization is run. SFs do not fight the system, but
use what is available for problem solving. SFs are nonjudgmental of their co-workers and do not
look for underlying motives and meanings in people’s behavior. If organizations do not have
adequate SF’s, small problem will goun attended till they become big. Possible Shortcomings: SF’s
may be reluctant to accept new ideas and are impatient with abstract theories. They react adversely
to radical changes. They have difficult honouring commitments and decision made in the past since
they live full in the present moment.
Intuition
This person relies more on their insights and based on that they guess, assume and draw the
inferences. Ideas, associations or creative process often accompany the presence of intuition. They
focus on the relationships and connections between facts. In tuition manager like solving new
problems and are impatient with routine details. They perceive the problem in its totality and
consider several alternatives simultaneously. They are imaginative and futuristic, enjoying mind
testing games.
Type A and Type B Personality Types.
Type A. These people are very competitive and have a strong sense of urgency. They work well in
moderate-to-high levels of stress. Type As are fast workers who may not be too interested in the
quality of their output. They are infrequently creative and often make poor decisions because of
their focus on time. This type of individual is highly prized in North America but may not be seen as
positively in other societies.
Type B. The opposite of Type A people, Type Bs have far less time urgency and less competitive
natures. Type As do better in getting hired, but the work situation itself may indicate that a Type B
person would be an overall better fit.
Major Personality Traits Influencing Behaviour.
Certain personality attributes above and beyond personality type do have influences on job
performance and behaviour.
Self Esteem: This refers to the individuals’ self-worthiness and the extent to which they regard
themselves as capable, successful, important and worthwhile. People who feel good about
themselves will always produce good results. Studies of self-esteem show that it is closely related to
mental health. People with low self-esteem are more likely to suffer depression and greater stress.
People with positive self-esteem adjust to life better and deal everyday problems more effectively.
Individuals’ with high self-esteem will try to take up more challenging assignments and be
successful, which in turn, enhance their overall self-concept. People with high self-esteem would
tend to classify themselves as highly valuable in the organization.
Locus of Control: This refers to the extent to which people tend to have control over their own fate
and life. There are two type of locus of control. The Internal Locus of Control refers to those who
believe that they control what happens to them and shape the course of their evens in their lives,

whereas the External Locus of Control believe that what happens to them is controlled by outside
forces such as luck or chance. Internals always believe in putting more effort and seek more job
related information, rely more on their own abilities and judgment at work, and more actively seek
opportunities for advancement.
Self Efficacy: This refers to the belief that a person has in their own capability to perform a
specific task. People with high self-efficacy will prefer to have moderate level of task difficulty,
strong self-confidence and conviction in the chosen tasks and possess high expectation in
completing the assignment across the entire situation. Employees with high self-efficacy respond to
specific negative feedback about their performance with increased motivation and effort, while
those with low self-efficacy are more likely to give up and reduce their motivation.
Self-Monitoring:
It refers to the extent to which a person has the ability to adjust his or her behavior to external or
situational factors. Those with high self-monitoring will be more sensitive and notice the significant
changes occurring in the environment and able to adapt them by adjusting their behavior. High self-
monitors are capable of exhibiting a striking contrast between their public persona and their private
self. Low self-monitors cannot disguise their behavior and tend to exhibit the same behavior all the
time.
Emotional Intelligence: This is also known as EQ which refers to individual’s ability to be aware
of feelings and emotions and the extent to which they can manage them more effectively in dealing
with others and challenging events. It consists of five main abilities which include: knowing one’s
emotions, managing emotions, motivating oneself, recognizing emotions in others, handling
Relationships for example being able to interrelate, communicate and work with others. Emotional
Intelligence (EI) is very closely linked to our self-concept, because it is strongly related to self-
awareness.
Core Self-Evaluation. Positive core self-evaluators like themselves and see themselves as being
capable and in charge of situations. Two elements determine this attribute. Self-Esteem, individuals
with high self-esteem see themselves as capable and able to influence the environment around them.
Low self-esteem individuals tend to seek external approval.
Narcissism. A person with high narcissism has a grandiose sense of his or her own importance,
requires excessive admiration, has a sense of entitlement and tends to be arrogant. Narcissists are
selfish, often difficult to work with, and may have a false sense of their effectiveness.
Self-Monitoring. High self-monitors show a strong ability to adapt their behaviors to fit external,
situational factors. People with low self-monitoring tend to have high behavioral consistency while
high self-monitors can appear chameleon-like to their co-workers. High self-monitors tend to get
better performance ratings, take leadership positions, are more mobile and take up central positions
in their organizations, even though they have less commitment to their organization.

Risk Taking. High-risk takers tend to make decisions faster and with less supporting information
than do low-risk takers. The need for high-risk acceptance behavior must be linked to the
requirements for the job.
Proactive Personality. Individuals with this type of personality tend to identify opportunities, show
initiative, take action, and persevere until meaningful change occurs. People with this personality
attribute are highly prized by organizations for obvious reasons. They are often leaders or change
agents and will challenge the status quo. Proactive people tend to have successful careers but may
not be a good match for organizations who do not value change.

2.2 PERCEPTION
All of individuals behaviour is somewhat shaped by not only personality but by our perceptions,
emotions, and experiences. This section, examines the role that perception plays in affecting the way
the people behave and how the world and the people around us. Perception is defined as the process
by which individuals select, organize, and interpret their sensory impressions in order to give meaning
to their environment. Perception is a cognitive process. Cognitions are basically bits of information and
cognitive processes involve the ways in which people process that information. The key to
understanding perception is that Perception is a unique interpretation of a situation and not an exact
recording of it. It is also a subjective process as different people may perceive the same environmental
event differently.
Factors Influencing Perception

How do we explain that individuals may look at the same thing, yet perceive it differently, and both be
right? A number of factors affect perception. These factors can be found in the perceiver, in the object
or target being perceived, or in the context of the situation in which the perception is made.
The Perceiver: When an individual (“the perceiver”) looks at something (“the target”) and tries toin
terpret what he or she sees, that interpretation is heavily influenced by the perceiver’s personal
characteristics.
The Target: A target’s characteristics can affect what is perceived. Loud people are more likely to be
noticed in a group than are quiet ones. So, too, are extremely attractive or unattractive individuals.
Novelty, motion, sound, size, and other attributes of a target shape the way we see it. Because targets
are not looked at in isolation, the relationship of a target to its back ground influences perception.
Objects that are close to each other will tend to be perceived together rather than separately. Events
that are close in time may also be seen as related, even if they are not. Employees in a particular
department are seen as a group. If two people in a four-member department suddenly resign, we tend
to assume that their departures were related when, in fact, they may be totally unrelated. Persons,
objects, or events that are similar to each other also tend to be grouped together. The greater the
similarity, the greater the probability that we will tend to perceive them as a common group. People
who are female, black or members of any other clearly distinguishable group will tend to be perceived
as similar not only in physical terms but in other unrelated characteristics as well.
The Situation: The context in which we see objects or events is important. Elements in the
surrounding environment influence our perceptions. For instance, it might be entirely appropriate to
wear shorts and T-shirts in a social setting, but not appropriate in a work setting. The time at which an
object or event is seen can influence attention, as can location, light, heat, or any number of situational
factors. Thus, it is possible to say that truth is often in the eye of the perceiver, rather than some
objective fact.

Stages in the Perception Process
So far we have discussed key factors influencing the perceptual process. Now we will look at the
stages involved in processing the information that ultimately determines a person’s perception and
reaction.
Stage 1: Observation Phase. It depicts the environmental stimuli being observed by the five senses of
the perceived.
Stage 2: Selection of the Stimuli: We are confronted with many stimuli at the same time. Because all
this cannot be processed simultaneously, only the most relevant things are selected and given attention.
An individual selects certain objects in the environment for attention.This is governed both by external
and internal factors. External factors consist of environmental influences and are in the form of the
characteristics of perceptual inputs or stimuli. Such characteristics may be in the form of size,
intensity, repetition, motion etc. Internal stimuli are related to the individual’s complex psychological
make-up. People will select out stimuli or situations from the environment that appeal to, and are
compatible with their: learning, motivation, and personality.
Stage 3: Organizing Stage after the information from the situation has been selected; it is organized to
extract meaning out of what is perceived by the individual. Thus, while selection is a subjective
process, organizing is a cognitive process. The specific principles underlying perceptual organization
are often referred to as the Gestalt principle-the name of the school of psychology that first developed
it: Gestalt psychology. (Gestalt, in German, means pattern or configuration). In this stage, the perceiver
is influenced by figure and ground, grouping, and several perceptual errors such as stereotyping halo
effects, projection and perceptual defense.
Stage 4: Interpretation Stage: The perceptual inputs that have been organized are interpreted by the
perceiver so that he can sense and extract some meaning of what is going on in the situation. This stage
is governed by the perceiver’s assumptions of people and events and attributions about causes of
behavior and feelings. In other words interpretation is governed by characteristics of the stimuli,
situation under which the perception is taking place and the characteristics of the perceiver. There are
often chances of misinterpretation and the perceiver may make mistakes due to several reasons. And
these are known as perceptual errors.
Stage 5: Behavior Response: In this stage the response of the perceiver takes on both covert and overt
characteristics. Covert response will be reflected in the attitudes, motives, and feelings of the perceiver
and overt responses will be reflected in the actions of the individual.
Common Perceptual Errors

Some distortions can occur during perception and therefore make the perceptual process inaccurate and
affect the response. These includes; stereotypes, halo effects, selective perception, projection, contrast
effects, and self-fulfilling prophecy.
Stereotyping: This refers to judging someone on the basis of one’s perception of the group to which
that person belongs.
A halo effect occurs when one attribute of a person or situation is used to develop an overall
impression of the individual or situation. Like stereotypes, these distortions are more likely to occur in
the organization stage of perception. Halo effects are particularly important in the performance
appraisal process because they can influence a manager’s evaluations of subordinates’ work
performance. For example, people with good attendance records tend to be viewedas intelligent and
responsible; those with poor attendance records are considered poor performers. Such conclusions may
or may not be valid. It is the manager’s job to try to get true impressions rather than allowing halo
effects to result in biased and erroneous evaluations.
Selective perception is the tendency to single out those aspects of a situation, person, or object that are
consistent with one’s needs, values, or attitudes. Its strongest impact occurs in the attention stage of the
perceptual process.
Projection is the assignment of one’s personal attributes to other individuals; it is especially likely to
occur in the interpretation stage of perception. A classic projection error is illustrated by managers who
assume that the needs of their subordinates and their own coincide. For example If you project our
needs onto the subordinates, individual differences are lost. Instead of designing the subordinates’ jobs
to fit their needs best, you have designed, you have designed their jobs to fit your needs.
Contrast effects occur when an individual’s characteristics are contrasted with those of others recently
encountered who rank higher or lower on the same characteristics.
Self-fulfilling prophecy is the tendency to create or find in another situation or individual that which
you expected to find in the first place. Self-fulfilling prophecy is sometimes referred to as the
“Pygmalion effect,” named for a mythical Greek sculptor who created a statue of his ideal mate and
then made her come to life. His prophecy came true! Through self-fulfilling prophecy, you also may
create in the work situation.
Attribution theory explains how we judge people differently, depending on the cause we attribute to a
given behaviour. Basically, the theory suggests that when we observe an individual’s behaviour, we try
to determine whether the individual is responsible for the behaviour (the cause is internal), or whether
something outside the individual caused the behaviour (the cause is external). Whether we realize it or
not, we use attribution theory whenever we try to come up with explanations for why people behaved
the way they did. In trying to understand another person’s behaviour, then, we consider whether the
behaviour was internally or externally caused. Internally caused behaviour is believed to be under the
personal control of the individual; that is, the person chooses to engage in the behaviour. Externally
caused behaviour is believed to result from outside causes; that is, the person does not have control
over his or her actions and is forced into the behaviour by the situation. In trying to determine whether
behaviour is internally or externally caused, we rely on three rules about the behaviour: distinctiveness
refers to whether an individual acts similarly a cross a variety of situations, consensus considers how
an individual’s behaviour compares with others in the same situation. If everyone who is faced with a
similar situation responds in the same way, we can say the behaviour shows consensus. When
consensus is high, an external attribution is given to an individual’s behaviour. But if an individual’s
behaviour is different from everyone else’s, you would conclude the cause for that individual’s
behaviour was internal and finally, consistency in an action that is repeated over time. Learning: how
learning occurs, principles of learning.
Managing the Perceptual Process

To be successful, managers must understand the perceptual process, the stages involved, and the
impact the perceptual process can have on their own and others’ responses. They must also be aware of
what roles the perceiver, the setting, and the perceived have in the perceptual process. Particularly
important with regard to the perceived is the concept of impression management for both managers
and others. Impression management is a person’s systematic attempt to behave in ways that will create
and maintain desired impressions in the eyes of others. First impressions are especially important and
influence how people respond to one another. Distortion management: During the attention and
selection stage, managers should be alert to balancing automatic and controlled information
processing.

2.3 LEARNING
Today’s organisations are rapidly changing requiring both managers and employees to adapt to
changes through learning. Therefore there is need to create a learning environment that is responsive to
the unique needs of adult learners by addressing five characteristics of that environment:
Learning is defined as any relatively permanent change in behaviour that occurs as a result of
experience. Whenever any change occurs learning is taken place in the individual. If an individual
behaves, reacts, responds as a result of experience which is different from others, a person has
encountered some new learning experience in his life. This definition consists of the following four
key elements: Change process: Learning involves some change in oneself in terms of observable
actions explicitly shown to others or change in one’s attitude or thought process occurs with oneself
implicitly. Permanent change: Due to whatever exposure a person encounters, the impact what it
generates may be long lasting and permanent. Hence, the change must be of relatively permanent. If
change occurs due to fatigue or alcohol consumption or temporary adaptation, it may be vanished once
the goal is achieved. Setting behavioral actions: Explicit changes occurring in behavior is the main
goal of learning process. A change in an individual’s thought process or attitudes without any changes
in any explicit behavior will not be considered as learning process. Need for meaningful experiences:
Some form of experiences is necessary for learning. Experience may be acquired directly through
observation or practice. If experience results in a relatively permanent change in behavior, one can
confidently say that learning has taken place.
Learning Theories
Theories of learning demonstrate different ways by which learning takes place. There are three types of
learning theories, and these are classical conditioning, operant conditioning and social learning.
Classical Conditioning Theory
Russian physiologist Ivan Pavlov developed classical conditioning theory. When he was doing a
research on the chemical properties of saliva of dog, he noticed accidentally that the dog started
salivating the moment hearing the sound of a door of cupboard clinging. Based on his observation, he
wanted to do some experiment whether the dog can be conditioned to respond to any neutral stimuli.
He used a simple surgical procedure to operate the salivary glands of a dog to measure accurately the
amount of saliva. Pavlov’s Experiment: Pavlov conducted his experiment in three stages:
Stage I: When Pavlov presented the dog with a piece of meat, the dog exhibited a noticeable increase
in salivation. The meat is unconditional stimulus and salivation is unconditional response.
Stage II: In this stage, the dog was not given a piece of meat but only exposed to a sound of ringing
bell; the dog did not salivate to the mere sound of a ringing bell.
Stage III: Pavlov decided to link both the presentation of meat and the ringing of a bell one after the
other with an interval of 5 minutes. After repeatedly hearing the bell before getting the meat, the dog
began to salivate as soon the bell rang. There is an association or link between meat and ringing a bell.
After repeating the association between meat and ringing a bell, the dog started salivating merely at the
sound of the bell, even if no food was offered. The dog is now conditioned to respond to a sound of a
bell and started alivating. This is called classical conditioning process.
Thus, classical condition is defined as the formation of S-R link (Stimulus-Response) or habit between
a conditioned stimulus and a conditioned response through the repeated paring of conditioned stimulus
with an unconditioned stimulus. In this experiment, the meat is unconditioned stimulus, and the
expected response that is, salivating to the meat is called as unconditioned response. The sound of a
bell is a neutral stimulus which does not have any property to elicit salivation, is called as conditioned
stimulus. Although it was originally neutral, if the bell was paired with meat (unconditioned stimulus)
it acquired the same property as meat eliciting the salivation. The sound of a bell produced salivation
when presented alone. This is called conditioned response, that is, now the dog is conditioned to
respond to the sound of a bell.
Learning conditioned response involves building up an association between a conditioned stimulus and
unconditioned stimulus. When the stimuli, one is natural and the other one neutral are paired, the
neutral one becomes a conditioned stimulus and hence takes on the properties of the unconditioned
stimulus. Closely associated with classical conditioning as a vehicle for learning new behaviors are the
phenomenon of extinction, spontaneous recovery, stimulus generalization and stimulus discrimination.
Once a dog has learned to salivate to a bell, does this reflex continue to occur if the bell is sounded for
many trails without the meat (unconditioned stimulus). Pavlov found that without meat, the bell elicits
less and less salivation on each trail and eventually stopped salivating once for all. This phenomenon is
called as extinction.
Operant Conditioning
Operant conditioned principle is proposed by B.F. Skinner, an American Psychologist. Itis a type of
conditioning in which desired voluntary behavior leads to a reward or prevent a punishment. Operant
conditioning principle emphasizes strongly that the behavior of an individual is a function of its
consequences. If the consequences are pleasant, the behavior associated with such consequences will
be repeated again and again. If the consequences are unpleasant, the behavior will be in extinct. The
rationale behind this theory is that people learn to behave in order to get something they want or to
avoid something they don’t want. Operant condition is learned process. The tendency to repeat such
behaviour r is influenced by the reinforcement or lack of reinforcement brought about by the
consequences of the behavior. The proper reinforcement strengthens a behavior and increases the
likelihood that it will be repeated.

