UNIT –I

INTRODUCTION TO ORGANIZATIONAL BEHAVIOUR

INTRODUCTION
An organization is generally regarded as group of individuals contributing their efforts
towards common goal. It is a mechanism which helps the activities to be performed effectively.
The organization is established for the purpose of achieving business objectives those may
differ from business to business. But for every business an organization is a must. In the
organization, individuals and groups behave in diverse ways. Such behaviour is influenced by
a wide range of factors which in turn influences the functioning of the organization. Thus the
study and analysis of human behaviour in organizations has been termed as a separate
discipline called as “Organizational Behaviour”.
Organizational behaviour is the study of how people behave both individually and
within informal and formal groups. Every organization’s performance is ultimately dependent
on the motivational levels of its human resources and the willingness and ability of people to
work harmoniously and effectively towards the accomplishment of shared goals. It is the duty
of every leader to respect individual values, job satisfaction, and ensure collective
involvement. Having challenging selection, training, and rewards for employees ushers in and
helps shape team players.

Meaning:
Organizational Behavior is the study of human behavior in organizational settings,
the interface between human behavior and the organization, and the organization itself.
Organizational Behavior is a field of study that investigates the impact that
individuals, groups, and structures have on behavior with in organizations for the purpose of
applying such knowledge towards improving organization’s effectiveness.
OB is the study and application of knowledge about how people – as individuals and
as group – act within organizations.”

Definition:
1. Roman J. Alday has defined “O.B as a branch of the social science that seeks to build
theories that can be applied to predicting understanding and controlling behavior in
work organizations”.

2. In words of Stephen P. Robbins, “OB is a field of study that investigates the impact that
individuals, groups and structures have on behaviour within organizations for the
purpose of applying such knowledge towards improving an organization’s
effectiveness.”

3. According to L. M. Prasad, “Organizational behaviour can be defined as the study and

application of knowledge about human behaviour related to other elements of an
organization such as structure, technology and social systems.”

4. According to Davis and Newstram, “Organizational behaviour is the study and

application of knowledge about how people act within organizations.”

5. According to Fred Luthans, “Behaviour is directly concerned with the understanding,

prediction and control of human behaviour in organizations.”
NEED AND IMPORTANCE OF ORGANIZATIONAL BEHAVIOR
1. OB provides a road map to our lives in organizations
2. OB uses scientific research to understand and make organization life, as it helps in
predict what people will do under various conditions.
3. It helps to influence organizational events – to understand and predict events.
4. It helps individual understand herself/himself in better fashion.
5. It helps managers to manage human resources effectively.
6. It helps organizations for maintaining cordial industrial relations.
7. It is also useful in the field of marketing.

NATURE OF ORGANIZATIONAL BEHAVIOUR

Organizational behaviour has emerged as a separate field of study. The nature it has
acquired is identified as follows:
1. A Separate Field of Study and not a Discipline Only
2. An Interdisciplinary Approach
3. An Applied Science
4. A Normative Science
5. A Humanistic and Optimistic Approach
6. A Total System Approach

1. A Separate Field of Study and not a Discipline Only: By definition, a discipline is

an accepted science that is based on a theoretical foundation. But, O.B. has a multi-
interdisciplinary orientation and is, thus, not based on a specific theoretical background.
Therefore, it is better reasonable to call O.B. a separate field of study rather than a
discipline only.
2. An Interdisciplinary Approach: Organizational behaviour is essentially an
interdisciplinary approach to study human behaviour at work. It tries to integrate the
relevant knowledge drawn from related disciplines like psychology, sociology and
anthropology to make them applicable for studying and analysing organizational
behaviour.
3. An Applied Science: The very nature of O.B. is applied. What O.B. basically does is
the application of various researches to solve the organizational problems related to
human behaviour. The basic line of difference between pure science and O.B. is that
while the former concentrates of fundamental researches, the latter concentrates on
applied researches. O.B. involves both applied research and its application in
organizational analysis. Hence, O.B. can be called both science as well as art.
4. A Normative Science: Organizational Behaviour is a normative science also. While
the positive science discusses only cause effect relationship, O.B. prescribes how the
findings of applied researches can be applied to socially accept organizational goals.
Thus, O.B. deals with what is accepted by individuals and society engaged in an
organization. Yes, it is not that O.B. is not normative at all. In fact, O.B. is normative
as well that is well underscored by the proliferation of management theories.
5. A Humanistic and Optimistic Approach: Organizational Behaviour applies
humanistic approach towards people working in the organization. It, deals with the
thinking and feeling of human beings. O.B. is based on the belief that people have an
innate desire to be independent, creative and productive. It also realizes that people
working in the organization can and will actualize these potentials if they are given
proper conditions and environment. Environment affects performance or workers
working in an organization.
6. A Total System Approach: The system approach is one that integrates all the
variables, affecting organizational functioning. The systems approach has been
developed by the behavioural scientists to analyse human behaviour in view of his/her
socio- psychological framework. Man's socio-psychological framework makes man a
complex one and the systems approach tries to study his/her complexity and find
solution to it.

