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Samaresh chhotray CA/MBA



Section I

Organizational Behaviour - What managers do, definition of OB, contributing

discipline to OB, challenges and opportunities for OB. Foundations of Individual behaviour - biographical characteristics, ability, and learning. Values, Attitudes and Job satisfaction. Personality and Emotions Perception.

Section II Motivation - Concept, Theories of Maslow, Herzberg, McCelland, Porter & Lawler Model, Application of Motivation concept. Foundations of Group Behaviour - Group formation, development and structure, group processes, group decision – making techniques, work teams. Interpersonal Skill - Transactional analysis, Life Positions, Johari Window. Leadership: Concept, theories, Styles and their application.

Section III

Power and politics in organization Conflict Management, Stress Management, Crisis Management Organisational Change & Development, innovation, creating learning organization Organisational Culture Organisational Effectiveness.


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UNIT 1 Introduction


Evolution and nature of Organizational Behavior

The knowledge and information explosion, global competition, total quality and diversity are some of the bitter realities that the managers are facing today. There are many solutions being offered to deal with these complex challenges. Yet the simple but most profound solution may be found in the words of Sam Walton, the richest person in the world and the founder of Wal-Mart. Sam was once asked the key to successful organizations and management. Sam quickly replied, "People are the key". The term paradigm comes from the Greek word 'paradigma', which means ''model, pattern or example". First introduced over thirty years ago, by the philosophy and science historian Thomas Khun, the term "paradigm" is now used as, a broad model, a framework, a way of thinking, and a scheme for understanding reality. The impact of information technology, total quality and diversity mentioned earlier has led to a paradigm shift.


The organizational behaviour has a goal lo help the managers make a transition to the new paradigm. Some of the new paradigm characteristics include coverage of second-generation information technology and total quality management such as

empowerment, reengineering and benchmarking, and learning organization for managing diversity of work. The new paradigm sets the stage for the study, understanding, and application of the time-tested micro-variables, dynamics and macro-variables. One must know why management needs a new perspective to meet the environmental challenges and to shift to a new paradigm.


Management is generally considered to have three major dimensions—technical, conceptual and human. The technical dimension consists of the manager's expertise in particular functional areas. They know the requirements of the jobs and have the functional knowledge to get the job done. But the practicing managers ignore the conceptual and human dimensions of their jobs. Most managers think that their employees are lazy, and are interested only in money, and that if you could make them happy in terms of money, they would be productive. If such assumptions are accepted, the human problems that the management is facing are relatively easy to solve. But human behaviour at work is much more complicated and diverse. The new perspective assumes that employees are extremely complex and that there is a need for theoretical understanding given by empirical research before applications can be made for managing people effectively.


The modern approach to organizational behaviour is the search for the truth of why people behave the way they do. The organizational behaviour is a delicate and complex process. If one aims to manage an organization, it is necessary to


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understand its operation. Organization is the combination of science and people. While science and technology is predictable, the human behaviour in organization is rather unpredictable. This is because it arises from deep needs and value systems of people.


Scientific management approach was developed by F.W. Taylor 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. His assumption was that employees are motivated largely by money. To increase the output, Taylor advised managers to pay monetary incentives to efficient workers. Yet, his theory was criticized by many employers and workers. Workers objected to the pressure of work as being harder and faster. Critics worried that the methods took the humanity out of labor, reducing workers to machines responding to management incentives. Therefore, Taylor's view is now considered inadequate and narrow due to the points given by the critics.

Bureaucratic Approach

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








proposed a












organizations. Weber's idea! bureaucracy was , logical, rational and efficient. He

made the












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

Hawthorne Studies

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

The real beginning


applied research in the area of organizational

behaviour started with Hawthorne Experiments. In 1924, a group of professors began an enquiry into the human aspects of work and working conditions at the Hawthorne plant of Western Electric Company, Chicago. The findings of these studies were given a new name 'human relations' the studies brought out a


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number of findings relevant to understanding human behaviour at work. The Human element in the workplace was considerably more important. The workers are influenced by social factors and the behaviour of the individual worker is determined by the group. Hawthorne studies have been criticized for their research methods and conclusions drawn. But their impact on the emerging field of organizational behaviour was dramatic. They helped usher in a more humanity centered approach to work.


There are mainly four approaches to organizational behaviour. They are:

Human resources approach '

Contingency approach

Productivity approach

Systems 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. This approach is also known as 'supportive approach' because the manager's primary role changes from control of employees to providing an active support for their growth and performance.

A Contingency Approach

A contingency approach to organizational behaviour implies that different situations require different behavioral practices for effectiveness instead of following a traditional approach for all situations. Each situation must be analyzed carefully to determine the significant variables that exist in order to establish the more effective practices. The strength of this approach is that it encourages analysis of each situation prior to action. Thus, it helps to use all the current knowledge about people in the organization in the most appropriate manner.

Productivity Approach

Productivity is a ratio that compares units of output with units of input. It is often measured in terms of economic inputs and outputs. Productivity is considered to be improved, if more outputs can be produced from the same amount of inputs.

But besides economic inputs and outputs, human and social inputs and outputs also arc important.

Systems Approach

A system is an interrelated part of an organization or a society that interacts with everyone related to that organization or society and functions as a whole. Within the organization 'people' employ 'technology' in performing the 'task' that they are responsible for, while the 'structure' of the organization serves as a basis for co-ordinating all their different activities. The systems view emphasizes the


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interdependence of each of these elements within the organization, if the organization as a whole is to function effectively. The other key aspect of the systems view of organization is its emphasis on the interaction between the organization and its broader environment,, which consists of social, economic, cultural and political environment within which they operate. Organizations arc dependent upon their surrounding environment in two main ways: First, the organization requires 'inputs' from the environment in the form of raw material, people, money, ideas and so on. The organization itself can be thought of as performing certain 'transformation' processes, on its inputs in order to create outputs in the form of products or services. Secondly, the organization depends on environment such as, public to accept its output. The systems view of organization thus emphasizes on the key interdependencies that organizations must manage. Within themselves the organizations must trade off the interdependencies among people, tasks, technology and structure in order to perform their transformation processes effectively and efficiently. Organizations must also recognize their interdependence with the broader environments within which they exist.


Organisational behaviour is concerned with people's thoughts, feelings, emotions and actions in setting up a work. Understanding an individual behaviour is in itself a challenge, but understanding group behaviour in an organisational environment is a monumental managerial task.

As Nadler and Tushman put it, "Understanding one individual's behaviour is challenging in and of itself; understanding a group that is made up of different individuals and comprehending the many relationships among those individuals is even more complex. Ultimately, the organisation's work gets done through people, individually or collectively, on their, own or in collaboration with technology. Therefore, the management of organisational behaviour is central to the management task—a task that involves the capacity to "understand" the behaviour patterns of individuals, groups and organisations, to ''predict'" what behavioural responses will be elicited by various managerial actions and finally to use this understanding and these predictions to achieve "control".

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

The above definition has three parts—the individual behaviour, the organisation and the (interface between the two. Each individual brings to an organisation a unique set of beliefs, values, attitudes and other personal characteristics and these characteristics of all individuals must interact with each other in order to create organisational settings. The organisational behaviour is specifically concerned with work-related behaviour, which takes place in organisations.

In addition to understanding; the on-going behavioural processes involved, in 'their own jobs, managers must understand the basic human element of their


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work. Organisational behaviour offers three major ways of understanding this context; people as organisations, people as resources and people as 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.

As resources, people are one of the organisation's most valuable assets. People create the organisation, guide and direct its course, and vitalise and revitalise it. People make the decisions, solve the problems, and answer the questions. As managers increasingly recognise the value of potential contributions by their employees, it will become more and more important for managers and employees to grasp the complexities of organisational behaviour.

Finally, there is people as people - an argument derived from the simple notion of humanistic management. People spend a large part of their lives in ; organisational settings, mostly as employees. They have a right to expect something in return beyond wages and benefits. They have a right to expect satisfaction and to learn new skills. An understanding of organisational behaviour can help the manager better appreciate the variety of individual needs and' expectations.

Organisational behaviour is concerned with the characteristics and behaviours of employees in isolation; the characteristics and processes that are part of the organisation itself; 'and the characteristics and behaviours directly resulting from people with their individual needs and motivations working within the structure of the organisation. One cannot understand an individual’s behaviour completely without learning something about that individual's organisation. Similarly, he cannot understand how the organisation operates without; studying the people who-make it up. Thus, the organisation influences and is influenced by individuals.


The key elements in the organisational behaviour are people,, structure,

technology and the environment in which the organisation operates.

People: People make up the internal and social system of the organisation.

They consist of individuals and groups. The groups may be big or small; formal or informal; official or unofficial. Groups are dynamic and they work in the organisation to achieve their objectives. Structure: Structure defines the formal relationships of the people in

organisations. Different people in the organisation are performing different type of jobs and they need to be (elated in some structural way so that their work can be effectively co-ordinated. Technology: Technology such as machines and work processes provide

the resources with which people work and affects the tasks that they perform. The technology used has a significant influence on working relationships. It allows people to do more and work better but it also restricts' people in various ways.


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Environment: All organisations operate within an external environment. It is the part of a larger system that contains many other elements such as government, family and other organisations. All of these mutually influence each other in a complex system that creates a context for a group of people.


Each individual brings to an organisation a unique set of personal characteristics, experiences from other organisation, the environment surrounding the

organisation and 1 they also posses a personal background. In considering the people working in an organisation, organisational behaviour must look at the unique perspective that each individual brings to the work setting.

But individuals do not work in isolation. They come in contact with other individuals and the organisation in a variety of ways. Points of contact include managers, co-workers, formal policies and procedures of the organisation, and various changes implemented by the organisation. Over time, the individual, too, changes, as a function of both the personal experiences and the organisation. The organisation is also affected by the presence and eventual absence of the individual. Clearly, the study of organisational behaviour must consider the ways in which the individual and the organisation interact.

An organisation, characteristically, exists before a particular person joins it and continues to exist after he leaves it. Thus, the organisation itself represents a crucial third perspective from which to view organisational behaviour.


The rules of work are different from the rules of play. The uniqueness of rules and

the environment of organisations forces managers to study organisational behaviour in order to learn about normal and abnormal ranges of behaviour.

More specifically, organisational behaviour serves three purposes:

What causes behaviour?

Why particular antecedents cause behaviour?

Which antecedents of behaviour can be controlled directly and which are beyond control?

A more specific and formal course in organisational behaviour helps an individual to develop more refined and workable sets of assumption that is directly relevant to his work interactions. Organisational behaviour helps in predicting human behaviour in the organisational setting by drawing a clear distinction between individual behaviour and group behaviour.

Organisational behaviour does not provide solutions to all complex and different behaviour puzzles of organisations. It is only the intelligent judgement of the manager in dealing with a specific issue that can try to solve the problem. Organisational behaviour only assists in making judgements that are derived from tenable assumptions; judgement that takes into account the important variables


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underlying the situation; judgement that are assigned due recognition to the complexity of individual or group behaviour; judgement that explicitly takes into account the managers own goals, motives, hang-ups, blind spots and weaknesses.


Organisational behaviour offers several ideas to management as to how human factor should be properly emphasised to achieve organisational objectives. Barnard has observed that an organisation is a conscious interaction of two or

more people. This suggests that since an organisation is Ihe interaction of persons, they should be given adequate importance in managing the organisation. Organisational behaviour provides opportunity to management to analyse human behaviour and prescribe means for shaping it to a particular direction.

Understanding Human Behaviour Organisational behaviour provides under- standing the human behaviour in all directions in which the human beings interact. Thus, organisational behaviour can be understood at the individual level, interpersonal level, group level and inter-group level.

Organisational behaviour helps to analyse 'why' and 'how' an individual behaves in a particular way. Human behaviour is a complex phenomenon and is affected by a large number of factors including the psychological, social and cultural implications. Organisational behaviour integrates these factors to provide* simplicity in understanding the human behaviour.

Interpersonal Level: Human behaviour can be understood at the level of interpersonal interaction. Organisational behaviour provides • means for understanding the interpersonal relationships in an organisation. Analysis of reciprocal relationships, role analysis and transactional analysis are some of

the common methods, which provide such understanding. Group Level: Though people interpret anything at their individual level, they are often modified by group pressures, which then become a force in shaping human behaviour, Thus, individuals should be studied in groups


Research in group dynamics has contributed vitally to organisational

.. behaviour and shows how a group behaves in its norms, cohesion, goals, procedures, communication pattern and leadership. These research results are advancing managerial knowledge of understanding group behaviour, which is very important for organisational morale and productivity. Inter-group Level: The organisation is made up of many groups that develop complex relationships to build their process and substance. Understanding the effect of group relationships is important for managers in today's organisation. Inter-group relationship may be in the form of co- operation or competition.

The co-operative relationships help the organisation in achieving its objectives. Organisational behaviour provides means to understand and achieve co-operative group relationships through interaction, rotation of members among groups, avoidance of win-lose situation and focussing on total group objectives.


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Controlling and Directing Behaviour: After understanding the mechanism of human behaviour, managers are required to control and direct the behaviour so that it conforms to the standards required for achieving the organisational objectives. Thus, managers are required to control and direct the behaviour at all levels of individual interaction. Therefore, organisational behaviour helps managers in controlling and directing in different areas such as use of power and sanction, leadership, communication and building organisational climate favourable for better interaction.

Use of Power and Sanction: The behaviours can be controlled and directed by the use of power and sanction, which are formally defined by the organisation. Power is referred to as the capacity of an individual to take certain action and may be utilised in many ways. Organisational behaviour explains how various means of power and sanction can ,be utilised so that both organisational and individual objectives are achieved simultaneously.

Leadership: Organisational behaviour brings new insights and understanding to the practice and theory of leadership. It identifies various leadership styles available to a manager and analyses which style is more appropriate in a given situation. Thus, managers can adopt styles keeping in view the various dimensions of organisations, individuals and situations. Communication: Communication helps people to come in contact with each other. To achieve organisational objectives, the communication must be effective. The communication process and its work in inter-personal dynamics have been evaluated by organisational behaviour. Organisational Climate: Organisational climate refers to the total organisational situations affecting human behaviour. Organisational climate takes a system perspective that affect human behaviour. Besides improving the satisfactory working conditions and adequate compensation, organisational climate includes creation of an atmosphere of effective supervision; the opportunity for the realisation of personal goals, congenial relations with others at the work place and a sense of accomplishment. Organisational Adaptation: Organisations, as dynamic entities are characterised by pervasive changes. Organisations have to adapt themselves to the environmental changes by making suitable, internal arrangements such as convincing employees who normally have the tendency of resisting any changes.


Organisational behaviour can be viewed from different perspectives or levels of analysis. At one level, the organisation can be viewed as consisting of individuals working on tasks in the pursuit of the organisational goals. A second level of analysis focuses upon the interaction among organisational members as they work in' teams, groups and departments. Finally, organisational behaviour can be

analysed from the perspective of the organisation as a whole. Organisation at the Individual Level: Organisational behaviour can be studied in the perspective of individual members of the organisation. This approach to organisational behaviour draws heavily on the discipline of psychology and explains why individuals behave and react the way they do


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to different organisational policies, practices and procedures. Within this perspective, psychologically based theories of learning, motivation, satisfaction and leadership are brought to bear upon the behaviour and performance of individual members of an organisation. Factors such as attitudes, beliefs, perceptions and personalities are taken into account and their impact upon individuals’ behaviour and performance on the job is studied. Organisation at the Group Level: People rarely work independently in organisations; they have to necessarily work in coordination to meet the organisational goals. This frequently results in people working together in teams, committees and groups. How do people work together in groups? What factors determine whether group will be cohesive and productive? What types of tasks could be assigned to groups? These are some of the questions that can be asked about the effective functioning of groups in organisations. An important component of organisational behaviour involves the application of knowledge and theories from social psychology to the study of groups in organisations. Organisation at the Organisational Level: Some organisational behaviour researchers take the organisation as a whole as their object of study. This j macro perspective on organisational behaviour draws heavily on theories and concepts from the discipline of 'sociology'. Researchers seek to understand the implications of the relationship between the organisation and its environment for the effectiveness of the organisation. Emphasis is placed upon understanding how organisational structure and design influences the effectiveness of an organisation. Other factors such as the technology employed by the organisation, the size of the organisation and the organisation's age are also examined and their implications for effective organisational functioning are explored. These different perspectives on the study of organisational behaviour are not in conflict with one another. Instead they are complementary. A full and complete understanding of the nature of organisations and the determinants of their effectiveness requires a blending of knowledge derived from each perspective.