Skinner argued that creating pleasant consequences (giving attractive rewards) to follow specific forms
of behavior (hitting sales target) would increase the frequency of that behavior. People will most likely
engage in desired behaviors if they are positively reinforced for doing so. Rewards are most effective if
they immediately follow the desired response. In addition, Behavior that is not rewarded is less likely
to be repeated.
Social Learning Theory
Albert Bandura, who has most vigorously studied observational learning in humans, has emphasized
that people observe others to learn not just specific motor skills (such as driving a car and performing
surgery) but also more general modes or styles of behaving. People learn through both observation and
direct experience, which is called as social learning theory. Individual learn by observing what happens
to other people and just by being told about something, as well as by direct experiences. By observing
people around us, mostly from parents, teachers, peers, films and television performers, bosses, we
learn new behavior pattern. Bandura demonstrated both of these functions of observational learning;
acquiring specific actions and learning general styles of behaviour, Bandura proposed that people
actively observe the behavior of other people to gain knowledge about the kinds of things that people
do, and use that knowledge in situations where it is useful. Social learning theory gives much
importance to perceptual process. People respond to how they perceive and defy consequences, not to
the objective consequence themselves. The influence of models is key to the social learning process.
The following four processes are vital to determine the influence that a model will have on an
individual.
i) Attention Process: People learn from a model only when they recognize and pay attention to its
critical features. People tend to be most influenced by models that are attractive, repeatedly available
similar to us in our estimation.
ii) Retention Process: A model’s influence will depend on how well the individual remembers the
model’s action after the model is no longer readily available.
Iii) Motor Reproduction Process: After a person has seen a new behavior observing the model, the
watching must be converted to doing. This process then demonstrates that the individual can perform
the modelled activities.
iv) Reinforcement Process: Individual will be motivated to exhibit they modelled behavior if positive
incentives or rewards are provided. Behavior that is positively reinforced will be given more attention,
learned better and performed more often.

2.4 ATTITUDES
Formally defined, an attitude is a predisposition to respond in a positive or negative way to someone

or something in one’s environment. Attitudes are influenced by values and are acquired from the same
sources as values: friends, teachers, parents, and role models. Attitudes focus on specific people or
objects, whereas values have a more general focus and are more stable than attitudes. There are three
components of attitudes such as Cognitive (Thinking), Affective (Feeling) and Cognitive (Behavioral).
The cognitive component deals with thinking, evaluation, comparison, rational, logical issues with
respect to the targeted object. This facilitates to form a strong belief or further strengthen the belief
system towards various objects. The affective component deals with feelings or emotional issues of the
targeted objects and the behavioural component refers to intentions to behave in a certain way towards
someone or something. Applied motivation practices: rewards, job design, socio technical systems OB
model, empowerment, goal setting.
A person can have thousands of attitudes, but organizational behaviour focuses our attention on a
limited number of job-related attitudes. These job-related attitudes tap positive or negative evaluations
that employees hold about aspects of their work environment. We will now consider three important
attitudes that affect organizational performance: job satisfaction, organisational involvement and
organizational commitment.
The term job satisfaction refers to an individual’s general attitude toward his or her job.b A person
with a high level of job satisfaction holds positive attitudes toward the job, while a person who is
dissatisfied with his or her job holds negative attitudes toward the job. When people speak of employee
attitudes, more often than not they mean job satisfaction. In fact, the terms are frequently used
interchangeably.
The evidence suggests that the link between an individual’s job satisfaction and his or her productivity
is very slightly positive. It turns out the productivity can be affected as much by external conditions as
it is by job satisfaction. The relationship between job satisfaction and productivity is stronger when the
employee’s behaviour is not controlled by outside factors. Job satisfaction is also a major determinant
of an employee’s OCB. Satisfied employees would seem more likely to talk positively about an
organization, help others, and go beyond the normal expectations in their jobs. Moreover, satisfied
employees might be more prone to go beyond the call of duty because they want to reciprocate their
positive experiences.
Research evidence suggests that employees who are dissatisfied can express dissatisfaction in a
number of ways. For example, rather than quit, employees can complain, be insubordinate, steal
organizational property, or avoid some of their work responsibilities illustrates a model that can be

used to examine individual responses to dissatisfaction along two dimensions: whether they are
constructive or destructive and whether they are active or passive. Four types of behaviour result:
• Exit. Actively attempting to leave the organization, including looking for anew position as well as
resigning. This is a destructive action from the point of view of the organization.
• Voice. Actively and constructively trying to improve conditions, including suggesting improvements,
discussing problems with superiors, and some forms of union activity.
• Loyalty. Passively but optimistically waiting for conditions to improve, including speaking up for the
organization in the face of external criticism and trusting the organization and its management to do
the right thing.
• Neglect. Passively allowing conditions to worsen, including chronic absenteeism or lateness, reduced
effort, and increased error rate.
Job Involvement: Job involvement is the degree, to which a person identifies with his or her job,
actively participates in it and considers his or her performance important to self-worth. Employees
with a high level of job involvement strongly identify with and really care about the kind of work they
do. High levels of job involvement have been found to be related to fewer absences and lower
resignation rates.
Organizational commitment is defined as a state in which an employee identifies with a particular

organization and its goals, and wishes to maintain membership in the organization. Professor John
Meyer at the University of Western Ontario and his colleagues have identified and developed measures
for three types of commitment:
• Affective commitment. An individual’s relationship to the organization: his or her emotional

attachment to, identification with, and involvement in the organization.
• Normative commitment. The obligation an individual feels to staying with the organization.
• Continuance commitment. An individual’s calculation that it is in his or herbest interest to stay with
the organization based on the perceived costs of leaving the organization. Affective commitment is
strongly associated with positive work behaviours such as performance, attendance, and citizenship.
Normative commitment is less strongly associated with positive work behaviours. However, when
affective and normative commitment decline, individuals are much more likely to quit their jobs.
Because continuance commitment reflects an individual’s calculation that it is in his or her best
interest to stay with the organization (perhaps because it would be difficult to find a job elsewhere),
it is often associated with negative work behaviours.
2.5 VALUES
Values are basic convictions that a specific mode of conduct or end state of existence is personally or
socially preferable to an opposite or converse mode of conduct or end state of existence. Values are
important to the study of organisational behaviour because they lay the foundation for the
understanding of people’s attitudes and motivation, and they influence people’s perceptions as well.
Values are more difficult to change or alter than are attitudes, although attitudes are based on values.
As ethical conduct receives more visibility in the workplace, values increase in importance as a topic
of discussion in management.
Types of values
Rokeach divides values into instrumental and terminal values. Instrumental values represent
acceptable behaviors as the means to reach a goal. Terminal values represent the goals to be
achieved.
Work values are more specific than personal values, and have direct implications for behavior and
attitudes in organizations. The work values most relevant to individuals are achievement, concern for
others, honesty, and fairness.
Cultural Differences in Values
Culture exerts a significant influence on individuals’ values and the differences in values within
various cultures become increasingly important as workforce diversity broadens. Central values such
as loyalty, contribution, and authority can vary greatly from one culture to another, making it more
important than ever that managers seek to understand, tolerate, and capitalize on those differences.
2.6 WORK STRESS
Work stress has become a subject of interest only recently and its inclusion as one of the in OB is
justified for at least two reasons. First, stress is an independent variable influencing employee
satisfaction and performance. Second, it is incumbent on management to improve quality of life of
organisational members.
Stress refers to an individual’s reaction to a disturbing factor in the environment. To quote a formal
definition: “Stress is defined as an adaptive response to an external situation that results in physical,
psychological, and / or behavioural deviations for organisational participants”. Stress can manifest
itself in both a positive and a negative way. Stress is said to be positive when the situation offers an
opportunity for one to gain something. Eustress is the term used to describe positive stress. Eustress is
often viewed as motivate or since in its absence the individual lacks that, edge necessary for peak
performance. It is negative when stress is associated with heart disease, alcoholism, drug abuse, marital
breakdowns, absenteeism, child abuse, and a host of other social, physical, organisational, and
emotional problems. Stress is associated with constraints and demands. The former prevents an
individual from doing what he or she desires. The latter refers to the loss of something desired. It is
necessary to realize that stress is an inevitable part of life, and that it cannot be avoided. What can
however, be avoided are the negative reactions to stress.
Stress generate from individual group and organisational sources. These sources are explained below:

Organisational Stressors: In organisations frequent causes of stress are task demands, role demands,
interpersonal demands, organisation structure, organisational leadership and organisation’s life cycle.
Task demands are factors related to a person’s job. They include the design of the individual’s job,
working conditions, and the physical work layout. Assembly line scan put pressure when their speed is
perceived as excessive. The more interdependence between a person’s tasks and the tasks of others, the
more potential stress there is. Jobs where temperatures, noise, or other walking conditions are
dangerous or undesirable can increase anxiety. So, too can working in an overcrowded room or in a
visible location where interruptions are constant. Security is another task demand that can cause stress.
Someone in a relatively secure job is not likely to worry unduly losing that position. On the other hand,
if job security is threatened stress can increase dramatically. The final task demand stressor is overload.
Overload occurs when a person simply has more work to do than he or she can handle. The overload
can be either quantitative (the individual has too many tasks to perform or too little time in which to
perform them) or qualitative (the person may believe that she or he lacks the ability to do the job). We
should also note that the opposite of overload may also be undesirable. As shows low task demands
can result in boredom and apathy just asoverload can cause tension and anxiety. Thus, a moderate
degree of workload related stress is optimal, because it leads to high levels of energy and motivation.
Role demands include role conflict, role ambiguity, role erosion, and role overload. Role conflict
occurs when an individual receives competing and conflicting expectations from others. Role
ambiguity results from having unclear expectations. Role erosion arises when the functions of one
incumbent are performed by someone else. Role overload occurs when there are too many expectations
than one is able to fulfill. All these role demands are stressors.
Inter-personal Demands: Conflicting personalities and behaviours may cause stress. Conflict can
occur when two or more people must work together even though their personalities, attitudes and
behaviours differ. For instance, a smoker and non–smokers who are assigned adjacent work places
obviously experience stress. Similarly, a person with an internal locus of control that is who always
wants to control how things turn out might get frustrated working with an external person who likes to
wait and just let things happen.
Organisation structure: Defines the level of differentiation, the degree of rules and regulations, and
where decisions are made, excessive rules and lack of participation in decisions that affect an
employee are examples of structural variables that might be potential stressors.
Organisational leadership: Some managers may create a culture characterized by tension, fear and
anxiety. They establish unrealistic pressures to perform in the short run, impose excessively tight
controls, and routinely fire employees who fail to measure up.
Organisation’s Life cycle: Organisations like human beings pass through a lifecycle. In this cycle,
the organisation is born and then has its growth. Policies are developed to guide decisions and these are
carried out through procedures. These procedures are refined and made more efficient with theories
about efficiency. In time organisation may develop characteristics of a religion, it may worship the
way it does things. Performance is by ritual; things are done by habit without questioning. The death
and last rites of the organisation will ordinarily follow. Each stage of the life cycle poses its own
challenges and problems. While the early stages are exciting, the latter ones create anxiety and tension.
Group Stressors: Groups influence on employee behaviour, performance, and satisfaction. The group
can also be a potential source of stress. Group stressors can be categorized into four as explained
below:
1. Lack of Group Cohesiveness: It has become very clear that cohesiveness is very important to
employees, particularly at the lower levels of organisations. If an employee is denied the
opportunity for this cohesiveness because of the task design, because the supervisor does things to
prohibit or limit it, or because the other members of the group shut the person out, this can be very
stress producing.
2. Lack of Social support: Employees are greatly affected by the support of one more members of a
cohesive group. By sharing their problems and joys with others, they may be much better. But if this
type of social support is lacking for an individual, it can be very stressful.
3. Inter-personal and inter group conflict: conflict has both functional and dysfunctional consequences.
Dysfunctional consequences have stress potential.
4. Sexual Harassment: Sexual harassment may be understood as unwanted contact or communication

of a sexual nature, usually against women. Sexual harassment is increasingly becoming a source of
stress in many of today’s workplaces. The stressful effects of sexual harassment stem primarily
from two reasons: the direct affront to the victim’s personal dignity. And the harasser’s interference
with the victim’s capacity to do the job.
Individual Stressors: Among individual factors contributing to stress personality, life and career
changes and life trauma. In respect of personality the distinction between Type A and Type B
behaviour patterns become relevant. The Type A personality is one for which stressful behaviour
patterns. The achievement orientation, impatience and perfectionism of individuals with Type A
personalities may create stress in work circumstances that other persons find relatively stress free.
Type A personalities, in this sense, bring stress on themselves.
Life change can also be stress producing. Life change may be slow (like getting older) or sudden (like
the death of a spouse). These changes have dramatic effect on People. Sudden changes are highly
stressful. Life trauma can be highly stressful. A life trauma is any upheaval in an individual’s life that
alters his or her attitudes, emotions or behaviours. Life change and life trauma look alike but there is
difference between the two. This turmoil constitute life trauma which is likely to spill over to work
place. Major life traumas that may cause stress include marital problems, family difficulties, and health

problems. Career changes may also be stressful. Being suddenly thrust into a new job with new
responsibilities can be very stressful. Under promotion or over promotion can also be stressful.
Environmental Factors: Extra organisational factors also contribute to job stress. These factors
include political, economic and technological uncertainties. Political factors are likely to cause stress in
countries which suffer from political uncertainties, Changes in the business cycle create economic
uncertainties. When the economy is contracting, people become increasingly anxious about their
security. Downward swings in the economy are often accomplished by permanent reduction sin the
workforce, temporary lay-offs, reduced pay, and the like. New innovations can make an employee’s
skills and experience obsolete in a very short period of time. Technological uncertainty, therefore, is a
third type of environmental factor that can cause stress. Computers, robotics, automation and other
forms of technological innovation are a threat to many people and cause them stress.
Stress Consequences or impact
Stress can have serious consequences for both our health and our work performance. In terms of
health, the current belief among many medical practioners is that 50 to 70 per cent of all physical
illnesses are related to stress. The link between stress and heart disease is well known. High levels of
stress are also associated with diabetes, ulcers, high blood pressure, andarterioscleros is. Stress can
cause depression, irritation, anxiety, fatigue, lowered self-esteem, and reduced job satisfaction.
Sustained over a long period, stress can leadto attempts to escape through the use of drugs or alcohol.
It may also lead to burn out which has been defined as a state of mind resulting from prolonged
exposure to intense emotional stress and involving physical, emotional and mental exhaustion. The
most serious consequence of stress relates to performance. It is said that moderate levels of stress
stimulate the body and increase its ability to react, individuals then perform better. But too much stress
places unattainable demands or constraints on a person, which results in lower performance.
Coping Strategies for Stress
Coping strategies may be categorized into (a) individual strategies, and (b) organisational strategies:
Individual Strategies: As an individual one has several techniques available to reduce his or her
tension. More prominent among them are time management, physical exercise, relaxation, yoga, social
support, situation control and unburdening oneself. Time Management Most of us are poor in time
management. The result is feeling of work overload, skipped schedules and attendant tension. Some
basic principles in time management are (i) preparing daily a list of activities to be attended to; (ii)
prioritizing activities by importance and urgency, (iii) scheduling activities according to the priorities
set and (iv) handing the most demanding parts of a job when one is alert and productive. It is reported
that effective time management results in reduction in blood pressure, clarity in thinking, and steep
decrease in the consumption of tranquillizers and relaxed feeling inaction.

Exercise in any form helps people to cope with the stress as it is for this reason that people of all ages
are seen taking early morning walk, or engaging themselves in jogging, swimming or playing games.
One can have relaxation through meditation. Whatever the method the objective is that one must have
deep relaxation where he or she feels physically relaxed and detached from body sensations. 15 or 20
minutes a day of deep relaxation releases tension and provide a person with a pronounced sense of
peacefulness. Importantly, significant changes in heart rate, blood pressure, and other physiological
factors result from achieving the deep relaxation condition.
Social Support: It is truism that people need and benefit from social support. Applied as a strategy to
reduce job stress, this would entail forming close associations also called net works with trusted,
empathetic co-workers and colleagues who are good listeners and confidence builders. These friends
are there when needed and provide support to get the person through stressful situations.
Control the Situation: One must avoid unrealistic deadlines. He or she must do his or her best and at
the same time be aware of limits. It is impossible to please everyone.
Organisational Strategies: Individuals are capable of increasing their own resistance to stress, but
find it almost impossible to eliminate work related stresses. In other words, while they maybe able to
help minimize its effects, they may not able to prevent stress in the first place. For this reason,
organisations can play a key role in stress management.
Personal Wellness: Personal wellness is a term used to describe the pursuant of one’s physical and
mental potential through a personal health promotion programme. A supervisor can impact personal
wellness of his subordinates through positive example, encouragement, and by practicing the basic
concepts and techniques of human resource management. When the manger is successful in creating a
healthy work climate and environment, everyone should benefit from the increased capacity of people
to handle successfully the change and stress that inevitably accompanies their lives a work.
Improved communication: Increased communication with employees reduces uncertainty by

lessening role ambiguity and role conflict.
Participative Decision making: Role stress is detrimental to a large extent because employees feel
uncertain about goals, expectations, how they will be evaluated and the like. By giving these
employees a voice in those decisions that directly affect their job performances, management can
increase employee control and reduce the role stress. So managers should consider increasing
employee participation in decision making.
Job Redesign: Job Redesign involves enriching jobs either by improving job content factors (such as
responsibility, recognition and opportunities for achievement, advancement, growth etc.) or by
improving core job characteristics (such as skill variety, task identity, autonomy, and feedback).
Enriched tasks will eliminate the stress found in more routine and structured job.
Selection and placement: Certain jobs are more stressful than others. Individual too differ in their
response to stress situations. Individuals with little experience should not restrict hiring to only
experienced individuals with an internal locus, such individuals may adapt better to high stress jobs
and perform those jobs more effectively
UNIT SUMMARY
In this unit we have learnt that individual behavior refers to how individual behaves at work place, his
behavior is influenced by a number of factors such as ability, attitude, values, personality, perception,
learning and motivation.
The physical capacity of an individual to do something can be termed as ability. Skill can be defined as
the ability to act in a way that allows a person to perform well. The individual behaviour and
performance is highly influenced by ability and skills. A person can perform well in the organisation if
his abilities and skills are matched with the job requirement. The managers plays vital role in matching
the abilities and skills of the employees with the particular job requirement.
Perception: The cognitive process meant for interpreting the environmental stimuli in a meaningful
way is referred to as perception. Every individual on the basis of his/he reference can organize and
interpret environmental stimuli. There are many factors that influence the perception of an individual.
The study of perception plays important role for the managers. It is important for mangers to create the
favorable work environment so that employees perceive them in most favorable way. The employees
are likely to perform better if they are going to perceive it in a positive way.
Attitude can be defined as a tendency to respond favorably or unfavorably to certain objects, persons
or situations. The factors such as family, society, culture, peers and organisational factors influence the
formation of attitude. The managers in an organisation need to study the variables related to job as to
create the work environment in a favorable way that employees are tempted to form a positive attitude
towards their respective jobs. The employees can perform better in the organisation if they form a
positive attitude.
Personality can be defined as the study of the characteristics and distinctive traits of an individual, the
inter-relations between them and the way in which a person responds and adjusts to other people and
situations. The several factors that influence the personality of an individual are heredity, family,
society, culture and situation. It implies to the fact that individuals differ in their manner while
responding to the organizational environment. Personality can be regarded as the most complex aspect
of human beings that influences their behaviour in big way. It can be concluded that the study of
personality traits offers an opportunity to understand the individuals

Activity
1. Discuss how personality traits can predict behaviour in work settings.

