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CHAPTER ONE

INTRODUCTION TO ORGANIZATIONAL BEHAVIOR


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Learning Objectives
After reading this chapter, the student should be able to:
 Define organizational behavior
 Understand features of organizational behavior
 Know the scope of organizational behavior.
 Identify the fields which contribute to organizational behavior.
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Meaning & Definition of Organizational Behavior (OB)
1. Broadly, OB can be defined as the knowledge of people’s behavior at work.
2. Organizational behavior is the study and application of knowledge about how people act
within an organization.
The study of behavior is important because employee’s productivity is directly related to their
behavior. And behavior [which productivity depends upon] can be influenced by the different
nature of people; wholeness of human beings, motivation provided; internal organizational
environment, social environment, individual perception & learning, group affiliation and
technological development. (Technology helps in performance of job in a successful way). Etc.
The purpose of the study of individuals behavior in organizations is to modify & mould their
behavior so that to improve their performance.
Example, if a supervisor is more friendly, trusting & approachable, subordinates will be more
willing to undertake challenging jobs this example shows that behavior of employees is a factor
for productivity).
 Cheek your progress.
Why do managers study about individuals behaviors in organizations?

1.2 Features of OB
OB is the study of the behavior of individuals at work. Work takes place within the structured
organization wherein groups of individuals put in unified common effort in the environment.
People use technology to get work done.
Therefore, OB concentrates on individual, the group, structure, technology and environment.

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Individual
- Employee’s work behavior is influenced not only by his biological make up, but is also
influenced by his interactive environment (i.e. family relationship, racial background,
social set up, religious beliefs, technological innovations. Individuals are also made up of
all these factors – in addition to their perception, personality, learning, etc.
- Each employee has his own physical, psychological and social needs. His desires, needs,
wants and goals bring specific work behavior.
Group
- An organization consists of formal & informal groups, large & small groups. Group
performance is more effective than individual performance. This synergy is observed in
group behavior. If group power is canalized towards goal achievement, it can bring
outstanding performance.
Structure
- The formal relationship of people forms the structure of an organization. The methods of
establishing the relationship the behavior employee’s i.e. the structural relationship are
determinant in the behavior of employees at work. Because the structured relationship is
carried out by policies, procedures, hierarchical authority and responsibilities. The
structural behaviors of individuals have their own entity.
Technology
- Technology has its own behavioral role. Better work is a source of satisfaction to
employees. Technology results in better work, because it incorporates technical skills
which encompass the ability to apply specialized knowledge. When people develop their
technical skills, they get satisfaction at work. It also facilitates responsibility discharging.
Environment
- Environment has its own behavior which influences the people’s behavior at work.
Government policies, religious beliefs, family & economic conditions, national
philosophies and employee’s psychology and other factors inside and outside the
organization have a mutual influence on each other’s behavior.
- The environment influences the personality of people, working conditions, the use of
authority, relationships & perceptual framework of which have a paramount impact on
employee’s behavior.

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 Cheek your progress.
State the factors that shape organizations Behavior?

1.3 Scope of Organizational Behavior

In many situations it may be permissible to use the term organizational behavior and
Management interchangeably. A good case may be made for doing so since both involve the
study of organization. But it is important that we distinguish between the two. It is sometimes
convenient to divide the term management into two areas: the behavior side and the managerial
process side. The behavioral side concerns why people behave the way they do in organization;
the process side, which has its origins in the classical “principle of management”, concern the
managerial process of planning, organizing, controlling etc. While it is convenient to make this
arbitrary division, it must be understood that organizational behavior is affected by management
process.
Generally speaking, organizational behavior is relevant for all types of organizations, although
much of research in the area has been conducted in business and government organizations.

 Cheek your progress.


Is OB important in all types of organizations? How it can be?

1.4 Disciplines that Contributed to Organizational Behavior


Various disciplines have contributed towards the development of organizational behavior. The
important among them include the following:
1. Psychology: - Psychology is a science of behavior. It relates to individual and inter-
personal relations. The matters involved in psychology are motivation. Personality,
progress, opinion, education etc. By studying all these things, employee behavior can be
detected
2. Sociology: - Sociology is the study of group behavior. It studies the behavior of people
towards the co-workers. Sociology contributes the development of communication.
Group formation, formal and informal organization, organizational culture, etc

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3. Social Psychology: - Social psychology is associated with sociology and psychology. It
studies mutual effectiveness of persons. One element of social psychology is most
important, that is change Organizational behavior changes, to reduce reaction of the
employees, and to implement the changes successfully.
4. Anthropology: - It studies a person and its activities. It also studies cultures which
influence the individual behavior. The subject of Anthropology states how people acquire
knowledge, values in life. And how the society is influenced by traditions and beliefs.
Every organization has its culture which puts large influence on its member for the study
of organizational culture value. Ideals, etc. the principles of anthropology have provide
more useful.
Organizational behavior is not a discipline in the usual sense of the term, but rather an electric
field of study that integrates the behavioral science (psychology, sociology, anthropology, etc.)
in to the study of human behavior within organizations. Although those who research
organizational behavior often come from business schools, they may have their roots in diverse
areas such as political science, cultural anthropology or social psychology.
Although organizational behavior uses the relative exact tools of mathematics & statistics in its
research methods, it is far from an exact science itself. Because it is such a young field of
inquiry, at least in terms of the use of scientific techniques, comparatively little progress has
been made in providing specific answers to specific organizational problems. This can be quite
frustrating for the teacher and students of organizational behavior. Mangers feels a need for
precise answer as they face important day to day problems; teachers, on the other, knowing that
organizational behavior is a ‘soft’ area, are reluctant (or should be) to be too precise in teaching
“how-to-do- it” methods. The net result is a feeling of irritation by the student and a feeling of in
adequacy by the teacher (I wish I had something more concrete to give them). But to learn that
human behavior in organizations is not an exact science is a significant realization.
Application Areas of Organizational Behavior
Generally speaking, organizational behavior is relevant for all types of organizations, although
much of research in the area has been conducted in business and government organizations.

 Check your progress.


State as to how different fields contributed to OB.

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Review Questions
1. Define organizational behavior
2. Explain the relationship exists between people’s behavior and productivity.
3. Elaborate how technology affects human behavior at work
4. Why is group performance more effective than individual performance?
5. Discuss the scope of organizational behavior.
6. Identify and the field of studies that contribute to OB. And explain how they contribute to
the field.
7. If you were a manager in today’s organization what would be your major challenges and
how would you overcome them.

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CHAPTER TWO
UNDERSTANDING AND MANAGING BEHAVIOR
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Learning objectives
 After reading this chapter, the student should be able to:
 Understand foundations of individual behaviors
 Know what group behavior is and types of group behavior
 Understand why people join groups
 Familiar with determinant factors for group performance and satisfaction.
_________________________________________________________________
2.1 THE INDIVIDUAL BEHAVIOR
The outcome of an organization depends partly (partially) on how its individual members
behave; thus it is important to study individual behavior. When an organization acquires its
individual employees, they enter into a psychological contact, meaning that the employees and
the organization each expect to contribute to and receive benefit from employment relationship.
Employers expect that employees will contribute effort; locality, time and employee may expect
that the organization will provide rewards such as pay status and career opportunities. If both
parties value each other’s contribution we say both parties to this contract are satisfied and we
say there is a good person job fit.
Foundation of Individual Difference
Our behavior is somewhat shaped by our personalities and the learning experiences we have
encountered. In this topic we look at four individual level variables biographical characteristics,
ability, personality and learning and consider their effect on employee performance and
satisfaction.
1. Biographical characteristics: are personal characteristics such as age, gender and
marital status that are objectively and easily obtained from personal record. The
relationship between age and job performance is likely to be an issue of increasing
importance –why?
I. AGE
- Age has an impact on organizational performance on the following manners:
A. Work Quality
- Old people provide work quality because of their experience, strong work ethic &
commitment. But they are inflexible (do not fit to change).

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- Young employees are not experienced & are poorly committed. But they are adaptive.
B. Turnover
- Few turnover of old employees but high turnover of young employees
C. Absenteeism
- Old employees display lower avoidable absenteeism (absenteeism that can be emanating
from drinking, get bored, etc.,) but higher unavoidable absenteeism (absenteeism that
may emanate from poor health).
- Young employees show higher avoidable absenteeism while they are almost free of the
unavoidable ones.
D. Productivity
- Elders are less productive in technical jobs but they are more productive in professional
jobs & vice versa for youngsters.
E. Satisfaction
- It continually increases among professionals but it continually declines among
nonprofessionals.
II. GENDER
There are few important differences between women & men that will affect their job
performance.
- Women are more sociable than men
- Absenteeism is more likely in women than men.
- Men are more productive in physical jobs.
III. MARITAL STATUS
- Research shows that married employees have fewer absences, less turnover & more
satisfied with their job than unmarried.
- Marriage imposes increased responsibilities.
- But being divorced & widowed have an impact on employee satisfaction & performance.
IV. ABILITY
Ability refers to an individual’s capacity to perform the various tasks in a job.
A. Intellectual Abilities
- Intellectual abilities play a role in complex jobs that demand information- processing
requirements.

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- As tests used for selection, promotion, training, etc.