Organisational behaviour starts with the following six fundamental concepts revolving around the nature of people and organisations:

The nature of people:

Individual differences

A whole person

Motivated behaviour

Value of the person

The nature of organisation:

Social system

Mutual interest

Individual Differences: Individuals are different in their physical and mental traits. They are different not only in the physical appearance such as sex, age, height, weight, complexion and so on but also different in their psychological trait such as intelligence, attitude, motivation and perception. This belief that each person is different from all others is typically called the


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'Law of Individual Differences'. Individual differences mean that the management has to treat them differently to get the best out of them. A Whole Person: Though the organisation may feel that they are employing only the individual's skill or intelligence, in fact, they employ the 'whole person'. This means that individual does not have only the skill and intelligence but he has a personal life, needs and desires as well. In other words, his personal life cannot be separated from his work life since people function as total human beings. When management practices organisational behaviour, it is not only trying to

develop a better employee but it also wants to develop a 'better person' in terms of all round growth and development. The benefit will extend beyond the firm into the larger society in which each employee lives.

Motivated behaviour: It is the urge of the individual to satisfy a particular

need that motivates him to do an act. The motivation could be positive or negative. Motivation is essential for the proper functioning of organisations. The organisation can show to its employees how certain actions will increase their need fulfilment. Value of the Person: It is more an ethical philosophy. It stresses that people are to be treated with respect and dignity. Every job, however simple, entitles the people who do it to proper respect and recognition of their unique aspirations and abilities. Since organisational behaviour involves people, ethical philosophy is involved in one way or the other.

The nature of an organisation can be understood with the help of tjie description of following two points:

Social System: A system is a group of independent and interrelated

elements comprising a unified whole. In context with an organisation, the individuals of a society are considered as a system organised by a characteristic pattern of relationships having a distinctive culture and values. It is also called social organisation or social structure. It can be further divided into following categories:

Feudal system: This is a social system, which is developed in Europe in the 8th Century. A political and economic system based on the holding of. land and relation of lord to vassal and characterized by homage, legal and military service of tenants, and forfeiture. Patriarchate: This is social system, in which a male is considered to be the family head and title or surname is traced through his chain. In other words, power lies in his hands. o Matriarchate: This is social system, in which a female is considered to be the family head and title or surname is traced through her chain. In other words, power lies in her hands. Meritocracy: This is a social system, in which power vests in the hands of the person with superior intellects. Class Structure: This is a social system of different classes with in a society. Segregation: This is a social system, which provides separate facilities for minority groups of a society.







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Mutual Interest: Organisational relationships are most likely to be strong if different groups can negotiate strategies. This can be defined as the interests that are common to both the parties and are related to the accomplishment of their respective goals. This space for sharing ideas builds trust. Individuals who have shared mutual interests are likely to make their organisation the strongest, because even though the views are different they have a shared concern for similar objectives. It is important for the individuals to think about their issues openly, and to incorporate the perspectives of their colleagues. This helps to build sustainable and harmonious activities that can operate in the mutual direct interests of the organisation.

Holistic Organisational Behaviour: When the above six concepts of organi- sational behaviour are considered together, they provide a holistic concept of the subject. Holistic organisational behaviour interprets people-organisation relation- ships in terms of the whole person, whole group, whole organisation and whole social system.


the blending


nature of

holistic organisational behaviour.

people and organisation

results in



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Managers perform four major functions such as planning, organizing, directing and controlling. In addition to these functions there are ten managerial roles, which can be defined as organized set of behaviors identified with the position. These roles are developed by Henry Mintzberg in 1960s after a careful study of executives at work. All these roles, in one form or other deal with people and their behaviour. These ten managerial roles are divided into three categories. The first category called the interpersonal roles arises directly from the manager's position and the formal authority given to him. The second category, the informational role arises as a direct result of the interpersonal roles and these two categories give rise to the third category called decisional roles. Figure 3.2 shows the categories of managerial roles.

Samaresh chhotray CA/MBA 9717219922 IMPORTANCE OF ORGANIZATIONAL BEHAVIOUR TO MANAGERS Managers perform four major functions such

The roles, in the context of organizational behaviour, are as follows:

Interpersonal Roles In every organization managers spend a considerable amount of time in interacting with other people both within their own organizations as well as outside. These people include peers, subordinates, superiors, suppliers, customers, government officials and community leaders. All these interactions require an understanding of interpersonal behaviour. Studies show that interacting with people takes up nearly 80% of a manager's time. These interactions involve the following three major interpersonal roles:

Figure/lead Role: Managers act as symbolic figureheads performing social or legal obligations. These duties include greeting visitors, signing legal documents, taking important customers to lunch, attending a subordinate's wedding and speaking at functions in schools and churches. All these,


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primarily, are duties of a ceremonial nature but are important for the smooth functioning of an organization.

Leadership Role: The influence of the manager is most clearly seen in the leadership role as a leader of a unit or an organization. Since he is responsible for the activities of his subordinates therefore he must lead and coordinate their activities in meeting task-related goals and motivate them to perform better. He must be an ideal leader so that his subordinates follow his directions and guidelines with respect and dedication.

Liaison Role: The managers must maintain a network of outside contacts. In addition, they need to have a constant contact with their own subordinates, peers and superiors in order to assess the external environment of competition, social changes or changes in governmental rules and regulations. In this role, the managers build up their own external information system. This can be achieved by attending meetings and professional conferences, personal phone calls, trade journals and informal personal contacts with outside agencies.

Information Roles

A manager, by virtue of his interpersonal contacts, emerges as a source of information about a variety of issues concerning an organization. In this capacity of information processing, a manager executes the following three roles. Monitor Role: The managers are constantly monitoring and scanning their internal and external environment, collecting and studying information regarding their organization. This can be done by reading reports and periodicals, interrogating their liaison contacts and through gossip, hearsay and speculation. Information Disseminator Role: The managers must transmit the information regarding changes in policies or other matters to their subordinates, their peers and to other members of an organization. This can be done through memos, phone calls, individual meetings and group meetings.

Spokesman Role: A manager has to be a spokesman for his unit and represent his unit in either sending relevant information to people outside his unit or making some demands on behalf of his unit.

Decision Roles

A manager must make decisions and solve organizational problems on the basis of the environmental information received. In that respect, a manager plays four important roles. Entrepreneur Role: Managers, as entrepreneurs are constantly involved in improving their units and facing the dynamic technological challenges. They are constantly on the lookout for new ideas for product improvement or product addition. They initiate feasibility studies, arrange capital for new products and ask for suggestions from the employees to

improve organization. This can be achieved through suggestion boxes, holding strategy meetings with project managers and R&D personnel. Conflict Handling Role: The managers are constantly involved as judge in solving conflicts among the employees and between employees and management. Mangers must anticipate such problems and take preventive


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action and take corrective action once the problem arises. These problems may involve labor disputes, customer complaints, employee grievances, machine breakdowns, cash flow shortages and interpersonal conflicts. Resource Allocation Role: The managers establish priorities among various projects or programs and make budgetary allocations to different activities of an organization based on these priorities. Negotiator Role: The managers in their negotiator role represent their organization in negotiating deals and agreements within and outside of an organization. They negotiate contracts with the unions. Sales managers may negotiate prices with prime customers. Purchasing managers may negotiate prices with vendors. All these ten roles are important in a manager's job and are interrelated, even though some roles may be more influential than others depending upon the managerial position. For example, sales manager gives more importance to interpersonal roles, while the production manager may give more importance to decisional roles.

LIMITATIONS OF ORGANIZATIONAL BEHAVIOUR Organizational behaviour cannot abolish conflict and frustration but can

only reduce them. It is a way to improve but not an absolute answer to problems. It is only one of the many systems operating within a large social system.

People who lack system understanding may develop a 'behavioral basis', which gives them a narrow view point, i.e., a tunnel vision that emphasizes on satisfying employee experiences while overlooking the broader system of an organization in relation to all its public. The law of diminishing returns also operates in the case of organizational behaviour. It states, that at some point increase of a desirable practice produce declining returns and sometimes, negative returns. The concept implies that for any situation there is an optimum amount of a desirable practice. When that point is exceeded, there is a decline in returns. For example, too much security may lead to less employee initiative and growth. This relationship shows that organizational effectiveness is achieved not by maximizing one human variable but by working all system variables together in a balanced way. A significant concern about organizational behaviour is that its knowledge and techniques could be used to manipulate people without regard for human welfare. People who lack ethical values could use people in unethical ways.


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UNIT 2 Foundations of individual behavior


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. These responses would reflect psychological structure of the person and may be results' of the combination of biological and psychological processes, which interpret them, respond to them in an appropriate manner and learn from the result of these responses. Psychologist Kurt Levin has conducted; considerable research into the human behavior and its causes. 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. Whenever people buy something, for example, a car, both the buyer and the seller sign a contract that specifies the terms of the sales agreement. Similarly, most people, when they begin a working relationship with an organization formulate a psychological contract with their employer. A psychological contract is the overall set of expectations that an individual holds with respect to his or her contributions to the. organization and the organization's response to those contributions. A psychological contract is not written down like a legal contract. An individual makes a variety of contributions to an organization in the form of—efforts, skills, ability, time, loyalty and so forth. These contributions presumably satisfy various needs and requirements of the organization. In return for contributions, the organization provides incentives such as pay, promotion, and job security to the employee. Just as the contributions available from the individual must satisfy the organization's needs, the incentives must serve the employees' needs in return.

If both the individual and the organization consider the psychological contract fair and equitable, they will be satisfied with the relationship and are likely to continue it. If either party perceives an imbalance or iniquity in the contract, it may initiate a change. A major challenge faced by an organization, thus, is to manage the psychological contracts. One specific aspect of managing psychological contracts is managing the person-job fit. The 'person-job fit' is the extent to which the contributions made by the individual match the incentives offered by the organization. In theory, each employee has a specific set of needs to fulfill and a set of job related behaviors and abilities to contribute. If the organization can take complete advantage of those behaviors and abilities and exactly fulfill the employee's needs, it will achieve a perfect person-job fit. Of course, such a precise, level of person-job fit is seldom achieved due to various reasons such as imperfect selection procedures, differences in individual skills, constant change in the needs and requirements of people and organization. Thus, the behavior of individuals in organization is the primary concern of management and it is essential that the managers should have an understanding of the factors influencing the behavior of the employees they manage. The figure 5.1 identifies five sets of factors that have an impact upon individual behavior in organizations.

Samaresh chhotray CA/MBA 9717219922 UNIT 2 Foundations of individual behavior INDIVIDUAL BEHAVIOR Human behavior, which is;



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Individual differences are personal attributes that vary from one person to another. Individual differences may be physical and psychological. The figure 5.2 shows the attributes of physical and psychological differences.

Physical Differences



Body Shape





Psychological Differences






Whenever an organization attempts to assess the individual differences among its employees, it must consider the situation in which that particular behavior occurs. Individuals who are satisfied in one context may prove to be dissatisfied in another context. Assessing both individual differences and contributions in relation to incentives and contexts, then, is a major challenge for organizations as they attempt to establish effective psychological contracts with their employees and achieve optimal fits between people and jobs. Individual differences make the manager's job extremely challenging. In fact, according to a recent research, "variability among workers is substantial at all levels but increases dramatically with job complexity. Due to these reasons, growing work force diversity compel managers to view individual differences in a fresh way. Leaders now talk frequently about "valuing differences" and learn to "manage diversity". So rather than limiting diversity, as in the past, today's managers need to better understand and accommodate employee diversity and individual differences.



Personality dimensions

Abilities, and

Personal values and ethics.


Self is the core of one's conscious existence. Awareness of self is referred to as one's self-concept. Sociologists Viktor Gecas defines self-concept as "the concept the individual has of himself as a physical, social and spiritual or moral being". In other words, every individual recognizes himself as a distinct individual. A self-concept would be impossible without the capacity to think. This brings us to the role of cognitions. Cognitions represent, "any knowledge, opinion, or belief about the environment about oneself, or about one's behavior". Among many different types of cognitions, those involving expectation, planning, goal setting, evaluating and setting personal standards are particularly relevant to organizational, behavior.


Self-esteem is a belief over one's own worth based on an overall self-evaluation. Those with low self- esteem tend to view themselves in negative terms. They do not feel good about themselves, tend to have trouble in dealing effectively with others, and are hampered by self-doubts. High self-esteem individuals, in contrast, see themselves as worthwhile, capable and acceptable. Although, high self- esteem is generally considered a positive trait because it is associated with better performance and greater satisfaction, recent research uncovered flaws among those having high self-esteem. Specifically, high self-esteem subjects tended to become self-centered and boastful when faced with situations under pressure Hence moderate self-esteem is desirable.

Managers can build employee self-esteem in four ways:

  • 1. Be supportive by showing concern for personal problems, interests, status and contribution.


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  • 2. Offer work involving variety, autonomy and challenges that suit the individual's values, skills and abilities.

  • 3. Strive for management-employee cohesiveness and trust building.

  • 4. Have faith in each employee's self-management ability, reward successes.


Self-efficacy is a person's belief about his' or her chances of successfully accomplishing a specific task. According to one organizational behavior writer, "Self-efficacy arises from the gradual acquisition of complex, cognitive, social, linguistic, and/or physical skills through experience", There is strong linkage between high self-efficacy expectations and success in terms of physical and mental tasks, anxiety reduction, addiction control, pain tolerance and illness recovery. Oppositely, those with low self-efficacy expectations tend to have low success rates.

Self-efficacy Implications for Managers

Managers need to nurture self-efficacy in them and in their employees. Self-efficacy requires constructive action in each of the following managerial areas:

To design recruitment selection procedure.

To design interview questions to probe applicant's general self-efficacy for determining

orientation and training needs. For designing job.

For systematic self-management training.

For goal-setting and quality improvement.

To evolve suitable leadership.

To design suitable regards.

Personality Dimensions

The big, five personality dimensions are: extroversion, agreeableness, thoroughness, emotional stability and openness to experience. Ideally, these personality dimensions that correlate positively and strongly with job performance would be helpful in the selection, training and appraisal of employees. The individuals who exhibit; traits associated with a strong sense of responsibility and determination generally perform better than those who do not.


Physical differences among individuals are the most visible of all differences. They are also relatively easy to assess. Intellectual differences are somewhat more difficult to discern, but they too can be assessed by fairly objective means. The abilities/skills and competencies of employees are both physical and intellectual qualities.

Ability refers to an individual's skill to perform effectively in one or more areas of activity, such

as physical, mental or interpersonal work. Individuals with numerical ability, for example, can be trained to apply their ability in the field of engineering, accounting and computer science. Abilities develop from an individual's natural aptitudes and subsequent learning opportunities. Aptitudes are relatively stable capacities for performing some activity effectively. Learning opportunities translate aptitude into abilities through practice, experience and formal training. Organizations have to ensure that people possess the necessary abilities to engage in the behaviors required for effective performance. This can 6e accomplished either by careful selection of people or by a combination of selection and training. Skills are generally thought of as being more task-specific capabilities than abilities. For

example, an individual with numerical ability who goes to school to learn accounting develops a numerical skill specific to that field'. Thus, when a particular ability is applied to a specialized area, (for example accounting), it becomes a skill. Competencies are skills associated with specialization. Competencies are skills that have been refined by practice and experience and that enable, the-individual to specialize in some field. For example, an accountant with numerical "ability and accounting skill takes a position in the Taxation Department and as time passes, he develops more competency as a tax expert.


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Physical abilities such as strength, flexibility, endurance and stamina can be developed with exercise and training. Mental abilities such as reasoning, memory visualization, comprehension and inter- personal abilities can also be developed through practice and education. Even in the absence of such formal programs, many individuals manage their own careers in such a way as to continually upgrade their abilities, skills and competencies in order to remain valuable to their organizations.


According to Milton Rokeach, a value is "an enduring belief that a specific mode of conduct or end-stated of existence is personally or socially preferable to an opposite or converse mode of conduct are end-state of existence". Ethics involve the study of moral issues and choices. It is concerned with right versus wrong and good versus bad. Relative to the workplace, the terms business ethics and management ethics are often heard.

Moral Principles for Managers

Judge actions by their consequences; achieve the greatest good for the greatest number of

people. Basic human rights should be respected.

Rules and rewards should be administered impartially, fairly and equitably.

Improving Organization's Ethical Climate


Managers are powerful role models whose habits and actual behavior send clear signals about

the importance of ethical conduct. Ethical behavior is a 1

top to bottom proposition.

Screen potential employees by checking references, credentials, and other information for ascertaining their ethical behavior.



According to Stephen Robbins, learning may be defined as any relatively permanent change in behavior that occurs as a result of experience. Our definition is concerned with behavior. As Behaviour is collection of related activities, so change in behaviour results in to change in activities which are responsible for the concerned change

behaviour. The present definition of learning has several components that deserve clarification.

  • 1. Learning involves change.

Change may be good or bad from an organizational point of view. People can learn

unfavorable behaviors to hold prejudices restrict their output, for example-as well as favorable behaviors.

  • 2. The change must be relatively permanent.