2. Explain how learning theories influence your understanding employees’ behaviour.
3. Discuss the work attitudes which are critical to job performance.
4. Explain the consequences of job stress and suggest methods of its management.
5. Explain the impact of stress on individual performance and job satisfaction?

UNIT 3: GROUP AND INTERPERSONAL BEHAVIOUR
3.0 INTRODUCTION
This Unit provides insighst into how the group behaviour plays a crucial role in OB. Nearly fifty years
ago it was acceptable to say that organisations were composed of individuals. Now in the present
context, besides the importance of individuals in OB, the group and the behaviour of individuals in
groups have become the major areas of discussion. Today, we recognize the role of group in explaining
the comprehensive phenomena of OB. We are now to examine group behaviour in relation to the
nature of groups, why groups including conflict, power and political behaviour.
LEARNING OUTCOMES
By the end of this unit you should be able to:
 Analyse the nature and functioning of groups in organizations.

 Identify different types of teams in organisations
 Describe group decision making styles and strategies
 Examine sources of conflict and strategies for resolving
conflict in organizational settings.
 Explain concepts of power and political behavior.
3.1 NATURE OF GROUPS
A group may be defined as a collection of two or more people who work with one another regularly to
achieve common goals. In a true group, members are mutually dependent on one another to achieve
common goals, and they interact with one another regularly to pursue those goals over a sustained
period of time. Groups are good for both organizations and their members, helping to accomplish
important tasks and to maintain a high-quality workforce.
According to David Horton Smith, “a group is the largest set of two or more individuals who are
jointly characterized by a network of relevant communications, a shared sense of collective identify
and one or more shared dispositions with associated normative strength”. From the above, we may say
that group is;
 A collection of two or more individuals

 Have a common goal or interest, which is shared.
 Interact with each other to accomplish their objectives.

 Perceive themselves to be a part of the group.
 Have a collective identity.
Groups may be formal or informal. The formal group is one which has a definite organisational
structure, with a designed work assignment, establishing tasks and work groups. In a formal group the
behaviour of an individual is directed towards achieving the organisational goals. Formal groups may
be permanent or temporary. Permanent work groups, or command groups in the vertical structure,
often appear on organization charts as departments (e.g., market research department), divisions (e.g.,
consumer products division), or teams (e.g., product-assembly team). Such groups can vary in size
from very small departments or teams of just a few people to large divisions employing a hundred or
more people. In all cases, permanent work groups are officially created to perform a specific function
on an ongoing basis. They continue to exist until a decision is made to change or reconfigure the
organization for some reason. In contrast, temporary work groups are task groups specifically created
to solve a problem or perform a defined task. They often disband once the assigned purpose or task has
been accomplished. Examples are the many temporary committees and task forces that are important
components of any organization.
Informal groups emerge without being officially designated by the organization. They form
spontaneously and are based on personal relationships or special interests, and not on any specific
organizational endorsement. They are commonly found within most formal groups. Friendship groups,
for example, consist of persons with natural affinities for one another. They tend to work together, sit
together, take breaks together, and even do things together outside of the workplace. Interest groups
consist of persons who share common interests. These may be job-related interests, such as an intense
desire to learn more about computers,
Informal groups often help people get their jobs done. Through their network of interpersonal
relationships, they have the potential to speed up the workflow as people assist each other in ways that
formal lines of authority fail to provide. They also help individuals satisfy needs that are thwarted or
otherwise left unmet in a formal group. In these and related ways, informal groups can provide their
members with social satisfactions, security, and a sense of belonging.
Group formation and development: The process of group development is a dynamic process. Groups
can form when individuals with similar goals and motives come, together. Groups are formed
voluntarily. The individuals of a group can join and leave the group any time and they can also change
their tasks. Hence, understanding how groups form and develop is important for managers. There are
certain motives because of which, the individuals join a group, which are as follows:
 Organizational motives to join groups: Organizations form functional and task groups
because such groups help the organization in structuring and grouping the organizational
activities logically and efficiently.
 Personal motives to join groups: Individuals also choose to join informal or interest groups
for unimportant reasons. Since joining these groups is voluntary, various personal motives
affect membership.
 Interpersonal attraction: Individuals conic together to form informal or interest group, as
they are also attracted to each other. The factors that contribute to interpersonal attraction
are sex, similar attitudes, personality and economic standing. The closeness of group members
may also be an important factor.
 Interest in-group activities: Individuals may also be motivated to join an informal or
interest group because the activities of the group appeal to them. Playing tennis, discussing
current events or contemporary literature, all these are group activities that individuals enjoy.
 Support for group goals: The individuals may also be motivated goals by the other group
members to join.
 Need for affiliation: Another reason for individuals to join groups is to satisfy their need
for attachment. Retired/old aged individuals join groups to enjoy the companionship of
other individuals in similar situation.
 Instrumental benefits: Group membership sometimes also helpful in providing other
benefits to an individual. For example, a manager might join a Rotary/ Lions club if he feels
hat being a member of this club will lead to important and useful business contacts.
The process of joining and being influenced by a group doesn’t generally happen all at once. It is an
ongoing process. One very well established general model of group development is Tuckman’s five-
stage model outlined below.
Forming Stage The first stage in the process of group formation is characterized by a great deal of
uncertainty, about the group’s purpose, structure, leadership, etc. Members are “testing the waters”- to
determine what types of behaviour are acceptable. This stage is completed when members begin to
think of themselves as a part of the group, their contribution etc.
Storming Stage In this second phase, the transaction of members results in intra group conflicts.
Members accept the existence of the group, but there is resistance to the control that the group imposes
on individuality. Further, there will be conflict over who will control the group. This stage brings in a
relatively clear hierarchy of leadership, when the stage is completed.
Norming Stage In this third stage a close relationship develops and the group demonstrates
cohesiveness. There is now a strong sense of group identity and camaraderie. This stage is complete
when there is a continuous structure for the group and the group has assimilated a common set of
expectations of what defines correct member behaviour.
Performing Stage This is the final stage of development in the group. The structure at this point is
fully functional and accepted by the member in general. The members understand each others role and
understand each other to perform their tasks in a concerted action. Often, they may get disturbed
because of interest conflict and role conflict within the group at later stage. It is better to think of this
four stage model as a general framework, when you want to understand OB. It gives a clear picture that
the groups are dynamic entities and are the inevitable part of organisational life.
Adjourning Stage: For permanent work groups, performing is the last stage in their development.
However, for temporary committees, teams, task forces, and similar groups that have a limited task to
perform, there is an adjourning stage. In this stage, the group prepares to split up. High task
performance is no longer the group’s top priority. Instead, attention is directed toward wrapping up
activities. Group members’ responses vary at this stage. Some members are upbeat, basking in the
group’s accomplishments. Others may be depressed over the loss of camaraderie and friendships
gained during the work group’s life.
Groups and Intergroup Dynamics

The effectiveness of any group requires more than the correct inputs. It always depends in part on how
well members work together to utilize these inputs to produce the desired outputs. When we talk about
people “working together” in groups, we are dealing with issues of group dynamics which are the
forces operating in groups that affect the way members relate to and work with one another. From the
perspective of an open system, group dynamics are the processes through which inputs are transformed
into outputs. The term intergroup dynamics refers to the dynamics that take place between two or
more groups. Organizations ideally operate as cooperative systems in which the various components
support one another. In the real world, however, competition and intergroup problems often develop
within an organization and have mixed consequences
To achieve success a group must have the right skills and competencies available for group problem
solving. Although talents alone cannot guarantee desired results, they establish an important baseline
of performance potential. When the input competencies are insufficient, a group’s performance limits
will be difficult to overcome.

3.2 GROUP DECISION MAKING
One of the most common ways groups make decisions, especially when early signs of disagreement set
in, is decision by majority rule. Here, formal voting may take place, or members may be polled to find
the majority viewpoint. This method parallels the democratic political system and is often used without
awareness of its potential problems. The very process of voting can create coalitions. That is, some
people will be “winners,” and others will be “losers” when the final vote is tallied. Those in the
minority—the “losers,” may feel left out or discarded without having had a fair say. As a result, they
may be less enthusiastic about implementing the decision of the “winners.” Lingering resentments may
impair group effectiveness in the future.Another alternative is decision by consensus. Formally
defined, consensus is a state of affairs whereby discussion leads to one alternative being favoured by
most members and the other members agreeing to support it. A decision by unanimity may be the ideal
state of affairs. Here, all group members agree totally on the course of action to be taken. This is a
“logically perfect” group decision method that is extremely difficult to attain in actual practice.
How to improve Group decision making

In order to take full advantage of the group as a decision- making resource, care must be taken to
managegroup dynamics to balance individual contributions and group operations. A particular concern
is with the process losses that often occur in free-flowing meetings, such as a committee deliberation
or a staff meeting on a specific problem. In these settings the risk of social pressures to conformity,
domination, time pressures, and even highly emotional debates may detract from the purpose at hand.
They are also settings in which special group decision techniques may be used to advantage.
Brainstorming In brainstorming, group members actively generate as many ideas and alternatives as
possible, and they do so relatively quickly and without inhibitions. Four rules typically govern the
brainstorming process. The emphasis is on creativity and imagination; the wilder or more radical the
ideas, the better. Third, quantity is wanted. The emphasis is also on the number of ideas; the greater the
number, the more likely a superior idea will appear.
Nominal Group Technique In any group, there will be times when the opinions of members differ so
much that antagonistic arguments will develop during free-wheeling discussions. At other times the
group will be so large that open discussion and brainstorming are awkward to manage. In such cases, a
form of structured group decision making called the nominal group technique may be helpful. It puts
people in small groups of six to seven members and asks everyone to respond individually and in
writing to a “nominal question” such as: “What should be done to improve the effectiveness of this
work team. The nominal group procedure allows ideas to be evaluated without risking the inhibitions,
hostilities, and distortions that may occur in an open meeting.
Delphi Technique A third group decision approach, the Delphi technique, was developed by the
Rand Corporation for use in situations where group members are unable to meet face to face. In this
procedure, a series of questionnaires are distributed to a panel of decision makers, who submit initial
responses to a decision coordinator. The coordinator summarizes the solutions and sends the summary

back to the panel members, along with a follow-up questionnaire. Panel members again send in their
responses, and the process is repeated until a consensus is reached and a clear decision emerges.
Computer-Mediated Decision Making Today’s information and computer technologies enable group
decision making to take place across great distances with the support of group decision support
systems. The growing use of electronic brain storming is one example of the trend toward virtual
meetings. Assisted by special software, participants use personal computers to enter ideas at will,
either through simultaneous interaction or over a period of time. The software compiles and
disseminates the results. Both the nominal group and Delphi techniques also lend themselves to
computer mediation. Electronic approaches to group decision making can offer several advantages,
including the benefits of anonymity, greater number of ideas generated, efficiency of recording and
storing for later use, and ability to handle large groups with geographically dispersed members,
UNIT SUMMARY
When an employee joins an organisation, he\she joins as an individual. After joining the organisation ,
an individual either joins a group or form a group to satisfy various needs such a psychological, social,
safety, economic and cultural needs, which otherwise may not be fulfilled by the organisation. Thus,
groups are inevitable phenomena in the organisation. As it is difficult to understand, predict and
control the behaviour of an individual in the organisation, it becomes more difficult and challenging
for a manager to understand the behaviour of a group. There exist different types of groups in the
organisation. They can be broadly divided into two types such as formal and informal. While formal
groups are created by the organisation for some specific purpose; individual employees themselves
form informal groups. Informal groups are just like shadows of the formal organisation.
It is difficult to stop the formation of informal groups because no management can fulfill all types of
needs of their employees. Though team is a type of formal group but a team has to posses some unique
features of its aim such as; it always consists of the best employees of the organisation, the members of
team are supposed to be master piece of their own area of work and specialisation, which may not be
the case with a formal group. It is often formed on the basis of seniority, statutory requirements etc.
A group passes through different stages of its development such as storming, forming, norming,
performing and adjourning. With the passage of time a group achieves its cohesiveness to face the
threat competition and achieve its effectiveness. As a result, a structure develops in the group to give a
formal shape to its existence and monitor its day to day activities. Group also develops its norm. A
stable group cannot be effective for itself as well as the organisation, so needs to have dynamism of its
own. Since individual decisions have its own limitations, organisation are today forming team and
groups to take the advantages of group decision.

Activity
1. Explain how group interaction can be analyzed. Identify key factors in

explaining group behavior. Explain how role requirements change in different
situations.
2. Why it important for the manger to understand the group development process.
Discuss
3. What role group’s decision-making play in any organisation?

UNIT 4: CONFLICT, POWER AND POLITICAL BEHAVIOR
4.0 INTRODUCTION
Understanding and managing power, politics, and conflict is an integral part of a manager’s job.
Organizations are composed of people who come together to achieve their common goals. When
resources are scarce, people and groups have to compete for them, and some achieve their goals while
others do not. In an organization, managers have the primary responsibility to ensure that competition
for resources is free and fair and that people who obtain power over resources do so because they
possess skills and abilities that will, in the long run, benefit all members of the organization. Managers
also have the responsibility to manage conflicts as they arise to ensure the long-term success of the
organization and to maintain a balance of power to ensure that politics and conflict benefit rather than
harm the organization.
LEARNING OUTCOMES
By the end of this unit you should be able to:

.
 Describe organizational conflict and identify sources of

conflict in organizations.
 Describe techniques to manage conflict at the individual,
group, and organizational levels.
 Define power and politics and recognize their impact on
organizations.
 Describe sources of individual power and tactics for
increasing individual power.
 Identify sources of functional and divisional power in
organizations.
 Recognize factors that help one assess the amount of power
an individual has in an organization
4.1 INTERPERSONAL CONFLICT

Conflict is an inherent process to human relations, especially in
w o r k settings. People have different experiences, values, opinions and ways to carry out
tasks, which are likely to lead to disagreements. R e s e a r c h s t u d i e s s u g g e s t t h e e x i s t e n c e
o f t w o m a i n t y p e s o f interpersonal conflict at work: relationship conflict and task
conflict. While relationship conflict comprises perceived interpersonal
incompatibilities a m o n g g r o u p m e m b e r s s u c h a s d i s a g r e e m e n t s a b o u t
values, beliefs, attitudes and political ideology; task conflict
c o n s i s t s o f j o b - r e l a t e d disagreements about how to carry out specific tasks particularly in relation to
discrepancies about procedures or the distribution of available resources.
Conflicts in organisations come from several sources. Everyone does not have the same goals or
objections in life. We all have a set of expectations that differs from each other’s expectation. In a team
or group it is already given that there will be some form disagreement. Disagreements can come in
such area as roles of group members, task assignments, workloads, meeting scheduling, rules, work
flow process and others.
Conflict management methodologies
Thomas and Kilmann identified a conflict-handling grid comprised of five conflict management styles
based on two dimensions: assertiveness and cooperativeness. Assertiveness is the motivation of an
individual to achieve his/her own goals, objectives, and outcomes, while cooperativeness assesses the
willingness to allow or help the other party to achieve its goals or outcomes. Any of the five conflict
resolution styles might be appropriate based on the circumstances of the situation and the personalities
of the individuals involved.
1. Avoiding. The avoiding style is low on both assertiveness and cooperativeness. In other words,
the manager is not very cooperative in helping the other individuals to achieve their goals, but
neither is he/she aggressively pursuing his/her own preferred outcomes in the situation. The
original problem, conflict, or situation is never directly addressed or resolved. However,
avoiding behavior might be appropriate when the issue is perceived by the manager to be
trivial. It might also be an appropriate approach to use when there is no chance of winning or
when disruption would be very costly.
2. Competing. The competing style of resolving conflict is also known as the win-lose approach.
A manager using this style, characterized by high assertiveness and low cooperativeness, seeks
to reach his/her own preferred outcomes at the expense of other individuals. This approach may
be appropriate when quick, decisive action is needed, such as during emergencies. It can also
be used to confront unpopular actions, such as urgent cost cutting.
3. Accommodating. This style reflects a high degree of cooperativeness. It has also been labeled
as obliging. A manager using this style subjugates his/her own goals, objectives, and desired
outcomes to allow other individuals to achieve their goals and outcomes. This behavior is
appropriate when people realize that they are in the wrong or when an issue is more important
to one side than the other. This conflict resolution style is important for preserving future
relations between the parties.
4. Compromising. This style is characterized by moderate levels of both assertiveness and

cooperativeness. Compromise can also be referred to as bargaining or trading. It generally
produces suboptimal results. This behavior can be used when the goals of both sides are of
equal importance, when both sides have equal power, or when it is necessary to find a
temporary, timely solution. It should not be used when there is a complex problem requiring a
problem-solving approach.
5. Collaborating. This approach, high on both assertiveness and cooperativeness, is often