Table 2.1 Dimensions of intellectual abilities


Dimension Description Job Example
 Number aptitude Ability to do speedy and accurate Accountant: computing the
arithmetic computation. sales tax on a set of items.
 Inductive reasoning Ability to identify a logical sequence Market researcher: Fore-
in a problem & then solve the problem casting demand for the product
in next time.
 Deductive Ability to use logic and assess the Supervisor: choosing between
reasoning implications of an argument. two different suggestions given
by employees.
 Memory Ability to retain and recall past Sales person: Remembering
experiences. the names of customers.

B. Physical Abilities
- Physical abilities are important to successfully doing less skilled & more standardized
jobs.
- Physical abilities to fit job:
- Dynamic strength (exert muscular strength)
- Trunk strength (exert muscular strength)
- Static strength (Resisting external force)
- Explosive strength (explosive act)
- Dynamic flexibility (ordering body to desired direction)
- Body coordination (coordinating different body parts)
- Balance (maintaining equilibrium)
- Stamina (prolonging maximum effort extorted)
V. ATTITUDES
Attitudes are evaluative statements or judgments concerning objects, people, or events.
Attitudes are less stable. (For example, attitudes can be changed by advertisements)
Types of Attitudes

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A person can have thousands of attitudes, but OB focuses on only job related attitudes. They are:
job satisfaction, job involvement, and organizational commitment.
A. Job satisfaction. It refers to an individual’s general attitude toward his/her job. A person with
a high level of job satisfaction holds positive attitudes towards the job, while a person who is
dissatisfied with his/her job holds negative attitudes about the job.
Satisfaction and productivity: - Researches show that happy workers are not necessarily
productive workers. Rather it may be true that happy organizations are productive.
Satisfaction and absenteeism: - Absenteeism rates are lowers in satisfied employees, but
not always.
Satisfaction & turnover: - Level of satisfaction is less important in predicting turnover
in superior performers. Because high performers get pay raises, recognition, promotional
opportunities so they are more likely to remain in the organization. But poor performers will
not get pay raises, recognition, promotion so they are more likely to leave.
How employees express dissatisfaction
Employee dissatisfaction can be expressed in a number of ways. Four types of responses are
Construction

presented below:
LOYALTY
VOICE
Active

Positive
NEGLECT
Destructive
EXIT

 Exit Behavior directed toward leaving the organization.


 Voice Actively and constructively attempting to improve conditions.
Example: - Suggesting improvements
- Discussing problems with superiors
- Some form of union activity
 Loyalty passively but optimistically waiting for conditions to be improved
Examples: - External criticism

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- Trusting the mgt to do the right thing
 Neglect Passively allowing conditions to worsen.
Examples: – chronic absenteeism
- Reduced effort
- Increased error rate
Job Involvement it is the degree to which a person identifies epically, with his/her job, actively
participates in it, and considers his/her performance important to self-growth
- Employees with high level of job involvement strongly identify with and care about the
work they do.
- High level of job involvement is meant fewer absences & lower resignation rates.
Organizational commitment It is the degree to which an employee identifies with a hearing
organization and its goals and wishes to maintain membership in the organization
- High level of organizational commitment is meant lower absenteeism & turnover.

VI. PERSONALITY
Sum total of ways in which an individual react and interact with others. This is most often
described in terms of measurable personality traits that a person exhibits. It gives us a framework
for predicting behavior.
Major personality attributes influencing OB is Locus of control
Locus of control: some people believe that they are master of their own fate. Other people see
themselves as pawns of fate, believing that what happens to them in their lives is due to luck or
chance. The first type, those who believe that they control their destinies, have been; labeled as
internals, whereas the latter, which see their lines as being controlled by outside forces, have
been called externals. Highly externality are expressed as less satisfied in their job, have high
absenteeism rate and more alienated from work settings.
VII. LEARNING
Relatively permanent change in behavior that occur as a result of experience.
VIII. PERCEPTION
Perception can be defined as a process by which individuals organize and interpret their sensory
impression in order to give meaning to their environment. However, shat one perceives can be
substantially different from objective reality. For example it is possible that all employee in a

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firm may view it as a greater place to work –like work condition, job assignment, good pay etc.
but as most of us know, it is very unusual to find such agreement.

2.2. GROUP BEHAVIOR


Definition of Groups
Groups perform significant amount of work in organizations. Thus to understand group’s
behavior and to manage employee activities, we need to manage groups of employees. Different
scholars defined groups differently .For our purpose we consider the following definition .A
group is an association of two or more persons who have joined together at work in order to
accomplish some common goals who thereby experience a process of interdependence,
interaction and mutual influence that result in group behavior.

Types of Group
A group is defined as two or more individuals, interacting and interdependent, who have come
together to achieve particular objective. Groups can be either formal or informal.
By formal group means those defined by the organization structure with designated work
assignment establishing tasks. In formal groups, the behavior that one should engage in are
stipulated by and directed toward organizational goals.
Informal group: - are alliances that are neither formally structured nor organizationally
determined. These groups are natural formation in the work environment that appears in response
to the need for social contract.
It is possible to sub classify groups as command, task, interest or friendship groups. Command
and task groups are dictated by the formal organization whereas interest and friendship groups
are informal alliance
 Command group –a manger and his/her immediate subordinate or subordinates who report
directly to a given manager
 Task group – those working together to complete a job.
 Interest group – people who may or may not be aligned in to either task or command group
may affiliate to attain a specific objective with which each is concerned. E.g. Employees who
band together to support a peer who has been fired or to seek increased fringe benefit.

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 Friendship group – groups formed because members have one or more common
characteristics. E.g. Persons holding the same political view or persons having attending the
same college.
 Cheek your progress.
- Define group
- Does group work bring synersetic effect? How so?

Why do people join group?


The most popular reason for joining a group is related to our needs for security status, self –
esteem, affiliation, power and goal achievement.
 Security: - By joining a group, we can reduce the insecurity of “standing alone” we feel
stronger, have fewer self –doubts, and are more resistance to threats. New employees are
particularly vulnerable to sense of isolation and turn the group for guidance and support.
 Status: Person’s legal, social or professional position in relation to others recognition
 Self-esteem: to feel much more important.
 Affiliation: - I am independently wealthy, but I wouldn’t give up my job, why? Because I
really like the people I work with. People enjoy the regular interaction that comes with group
membership.
 Power: - For people with a high power need, group can be a vehicle for fulfillment. As a
group leader, you may be able to make request of group members and obtain compliance
without any of the responsibilities.
 Goal achievement: If groups were created to achieve a goal that would be considerably more
difficult if pursued by a single individual.

 Check your progress.


Why do people join a group?

Determinants of Group performance and Satisfaction


Work group are part of a large organization and that factors such as the organizations strategy,
authority structure, selection procedure and reward system can provide a favorable or
unfavorable climate for the group to operate within. For example, if an organization is

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characterized by distrust between management and workers, it is more likely that work group in
that organization will develop norms to restrict efforts and output than will workgroup in an
organization where trust is high. High congruence between a boss and employee shows a
significant association with high employee satisfaction.

 Check your progress.


How does organizational climate affects human behaviour?

Review Question
1. Identify and explain the basic foundations individual differences
2. Why is perception important in the study of organizational behavior
3. Explain factors that affect perception.
4. Define group
5. Differentiate between formal and informal groups
6. Why do people form a group
7. Is informal group destructive so that managers should move against it? Why? Why not?
8. How can you form an effect form an effective group?

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CHAPTER THREE
MOTIVATION
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Learning objectives
After reading this chapter, the student should be able to:
 Define Motivation.
 Know importance of motivation.
 Familiar with theories or motivation.
 Apply motivation theories into practical cases.
_____________________________________________________________________
Definition
Motivation is the willingness to exert high level of effort toward organizational goal, conditioned
by the efforts ability to satisfy some individual need. While general motivation is concerned with
effort toward any goal, we will narrow the focus toward organizational goal in order to reflect
our singular interest in work related behavior. The three key elements in our definitions are
effort, organizational & need.

When someone is motivated he/she tries to work hard. But high level of effort is unlikely to lead
to favorable job performance outcome unless the effort is channeled in a direction that benefits
the organization.

3.1 Importance of Motivation


Why do motivated employees make an organization more effective? First, a motivated employee
is always looking for better ways to do a job. This statement applies to top managers & to
production workers. Second, a motivated employee generally is a quality-oriented. Third, highly
motivated workers are more productive than apathetic workers.
Intrinsic and Extrinsic Motivation
There are many reasons why people work. If we accept the notion that people work for broadly
defined “rewards” we can break these rewards in to two very general classes. Extrinsic Reward
(e.g. pay, promotion, compliments, etc) are independent of the task performed and are controlled
by other people. Intrinsic Reward (e.g. a feeling of accomplishment of a task that was interesting
and challenging is an integral part of the task and is administered by the individual doing the
task. Extrinsic motivation therefore results from anticipation (expectation) of extrinsic reward,
and intrinsic motivation result from potential intrinsic reward.

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 Check your progress.
- Why do motivated employees make an organization more effection?
- What are the sources of intriscic and extrinsic lewards?