Temporary changes may be only reflexive and fail to represent any learning. Therefore,

the Requirement that learning must be relatively permanent rules out behavioral changes caused by fatigue Or temporary adaptations.

  • 3. Learning involves change in behaviour.

Learning takes place when there is a change in actions. we must depend on observation to see how much learning has occurred. For example if a word processing operator who key boarded 70 words a minute before taking a new training course can now key board 85 words in a minute, we can infer that learning has occurred. n has learned whenever changes in behavior of that person take place. In other words, we can say that changes in behavior indicate that learning has taken place. Similarly, no change in behavior indicates no learning has taken place. It must however be remembered that in certain types of learning, there are some periods of time that follow the learning during which there is no indication of apparent changes. This does not necessarily mean that no learning has taken


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place. These periods of no apparent change in behaviour is called the ‘incubation period’, where the assimilation and internalization of learning take place. But in a general way we may say that in the process of learning, people behave in a changed way as a result of learning. Thus we infer that learning has taken place if an individual behaves, reacts, responds as a result of experience in a manner different from the way he formerly behaved.

LEARNING THEORIES Classical Conditioning

The work of the famous Russian physiologist Ivan Pavlov demonstrated the classical conditioning process. When Pavlov presented a piece of meat to the dog in the experiment, Pavlov noticed a great deal of salivation. He termed the food an unconditioned stimulus and the salivation an unconditioned response. When the dog saw the meat, it salivated. On the other hand, when Pavlov merely rang a bell, the dog did not salivate. Pavlov subsequently introduced the sound of a bell each time the meat was given to the dog. The dog eventually learned to salivate in response to the ringing of the-bell-even when there was no meat. Pavlov had conditioned the dog to respond to a learned stimulus. Thorndike called this the "law of exercise" which states that behavior can be learned by repetitive association between a stimulus and a response. Classical conditioning has a limited value in the study of organizational behavior. As pointed out by Skinner, classical conditioning represents an insignificant part of total human learning. Classical conditioning is passive. Something happens and we react in a specific or particular fashion. It is elicited in response to a specific, identifiable event. As such it explains simple and reflexive behaviors. But behavior of people in organizations is emitted rather than elicited, and it is voluntary rather than reflexive. The learning of these complex behaviors can be explained or better understood by looking at operant conditioning.

Operant Conditioning

An operant is defined as a behavior that produces effects. Operant conditioning, basically a product of Skinnerian psychology, suggests that individuals emit responses that are either not rewarded or are punished. Operant conditioning is a voluntary behavior and it is determined, maintained and controlled by its consequences. Operant conditioning is a powerful tool for managing people in organizations. Most behaviors in organizations are learned, controlled and altered by the consequences; i.e. operant behaviors. Management can use the operant conditioning process successfully to control and influence the behavior of employees by manipulating its reward system. Reinforcement is anything that both increases the strength of response and tends to induce repetitions of the behavior. Four types of reinforcement strategies can be employed by managers to influence the behavior of the employees, viz., positive reinforcement, negative reinforcement, extinction and punishment.

Positive Reinforcement

Positive reinforcement strengthens and increases behavior by the presentation of a desirable consequence (reward). In other words, a positive reinforce is a reward that follows behavior and is capable of increasing the frequency of that behavior. There are two typos of positive: reinforces:

primary and secondary. Primary reinforcers such as food, water and sex are of biological importance and have effects, which arc independent of past experiences. For instance, a primary reinforcer like food satisfies hunger need and reinforced food-producing behavior. Secondary reinforcers like job advancement, recognition, praise and esteem result from previous association with a primary reinforcer. Primary reinforcers must be learned. In order to apply reinforcement procedures successfully, management must select reinforcers that are sufficiently powerful and durable.

Negative Reinforcement

The threat of punishment is known as negative reinforcement. Negative reinforcers also serve to

strengthen desired behavior responses leading to their removal or termination.



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Extinction is an effective method of controlling undesirable behavior. It refers to non-reinforcement. It is based on the principle that if a response is not reinforced, it will eventually disappear. Extinction is a behavioral strategy that does not promote desirable behaviors but can help to reduce undesirable behaviors.


Punishment is a control device employed in organizations to discourage and reduce annoying behaviors of employees.


Observational learning results from watching the behavior of another person and appraising the consequences of that behavior. It does not require an overt response. When Mr. X observes that Y is rewarded for superior performance, X learns the positive relationship between performance and rewards without actually obtaining the reward himself. Observational learning plays a crucial role in altering behaviors in organizations.

Cognitive Learning

Here the primary emphasis is on knowing how events and objects are related to each other. Most of the learning that takes place in the classroom is cognitive learning. Cognitive learning is important because it increases the change that the learner will do the right thing first, without going through a lengthy operant conditioning process.


The relevance of the learning theories for explaining and predicting of organizational behavior is marginal. This does not mean that learning theories are totally irrelevant. Learning concepts provide a basis for changing behaviors that are unacceptable and maintaining those behavior that are acceptable. When individuals engage in various types of dysfunctional behavior such as late for work, disobeying orders, poor performance, the manager will attempt to educate more functional behaviors.

Learning theory can also provide certain guidelines for conditioning organizational behavior. Managers know that individuals capable of giving superior performance must be given more reinforces than those with average or low performance.

Managers can successfully use the operant conditioning process to control and influence the behavior of employees; by manipulating its reward system.


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Theory of reinforcement


Reinforcement is the process by whichcertain types of behaviour are strengthened.

Reinforcement strengthens desirable behaviour by either bestowing positive consequences or withholding negative consequences and increases the likelihood that the

behaviour will be repeated.


1. Behavior that is positively reinforced will recur; intermittent reinforcement is

particularly effective 2. Information should be presented in small amounts so that responses can be reinforced ("shaping")

3. Reinforcements





stimuli ("stimulus

generalization") producing secondary conditioning.


Operant conditioning has been widely applied in clinical settings (i.e., behavior

modification) as well as teaching (i.e., classroom management) and instructional development (e.g., programmed instruction).

Types of Reinforcement

Managers can use various kinds of reinforcement to affect employee behavior. There are four basic forms of Reinforcement:

Positive reinforcement Avoidance Extinction Punishment

1)Positive reinforcement

Positive reinforcement is a reward or other desirable consequence that follows behavior. A compliment from the boss after completing a difficult job and a salary increase following a period of high performance are examples of positive reinforcement .. The general affect of providing positive reinforcement after behavior is to maintain or increase the frequency of that behavior. Managers might define “desirable” employee behavior as hard work, punctuality, loyalty and commitment to the organization. When employees exhibit these behaviors, the managers may reward them with pay increases, promotions and the like. Positive reinforcement is mainly intended to ensure the same type of behavior in future.


Also known as negative reinforcement. It is another means of increasing the frequency of desirable behavior. Rather than receiving a reward following a desirable behavior, the person is given the opportunity to avoid an unpleasant consequence. For example, an employee’s boss may habitually criticize individuals who dress casually. To avoid criticism, the employee may formally dress to suit the supervisor’s taste. The employee is engaging in desirable behavior to avoid an unpleasant or aversive, consequence.


Positive reinforcement and avoidance increase the frequency of desirable behavior, extinction tends to decrease the frequency of undesirable behavior. For example, a manager with small staff may encourage frequent visit from subordinates as a way to keep in touch with what is going on. Positive reinforcement might include cordial conversation, attention to subordinates concerns and encouragement to come in again soon. As the staff grow, however, the manager may find that such unstructured conversations now make it difficult to get her own job done. Then the manager might brush off casual conversation and talk to the point of “business” conversations.


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Withdrawing the rewards for casual chatting probably will extinguish behavior of subordinates to enter into managers cabin again and again.


Punishment, like extinction, also tends to decrease the frequency of undesirable behaviors. In the work place, undesirable behavior might include being late, arguing with superiors and not following the rules framed by the organization. Examples of punishment are verbal or written reprimands, pay cuts, loss of privileges, lay offs, and termination.

Positive Reinforcement :

Samaresh chhotray CA/MBA 9717219922 Withdrawing the rewards for casual chatting probably will extinguish behavior of subordinates
Samaresh chhotray CA/MBA 9717219922 Withdrawing the rewards for casual chatting probably will extinguish behavior of subordinates


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Values are ideals that guide or qualify your personal conduct, interaction with others, and

involvement in your career. Like morals, they help you to distinguish what is right from what is wrong and inform you on how you can conduct your life in a meaningful way.

Values can be classified into four categories:

Personal Values

Personal values are principles that define you as an individual. Personal values, such as

honesty, reliability, and trust, determine how you will face the world and relate with people.

Cultural Values

Cultural values, like the practice of your faith and customs, are principles that sustain

connections with your cultural roots. They help you feel connected to a larger community of people with similar backgrounds.

Social Values

Social values are principles that indicate how you relate meaningfully to others in social

situations, including those involving family, friends, and co-workers.

Work Values

Work values are principles that guide your behaviour in professional contexts. They define how you work and how you relate to your co-workers, bosses, and clients. They also

reveal your potential for advancement. The following table provides examples of each type of values.

Values Sampler




Cultural Values

Social Values

Work Values










Ethnic roots











Linguistic ties




National ties




Regional ties



















Team player


The attitude is the evaluative statements or judgments concerning objects, people, or

events. More precisely

attitudes can be

defined as a persistent

tendency to feel and


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behave in a particular way toward some object which may include events or individuals as well. Attitude can be characterized in three ways:

  • 1. First, they tend to persist unless something is done to change them.

  • 2. Second, attitudes can fall anywhere along a continuum from very favorable to very unfavorable.

  • 3. Third, attitudes are directed toward some object about which a person has feelings( sometimes called “affect”) and beliefs.

Components of Attitudes

The three basic components of attitude are cognitive, cognitive and affective part.

Cognitive Component of Attitude refers to opinion or belief part of attitude. When you form your opinion or judgment on the basis of available information and decide whether you have a favorable or unfavorable opinion on that, it the cognitive part of attitude we are talking about.

Conative Component of Attitude refers to the emotional aspect of attitude. This is perhaps the most often referred part of attitude and decides mostly the desirable or undesirable aspect attitude.

Affective Component of Attitude refers to the behavioral part of attitude. If we have a positive attitude for a particular object, it is likely to be translated into a particular type of behavior, such as buying or procuring that object. Formation of Attitude How attitudes are formed? How do you develop your attitude? Essentially attitudes are the outward manifestation of your inner values and beliefs. These develop over time. As you grow you watch the significant people around you behaving in a particular way; you are being told to cherish certain things over others and you learn from your teachers and peers and come to value certain thins over other, thus forming your value system. These in turn give rise to development of your attitudes.

Attitudes help predict work behavior. The following example might help to illustrate it. After introducing a particular policy, it is found from an attitude survey, that the workers are not too happy about it. During the subsequent week it is found that the attendance of the employees drops sharply from the previous standard. Here management may conclude that a negative attitude toward new work rules led to increased absenteeism.

Attitudes help people to adapt to their work environment. An understanding of attitudes is also important because attitudes help the employees to get adjusted to their work. If the management can successfully develop a positive attitude among the employees, they will be better adjusted to their work.

Functions of Attitude

According to Katz, attitudes serve four important functions from the viewpoint of organizational behaviour. These are as follows.

The Adjustment Function. Attitudes often help people to adjust to their work environment. Well-treated employees tend to develop a positive attitude towards their job, management and the organization in general while berated and ill treated organizational members develop a negative attitude. In other words, attitudes help employees adjust to their environment and form a basis for future behaviour.


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Ego-Defensive Function. Attitudes help people to retain their dignity and self- image. When a young faculty member who is full of fresh ideas and enthusiasm, joins the organization, the older members might feel somewhat threatened by him. But they tend to disapprove his creative ideas as ‘crazy’ and ‘impractical’ and dismiss him altogether.

The Value-Expressive Function. Attitudes provide individuals with a basis for expressing their values. For example, a manager who values hard and sincere work will be more vocal against an employee who is having a very casual approach towards work.

The Knowledge Function. Attitudes provide standards and frames of reference that allow people to understand and perceive the world around him. If one has a strong negative attitude towards the management, whatever the management does, even employee welfare programmes can be perceived as something ‘bad’ and as actually against them.

Changing Attitudes

Employees’ attitudes can be changed and sometimes it is in the best interests of managements to try to do so. For example, if employees believe that their employer does not look after their welfare, the management should try to change their attitude and help develop a more positive attitude in them. However, the process of changing the attitude is not always easy. There are some barriers which have to be overcome if one strives to change somebody’s attitude. There are two major categories of barriers that come in the way of changing attitudes:

1. Prior commitment when people feel a commitment towards a particular course of action that have already been agreed upon and thus it becomes difficult for them to change or accept the new ways of functioning.

2. Insufficient information also acts as a major barrier to change attitudes. Sometimes people simply see any reason to change their attitude due to unavailability of adequate information.

Some of the possible ways of changing attitudes are described below.

Providing New Information. Sometimes a dramatic change in attitude is possible only by providing relevant and adequate information to the person concerned. Scanty and incomplete information can be a major reason for brewing negative feeling and attitudes.

Use of Fear. Attitudes can be changed through the use of fear. People might resort to change their work habit for the fear of fear of unpleasant consequences. However, the degree of the arousal of fear will have to be taken into consideration as well.

Resolving Discrepancies. Whenever people face a dilemma or conflicting situation they feel confused in choosing a particular course of action. Like in the case where one is to choose from between two alternative courses of action, it is often become difficult for him to decide which is right for him. Even when he chooses one over the other, he might still feel confused. If some one helps him in pointing out the positive points in favour of the chosen course of action, he person might resolve the his dilemma.

Influence of friends and peers. A very effective way of changing one’s attitude is through his friends and colleagues. Their opinion and recommendation for something often proves to be more important. If for example, they are all praise for a particular policy introduced in the work place, chances are high that an individual will slowly accept that even when he had initial reservations for that.


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Co-opting. If you want to change the attitude of some body who belongs to a different group, it is often becomes very effective if you can include him in your own group. Like in the case of the union leader who are all the time vehemently against any management decision, can be the person who takes active initiative in implementing a new policy when he had participated in that decision making process himself.

Important Attitudes Related to Organizations

Job satisfaction and organizational commitment are some of the important attitudes which are important from the point of view of organization. We will describe these now. Job satisfaction, organizational commitment and organizational loyalty are some of the important attitudes related to work organizational set up. These are described in details bellow.

Job Satisfaction

In a generalized way, job satisfaction has been defined as a pleasurable emotional state resulting from the appraisal of one’s job or job experiences (Locke, 1976). his positive feeling results from the perception of one’s job as fulfilling or allowing the fulfilment of one’s important job values, provided these values are compatible with one’s needs (Locke, 1976). Given that values refer to what one desires or seeks to attain (Locke, 1976), job satisfaction can be considered as reflecting a person’s value judgment regarding work-related rewards. Locke and Henne (1986) defined job satisfaction as the pleasurable emotional state resulting from the achievement of one’s job values in the work situation. According to Mottaz (1987), satisfaction with one’s job reflects a person’s affective response resulting from an evaluation of the total job situation. In sum, the job satisfaction construct can be considered to be a function of work-related rewards and values. Based on the review of literature, the following framework can be proposed for the understanding of job satisfaction.

Samaresh chhotray CA/MBA 9717219922 Co-opting. If you want to change the attitude of some body who


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Unit 4 Personality and its theories


The word personality comes from the Latin root persona, meaning "mask." According to this root, personality is the impression we make on others; the mask we present to the world. Personality is defined as "a unique set of traits and characteristics, relatively stable over time." Clearly, personality is unique insofar as each of us has our own personality, different from any other person's. The definition further suggests that personality does not change from day to day. Over the short-term, our personalities are relatively set or stable. However, definition does not suggest that personality is somehow rigid, unchangeable, and cast in concrete. Definition recognizes that, over a longer term, personality may change. Determinants of Personality Several factors influence the shaping of our personality. Major among these are

  • 1. Heredity,

  • 2. Culture,

  • 3. Family Background,

  • 4. Our Experiences through Life,

  • 5. And The People we interact with.

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


The culture and the values we are surrounded by significantly tend to shape our personal

values and inclination. Thus, people born in different cultures tend to develop different

types of personalities which in turn significantly influence their behaviours. India being a vast country with a rich diversity of cultural background provides a good study on this. For example, we have seen that people in Gujarat are more enterprising than people from other states, Punjabees are more diligent and hardworking, people from Bengal are more creative and with an intellectual bend and the likes.

Family Background:

The socio-economic status of the family, the number of children in the family and birth

order, and the background and education of the parents and extended members of the family such as uncles and aunts, influence the shaping of personality to a considerable extent.

First-borns usually have different experiences, during childhood than those born later; Members in the family mould the character of all children, almost from birth, in several ways -by expressing and expecting their children to conform to their own values, through role modeling, and through various reinforcement strategies such as rewards and punishments which are judiciously dispensed. Think of how your own personality has been shaped by your family background and parental or sibling influences!