OBJECTIVES OF ORGANIZATIONAL BEHAVIOUR

Studying organizational behaviour can help assess how the employees process these
changes and inculcate them into their work patterns. In addition, there are certain objectives
that organizational behaviour fulfils or needs to be fulfilled in the workplace.
Given below are the basic objectives of organizational behaviour.
1. Improving Employee Behaviour
2. Enhances Leadership Skills
3. Increases the Motivation of Employees
4. Assists in Organizational Change
5. Creating a Desirable Workplace Culture

1. Improving Employee Behaviour: With the help of organizational behaviour, it is easy

to understand employees' behaviour and access their workplace situation. It also helps
in analyzing how employees' positive and negative behaviour while working can impact
the workflow. And through all these necessary steps can be taken to handle any situation
that may arise. For example, with the help of organizational behaviour, we can look
into the fact as to why the deadlines by a particular employee are not being met.
2. Enhances Leadership Skills: For one to become an effective leader, it is necessary to
understand organizational behaviour. When one is in a higher position, it is important
to look into the factors that affect employees' or subordinates' behaviour in the
workplace. Once the reasons are understood, effective steps can be taken at an
immediate level. Leadership skills ensure to handle the employees work effectively and
efficiently.
3. Increases the Motivation of Employees: When they look through the employees'
perspective, they will always find it motivating that their problems are being understood
and reasons for their behaviour, in a certain way, are taken into consideration. Like,
when effective feedback is taken, the employees feel valued and satisfied. It motivates
them to work in a better way, which will, in turn, increase productivity.
4. Assists in Organizational Change: When working in an organization, the employees
have to go through several changes like technological changes, customer tastes, etc.
And any difficulty that arises can be solved without having any major effect on the
working by looking into it prior.
5. Creating a Desirable Workplace Culture: By taking steps to understand
organizational behaviour, desirable workplace culture is created. The employees feel
satisfied and important. It helps understand what style of leadership must be used, hiring
strategies, compensation, etc.

SCOPE OF ORGANIZATIONAL BEHAVIOUR

The three internal organizational elements viz., people, technology and structure and
the fourth element, i.e., external social systems may be taken as the scope of O.B.
1. People: The people constitute the internal social system of the organization. They
consist of individuals and groups. Groups may be large or small, formal or informal,
 official or unofficial. They are dynamic. They form, change and disband. People are
living, thinking and feeling being who created the organization and try to achieve the
objectives and goals. Thus, organizations exist to serve the people and not the people
exist to serve the organization.
2. Structure: Structure defines the sole relationship of people in an organization.
Different people in an organization are given different roles and they have certain
relationship with others. All are so related to each other to accomplish the goal in a
coordinated manner. Thus, structure relates to power and duties. One has the authority
and others have a duty to obey him.
3. Technology: Technology imparts the physical and economic conditions within which
people work. With their bare hands people can do nothing so they are given assistance
of buildings, machines, tools, processes and resources. Thus, technology brings
effectiveness and at the same restricts people in various ways.
4. Social System: Social system provides external environment which the organization
operates. A single organization cannot exist also. It is a part of the whole. All
organizations influence each other. It influences the attitudes of people, their working
conditions and above all provides competition for resources and power.

CHALLENGES AND OPPORTUNITIES OF ORGANIZATIONAL BEHAVIOR

Challenges and opportunities of organizational behavior are massive and rapidly
changing for improving productivity and meeting business goals. Although the problems with
organizations and the solutions over the ages have not really changed, the emphasis and
surrounding environmental context certainly have changed. Although the resulting lean and
mean organizations offered some short-run benefits in terms of lowered costs and improved
productivity, if they continued to do business, as usual, they would not be able to meet current
or future challenges. Main challenges and opportunities of organizational behavior are;
1. Improving Peoples’ Skills: Technological changes, structural changes, environmental
changes are accelerated at a faster rate in the business field. Unless employees and
executives are equipped to possess the required skills to adapt those changes, the
targeted goals cannot be achieved in time. These 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 programs, career development programs, induction, and
socialization etc.
2. Improving Quality and Productivity: Organizational Behavior Opportunities for
Improving Quality and Productivity. Quality is the extent to which the customers or
users believe the product or service surpasses their needs and expectations. For
example, a customer who purchases an automobile has a certain expectation, one of
which is that the automobile engine will start when it is turned on.
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) An intense focus on 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.
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, elderly people etc. The primary reason to
employ heterogeneous category of employees is to tap the talents and potentialities,
harnessing the innovativeness, obtaining synergetic effect among the divorce
workforce. In general, employees wanted to retain their individual and cultural identity,
values and life styles even though they are working in the same organization with
common rules and regulations. The major challenge for organizations is to become
more accommodating to diverse groups of people by addressing their different life
styles, family needs, and work styles.
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, the internet, faster transportation etc. More than 95% of Nokia (Now
Microsoft) hand phones are being sold outside of their home country Finland. Japanese
cars are being sold in different parts of the globe. Sri Lankan tea is exported to many
cities around the globe. Garment products of Bangladesh are exporting in USA and EU
countries. Executives of Multinational Corporation are very mobile and move from one
subsidiary to another more frequently.
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
sizable enhance their commitment to 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. 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.
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 yesteryears, there used to be a long period of
stability and occasionally interrupted by a 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.
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 EBNM 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.
9. Emergence of E-Organization & E-Commerce: It refers to the business operations
involving the electronic mode of transactions. It encompasses presenting products on
websites and filling the order. The vast majority of articles and media attention given
to using the Internet in business are directed at online 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.
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,
(a) 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?
(b) Do managers give an inflated performance evaluation to an employee they like,
knowing that such an evaluation could save that employee’s job?
11. Improving Customer Service: OB can contribute to improving an organizational
performance by showing drat how employees’ attitude and behavior are associated with
customer satisfaction. In that case, service should be the first production oriented by
using technological opportunities like a computer, the internet etc. To improve the
customer service, need to provide sales service and also the after sales service.