3.2 Theories of Motivation


I. THE CONTENT THERORIES OF WORK MOTIVATION
The basic idea of content theories is that people have certain fundamental needs (both
physiological and psychological) and that they are motivated to engage in activities that would
satisfy these needs. Thus the nature of needs establishes the nature of behavior that result in a
specific behavior.
These theories are discussed below.
1. Maslow’s Hierarchy of Needs Theory
Maslow postulated five need levels. These needs are arranged in order of importance and
priority.
- When one need is satisfied, the next need will appear.
- Only unsatisfied need act as a motivator
- A person can’t jump one of the hierarchies,
Self –Actual-
Esteem lzation Needs
Social
Security Needs
Physiological Needs
Needs
Needs

A. Physiological Needs: They are food, water, clothing, shelter, sleep, etc. These needs can
be satisfied by salary and payment.
B. Security /Safety needs- They are a needs of being secured from physical fear and danger
– fear and danger of loss of job, life or climb, violence. These needs can be satisfied by
tools such as job security, insurance, safety working environment.
C. Social Needs: Once body and security needs are guaranteed, social needs will arise.
These needs include the need for love, friendship, social interaction, belongingness in a
group. We look for an environment where we are understood, respected and wanted

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D. Esteem Needs: These are needs for power, status prestige, self- respect, and self-worth.
Self- respect is internal while respect from others is external recognition. This internal-
external respect would result in self-confidence, independence, status, reputation and
prestige. People then would begin to feel that they are useful and have some positive
effect on their surroundings.
E. Self-actualization Need: This is the highest need in the hierarchy. This refers to the desire
to become what one is capable of becoming.
- This need is activated while all other needs have been fulfilled.
- At this stage a person seeks challenging work assignments that allow for creativity and
opportunity for personal growth and advancement.

Lessons from Maslow’s Theory


Managers should try to satisfy higher level needs of their subordinates once lower level
needs are reasonably satisfied.
Managers must be sensitive to changing needs Subordinates so as to create conductive
environment for the satisfaction of their needs.
2. Herzberg’s Two – Factor Theory
Herzberg has modified maslow’s theory and called two factor theory. The two factors are:
Hygiene’s- salary, working condition, security company policy, and interpersonal relationship,
personal life belongs to this group.
- These factors don’t satisfy, rather keep the stats? Not to dissatisfy – because the absence
of these factors leads to dissatisfaction.
Motivators Achievement, recognition, challenging work, advancement, responsibility belong to
this group
- These factors will satisfy if they are available.

3. ERG Theory
Alderfer has refined maslow’s needs into three. These three needs are:
A. Existence Needs (E) . These needs include the need for sustenance, shelter, and physical
and physiological safety.

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B. Relatedness Needs (R). These needs roughly correspond to social and esteem needs. They
are satisfied by personal relationships and social interaction with others. [fulfilled by
open communication with peers]
C. Growth Needs (G). These are needs to develop and grow to the full potential that a
person is capable of reaching. They are fulfilled by strong personal involvement in the
orgn’al environment.
The rough similarity between ERG and Maslow’s theory is shown below.

Self-actualization Growth
Esteem –(upper level)
Esteem – (lower level) Relatedness
Social
Safety Existence
Physiological

Lessons from ERG Theory


- Needs are in a flexible hierarchical order – unlike maslow
- People may be motivated by more than one need at a time
- Maslow believes a person will satisfy lower level needs before he moves up to the next
level. But ERG theory suggests that if a person is frustrated in satisfying his needs at a
given level, he will move back to the lower.

Example: A manager’s existence needs are reasonably satisfied and he looks


for more challenging tasks to satisfy his esteem needs. If his efforts are
frustrated, he will move back to existence needs and may seek more material
benefits.

4. Mclelland’s Theory of Needs


According to him, the most prominent needs are achievement, affiliation and power.
Individuals with a strong need for achievement need and perform well in challenging
tasks which require creativity, ingenuity and hard work. They have strong desire for

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improvement. They excite from solving complex problems than financial incentives and
praise.
The need for affiliation is related to social needs and reflects the desire for friendly and
warm relationship with others. An individual with a high affiliation needs tends to engage
in jobs such as teaching, nursing, being social worker, etc.
The need for power is the desire to affect and control the behavior of other people and to
manipulate the surroundings. If power motivation is positively applied, it results in
successful democratic leadership. If it is negatively applied, it results in creating arrogant
autocratic leadership. Executives, political leaders and military officers are examples of
positions for higher power drives.

 Check your progress.


- What are the basic thame of content theories in general.
- List out the basic lessons of the above theories.

II. THE PROCESS THEORIES OF WORK MOTIVATION


While “need theories” of motivation focuses upon “what,” people, the process theories” focus
upon “how” motivation occurs.
These theories are discussed below:
1. Vroom’s Expectancy Model
According to this model, motivation is determined by the value of the reward people to receive
as a result of their job performance.
People are highly motivated if they believe that a certain type of behavior will lead to a certain
type of outcome and if such outcome is their type of outcome and if such outcome is their
preference.
This model is described by three elements:
A. Expectancy. This is a person’s perception that a certain behavior/ action will
result in a certain outcome.
B. Instrumentality. This is a person’s belief and expectation that a certain outcome
(obtained from action) will lead to a desired reward.

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C. Valence. It is the value a person assigns to his desired reward. He may not be
willing to work hard to improve his performance if the reward for such improved
performance is not what he desires (values).
To summaries, according to this model of motivation, the person’s level of effort (motivation)
depends upon:
Expectance The worker must be confident that his efforts will result in better productivity and
that he has the ability and resources to perform the task well.
Instrumentality The worker must be confident that such high performance will be instrumental
in getting the desired rewards.
Valence. The worker must value these rewards as desired and satisfactory.
2. Equity Theory
According to equity theory employees are not only concerned with the rewards they receive for
their efforts, but are also concerned with the relationship of their rewards with others rewards
given for similar outcome. i.e. They evaluate equity their input : out come ratio with others input
: outcome ratio.
The inputs could be: education, experience, skill; and the outcome could be salary level,
recognition, pay raise, promotion, etc.
The result of equity evaluation of employees could be:
 All are equally treated Input = outcome
 The person is equally treated but others are over treated [Input maintain existing effort =
outcome ] [Input< outcome] work mare
 The person is under treated but others are equally treated. [Input > outcome reduce effort]
input = outcome]
If the individual perceives inequity he will take corrective action:
 Reduction in effort
 Leaving the organization
 Working hard
3) Goal Setting Theory
Motivation depends on goals stetted by the individual for himself.
- The quality of performance is shaped by how difficult and how specifically defined the
goals is.

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Goal specificity Performance satisfaction
Goal difficulty

 Goal Specificity. A specific goal identifies the target in quantitative terms. This would
enable the worker to worker to evaluate his performance and judge as to how he is doing
relative to the goal. For example, if a worker is producing 50 units a day, which is the
average output, then he may set his goal of 60 units per day, to be achieved within 10
days. The worker can evaluate his output each day and decide whether he is adequately
moving towards that goal.
 Goal Difficulty. Difficult but feasible goals provide more challenge than easy goals.
Reaching an easy target is not competitive and hence hardly exciting. This is particularly
true for high need achievers. Goal commitment is independent of whether the goal is set
by the worker himself or is assigned by superiors, but depends upon expectations of
success and degree of success achieved. Commitment would also depend upon provisions
of rewards for goal achievement
The most important element of goal setting theory is the acceptance of goal by the workers. Of
course, the best way to have the goal accepted by workers is to let them set their own goals
within the general organizational frame work. Assigned goals are equally acceptable if these
goals are consistent with personal aspirations of workers. Acceptance becomes easier if the
workers are encouraged to participate in the goal setting process. Goal acceptance can also be
facilitated if the management demonstrates a supportive attitude towards subordinates regarding
goal achievement.

 Cheek your progress.


Identify the basic theme of process theories of motivation.
List down the basic lessons managers should grasp from each theory

Review Questions
1. Define Motivation using your own words
2. Why do motivated employees make an organization more effective?
3. Differentiate between intrinsic and extrinsic motivation.

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4. What are the main lessons extracted from Maslow’s need theory?
5. What do managers learn from Herzberg’s two factor theory?
6. An individual with a high affiliation needs tends to engage in jobs such as
teaching, nursing, being social workers. Justify this argument of McClelland
using a practical example.
7. How do Expectancy, Instrumentality and valence influence employees.
8. Explain Equity adjustment techniques in equity theory.
9. Why do goal seating influences work behavior of employees?
10. What can the management do to satisfy the various level needs of workers as
shown in Maslow’s model?

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CHAPTER FOUR
LEADERSHIP
__________________________________________________________________
Learning objectives
 After reading this chapter, the student should be able to:
 Define Leadership
 Differentiate between leading and managing.
 Identify leadership styles.
 Grasp basic concepts from leadership theories
 Criticize leadership styles.
_____________________________________________________________________

4.1. Meaning of Leadership


There are disagreements in the definition of leadership by many, and this stems from the fact that
it involves a complex interaction among the leader, the followers and situations. However, in our
subject matter we will define leadership as follows:
Leadership: - is the ability to influence a group toward the achievement of goals. The source of
this influence may be formal such as that provided by the possession of managerial rank in an
organization. A person may assume a leadership role simple because of the position he or she
holds in the organization. But not all leaders are mangers; nor, for that matter are all mangers
leaders. Just because an organization provides its managers with certain formal rights is no
assurance that they will be able to lead effectively.

 Check your progress.


Define leadership.

4.2. Leading versus Managing


It is important to make a distinction between the terms “manager” and “leader”. Broadly
speaking, managers are one who performs the function of management (planning, organization,
directing and controlling) and occupies a formal position in an organization, and leaders deal
with the interpersonal aspect of a manager’s job i.e. ability to influence others to pursue certain
goals. Leaders inspire others & provide emotional support.