Experiences in Life:

Whether one trusts or mistrusts others, is miserly or generous, have a high or low self esteem and the like, is at least partially related to the past experiences the individual has had. Imagine if someone came to you and pleaded with you to lend him Rs. 100 which he promised to return in a week's time, and you gave it to him even though it was the last note you had in your pocket to cover the expenses for the rest of that month. Suppose


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that the individual never again showed his face to you and you have not been able to get hold of him for the past three months. Suppose also that three such incidents happened to you with three different individuals in the past few months. What is the probability that you would trust another person who comes and asks you for a loan tomorrow? Rather low, one would think. Thus, certain personality characteristics are moulded by frequently occurring positive or negative experiences in life.

People We Interact With

"A Person is known by the company he or she keeps" is a common adage. The implication is that people persuade each other and tends to associate with members who are more like them in their attitudes and values. Beginning childhood, the people we interact with influence us. Primarily our, parents and siblings, then our teachers and class mates, later our friends and colleagues, and so on. The influence of these various individuals and groups shapes our personality. For. Instance, if we are to be accepted as members of our work group, we have to conform to the values of that group which mayor may not always be palatable to us; if we don't, we will not be treated as valued members of the group. Our desire to be a part of the group and belong to it as its member, will compel many of us to change certain aspects of our personality (for instance, we may have to become less aggressive, more cooperative, etc.). Thus, our personality becomes shaped throughout our lives by at least some of the people and groups we interact with. In summary, our personality is a function of both heredity and other external factors that shape it. It is important to know what specific personality predispositions influence work behaviors.


The traditional approach of understanding personality was to identify and describe

personality in terms of traits. In other words, it viewed personality as revolving around attempts to identify and label permanent characteristics that describe an individual's behavior.

Popular characteristics or traits include shyness, aggressiveness, submissiveness, laziness, ambition, loyalty, and timidity. This distinctiveness, when they are exhibited in a large number of situations, are called personality traits. The more consistent the characteristic and the more frequently it occurs in diverse situations, the more important that trait is in describing the individual.

Early Search for Primary Traits

Efforts to isolate traits have been stuck because there are so many of them. In one study,

as many as 17,953 individual traits were identified. It is virtually impossible to predict behavior when such a large number of traits must be taken into account. As a result, attention has been directed toward reducing these thousands to a more manageable number. One researcher isolated 171 traits but concluded that they were superficial and lacking in descriptive power. What he sought was a reduced set of traits that would identify underlying patterns. The result was the identification of 16 personality factors by Cattell, which he called the source, or primary, traits. These 16 traits have been found to be generally steady and constant sources of behavior, allowing prediction of an individual's behavior in specific situations by weighing the characteristics for their situational relevance. Based on the answers individual gave they have been classified as n the basis of the answers individuals give to the test, they are classified as:

  • 1. Extroverted Or Introverted (E Or I),

  • 2. Sensing Or Intuitive (S Or N),

  • 3. Thinking Or Feeling (T Or F), And

  • 4. Perceiving Or Judging (P Or J).


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These classifications are then combined into 16 personality types. To illustrate, let's take several examples.

Measures of Personality Can Personality be measured?

If we wish to measure the current in a electric circuit, we can insert an ammeter into the

circuit. If we wish to measure the weight of some substance, we simply place that substance on scales designed to measure weight. What about personality? Unfortunately, we cannot directly "measure" personality. But if we cannot directly observe the seemingly unconscious, how do we know it exists? The answer to the question lies in the fact that we can, in fact, directly observe behaviors. As students of human behavior, we are then left to infer personality from the behaviors it manifests. Psychologists thus use behavioral indicators in constructing projective tests. These tests are designed to draw conclusions about personality from observed behaviors. There are various standard tests and scales available to measure personality. In the following section we will be describing a few of these.

Thematic Apperception Test (TAT) :It is a projective test that offers more validity. The TAT consists of drawings or photographs of real-life situations. People taking the test are instructed to construct stories based on these images, and trained raters then score the recorded story for predefined themes. Psychologists assume that the stories people tell reflect the unconscious. Myers-Briggs Types Indicator (MBTI) was originally developed by a mother & daughter team which have the following components.

INTJs are visionaries.

They usually have original minds and great drive for their own ideas and purposes. They are characterized as skeptical, critical, independent, determined, and often stubborn. ESTJs are organizers. They are realistic, logical, analytical, decisive, and have a natural head for business or mechanics. They like to organize and run activities.

The ENTP type is conceptualizer.

He or she is pioneering, individualistic, versatile, and attracted to entrepreneurial ideas. This person tends to be resourceful in solving challenging problems but may neglect routine assignments. A recent book that profiled 13 contemporary businesspeople who created super successful firms including Apple Computer, Federal Express, Honda Motors, Microsoft and Sony found that all 13 are intuitive thinkers (NTS).lZ This result is predominantly interesting because intuitive thinkers represent only about 5

percent of the population. More than 2 million people a year take the MBTI in the United States alone. Organizations using the MBTI include Apple Computer, AT&T, Citicorp, Exxon, GE, 3M Co., plus many hospitals, educational institutions, and even the U.S. Armed Forces.

The Big Five Model

MBTI may be deficient in valid supporting evidence, but that can't be said for the five- factor model of personality 'more typically called the Big Five. In contemporary, an impressive body of research supports that five basic dimensions.

motivate all others and encompass most of the significant variation in human personality .

The Big Five factors are:

Extraversion. This dimension captures one's comfort level with relation ships. Extraverts tend to be gregarious, assertive, and sociable. Introverts tend to be reserved, timid, and quiet.


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Agreeableness. This dimension refers to an individual's tendency to defer to others. Highly agreeable people are cooperative, affectionate, and trusting. People who score low on agreeableness are cold, disagreeable, and antagonistic. • Conscientiousness. This dimension is a measure of reliability. A highly conscientious person is responsible, organized, dependable, and persistent. Those who score low on this dimension are easily distracted, disorganized, and unreliable. • Emotional stability. This dimension taps a person's ability to bear up stress. People with positive emotional stability tend to be calm, self-confident, and secure. Those with highly negative scores tend to be nervous, anxious, Depressed, and insecure. • Openness to experience. The final dimension addresses an individual's range of interests and fascination with novelty. Extremely open people are creative, curious, and artistically sensitive. Those at the other end of the open- ness category are conventional and find comfort in the familiar.


We have experiences, and as a result, our autonomic nervous system creates physiological events such as muscular tension, heart rate increases, perspiration, dryness of the mouth, etc. This theory proposes that emotions happen as a result of these, rather than being the cause of them. The sequence thus is as follows:

Event ==> arousal ==> interpretation ==> emotion

There are different emotions like joy , sorrow , excitement ,disappointmtnt,anger,love and fear, hope etc.

Theories of emotion

James-Lange theory

is that the bodily changes follow directly the perception of the exciting fact, and

that our feeling of the same changes as they occur is the emotion. Common sense says, we lose our fortune, are sorry and weep; we meet a bear, are frightened and run; we are insulted by a rival, are angry and strike. The hypothesis here to

be defended says that this order of sequence is incorrect

and that the more

... rational statement is that we feel sorry because we cry, angry because we strike,

afraid because we tremble

Without the bodily states following on the

... perception, the latter would be purely cognitive in form, pale, colorless, destitute of emotional warmth. We might then see the bear, and judge it best to run,

receive the insult and deem it right to strike, but we should not actually feel afraid or angry.

Cannon-Bard theory

The Cannon-Bard theory is a psychological theory developed by physiologists Walter Cannon and Philip Bard, which suggests that people feel emotions first and then act upon them. These actions include changes in muscular tension, perspiration, etc. The theory was formulated following the introduction of the James-Lange theory of Emotion in the late 1800s, which alternately suggested that emotion is the result of one's perception of their reaction, or "bodily change."


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The Cannon-Bard theory sparked much controversy in cognitive circles due to its suggestion that there is no mechanism to emotion, and many theorists attempted to provide explanations of emotion that suggested a mechanism. One such theory was provided by Schachter & Singer's Two factor theory of emotion, in which they posited that emotion is the cognitive interpretation of a physiological response. For many, this remains the best formulation of emotion.

Two factor theory of emotion

The Two Factor Theory of Emotion is a social psychology theory that views emotion as having two components (factors): physiological arousal and cognition. According to the theory, "cognitions are used to interpret the meaning of physiological reactions to outside events."

Schachter and Singer Study

Stanley Schachter and Jerome Singer gave 184 college students one of two types of injections: adrenaline (also called epinephrine) or a placebo. All experimental subjects were told that they were given vitamins to test their vision. The adrenaline injection caused a number of effects including increased heart rate, rapid breathing, and increased blood flow to the muscles and brain. The saline injection had no such effects.

Some subjects were told about the effects of the adrenaline while others were misled and told that it would produce a dull headache and numbness. A third group of subjects received no information at all.

After the injections the subjects waited in a room with another subject who was actually a confederate of the experimenter. The confederate behaved one of two ways: playful or angry.

Subjects who were misled or naive about the injection's effects behaved similarly to the confederate, taking cues from the situation to interpret their arousal level to determine their emotional state. Subjects who knew what to expect, on the other hand, did not manifest emotion mirroring the confederate.


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Unit 5 Perception and Person perception

Perception refers to the way we try to understand the world around us. We gather information through our five sense organs, but perception adds meaning to these sensory inputs. The process of perception is essentially subjective in nature, as it is never an exact recording of the event or the situation. Perception is the process by which we organize and interpret our sensory impressions in order to give meaning to the environment. As pointed out, a situation may be the same but the interpretation of that situation by two individuals may be immensely different. Definition: Perception is the set of processes by which an individual becomes aware of and interprets information about the environment. The perceptual process can be depicted simplistically in the following way :

Samaresh chhotray CA/MBA 9717219922 Unit 5 Perception and Person perception Perception refers to the way we

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

Factors affecting perception Internal Factors

Sensory Limits and Thresholds : Our sensory organs have specialized nerves which respond differently to the various forms of energy they receive. For instance, our eyes receive and convert light waves into electrical energy which are transmitted to the visual cortex of the brain to create the sensation of vision and subsequently leading to perception. But each sense receptor requires a minimum level of energy to excite it before perception can take place. The minimum level is called the absolute threshold – a point


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below which we do not perceive energy. The differential threshold is the smallest amount by which two similar stimuli must be different in order to be perceived as different.

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

External Factors

The Target : The characteristics of the target that is being observed can affect perception. We have earlier noted (refer to Figure 11.1 above) that a pre-requisite of

perception is attention. It has been found that there is a tendency to give more attention to stimuli which are :

  • 1. Large in size

  • 2. Moving

  • 3. Intense

  • 4. Loud

  • 5. Bright

  • 6. Contrasted

  • 7. Novel

  • 8. Repeated

  • 9. Stand out from the background.

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

Person Perception

Our perceptions of people differ from the perceptions of inanimate objects like tables, chairs, books, pencil, etc. mainly because we are prone to make inferences regarding the intentions of people and thus form judgment about them. The perceptions and judgments regarding a person’s actions are often significantly influenced by the assumptions we make about the person’s internal state. Attribution theory refers to the ways in which we judge people differently, depending on what meaning we attribute to a given behaviour. Whenever we observe the behaviour of an individual, we attempt to determine whether it was internally or externally caused. Internally caused behaviours are those that


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are believed to be under the personal control of the individual or have been done deliberately by him. Externally caused behaviour is seen as resulting from outside causes, that is the person is seen as having been compelled to behave in a particular way by the force of the situation, and not because of his own choice. When after repeated requests your friend failed to turn up at the special old school boys’ meet you might ascribe his absence as a deliberate move on his part, and you will feel hurt since it appeared that he is quite unconcerned and careless about your feeling. But if someone now points out about his recent increased responsibilities in the business after his father’s untimely death and acute time shortage, you tend to condone him as you are now ascribing his absence to the external factors. The determination of internally or externally caused behaviour depends chiefly on the following three factors :

Distinctiveness which refers to whether an individual displays different behaviour at different situations. If the behaviour (say being late in the class on a particular day) is unusual, we tend to give the behaviour an external attribution; and if it usual, the reverse.

Consensus refers to the uniformity of the behaviour shown by all the concerned people. If every one reports late on a particular morning, it is easily assumed that there must be a severe traffic disruption in the city and thus the behaviour is externally attributed. But if the consensus is low, it is internally attributed.

Consistency is the reverse of distinctiveness. Thus in judging the behaviour of an individual, the person looks at his past record. If the present behaviour is consistently found to occur in the past as well (that is being late at least three times a week), it is attributed as internally caused. In other words, the more consistent the behaviour, the more the observer is inclined to attribute it to external causes.

Samaresh chhotray CA/MBA 9717219922 are believed to be under the personal control of the individual or

There are often some errors or

biases in our judgment about others. When we make

judgment about other people’s behaviour, we tend to underestimate the influence of external factors and overestimate the influence of internal or personal factors. This is


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called fundamental attribution error. Another noticeable tendency, called self-serving bias, refers to the inclination for individuals to attribute their own successes to internal factors while putting the blame for failures on external factors.

Self-fulfilling Prophecy or Pygmalion Effect : An interesting aspect of people perception is the fact that people’s expectations are often found to determine the actual performance level. If a manager expects an excellent level of performance from his subordinates, chances are quite high that they will actually reach up to his expectation and will make impossible possible. Surely the contrary is also true. If you feel your subordinates are a worthless bunch of people, they will only prove the same. Attributions are found to strongly affect various functions in an organization, e.g. the process of employee performance evaluations, nature of supervision or guidance or the general attitude towards the organization in general. As mentioned earlier, we also tend to make various types of errors while judging others. A few of the frequently committed mistakes are given below :

Selective Perception : People have a tendency to selectively interpret what they see on the basis of their interests, background, experiences and attitudes. We hardly have either time or inclination to process all the relevant inputs and we automatically select a few. Naturally chances are there to miss some important cues in the process. Ex


Effect :


refers to the tendency


forming a

general impression about an

individual on the basis of a single characteristic. The smartly dressed guy who is very fluent in English often tends to create a favourable impression on the interviewer even when the job is of an accountant or engineer, requiring little or no verbal fluency.

Contrast Effect : It refers to the process of rating individuals in the light of other people’s performance which are close in time frame. You might be rated excellent in your project presentation if your predecessor makes a mess in his presentation. The case would have been just the reverse if you were to present just after a superb presentation!

Stereotyping : It is the process of judging someone on the basis of one’s perception of the group to which that perception belongs to. Common examples include the debate regarding the effectiveness of a lady doctor or manager or MBA’S from prestigious B’schools.


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The word motivation is derived from ‘motive', which means an active form of a desire, craving or need that must be satisfied. Motivation is the key to organizational effectiveness. The manager in general has to get the work done through others. These 'others' are human resources who need to be motivated to attain organizational objectives.


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

In the words of Robert Dubin, it is "the complex of forces starting and keeping a person at work in an organization". Viteles defines motivation as "an unsatisfied need which creates a state of tension or disequilibrium, causing the individual to move in a goal directed pattern towards restoring a state of equilibrium, by satisfying the need." According to Encyclopaedia of Management. "Motivation refers to the degree of readiness of an organism to pursue some designated goals and implies the determination of the nature and locus of force inducing a degree of readiness." On the basis of above definitions, the following observations can be made regarding motivation:

Motivation is an inner psychological force, which activates and compels the person to behave in

a particular manner. The motivation process is influenced by personality traits, learning abilities, perception and

competence of an individual. A highly motivated employee works more efficiently and his level of production tends to be

higher than others. Motivation originates from the-needs and wants of an individual. It is a tension of lacking

something in his mind, which forces him to work more efficiently. Motivation is also a process of stimulating and channelising the energy of an individual for

achieving set goals. Motivation also plays a crucial role in determining the level of performance. Highly motivated

employees get higher satisfaction, which may lead to higher efficiency. Motivating force an^ its degree, may differ from individual to individual depending on his

personality, needs, competence and other factors. The process of Motivation helps the manager in analysing and understanding human behavior

and finding but how an individual can be inspired to produce desirable working behavior. Motivation may be positive as well as negative. Positive motivation includes incentives, rewards

and other benefits while negative motivation implies some punishment, fear, use of force etc. The motivation procedure contributes to and boosts up the morale of the employees. A high degree of motivation may lead to high morale.


The following are the features of motivation:

It is an internal feeling and forces a person to action.

It is a continuous activity.

It varies from person to person and from time to time.

It may be positive or negative.


Motivation is an important part of managing process. A team of highly qualified and motivated employees is necessary for achieving objectives of an organization because of the following reasons:

Motivated employees make optimum use of available resources for achieving objectives.

Motivation is directly related to the level of efficiency of employees.