FOUNDATIONS OF INDIVIDUAL BEHAVIOR

Organizational behavior is the study of both group and individual performance and
action within an enterprise. This field of study scans human behavior in the working
atmosphere. It determines its effect on job structure, performance, communication, motivation,
leadership, decision making abilities etc. The way an individual behaves and behavior as a
group have two perspectives − internal and external.

Behavior Analysis at Different Levels: Behavior as an individual or in a group is always

analyzed by everyone in the organization. It is analyzed at three different levels −
• Individual level of analysis
• Group level of analysis
• Organizational level of analysis
1. Individual Level of Analysis: Organizational behavior, at this level of analysis
massively draws upon psychology, engineering, and medicine. At the individual level
of analysis, organizational behavior includes the study of learning, perception,
creativity, motivation, and personality. In addition, it also includes the study of
turnover, task performance and evaluation, coordinated behavior, deviant work
behavior, ethics, and cognition. For example: Ram joins a company as an intern and is
 very open to learning new things but as time passes and he gets promoted his attitude
towards his interns becomes rude. This is a fine example of individual level of analysis.
2. Group Level of Analysis: Organizational behavior, at this level of analysis, draws
upon the sociological and socio-psychological discipline. At the group level of analysis,
organizational behavior includes the study of group gesture, intra-group and intergroup
dispute and attachment. It is further extended to the study of leadership, power, norms,
interpersonal communication, networks, and roles. An example of this level of analysis
− Board of directors of company X decide to give bonus to their workers as they have
really worked hard on a certain project.
3. Organizational Level of Analysis: Organizational behavior, at this level of analysis
draws upon sociology and political science. At this level of analysis, organizational
behavior includes the study of organizational culture, structure, cultural diversity, inter-
organizational cooperation and coordination. It further includes the study of dispute,
change, technology, and external environmental forces. Some other fields of study that
adds to the interest of organizational behavior are ergonomics, statistics, and
psychometrics. To have a clear understanding on the topic and avoid any kind of
confusion let’s look at an example at different levels and try to analyze it. Rohit is
interested in becoming a singer as he is interested in music and feels he can do better in
this field. While his parents force him to pursue his job as a software engineer, as
according to his father’s perception a software job pays well and is far better than
struggling to become a singer. In this case, we see Rohit and his father have a clash of
opinions, hence this is a case of individual level of analysis. Extending this example
further, if Rohit seeks help from his friends on this matter his friends will support him
as they have the same mindset support the idea of following their own dreams,
struggling and achieving their goal. Meanwhile Rohit’s father’s friend circle might find
the idea of pursuing singing as a career insane and support his father’s decision of
opting for a software. Here we see two different groups of people with contradicting
ideologies, this becomes a case of group level of analysis. Individual behavior can be
defined as a mix of responses to external and internal stimuli. It is the way a person
reacts in different situations and the way someone expresses different emotions like
anger, happiness, love, etc. To get a brief idea about the individual behavior let us learn
about the individual behavior framework and other key elements related to it.

Individual Behavior Framework

On the basis of these elements, psychologist Kurt Lewin stated the Field theory and
outlined the behavior framework. This psychological theory studies the patterns of interaction
between an individual and the environment. The theory is expressed using the formula
B = F(P,E)
where, B – Behavior, F – Behavior Function, P – Person, and E – Environment around the
person.
For example, a well payed person who loses his job in recession may behave differently
when unemployed.
Causes of Individual Behavior
Certain individual characteristics are responsible for the way a person behaves in daily life
situations as well as reacts to any emergency situations. These characteristics are categorized
as:
Inherited Characteristics: The features individuals acquire from their parents or from our
forefathers are the inherited characteristics. In other words, the gifted features an individual
possesses by birth is considered as inherited characteristics. Following features are considered
as inherited characteristics:
• Color of a person’s eye
• Religion/Race of a person
• Shape of the nose
• Shape of earlobes
Learned Characteristics: Nobody learns everything by birth. First our school is our home,
then our society followed by our educational institutions. The characteristics an individual
acquires by observing, practicing and learning from others and the surroundings is known as
learned characteristics. It consists of the following features:
• Perception: Result of different senses like feeling, hearing etc.
• Values: Influences perception of a situation, decision making process.
• Personality: Patterns of thinking, feeling, understanding and behaving.
• Attitude: Positive or negative attitude like expressing one’s thought.