22
Is the sales manager both a leader and a manger? Not necessarily. The sales manager is certainly
a manager because of the formal position he or she occupies. Whether the sales manager is also a
leader depend on the sales manger’s ability to inspire sales people to pursue organizational goal.
Differentiate
 Check your progress.
Differentiate between a leader and a manager.
4.3. Leadership Style
The behavior the leader exhibits during supervision of subordinates is known as leadership style.
There are probably as many different styles of leadership as there are leaders. However, three
types are generally recognized; autocratic, democratic (participative), and “abdicate” (laissez-
faire)
The Autocratic Style:- The autocrat believes that decision making authority must be retained by
the leader. Leaders give order and subordinates are expected to follow them. Assuming the
leader is competent; the advantage of this type of leadership style is that tasks are efficiently
complete, since there is no opportunity for the time consuming two-way communication
associated with more democratic styles.
The primary problem with the autocratic leadership style is that workers are made aware of what
to do, but not why. This leads to
1. Low employee morale.
2. Workers following leader direction to the letter while knowing the direction are wrong.
Later, when blame is attached for errors, subordinate workers will take no responsibility since
they were merely “following order”. Thus this style satisfies leader’s need, but induce employees
to avoid responsibility, initiative, and innovative productivity. Obviously, individuals who prefer
a safe, secure situation in which they are not required to assume any responsibility will find the
autocratic style quite satisfying.
The Democratic Style:- In contrast to the autocrat, the democratic leader delegates authority to
subordinate employees, allowing them discretion to make certain decisions based on their
interest, competence in dealing with the situation they face.
Advantages of this style:-
1. The employees’ feelings of self –worth and satisfaction are increased because the leader
conveys a sense of confidence in employee judgment.

23
2. Participation allows employees to satisfy high-level needs such as esteem and self-
actualization by letting them take part in important decisions.
3. Employee participation in decision making improves the quality of decisions, because
when more people think about a problem it is likely that a better solution will be found.
4. There will be less resistance to change because those who have developed the solution
will usually support its implementation.
Disadvantage
- They employee may not have interest in participation. They may simply want to
do their job and be let alone.
- Leaders may lack the flexibility to behave in a consultative fashion.
- Employee may see “participation” as “Manipulation”.
The “Abdicate” Style:- the abdicate leader chooses not to adopt a leadership role and actually
abdicates the leadership position, generally relinquishing (resigning) it to someone else in the
workgroup. The specific reasons may be lack of self-confidence, fear of failure, or the perceived
social cost by the work group. We can immediately question why a leader who feels this way is
occupying this type of role. On the positive side, a leader may /adopt an abdicate style because
he/she feels that subordinates will perform better if they are given a great deal of discretion.

 Cheek your progress.


Explain the various leadership styles & state the situations these styles could be used.

4.4. Theories of Leadership


4.4.1 "Great Man" Theories
Have you ever heard someone described as "born to lead?" According to this point of view, great
leaders are simply born with the necessary internal characteristics such as charisma, confidence,
intelligence, and social skills that make them natural-born leaders. Ex Alexander the great, Jesus
Christ, Julius Caesar, Winston Churchill and others. But there are a lot of criticisms on this
theory.
Great man theories assume that the capacity for leadership is inherent—that great leaders are
born, not made. These theories often portray great leaders as heroic, mythic, and destined to rise

24
to leadership when needed. The term "Great Man" was used because, at the time, leadership was
thought of primarily as a male quality, especially in terms of military leadership.
Such theories suggest that people cannot really learn how to become strong leaders. It's either
something you are born with or born without. It is very much a nature (as opposed to nurture)
approach to explaining leadership.
4.4.2 Trait Theories
Similar in some ways to Great Man theories, trait theories assume that people inherit certain
qualities and traits that make them better suited to leadership. Trait theories often identify a
particular personality or behavioral characteristics shared by leaders. For example, traits like
extroversion, self-confidence, and courage are all traits that could potentially be linked to great
leaders.
If particular traits are key features of leadership, then how do we explain people who possess
those qualities but are not leaders? This question is one of the difficulties in using trait theories to
explain leadership.
There are plenty of people who possess the personality traits associated with leadership, yet
many of these people never seek out positions of leadership. There are also people who lack
some of the key traits often associated with effective leadership yet still excels at leading groups.
4.4.3 Contingency Theories
Contingency theories of leadership focus on particular variables related to the environment that
might determine which particular style of leadership is best suited for the situation. According to
this theory, no leadership style is best in all situations.
Leadership researchers White and Hodgson suggest that truly effective leadership is not just
about the qualities of the leader, it is about striking the right balance between behaviors, needs,
and context.
Good leaders are able to assess the needs of their followers, take stock of the situation, and then
adjust their behaviors accordingly. Success depends on a number of variables including the
leadership style, qualities of the followers, and aspects of the situation.
4.4.4 Situational Theories
Situational theories propose that leaders choose the best course of action based upon situational
variables. Different styles of leadership may be more appropriate for certain types of decision-
making.

25
For example, in a situation where the leader is the most knowledgeable and experienced member
of a group, an authoritarian style might be most appropriate. In other instances where group
members are skilled experts, a democratic style would be more effective.
4.4.5 Behavioral Theories
Behavioral theories of leadership are based upon the belief that great leaders are made, not born.
Consider it the flip-side of the Great Man theories. Rooted in behaviorism, this leadership theory
focuses on the actions of leaders, not on mental qualities or internal states. According to this
theory, people can learn to become leaders through teaching and observation.
4.4.6 Participative Theories
Participative leadership theories suggest that the ideal leadership style is one that takes the input
of others into account. These leaders encourage participation and contributions from group
members and help group members feel more relevant and committed to the decision-making
process. In participative theories, however, the leader retains (holds) the right to allow the input
of others.
4.4.7 Management Theories
Management theories, also known as transactional theories, focus on the role of supervision,
organization, and group performance. These theories base leadership on a system of rewards and
punishments. Managerial theories are often used in business; when employees are successful,
they are rewarded and when they fail, they are reprimanded or punished.
4.4.8 Relationship Theories
Relationship theories, also known as transformational theories, focus upon the connections
formed between leaders and followers. Transformational leaders motivate and inspire people by
helping group members see the importance and higher good of the task.
These leaders are focused on the performance of group members, but also want every person to
fulfill their potential. Leaders with this style often have high ethical and moral standards.

 Check your progress.


- Identify the emphasis areas of both transactional and charismatic leaderships.
- Explain the Likert’s four basic styles managing organizations.
-

26
Review Question
1. Define leadership using your own words.
2. Identify the traits that differentiate leaders from managers.
3. What are the consequences of autocratic leadership and how can you overcome them?
4. Is it good to be democratic leader always? Why or Why not?
5. Criticize great man theory of leadership
6. Summarize the Ohio Michigan States studies using your own words
7. According to filer, the performance of a leader depends upon two interrelated factors.
Explain in detail.
8. Give at least five individuals who could be charismatic leaders and give reasons for why
you named them as charismatic leaders.
9. Describe and explain some of the personal characteristic of successful leaders. Which of
these characteristics are most important and why?

27
CHAPTER FIVE
MANAGING CONFLICTS
__________________________________________________________________
Learning objectives
After reading this chapter, the student should be able to:
 State the meaning of conflict
 Familiar with types of conflicts.
 Identify source of conflicts.
 Understudied sources of conflicts.
 Techniques of conflict management.
_____________________________________________________________________
Meaning of conflict
Conflict is a process in which one party perceives that its interests are being opposed or negative
affected by another party. The word “perceives” reminds us that sources of conflict and issues
can be real or imagined. Or
Conflict is a process that beings when one party perceives that another party has negatively
affected or is about to negatively affect, 5th that the first party cares about.
TYPES OF CONFLICTS
Conflict

Individual Conflict Group Level Conflict

Inter Intra
individual individual Inter Intra
conflict Conflict Group Group
Conflict Conflict

I. INDIVIDUAL LEVEL CONFLICT


(a) Intra Individual Conflict (Intra Personal conflict) is internal to the person and is
probably the most difficult type of conflict to analyze. To begin with, all of us have
needs. These needs form the basis for our behavior at work, at home, and in every
activity we pursue. Everything we do is directed at satisfying some need. Humans are, to
put it in simple terms, goal directed. Need satisfaction spurs people on; non-satisfaction
of needs frustrates people and leads to behavior that negatively affects job performance.