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Motivated employees make full use of their energy and other abilities to raise the existing level

of efficiency. Motivated employees make goal-directed efforts. They are more committed and cooperative for

achieving organizational objectives. Motivated employees are more loyal and sincere to an organization. These factors help reduce

absenteeism and labor turnover. Motivation is considered as a backbone of good industrial relations.

Effectively motivated employees get more job satisfaction and possess high morale.

Motivation also helps in improving the image of an organization.

The motivation process begins with identification of individual needs. For example, when an employee feels underpaid then what, then he tries to fulfill his needs by asking for a raise or by working harder to earn a raise or by seeking a new job. He then chooses to pursue one or more of these options for instance, working harder while simultaneously looking for a job. If his hard work resulted in a pay rise, he probably feels satisfied and will continue to work hard. But if no raise has been provided he is likely to try another option. Since people have many different needs, the satisfaction of one need or set of needs is likely to give rise to the identification of other needs. Thus, the cycle of motivation is constantly repeated. Understanding human motivation is crucial for managing people. Extensive research has been performed to find out what makes people work and how to motivate them. This includes managers, social scientists, behaviorists and psychologists. A number of theories have been developed, even though there is no universally acceptable motivation theory. Understanding these theories facilitates the managers to get a better insight into the human behavior.


Need-based theories try to answer the question, "what factor(s) motivate people to choose certain behaviors?" Some of the widely known need-based theories are as follows:

(a) Maslow's Hierarchy of Needs

Maslow Abraham proposed his theory in the 1940s. This theory, popularly known as the Hierarchy of Needs assumes that people are motivated to satisfy five levels of needs: physiological, security, belongingness, esteem and self-actualization needs. The figure 9.1 shows Maslow's hierarchy of needs

Samaresh chhotray CA/MBA 9717219922 ∑ Motivated employees make full use of their energy and other abilities

Maslow suggested that the five levels of needs are arranged in accordance with their importance, starting from the bottom of the hierarchy. An individual is motivated first and foremost to satisfy physiological needs. When these needs are satisfied, he is motivated and 'moves up' the hierarchy to satisfy security needs. This 'moving up process continues until the individual reaches the self-actualization level.


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Physiological needs represent the basic issues of survival such as food, sex, water and air. In organizational settings, most physiological needs are satisfied by adequate wages and by the work environment itself, which provides employees with rest rooms, adequate lighting, comfortable temperatures and ventilation. Security or safety needs refer to the requirements for a secure physical and emotional environment. Examples include the desire for adequate housing and clothing, the need to be free from worry about money and job security and the desire for safe working conditions. Security needs are satisfied for people in the work place by job continuity, a grievance resolving system and an adequate insurance and retirement benefit package. Belonging or social needs are related to the, social aspect of human life. They include the need for love and affection and the need to be accepted by one's peers. For most people these needs are satisfied by a combination of family and community relationships and friendships on the job. Managers can help ensure the 'satisfaction of these important needs by allowing social interaction and by making employees feel like part of a team or work group. Esteem needs actually comprise of two different sets of needs:

The need for a positive self-image and self-respect.

The need for recognition and respect from others.

Organizations can help address esteem needs by providing a variety of external symbols of accomplishment such as job titles and spacious offices. At a more fundamental level, organizations can also help satisfy esteem needs by providing employees with challenging job assignments that can induce a sense of accomplishment. At the top of the hierarchy are those needs, which Maslow defines the self-actualization needs. These needs involve realizing one's potential for continued: growth and individual development. Since these needs are highly individualized and personal, self-actualization needs are perhaps the most difficult for managers to address. Therefore, an employee should try to meet these needs on his own end. However, an organization can help his employee by creating a climate for fulfillment of self- actualization needs. For instance, an organization can help in fulfillment of these needs by encouraging employee’s participation in decision-making process and by providing them with an opportunity to learn new things about their jobs and organization. This process of contributing to actual organizational performance helps employees experience personal growth and development associated with self- actualizing. Maslow's concept of the need hierarchy possesses a certain intuitive logic and has been accepted universally by managers. But research has revealed several shortcomings of the theory such as some research has found that five levels of needs are not always present and that the order of the levels is not always the same as assumed by Maslow. Moreover, it is difficult for organizations to use the need hierarchy to enhance employee motivation.

(b) ERG Theory of Motivation

Clayton Alderfer has proposed an alternative hierarchy of needs - called the ERG Theory of Motivation. The letters E, R and G stand for Existence, Relatedness and Growth. The figure 9.2 shows ERG theory:


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Samaresh chhotray CA/MBA 9717219922 ERG Theory the need hierarchy developed by Maslow into three 9.2. The

ERG Theory the need hierarchy developed by Maslow into three 9.2. The existence needs in this theory refers to the physiological and security needs of Maslow. Relatedness needs refers to belongingness and esteem needs. Growth needs refers to both self-esteem and self-actualization needs.

Although ERG Theory assumes that motivated behavior follows a hierarchy in somewhat the same fashion as suggested by Maslow, there are two important differences.

Firstly, ERG theory suggests that more than one kind of need might motivate a person at the

same time. For example, it allows for the possibility that people can be motivated by a desire for money (existence); friendship (relatedness), and an opportunity to learn new skills (growth) all at the same time. Secondly, ERG theory has an element of frustrations-regression that is missing from Maslow's need hierarchy. Maslow maintained that one heed must be satisfied before an individual can progress to needs at a higher level, for example, from security needs to belongingness. This is termed as satisfaction—progression process. Although the ERG theory includes this process, it also suggests that if needs remain unsatisfied at some higher level, the individual will become frustrated, regress to a lower level and will begin to pursue low level needs again. For" example, a worker previously motivated by money (existence needs) is awarded a pay rise to satisfy this needs. Then he attempts to establish more friendship to satisfy relatedness needs. If for some reason an employee finds that it is impossible to become better friends with others in the work place, he may eventually become frustrated and regress to being motivated to earn even more money. This is termed as ‘frustration-regression' process.

The ERG theory emphasis on the following key points regarding needs:


Some needs may be more important than others.


People may change their behavior after any particular set of needs has been satisfied.

(c) The Dual-Structure Approach to Motivation

Another popular need-based approach to motivation is the dual-structure approach developed by Frederick Herzberg. This is also known as Two-factor Theory. Herzberg developed this approach after


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

This finding suggests that satisfaction and dissatisfaction are at opposite ends of a single scale. Employees would, therefore, be satisfied, dissatisfied or somewhere in between. Herzberg argued that attitudes and motivation consists of a dual structure. One structure involves a set of factors that result in feelings ranging from satisfaction to no satisfaction. The other structure involves a set of factors that result in feelings ranging from dissatisfaction to no satisfaction.

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





The work itself

The possibility of personal growth


Hygiene or Maintenance Factors

Company policies

Technical supervision

Interpersonal relations with supervisor

Interpersonal relations with peers

Interpersonal relations with subordinates


Job security

Personal life

Work conditions


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

Although widely accepted by managers, Hertzberg’s dual structure approach however suffers from certain drawbacks. Other researchers who measured satisfaction and dissatisfaction based on different aspects reached very different conclusions. They have also criticized Herzberg's theory for its inability to define the relationship between satisfaction and motivation and to pay enough attention to differences between individuals. Hence, at present Herzberg's theory is not held in high esteem by researchers in the field of motivation. The theory, however, had a major impact on managers and has played a key role in increasing their awareness of motivation and its importance in type work place.


Douglas McGregor observed two diametrically opposing viewpoints of managers 'about their employees; one is negative called "Theory of X" and another is positive called "Theory of Y". I


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Theory of X


Following are the assumptions of managers who employees.



the "Theory


X" regarding their

Employees dislike work.

Theory of Y

Employees must be coerced, controlled or threatened to do the work.

Employees avoid responsibilities and seek formal direction.

Most employees consider security of job, most important of all other factors in the job and have

very little ambition.

Following are the assumptions of managers who employees.



the "Theory


Y" regarding their

Employees love work as play or rest.

Employees are self-directed and self-controlled and committed to the organizational objectives.

Employees accept and seek responsibilities.

Innovative spirit is not confined to managers alone, some employees also possess it.

Applicability of Theories 'X' and 'Y'

Theory 'X' in its applicability, places exclusive reliance upon external control of human behavior, while theory 'Y', relies heavily on self-control -and self-direction.

Theory 'X' points to the traditional approach of management. Literally, this theory of behavior is related to organizations that lay hard and rigid standards of work-behavior. Some examples of such organizations are organizations that break down jobs into specialized elements, establish 'norms of production, design equipment to control worker's pace of work, have rigid rules and regulations, that are sometimes very vigorously enforced.

Theory 'Y’, on the other hand, secures the commitment of employees to organizational objectives. This motivational theory places emphasis on satisfaction of employees. While applying this theory, the use of authority, as an instrument of command and control is minimal. Employees exercise self-direction and self-control.

The concepts of 'Job' Enlargement', 'Participation' and 'Management by Objectives' are quite consistent with theory ' Y'.

McGregor supports the applicability of motivational theory 'Y', instead of theory X'. Organization should keep in mind that once theory 'X' is employed for organizational working, it is difficult for the management to shift to theory ' Y', all of a sudden. However, with systematic, judicious and slow steps, shifting in the practical applicability of theory 'X' to theory ' Y' usually can be achieved.


David C. McClelland and his associate Atkinson have contributed to an understanding of motivation by identifying three types of basic motivating needs. These needs have been classified as:

  • 1. Need for Power

  • 2. Need for Affiliation

  • 3. Need for Achievement :


Need for Power

According to this theory the need for power, which might be defined as the desire to be influential in a group and to control one's environment is an important motivation factor. Research suggests that people with a strong need for power, are likely to be superior performers and occupy supervisory positions. Such types of individuals generally look for positions of leadership, they act effectively, are outspoken, have a stubborn character and exert authority.


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Need for Affiliation


The need for affiliation means the desire for human companionship and acceptance. Those with a high need for affiliation often behave the way they think other people want them to, in an effort to maintain friendship. They prefer a job that entails a good deal of social interaction and offers opportunities to make friends. The principal characteristics of such peoples' traits are as follows:

Desire to like and be liked.

Enjoy company and friendship.

Prefer cooperative situation.

Excel in group task.

Star attraction in gathering.

Leadership qualities.

This need is closely associated with the "social-type” of personality, who are sociable, friendly, cooperative and understanding. Persons with high motivation for power and affiliation have better chances of becoming good managers.

Need for Achievement

People with a high need for achievement, always feel ambitious to be successful; are ever prepared to face challenging situations and set arduous goals .for themselves. They are prone to take calculated risks; and possess a high sense of personal responsibility in getting jobs done. These people are concerned with their progress, and feel inclined to put in longer hours of work" Failures never dishearten them and they are always ready to put in their best efforts for excellent performance.


The field of organizational behavior has generally moved a way from the needs theories of motivation. Needs theories are content-oriented - that is, they explain what are the causes leading to motivated behaviors. They do not explain why or how motivated behavior occurs. These questions relate to behaviors or actions, goals and feelings of satisfaction., These concepts are addressed by various process-based theories to motivation. Process-based theories to motivation are concerned with how motivation occurs. They focus on why people choose to enact certain behavioral options to fulfill their needs and how they evaluate their satisfaction after they have attained these goals. Two of the most useful process-based approaches to motivation arc expectancy theory and equity theory.

(a) Expectancy Theory of Motivation Expectancy theory of motivation was developed by- Victor Vroom. Basically, Vroom's expectancy theory views motivation as a- process of governing choices. The expectancy theory tries to explain how and why people choose a particular behavior over an alternative. The theory suggests that motivation depends on two things: how much an individual desires a particular goal and how likely he thinks he can get it. For instance, a person is looking for a job and reads an advertisement for a position of Marketing Executive with a starting salary of Rs. 3 lakh per year. Even though he might want the job, he probably does not apply because he is aware that there is little chance of getting it. Next he sees an advertisement is for Field Supervisor for a salary of Re. 1 lakh per year. In this case he realizes that he .can probably get the job, but still doesn't apply simply because he doesn't want it. Then he comes across another advertisement for a Management Trainee in a big organization with a starting salary of Rs. 2 lakh per year. He chooses to apply for this job because he wants it and also thinks that he has a reasonable chance of getting it. Figure 9.3 shows the expectancy theory of motivation.


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A group consists of a number of individuals working together for a common objective. Groups have significant influence on an organization and are inseparable from an organization. They are useful for the organization as they form foundation of human resources. The study of group behavior is essential for an organization to achieve its goals. Individual and group behavior vary from each other. In 1920, Elton Mayo and his associates conducted the Hawthorne experiments and came to know that the group behavior has great impact on productivity. The importance of group behavior has been realized from time to time. Human behavior consists of individuals, who move in groups. The knowledge of group behavior as well as individual behavior is necessary for a manager. He must understand group psychology and should also understand individual behavior in the context of group behavior. The group in which he moves influences individual work, job satisfaction and effective performance.


A group is a two or more individual who interact regularly with each other to accomplish a common purpose or goal. According to Marvin Shaw, "a group comprises, of two or more persons who interact with one another in such a manner that each person influences and is influenced by each other person'. The key parts of this definition are the concepts of interaction and influence, which also limit the size of the group. It is difficult for members to interact sufficiently in a large group. Groups or work teams are the primary tools used by managers. Managers need groups to co- ordinate individual behavior in order to reach the organizational goals. Groups can make a manager's job easier because by forming a group, he need not explain the task to each and every individual. A manager can easily coordinate with the work of an individual by giving the group a task and allow them to co-ordinate with each other. But for a group to work effectively, the interactions between its members should be productive. Therefore, managers must pay attention to the needs of individuals.

Need for a Group

The reasons for the need, of groups are as follows:

Management of modern organizations make mutual efforts to introduce industrial democracy at

workplace. They use project teams and work committees where workers get due recognition. They willingly participate in decision-making. The tasks in modern industries are becoming more complex, tedious arid of repetitive nature.

Work committees, work groups and teams are formed to monitor the work. They also make the environment at workplace more lively. Groups help in making participative management more effective.

Groups of all kinds and types help by cooperating in all the matters related to production and

human relations to work effectively in the organization. An individual cannot perform each and every task. Group efforts are required for its completion.

For example, building a ship, making of a movie, construction of a fly-over, etc. All these require coordinated and unified efforts of many individuals, working in a group. A group can judge in a better way as compared to an individual.

While accomplishing tasks, all members of a group together use their creative and innovative

ideas than a single individual. In a group, individuals communicate with each oilier, discuss their work performances and take

suggestions from each other to make it better. Group efforts affect an individual, his attitude and behavior.

Group has the ability to satisfy the needs of its members.

Types of Groups

In an organization, there are three types of groups, which are as follows:

Functional or formal groups


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Functional groups are the groups formed by the organization to accomplish different organizational purposes. According to A L Stencombe, "a formal group is said to be any social arrangement in which the activities of some persons are planned by others to achieve a common purpose". These groups are permanent in nature. They have to follow rules, regulations and policy of the organization. A formal organizational group includes departments such as the personnel department, the advertising department, the quality control department and the public relations department.

Task group

Tasks groups are the groups formed by an organization to accomplish a narrow range of purposes within a specified time. These groups are temporary in nature. They also develop a solution to a problem or complete its purpose. Informal committees, task forces and work teams are included in task groups. The organization after specifying a group membership, assigns a narrow set of purposes such as developing a new product, evaluating a proposed grievance procedure, etc.

Informal group

Informal groups are the groups formed for the purposes other than the organizational goals. Informal groups form when individuals are drawn together by friendship, by mutual interests or both. These groups are spontaneous. According to Keith David, "the network of persons and social relations which is not established or required form an informal organization". These are the groups formed by the employees themselves at the workplace while working together. The organization does not take any active interest in their formation.

Informal groups are very effective and powerful. These groups work as an informal communication network forming a part of the grapevine to the organizations. They are also like a powerful force, which an organization cannot avoid. Some managers consider them to be harmful to the interest of an organization. They suspect their integrity and consider as a virtual

threat. Some managers do not consider them as threat and seek the help of group members in getting the organizational task accomplished. Informal groups are of following types:

Interest group: Interest groups are the groups formed to attain a common purpose. Employees coming together for payment of bonus, increase in salary, medical benefit and other facilities are the examples of interest groups Membership group: Membership groups are the groups of individuals' belonging to the same profession and knowing each other. For example, teachers of the same faculty in a university. Friendship group: Friendship groups are the groups of individuals belonging to same age group, having similar views, tastes and opinions. These groups can also be formed outside the plant or office and can be in the form of clubs and associations. o Reference group: Reference groups are the group where individuals shape their ideas, beliefs, values etc. They want support from the group.