described as the win-win scenario. Both sides creatively work towards achieving the goals and
desired outcomes of all parties involved. The collaboration style is appropriate when the
concerns are complex and a creative or novel synthesis of ideas is required. The downside of
this approach is that the process of collaborating mandates sincere effort by all parties involved
and it may require a lot of time to reach a consensus.
While all of these modes have their place among the strategies available to the manager, the
collaborating approach to conflict management represents the most beneficial mode for most types of
conflict management. In the collaborating mode, conflict itself acts as a managerial tool. The manager
utilizes the conflict to guide the conflicting parties to address what essentially are obstacles faced by
the organization. Through collaborative behavior, the conflicting parties pool their creative energies to
find innovative answers to old problems.
However, any of the five conflict resolution styles may be appropriate and effective depending on the
specific situation, the parties' personality styles, the desired outcomes, and the time available, the key
to becoming more prepared is to understand the advantages and disadvantages of each method.
Bargain Approaches
Inter-group conflict at times is resolved through bargaining and negotiation. Most bargaining
approaches are of two types: i) distributive bargaining – classical will-lose approach in which a fixed
amount of resources is divided, for example Union- Management negotiations. It has a short-term
focus on resolutions because it results in winning the battle and losing the war. Resentful losers try to
figure out a way to get back at the winners, which creates adversarial relationships and ii) integrative
bargaining a win-win approach suitable to maintain long term resolutions. Settlements in integrative
bargaining consist of creative solutions.
Negotiation
The negotiation scheme discussed here is based on integrative bargaining. Some people are too soft
and accommodating when they negotiate while other are too hard and competitive. The alternative to

these approaches is “principled negotiation” consisting of four principles: i) People: separate the
people issues from problems, that is being “soft on people and hard on problem”. Negotiators should
be empathetic with other party and accept that human problems concerning perception, communication
and emotions will emerge in the negotiation process ii) Interests; focus on interests not positions; when
parties enter a negotiations (or conflict) with a set position, they become locked into it and develop a
vested interest in saving face by not backing away from that position. Parties should assertively
present their own interest and mutually identify those that are shared, opposed, and simply difference;
iii) Options: invent options for mutual gain: Parties brainstorm options that are favourable to both
parties, this requires creativity and commitment to joint problem – solving and iv) criteria: insist on
objective criteria – to avoid a standoff, look for objective criteria, like market value, expert opinion,
custom or law that are agreeable to both parties, for example in salary negotiations the use of a salary
survey of similar companies as an objective standard of reference.
4.2 POWER AND POLITICAL BEHAVIOUR
Power and politics are among the most important concepts in the study of organization behavior. Both
power and politics are dynamic concepts and are a function of the interaction between different
elements in organizations. Power is the capacity to influence the behavior of others. The term power
may be applied to individuals, groups, teams, departments, organizations, and countries. For example,
a certain team within an organization might be labeled as powerful, which suggests that it has the
ability to influence the behavior of individuals in other teams or departments. This influence may
affect resource allocations, space assignments, goals, hiring decisions, and many other outcomes and
behaviors in an organization.
Power is a social term; that is, an individual has power in relation to other people, a team has power in
relation to other groups, and so on. Thus the concept of power characterizes interactions among people
more than one person must be involved for the concept to have meaning. Further, power is never
absolute or unchanging. It is a dynamic relationship that changes as situations and individuals change.
For example, a manager may strongly influence the behavior of one subordinate but, at the same time,
only marginally influence another. Managers may be powerful with respect to their own subordinates,
yet be unable to influence the behaviors of employees in other departments. In addition, relationships
change with time. Last month’s successful influence attempt may fail tomorrow, even though the same
people are involved in both situations.
Power issues in organizations often focus on interpersonal relationships between managers and
subordinates, or leaders and followers. French and Raven, social psychologists, identified five sources
of power: coercive, reward, legitimate, expert and referent. Coercive power is based on fear and is the
ability to influence another person through threats or fear of punishment. Reward power is a positive
power which refers to the ability to get things done through others on the basis of one's power to grant
rewards. Legitimate power depends on organizational position and authority. It refers to the power
conferred by a person's organizational position. Expert power is derived from a person's expertise or
specialized knowledge of a certain subject that is perceived as important to the organization. Referent

power is based on people's identification with a certain individual and their attempt to emulate his
behavior. The person who acts as a model for reference has power over the person who emulates his
behavior. Dependency is the most important concept of power. The degree of dependence of the target
determines the power exercised by the agent. Dependency is a function of importance, scarcity and
non substitutability of the resources controlled by a person.
Much of the interest in organizational power tends to focus on the power of managers over
subordinates. However, an additional crucial perspective is that the characteristics of a situation also
affect or determine power. Situational characteristics include the design of the organization, the type
of departmental structure, the opportunity to influence, access to powerful individuals and critical
resources, the nature of the position an individual holds, and so on. For example, the power associated
with a particular position or job is affected by its visibility to upper management and its importance or
relevance with respect to the organization’s goals or priorities. Structural and situational sources of
power reflect the division of labor and position in different teams and departments. Work
assignments, locations, and roles naturally result in unequal access to information, resources, decision
making, and other people. Any of an almost infinite variety of specific situational factors could
become a source of power in an organization. Important structural sources of power include
knowledge, resources, decision making, and networks.
When managers, employees, or teams face a situation in which they want to influence the behaviors
of others, they must choose a strategy. Influence strategies are the methods by which individuals or
groups attempt to exert power or influence others’ behaviors.
Political behavior
Political behavior involves attempts by some to influence the behaviors of others and the course of
events in the organization in order to protect their self-interests, meet their own needs, and advance
their own goals. Described in this way, almost all behavior may be regarded as political. Labeling
behavior as political, however, usually implies a judgment that certain people are gaining something
at the expense of others or the organization as a whole.
Organizational politics is often called 'power in action.' Politics may be legitimate (within sanctioned
organizational limits) or illegitimate (exceeding sanctioned organizational limits) in nature. The
degree of politicking engaged in depends on individual as well as organizational factors. Individual
politicking is a function of the person's power motive, personality factors and background, and current
work environment. Organizational politicking is a function of culture, goal and role clarity and the
attitude of top management.
Considerable importance has also been given to the ethical aspects of power and politics. It is not
always easy to develop ethical standards because of the ambiguous and subjective nature of certain
actions.
The most commonly used techniques of political behavior in organizations are:

 One technique of political behavior is to control the dissemination of critical information to
others. The more critical the information and fewer the people who have it, the stronger is
political power base of those who possess these information.
 Controlling lines of communication is another political technique related to the flow of
information. People who have some control over lines of communication can yield
considerable political power. For example, the secretary may have considerable power in
deciding who sees the boss and who does not at a given time. She may use this power in
favoring those whom she likes and frustrating those against whom she may have it grudge.
 Controlling the agenda also gives a person power over information. The person who controls
a meeting’s agenda, for instance, may consistently put a particular item last on the list and then
take up time so that meeting adjourns before considering the item.
 The opinions of outside experts and consultants often carry much weight in organizations
and many consultants can be swayed by political interests. Consultants know who is paying
them and even honest consultants are likely to give opinions consistent with those of their
employer. Hence, hiring an outside consultant can be a clever political move.
 Game playing can range from fairly innocent to very manipulative. It involves people doing
something insincere, but not outright illegal or unethical to gain political ends. For instance, a
manager who does not want to answer a committee’s tough questions may, for instance, avoid
meeting by going out of the town on the day of meeting.
 Image building is creating positive impression reflected by the personality, appearance and
style. Some of the factors that enhance a preferred image consist of being well dressed, having
a pleasant smile, being attractive, honest, sociable and loyal to the organizational interests. In
addition, always project an image of competence and self-assurance.
 Building coalitions or alliance is another technique of gaining political power. It is necessary

to have the alliance with the right people. Coalition building can become simply a matter of
quid pro quo, i.e. I will support you if you will support me.
Five Common Sources of uncertainty within Organizations
1. Unclear objectives.
2. Vague performance measures.
3. Ill-defined decision processes.
4. Strong individual or group competition.
5. Any type of change in organization or environments.
Tips for Managing Organization Politics

1. Reduce Uncertainty in the system
 Make clear the bases & processes for evaluation.

 Differentiate rewards among high & low performers.
 Make immediate & performance –related rewards.
2. Reduce Competition
 Try to minimize resource competition among managers.

 Promotion should be based on an attitude that puts organization interests ahead of personal
power interests.
UNIT SUMMARY
Power is the capacity to influence the behaviors of others. Power is a social term; that is, individuals
have power in relation to others. Power also involves a dynamic relationship among people that can
change over time. Sources of power stem from both interpersonal and structural factors in an
organization. Interpersonal power sources can be categorized as reward power, coercive power,
legitimate power, expert power, and reference power. These power sources may complement or detract
from one another. Structural power differences stem from unequal access to information, resources,
decision making, and networks with others. Lower level employees, despite their positions in the
organizational hierarchy, may have considerable power to influence events and behavior.
Individuals who can effectively influence others’ behaviors usually understand clearly the sources of
power and its appropriate and fair uses. Such individuals also usually understand the important role
that the exchange process plays in the ability to influence the behaviors of other.
Organizational politics involves the use of power and other resources by individuals, teams, or
departments to obtain their own preferred outcomes. Political behavior is inevitable, owing to naturally
occurring disagreements and uncertainty about choices and actions. Political behavior can have both
positive and negative consequences; it may or may not result in optimal decisions, and some real costs
are associated with avoiding political behavior. Political behavior is more likely to occur when
resources are scarce or rules and procedures are unclear. The performance appraisal process often
invites political behavior, sometimes with negative results.
Certain personality traits predispose some people to engage in political behavior. Specifically, the
probability that individuals will do so increases if they have (1) a strong need for power, (2) a
Machiavellian interpersonal style, (3) a high internal locus of control, and (4) a preference for risk
taking

Activity
1. To what extent do you think conflict is inevitable in

public service organisation? Justify you’re your answer
with example
2. What are the consequences of intergroup conflicts?
3. A number of conflict management styles / strategies have

been presented by different authors, describe these styles
indicating what will influence your choice of style of
handling conflicts within work places.
4. What are the implication of political behavior in an

organisation.
UNIT FIVE: MOTIVATION
5.0 INTRODUCTION
Motivation is one of the most important factors determining organizational efficiency. All
organizational resources and facilities will get waste in absence of motivated employees to utilize these
resources effectively. Every superior in the organization must motivate its subordinates for the right
types of behaviour. The performance of human beings in the organization is dependent on the ability
embedded in motivation. This unit is designed to support your appreciation of theories and concepts
underpinning motivation.
LEARNING OUTCOMES
By the end the unit you should be able to:

 Explain the role of motivation in determining human behaviour.
 Critically evaluate the strengths and weaknesses of different approaches
to motivation in a variety of organisational settings.
 Apply theories and concepts of motivation to enhance group
performance in the organisation.
5.1 MOTIVATION DEFINITION
One of the factors that have a greatest effect on productivity is motivation and it is one of the greatest
concerns for managers. Motivation is a psychological feature that arouses an organism to act towards a
desired goal and elicits, controls, and sustains certain goal-directed behaviors. It can be considered a
driving force; a psychological one that compels or reinforces an action toward a desired goal. (Schater
2011 as cited in Wikipedia)
According to Slocum and Hellriegel (2007), motivation represents the forces acting on or within a
person that cause the person to behave in a specific, goal-directed manner. From the above definition,
we could infer that because motives of employees affect their productivity, one of management’s jobs
is to channel employee motivation effectively toward achieving organizational goals.
To be effective, managers need to understand what motivates employees within the context of the roles
they perform. Of all the functions a manager performs, motivating employees is arguably the most
complex. This is due, in part, to the fact that what motivates employees changes constantly.
5.3 THEORIES OF MOTIVATION
Several theories attempt to explain how motivation works. Motivation theories can be classified
broadly into two different perspectives: Content and Process theories. Content Theories deal with
“what” motivates people and it is concerned with individual needs and goals. Process Theories deal
with the “process” of motivation and is concerned with “how” motivation occurs
5.3.1 Abraham Maslow's Hierarchy of Needs Theory
According to Maslow, employees have five levels of needs; physiological, safety, social, ego, and self-
actualizing Maslow’s work provides two postulates concerning motivation; i) that human needs can be
viewed in a hierarchical fashion, lower needs of physiological and security must be satisfied to some
extent before higher order needs of social, ego and self actualization become activated. The provision
of these needs changes people’s behavior or employee’s behaviour in working towards achieving
organizational objectives. He pointed out that when a need or set of needs is satisfied, it can no longer
motivate someone.
Although research has not verified the strict deficit and progression principles of Maslow's theory, his
ideas can help managers understand and satisfy the needs of employees.
5.3.2 Herzberg's two-factor theory
Frederick has tried to modify Maslow’s need Hierarchy theory. His theory is also known as two-factor
theory or Hygiene theory. He stated that there are certain satisfiers and dissatisfiers for employees at
work. Intrinsic factors are related to job satisfaction, while extrinsic factors are associated with
dissatisfaction. He devised his theory on the question: “What do people want from their jobs?” He
asked people to describe in detail, such situations when they felt exceptionally good or exceptionally
bad. From the responses that he received, he concluded that opposite of satisfaction is not
dissatisfaction. Removing dissatisfying characteristics from a job does not necessarily make the job
satisfying. He states that presence of certain factors in the organization is natural and the presence of
the same does not lead to motivation. However, their nonpresence leads to demotivation. In similar
manner there are certain factors, the absence of which causes no dissatisfaction, but their presence has
motivational impact.
Hygiene factors include salary, job security, working conditions, organizational policies, and technical
quality of supervision. Although these factors do not motivate employees, they can cause
dissatisfaction if they are missing. Something as simple as adding music to the office place or
implementing a no‐smoking policy can make people less dissatisfied with these aspects of their work.
However, these improvements in hygiene factors do not necessarily increase satisfaction.
Satisfiers or motivators include such things as responsibility, achievement, growth opportunities, and
feelings of recognition, and are the key to job satisfaction and motivation. For example, managers can
find out what people really do in their jobs and make improvements, thus increasing job satisfaction
and performance.
Following Herzberg's two‐factor theory, managers need to ensure that hygiene factors are adequate and
then build satisfiers into jobs.
5.3.3 Alderfer's ERG theory
Clayton Alderfer's ERG (Existence, Relatedness, and Growth) theory is built upon Maslow's
hierarchy of needs theory. To begin his theory, Alderfer collapses Maslow's five levels of needs into
three categories.
Existence needs are desires for physiological and material well‐being. (In terms of Maslow's model,
existence needs include physiological and safety needs)
Relatedness needs are desires for satisfying interpersonal relationships. (In terms of Maslow's model,
relatedness correspondence to social needs)

Growth needs are desires for continued psychological growth and development. (In terms of Maslow's
model, growth needs include esteem and self‐realization needs)
This approach proposes that unsatisfied needs motivate behavior, and that as lower level needs are
satisfied, they become less important. Higher level needs, though, become more important as they are
satisfied, and if these needs are not met, a person may move down the hierarchy, which Alderfer calls
the frustration‐regression principle. What he means by this term is that an already satisfied lower level
need can become reactivated and influence behavior when a higher level need cannot be satisfied. As a
result, managers should provide opportunities for workers to capitalize on the importance of higher
level needs.
5.3.4 McClelland's acquired needs theory
David McClelland’s acquired needs theory recognizes that everyone prioritizes needs differently. He
also believes that individuals are not born with these needs, but that they are actually learned through
life experiences. McClelland identifies three broad categories of human needs; need for power, need
for affiliation and need for achievement.
Need for power is the desire to influence and lead others and to be in control of one’s environment to
behave in a way that they would not have behaved otherwise.
Need for affiliation is the desire for friendly, close interpersonal relationships and conflict avoidance.
Need for achievement represents the need to accomplish goals, excel and strive continually to do
better.
McClelland associates each need with a distinct set of work preferences, and managers can help tailor
the environment to meet these needs. High achievers differentiate themselves from others by their
desires to do things better. These individuals are strongly motivated by job situations with personal
responsibility, feedback, and an intermediate degree of risk. In addition, high achievers often exhibit
the following behaviors:
 Seek personal responsibility for finding solutions to problems

 Want rapid feedback on their performances so that they can tell easily whether they are
improving or not
 Set moderately challenging goals and perform best when they perceive their probability of
success as 50‐50
An individual with a high need of power is likely to follow a path of continued promotion over time.
Individuals with a high need of power often demonstrate the following behaviors:
 Enjoy being in charge

 Want to influence others
 Prefer to be placed into competitive and status‐oriented situations
 Tend to be more concerned with prestige and gaining influence over others than with effective
performance
People with the need for affiliation seek companionship, social approval, and satisfying interpersonal
relationships. People needing affiliation display the following behaviors:
 Take a special interest in work that provides companionship and social approval
 Strive for friendship
 Prefer cooperative situations rather than competitive ones
 Desire relationships involving a high degree of mutual understanding
 May not make the best managers because their desire for social approval and friendship may
complicate managerial decision making
Interestingly enough, a high need to achieve does not necessarily lead to being a good manager,
especially in large organizations. People with high achievement needs are usually interested in how
well they do personally and not in influencing others to do well. On the other hand, the best managers
are high in their needs for power and low in their needs for affiliation.

5.3.5 Victor Vroom's Expectancy Theory of Motivation
The Expectancy Theory of Victor Vroom deals with motivation and management. Vroom's theory
assumes that behavior results from conscious choices among alternatives whose purpose it is to
maximize pleasure and minimize pain. Together with Edward Lawler and Lyman Porter, Vroom
suggested that the relationship between people's behavior at work and their goals was not as simple as
was first imagined by other scientists. Vroom realized that an employee's performance is based on
individual factors such as personality, skills, knowledge, experience and abilities. The expectancy
theory says that individuals have different sets of goals and can be motivated if they believe that: There
is a positive correlation between efforts and performance, Favorable performance will result in a
desirable reward, The reward will satisfy an important need, The desire to satisfy the need is strong
enough to make the effort worthwhile. Vroom's Expectancy Theory is based upon the following three
beliefs: Valence (Valence refers to the emotional orientations people hold with respect to outcomes
[rewards]. The depth of the want of an employee for extrinsic [money, promotion, time-off, benefits]
or intrinsic [satisfaction] rewards). Management must discover what employees value. Expectancy
(Employees have different expectations and levels of confidence about what they are capable of
doing). Management must discover what resources, training, or supervision employees need.
Instrumentality (The perception of employees whether they will actually get what they desire even if
it has been promised by a manager). Management must ensure that promises of rewards are fulfilled
and that employees are aware of that. Vroom suggests that an employee's beliefs about Expectancy,
instrumentality, and Valence interact psychologically to create a motivational force such that the
employee acts in ways that bring pleasure and avoid pain. This force can be 'calculated' via the
following formula:
Motivation = Valence x Expectancy (Instrumentality). This formula can be used to indicate and predict
such things as job satisfaction, one's occupational choice, the likelihood of staying in a job, and the
effort one might expend at work
5.3.6 The Porter and Lawler Model:
Lyman W. Porter and Edward E. Lawler developed a more complete version of motivation depending
upon expectancy theory.