MOTIVATION
Motivation is the process of channeling a person's inner drives so that he wants to
accomplish the goals of the organization. Motivation concern itself with the will to work. It
seeks to know the incentives for work and tries to find out the ways and means whereby their
realization can be helped and encouraged. Managers, by definition, are required to work with
and through people, so they must gain at least some understanding of the forces that will
motivate the people they are to manage. People are complex and they are uniquely different.
What motivates one person may not motivate another. Most successful managers have learned
to understand the concept of human motivation and are able to use that understanding to
achieve higher standards of subordinate work performance.
 "Motivation" is a Latin word, meaning "to move". Human motives are internalised
goals within individuals. Motivation may be defined as those forces that cause people to behave
in certain ways. Motivation encompasses all those pressures and influences that trigger,
channel, and sustain human behaviour. Most successful managers have learned to understand
the concept of human motivation and are able to use that understanding to achieve higher
standards of subordinate work performance.
• Motivation has been defined by Michael J Juicus as "the act of stimulating someone or
oneself to get a desired course of action".
• In the words of Lewis Allen, "Motivation is the work a manager performs to inspire,
encourage and impel people to take required action".
• According to Koontz and O'Donnell, "Motivation is a general term applying to the
entire class of drives, needs, wishes and similar forces".

MASLOW’S THEORY OF HUMAN NEEDS

Abraham H. Maslow, a famous social scientist or psychologist, has given a framework
that helps to explain the strength of certain needs. He identifies five levels of needs, which are
best seen as a hierarchy with the most basic need emerging first and the most sophisticated
need last. People move up the hierarchy one level at a time. Gratified needs to lose its strength
and the next level of needs is activated. As basic or lower-level needs are satisfied, higher-level
needs become operative. A satisfied need is not a motivator. The most powerful employee need
is the one that has not been satisfied.

The hierarchy of needs is identified as follows:

1. Physiological needs: The Physiological needs are at the top of the hierarchy because
they tend to have the highest strength until they are reasonably satisfied. It includes the
need for food, sleep, shelter, etc. these are the basic needs and if these are not satisfied,
one does not think of needs at higher level.
2. Safety or Security Needs: Once physiological needs are satisfied to a reasonable level,
the next level in the hierarchy is safety. Safety means being free of physical danger or
self-preservation. It covers protection, job security, the safety of property, food or
shelter, etc.
3. Affiliation or Acceptance or Social needs: After the first two needs are satisfied,
social needs become important in the need hierarchy. Man wants to live in society as a
member of society. He wants to love and be loved by others. It includes desire to seek
 or show affection and recognition, needs for companionship, identification with a
group, etc.
4. Esteem needs: These needs are concerned with self-respect, self-confidence, a feeling
of personal worth, feeling of being unique and recognizable. The satisfaction of these
needs produces feelings of self-confidence, prestige, power and control.
5. Self-actualization needs: These needs indicate the strong desire to achieve something,
particularly in view of the potential one has. This includes competence which implies
control over environmental factors both physical and social and achievement.
Maslow suggests that the various levels are interdependent and overlapping, each
higher-level need emerging before the lower-level need has been completely satisfied.

DOUGLAS Mc GREGOR’S THEORY X AND THEORY Y

McGregor's work was based on Maslow's hierarchy of needs. He grouped Maslow's
hierarchy into "lower-order" (Theory X) needs and "higher-order" (Theory Y) needs.
McGregor, in 1960 in his book “The Human Side of Enterprise” states that people inside the
organization can be managed in two ways. The first is basically negative, which falls under the
category X and the other is basically positive, which falls under the category Y.
After viewing the way in which the manager dealt with employees, McGregor
concluded that a manager’s view of the nature of human beings is based on a certain grouping
of assumptions and that he or she tends to mould his or her behaviour towards subordinates
according to these assumptions. Douglas McGregor has classified the basic assumption
regarding human nature into twoparts and has designated them as 'theory X’ and 'theory Y' as
discussed below:

Theory - X:
This is the traditional theory of human behaviour, which makes the following
assumptions about human nature:
1. Management is responsible for organizing the elements of productive enterprises -
money, material, equipment, and people - in the interest of economic ends.
2. With reference to people, it is a process of directing their efforts, motivating them,
controlling their actions, modifying their behaviour in order to be in conformity with
the needs of the organization.
3. Without this active intervention by management, people would be passive – even
resistant to organizational needs. Hence, they must be persuaded, rewarded, punished
and properly directed.
4. The average human being has an inherent dislike of work and will avoid it if he can.
5. He lacks ambition, dislikes responsibility and prefers to be led.
6. He is inherently self-centred, indifferent to organizational needs.
7. He is by nature resistant to change.
8. He is gullible, not very bright.

Theory - Y: The assumption of theory Y, according to McGregor are as follows:

1. Work is as natural as play or rest, provided the conditions are favourable; the average
human being does not inherently dislike work.
2. External control and the thrust of punishment are not the only means for bringing about
efforts towards organizational objectives. Man can exercise self-control and self-
direction in the service of objectives to which he is committed.
 3. Commitment to objectives is a result of the rewards associated with their achievement.
People select goals for themselves if they see the possibilities of some kind of reward
that may be material or even psychological.
4. The average human being, under proper conditions, does not shirk responsibility but
learn not only to accept responsibility but also to seek it.
5. He has the capacity to exercise a relatively high degree of imagination, ingenuity and
creativity in the solution of organizational problems is wide, not narrowly distributed
in the population.
6. Under conditions of modern industrial life, the intellectual potentialities of people are
only partially utilized. As a matter of fact, men, have unlimited potential.