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:


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Samaresh chhotray CA/MBA 9717219922 ∑ Organizational motives to join groups: Organizations form functional and task groups

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. Some of these are shown in the figure 11.1:

Interpersonal attraction: Individuals conic together to form informal or interest group, as they

arc 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. For example, a club, which is dedicated to environmental conservation, may motivate individuals to join. Individuals join groups, such as these in order to donate their money and time to attain the goals they believe in and to meet other individuals with similar values. 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 that being a member of this club will lead to important and useful business contacts.


Members of new group are unfamiliar with one another's personalities and : hesitant in their interactions. The new group must pass s of development, which are depicted in the figure 11.2.

Mutual Acceptance

Making Acceptance

Sharing Acquaintances

Discussing Subjects

Testing Each Other

Being Defensive

Slow Evolution to Next Stage


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Communication and Decision-Making

Expressing Attitudes

Establishing Norms

Establishing Goals

Openly Discussing Tasks

Being Defensive


Burst of Activities to Next Stage

Motivation and Productivity



Working Actively on Tasks

Being Creative

Slow Evolution to Next Stage

Control and Organization

Working Independently

Assigning Tasks Based on Ability

Being Flexible

Figure 11.2

These different stages of group development are explained as follows:

Mutual Acceptance

The very first stage of a group development is called "Mutual Acceptance". During this stage, the members of the group get familiar with one another and check, which inter-personal behavior is acceptable and which is unacceptable by the other members of the group. This helps all the members of a group to know each other better and helps the group to move to the next stage easily.

Communication and Decision-making

The second stage of group development is "Communication and Decision-making''. During this stage, group members share their opinions and formulate the group's goals. Through communication and decision-making, the structure becomes clear and the group moves to the third stage.

Motivation and Productivity

The third stage is "Motivation and Productivity", which is characterized by a shared acceptance among members of what the group is trying to do. Each person recognizes and accepts his role as well as to accept and to understand the roles to others. Members also become more comfortable with each other and develop a sense of group identity and unity.

Control and Organization

The fourth stage is "Control and Organization", in which the members perform the roles they have accepted and direct their group efforts toward goal attainment. In reality, this developmental sequence varies from group to group, depending on the time, personal characteristics of group members and frequency of interaction.


As groups pass through the stages of development to maturity, they begin show signs of the following four characteristics: a role structure, behavioral norms, cohesiveness and informal leadership.

Role Structures A role is the part that an individual plays in a group to reach its goals. Some individuals are leaders, some focus on the group's task; some interact with other groups and so on. Role structure is the set of defined roles and interrelationships among those roles that the group members define and accept. The failure in role development result in role ambiguity, role conflict and role overload. Managers have to take steps to avoid role ambiguity, role conflict and role overload.


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Behavioral norms


Although informal groups do not have any specific goals to accomplish, but they must have

some goals over a period of time. These goals are temporary and can be changed in accordance with the needs of the group members. The goals can be achieved effectively depending on the following factors:


The extent of cooperation with management.


Maintenance of an efficient communication system.


Satisfaction of the needs of group members.

Informal leadership

Each informal group has one or more leaders. These leaders come forward on the basis of acceptance of all the group members. Every informal group has one primary leader apart from the secondary :

leaders. The primary leader has more influence on the group members than the secondary leaders.

• Cohesiveness

Cohesiveness is defined as the attractiveness of group members towards the group. It also emphasizes on the group's ability to satisfy its members needs. It, therefore, helps the group members to work more consistently and make greater contribution to the achievement of the organizational goals. It is also psychologically more satisfying to all of its members. According to Cartwright there are four principal consequences of cohesiveness, which are as follows:


Ability of a group to retain its members.


Power of the group to influence its members.


Degree of participation and loyalty of members.


Feeling of security on the part of the members.


Norms refer to group behavior standard, beliefs, attitudes, traditions and expectations shared by group members. According to Michael Argyle, "Group norms are rules or guidelines of accepted behavior which are established by a group and used to monitor the behavior of its members". They are framed to achieve objectives of the group. They can be social and fair in nature. Norms define boundaries between acceptable and unacceptable behavior. They make the members to identify themselves with the group. Norms play a significant role in disciplining the members of a group to make them to work regularly and properly. This reduces absenteeism and employee turnover. The members of the group are expected follow the norms strictly. This will make the group more organized

Types of Group Norms

There are two types of group norms, which arc as follows:

Behavior norms: Behavior norms are rules that standardise how individuals act while working on a day-to-day basis. Examples are. "do not come to committee meetings unless you have read the reports to be '"discussed"', "greet every customer with a smile'', etc. These norms tend to reflect motivation, commitment to the organization and therefore result in high level of performance.

Performance norms:






standardize employee

output and number of hours worked.

Reasons for Strong Enforcement of Norms

Groups don't have the time or energy, to regulate each and every action of the group members. Only those behaviors that sound to-be important by group members should be brought under control. Groups, like individuals, try to operate in such a way that they maximize their chances of task success and minimize (heir chances of task failure. Groups want to facilitate their performance and overcome barriers to reach their goals. Moreover, groups want to increase morale and prevent any interpersonal discomfort to their members. Norms that will help groups meet these aims of performing successfully and keeping morale high are likely to be strongly enforced. Conditions where group norms will be strongly enforced are as follows:

If the norms facilitate group success or ensure group survival,

If the norms simplify or predict regarding the behavior which is expected from group members.

If the norms emphasize the roles of specific members within a group and

If the norms help the group to solve the inter-personal problems themselves.


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Uniqueness of Group Norms


The norms of one group cannot be easily mixed with another group. Some differences are primarily due to the difference in structure of the groups. However, even very similar work groups may develop different norms-. The members of one group may be friendly with their supervisor whereas those of another group may not

Norm Conformity

Norms have the power to force a certain degree of conformity. There are several factors consist of norm conformity, which are as follows:

Some groups may exert more pressure for conformity than others because of the personalities

of the group members. The history of the group and its members also plays a part in conformity. For example, if the group has always been successful by following certain behaviors, new group members are also

asked to follow the same. If the group was not successful in the past, a new group member may have greater freedom to exhibit other behaviors.

Group Cohesiveness

According to Rcnsis Likert, "cohesiveness is the attractiveness of the members towards the group or resistance of the members leaving it". It refers to the attachment of members with the group. According lo K. Aswalhappa, "cohesiveness is understood as the extent of liking each member has towards others and how far everyone wants to remain as the member of the group". Attractiveness is the key to cohesiveness. Cohesiveness is the extent to which group members are loyal and

committed lo the group and to each other. In a highly cohesive group, the members work well together, support and trust one another and are generally effective at achieving their chosen goals. A group that lacks cohesiveness will not be very much coordinated. Its members will not support one another and they may face difficulty in reaching their goals. Managers should develop an understanding of the factors that increase and reduce group cohesiveness.

Advantages of Group Cohesiveness

The advantages of group cohesiveness are as follows:

The members of cohesive groups have high morale.

The members don't have conflicting views, which decreases the chances of in clash among the

views of group members at the workplace or elsewhere. Individuals of cohesive groups have no anxiety at the workplace.

Members of cohesive groups are regular at their work.

Cohesiveness increases productivity.

Organizations gain from the members of cohesive group because they communicate better they share ideologies and respect opinions of fellow employees.

The following factors can increase group cohesiveness:

Competitiveness with other groups.

Inter-personal attraction.

Favourable evaluation from outsiders.

Agreement on goals.

Frequent interaction. The following factors decrease cohesiveness:

Large group size.

Disagreement on goals.

Competitiveness within group.

Domination by one or more members.

Unpleasant experiences.

How Groups Are Formed?

Formation of Groups

Two models of group development have been offered by the researchers in the field of

social sciences to explain how groups are formed. These are: a) Five-Stage Model and b) Punctuated Equilibrium Model.


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According to the Five-Stage Model of group development, groups go through five distinct stages during the process of its development. These are as follows:

Five-Stage Model

Forming is the initial stage of group development when the group members first come in contact with others and get acquainted with each other. This stage is characterized predominantly by a feeling of uncertainty among the group members as they now try to establish ground rules and pattern of relationship among themselves. Storming is the next stage that is characterized by a high degree of conflict among the members. Members often show hostility towards each other and resist the leader’s control. If these conflicts are not adequately resolved, the group may even be disbanded.

Samaresh chhotray CA/MBA 9717219922 According to the Five-Stage Model of group development, groups go through five

But, usually the group eventually comes in terms with each other and accepts the leadership role at the end of this stage. Norming is the third stage of the group development process during which the group members become closer to each other and the group starts functioning as a cohesive unit. The group members now identify themselves with the group and share responsibility for achieving the desired level of performance of the group. Norming stage is complete when the group members can set a common target and agree on the way of achieving this. Performing is the fourth stage when the group is finally ready to start working. As the group is now fully formed after resolving their internal conflicts of acceptance and sharing responsibility, they can now devote energy to achieve its objectives. Adjourning is the final stage when the group, after achieving the objectives for which it was created, starts to gradually dissolve itself.

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

Role or the typical part played by an individual group member in accordance with the expectations of other members from him. Role expectations refer to the behaviours that are expected from the person playing the role. The person holding the role is known as the role incumbent. Role ambiguity takes place when the person holding the role feels confused and does not know what is being expected from him. The role incumbent is said to suffer from the problem role identity when he faces difficulty in accepting the assigned role. Norms or the rules and mutual expectations that develop within the group. This refers to the generally agreed upon rules that guide the group members’ behaviour. Norms have profound effect on members’ behaviour as it ensures conformity among them. Norms can be of two types: prescriptive when it dictates behaviours that should be performed and


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proscriptive when it dictates specific behaviours that should be avoided by the group members. Status or the relative prestige or social position given to groups or individuals by others. People often join the core group or a renowned club because of the prestige associated with these groups. Group cohesiveness referring to the strength of group members’ desires to remain a part of the group. This also refers to the degree of attraction of the group members for each other and the ‘we-feeling’ among the members. The degree of cohesiveness has been found to depend on external threats, the difficulty in getting included in the group, the amount of time spent by the group members with each other and the success of the group.

Groups and Teams

Do you still remember the excitement during the last world cup and the way the Indian team performed? No matter what they could finally achieve or not, we all used to comment on spirit of the Indian team. A team can be defined as a special type of group whose members have complementary skills and are committed to a common purpose or set of goals for which they hold themselves mutually accountable. In the recent times, a lot of emphasis is being given on developing teams. The importance of teams has long been appreciated in the world of sports, and now it is being used increasingly in the realm of business and industry as well. Though there are similarities between groups and teams and these two terms are often used interchangeably, there are in fact a few striking differences between the two. The following table will help to summarize this.

Samaresh chhotray CA/MBA 9717219922 proscriptive when it dictates specific behaviours that should be avoided by the



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The most common form of group decision making takes place in interacting groups. In these groups, members meet face-to-face and rely on both verbal and nonverbal interaction to communicate with each other. But as our discussion groupthink demonstrated, interacting groups often censor themselves and pressure individual members toward conformity of opinion. Brainstorming, the nominal group technique, and electronic meetings have been proposed as ways to reduce many of the problems inherent in the traditional interacting group. Brainstorming is meant to overcome pressures for conformity in the interacting group that retard the development of creative alternatives. It does this by utilizing an idea- generation process that specifically encourages any and all alternatives, while withholding

any criticism of those alternatives. In a typical brainstorming session, a half dozen to a dozen people sit around a table. The group leader states the problem in a clear manner so that it is understood by all participants. Members then "freewheel" as many alternatives as they can in a given length of time. No criticism is allowed, and all the alternatives are recorded for later discussion and analysis. That one idea stimulates others and that judgments of even the most bizarre suggestions are with held until later encourage group members to "think the unusual. Brainstorming, however, is merely a process for generating ideas. The following two techniques go further by offering methods of actually arriving at a preferred solution. The nominal group technique restricts discussion or interpersonal Immunization during the decision-making process, hence, the term nominal. Group technique members are all physically present, as in a traditional committee meeting, but A members operate independently. Specifically, a problem is presented and then m the following steps take place….

  • 1 Members meet as a group but, before any discussion takes place, each member independently writes down his or her ideas on the problem.


  • 2. After this silent period, each member presents one idea to the group. Each member

takes his or her turn, presenting a single idea until all ideas have been presented and

recorded. No discussion takes place until all ideas have been recorded.

  • 3. The group now discusses the ideas for clarity and evaluates them.

  • 4. Each group member silently and independently rank-orders the ideas. The ideas with

the highest aggregate ranking determine the final decision. The chief advantage of the nominal group technique is that it permits the group to meet formally but does not restrict independent thinking, as does the interacting group. The most recent approach to group decision making blends the nominal group technique with sophisticated computer technology . The future of group meetings undoubtedly will include extensive use of this technology . Each of these four group decision techniques has its own set of strengths and weaknesses. The choice of one technique over another will depend on what criteria you want to emphasize and the cost-benefit trade-off. For instance, the interacting group is good for building group cohesiveness, brainstorming keeps social pressures to a minimum, the nominal group technique is an inexpensive means for generating a large number of ideas, and electronic meetings process ideas fast. In a typical brainstorming session, a half dozen to a dozen people sit around a table. The group leader states the problem in a clear manner so that it is understood by all participants. Members then "freewheel" as many alternatives as they can in a given length of time. No criticism is allowed, and all the alternatives are recorded for later discussion and analysis. That one idea stimulates others and that judgments of even the most bizarre suggestions are with- held until later encourage group members to "think the unusual.1I Brainstorming, however, is merely a process for generating ideas. The following two techniques go further by offering methods of actually arriving at a preferred solution.74


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The nominal group technique restricts discussion or interpersonal communication during the decision-making process, hence, the term nominal. Group members are all physically present, as in a traditional committee meeting, but members operate independently. Specifically, a problem is presented and then the following steps take place:

I. Members meet as a group but, before any discussion takes place, each member independently writes down his or her ideas on the problem.

  • 2. After this silent period, each member presents one idea to the group. Each member

takes his or her turn, presenting a single idea until all ideas have been presented and

recorded. No discussion takes place until all ideas have been recorded.

  • 3. The group now discusses the ideas for clarity and evaluates them.

  • 4. Each group member silently and independently rank-orders the ideas. The idea with the

highest aggregate ranking determines the final decision. The chief advantage of the nominal group technique is that it permits the group to meet formally but does not restrict independent thinking, as does the interacting group. The most recent approach to group decision making blends the nominal group technique with sophisticated computer technology.

It's called the computer assisted group or electronic meeting. Once the technology is in place, the concept is simple. Up to SO people sit around a horseshoe-shaped table, empty except for a series of computer terminals. Issues are presented to participants and they type their responses onto their computer screen. Individual comments, as well as aggregate votes, are displayed on a projection screen in the room.

The major advantages of electronic meetings are anonymity, honesty, and speed. Participants can anonymously type any message they want and it flashes on the screen for all to see at the push of a participant's keyboard. It also allows people to be brutally honest without penalty. And it's fast because chitchat is eliminated, discussions don't digress, and many participants can talk" at once without stepping on one another's toes. The future of group meetings undoubtedly will include extensive use of this technology.

Each of these four group decision techniques has its own set of strengths and weaknesses. The choice of one technique over another will depend oh what criteria you want to emphasize and the cost-benefit trade-off. For instance, the interacting group is good for building group cohesiveness, brainstorming keeps social pressures to a minimum, the nominal group technique is an inexpensive means for generating a large number of ideas, and electronic meetings process ideas fast. Norms control group member behavior by establishing standards of right and wrong. If managers know the norms of a given group, it can help to explain the behaviors of its members. When norms support high output, managers can expect individual performance to be markedly higher than when group norms aim to restrict output. Similarly; acceptable standards of absenteeism will be dictated by the group norms.

Status inequities create frustration and can adversely influence productivity and the willingness to remain with an organization. Among those individuals who are equity sensitive, incongruence is likely to lead to reduced motivation and an increased search for ways to bring about fairness (i.e., taking another job). The impact of size on a group's performance depends upon the type of task in which the group is engaged. Larger groups are more effective at fact-finding activities. Smaller groups are more effective at action-taking tasks. Our knowledge of social loafing suggests that if management uses larger groups, efforts should be made to provide measures of individual performance within the group.


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We found the group's demographic composition to be a key determinant of individual turnover. Specifically, the evidence indicates that group members who share a common age or date of entry into the work group are less prone to resign.


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Unit 8 Interpersonal skills


Interpersonal skills are perhaps the most important attribute for managerial effectiveness. Studies have shown that managers engage in over 50 different types of behaviour involving organising and co-ordinating, information handling, motivation and conflict management, problem solving and control of resources. Many of these behaviours involve the type of interpersonal skills which can be learnt.

Interpersonal skills enables you to:

  • 1. work harmoniously and efficiently with others

  • 2. Evaluate and accept responsibility.