Actual performance in a job is primarily determined by the effort spent. But it is also affected by the
person’s ability to do the job and also by individual’s perception of what the required task is. So
performance is the responsible factor that leads to intrinsic as well as extrinsic rewards. These rewards,
along with the equity of individual leads to satisfaction. Hence, satisfaction of the individual depends
upon the fairness of the reward.
5.3.7 Equity Theory
Stacey Adams proposes equity theory of motivation based on the proposition that every one tend to
compare the ratio of his/her input and out come with input-outcome ratio of other person. The
comparison process is highly inevitable. The reference person or comparison person will always be in
the same group, class, age, category etc. For example, a manager will always compare himself/herself
with other fellow manages. A worker will always compare with another worker in the same
organization. In the comparison process, if a person feels that his ratio of input-outcome is more or less
equal to that of his comparison person’s ratio of input-outcome, a state of equity exists. Then he
perceives the situation as just and fair. If a person perceives the ratio as unequal, he will experience
inequity that will lead to tension and stress.
Inequity exists under two conditions: 1. the person feels a negative inequity, when he has been
rewarded less for his efforts than another and 2. The person experiences a positive inequity, when he
finds himself rewarded more than another for a similar degree of effort. Both kinds’ of inequities
produce cognitive dissonance or internal tensions and propel people to action in order to reduce the
dissonance.
The selection of comparison person adds to the complexity of equity theory. Research studies reveal
that the type of reference person chosen plays an important role in equity theory. There are four
referent comparisons that an employee can use.

1. Self-inside: An employee’s experiences in a different position inside his or her present organization.
2. Self-outside: An employee’s experiences in a situation or position outside his or her present

organization.
3. Other-inside: Another individual or group of individuals inside the employee’s organization
4. Other-outside: Another individual or groups of individuals outside the employee’s organization.
Employees might compare themselves with other friends, neighbors, co-workers, colleagues in other
organizations. The type of reference person or comparison person an employee chooses will be
influenced by the information the employee holds about referents, as well as by the attractiveness of
the referent. There are many factors which moderate the selection of reference person such as age, sex,
education, tenure, nature of job etc. The positive and negative inequities can be denoted as follows:
Positive Inequity Outcomes for Person Outcomes for Other
Inputs of Person > Inputs of Other
Negative Inequity Outcomes for Person Outcomes for Other
Inputs of Person < Inputs of Other
Based on equity theory, the employees who perceive inequity in the occupation may have many
options to choose to restore balance.
1. Changing their input by putting more effort in their job, updating skills, knowledge or talents etc.
2. Changing their outcomes by increasing their output such as producing more volume of output, high
quality of output, conserving more resources. Saving more time, minimizing downtime etc.
3. Distorting self perception by rationalizing certain things such as due to sickness the amount of effort
put in is very low or acquisition of some degrees or certificates will make a person feel that I am
working harder than anyone else.
4. Distorting perception of the reference person by assuming that the person has more contacts with
influential superiors and gets more benefits.
5. Choosing a different referent person and seeking comfort with that person. For instance, if A used B
as her comparison point till now, she might after feeling negative inequity, change her comparison
point to C by persuading herself that B is now bound to enjoy special favors since she has married
the boss’s nephew.
6. Leaving the field once for all.
There are two types of justice emphasized in equity theory such as Distributive Justice and
Procedural justice.

Distributive Justice: It refers to the perceived fairness of the amount and allocation of rewards among
individuals.
Procedural Justice: It refers to the perceived fairness of the process used to determine the distribution
of rewards.
Research results indicate that distributive justice has a grater influence on employee satisfaction than
procedural justice, while procedural justice tends to affect employees organizational commitment, trust
in their boss and intention to quit.
Equity theory sensitizes managers to the fact that individuals often make equity comparisons and that
sometimes the rewards given by managers may have consequences which might be reflected in
subordinates’ behaviors. This is especially true when visible rewards such as promotions, pay increases
and bonuses are given to employees. Managers must anticipate when the employees experience
inequities and try to adjust the behavior in such a way by communicating the performance appraisal
process to their employees. The proper explanation of how the performance appraisal process is being
carried out must be explained to all the employees. Further, the types of rewards dispensed and
creating a well established system which takes care of the anomalies in the reward systems are
essential in maintaining inequity in the organization. . Felt inequities are common in all organizations
and hence it is important for managers to manage equity dynamics intelligently and carefully.
Managers should consider openly sharing information on how allocation decisions are made, following
consistent and unbiased procedures and engaging in similar practices to increase the perception of
procedural justice. By increasing the perception of procedural fairness, employees are likely to view
their bosses and the organization as positive even if they have dissatisfied with pay, promotions and
other outcomes.
Equity theory proves at least three guidelines for managers to consider:
i) It emphasizes on equitable rewards for employees. When individuals believe that they are not being
rewarded in an equitable fashion, certain morale and productivity problems may arise.
ii) The concerning equity or inequity is not made solely on a personal basis but involves comparison
with other workers, both within and outside the organization. In other words, it is not only important
how much an employee is being paid, but how much he or she is being paid compared to other
employees who have the same or similar jobs.
iii) Individual reaction to inequity can include changes in inputs and changes in outcomes, with the
level or direction depending on whether the inequity was perceived to be underpaying or overpaying.
5.3.8 Goal Setting Theory

Since it was first researched five decades ago, goal-setting theory has been the most researched,
utilized, and established theory of work motivation in the field of industrial and organizational
psychology. The theory began with the early work on levels of aspiration developed by Kurt Lewin
and has since been primarily developed by Dr. Edwin Locke, who began goal setting research in the
1960’s. The research revealed an inductive relationship between goal setting and improved
production performance. A goal is the aim of an action or task that a person consciously desires to
achieve or obtain. Goal setting involves the conscious process of establishing levels of performance
in order to obtain desirable outcomes. This goal setting theory simply states that the source of
motivation is the desire and intention to reach a goal. If individuals or teams find that their current
performance is not achieving desired goal they will be demotivated.
For a goal to motivate an individual, it must have:

 Clarity – clear goals must be measurable and unambiguous (i.e., increase sales by 15%)
 Challenge – the level of challenge must be achievable and rewarded.
 Commitment – goals must be understood and agreed upon if they are to be effective. Involve an
employee and encourage them to set high goals.
 Feedback – an effective goal program includes feedback on expectations, adjustment to goal
difficulty, and to gain recognition (i.e., benchmarking – must be measurable).
 Task complexity – highly complex goals may be overwhelming and complex lending to low
motivation to complete the task(s). Time is needed to meet the goal or improve performance or
learn what is expected and required for success.
UNIT SUMMARY
Motivation theories can be classified broadly into two different perspectives: Content and Process
theories. Content Theories deal with “what” motivates people and it is concerned with individual needs
and goals. Maslow, Alderfer, Herzberg and McCelland studied motivation from a “content”
perspective. Process Theories deal with the “process” of motivation and is concerned with “how”
motivation occurs. Vroom, Porter & Lawler, Adams and Locke studied motivation from a “process”
perspective.
Activity
1. Explain need hierarchy theory and how it applies in organizations.
2. Describe equity theory's approach to motivation in the workplace.
3. Outline the basic assumptions of expectancy theory and its implications in

organizations.
4. Explain how goals can be set to motivate high levels of job performance.
5. Describe ways in which jobs can be designed so as to employee enhance

motivation

UNIT SIX: LEADERSHIP THEORIES
6.0 INTRODUCTION
This unit discusses the concept of leadership, leadership theories its importance in achieving
organisational effectiveness. It is said, “get the right man/woman in the leadership job all your
problems will be solved”. Leadership plays a central part in understanding group behavior. Leadership
is a process by which an executive can direct, guide and influence the behavior and work of others
towards accomplishment of specific goals in a given situation. Leadership is the ability of a manager to
induce the subordinates to work with confidence and zeal.
LEARNING OUTCOMES
By the end the unit you should be able to:
 Explain the importance of leadership in achieving organisational

effectiveness.
 Critically evaluate the strengths and weaknesses of different leadership
theories.
 Apply leadership theories to enhance group performance in the
organisation.
6.1 DEFINITION OF LEADERSHIP
First, it is important to distinguish between managing and leading. Management and leadership are
overlapping domains of activity, and each concept adds meaning to the other. Management without
leadership encourages an uninspired style that typically maintains the status quo. Leadership without
management encourages a disconnected style that promotes arrogance and isolation.
Management supports the efforts by organisations to plan, budget, coordinate and to compete for
today. Leadership supports the efforts of an organisation to set a vision and direction for the future.
It is the capacity to set new goals, to hold forth new and loftier expectations for the group, to embody
moral and spiritual aspiration and to show the group its nobler potentialities that make a man or
woman a leader. Leadership has, therefore, double meaning. The dictionary meaning of the verb to
lead shows that the term is used in two different senses. (a) ‘to excel, to advance, to be prominent” and
(b) to guide others, to be head of an organisation, to hold command”. In the former sense, leadership is
identified with individual pre-eminence and in the latter sense; it is identified with managerial talent or
leadership. According to Keith Davis, “Leadership is the ability to persuade others to seek defined
objectives enthusiastically. It is an inter-personal process in which a manager is into influencing and
guiding workers towards attainment of goals.
Leadership is an important function of management which helps to maximize efficiency and to achieve
organizational goals. The following points justify the importance of leadership in a concern.
1. Initiates action- Leader is a person who starts the work by communicating the policies and
plans to the subordinates from where the work actually starts.
2. Motivation- A leader proves to be playing an incentive role in the concern’s working. He
motivates the employees with economic and non-economic rewards and thereby gets the work
from the subordinates.
3. Providing guidance- A leader has to not only supervise but also play a guiding role for the
subordinates. Guidance here means instructing the subordinates the way they have to perform
their work effectively and efficiently.
4. Creating confidence- Confidence is an important factor which can be achieved through

expressing the work efforts to the subordinates, explaining them clearly their role and giving
them guidelines to achieve the goals effectively. It is also important to hear the employees with
regards to their complaints and problems.
5. Building morale- Morale denotes willing co-operation of the employees towards their work
and getting them into confidence and winning their trust. A leader can be a morale booster by
achieving full co-operation so that they perform with best of their abilities as they work to
achieve goals.
6. Builds work environment- Management is getting things done from people. An efficient work
environment helps in sound and stable growth. Therefore, human relations should be kept into
mind by a leader. He should have personal contacts with employees and should listen to their
problems and solve them. He should treat employees on humanitarian terms.
7. Co-ordination- Co-ordination can be achieved through reconciling personal interests with

organizational goals. This synchronization can be achieved through proper and effective co-
ordination which should be primary motive of a leader.
6.2 LEADERSHIP THEORIES
Interest in leadership increased during the early part of the twentieth century. Early leadership theories
focused on what qualities distinguished between leaders and followers, while subsequent theories

looked at other variables such as situational factors and skill levels. While many different leadership
theories have emerged, most can be classified as one of eight major types:
1. "Great Man" Theories:
The great man theory of leadership became popular during the 19th-century. The mythology behind
some of the world's most famous leaders such as Abraham Lincoln, Julius Caesar, Mahatma Gandhi,
and Alexander the Great helped contribute to the notion that great leaders are born and not made. The
theory states that some people are born with the necessary attributes that set them apart from others
and that these traits are responsible for their assuming positions of power and authority. A leader is a
hero who accomplishes goals against all odds for his followers. The theory implies that those in power
deserve to be there because of their special endowment. Furthermore, the theory contends that these
traits remain stable over time and across different groups. Thus, it suggests that all great leaders share
these characteristic regardless of when and where they lived or the precise role in the history they
fulfilled.
The famous historian, Thomas Carlyle was deeply involved with this Great Man Theory of Leadership
and had even stated that the history of this world was basically the combined biographies of these great
men. Mr. Thomas Carlyle believed that effective leaders were a package of Godly motivation and the
right personality.
2. Traits Theories:
Traits theory attempts to describe the forms of personal tendencies and behavior related to effective
leadership. It is possibly the first academic theory on leadership. This theory dates back to the
nineteenth-century notion of attributing the society history to great men's history. Thomas Carlyle is
among the main pioneers of this leadership theory. The proponents of this theory often list leadership
qualities, and assume certain characteristics or traits will result in effective leadership. Similar in some
ways to "Great Man" theories, trait theories assume that people inherit certain qualities and traits that
make them better suited to leadership. Scholars taking the trait approach attempted to identify
physiological (appearance, height, and weight), demographic (age, education and socioeconomic
background), personality, self-confidence, and aggressiveness), intellective (intelligence, decisiveness,
judgment, and knowledge), task-related (achievement drive, initiative, and persistence), and social
characteristics (sociability and cooperativeness) with leader emergence and leader effectiveness.
Behavioural Theories
Partially as a result of the disenchantment with the trait approach to leadership that occurred by the
beginning of the 1950s, the focus of leadership research shifted away from leader traits to leader
behaviors. The premise of this stream of research was that the behaviors exhibited by leaders are more
important than their physical, mental, or emotional traits. The two most famous behavioral leadership
studies took place at Ohio State University and the University of Michigan in the late 1940s and 1950s.
These studies sparked hundreds of other leadership studies and are still widely cited.

The Ohio State studies utilized the Leader Behavior Description Questionnaire (LBDQ), administering
it to samples of individuals in the military, manufacturing companies, college administrators, and
student leaders. Answers to the questionnaire were factor-analyzed to determine if common leader
behaviors emerged across samples. The conclusion was that there were two distinct aspects of
leadership that describe how leaders carry out their role.
Two factors, termed consideration and initiating structure, consistently appeared. Initiating
structure, sometimes called task-oriented behavior, involves planning, organizing, and coordinating the
work of subordinates. Consideration involves showing concern for subordinates, being supportive,
recognizing subordinates' accomplishments, and providing for subordinates' welfare.
The Michigan leadership studies took place at about the same time as those at Ohio State. Under the
general direction of Rensis Likert, the focus of the Michigan studies was to determine the principles
and methods of leadership that led to productivity and job satisfaction. The studies resulted in two
general leadership behaviors or orientations: an employee orientation and a production orientation.
Leaders with an employee orientation showed genuine concern for interpersonal relations. Those with
a production orientation focused on the task or technical aspects of the job.
The conclusion of the Michigan studies was that an employee orientation and general instead of close
supervision yielded better results. Likert eventually developed four "systems" of management based on
these studies; he advocated System 4 (the participative-group system, which was the most participatory
set of leader behaviors) as resulting in the most positive outcomes.
One concept based largely on the behavioral approach to leadership effectiveness was the Managerial
(or Leadership) Grid, One concept based largely on the behavioral approach to leadership effectiveness
was the Managerial (or Leadership) Grid, developed by Robert Blake and Jane Mouton. The grid
combines "concern for production" with "concern for people" and presents five alternative behavioral
styles of leadership. An individual who emphasized neither production was practicing "impoverished
management" according to the grid. If a person emphasized concern for people and placed little
emphasis on production, he was terms a "country-club" manager.
Conversely, a person who emphasized a concern for production but paid little attention to the concerns
of subordinates was a "task" manager. A person who tried to balance concern for production and
concern for people was termed a "middle-of-the-road" manager.
Finally, an individual who was able to simultaneously exhibit a high concern for production and a high
concern for people was practicing "team management." According to the prescriptions of the grid,
team management was the best leadership approach. The Managerial Grid became a major consulting
tool and was the basis for a considerable amount of leadership training in the corporate world.
The assumption of the leader behavior approach was that there were certain behaviors that would be
universally effective for leaders. Unfortunately, empirical research has not demonstrated consistent
relationships between task-oriented or person-oriented leader behaviors and leader effectiveness. Like
trait research, leader behavior research did not consider situational influences that might moderate the
relationship between leader behaviors and leader effectiveness.
Contingency Theory
Contingency Theories - This group of theories explores the same ideas as the behavioural models but
includes situational factors. The core view is that a good match between the leader’s behaviour, the
situation and followers characteristics will provide the best outcomes. A number of different theories
fall under the contingency theory umbrella including Fiedler’s Contingency theory, Hersey and
Blanchard’s Situational Leadership theory and Path Goal theory as the most recent contingency
approach. The main contribution made by contingency models is recognition that different
environmental/situational variables require a different style/approach from the leader in order to
achieve positive outcomes. Contingency factors include the ability of followers to complete task; the
degree of structure in job assignments; and the degree of confidence, trust and respect subordinates
have for their leader.
They argue that there is no single way of leading and that every leadership style should be based on
certain situations, which signify that there are certain people who perform at the maximum level in
certain places; but at minimal performance when taken out of their element. Generally speaking,
contingency theories of leadership hold that a leader's effectiveness is related to the leader's traits or
behaviors in relation to differing situational factors. According to situational leadership theory, a
leader's effectiveness is contingent on his ability to modify his management behavior to the level of his
subordinates' maturity or sophistication.
Fiedler's Contingency Theory
Fred. E. Fiedler's contingency theory centers on the belief that there is no best way for managers to
lead. Different situations create different leadership style requirements for managers. The style that
works in one environment may not work in another. Fiedler looked at three elements that dictate a
leader's situational control. These elements are:
 Task structure. Is the job highly structured, fairly unstructured, or somewhere in between?
The spelling out in detail (favorable) of what is required of subordinates affects task structure.
 Leader/member relations. This element applies to the amount of loyalty, dependability, and
support that a leader receives from his or her employees. In a favorable relationship, a manager
has a highly formed task structure and is able to reward and/or punish employees without any
problems. In an unfavorable relationship, the task structure is usually poorly formed, and the
leader possesses limited authority.
 Positioning power. Positioning power measures the amount of power or authority a manager
perceives the organization has given him or her for the purpose of directing, rewarding, and

punishing subordinates. Positioning powers of managers depends on the taking away
(favorable) or increasing (unfavorable) of the decision‐making power of employees.
Fiedler then rated managers as to whether they were relationship oriented or task oriented. Task‐
oriented managers tended to do better in situations with good leader/member relationships, structured
tasks, and either weak or strong position power. They also did well when the tasks were unstructured
but position power was strong, as well as when the leader/member relations were moderate to poor and
the tasks were unstructured. Relationship‐oriented managers, on the other hand, do better in all other
situations.
Hersey-Blanchard Situational Leadership Theory
The Hersey-Blanchard Situational Leadership Theory was created by Dr Paul Hersey, a professor and
author of "The Situational Leader," and Ken Blanchard, author of the best selling "The One-Minute
Manager," among others. The theory states that instead of using just one style, successful leaders
should change their leadership styles based on the maturity of the people they're leading and the details
of the task. Using this theory, leaders should be able to place more or less emphasis on the task, and
more or less emphasis on the relationships with the people they're leading, depending on what's needed
to get the job done successfully.
According to Hersey and Blanchard, there are four main leadership styles:
 Telling (S1) – Leaders tell their people exactly what to do, and how to do it.
 Selling (S2) – Leaders still provide information and direction, but there's more communication
with followers. Leaders "sell" their message to get the team on board.
 Participating (S3) – Leaders focus more on the relationship and less on direction. The leader
works with the team, and shares decision-making responsibilities.
 Delegating (S4) – Leaders pass most of the responsibility onto the follower or group. The
leaders still monitor progress, but they're less involved in decisions.
As you can see, styles S1 and S2 are focused on getting the task done. Styles S3 and S4 are more
concerned with developing team members' abilities to work independently. ‘
According to Hersey and Blanchard, knowing when to use each style is largely dependent on the
maturity of the person or group you're leading. They break maturity down into four different levels:
 M1 – People at this level of maturity are at the bottom level of the scale. They lack the
knowledge, skills, or confidence to work on their own, and they often need to be pushed to take
the task on.
 M2 – At this level, followers might be willing to work on the task, but they still don't have the
skills to do it successfully.