28
Organizations are basically formed for the purpose of meeting humanistic and economic
needs of individuals. However, the nature of formal organization is such that it tends to
create innumerable problems for individuals working therein. The goals of organizational
life are in direct conflict with the individual’s goals of workers causing them to be
frustrated, alienated and threatened.
Thus, he faces a conflict within himself. He is confronted with many puzzling questions:
Whether to hang on to the present job in spite of its in built disincentives? Whether to tolerate the
inhuman treatment meted out daily by the Boss? Whether to manipulate the figures to curry
favor with the boss and prospect? To-do or not to-do? Basically intrapersonal conflict can be
related to two things: conflict arising due to divergent goals, or conflict arising from out of
multiple roles to be played daily.
1. Goal conflict.
Goal conflict occurs when a goal that an individual is attempting to achieve goals which have
both positive and negative features; or when two or more competing goals exist. Generally three
separate types of goal conflicts are identified.
(i) Approach-approach conflict. A person wants two positive situations but can have
only one. The person might be torn (uncertain) between jobs (mutually exclusive
goals).
(ii) Approach-avoidance conflict. In this form of goal conflict the person attempts to
achieve a goal that has both positive and negative aspects. For example, a teacher
may be offered an excellent job in a harsh location.
(iii) A voidance-avoidance conflict. This type of conflict can be easily resolved because a
person faced with two negative goals may not choose either of them and may simply
leave the situation. This type of conflict may also exist when the person does not have
the opportunity to leave. For example, a worker may dislike his present job, but the
alternative of leaving and looking of another job may be even less attractive.
2. Role
A role is a set of expectations people have about the behavior of a person in a position. An
individual occupies many different positions in a variety of organizations and performs multiple
roles. Professors may be teachers, researchers, consultants, wives or husbands, community
leaders. In organizations such roles are formally prescribed and others are created by the

29
informal activities of the organization members. When we examine the concept of role three
types of roles clearly emerge: the expected role, the perceived role and the actual role. The
expected role is what other people expect from an individual. For example a college teacher is
expected by his role partners (Principal, colleagues, Students) to behave in a specific way. The
perceived role is how the individual thinks he or she should behave to fulfill the expected role.
The enacted role is the way the person actually behaves in an organization. Thus in the complex
theatre of modern life, most people play not to one audience but to several, and they play
multiple roles simultaneously.
3. Role ambiguity
Role ambiguity occurs when an individual is unclear regarding duties and responsibilities. As a
result, the individual experiences difficulty in enacting the role. For example, let us see a college
counselor. If he spends much time in meeting with the faculty, he is being dictated to by them. if
he spends much time with the faculty. If he spends much time with the faculty, he is being
dictated to by them. if he is off campus, he should be back minding the store. If he changes his
mind on an issue he is wishy-washy. If he does not, he is pig-headed. Ambiguity provides
enough scope for variations in work or role performance by individuals; thereby increasing
opportunities for conflict. When employees experience role ambiguity, job performance is
adversely affected because literally they do not know what they are expected to do.

4. Role conflict
Role conflict is the result of divergent role expectations. It exists when the expectations of a job
are mutually different or opposite and the individual cannot meet one expectation without
rejecting the other. For example, being both a boss and a subordinate. As a part of the
management team he should have the corresponding values and attitudes. As a member from the
workers’ group he should have their values and attitudes. He is expected to wear both the hats
gracefully. Role conflict arises because when roles are so conflicting. Supervisors do not know
which set of expectations they should follow. Other role conflicts are discussed below.
(i) Person-role conflict. This conflict arises when the expected behavior is incompatible with
a person’s own basic values and attitudes. For example, a spiritual man engages in usury
(money lending).

30
(ii) Inter-role conflict. This type of conflict is the result of facing multiple roles. It occurs
because individuals simultaneously perform many roles, and they conflict with each
other. Many professors who try to evaluate the performance of students (judge role) may
find it uncomfortable to fulfill the demands of other roles like the role of trainer,
developer or teacher.
(iii) Intrasender role conflict this occurs when an individuals is expected to perform a task
within specified limits but it is not possible to behave in a manner consistent with role
assignment. For example, if the librarian is asked to purchase rate, precious books from
approved books sellers and the books are not found there but are found in roadside
bookshops-intra sender conflict may develop.
(iv) Intersender role conflict. If a building contractor asks a carpenter to do something that is
different from the instructions of the architect or his union’s work rules that is called
intersender role conflict.
5. Results of role conflict. An individual confronted with role conflict will
experience psychological stress leading to emotional problems. The likely end result will
be a decline in performance. “Research shows that where there is wide variance in a
manager’s role perception of his job and the employees’ role expectations of that job there
tend to be poor motivation and inefficiency. Role conflict is inversely related to job
satisfaction and directly related to job tension and anxiety. Role conflicts can have a
markedly adverse impact on satisfaction and even on mental or physical health. Sometimes
for the focal person, the emotional costs of role conflict include low job satisfaction, low
confidence in the organization and high scores on the multi-item index of tension.
6. Role conflict resolution. Organizations using participative management tend
to minimize role conflict. Persuasion and group pressures can be exercised to bring
subordinates’ goals closer to organizational goals. Role conflict cannot be completely
planned away. The management’s approach towards resolving role conflicts should be
matching situations and approaches.
 Check your progress.
Identify all intra – individual conflicts. Suggest methods that managers shouold use to reduce the
degree of occurance of these conflicts.

31
(b) Interpersonal Conflict
Interpersonal conflict involves two or more individuals rather than one individual. Two boys
fighting for one cinema ticket, two men vying for one woman, two managers competing for the
some promotion, two executives maneuvering for a larger share of corporate capital-examples of
conflict between individuals are legion and quite familiar.
Reasons
1. Personality differences. Some people have difficulty in getting along with each other.
This is purely a psychological problem and it has nothing to do with their job
requirements or formal interactions.
2. Perceptions. Varied backgrounds, experiences, education and training result individuals
developing different perceptions of similar realities; the result being an increase in the
likelihood of interpersonal conflict. The belief that somebody else is out to eat away our
share of resources may create ill-feelings between us and that person. An individual who
perceives conflict is likely (between managers and subordinates) to act in a manner
conveying conflict intentions. Vertical conflicts develop usually because superiors try to
control subordinates and subordinates tend to resist. The subordinates may resist because
they believe the control infringes on their personal autonomy, “makes his behavior more
predictable to others and thus weakens his power position in the organization”.
3. Clashes of values and interests. Conflict that so commonly develops between
engineering and manufacturing personnel shows how differences in values might underlie
conflict. Members of the engineering department might place a premium on quality,
sophisticated design and durability while members of the manufacturing department
might value simplicity and low manufacturing costs. The typical reactions may erupt in
such forms.
4. Power and status differences. Interpersonal conflicts arise from unequal distribution of
power and status. As pointed out by Abraham Zalenznik” Organizations are political
structures.” They operate by distributing authority and setting a stage for the exercise of
power. Similarly status inconsistencies lead to conflict.
For example, conflict may result in when low status waitresses try to give orders to high
status cookers.

32
5. Scarce resources. Conflicts over scarce resources are exceedingly common in
organizations. Where the scarcity is severe (the resource level cannot be enhanced) it is
very difficult to manage interpersonal conflicts. For example, if three qualified
individuals compete for superior positions in the organization and there is only one such
position, interpersonal conflict may develop to an unmanageable level.
 Check your progress.
Explain the possible reasons of interpersonal conflicts using examples.

II. Individual –Group Conflict:- There are two important situations where individuals
find them-self’s in conflict with groups. The first situation is one in which an
individual is violating group norms. The reason for this conflict is that groups have a
greater ability to block in individuals goal achievement than the other way around.
The 2nd situation in which subordinates of one boss collectively disagree with a course
of action the boss wants to take. The reason is that subordinates are blocking the goal
achievement plan of the boss.
III. Inter group Conflict – this involve conflict between groups of people, irrespective of
the size of the group. Included in this category, therefore, is interdepartmental conflict
within organizations and conflict between organizations. E.g. inter group conflict are
labor management conflict, conflict between depts.
IV. Functional Vs. Dysfunctional Conflict
The distinction between functional and Dysfunctional conflict rest on whether the organization’s
interests are served.
Functional conflict:- Conflict that support the goals of the organization and improve its
performance; these are constructive form of conflict.
Dysfunctional Conflict: - Conflict that hinders organizational performance; these are destructive
forms. They are undesirable and the manger should seek their eradication.
The criterion that differentiates functional form dysfunctional conflict is group performance,
since groups exist to attain a goal or goals; it is the impact that the conflict has on the group,
rather than any individual member that determines functionally.
 Check your progress.

33
Explain i) individual-group conflict ii) Inter-group conflict
iii) Fundctional and dis fancational conflicts.

Sources of Conflict
1. Limited Resource:- The greater the scarcity of resource, the greater the potential for
conflict. In organization resource are finite and this results for organizational department to
involve them self in conflict if their request for their need is not met.
2. Interdependent Work Activities:- This is a particularly salient cause of conflict because
there is so much interdependence of work activities in organization.
3. Differentiation of Activities: - The mere existence of groups doing different functions
creates the potential for conflict. As groups doing different functions creates the potential for
conflict. As groups become familiar with how they perform their own decision job, they may
turn inward and become uninterested in 1) how their work fits in with other groups or 2) the
importance of other group’s work.
4. Communication Problem: - Communication problems develop because not all groups
have the same information. Each group therefore takes a position based on it view of the
world and the information it has. The obvious solution to this problem is to give all groups
equal information. However, this is generally not feasible because individuals with important
information may want to use it for their own advantage and not share it.
5. Difference In Perceptions:- Individuals have had different experience through their
time and this creates conflict. One of the classic differences in perception involves the value
of experience Vs the value of education.

Conflict Outcomes
The outcome of conflict can be functional and dysfunctional. The following are some of the
outcomes.
Functional outcome
1. Conflict is constructive when it improves the quality of decision, stimulates creativity
and innovation.
2. Problems are made know during conflict.

34
3. Group cohesion increase when groups are engage in a conflict their internal cohesion
increases.
4. Conflict motivates group to clarify their objectives and this increases the groups
awareness of its purpose.
5. Conflict encourages innovative solutions.
6. Not only do better and more innovative decisions results from situations where there is
some conflict, but there is evidence indicating that conflict can be positively related to
productivity.
7. Groups composed of members with different interests tend to homogenous groups.
8. Intellectual conflict also leads to productive outcome

Negative Outcomes
1. A decline in communication between the conflicting parties; when individuals/groups are
upset with each other, a common developed is that they stop speaking – This worseness
conflict
2. Hostility and aggression development:- hostility toward someone who is blocking one’s
attempt to reach a goal. Both are undesirable from the organizational point of view.
3. Over conformity to group demand:- We noted that conflict causes cohesiveness & result
in higher productivity. However this may involve blinded acceptance of the leader’s
interpretation of the opposing group & no thinking about solutions by anyone in the group.
This prolongs the conflict & makes it more intense.
 Check your progress.
List dsown potential sources of conflicts.
Explain the functional and negative outcomes of conflicts.