  • 3. identify methods you use to respond to conflict

  • 4. work in teams more efficiently

Transactional analysis

Transactional analysis, commonly known as TA to its adherents, is an integrative approach to the theory of psychology and psychotherapy. Integrative because it has elements of psychoanalytic, Humanist and Cognitive approaches. It was developed by Canadian-born US psychiatrist Eric Berne during the late 1950s.

TA is a theory of personality and a systematic psychotherapy for personal growth and personal change.

  • 1. As a theory of personality, TA describes how people are structured psychologically. It uses what is perhaps its best known model, the ego-state (Parent-Adult-Child) model to do this. This same model helps understand how people function and express themselves in their behaviors.

  • 2. As a theory of communication it extends to a method of analysing systems and organisations.

  • 3. It offers a theory for child development, where it ties in very neatly with the Freudian developmental stages -oral, anal, phallic.

  • 4. It introduces the idea of a "Life (or Childhood) Script", that is, a story one perceives about ones own life, to answer questions such as "What matters", "How do I get along in life" and "What kind of person am I". This story, TA says, is often stuck to no matter the consequences, to "prove" one is right, even at the cost of pain, compulsion, self-defeating behaviour and other dysfunction. Thus TA offers a theory of a broad range of psychopathology.

Parent-Adult-Child, PAC) model- three ego analysis of berne

At any given time, a person experiences and manifests their personality through a mixture of behaviours, thoughts and feelings. Typically, according to TA, there are three ego- states that people consistently use:

Parent ("exteropsychic"): a state in which people behave, feel, and think in response to an unconscious mimicking of how their parents (or other parental

figures) acted, or how

they interpreted their parent's actions. For example, a

person may shout at someone out of frustration because they learned from an


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influential figure in childhood the lesson that this seemed to be a way of relating that worked. Adult ("neopsychic"): a state in which people behave, feel, and think in

response to what is going on in the "here-and-now," using all of their resources as an adult human being with many years of life experience to guide them. This is the ideal ego state, and learning to strengthen the Adult is a goal of TA. While a person is in the Adult ego state, he/she is directed towards an objective appraisal of reality. Child ("archaeopsychic"): a state in which people revert to behaving, feeling and thinking similarly to how they did in childhood. For example, a person who receives a poor evaluation at work may respond as they did in their childhood, by looking at the floor, and feeling shame or anger, as they used to when scolded as a child.

Berne differentiated his Parent, Adult, and Child ego states from actual adults, parents, and children, by using capital letters when describing them. These ego-states may or may not represent the relationships that they act out. For example, in the workplace, an adult supervisor may take on the Parent role, and scold an adult employee as though they were a Child. Or a child, using their Parent ego-state, could scold their actual parent as though the parent were a Child.

Johari window analysis

The Johari Window, named after the first names of its inventors, Joseph Luft and Harry Ingham, is one of the most useful models describing the process of human interaction. A four paned "window," as illustrated above, divides personal awareness into four different types, as represented by its four quadrants: open, hidden, blind, and unknown. The lines dividing the four panes are like window shades, which can move as an interaction progresses.


Known to Self

Not Known to Self

Known to Others

Known to Others
Known to Others

Not Known to Others

Not Known to Others
Not Known to Others

In this model, each person is represented by their own window. Let's describe mine:

1. The "open" quadrant represents things that both I know about myself, and that you know about me. For example, I know my name, and so do you, and if you have explored some of my website, you know some of my interests. The knowledge that the window represents, can include not only factual information, but my feelings, motives, behaviors,

wants, needs and desires

indeed, any information describing who I am. When I first

... meet a new person, the size of the opening of this first quadrant is not very large, since

there has been little time to exchange information. As the process of getting to know one


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another continues, the window

shades move down



the right,

placing more









  • 2. The "blind" quadrant represents things that you know about me, but that I am unaware

of. So, for example, we could be eating at a restaurant, and I may have unknowingly gotten some food on my face. This information is in my blind quadrant because you can see it, but I cannot. If you now tell me that I have something on my face, then the window shade moves to the right, enlarging the open quadrant's area. Now, I may also have blindspots with respect to many other much more complex things. For example, perhaps in our ongoing conversation, you may notice that eye contact seems to be lacking. You may not say anything, since you may not want to embarrass me, or you may draw your own inferences that perhaps I am being insincere. Then the problem is, how can I get this information out in the open, since it may be affecting the level of trust that

is developing between us? How can I learn more about myself? Unfortunately, there is no readily available answer. I may notice a slight hesitation on your part, and perhaps this may lead to a question. But who knows if I will pick this up, or if your answer will be on



  • 3. The "hidden" quadrant represents things that I know about myself, that you do not

know. So for example, I have not told you, nor mentioned anywhere on my website, what one of my favorite ice cream flavors is. This information is in my "hidden" quadrant. As soon as I tell you that I love "Ben and Jerry's Cherry Garcia" flavored ice cream, I am effectively pulling the window shade down, moving the information in my hidden quadrant and enlarging the open quadrant's area. Again, there are vast amounts of information,

virtually my whole life's story, that has yet to be revealed to you. As we get to know and trust each other, I will then feel more comfortable disclosing more intimate details about







  • 4. The "unknown" quadrant represents things that neither I know about myself, nor you

know about me. For example, I may disclose a dream that I had, and as we both attempt to understand its significance, a new awareness may emerge, known to neither of us before the conversation took place. Being placed in new situations often reveal new information not previously known to self or others. For example, I learned of the Johari window at a workshop conducted by a Japanese American psychiatrist in the early 1980's. During this workshop, he created a safe atmosphere of care and trust between the various participants. Usually, I am terrified of speaking in public, but I was surprised to learn that in such an atmosphere, the task need not be so daunting. Prior to this event, I had viewed myself and others had also viewed me as being extremely shy. (The above now reminds me of a funny joke, which I cannot refrain from telling you. It is said that the number one fear that people have is speaking in public. Their number two fear is dying. And the number three fear that people have, is dying while speaking in public.) Thus, a novel situation can trigger new awareness and personal growth. The process of moving previously unknown information into the open quadrant, thus enlarging its area, has been likened to Maslow's concept of self-actualization. The process can also be viewed as a game, where the open quadrant is synonymous with the win-win situation.

Games and their analysis

Definition of game

A game is a series of transactions that is complementary (reciprocal), ulterior, and proceeds towards a predictable outcome. Games are often characterized by a switch in roles of players towards the end. Games are usually played by Parent, Adult and Child ego


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states, and games usually have a fixed number of players; however, an individual's role can shift, and people can play multiple roles. Berne identified dozens of games, noting that, regardless of when, where or by whom they were played, each game tended towards very similar structures in how many players or roles were involved, the rules of the game, and the game's goals. Each game has a payoff for those playing it, such as the aim of earning sympathy,

satisfaction, vindication, or some other emotion that usually reinforces the life script. The antithesis of a game, that is, the way to break it, lies in discovering how to deprive the actors of their payoff. Students of transactional analysis have discovered that people who are accustomed to a game are willing to play it even as a different "actor" from what they originally were.

Analysis of a game

One important aspect of a game is its number of players. Games may be two handed (that

is, played by two players), three handed (that is, played by three players), or many handed. Three other quantitative variables are often useful to consider for games:

Flexibility: The ability of the players to change the currency of the game (that is, the tools they use to play it). In a flexible game, players may shift from words, to money, to parts of the body.

Tenacity: The persistence with which people play and stick to their games and their resistance to breaking it.

Intensity: Easy games are games played in a relaxed way. Hard games are games played in a tense and aggressive way.

Based on the degree of acceptability and potential harm, games are classified as:

First Degree Games are socially acceptable in the players' social circle.

Second Degree Games are games that the players would like to conceal, though

they may not cause irreversible damage. Third Degree Games are games that could lead to drastic harm to one or more of the parties concerned.

Games are also studied based on their:



Social and Psychological Paradigms


Advantages to players (Payoffs)

Transactional game analysis is fundamentally different from rational or mathematical game analysis in the following senses:

The players do not always behave rationally in transactional analysis, but behave more like real people.

Their motives are often ulterior


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UNIT 9 Leadership and approaches to leadership

Definition and Meaning of leadership

Leadership is the ability to influence individuals or groups toward the achievement of goals. Leadership, as a process, shapes the goals of a group or organization, motivates behavior toward the achievement of those goals, and helps define group or organizational culture. It is primarily a process of influence. Leader ship versus Management : Although some managers are able to influence followers to work toward the achievement of organizational goals, the conferring of formal authority upon a manager does not necessarily make that individual a leader. Yes, that individual has authority, but whether or not they are able to influence their subordinates may depend on more that just that authority. Not all leaders are managers, and similarly, not all managers are leaders. Within a team environment, manager and leader are simply roles taken on by members of the team. Most teams require a manager to "manage" -- coordinate, schedule, liaise, contact, organize, procure -- their affairs. The functions of this role may well be quite different from those of the leader (to motivate followers towards the achievement of team goals). Management roles need not presuppose any ability to influence. A leader, on the other hand, must have the ability to influence other team members.

The fundamental difference between a manager and a leader:

A manager administers, but a leader innovates A manager maintains, while a leader develops A manager focuses on systems and structures, whereas a leader’s focus is on people A manager relies on control, but a leader inspires trust A manager keeps an eye on the bottom line, while a leader has an eye on the horizon A manager does things right, a leader does the right thing.


Leadership is the art of influencing and inspiring subordinates to perform their duties willingly, competently and enthusiastically for achievement of groups objectives. According to Wendell French, "Leadership is the process of influencing the behavior of others in the direction of a goal or set of goals or, more broadly, toward a vision of the future”, According to Keith Davis, “Leadership is the process of encouraging and helping others to work enthusiastically towards objectives”. According to Koontz and O'Donnell, "Leadership is the art or process of influencing people so that they will strive willingly towards the achievement of group goals". According to Peter Drucker, "Leadership means the lifting of man's visions to higher sights, the raising of man's performance to higher standard, the building of man's personality beyond its normal limitations". According to Grey and Starke, "Leadership is both a process and a property. As a process, it is used for non-coercive influence lo shape up the goals of a group or organization, to motivate behavior toward the achievement of those goals and to help define group or organizational culture. As a property, leadership is the set multi characteristics attributed to those who are perceived to be leaders". Thus, leaders are people who are able to influence the behavior of others without recourse to threats or other forms of force towards the individuals. Leaders are the people who are accepted by the other individuals, as a superior person to them.


The features of leadership are as follows:


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Leadership is the process of influencing behavior of individuals of an organization.

Leadership uses non-coercive methods to direct and coordinate the activities of the

individuals of an organization. Leadership directs the individuals to attain the tasks assigned to them by following the

instructions of their leaders. A leader possesses qualities to influence others.

Leadership gives the individuals, a vision for future.

Leadership is a group activity. Leader influences his followers and followers also exercise

influence over his leader. Leadership is meant for a given situation, given group for a pre-determined period of lime.

Leadership is continuous process of influencing behavior. It encourages liveliness in the group.

Importance of Leadership

The following points can judge the importance of leadership:

A leader should act as a friend of the people whom he is leading.

A leader must have the capacity to recognize the potentials of the individuals and transform them into realities.

A leader should have the confidence of the individuals of the organization.


A leader must be able to unite the people as a team and build up team spirit.

A leader

should be able to maintain

discipline among his group and develop a

sense of


A leader must be able to build up a high morale among the individuals of the organization.

A leader should motivate his people to achieve goals.

A leader should try to raise the morale of the individuals and should maintain ethical standards

among the individuals. A leader should act as a link between the work groups and the forces outside the organization.

Difference between Leadership and Management

Leading and managing go together but some differences exist between the two. The following are the differences between the leadership and the management:

Management takes rational and logical decisions while leadership takes decision on

expectations of the followers. Leadership has an emotional appeal while management acts on rationality. The management establishes relationship through a lawful authority while leadership

establishes relationship through power. Managers have formal authority but the leaders have no such authority.

All leaders are not managers and all managers are leaders.

Management is a process of planning, organizing, directing and controlling the activities of others to attain the organizational objectives. Leadership on the other hand, is a process of influencing the behavior of the people to attain their assigned tasks. A successful manager must possess both the managerial and leadership qualities.


Following are the main types of leadership:

Autocratic or Authoritarian

In this type of leadership, there is a complete centralization of authority in the leader, i.e., authority is centered in the leader himself. He has all the powers to make decisions. He uses coercive measures and adopts, negative method of motivation. He wants immediate obedience of his orders and instructions. Any negligence on the part of subordinates results in punishment. There is no participation


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from the subordinates in decision-making. A leader thinks that he is the only competent person in the organization. According to Edwin B. Filippo, there are following three types of leaders in autocratic:

  • 1. Hard Boiled or Strict Autocrat: Leader, under such type uses negative influence and expects that the employees should obey his orders immediately. Non-compliance of his orders results in punishment. He makes all decisions and does not disclose anything to anyone. He is quite rigid on performance.

  • 2. Benevolent Autocrat: Benevolent autocrat leader uses positive influences and develops effective human relations. He is known as paternalistic leader. He praises his employees if they follow his orders and invites them to get the solutions of the problems from him. He feels happy in controlling all the actions of his subordinates.

  • 3. Manipulative Autocrat: Leader, under such type is manipulative in nature. He creates a feeling in the minds of his subordinates and workers that they are participating in decision- making processes. But he makes all decisions by himself. Non-compliance of his orders also results jn punishment.

Democratic or Participative

Democratic or Participative leadership is also known as group centered or consultative leadership. In this type of leadership, leaders consult their groups and consider their opinion in the decision-making process. Leaders encourage discussion among the group members on the problem under consideration and arrive at a decision depending on their consent. Participation or involvement of the employees in the decision-making process is also rewarded. Exchange of ideas among subordinates and with the leader is given encouragement. Leaders give more freedom to their group members, who feel that, their opinions arc honored and they are given importance. It develops a sense of confidence among subordinates and they derive job satisfaction. It improves quality of decision as it is taken after due consideration of valued opinions of the talented group members. The demerit of this type of leadership is that it takes more time to arrive at a decision, as a lot of time is wasted while taking the views from the employee. It is, therefore, very time consuming.

Laissez-faire or Free Rein

In this type of leadership, there is virtual absence of direct leadership. It is, therefore, known as "no leadership at all". There is complete delegation of authority to subordinates so that they can make decisions by themselves. Absence of leadership may have both positive and negative effects. Free rein leadership may be effective if members of the group are highly committed to their work. The negative aspect shows that the leader is not competent enough to lead his group effectively. Members may feel insecure and develop frustration for lack of decision-making authority.


This type of leadership emphasizes the rules and regulations of an organization. The behavior of a leader is determined by the rules, regulations and procedure to be followed under his leadership. The leader and the subordinates both follow these rules and regulations. Therefore, there is no difference between the management and the administration in this type of leadership. The employees, themselves cannot do anything in this regard. It is the rules that determine their performance.


This type of leadership manipulates the employees to attain their assigned tasks. A manipulative leader is quite selfish and exploits the aspirations of the employees for his gains. He knows very well the needs and desires of the employees but he does very little to fulfill them. Due to such attitude, he has to face the hatred of the employees at times.


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The paternalistic leadership believes in the concept that the happy employees work better and harder. It maintains that the fatherly altitude is the right one for better relationship between the manager and the employees. Everyone within the organization should work together like a family.

Expert Leadership

The expert leadership emerged as a result of complex structure of modern organizations. This type of leadership is based on the ability, knowledge and competence of the leaders. He handles the situation skillfully with his talent. The employees feel relieved as they are working under a person who is expert and can handle the situation without any problem. In modern organizations, human resources vary in terms of skill, knowledge and competences. They differ in quality, determination and their attitude towards the organization. They exhibit different behaviors as they differ in attitude and outlook also. The leader must understand their behavior and accordingly can make use of the various types LEADERSHIPS. The manager should assess the situation and adopt that type of leadership, which suits that situation. He should remember that leadership is situational. If situation changes, the use of leadership among its various types also changes. A successful leader is the one who assesses the situation, studies the psychology of the subordinates and adopts the most useful type of leadership to lead the people at work to accomplish the organizational goals.


A number of theories and approaches to study leadership have been developed. There are broadly three theories of leadership.

Trait Theory

Behavior Theory

Contingency Theory

  • (a) Trait Theory

This theory of studying leadership is taken into consideration to analyze the personal, psychological and physical traits of strong leaders. The assumption made in this theory was that some basic traits or set of traits differentiates leaders from non-leaders. For example, the leadership traits might include intelligence, assertiveness, above average height, self-confidence, initiative and understanding of interpersonal human relations. The existence of these traits determines the importance of leadership. Possession of these traits helps the individuals to gain possession of leadership. Since all individuals do not have these qualities, only those who have them would be considered potential leaders. Some of the weakness of this theory is:

All the traits are not identical with regard to essential characteristics of a leader.


Some traits may not be inherited, but can only be acquired by training.


does not

identify the traits that

are most


and that

are least

important for a

successful leader. It does not explain the leadership failures, in spite of the required traits.