ERG THEORY
ERG theory of motivation is the condensed form of Maslow’s Hierarchy of Needs. The theory
was developed by Clayton Paul Alderfer, an American psychologist, and consultant, between
the 60s and the 70s, based on the empirical study conducted at a factory in Easton,
Pennsylvania. Maslow’s Hierarchy of Needs has been criticized and modified by various
critics, among which Alderfer’s is probably the most interesting and logical one. Alderfer has
compacted Maslow’s five needs into three broad categories – Existence, Relatedness, and
Growth, based on which the theory has been named as ERG Theory of motivation. ERG theory
alike Maslow’s theory describes the needs in the pecking order.

Existence needs (E): What Maslow had described as “physiological needs” and “safety needs”
were merged together by Alderfer to constitute existence needs. The group is concerned with
basic physical needs and security needs, without which human body will fail to function
properly, and ultimately break down. An employee won’t be motivated to work unless his
physiological needs such as food, shelter, clothing, sleep, etc. are being fulfilled. While
materialistic requirements relatively satisfy the employee, his behavior is significantly affected
by the safety needs. Here, safety is concerned with both physical as well as economic. Any
employee would be motivated to continue working only when his health, financial and other
personal security is ensured.
Relatedness needs (R): The need for love, friendship and other intrapersonal relationship,
which were categorized as “belongingness” in Maslow’s Hierarchy of Needs were included in
this group. It is the necessity of all humans to have a good relationship with the ones who are
present around him. Thus, he always looks for a good working environment where he can
establish a good relationship with his superiors, colleagues or subordinates. Such workplace
which consists of hostile employers or co-workers contributes to grievances and conflicts,
which in long run can increase labor turnover rate.
Growth needs (G): The intrinsic desire for progress and development which were categorized
as “esteem” and “self-actualization” by Maslow was fitted by Alderfer into this group. An
employee feels highly motivated when he realizes the outcomes or consequences of his efforts.
The consequences might be feeling of achievement, respect from others, goal actualization,
increase in knowledge, etc. In absence of these factors, an employee can never be happy with
his job.
Priority of needs differs from person to person. However, Alderfer has been able to
broadly classify and prioritize these needs. According to him, existence needs are the most
concrete, which is followed by relatedness needs and growth needs, consecutively.

GROUP DYNAMICS
Group dynamics deals with the attitudes and behavioral patterns of a group. Group
dynamics concern how groups are formed, what is their structure and which processes are
followed in their functioning. Thus, it is concerned with the interactions and forces operating
between groups. Group dynamics is relevant to groups of all kinds – both formal and informal.
If the UPA government has set up Group of Ministers for every governance issue, the Supreme
Court of India has 27 Group of Judges committees overseeing all manner of non-judicial work
in the apex court. In an organizational setting, the term groups are a very common and the study
of groups and group dynamics is an important area of study.

Group
Every organization is a group unto itself. A group refers to two or more people who
share a common meaning and evaluation of themselves and come together to achieve common
goals. In other words, a group is a collection of people who interact with one another; accept
rights and obligations as members and who share a common identity.

Characteristics of a Group:
Regardless of the size or the purpose, every group has similar characteristics:
(a) 2 or more persons (if it is one person, it is not a group)
(b) Formal social structure (the rules of the game are defined)
(c) Common fate (they will swim together)
(d) Common goals (the destiny is the same and emotionally connected)
(e) Face-to-face interaction (they will talk with each other)
(f) Interdependence (each one is complimentary to the other)
(g) Self-definition as group members (what one is who belongs to the group)
(h) Recognition by others (yes, you belong to the group).

Process/Stages of Group Development/Evolution:

Group Development is a dynamic process. How do groups evolve? There is a process
of five stages through which groups pass through. The process includes the five stages:
forming, storming, forming, performing, and adjourning.
1. Forming: The first stage in the life of a group is concerned with forming a group. This
stage is characterized by members seeking either a work assignment (in a formal group)
or other benefit, like status, affiliation, power, etc. (in an informal group). Members at
this stage either engage in busy type of activity or show apathy.
2. Storming: The next stage in this group is marked by the formation of dyads and triads.
Members seek out familiar or similar individuals and begin a deeper sharing of self.
 Continued attention to the subgroup creates a differentiation in the group and tensions
across the dyads / triads may appear. Pairing is a common phenomenon. There will be
conflict about controlling the group.
3. Norming: The third stage of group development is marked by a more serious concern
about task performance. The dyads/triads begin to open up and seek out other members
in the group. Efforts are made to establish various norms for task performance.
Members begin to take greater responsibility for their own group and relationship while
the authority figure becomes relaxed. Once this stage is complete, a clear picture will
emerge about hierarchy of leadership. The norming stage is over with the solidification
of the group structure and a sense of group identity and camaraderie.
4. Performing: This is a stage of a fully functional group where members see themselves
as a group and get involved in the task. Each person makes a contribution and the
authority figure is also seen as a part of the group. Group norms are followed and
collective pressure is exerted to ensure the Process of Group effectiveness of the group.
The group may redefine its goals Development in the light of information from the
outside environment and show an autonomous will to pursue those goals. The long-
term viability of the group is established and nurtured.
5. Adjourning: In the case of temporary groups, like project team, task force, or any other
such group, which have a limited task at hand, also have a fifth stage, this is known as
adjourning. The group decides to disband. Some members may feel happy over the
performance, and some may be unhappy over the stoppage of meeting with group
members. Adjourning may also be referred to as mourning, i.e. mourning the
adjournment of the group.