Conflict Management Techniques


While there are many specific techniques for managing conflict, there are only two broad
approaches.
1. Stimulate the conflict
2. Resolve it
Conflict Stimulation Techniques

35
1. Communication: using ambiguous or threatening messages to increase conflict level.
2. Bringing outsiders: Adding employees to a group whose backgrounds, values, attitudes
or managerial styles differ from those of present members.
3. Restructuring the organization: realigning workgroup, altering rules and regulations,
increasing interdependence and making structural changes to disrupt the status quo.
4. Appointing a devil’s advocacy: - Designating a critic to purposely argue against the
majority position held by the group.
Conflict Resolution Techniques
1. Integrating (Problem Solving):- is face to face meeting of the conflicting parties for the
purpose of identifying problems, generate and weigh alternative solution and select a
solution, through open discussion.
2. Expansion of Resource:- when a conflict is caused by the scarcity or resource say money,
promotion opportunities, office space expansion of resource can create a win-win situation.
3. Smoothing:- involves playing down of differences while emphasizing common interest
between the conflicting parties.
4. Forcing:- this style is often called forcing because it relies on formal authority to force
compliance. If workers are in conflict and the boss says, “you two stop arguing ; I will decide
which course of action is reasonable,” The two workers can no longer disagree about the
issue.
5. Avoiding:- This active may involve either passive withdrawal from the problem or active
suppression of the issue. It is appropriate when cost of confrontation outweigh the benefit of
resolving the conflict.
6. Compromising:- This a give and take approach involving mode rate concern for both self
and others. It is appropriate when parties have opposite goals or possess equal power.
7. Majority vote:- Reasonable argument
8. Consensus.

36
Negotiation
Negotiation is a given and take decision making process involving interdependent parties with
different preferences. Common examples include labor –management negotiating over wages,
hours, and working conditions.
Two Basic Types of Negotiation
Negotiation experts distinguish between two types of negotiation distributive and integrative.
 A distributive negotiation: - usually involves a single issue in which one
person gains at the expense of the other.
 An agreement can be found that is better for both parties that what they
would have reached through distributive negotiation. This is an integrative negotiation.
- Distributive negotiation involves traditional win –lose thinking.
Integrative negotiation calls for a progressive win- win strategy.
 Check your progress.
Why do managers deliberately stimulate conflicts?
Elaborate how conflict resolution techniques are applied.

Review Question
1. Explain conflict and state why the conflict could crate opportunity for the organization.
2. Explain strategies in conflict management & what is their relationship.
3. Explain the difference between competition and conflict. Can the competition develop
into a conflict? If so, how?
4. Is the conflict desirable in certain situations? If so, then what are such situations?
5. What are the various causes that create conflict? Explain in detail the structural causes of
conflict.
6. Some people feel that conflict is necessary for organizational activity. Explain why?

37
UNIT SIX
DECISION MAKING
__________________________________________________________________
Learning objectives
 After reading this chapter, the student should be able to:
 Understand the meaning of decision making.
 Types of decision makings.
 Acquaint with decision making models.
 Know the pros & cons of individual & group decision making techniques.
 Understand group decision making techniques,
_____________________________________________________________________
6.1 MEANING OF A DECISION
A decision is a choice between two or more alternatives. This implies three things:
1. When managers make decisions they are choosing/ deciding what to do on the basis of
some conscious and deliberate logic or judgment.
2. Managers have alternatives available when they are making a decision. It does require
wisdom and experience to evaluate several alternatives and select the best one
3. Managers have a purpose in mind when they make a decision. There would be no reason
for carefully making a choice among alternatives, unless the decision brings them closer
to some goal.

6.2 Types of Decisions


While there are infinitely many decisions that can be made, they really can be placed in- to one
of two categories.
1. Programmed Decision- these are decisions for which routine (either physical or
conceptual) has been established. For example, when sales people turn in their expenses
account at the end of each month, there is a specified procedure in most firms of handling
this situation. Every individual who is involved in this activity knows exactly what to do,
and the procedure is used regularly.
2. Non Programmed Decision- these are decisions that do not recur frequently and therefore
no routine has been established for making them. For example, if a firm wishes to build a
new plant but has never done so far (before), this activity is clearly non-programmed
decision.

38
Programmed and un programmed decisions can be found at all levels in the organization, but
generally speaking, the former should be made near the bottom while the latter should be made
near the top of the organization.
Decision Making Situations
When managers make decision, they find that the quality of information about the alternatives,
the pay offs, the risks, etc., varies widely. The information environment that manager’s face
range all the way from complete uncertainty to completed certainty.
Certainty – at one extreme manger can have very exact information about the relevant aspects
of the problem facing them. When certainty exists, the manager knows exactly how many
alternatives are available, the nature of each alternative, the pay off from each alternative, and
the likelihood of chance events associated with each alternative. Generally speaking, the lower
the organizational level, the greater the degree of certainty. At upper levels, uncertainty exists
about which alternatives are available.
Risk- under conditions of risk, the manager is able to define the problem clearly, to list many
(but not all) of the alternatives and to make an assessment of the likelihood of pay offs, given a
certain alternative. However, the manger cannot guarantee that a certain pay off will occur once
a given alternative is chosen.
Situation of risk require the use of probability analysis. In order to use probability in making
decision, managers must have some basis for assessing the likelihood that a given alternative will
result in a certain outcome.
Uncertainty – uncertainty condition exists when managers cannot assign probabilities to chance
outcomes for the alternatives that they develop. At the extreme, the manger cannot even define
clearly what the problem is or the possible alternative solutions. This is because the decision
maker has virtually no information about faced before uncertainty is most likely arising in top
onset decision.
 Check your progress.
State the meaning of decision making.
Differentiate between programmed and non-programmed decisions.
Identify decision making situations.

39
6.3 Decision Making Techniques
There are several models of decision-making. Each is based on a different set of assumptions and
offers unique insight into the decision – making process. This section reviews three key
historical models of decision making. They are:
1. The Rational Model,
2. The Simon’s Normative Model, and
3. The garbage can Model.
6.3.1. The Rational Model
The rational model proposes that manger use a rational, four step sequence when making
decision:
 Identifying the Problem
 Generating Alternative Solutions
 Selecting a Solution and
 Implementing and Evaluating the Solution
The model is based on the assumption that mangers optimize when they make decisions.
Optimizing involves solving problems by producing the best possible solutions. This assumes
that mangers:
 Have knowledge of all possible alternatives.
 Have complete knowledge about the consequence that follows each alternative.
 Have a well-organized and stable set of preference for these consequences.
 Have the computational ability to compare consequences and determine
which one is preferable.
Despite criticism for being unrealistic, the rational model is instructive because it analytically
breaks down the decision-making process and serves as a conceptual anchor for newer models.
6.3.2. Simon’s Normative Model
This model attempts to identify the process that managers actually use when making decisions.
The process is guided by a decision maker’s bounded rationality.
Bounded Rationality- Decision makers are “Bounded” or restricted by a variety of constraints
when making decisions.
These constrains may be personal or environmental characteristics. For example:
– Limited capacity of human mind

40
- Uncertainty of the environment.
- Amount & timelines of information at hand
As opposed to the rational model Simon’s normative model suggests that decisions making is
characterized by:
- Limiting information processing
- Satisficing
Limited Information Processing – Managers are limited by how much information they process
because of the bounded rationality. This results in the tendency to acquire manageable rather
than optimal amount of information. This means mangers cannot have all possible alternative
solutions.
Satisficing- People satisfice because they don’t have the time, information, or ability to handle
the complexity associated with following a rational process. It consists of choosing a solution
that meets some minimum qualification one that is “good enough”. Satisficing resolve problems
by producing solutions that are satisfactory, as opposed to optimal.
Decision makers tend to select the alternative that is acceptable or “good enough” rather than the
best possible solution. In other words, they engage in satisfying rather than maximizing.
Satisficing occurs because it isn’t possible to identify all of the possible alternatives, and
information about available alternative is imperfect or ambiguous.

6.3.3. The Garbage Can Model


This assumes that organizational decision making is a sloppy & haphazard process. This
contrasts sharply with the rational model, which proposed that decision makers follow a
sequential series of steps beginning with a problem and ending with a solution.
According to this model, decisions result from a complex interaction between four independent
streams of events: Problems, Solutions, Participants and Choice opportunities. According to this
model decision are the functions of the interaction among these independent events.
 Problem: - a gap between an actual situation and a desired condition. But problems are
independent from alternatives and solutions. The problems may or may not lead to a solution.
 Solution: - Ideas constantly flowing through an organization.
 Participants: - are the organizational members who bring different values, altitudes &
experience to a decision making situation.

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 Choice opportunities: - Occasions in which an organization is expected to make a decision.