It has been found that many traits exhibited by leaders are also found among followers without

explaining as to why followers could not become leaders. It is difficult to define traits in absolute terms.

Thus, the trait theory has been criticized for lack of conclusiveness and predictability.

  • (b) Behavior Theory

The behavioral theory assumed that effective leaders behaved differently from ineffective leaders. It also identified the need of consistency of behavior of good leaders. This theory can be more clearly understood with the help of following case studies.

The Michigan Studies: Researchers at the University of. Michigan, led by Rensis Likert, began studying leadership in the late 1940s. Depending on broad discussions with both the managers and sub-ordinates, the Michigan studies identified two forms of leadership behavior. They are discussed as below:


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Job-centered leadership behavior : The first was called job-centered leadership behavior, which focuses on performances and efficient completion of the assigned tasks. A job-centered leader interacts with group members to explain task procedures and oversee their work. Employee centered leadership behavior: The second behavior was identified as employee centered leader behavior, which focuses on, high performance standards to be accomplished. This can be done by developing a cohesive work group and ensuring that employees are satisfied with their jobs. Thus, the leader's primary concern is the welfare of the ordinates. The Michagan researchers thought a leader could show signs of one kind of behavior, but not both.

The Ohio State Studies: At about the same time, a group of researchers at Ohio State also began studying leadership. The Ohio State leadership studies also identified two major kinds of leadership behaviors or styles, which are as follows:

Initiating-structure behavior: In initiating-structure behavior, the leader clearly defines

the leader-subordinate roles so that everyone knows what is expected. The leader also establishes formal lines of communication and determines how tasks will be performed. Consideration behavior: In consideration behavior, the leader shows concern for subordinates feelings' and ideas. He attempts to establish a warm, friendly and supportive. The most obvious difference between Michigan and Ohio State studies is that the Ohio State researchers did not position their two forms of leader behavior at opposite ends of a single continuum. Rather, they assumed the behaviors to be independent variables, which means that a leader could exhibit varying degrees of initiating structure and consideration at the same time i.e. a particular leader could have higher ratings on both measures, low ratings on both or high ratings on one and low on the other.

The Ohio State researchers found that a leader’s behavior remains consistent over a period of time, if the situation also remains same. But the researchers could not come up with one best combination of behavior suitable to all the situations. The researchers used to believe that the leaders in possession of both types of behavior are most effective. However, their studies at International Harvester found that leaders rated highly on initiating structure behavior have higher performing but dissatisfied sub-ordinates, whereas leaders rated highly on consideration structure had lower- performing sub-ordinates who showed signs of higher satisfaction. Most experts now agree that no single set of traits or behaviors appears to be common to all good leaders. The universal approaches to leadership can help managers examine their own leadership characteristics and match them against the traits most commonly identified with good leaders. In order to understand the full complexity of leadership, contingency theory is to be studied.

(c) Contingency Theory

The main assumption of contingency theory is that the behavior of an appropriate leader varies from one situation to another. The motive of a contingency theory is to identify key situational factors and to specify how they interact to determine appropriate behavior of a leader The three most important and widely accepted contingency theories of leadership are as


The LPC theory: The first contingency theory of leadership is Fred Fielder's Least Preferred Co-worker (LPC) Model. Fielder identified two types of leadership: task-oriented and relationship-oriented. Fielder believes that a leader's tendency to be task-oriented or relationship oriented remains constant. In- other words, a leader is either task-oriented or

relationship-oriented while leading his group members. Fielder used the Least Preferred Co- worker (LPC) scale to measure the type of leadership. A leader is asked to describe characteristics of the person with whom he or she is least comfortable while working. They can do this by marking in a set of sixteen scales at each end, by a positive or negative adjective. For example, three of the scales Fielder uses in the LPC are:

Helpful -------------------- Frustrating 8 7 6 5 4 3 2 1

Tense Boring -------------------



1 2 3 4 5 6 7 8

Interesting 1 2 3 4 5 6 7 8


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The leader's LPC score is (hen calculated by adding up the numbers below the line checked on each scale. A high total score is assumed to reflect a relationship orientation and a low score, a task orientation by the leader. The LPC measure is controversial because researchers disagree about its validity. This is because some of the LPC measures show whether the score is an index of behavior, personality or some other unknown factor. According to Fielder, the contingency factor favours the situation from the leader's point of view. This factor is determined by leader-member relations, task-structure and position-power, which are discussed as below:

Leader-member relations: A Leader-member relation refers to the nature of relationship

between the leader and his work group. If the leader and the group enjoy mutual trust, respect, confidence and they like one another, relations will remain good. If there is little trust, respect or confidence and. if they do not like one another, relations will remain bad. Good relations are assumed to be favourable and bad relations unfavorable. Task-structure: Task-structure is the degree to which the group's task is clearly defined. When the task is routine, easily understood, and unambiguous and when the group has standard procedures, the structure is assumed to be high. When the task is non-routine, ambiguous, complex, with no standard procedures and precedents, structure is assumed to be low. High structure is more favourable for the leader and low structure is unfavorable. If the task structure is low, the leader will have to play a major role in guiding and directing the group's activities. If the task structure is high, the leader will not have to pay much attention.

Position-power: Position-power is the power vested in the position of a leader in an

organization. If the leader has the power to assign work, administer rewards and punishment, recommend employees for promotion or demotion, position-power is assumed lo be strong. If the leader does not have required powers, the position-power is weak. From the leader's point of view, strong position power is favourable and weak position power is unfavorable. Fielder and his associates conducted various studies highlighting if a situation favors the leadership and group effectiveness or not. When the situation includes good relations, high structure and strong power, a risk-oriented leader to lie most effective. However, when relations are good but task structure is low and position- power is weak, LI relationship-oriented leader is considered to be most effective.

A final point about LPC theory is that, Fielder argues that any particular-type of leadership, which is measured by the LPC is inflexible and cannot be changed. In other words a leader cannot change his behavior to fit a particular situation. Fielder's contingency theory has been criticized on the ground that LPC measure lacks validity and that the assumption about the inflexibility of the leader's behavior is unrealistic.

  • (d) The Path-Goal theory

The path-goal model of leadership was introduced by Martin Evans and Robert House. Path-goal theory says that a leader can motivate subordinates by influencing their expectations. Leaders can motivate sub-ordinates by making clear what they have to do to get the reward they desire. The path- goal model assumes that leaders can change their style or behavior to meet the demands of a particular situation. This model identifies four kinds of leader behavior: directive, supportive, participative and achievement-oriented. According to this model managers can adjust their behavior to include any four kinds of leadership behavior mentioned above. For instance, while leading a new group of sub-ordinates, the leader may be directive in giving guidance and instructions to them. He may also adopt supportive behavior to encourage group cohesiveness, to look after their needs and ensuring that they get the rewards and benefits. As the group becomes more familiar with the task and as new problems are taken into consideration, the leader may use participative behavior by which he can participate with employees in making decisions and take their suggestions as well. Finally, the leader may use achievement-oriented behavior to encourage continued high performance of sub- ordinates. Environmental characteristics are factors, which are beyond the control of subordinates. It includes task structure, the primary work group and the formal authority system. For instance, when structure is high, directive leadership is less effective than when structure is low. Sub-ordinates do not usually need their boss to repeatedly tell them how to do a routine job. According to the path-goal theory, these environmental factors can create uncertainty for employees. A leader who helps


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employees reduce such uncertainty can motivate them. The figure 14.1 shows the path goal model of leadership.

Samaresh chhotray CA/MBA 9717219922 employees reduce such uncertainty can motivate them. The figure 14.1 shows the

Leaders do not always have control over environmental factors, but the theory emphasizes that leaders can use the control they want, to adjust the environment and to motivate sub-ordinates.

  • (e) The Vroom-Yetton-Jago Theory (VYJ)

The Vroom-Yetton-Jago model was first introduced by Vroom and Yetton in 1973 and was revised by

Vroom and Jago in 1988, This model has a much less focus than the path-goal theory. It helps a leader to determine the extent, to which employees should participate in the decision-making processes, The VYJ theory argues that decision-effectiveness is best judged by the quality of decision and by the acceptance of that decision on the part of employees. Decision acceptance is the extent to which employees accept and are loyal to their decisions. To maximize decision effectiveness, the VYJ theory suggests that leaders adopt one of five decision-making leaderships. The appropriate leadership depends on the situation. As summarized in the following table, there are two autocratic types of leadership, which are AI and All, two consultative types of leadership, which are CI and CII and the other one is group GII.


Decision-Making Styles in the VYJ model Decision Style





Manager makes the decision alone. Manager asks for information from subordinates but makes (he decision alone. Sub- ordinates may or may mil be informed about what the situation is.


Manager shares the situation with individual subordinates and asks for information and evaluation. Subordinates do not meet


as a group and the manager alone makes the decision. Manager and subordinates meet as a group to discuss the


situation but the manager makes the decision. Manager and subordinates meet as a group to discuss the situation and the group makes the decision.

A = Autocratic; C= Consultative; G = Group


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The situation is defined by a series of questions about the characteristics or attributes of the problem under consideration. To address the questions, the leader uses one of the four decisions. Two of them are used when the problem affects the entire group. For example, a decision about the facilities to be given to employees in a new office affects the entire group and the other two are appropriate when the decision affects a single individual only. e.g. a new office for that individual only. Moreover, one of each is to be used when the decision has to be made quickly because of some urgency and the others arc to be used when the decision can be made more slowly and the leaders wants to use the opportunity to develop subordinates' decision-making abilities. The VYJ model was criticized because of its complexity. Computer software has been developed to aid leaders in defining the situation, answering the questions about the problem attributes and developing a strategy for decision-making participation. Although the VYJ model is too new to have been thoroughly tested, evidence so far indicates that this model can help leaders to choose the most effective way to include the sub-ordinates in decision-making.


In addition to these three major theories, there are other contingency models or theories developed in recent years. The other models are as follows:

Vertical Dyad Linkage Model: This model stresses the .fact that leaders actually have different kinds of working relationship with different subordinates. Each manager-subordinate relationship represents one vertical dyad. The Vertical Dyad Linkage model suggests that leaders establish special working relationships with some subordinates based on some combination of respect, trust and liking. These people constitute the ‘in-group’. Other subordinates remain in the ‘out-group’s, who receive less of leader's time and attention. Those in the 'in-group' receive more of the manager's time and attention and are better performers. Research shows that people in the ‘in-group’ are more productive and more satisfied with their work than ‘out group’ members.

Life Cycle Model: The life cycle model suggests-that appropriate leader behavior depends on the maturity of the followers. In this context, maturity includes motivation, competence and experience. The model suggests that as followers become more mature, the leader needs to move gradually from high to low task orientation. Simultaneously, the leader's employee- oriented behavior should start low, increase at a moderate rate and then decline again. Many leaders are familiar with the life cycle theory because it is both simple and logical. However, it has received little scientific support from researchers.


The new perspectives that have attracted attention are the concepts of substitutes for leadership and transformational leadership.

Substitutes for Leadership

The existing leadership theories and models try to specify what kind of leader’s behavior is appropriate for different situations. They do not take into consideration, the situations where the leadership is not needed. The substitute concept identifies the situations where the characteristics of the subordinates, the task and the organization replace leaders' behaviors. For example, when a patient is admitted to an emergency room in a hospital, nurses, doctors and attendants act immediately without waiting for directive or supportive behaviors of leaders in an emergency ward. Several characteristics of the sub-ordinate may serve to replace or change .the behavior of the leaders. For example, employees with much ability and experience may not need to be told what to do. Similarly, a strong need for independence by the sub-ordinate may result in ineffectiveness of leaders’ behavior. Characteristics of the task that may substitute the leadership include, the availability of feedback and intrinsic satisfaction. For example, when the job is routine and simple, the subordinate may not need direction. When the task is challenging, the subordinate may not need or want support. Organizational characteristics that may substitute for leadership include formalization group cohesion, inflexibility and a rigid reward structure. For example, when policies are formal and rigid, leadership may not be needed.

Transformational Leadership


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Another new concept of leadership goes by a number of labels: charismatic leadership, inspirational leadership, symbolic leadership and transformational leadership. This is a leadership that transmits a sense of mission, increases teaming experiences and inspires new ways of thinking. Charisma is a form of interpersonal attraction. Charismatic people attract followers and this type of leader has great power over his or her followers. Charismatic leaders are self-confident and can influence others. The followers of a charismatic leader identify with the leader's beliefs, accept, trust and obey the leader without questioning him and thereby contribute toward the success of the organizational goals.

Leadership Skills

There is now recognition in both leadership theory and practice of the importance of skills, how leaders should behave and perform effectively. Although there are many skills, such as cultural flexibility, communication, HRD, creativity, and self-management of learning, the research-based skills identified by Whetten and Cameron seem to be most valuable. Their personal skills model, involving developing self-awareness, managing stress and solving problems creatively; the interpersonal skills model, involving communicating supportively, gaining power and influence, motivating others and managing conflict, are especially comprehensive and useful. Finally, the widely recognized organizational behavior .techniques such as, training, job design and leaders can also effectively use behavioral management.


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

Samaresh chhotray CA/MBA 9717219922 Unit 10 & 11 POWER AND ORGANIZATIONAL POLITICS, CONFLICT MANAGEMENT Definitions of

Power refers to A's ability to influence B, not A's right to do so; no right is implied in the concept of power ... At this point it is useful to point out that power refers to A's ability to influence B, not A's right to do so; no right is implied in the concept of power. A related concept is authority. Authority does represent the right to expect or secure compliance; authority is backed by legitimacy. For purposes of differentiating between power and authority, let us examine the relationship between the manager of a sawmill and her subordinates. Presumably, the manager has the authority -- the right -- to request that the sawyer cut lumber to certain specifications. On the other hand, the manager would not have the right to request that the sawyer wash her car. However, that sawyer may well accede to her request that he wash her car. Why? It is possible That the sawyer responds to the power that the manager has over him -- the ability to influence his behavior.

Classification of power : Etizoni has made the classification of power as follows:

COERCIVE POWER : Involves forcing someone to comply with one's wishes. A prison would be an example of a coercive organization. UTILITARIAN POWER: Is power based on a system of rewards or punishments. Businesses, which use pay raises, promotions, or threats of dismissal, are essentially utilitarian organizations. NORMATIVE POWER : Is power which rests on the beliefs of the members that the organization has a right to govern their behavior. A religious order would be an example of a utilitarian organization.

ORGANIZATIONAL POLITICS To help us understand organizations, we might consider them as political systems. The political metaphor helps us understand power relationships in day-to-day organizational relationships. If we accept that power relations exist in organizations, then politics and politicking are an essential part of organizational life. Politics is a means of recognizing and, ultimately, reconciling competing interests within the organization. Competing interests can be reconciled by any number of means. For example, resorting to "rule by the manager" might be seen as an example of


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totalitarian rule. On the other hand, politics may be a means of creating a noncoercive, or a democratic work environment.

To help us understand organizations, we might consider them as political systems. The political metaphor helps us understand power relationships in day-to-day organizational relationships. If we accept that power relations exist in organizations, then politics and politicking are an essential part of organizational life. Politics is a means of recognizing and, ultimately, reconciling competing interests within the organization. Competing interests can be reconciled by any number of means. For example, resorting to "rule by the manager" might be seen as an example of totalitarian

rule. On the other hand, politics may be a means of creating a no coercive, or a democratic work environment. As mentioned, organizations need mechanisms whereby they reconcile conflicting interests. Hence, organizations, like governments, tend to "rule" by some sort of "system". This "system" is employed to create and maintain "order" among the organization's members. Systems of rule within organizations range from autocratic to democratic at the extremes. Between these extremes we find bureaucratic and technocratic systems. Whatever the system, each represents a political orientation with respect to how power is applied and distributed throughout the organization. Each type of organizational "rule" simply draws on different principles of legitimacy.

politics stems from a diversity of interests ...

Organizational actors seek to satisfy not only organizational interests, but also their own ...

needs; driven by self-interest ...

According to Aristotle, politics stems from a diversity of interests. To fully understand the politics of the organization, it is necessary to explore the processes by which people engage in politics. Consistent with Aristotle's conceptualization, it is a given that, within the organization, all employees bring their own interests, wants, desires, and needs to the workplace. Organizational decision-making and problem- solving, while seemingly a rational process, is also a political process. Organizational actors seek to satisfy not only organizational interests, but also their own wants and needs; driven by self-interest.

Members of a corporation are at one and the same time cooperators


and rivals for the


rewards of successful competition Rational models of organizational behavior only explain a portion of the behavior observed (Farrell and Peterson, 1982):

Members of a corporation are at one and the same time cooperators in a common enterprise and rivals for the material and intangible rewards of successful competition with each other. (Farrell and Peterson, 1982)

Political behavior has been defined as :