 M3 – Here, followers are ready and willing to help with the task. They have more skills than
the M2 group, but they're still not confident in their abilities.
 M4 – These followers are able to work on their own. They have high confidence and strong
skills, and they're committed to the task.
The Hersey-Blanchard model maps each leadership style to each maturity level, as shown below.
Maturity Level Most Appropriate Leadership

Style
M1: Low maturity S1: Telling/directing
M2: Medium maturity, limited S2: Selling/coaching
skills
M3: Medium maturity, higher S3: Participating/supporting
skills but lacking confidence
M4: High maturity S4: Delegating
To use this model, reflect on the maturity of individuals within your team. The table above then shows
which leadership style Hersey and Blanchard consider the most effective for people with that level of
maturity.
The path–Goal Theory
The path–goal theory is a leadership theory developed by Robert House, an Ohio State University
graduate, in 1971 and revised in 1996. The theory states that a leader's behavior is contingent to the
satisfaction, motivation and performance of her or his subordinates. The revised version also argues
that the leader engages in behaviors that complement subordinate's abilities and compensate for
deficiencies. The path–goal model can be classified both as a contingency and as a transactional
leadership theory. The original path-goal theory identifies achievement-oriented, directive,
participative, and supportive leader behaviors:
 The directive leader behavior refers to situations where the leader lets followers know what is
expected of them and tells them how to perform their tasks. The theory argues that this
behavior has the most positive effect when the subordinates' role and task demands are
ambiguous and intrinsically satisfying.
 The achievement-oriented leader behavior refers to situations where the leader sets challenging
goals for followers, expects them to perform at their highest level, and shows confidence in
their ability to meet this expectation. Occupations in which the achievement motive was most
predominant were technical jobs, sales persons, scientists, engineers, and entrepreneurs.

 The participative leader behavior involves leaders consulting with followers and asking for
their suggestions before making a decision. This behavior is predominant when subordinates
are highly personally involved in their work.
 The supportive leader behavior is directed towards the satisfaction of subordinates needs and
preferences. The leader shows concern for the followers’ psychological well being. This
behavior is especially needed in situations in which tasks or relationships are psychologically
or physically distressing.
Path–goal theory assumes that leaders are flexible and that they can change their style, as situations
require. The theory proposes two contingency variables, such as environment and follower
characteristics, that moderate the leader behavior-outcome relationship. Environment is outside the
control of the follower-task structure, authority system, and work group. Environmental factors
determine the type of leader behavior required if the follower outcomes are to be maximized. Follower
characteristics are the locus of control, experience, and perceived ability. Personal characteristics of
subordinates determine how the environment and leader are interpreted. Effective leaders clarify the
path to help their followers achieve goals and make the journey easier by reducing roadblocks and
pitfalls. Research demonstrates that employee performance and satisfaction are positively influenced
when the leader compensates for the shortcomings in either the employee or the work setting.
Transformational Leadership - In environments of uncertainty and change, transformational theories

explain how leaders influence followers to commit to difficult goals, and to achieve more than
previously expected. Their focus is best summarised by the catch cry “encouraging ordinary people to
do extraordinary things”. However, these newer theories about transformation and change also have a
stake in the past. In particular, they recognise the older heroic leadership stereotype, especially how
leaders motivate followers to make self-sacrifices because they trust, admire and are loyal to the leader.
A critical component of these newer theories about what leaders do, and how followers respond, is the
aspirational goal or vision. The vision is a motivational device, a statement about a highly desirable
future that is meaningful for followers, and which over time they identify with and commit to.
Transformational leadership focuses upon the significant role that leaders can play in promoting both
personal and organisational change, and the role of leaders in assisting their employees to meet and
exceed expectations about performance. There is considerable agreement that transformational
leadership is comprised of at least four interrelated behaviours or sets of actions. These leaders engage
in: 1. inspirational motivation – articulating an appealing and evocative vision about what the
organisation wants to become, and how it wants to serve its customers and related stakeholders; 2.
intellectual stimulation – promoting opportunities, and organisational cultures, that encourage
creativity and innovation among staff; 3. idealised influence – providing a role model for staff at all
levels; and 4. individualised consideration – engaging in coaching and mentoring roles that empower
staff.
While it might be the dominant school of thought about leadership at present, the transformational
model is not without criticism including giving less attention to how these leaders shape group and
organisational processes; little attention to task-oriented behaviours like how leaders clarify to staff
their expectations, set goals, plan, coordinate, allocate resources and monitor the performance of their
staff; and they are criticised for not describing the importance of contextual or more situational
influences upon leaders’ behaviours. Despite these criticisms, transformational leadership still presents
the most widely accepted and supported approach to leadership at the current time.
Major lessons from theory and research into transformational leadership are that:
• Subordinates judge leaders as more effective when they engage in transformational behaviours
• Transformational leaders exist at all levels of organisations
• The more transformational is the leadership at higher levels in the organisation, the more it is
found at lower levels, including in its teams.
As well as the lessons and direction they provide for managers and leaders of change, transformational
leadership frameworks have opened up related and significant discussions about the links between
employee performance, and the roles of positive emotions, emotional intelligence, authenticity and the
promotion of innovation in organisations. Strong conceptual and empirical links are being established
in more recent times between being more transformational as a leader, and emotional intelligence and
higher levels of creativity and innovation among employees.
3. Emotions and leadership - There is growing recognition of the role of emotions and values on
leader and follower behaviours. More attention is being given to various emotional and social aspects
of leader behaviours (i.e. values, self-awareness, management of self and others, emotions) and their
impact on producing higher levels of trust, engagement, well-being and performance among
employees. The recent focus upon leadership and emotions is also linked to other debates. These
discussions include the role of the leader in managing the social, emotional and psychological impact
upon employees of large scale and disruptive change. In addition, there are debates about the ethical
and moral imperatives of leadership and, in turn, the important role of leaders in building positive
psychological states and emotional capital (e.g. self-esteem, hope, optimism and personal
expressiveness), if organisations and their staff are to grow and thrive in highly turbulent
environments. Recent collapses of well-known organisations have fuelled these debates.
While there is continued controversy about definitions of emotional intelligence, possibly the best
known writing is by Goleman. According to Goleman, emotionally intelligent leaders manage
themselves and their relationships effectively. In particular, they display sets of behaviour that
demonstrate: self-awareness (i.e. self-confidence, realistic evaluations of their strengths and
weaknesses); self-management (i.e. self-control, trustworthiness, conscientiousness, adaptability,
initiative); social awareness (i.e. empathy, ability to build networks and to navigate politics); and social
skills (i.e. visionary leadership, developing others, communication, change catalyst, teamwork, conflict
management).

Goleman argues that our leaders need many different styles of leading, and the more styles a leader
exhibits, the better. More emotionally intelligent leaders are more able to switch styles (i.e.
authorative, democratic, affiliative, coaching) due to their higher levels of self- awareness, ability to
read a situation, and adaptability. Transformational leaders in particular establish more intellectually
stimulating workplaces that in turn also foster more openness, creativity, and willingness by their
employees to challenge the status quo.
UNIT SUMMARY
Leadership can be explained by exploring four different approaches: trait theory, behavioral theory,
contingency theory, and contemporary theories. Trait theory is based on an individual’s personal
attributes as a leader. Behavioral theory is based on the relationship between getting the job done
(task) and concern for the employees (consideration). The contingency theory of leadership from
Fiedler is based on the leader’s power position, task structure, and leader-member relations. Blanchard
and Hersey state that the contingency theory of leadership is based on the leader’s task behavior
(getting the job done), the leader’s supportive behavior (taking care of the workers), and follower
readiness measure of the ability and willingness to work).
Contemporary approaches include:
 Attribution theory (cause and effect)

 Charismatic and visionary leadership (self-confidence, vision, articulates the vision behavior
out of the ordinary, perceived as a change agent, sensitive to the organizational environment)
 Transactional leadership (change things)
 Transformational leadership (change people)
People should seek to understand their own leadership styles, the workers, the work to be done, and the
situation. Greater understanding of a leadership style can be achieved through self-assessment.
Activity
A number leadership theories or approaches have been presented by various

scholars. Present a well argued paper on the pros and cons of each one of them.

UNIT SEVEN: ORGANISATIONAL PROCESSES
7.0 INTRODUCTION
In this unit, we bundle together the three topics of organizational design or structure, culture, and
change, because they are interrelated. Organizational structure affects the culture of the enterprise and
vice-versa. A properly implemented organizing process should result in a work environment where all
team members are aware of their responsibilities. If the organizing process is not conducted well, the
results may yield confusion, frustration, loss of efficiency, and limited effectiveness.
The unit discusses different organisation processes which include organisational design, organisation
change and organisation culture. The unit then considers various forms of design, factors that influence
design and a range of tools and models you can use to understand how organisation design fits
together. Organisational change and organisational culture are also discussed.
LEARNING OUTCOMES
By the end of this unit, you should be able to:
 Discuss the different types or forms of organisation designs

and their behavioural implications.
 Analyse organisational change and its implications n
organisational behaviour.
 Describe organisation culture and how it can be sustained.
7.1 ORGANISATIONAL DESIGN
Organisational design is the process of aligning the structure of an organisation with its objectives,
with the ultimate aim of improving efficiency and effectiveness. Work can be triggered by the need to
improve service delivery or specific business processes, or as a result of a new mandate. Organisational
design refers to the process of coordinating the structural elements of organisations in the most
appropriate manner. There are three distinct schools; the classical, the neoclassical and the
contemporary. The classical school represented by Max Weber, F.W.Taylor and Henry Fayol; the
proponents of formal hierarchy, clear set of rules and specialisation of labour. The neo-classical
represented by organisational scholars such as McGregor, Argyris and Likert. They emphasize on
employee satisfaction along with economic effectiveness and call for the designing of flat hierarchical
structure with a high degree of decentralisation. The proponents of contemporary design emphasize on
the environmental factors in which the organisations are operating.

Classical Form of Organisation
The Simple Structure: A simple structure has low departmentalisation, wide span of control,
concentration of authority in a single person, and little or no formalization. Simple structure is
normally flat type of organisation having two or three vertical levels, a loose body of employees and
one individual in whom the decision-making authority is centralised. Usually practiced in small
organisations having owner manager or family owned businesses. The advantage of simple structure is
in its simplicity. It is fast, flexible, inexpensive to maintain and accountability is absolutely clear.
However, it is very difficult to maintain especially when the organisations grow larger.
The Bureaucracy: The most common form of organisation is the classical bureaucratic structure. The
structure is inflexible, impersonal and highly standardised. You may observe some of the organisations
we come across very frequently. The banks, where we deposit our money and withdraw cash as and
when we need them. The stores from where we buy large number of items of daily use. The income tax
office, we need to file our income tax returns every year. If you observe these organisations closely, we
may find that they are all having highly routinised work system carried out through specialisation,
formally written rules and regulations, centralised authority, narrow span of control and all decision
have to follow the chain of command. Max Weber (1947), considered it as an ideal form of
organisation. The bureaucracy, though not very ideal form of organisation in modern times but still
holds ground. The strength of bureaucracy lies in its ability to perform standardised functions highly
efficiently. However, obsessive observance of rules and regulations is said to be its major weakness.
Managers must make choices about how to group people together to perform their work. Five common
approaches are; functional, divisional, matrix, team, and networking, these help managers determine
departmental groupings (grouping of positions into departments). The five structures are basic
organizational structures, which are then adapted to an organization's needs. All five approaches
combine varying elements of mechanistic and organic structures. For example, the organizational
design trend today incorporates a minimum of bureaucratic features and displays more features of the
organic design with a decentralized authority structure, fewer rules and procedures, and so on.
The functional structure group’s positions into work units based on similar activities, skills,
expertise, and resources Production, marketing, finance, and human resources are common groupings
within a functional structure.
As the simplest approach, a functional structure features well‐defined channels of communication and
authority/responsibility relationships. Not only can this structure improve productivity by minimizing
duplication of personnel and equipment, but it also makes employees comfortable and simplifies
training as well.
But the functional structure has many downsides that may make it inappropriate for some
organizations. Here are a few examples:

 The functional structure can result in narrowed perspectives because of the separateness of
different department work groups. Managers may have a hard time relating to marketing, for
example, which is often in an entirely different grouping. As a result, anticipating or reacting to
changing consumer needs may be difficult. In addition, reduced cooperation and
communication may occur.
 Decisions and communication are slow to take place because of the many layers of hierarchy.
Authority is more centralized.
 The functional structure gives managers experience in only one field i.etheir own. Managers do
not have the opportunity to see how all the firm's departments work together and understand
their interrelationships and interdependence. In the long run, this specialization results in
executives with narrow backgrounds and little training handling top management duties.
Divisional structure
Because managers in large companies may have difficulty keeping track of all their company's
products and activities, specialized departments may develop. These departments are divided according
to their organizational outputs. Examples include departments created to distinguish among
production, customer service, and geographical categories. This grouping of departments is called
divisional structure. These departments allow managers to better focus their resources and results.
Divisional structure also makes performance easier to monitor. As a result, this structure is flexible and
responsive to change.
However, divisional structure does have its drawbacks. Because managers are so specialized, they may
waste time duplicating each other's activities and resources. In addition, competition among divisions
may develop due to limited resources.
Matrix structure
The matrix structure combines functional specialization with the focus of divisional structure This
structure uses permanent cross‐functional teams to integrate functional expertise with a divisional
focus.
Employees in a matrix structure belong to at least two formal groups at the same time—a functional
group and a product, program, or project team. They also report to two bosses—one within the
functional group and the other within the team.
This structure not only increases employee motivation, but it also allows technical and general
management training across functional areas as well. Potential advantages include
 Better cooperation and problem solving.

 Increased flexibility.
 Better customer service.
 Better performance accountability.
 Improved strategic management.
Predictably, the matrix structure also has potential disadvantages. Here are a few of this structure's
drawbacks:
 The two‐boss system is susceptible to power struggles, as functional supervisors and team
leaders vie with one another to exercise authority.
 Members of the matrix may suffer task confusion when taking orders from more than one boss.
 Teams may develop strong team loyalties that cause a loss of focus on larger organization
goals.
 Adding the team leaders, a crucial component, to a matrix structure can result in increased
costs.
Team structure
Team structure organizes separate functions into a group based on one overall objective These cross‐
functional teams are composed of members from different departments who work together as needed
to solve problems and explore opportunities. The intent is to break down functional barriers among
departments and create a more effective relationship for solving ongoing problems.
The team structure has many potential advantages, including the following:
 Intradepartmental barriers break down.

 Decision‐making and response times speed up.
 Employees are motivated.
 Levels of managers are eliminated.
 Administrative costs are lowered.
The disadvantages include:
 Conflicting loyalties among team members.

 Time‐management issues.
 Increased time spent in meetings.
Managers must be aware that how well team members work together often depends on the quality of
interpersonal relations, group dynamics, and their team management abilities.

The Matrix Structure: Mathematically, matrix is an array of horizontal rows and vertical columns. In
order to understand the Matrix Structure, we first need to understand the Functional Organisation, a
form of departmentalisation in which every member of the organisation engaged in a functional area
i.e., employee engaged in marketing or production is grouped into one unit. The matrix organisation is
defined as type of organisation in which each employee has two bosses or (under dual authority). They
have to report to both functional and divisional manager and also to a project or group manager. This
type of structure is most popular in the advertising agencies, hospitals, Research and Development
laboratory and universities. The matrix structure allows for flexible use of organisations human
resources, pooling and sharing of specialized resources but the major problem is with regard to
coordination of task and stress caused by two bosses.
Alternate Design
Robins has classified the structural designs into three broad types; the team structure, the virtual
organisation, and the boundary less organisation.
The Team Structure: The team structure uses the team as the central device to coordinate work
activities. Robins defines work team as a group whose individual efforts result in a performance
greater than the sum of the individual inputs. The primary characteristics of the team structure are that
it breaks down departmental barriers and decentralises decision making to the level of the work team.
One of the prerequisites of the team structure is that the employees have to be both generalists as well
as specialists.
The Virtual Organisation: In the age of specialisation no organisation can survive without outsourcing.
The core activity remains with the main organisation whereas parts are performed by others. The
virtual organisation (also known as network or modular organisation) goes a step ahead by outsourcing
major business function. In structural terms the virtual organisation is highly centralised, with little or
no departmentation. When large organisations use virtual structure, they frequently use it to outsource
manufacturing activities.
The Boundaryless Organisation: The credit for coining the term boundary less organisation goes to Mr.
Jack Welch of General Electrics (GE). He wanted GE to become boundary less organisation. The type
of organisation, which seeks to eliminate the chain of command, have limitless span of control and
replace departments with empowered teams. By removing vertical boundaries, management flattens
the hierarchy, status, and ranks are minimized. G.E. has been using cross-hierarchical teams,
participative decision making practices and 360-degree performance appraisal system to break vertical
boundaries. It is the networked computers (with the help of internet and intra-net), which makes the
boundaryless organisation possible by allowing people to communicate across inter-organisational and
intra-organisational boundaries. Electronic Mail for example permits hundreds of employee to share
information simultaneously and allows ranks and file workers to communicate directly with senior
executives.