TYPES OF GROUPS:
One way to classify the groups is by way of formality – formal and informal. While
formal groups are established by an organization to achieve its goals, informal groups merge
spontaneously. Formal groups may take the form of command groups, task groups, and
functional groups.
1. Command Groups: Command groups are specified by the organizational chart and
often consist of a supervisor and the subordinates that report to that supervisor. An
example of a command group is a market research firm CEO and the research associates
under him.
2. Task Groups: Task groups consist of people who work together to achieve a common
task. Members are brought together to accomplish a narrow range of goals within a
specified time period. Task groups are also commonly referred to as task forces. The
organization appoints members and assigns the goals and tasks to be accomplished.
Examples of assigned tasks are the development of a new product, the improvement of
a production process, or designing the syllabus under semester system. Other common
task groups are ad hoc committees, project groups, and standing committees. Ad hoc
committees are temporary groups created to resolve a specific complaint or develop a
process are normally disbanded after the group completes the assigned task.
3. Functional Groups: A functional group is created by the organization to accomplish
specific goals within an unspecified time frame. Functional groups remain in existence
after achievement of current goals and objectives. Examples of functional groups would
be a marketing department, a customer service department, or an accounting
department.

In contrast to formal groups, informal groups are formed naturally and in response to
the common interests and shared values of individuals. They are created for purposes other
than the accomplishment of organizational goals and do not have a specified time frame.
Informal groups are not appointed by the organization and members can invite others to join
from time to time. Informal groups can have a strong influence in organizations that can either
be positive or negative. For example, employees who form an informal group can either discuss
how to improve a production process or how to create shortcuts that jeopardize quality.
Informal groups can take the form of interest groups, friendship groups, or reference groups.
1. Interest Group: Interest groups usually continue over time and may last longer than
general informal groups. Members of interest groups may not be part of the same
organizational department but they are bound together by some other common interest.
2. The goals and objectives of group interests are specific to each group and may not be
related to organizational goals and objectives. An example of an interest group would
be students who come together to form a study group for a specific class.
3. Friendship Groups: Friendship groups are formed by members who enjoy similar
social activities, political beliefs, religious values, or other common bonds. Members
enjoy each other’s company and often meet after work to participate in these activities.
For example, a group of employees who form a friendship group may have a yoga
group, a Rajasthani association in Delhi, or a kitty party lunch once a month.
4. Reference Groups: A reference group is a type of group that people use to evaluate
themselves. The main objectives of reference groups are to seek social validation and
social comparison. Social validation allows individuals to justify their attitudes and
values while social comparison helps individuals evaluate their own actions by
comparing themselves to others. Reference groups have a strong influence on members’
behavior. Such groups are formed voluntarily. Family, friends, and religious affiliations
are strong reference groups for most individuals.

FACTORS AFFECTING GROUP BEHAVIOUR

The success or failure of a group depends upon so many factors. Group member
resources, structure (group size, group roles, group norms, and group cohesiveness), group
processes (the communication, group decision making processes, power dynamics, conflicting
interactions, etc.) and group tasks (complexity and interdependence).
1. Group Member Resources: The members’ knowledge, abilities, skills; and
personality characteristics (sociability, self- reliance, and independence) are the
resources the group members bring in with them. The success depends upon these
resources as useful to the task.
2. Group Structure:
a) Group size can vary from two people to a very large number of people. Small
groups of two to ten are thought to be more effective because each member has
ample opportunity to take part and engage actively in the group. Large groups
may waste time by deciding on processes and trying to decide who should
participate next. Evidence supports the notion that as the size of the group
increases, satisfaction increases up to a certain point. Increasing the size of a
group beyond 10-12 members’ results in decreased satisfaction. It is
increasingly difficult for members of large groups to identify with one another
and experience cohesion.
b) Group Roles: In formal groups, roles are always predetermined and assigned
to members. Each role shall have specific responsibilities and duties. There are,
however, emergent roles that develop naturally to meet the needs of the groups.
These emergent roles will often substitute the assigned roles as individuals
 begin to express themselves and become more assertive. Group roles can then
be classified into work roles, maintenance roles, and blocking roles.
• Work roles are task-oriented activities that involve accomplishing the
group’s goals. They involve a variety of specific roles such as initiator,
informer, clarifier, summarizer, and reality tester.
• Maintenance roles are social-emotional activities that help members
maintain their involvement in the group and raise their personal
commitment to the group. The maintenance roles are harmonizer,
gatekeeper, consensus tester, encourager, and compromiser.
• Blocking roles are activities that disrupt the group. Blockers will stubbornly
resist the group’s ideas, disagree with group members for personal reasons,
and will have hidden agendas. They may take the form of dominating
discussions, verbally attacking other group members, and distracting the
group with trivial information or unnecessary humour. Often times the
blocking behaviour may not be intended as negative. Sometimes a member
may share a joke in order to break the tension, or may question a decision
in order to force group members to rethink the issue. The blocking roles are
aggressor, blocker, dominator, comedian, and avoidance behaviour.
c) Group Norms: Norms define the acceptable standard or boundaries of
acceptable and unacceptable behaviour, shared by group members. They are
typically created in order to facilitate group survival, make behaviour more
predictable, avoid embarrassing situations, and express the values of the group.
Each group will create its own norms that might determine from the work
performance to dress to making comments in a meeting. Groups exert pressure
on members to force them to conform to the group’s standards and at times not
to perform at higher levels. The norms often reflect the level of commitment,
motivation, and performance of the group. The majority of the group must agree
that the norms are appropriate in order for the behaviour to be accepted. There
must also be a shared understanding that the group supports the norms. It should
be noted, however, that members might violate group norms from time to time.
If the majority of members do not adhere to the norms, then they will eventually
change and will no longer serve as a standard for evaluating behaviour. Group
members who do not conform to the norms will be punished by being excluded,
ignored, or asked to leave the group.
d) Group Cohesiveness: Cohesiveness refers to the bonding of group members or
unity, feelings of attraction for each other and desire to remain part of the group.
Many factors influence the amount of group cohesiveness – agreement on group
goals, frequency of interaction, personal attractiveness, inter-group
competition, favourable evaluation, etc. The more difficult it is to obtain group
membership the more cohesive the group will be. Groups also tend to become
cohesive when they are in intense competition with other groups or face a
serious external threat to survival. Smaller groups and those who spend
considerable time together also tend to be more cohesive. Cohesiveness in work
groups has many positive effects, including worker satisfaction, low turnover
and absenteeism, and higher productivity. However, highly cohesive groups
may be detrimental to organizational performance if their goals are misaligned
with organizational goals. Highly cohesive groups may also be more vulnerable
to groupthink. Groupthink occurs when members of a group exert pressure on
each other to come to a consensus in decision making. Groupthink results in
 careless judgments, unrealistic appraisals of alternative courses of action, and a
lack of reality testing.
3. Group Processes: Decision-making by a group is superior, because group generates
more information and knowledge, generates diverse alternatives, increases acceptance
of a solution, and increases legitimacy. Decisions take longer time, minority is
dominated, pressure is applied to conform to group decisions, and none is responsible
for the decisions.