6.4 Individual versus Group Decision Making


Decision-Making groups may be widely used in organizations, but does that imply that group’s
decision are preferable to those made by an individual alone?
Advantage of Group Decision Making
Individual and group decision each have their own set of strengths. Neither is ideal for all
situations. The following identifies the major advantages that groups offer over individuals in the
making of decisions.
1. More Complete Information and Knowledge:- By aggregating the resources of
several individuals, we bring more input in to the decision process.
2. Increased Diversity of View:- In addition to more input, groups can bring
heterogeneity to the decision process. This opens up the opportunity for more approaches
& alternatives to be considered.
3. Increases Acceptance of Solution:- If people who will be affected by a decision and
who will be instrumental in implementing it are able to participate in the decision itself,
they will be more likely to accept it & encourage others to accept it.
4. Increased Legitimacy: the group decision-making process may be perceived as being
more legitimated than decision made by a single person.
5. Training Ground: - Less experienced participants in groups action learn how to cope
with group dynamics by actually being involved.
Problem in Team Decision Making
In this section, we look at the main problems people face when they make decision in group
setting.
Time Constraints
There is a saying that “Committee keep minutes and waste hours”. This reflects the fact that
teams take longer than individuals to make decisions. Unlike individuals, teams require extra
time to organize, coordinate, and socialize. The larger the group, the more time required to make
a decision. Team members need time to learn about each other & build rapport. They need to
manage an imperfect communication process so that there is sufficient understanding of each
other’s idea.

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 Another time constraint found in most team structure is that only one person can speak at a
time. This problem, known as production blocking, causes participants to forget what they
wanted to say by the time it is their turn to speak. Team members who rehearse their lines
while waiting might ignore what others are saying.
Evaluation Apprehension
Individuals are reluctant to mention ideas that may seem silly or not directly applicable because
they believe that other team members are silently evaluating them. This evaluation apprehension
is based on the individual’s desire to create a favorable self-presentation and his or her need for
social esteem.
Conformity to Peer Pressure
This is the desire by group members to be accepted and considered as an asset to the group.
When someone does state a point of view that violates the majority opinion, other members
might punish the violator or try to persuade him or her that the opinion is incorrect. It is not
surprising, then, that nearly half of the managers surveyed in a recent study say they give up in
team decision because of pressure from others to conform to the team’s decision.

Groupthink – is the tendency of highly cohesive groups to value consensus at the price of
decision quality. Groupthink is based on conformity, but it goes far beyond it. There are strong
social pressures on individual members to maintain harmony by avoiding conflict and
disagreement.
Ambiguous Responsibility
Group members share responsibility but who is actually accountable for the final outcome. In an
individual decision, it is clear who is responsible. In a group decision, the responsibility is
distributed over group of people so that there is no single responsible body.
6.5 Group – Problem- Solving Techniques
In order to minimize the problem discussed above decision-making experts have developed three
group problem solving techniques.
1. Brain storming – is used to help groups generate multiple ideas and alternatives for solving
problems. This technique is effective because it helps reduce interference caused by critical &
judgmental reaction to one’s ideas from other group members.

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Brainstorming requires group members to abide by four rules that encourage divergent
thinking & minimize evaluation apprehension.
a) No Criticism: - the most important rules in brainstorming is that no one should
criticize any ideas that are presented. Without criticism, team members might be
more willing to suggest crazy solution to the problem, which result to potentially
better ideas.
b) Encourage Freewheeling; - Crazy suggestions are sometimes crazy only because
they break out of the mold set by existing mental model.
c) Encourage Many Ideas: - Brainstorming is based on the idea that quality
increases with the number of ideas presented. This relates to the notion that
divergent thinking occurs after traditional ideas have been exhausted. Therefore,
the group should think many possible solutions & go beyond the traditional
solution.
d) Piggyback Ideas: - Team members are encouraged to combine and improve on
the ideas already presented because this strengthens the synergy of team process.

2. Nominal Group Techniques


The method is called nominal because participants form a group “in name only” during two
stages of decision making.
Nominal Group Technique Follow the Following Process:
Describe problem to team members.
Members individually write down possible solution.
Members describe their solution to each other.
Members individually rank order solutions presented.
Due to its high degree of structure, nominal group technique usually maintains a high task
orientation & relatively low potential for conflict within the team.
3. Delphi Technique
Delphi group don’t meet face to face; participants are often located in different parts of the world
and may not know each other’s identity. Delphi group members submit possible solutions or
comments regarding an issue to the central convener. The compiled results are turned to the
panel for a second round of comment and this process may continue until consensus is reached.

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 Check your progress.
Describe the pros and cons of group decision making.
Explain group decision making techniques.

Review Questions
1. Define decision making. Explain the essential steps in decision – making.
2. Explain decision making situations.
3. Describe the main problems in team decision making. How can you minimize them?
4. Briefly explain group problem solving techniques.
5. Point out the advantages and disadvantages of group decision-making?
6. Briefly point out the group decision-making techniques.
7. Differentiate between programmed and non-programmed decision.

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UNIT SEVEN
ORGANIZATIONAL POWER AND POLITICS
__________________________________________________________________
Learning objectives
 After reading this chapter, the student should be able to:
 Know the meanings of power & politics.
 Know the sources of power.
 Define organizational politics
 Know how to manage organizations policies
 Understand how to manage impression.
_____________________________________________________________________

7.1 The Meaning of Power


Power is the capacity of a person, team, or organization to influence others. It may refer
to that A has to influence the behavior of B, so that B act in accordance with A’s wish. This
definition implies a potential that need not be actualized to be effective and a dependency
relationship.
Power is not the act of changing other’s attitude or behavior; it is only the potential to do so.
People frequently have power they do not use; they might not even know they have power.
The basic prerequisite of power is that one party believes he or she is dependent on the other for
something of value. You might have power over others by controlling desired job assignments,
useful information, important resources or even the privilege of being associated with you.
Ultimately power may exist when others believe that you have control over resources that they
want.
Counter power: - the capacity of a person, team or organization to keep a more powerful
person or group in the exchange relationship. For example: - executives have power over
subordinates by controlling their job security and promotional opportunities, but employees have
counter –power by controlling the ability to work productively
Leadership versus Power
A central comparison of our description of power with our description of leadership in the
previous chapter reveals that the two concepts are closely intertwined. Leaders use power as a
means of attaining group goals. Leaders achieve goals and power as a mean of facilitating their
achievements.

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What difference is there between the two terms? One difference between the two relates to goal
attainment compatibility. Power doesn’t require goal compatibility, merely dependence.
Leadership on the other hand requires some congruence between the goals of the leader and
those being led. Another difference relates to that direction of influence. Leadership focuses on
the down ward influences of one’s subordinates. It minimizes the importance of lateral and
upward influence pattern. Power does not. Still another difference deals with research emphasis.
Leadership research, for the most part emphasis style, it seeks answer to such questions as: How
supportive should a leader be? How much decision-making should be shared with followers? In
contrast the research on power has tended to encompass a broader area and focus on tactics for
gaining compliance.

 Check your progress.


What difference is there b/n the term power and leadership?
- State the meaning of power. What are the basic requisites of power?

Sources of Power in Organizations


John French and Bertrand Raven listed five sources of power within the organizations:
legitimate, reward, coercive, expert, and referent. The first three power bases are derived from
the power holder’s position; that is the person receives these power bases because of the specific
authority or roles he or she is assigned in the organization. The latter two sources of power
originate from the power holder’s own characteristics. In other words people bring these power
bases to the organization.
1. Legitimate Power
Legitimate power is an agreement among organizational members that people in a certain role
can request specific behavior of others. This perceived right generally comes from the person’s
position, such as your boss’s right to require you to perform different tasks. Executives are the
most obvious source of legitimate power. However all employee have legitimate power, such as
their right to ask others for information that will help them perform their job. These rights exist
in formal job description as well as informal rules of conduct. However it also depends on
employees accepting this arrangement. Thus legitimate power is the person’s authority to make
discretionary decision as long as followers accept this discretion.

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Where legitimate power is strong, those receiving the order suspend judgment and let the power
holder guide their behavior
2. Coercive Power
Coercive power is the capacity to influence others through the ability to apply punishment. At
the organizational level A has cursive power over B if A can dismiss, suspend or denote B,
assuming that B values his or her jot. Similarly, if A can assign B work activities that B finds
unpleasant or treat B in a manner that B finds embarrassing, A possesses coercive power over B
Managers have coercive power through their authority to reprimand, demote and fire employees.
Labor union might use coercive power tactics, such as withholding services, to influence
management in collective agreement negotiations. Clients use coercive power by threatening to
take their business elsewhere unless certain improvements occur.
During times of law unemployment, employees have coercive power over their
employers because they pose a higher risk of quitting. This explains why many companies are
becoming more flexible with work hours, recreational facilities and other benefits that employees
request.
3. Reward Power
Reward power is the capacity to influence others by controlling the allocation of reward valued
by them and removal of negative sanctions (i.e negative reinforcement). People comply with the
wishes or directives of another because doing so produces positive benefits; therefore, one can
distribute rewards that others view as valuable will have power over those others. These rewards
can be anything that another person values. In an organizational context, we think of money,
favorable performance appraisals, promotions, interesting work assignment friendly colleagues,
important information & preferred work shifts or sales territories.
Coercive power and reward power are actually counterparts of each other. If you can remove
something of positive value from another or inflict something of negative value upon him or her,
you have coercive power over that person. If you can give someone something of positive value
or remove something of negative value, you have reward power over that person. You don’t need
to be mangers to be able to exert influence through rewards. Rewards such as friendliness,
acceptance, and praise are available to everyone in an organization. To the degree that an
individual seek such reward, your ability to give or withhold them gives you power over that
individual.