Organisational and Mechanistic Designs
There are two extreme models of organisational design i.e., mechanistic model and organic model. Let
us learn them briefly. Robins has identified following characteristics of mechanistic and organic model
of organisational design:
Mechanistic Model: The major features of mechanistic model are as follow; extensive
departmentalization, high formalization, a limited information network; and centralization. The
activities are grouped together based on the strategies of the departmentation like functional, division,
adaptive; etc. There are standardised policies, procedures, rules and decision making styles. The flow
of information is very limited. The decision making style is highly centralised. Thus, the mechanistic
model endevours to achieve efficiency because of its structural characteristics.
Organic Model: The major features of organic model are as follow; cross hierarchical and cross
functional teams, low formalization, comprehensive information network, high participation in
decision making. In the organic model teams emerge from different hierarchy and functional areas.
The tasks, rules, procedures and decision making are in a fluid situation and changeable. The
information flow across the organisation. There exists decentralisation of decision making where
participation is sought from the larger group. This model focuses on flexibility and adaptability and
encourages greater utilization.
6.2 ORGANISATIONAL CHANGE
Change is an inherent characteristic of any organisation and like it or not, all organisations whether in
the public or private sector must change to remain relevant. Change is a planned or unplanned
response to pressures and forces. Technological, financial, social, regulatory, political and competitive
forces push organizations to change. Organizations today operate in a fast changing environment. In
order to survive organization must be adaptive and they must adjust to new demands and
opportunities. It is argued that the only certainty in modern organizational life is countless change
which is inevitable. The rapid pace of change in the modern world has been influencing
organizational functioning and their managers. Managers can no longer be successful if they are
unaware of the need for adaptation and unable to bring about changes in their organizations and their
method of management. Hence, organizations of all types and roles require internal changes. Such
changes may be required in the attitude and values of organizational members, the patterns of the
behavior employed by organization members in dealing with one another, the structure, strategy of the
organization or the technology used or any combination of these factors. An organization not being
capable of adjusting with changes in time and situation is sure to go out of market or existence. To
keep up the survival, each organization requires coping with dynamics of the society. Organization is
to work in society. Changes around society will also influence organization.
Resistance to Organisational Change

In order to survive, organizations must adapt to fit their changing circumstances. Organizational
change may be necessary to maintain a competitive edge or adapt to changing economic factors.
Unfortunately, change within an organization is not always a smooth process. Reactions to change may
take many forms: Active resistance is the most negative reaction to a proposed change attempt. Those
who engage in active resistance may sabotage the change effort and be outspoken objectors to the new
procedures. In contrast, passive resistance involves being disturbed by changes without necessarily
voicing these opinions. Instead, passive resisters may dislike the change quietly; feel stressed and
unhappy, and even look for a new job without necessarily bringing their concerns to the attention of
decision makers. Compliance, however, involves going along with proposed changes with little
enthusiasm. Finally, those who show enthusiastic support are defenders of the new way and actually
encourage others around them to give support to the change effort as well.
Impediments to change exist at all levels, from the individual all the way up to the organization as a
whole. It is the responsibility of top managers to recognize the source of this resistance and work to
remedy it before it hampers the growth of the organization (George & Jones, 2008). Individual
resistance to change is the easiest for managers to identify. Individuals often feel threatened by
organizational change because the fear the change will negatively impact them. Individuals are
naturally more concerned with their current circumstances than that of the organization. They often fail
to recognize the positive impact that change will have on the organization. Finally, individuals tend to
develop work habits that may be impacted by the proposed organizational change. Bad habits are hard
to break, but they must be in order for the organization to advance. The insecurity that individuals feel
regarding organizational change can manifest itself in increased absenteeism and employee churn. In
extreme cases, individuals may take steps to prevent the change from occurring (George & Jones,
2008).
Groups within an organization tend to develop shared behaviors that may be resistant to change.
Organizational change may alter the dynamics of the group culture and disrupt its normal operation. A
tightly knit group may have an overdeveloped sense of cohesiveness that encourages organizational
inertia. This cohesiveness may result in individuals actively manipulating information in order to
promote an anti-change mentality within the group. Individual members of a group may begin to
realize the inaccuracy of their opinions, but the group cohesion will prevent them from acting on these
realizations (George & Jones, 2008).
Finally, the organization as a whole may resist change. Organizational change may lead to a change in
the organization’s power structure. The resulting power struggle between those losing power and those
gaining it will result in organizational stagnation. Similarly, the proposed change may assist one group
in achieving their goals while resulting in another group’s goals becoming more difficult. Large
organizations with a divisional structure may falter as divisions fail to recognize the benefit of change
to the entire organization. Organizations with strict organizational reporting or tall hierarchies tend to
resist change as individuals within the organization are not encouraged to find their own solutions.
Finally, change that cuts against the grain of the organization’s existing culture or values will find little
acceptance from those entrenched in it.

In order to effect change, the top managers of an organization must ensure that the forces for change
overcome the resistance to change. After you have identified the types of change resistance present in
your organization, employ a mix of strategies to counter the negative forces. Following are six classic
strategies for dealing with change resistance (in order from least to most extreme) – use them to
develop action plans that address the resistance within your organization.
 Education & Communication: One of the best ways to overcome resistance to change is to
educate people about the change effort beforehand. Up-front communication and education
helps employees see the logic in the change effort. This reduces unfounded and incorrect
rumors concerning the effects of change in the organization.
 Participation & Involvement: When employees are involved in the change effort they are
more likely to buy into change rather than resist it. This approach is likely to lower resistance
more so than merely hoping people will acquiesce to change.
 Facilitation & Support: Managers can head-off potential resistance by being supportive of
employees during difficult times. Managerial support helps employees deal with fear and
anxiety during a transition period. This approach is concerned with provision of special
training, counseling, time off work.
 Negotiation and Agreement: Managers can combat resistance by offering incentives to

employees not to resist change. This can be done by allowing change resistors to veto elements
of change that are threatening, or change resistors can be offered incentives to go elsewhere in
the company in order to avoid having to experience the change effort. This approach will be
appropriate where those resisting change are in a position of power.
 Manipulation and Cooptation: “Cooptation” (no it’s not misspelled) involves the patronizing
gesture of bringing a person into a change management planning group for the sake of
appearances rather than their substantive contribution. This often involves selecting leaders of
the resisters to participate in the change effort. These leaders can be given a symbolic role in
decision making without threatening the change effort.
 Explicit and Implicit Coercion: Managers can explicitly or implicitly force employees into
accepting change by making clear that resisting change can lead to losing jobs, firing, or not
promoting employees.
Change Management Approaches
Organizational change management involves both structural and cultural change. Structural change
management is concerned with the way functional units are organized to carry out their work
responsibilities. Structural change management has to do with things or facilities. The focus includes
policy and procedure, rules and regulations, management and staffing, facilities and equipment, and
human resource practices. Cultural change management is concerned with the way people interact
with each other, both in peer relationships and in superior/subordinate relationships. Cultural change
management has to do with people, and therefore, it is the more difficult of the two to successfully deal
with. People and culture - the human systems of an enterprise - are what make or break any change
initiative.
Irrespective of the way the change originates, change management is the process of taking a planned
and structured approach to help align an organisation with the change. In its most simple and effective
form, change management involves working with an organisation’s stakeholder groups to help them
understand what the change means for them, helping them make and sustain the transition and working
to overcome any challenges involved. From a management perspective it involves the organisational
and behavioural adjustments that need to be made to accommodate and sustain change.
Popular approaches include the linear, step by step methods exemplified by Kurt Lewin’s classic
three-phase model of change unfreeze, move or change, and refreeze, John Kotter’s popular 8 step
change model, the McKinsey’s 7-S model, and the ADKAR model. Other approaches such as
Rosabeth Moss Kanter’s theory and change theories based on derivatives of the Kübler-Ross model
focus on the cultural and people aspects of change. Each approach has its pros and cons; however no
one framework is "best" in all situations. Indeed it is not so much the actual model or theory that is
important, but more that the approach that is taken is relevant to the circumstances. In fact the best
change approaches appear to use and adapt aspects of various models to suit the culture of the
organisation and the context of the change. Fundamentally, the basic goal of all change management is
to secure buy-in to the change, and to align individual behaviour and skills with the change.
7.3 ORGANISATIONAL CULTURE
Organisational culture is a system of shared meaning within an organisation that determines, in large
degree, how employees act (Robbins and Coulter, 1996). Organisational culture represents a
common perception held by the organisation’s employees. Just as tribal cultures have rules and
taboos that dictate how members act toward one another and outsiders, organisations have cultures
that govern how their employees should behave. In every organisation, there are systems or patterns
of values, symbols, rituals, myths and practices that have evolved over time. These shared values
determine, in large degree, what employees see and how they respond to their world. When
confronted with a problem, the organisational culture restricts what employees can do by suggesting
the correct way with whichthe organisation solves the problem.
Schein (1990) defines organisational culture as having three key elements. The everyday cultural
manifestations of organisational culture are described as ‘artefacts’. Cultural artefacts are diverse and
can include staff facilities for example the availability of car parking spaces (and who gets them!) or
modes of mutual greeting in speech. Essentially, artefacts can be seen or heard.
Norms are less obvious, but examples include whether meetings always start and finish on time,
methods of communication (e.g. face-to-face, telephone, email) and whether there is an expectation
that colleagues will be available outside normal working hours. Values are hardest of all to identify,
although in recent times organisations have been more overt in the publication of their values.
However, in certain cases the publication of values creates tensions if employees perceive that they are

not being adhered to by management. In connection with this, Argyris (1980) distinguishes between
what he calls ‘espoused theory’, which is the value set declared publicly by management, and ‘theory-
in-action’, which is how management actually behaves.
Handy’s cultural typology
Handy (1999) identified four main types of organisational culture: power, role, task and person.
Power cultures are typical in small entrepreneurial companies, although they are certainly not confined
to them. Such organisations tend to be dominated by one individual or a small group. Handy likened
this type of culture to a spider’s web, the owner/manager or entrepreneur in the centre, controlling the
organisation by the exercise of power. In start-up companies this is not necessarily a bad thing, but the
persistence of such a culture can be a brake on the organisation’s development. Role cultures
correspond quite closely to the functional organisation referred to above. Handy likened these to a
Greek temple, in which each column represents one of the functions, and where the role of senior
management is to co-ordinate the efforts of the various functions. Such cultures are highly procedural
and can be very efficient at dealing with business in a mature organisation, including the public sector.
The drawback of such a culture is what is commonly referred to as a ‘silo mentality’ in which the
different functions of the business tend to see things their own way, and procedures and rules are
continually referred to in order to resolve the inevitable disputes. Such organisational cultures are
rarely agile in responding to customer needs. Task cultures most closely resemble the matrix
organisation referred to above. The task culture can be likened to a network of connections in which
the delivery of project or task requirements is the overriding concern. Such a culture enables
considerable sharing of ideas and internal mobility, although it can be difficult for someone coming
from a role culture to adjust to one in which they report to multiple leaders.
Person cultures can be likened to a cluster, where reporting lines are muted compared to the
importance of key individuals. Although rare, this culture occurs when individual (non-management)
employees of the organisation are of particular value for their professional skills. Person cultures tend,
therefore, to arise in professional practices such as law or architecture
Organisational culture is rarely static. The very nature of organisations, especially in the twenty-first
century, means that the inflow and outflow of individuals constantly causes the organisation’s culture
to change, sometimes imperceptibly, sometimes dramatically.
The cultural webDeveloped by Johnson and Scholes (1992), the cultural web is a diagnostic
management tool for identifying the state of an organisation through six perspectives. Each perspective
influences what Johnson and Scholes refer to as the organisational paradigm of the work environment.
The proposition is that by analysing each of these perspectives, it is possible to take the cultural
temperature of an organisation as a prelude to cultural change. The six factors in the cultural web are:
Stories: Every organisation has its folk tales, often referring to past events, such as how the business
was set up. Rituals and routines: The day-to-day ways in which people go about their business in the
organisation. Of particular importance here are the behaviours which management reward, and those
which they prohibit. Symbols: Rather like Schein’s cultural artefacts above, these are the visible
manifestations of the organisation’s culture, such as dress codes, quality of office furniture, and who
gets what comforts in the office, such as coffee machines, etc.
Organisational structure: Johnson and Scholes mean more here than simply the overt reporting lines in
accordance with the organisational chart. This heading also refers to the unwritten lines of power and
influence within the organisation.
Control systems: This refers not only to financial controls but also to the systems for rewarding
behaviour, and who decides how rewards are apportioned.
Power structures: This category refers to the hidden and informal power structures within the
organisation – who really wields the power?
International cultures
As organisations become more global in their reach, some significant work has been done on
international business cultures. One key area of debate in this regard is that over convergence v
divergence. Convergence theorists argue that with the impact of information technology, most notably
the Internet, business cultures are converging and the differences between national cultures pale into
insignificance. Ranged against this theory are those who argue that national and regional business
cultures are pervasive and influence those who enter them. In this respect, the work of Hofstede (1980)
is seminal.
Geert Hofstede is a Dutch social psychologist who set out to identify and measure those factors which
distinguish one national business culture from another. His research led him to create five indices of
cultural norms, which are:
Power distance: This refers to the degree of social distance between senior management and
workforce. If there are many levels of management within the organisation, and little contact between
those at the top and the bottom of the organisation, power distance can be said to be high.
Uncertainty avoidance: This refers to the appetite for risk which is prevalent in any organisation. A
high uncertainty avoidance culture is characterised by low risk-taking, and vice versa.
Individualism/collectivism: This refers to the propensity of the culture to reward individual effort, as
distinct from a collectivist approach. This has a clear bearing upon, for instance, reward systems in an
organisation.
Masculinity/femininity: This is probably the most controversial of Hofstede’s indices: a ‘masculine’

culture is seen as macho, whereas a ‘feminine’ culture is seen as nurturing.

Long-term orientation: – This was added later to the other four indices, and probably the term needing
least explanation. It refers to the distinction between those cultures (such as Japan) which place a
premium on long-term investment, and others, such as the USA, where judgements are made on short-
term results. Hofstede took each of these indices and measured them using a survey of managers in one
multinational organisation. From these results he discovered that there are regional clusters of business
culture which make it easier for those from countries with similar cultures to do business with each
other. For example, he identified a Scandinavian cluster which included Sweden, Norway, Denmark,
Finland and, interestingly, his own native Holland. The similarities in this cluster set them apart from
other clusters.
How Are Cultures Created?
Where do cultures come from? Understanding this question is important so that you know how they
can be changed. An organization’s culture is shaped as the organization faces external and internal
challenges and learns how to deal with them. When the organization’s way of doing business provides
a successful adaptation to environmental challenges and ensures success, those values are retained.
These values and ways of doing business are taught to new members as the way to do business. The
factors that are most important in the creation of an organization’s culture include founders’ values,
preferences, and industry demands.
Founder’s Values: A company’s culture, particularly during its early years, is inevitably tied to the
personality, background, and values of its founder or founders, as well as their vision for the future of
the organization. This explains one reason why culture is so hard to change: It is shaped in the early
days of a company’s history. When entrepreneurs establish their own businesses, the way they want to
do business determines the organization’s rules, the structure set-up in the company, and the people
they hire to work with them.
Industry demands: While founders undoubtedly exert a powerful influence over corporate cultures, the
industry characteristics also play a role. Industry characteristics and demands act as a force to create
similarities among organizational cultures. For example, despite some differences, many companies in
the insurance and banking industries are stable and rule oriented, many companies in the high-tech
industry have innovative cultures, and companies in the nonprofit industry tend to be people oriented.
If the industry is one with a large number of regulatory requirements for example, banking, health care,
and nuclear power plant industries then we might expect the presence of a large number of rules and
regulations, a bureaucratic company structure, and a stable culture. Similarly, the high-tech industry
requires agility, taking quick action, and low concern for rules and authority, which may create a
relatively more innovative culture. The industry influence over culture is also important to know,
because this shows that it may not be possible to imitate the culture of a company in a different
industry, even though it may seem admirable to outsiders.
How Are Cultures Maintained?

As a company matures, its cultural values are refined and strengthened. The early values of a
company’s culture exert influence over its future values. It is possible to think of organizational culture
as an organism that protects itself from external forces. Organizational culture determines what types
of people are hired by an organization and what types are left out. Moreover, once new employees are
hired, the company assimilates new employees and teaches them the way things are done in the
organization. These processes are known as attraction-selection-attrition and on boarding processes. It
is important to remember two points: The process of culture creation is in fact more complex and less
clean than the name implies. Additionally, the influence of each factor on culture creation is reciprocal.
For example, just as leaders may influence what type of values the company has, the culture may also
determine what types of behaviors leaders demonstrate.
Methods of learning organisational culture
Organisational members in a number of ways and methods can learn organisational culture. The
following ways have been identified to be methods of learning the organisation’s culture:
Artifacts: They refer to the total physical and socially constructed environment of an organisation.
Examples of artifacts include office space, equipments, rules, systems and procedures.
Language: It refers to the fundamental way in which the organisation comprehends its world.
Examples of language include jokes, metaphors, stories, myths and legends.
Behaviour patterns: They refer to recurrent patterns of behaviour which are a feature of organisational
life. These patterns include rites, rituals, ceremonies and celebrations.
Norms of Behaviour: They refer to rules for behaviour which dictate what are considered to be
appropriate and inappropriate responses from employees in certain circumstances. Such norms develop
overtime as individuals negotiate with each other in their attempts to reach a consensus on how to deal
with organisational issues.
Heroes: They make success possible, provide role models and portray the organisation to external
constituencies. Heroes are the people who motivate other employees.
Symbols and symbolic action: These include words, objects, conditions, acts or characteristics of the
organisation, which mean something to organisational members. Typical symbols found in
organisations include corporate logos, policies and products.
Believes, values and attitudes: Values are intimately connected with moral and ethical codes; they
determine what people think ought to be done. Beliefs on the other hand, refer to what people think is
and is not true. Attitudes connect belief and values with feelings; they may be thought of as a learned
predisposition to respond consistently in a favourable and unfavourable manner.