LEADERSHIP
Leadership is one of the most important aspects of studies of human behaviour in the
organization. It is the leader who creates working environment. The success of an organization
depends upon the efficiency of the leader. It is the attributes, positive approach and the ability
to solve problems that make a person leader. A leader should be able to turn the hopeless
situation in favour. In the environment of tough competition in the market where it is
undergoing financial recession, layoffs are the order of the day, market is facing poor demand
for product because everybody has enough and poor or no growth situation persists. In this
situation leader should not lose his balance but turn the situation in his favour. He should be
able to evolve techniques and lead the organization to win-win strategy.
A leader should be able to motivate employees. All leaders are not managers as they
have to work in non-organized sectors while the managers work in the organized sectors. All
managers should be leaders so that they are able to work efficiently.
• "Leadership" according to Alford and Beatty "is the ability to secure desirable actions
from a group of followers voluntarily, without the use of coercion".
• According to Koontz and O'Donnell - Managerial leadership is "the ability to exert
interpersonal influence by means of communication, towards the achievement of a goal.
Since managers get things done through people, their success depends, to a considerable
extent upon their ability to provide leadership".

LEADERSHIP STYLES
A leader is a person who influences a group of people towards the achievement of a goal while
leadership is the art of motivating a group of people to act towards achieving a common goal.
Different leadership styles will result in different impact to organization. The leader has to
choose the most effective approach of leadership style depending on situation because
leadership style is crucial for a team success. By understanding these leadership styles and their
impact, everyone can become a more flexible and better leader.

1. Transactional Leadership
Transactional leadership is a term used to classify a group of leadership theories that
inquire the interactions between leaders and followers. This style of leadership starts with the
premise that team members agree to obey their leader totally when they take a job on. The
“transaction” is usually that the organization pays the team members, in return for their effort
and compliance. As such, the leader has the right to “punish” team members if their work
doesn’t meet the pre-determined standard. Team members can do little to improve their job
satisfaction under transactional leadership. The leader could give team members some control
of their income/reward by using incentives that encourage even higher standards or greater
productivity. Alternatively, a transactional leader could practice “management by exception”,
whereby, rather than rewarding better work, he or she would take corrective action if the
required standards were not met.
 Transactional leadership is really just a way of managing rather a true leadership style,
as the focus is on short-term tasks. It has serious limitations for knowledge-based or creative
work, but remains a common style in many organizations.

2. Autocratic Leadership
Under the autocratic leadership styles, all decision-making powers are centralized in
the leader as shown such leaders are dictators. Autocratic leadership is an extreme form of
transactional leadership, where a leader exerts high levels of power over his or her employees
or team members. People within the team are given few opportunities for making suggestions,
even if these would be in the team’s or organization’s interest.
Autocratic leadership style is often considered the classical approach. It is one in which
the manager retains as much power and decision-making authority as possible. The manager
does not consult employees, nor are they allowed to give any input. Employees are expected to
obey orders without receiving any explanations. The motivation environment is produced by
creating a structured set of rewards and punishments. Autocratic leaders make decisions
without consulting their teams. This is considered appropriate when decisions genuinely need
to be taken quickly, when there’s no need for input, and when team agreement isn’t necessary
for a successful outcome.
Many people resent being treated like this. Because of this, autocratic leadership often
leads to high levels of absenteeism and staff turnover. Also, the team’s output does not benefit
from the creativity and experience of all team members, so many of the benefits of teamwork
are lost. For some routine and unskilled jobs, however, this style can remain effective, where
the advantages of control outweigh the disadvantages.