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Managers have formal authority that gives them power over the distribution of organizational
reward such as pay, promotion, time off, vocational schedules and work assignments.
As organizations delegate responsibility and authority, work team gain reward power over their
members. In some organizations, subordinates have reward power over their bosses through the
feedback system. Employee’s feedback affects the supervisor’s promotions and other rewards so
they tend to behave differently toward employees.
Tactics, such as withholding services, to influence management in collective agreement
negotiations. Clients use coercive power by threatening to take their business elsewhere unless
certain improvements occur.
4. Expert Power
Expert power is the capacity of influences others by possessing knowledge or skills that they
want. This power originates from within the person. Employees are gaining expert power in the
work place as our society moves from an industrial to a knowledge – based economy. The reason
is that employee knowledge becomes the means of production, not some machines that the
owner controls. And without this control over production, owners are more dependent on
employees to achieve their corporate objectives.
5. Referent Power
Referent power is the capacity to influence others by virtue of the admiration and identification
they have of the power holder. People have referent power when others identify with them, like
them, or otherwise respect them. It is largely of the function of the persons’ interpersonal skills
and usually develops slowly. Referent power is typically associated with charismatic leader ship.
Charisma is defined as forms of interpersonal attraction where by follows develop a respect for
and trust in the charismatic individual. If you admire someone to the point of modeling your
behavior and attitude after him or her, this person possesses referent power over you. Referent
power explains why celebrities are paid millions of dollars to endorse products in commercials.
Marketing research shows that people like Michael Jordan and Bill Cosby have the power to
influence your choice of athletic shoes & desserts.

 Check your progress.


Describe the various sources of power. How do they become power sources?

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Contingencies of Power
Power bases generate power only under certain conditions. These conditions called the
contingencies of power include substitutability & centrality.
Substitutability
Substitutability refers to the availability of resource. Power is strongest when someone has a
monopoly over a valued resource. Conversely, power decreases as the number of alternative
source of the critical resource increase. For instances, labor unions are weak when companies
introduce technologies that replace the need for their union members. Technology is a substitute
for employees & consequently reduces union power.
How do people and work units increase their power through non-substitutability? There
are several ways, although not all of them are ethical controlling task, controlling knowledge &
controlling labor.
Centrality
Employees and department have power as their centrality increases. Centrality refers to the
degree ad nature of interdependence between the power holders and others. There are two
dimension of centrality.
1. One dimension refers to how many people affect by your actions. An organization’s
finance department, for instance, may have considerable power because its budget
activities affect virtually every other department in the organization. In contrast,
employees in a branch office may affect only few people in the organization.
2. The other dimension of centrality refers to how quickly people are affected by your
actions.
Consequences of power
 Coercive power is generally the least desirable source because it generates
resistance by the person or department being influenced. Applying coercive power also
reduces trust between the parties and increase employee satisfaction. Resistance and distrust
also occur when other power bases are used arrogantly or in a manipulative way.
 Reward and legitimate power tend to produce compliance, where by
people are motivated to implement the power holders request for purely instrumental reasons.
Suppose your loss gives you a bonus for performing an extra task that you wouldn’t other

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wise accept. The reward will get you to comply with the request, but not to perform the task
with enthusiasm.
 Power also affects the power holder those you have strong need for power
are more satisfied and committed to their job when they have increased responsibility,
authority, and discretion. However, people who acquire too much power often abuse their
position to better their personal interests and to gain more power. If unchecked powerful
employees eventually become even more powerful. In short, there appears to be some truth in
lord actions well known statement that “power tends to corrupt; absolute power corrupts
absolutely.”

 Check your progress.


What does substitutability and certainty conditions refer to?
Identify the consequences of power.

Politics in Organization
Organizational politics represent attempt to influence others using discretionary behavior to
promote personal objectives. It is the exercise of power to get one’s own way, including the
acquisition of more power, often at the expense of others.
Organizational politics: Good or Bad
Organizational politics may include useful activities such as the way we dress, and whom we talk
to. These and other political tactics sometimes help the organization achieve its objectives.
Experts suggest that people need to be good politicians, particularly as they reach higher levels in
the corporation.
Of course, organizational politics are often more of a problem than a benefit. One concern is that
they consume time and disrupt work activities.
Types of Political Activity
There are various types of political games or tactics found in organizational settings.
Organizational behavior scholars have conveniently grouped most of them in to the seven
categories.

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Attacking or blaming others
Probably the most direct and nastiest form of organizational politics is attacking and blaming
others. This includes giving rivals a bad image in the eyes of decision makers. Not all blaming is
overt. For example, you might explain to your boss that a report is late because of the lack of
support from another work unit or other conditions beyond your control. In other words people
try to frame their failure in terms of external attribution.
Selectively Distributing Information
Information is a political tool as well as a source of power. People strategically manage the
distribution of information to shape perceptions, limit the potential performance of rivals or
further increase their power base.
Controlling Information Channels
Through legitimate power, some people can control the interaction among employees as well as
the topics of those discussions. An executive might discourage people in different work units
from talking directly to each other because this might threaten the executive’s power and job
status.
Forming Coalition
A coalition is a political tactic because it pools the power of several people toward common
objectives that each member is unable to influence alone. Coalitions also create a sense that an
issue has broad appeal and their fore deserves legitimate support.
Cultivating Network
Network refers to cultivating social relationship with others to accomplish one’s goal. By
forming a trust network, people receive valuable information that increases their power in the
organization. Networking nurtures allies and other initiatives. Finally, networking help
employees increases their referent power, and this may lead to more favorable decisions by
others in the network.
Crating Obligations
The obligation to help someone who has once helped you called the norm of reciprocity is deeply
embedded in many societies. It is also a political tactic. An employee who has helped someone
might late ask that person to put in a good word or support him or her on a promotion. The
indebted co – worker is more likely to agree to this than if he or she had no debt to repay.

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 Check your progress.
Define organizational politics.
How do organizational politics be more of problems?
Describe the various types of political games.

Managing Impressions

Impression management is the practice of actively shaping our public image. Many impression
management activities are done routinely to satisfy the basic norms of social behavior. Others are
political tactics because they are used deliberately to get one’s way. A well know impression
management tactic is to manage your appearance and behavior so that others develop a desired
image of you. For example, the way we dress is part of the impression management process.

Impression Management (IM) Techniques

Conformity
Agreeing with someone else’s opinion in order to gain his or her approval
Example: A subordinate manger tells his boss. “You’re absolutely right on your reorganization
plan for the western regional office.

Excuses
Explanations of a predicament- crating even aimed at minimizing the apparent severity of the
predicament.
Example: sales manager to boss, “we failed to get the advertisement in the paper on time, but no
one responds to those advertisements any way.”

Apologies
Admitting responsibility for an undesirable even a simultaneous seeking to get a pardon for the
action.
Example: Employee to boss, “ I’m sorry I made a mistake on the report please forgive me.”

Acclamation
Explanation of favorable events to maximize the desirable implications for oneself.
Example: A salesperson informs a peer. “The sales in our division have nearly tripled since I was
hired.”

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Flattery
Complimenting other about their virtues in an effort to make one self-appear perceptive and
likable.
Example: New sales trainee to peer. “You handled that client’s complaints so tactfully! I could
never have handled that as well as you did.

Favors
Doing something nice for someone to gain that person’s approval.
Example: Salesperson to prospective client, “I’ve got two tickets to the theater tonight that I
can’t use. Take them.
Consider it a thank-you for taking the time to talk the time to talk with me.”

Association
Enhancing or protecting one’s image by managing information about people and things with
which one is associated.
Example: A job applicant says to an interviewer. “What a coincidence. Your boss and I were
roommates in college.”

 Check your progress.


Briefly explain impression management techniques.
Give applicable examples for each impression management techniques.

Managing Organizational politics


The conditions that fuel organizational politics also give us some clues about how to control
dysfunctional political activities. Here are several strategies that should keep dysfunctional
politics in check.
 Ensure that there is a sufficient supply of critical resources.
 Where resources are necessary scarce, introduce clear rules and regulations to specify the
use of these resources.
 Establish a free flow of information so that the organization is less dependent on a few
people at the center of a communication wheel.
 Use effective organizational change management practice
 Restructure team & organizational norms.

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Review Question
1. State the meanings of power politics
2. Managers use power as a means to achieve organizational objectives. Comment.
3. List out the various sources of power and briefly explain them using practical examples.
4. Discuss the consequences of power. Which type of power is used upon irresponsible
followers?
5. Describe types of political games in detail.
6. Define impression management. What are the techniques used in managing impression?
7. Give example for each impression management techniques.
8. State the meaning of organizational politics.
9. How do people and work units increase their power through not substitutability?

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M.J Mathew, Business Management, 1st ed, (2000), Sheel Sons Jaipur,
Delhi.
Mekelle University, Reading material on Organizational Behavior,
Unpublished.
P.C. Tripathi & PN Reddy, Principles of Management, 2nd ed, (2000), Tata
MacCgraw- Hill, New Delhi.
Staya Saran Chatterjee, Introduction to Management, 12th ed, (1996),
world press pub Ltd, Calculta.
Terry & Franklin, Principles of Management, 8th ed, (2000) A.I.T.B.S
Publishers, Delhi.
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Publishing House, Mumbai.
V.S.P Rao & P.S Narayana, Principles and Practice of Management, 1st ed, (1999),
Knonark Publishers Pvt Ltd Co. Delhi.

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