Basic assumptions: They are taken-for-granted solution to an identifiable problem. Basic assumptions
guide organisational members’ perception, feelings and emotions about things in the organisation.
History: Culture is understood to be a product of the historical process.
The different ways described above, can be used to transmit organisational culture during the process
of sustaining it.
UNIT SUMMARY
Organizational design is a step-by-step methodology which identifies dysfunctional aspects of work

flow, procedures, structures and systems, realigns them to fit current business realities/goals and then
develops plans to implement the new changes. The process focuses on improving both the technical
and people side of the business. A well-designed organization ensures that the form of the organization
matches its purpose or strategy, meets the challenges posed by business realities and significantly
increases the likelihood that the collective efforts of people will be successful. As organisations grow
and the challenges in the external environment become more complex, businesses processes, structures
and systems that once worked become barriers to efficiency, customer service, employee morale and
general productivity.
Organizational change is both the process in which an organization changes its structure, strategies,
operational methods, technologies, or organizational culture to affect change within the organization
and the effects of these changes on the organization. Organizational change can be continuous or occur
for distinct periods of time.
Organizational culture is a set of shared assumptions that guide what happens in organizations by
defining appropriate behavior for various situations. It is also the pattern of such collective behaviors
and assumptions that are taught to new organizational members as a way of perceiving and, even,
thinking and feeling. Thus, organizational culture affects the way people and groups interact with each
other, with clients, and with stakeholders. In addition, organizational culture may affect how much
employees identify with an organization.
Activity
1. Can you think of an organizational or personal change that you had to go

through? Have you encountered any resistance to this change? What were the
reasons?
2. How would you deal with employees who are resisting change because their
habits are threatened? How would you deal with them if they are resisting
because of a fear or failure?
UNIT EIGHT: CHALLENGES FOR ORGANISATIONAL BEHAVIOUR
8.0 INTRODUCTION
The field of Organizational Behaviour is dynamic and not static. Behavioral scientists are continuously
engaged in updating behavioral skills to cope up with the emerging changes in the external
environment of the organizations.
LEARNING OUTCOMES
By the end of this unit, you should be able to:
 Identify and analyze the different challenges of

organisational behaviour.
 Discuss the implications of OB challenges for managers.
.

8.1 IMPROVING PEOPLE SKILLS
Technological changes, structural changes, environmental changes are accelerated at a faster rate in
business field. Unless employees and executives are equipped to possess the required skills to adapt
those changes, the achievement of the targeted goals cannot be achieved in time. There two different
categories of skills; managerial skills and technical skills. Some of the managerial skills include
listening skills, motivating skills, planning and organizing skills, leading skills, problem solving skill,
decision making skills etc. These skills can be enhanced by organizing a series of training and
development programmes, career development programmes, induction and socialization etc. In view of
this challenge managers have to aim at designing affective performance appraisal systems with built-in
training facilities which will help upgrade the skills of the employees to cope up the demands of the
external environment. The lower level cadre in management is required to possess more of technical
skills. As they move towards upward direction, their roles will be remarkably changed and expected to
have more of human relations and conceptual skills.
8.2 IMPROVING QUALITY AND PRODUCTIVITY
Quality is the extent to which the customers or users believe the product or service surpasses their
needs and expectations. For example, a customer who purchases a motor vehicle has certain
expectation, one of which is that the engine will start when it is turned on. If the engine fails to start,
the customer’s expectations will not have been met and the customer will perceive the quality of the
car as poor. Deming defined quality as a predictable degree of uniformity and dependability, at low
cost and suited to the market. Juran defined it as fitness for use. Quality dimensions include:
 Performance: Primary operating characteristics of a product such as signal coverage, audio
quality, display quality etc.
 Features: Secondary characteristics, added features, such as calculators, and alarm clock
features in hand phone
 Conformance: Meeting specifications or industry standards, workmanship of the degree to

which a product’s design or operating characteristics match preestablished standards
 Reliability: The probability of a product’s failing within t a specified period of time
 Durability: It is a measure of product’s life having both economic and technical dimension
 Services: Resolution of problem and complaints, ease of repair
 Response: Human to human interface, such as the courtesy of the dealer
 Aesthetics: Sensory characteristics such exterior finish
 Reputations: Past performance and other intangibles, such as being ranked first.

More and more managers are confronting to meet the challenges to fulfill the specific requirements of
customers. In order to improve quality and productivity, they are implementing programs like total
quality management and reengineering programs that require extensive employee involvement.
8.3 TOTAL QUALITY MANAGEMENT (TQM)
It is a philosophy of management that is driven by the constant attainment of customer satisfaction

through the continuous improvement of all organizational process. The components of TQM are (a)
intense focus of the customer,(b) Concern for continual improvement (c) improvement in the quality of
everything the organization does (d) accurate measurement and (e) empowerment of employees.
Reengineering refers to discrete initiatives that are intended to achieve radically redesigned and
improved work process in a bounded time frame. Business Process Reengineering employees a
structural methodology that reduces work process to their essential composite activist and provides
cost performance matrices to facilitate a business case for dramatic improvements. Both functional and
cross-functional processes are evaluated through workflow analysis and activity based costing. In
many cases, the application of new technology and industries best practices will enable quantum
improvement in an organization’s cost and performance.
Today’s managers understand that any efforts to improve quality and productivity must influence their
employees. These employees will not only be a major force in carrying out changes, but increasingly
will participate actively in planning those changes. Managers will put maximum effort in meeting the
customer’s requirements by involving everyone from all the levels and across all functions. Regular
communications (both formally and informally) with all the staff at all levels is must.
Two way communications at all levels must be promoted. Identifying training needs and relating them
with individual capabilities and requirements is must. Top management’s participation and
commitment and a culture of continuous improvement must be established.
8.4 MANAGING WORKFORCE DIVERSITY
This refers to employing different categories of employees who are heterogeneous in terms of gender,
race, ethnicity, relation, community, physically disadvantaged people etc. The primary reason to
employ heterogeneous category of employees is to tap the talents and potentialities, harnessing the
innovativeness, obtaining synergetic effect among the divorce workforce. In general, employees
wanted to retain their individual and cultural identity, values and life styles even though they are
working in the same organization with common rules and regulations. The major challenge for
organizations is to become more accommodating to diverse groups of people by addressing their
different life styles, family needs and work styles.
Managers have to shift their philosophy from treating everyone alike to recognizing individual
differences and responding to those differences in ways that will ensure employee retention and greater
productivity while, at the same time not discriminating. If work force diversity is managed more
effectively, the management is likely to acquire more benefits such as creativity and innovation as well
as improving decision making skills by providing different perspectives on problems. If diversity is not
managed properly and showed biases to favor only a few categories of employees, there is potential for
higher turnover, more difficulty in communicating and more interpersonal conflicts.
8.5 RESPONDING TO GLOBALIZATION
Today’s business is mostly market driven; wherever the demands exist irrespective of distance,
locations, climatic conditions, the business operations are expanded to gain their market share and to
remain in the top rank etc. Business operations are no longer restricted to a particular locality or
region. Company’s products or services are spreading across the nations using mass communication,
internet, faster transportation etc. An Australian or South African wine producer now sells more wine
through the Internet than through outlets across the country. More than 95% of Nokia hand phones are
being sold outside of their home country Finland. Japanese cars are being sold in different parts of
globe. Zambian products such as copper agricultural produce are now exported to many cities across
the globe. Executives of Multinational Corporation are very mobile and move from one subsidiary to
another more frequently.
Globalization affects managerial skills in at least two ways: i) an Expatriate manager have to manage a
workforce that is likely to have very different needs, aspirations and attitudes from the ones that they
are used to manage in their home countries. ii) Understanding the culture of local people and how it
has shaped them and accordingly learn to adapt ones management style to these differences is very
critical for the success of business operations. One of the main personality traits required for expatriate
managers is to have sensitivity to understand the individual differences among people and exhibit
tolerance to it.
8.6 EMPOWERING PEOPLE
The main issue is delegating more power and responsibility to the lower level cadre of employees and
assigning more freedom to make choices about their schedules, operations, procedures and the method
of solving their work-related problems. Encouraging the employees to participate in work related
decision will sizably enhance their commitment at work. Empowerment is defined as putting
employees in charge of what they do by eliciting some sort of ownership in them. Managers are doing
considerably further by allowing employees full control of their work. An increasing number of
organizations are using self-managed teams, where workers operate largely without boss. Due to the
implementation of empowerment concepts across all the levels, the relationship between managers and
the employees is reshaped. Managers will act as coaches, advisors, sponsors, facilitators and help their
subordinates to do their task with minimal guidance.
Today’ managers must learn to delegate their tasks to the subordinates and make them more
responsible in their work. And in so doing, managers have to learn how to give up control and
employees have to learn how to take responsibility for their work and make appropriate decision. If all
the employees are empowered, it drastically changes the type of leadership styles, power relationships,
the way work is designed and the way organizations are structured.
8.7 COPING WITH ‘TEMPORARINESS’
In recent times, the product life cycles are slimming, the methods of operations are improving, and
fashions are changing very fast. In those days, the managers needed to introduce major change
programs once or twice a decade. Today, change is an ongoing activity for most managers. The
concept of continuous improvement implies constant change. In yester years, there used to be a long
period of stability and occasionally interrupted by short period of change, but at present the change
process is an ongoing activity due to competitiveness in developing new products and services with
better features. Everyone in the organization faces today is one of permanent temporariness. The actual
jobs that workers perform are in a permanent state of flux. So, workers need to continually update their
knowledge and skills to perform new job requirements.
Managers and employees must learn to cope with temporariness. They have to learn to live with
flexibility, spontaneity, and unpredictability. The knowledge of Organizational Behavior will help
understand better the current state of a work world of continual change, the methods of overcoming
resistance to change process, the ways of creating a better organizational culture that facilitates change
process etc.
8.8 STIMULATING INNOVATION AND CHANGE
Today’s successful organizations must foster innovation and be proficient in the art of change;
otherwise they will become candidates for extinction in due course of time and vanished from their
field of business. Victory will go to those organizations that maintain flexibility, continually improve
their quality, and beat the competition to the market place with a constant stream of innovative
products and services. For example, Compaq succeeded by creating more powerful personal computers
for the same or less money than IBNM or Apple, and by putting their products to market quicker than
the bigger competitors. Amazon.com is putting a lot of independent bookstores out of business as it
proves you can successfully sell books from an Internet website.
Some of the basic functions of business are being displaced due to the advent of a new systems and
procedures. For example – books are being sold only through internet. Internet selling an
organization’s employees can be the impetus for innovation and change; otherwise they can be a major
hindrance. The challenge for managers is to stimulate employee creativity and tolerance for change.
8.9 EMERGENCE OF E-ORGANIZATION
E- Commerce: It refers to the business operations involving electronic mode of transactions. It

encompasses presenting products on websites and filling order. The vast majority of articles and media
attention given to using the Internet in business are directed at on-line shopping. In this process, the
marketing and selling of goods and services are being carried out over the Internet. In e-commerce, the
following activities are being taken place quite often - the tremendous numbers of people who are
shopping on the Internet, business houses are setting up websites where they can sell goods,
conducting the following transactions such as getting paid and fulfilling orders. It is a dramatic change
in the way a company relates to its customers. At present e-commerce is exploding. Globally, e-
commerce spending was increasing at a tremendous rate from US$ 111 billion in 1999 to US$ 1.3
trillion by 2003.
E-business: It refers to the full breadth of activities included in a successful Internet based enterprise.
As such, e-commerce is a subset of e-business. E-business includes developing strategies for running
Internet-based companies, creating integrated supply chains, collaborating with partners to
electronically coordinate design and production, identifying a different kind of leader to run a ‘virtual’
business, finding skilled people to build and operate intranets and websites, and running the back room
or the administrative side. E-business includes the creation of new markets and customers, but it’s also
concerned with the optimum ways to combine Computers, the Web and Application Software. A
sizable number of multinational corporations are selling goods and services via the Internet.
Growth rate of e-business: The application of Internet operations are initially covers a small part of
the business. At this point, their e-commerce operations are secondary to their traditional business. An
increasingly popular application of e-business is merely using the Internet to better manage an ongoing
business. Later, there are millions of firms that are now selling anything over the Internet, but they are
using e-business applications to improve communications with internal and external stakeholders and
to better perform traditional business functions. Some companies are putting maximum effort in
improving its internal efficiency and providing support to its wide-reaching dealer network and to on-
line sellers by creating a shared and integrated network. The companies wanted to make creasing
E-Organizations: This embraces e-commerce and e-business. State and central governments,
municipal corporations are using the Internet for extending all the public utility services more
efficiently through internet.
Implications for Managers: The employees must acquire skills, knowledge, attitudes in learning new
technology, overcoming any resistance
8.10 IMPROVING ETHICAL BEHAVIOR
The complexity in business operations is forcing the workforce to face ethical dilemmas, where they
are required to define right and wrong conduct in order to complete their assigned activities. For
example, Should the employees of chemical company blow the whistle if they uncover the discharging
its untreated effluents into the river are polluting its water resources? Do managers give an inflated
performance evaluation to an employee they like, knowing that such an evaluation could save that
employee’s job? The ground rules governing the constituents of good ethical behavior has not been
clearly defined. Differentiating right things from wrong behavior has become more blurred. Following
unethical practices have become a common practice such as successful executives who use insider
information for personal financial gain, employees in competitor business participating in massive
cover-ups of defective products etc.
Managers must evolve code of ethics to guide employees through ethical dilemmas. Organizing
seminars, workshops, training programs will help improve ethical behavior of employees. Retaining
consultants, lawyers, voluntary service organizations to assist the company in dealing with ethical
issues will ensure positive ethical behavior. Managers need to create an ethically healthy climate for
his employees where they can do their work productively and confront a minimal degree of ambiguity
regarding what constitutes right and wrong behavior.

UNIT SUMMARY
There are many challenges and opportunities that create a significant demand for understanding
organizational behavior. Organizations are no longer constrained by national borders and managers
find themselves having to travel to different countries, work with people from different cultures, and
cope with anti-capitalism backlash. Organizations also contend with within country diversity caused by
shifting demographics and immigration. In addition to country diversity, diversity also includes race,
gender, sexual orientation, ethnicity, religion, cultural values, lifestyle preferences, and virtually any
dimension on which employees differ. When diversity is not managed properly, there is a potential for
higher turnover, misunderstandings, and interpersonal conflicts. Perhaps the most significant change in
the labour force in the last few decades has been the sharp increase in the number of female workers.
Activity
Discuss the extent to which the external environment posses significant

challenges in the management of behaviour of employees in an organisation
and how managers can mitigate these.

References
George J and Jones G(2008) Understanding and managing organisational behavior sixth
edition Pearson Education Limited.
Hucheynski, A. Buchanan D (2007) Organisational Behavior.
Mullins, Laurie J (2004) Management and Organisational Behavior seventh Edition. Pearson
Education Limited
Robbins S and Judge P ( ) Organisational Behavior.
Schermehorn et al organisational behavior twelfth edition, John Wiley and Sons

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About this Degree in Public Administration (PA) 208 Organisational Behaviour

How this Organisational Behaviour (OB) Module is structured.

The Module overview

 What you can expect from the course.

The Module content

Welcome to this Organisational Behaviour Module

Units in this module

This module is divided in eight (8) units as outlined below:-

Unit 1: Introduction to Organizational Behaviour (OB)

Unit 3: Group and Interpersonal Behaviour

Unit 4: Conflict, Power and politics

Unit 5: Motivation theories

Unit 6: Leadership theories

Unit 7 Organisational Processes

Unit 8: Emerging Challenges for Organisational Behaviour

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Study skills Self-study time recommended is 4 hours per week

Assignments There shall be two assignments given for this module.

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Activity Assessment Assignment Case study

Discussion Group activity Help Note it!

Outcomes Reading Reflection Study skills

Summary Terminology Time Tip

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By the end of this Unit you should be able to:

  Describe the nature of organizations.

1.1 NATURE OF ORGANIZATIONS

The study of organizational behavior must be framed in an understanding of organizations as work

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• Individual behaviour and performance at work;

Organisational Behaviour focuses on five levels of analysis and they are:

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Environment: The other important key element in organisation is the environment.

1.3 IMPORTANCE OF ORGANIZATIONAL BEHAVIOUR

The goals of organisational behaviour are to:

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3. Control behaviour: The knowledge of OB can be used by managers to control behaviour.

1.4 INTERDISCIPLINARY FOCUS OF OB

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Contributions of Anthropology Anthropologists study societies, specifically the primitive society, to

1.5 HISTORICAL ROOTS OF ORGANISATIONAL BEHAVIOUR

The various schools of thought include:

Scientific Management (F.W.Taylor): Scientific management was developed by at the beginning of

1.5.1 Models of Organisational Behaviour

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3. Supportive Model: The supportive model of organizational behavior depends on managerial

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1) Human resources approach

Interdisciplinary approach: Organizational behavior is a modern interdisciplinary field. It draws

1.7 ORGANISATIONAL EFFECTIVENESS

The primary objective of OB is to contribute to organisational effectiveness. Actions of individuals and

Approaches to Organisational Effectiveness: The discussion on effectiveness till now is based on

Internal – Process Approach

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2. Trace the genesis of the concept of OB

3. Comment on the statement, “OB is an elastic concept”.

4. Examine OB as a Multi-disciplinary concept.