3. Transformational Leadership
Transformational leadership is a leadership style that is defined as leadership that
creates valuable and positive change in the followers. A transformational leader focuses on
“transforming” others to help each other, to look out for each other, to be encouraging and
harmonious, and to look out for the organization as a whole. In this leadership, the leader
enhances the motivation, morale and performance of his follower group. A person with this
leadership style is a true leader who inspires his or her team with a shared vision of the future.
Transformational leaders are highly visible, and spend a lot of time communicating. They don’t
necessarily lead from the front, as they tend to delegate responsibility amongst their teams.
While their enthusiasm is often infectious, they can need to be supported by “detail people”.
In many organizations, both transactional and transformational leadership are needed.
The transactional leaders (or managers) ensure that routine work is done reliably, while the
transformational leaders look after initiatives that add new value.

4. Servant Leadership
This term, coined by Robert Greenleaf in the 1970s, describes a leader who is often not
formally recognized as such. When someone, at any level within an organization, leads simply
by virtue of meeting the needs of his or her team, he or she is described as a “servant leader”.
Servant Leadership’s focus was on the leader as a servant, with his or her key role being in
developing, enabling and supporting team members, helping them fully develop their potential
and deliver their best. In many ways, servant leadership is a form of democratic leadership, as
the whole team tends to be involved in decision-making.
Supporters of the servant leadership model suggest it is an important way ahead in a
world where values are increasingly important, and in which servant leaders achieve power on
the basis of their values and ideals. Others believe that in competitive leadership situations,
people practicing servant leadership can find themselves “left behind” by leaders using other
leadership styles. Followers may like the idea of servant leadership so there’s something
immediately attractive about the idea of having a boss who’s a servant leader. People without
responsibility for results may like it for its obviously democratic and consensual approach.

5. Charismatic Leadership
The Charismatic Leader and the Transformational Leader can have many similarities,
in that the Transformational Leader may well be charismatic. Their main difference is in their
basic focus. Whereas the Transformational Leader has a basic focus of transforming the
organization and, quite possibly, their followers, the Charismatic Leader may not want to
change anything. A charismatic leadership style can appear similar to a transformational
leadership style, in that the leader injects huge doses of enthusiasm into his or her team, and is
very energetic in driving others forward.
However, charismatic leaders can tend to believe more in themselves than in their
teams. This can create a risk that a project, or even an entire organization, might collapse if the
leader were to leave because in the eyes of their followers, success is tied up with the presence
of the charismatic leader. As such, charismatic leadership carries great responsibility, and needs
long-term commitment from the leader.

6. Democratic Leadership or Participative Leadership

Although a democratic leader will make the final decision, he or she invites other
members of the team to contribute to the decision-making process. This not only increases job
satisfaction by involving employees or team members in what’s going on, but it also helps to
develop people’s skills. Employees and team members feel in control of their own destiny, and
so are motivated to work hard by more than just a financial reward. Democratic leadership can
produce high quantity work for long periods of time. Many employees like the trust they receive
and respond with cooperation, team spirit, and high morale. As participation takes time, this
style can lead to things happening more slowly than an autocratic approach, but often the end
result is better. It can be most suitable where team working is essential, and where quality is
more important than speed to market or productivity.

7. Laissez-Faire Leadership
The laissez-faire leadership style is also known as the “hands-off ¨ style. It is one in
which the manager provides little or no direction and gives employees as much freedom as
possible. All authority or power is given to the employees and they must determine goals, make
decisions, and resolve problems on their own.
This French phrase means “leave it be” and is used to describe a leader who leaves his
or her colleagues to get on with their work. It can be effective if the leader monitors what is
being achieved and communicates this back to his or her team regularly. Most often, laissez-
faire leadership works for teams in which the individuals are very experienced and skilled self-
starters. Unfortunately, it can also refer to situations where managers are not exerting sufficient
control. The advantage of this kind of style is positive only in the case when the employees are
very responsible and in case of creative jobs where a person is guided by his own aspirations.
In these cases, less direction is required so this style can be good. This style has more
disadvantages because usually it is the result of the lack of interest of the leader that leads to
his adopting this style. It proves poor management and makes the employees lose their sense
of direction and focus. The disinterest of the management and leadership causes the employees
to become less interested in their job and their dissatisfaction increases.
8. Bureaucratic Leadership
This is style of leadership that emphasizes procedures and historical methods regardless
of their usefulness in changing environments. Bureaucratic leaders attempt to solve problems
by adding layers of control, and their power comes from controlling the flow of information.
Bureaucratic leaders work “by the book”, ensuring that their staff follow procedures exactly.
This is a very appropriate style for work involving serious safety risks such as working with
machinery, with toxic substances, at heights or where large sums of money are involved such
as cash-handling. In other situations, the inflexibility and high levels of control exerted can
demoralize staff, and can diminish the organization’s ability to react to changing external
circumstances.