BCOMSCM Business Management 2

BUSINESS MANAGEMENT 2
BACHELOR OF COMMERCE IN
SUPPLY CHAIN MANAGEMENT
MODULE GUIDE
Copyright © 2022
REGENT BUSINESS SCHOOL
All rights reserved; no part of this book may be reproduced in any form or by any
means, including photocopying machines, without the written permission of the
publisher.
BACHELOR OF COMMERCE IN SUPPLY CHAIN MANAGEMENT

Table of Contents
INTRODUCTION TO BUSINESS MANAGEMENT 2 ...................................... 3
CHAPTER 1:
Organisational Theory ................................................................................... 12
CHAPTER 2:
Motivation ...................................................................................................... 26
CHAPTER 3:
Groups and Teams........................................................................................ 47
CHAPTER 4:
Management Decision-Making ...................................................................... 59
CHAPTER 5:
Diversity Management................................................................................... 71
CHAPTER 6:
Conflict Management .................................................................................... 84
CHAPTER 7:
Organisational Culture................................................................................... 92
CHAPTER 8:
Communication, Negotiation and Political Behaviour in Organisations ....... 108
CHAPTER 9:
People Management ................................................................................... 129
BIBLIOGRAPHY ......................................................................................... 144
BACHELOR OF COMMERCE IN SUPPLY CHAIN MANAGEMENT 1

List of Tables and Figures

Figure 1.1: Factors Affecting Organisational structure ............................................... 14
Figure 1.2: Functional Organisational structure ............................................................. 16
Figure 1.3: Departmentalisation according to product ................................................ 17
Figure 1.4: Departmentalisation according to location................................................ 17
Figure 1.5: Departmentalisation according to customer ............................................ 18
Figure 1.6: Matrix organisational structure ....................................................................... 18
Figure 2.1: Motivation ................................................................................................................. 28
Figure 2.2: Intrinsic Versus Extrinsic Factors .................................................................. 30
Figure 2.3: Motivation Process ............................................................................................... 31
Figure 2.4: Maslow’s Hierarchy of Needs ......................................................................... 38
Figure 2.5: Expectancy Theory .............................................................................................. 44
Figure 3.1: Characteristics of High Performing Teams .............................................. 55
Figure 4.1: Programmed vs non-programmed decisions .......................................... 62
Figure 4.2: Rational decision-making model ................................................................... 63
Figure 6.1: Conflict management .......................................................................................... 87
Figure 8.1: Communication Process ................................................................................... 110
Figure 8.2: Barriers to Effective Communication ........................................................... 114
Figure 9.1: Performance management process ............................................................ 141
Table 1.1: Functional departmentalisation ........................................................................ 19

Table 1.2: Product/service departmentalisation ............................................................. 19
Table 1.3: Geographic departmentalisation ..................................................................... 20
Table 1.4: Customer departmentalisation ......................................................................... 20
Table 1.5: Matrix departmentalisation................................................................................. 21
Table 2.1: Herzberg’s Motivation-Hygiene Theory ....................................................... 39
Table 4.1: Advantages and disadvantages of group decision making ................ 67
Table 5.1: Diversity challenges .............................................................................................. 75
Table 6.1: Conflict management overview ....................................................................... 88
Table 7.1: Benefits of a positive organisational culture .............................................. 96
Table 9.1: Generational values .............................................................................................. 134
Table 9.2: Rational perspective and the political perspective ................................. 139

INTRODUCTION TO BUSINESS MANAGEMENT 2
1. Introduction
Welcome to the Bachelor of Commerce In Supply Chain Management Programme.

As part of your studies, you are required to study and successfully complete a course
on Business Management 2. In completing Business Management 1, learners would
have gained insights into the concepts of managers and management.
Management is the process of using organisational resources to achieve

organisational goals effectively and efficiently through planning, organising, leading,
and controlling. An efficient organisation makes the most productive use of its
resources.
2. Module Overview
Business Management 2 provides the student with an enhanced understanding of

key managerial areas and concepts as well as how to apply them to business
organisations. The scope of focus areas includes organisational theory, employee
motivation, groups, teams, management decision making, diversity management,
conflict management, organisational culture, communication, negotiation, political
behaviour as well as people management.
3. Aim of the Module
This module aims to:
• Elucidate the relationship between organisations and management with

modern business landscapes.
• Analyse and discuss the link between organising and other managerial
functions.
• Analyse the value of virtual organisations.
• Assess the importance of managerial decision making and apply the decision-
making processes thereof.

• Discuss and apply the communication process while demonstrating an

understanding of its significance to business management, efficiency, and
performance.
• Demonstrate a detailed understanding motivation and differentiate between
the various motivation theories and their relevance to businesses of today.
• Describe the strategic role of motivation in an organisation and its impact on
goal attainment.
• Apply strategies of organisational culture and understand its impact on
management and organisational performance.
• Critically discuss workforce diversity, apply diversity management strategies,
and acknowledge its influence on enhancing business performance.
• Demonstrate knowledge of groups and teams in organisations and implement
its development such that it may positively influence productivity and
organisational success.
• Critically evaluate and apply the negotiation process and its importance to
business management and success.
• Discuss key components of political behaviour in organisations its impact on
organisational functioning.
• Analyse forms of organisational conflict and apply the appropriate strategies
thereof.
• Develop an understanding of people management & employee performance;
and to apply the appropriate people and performance management strategies
across contemporary business environments.
4. Essential (Prescribed) Reading
Your essential (prescribed) reading comprises the following:
4.1. Prescribed Reading
Badenhorst-Weiss, H., Botha, T. Cant, M. Jansen van Rensburg, M. Krüger, L.

(2019). Introduction to Business Management, 11th Edition. Southern Africa.

4.2. Recommended Reading
Jones, G; George, J. (2020) Contemporary Management McGraw Hill

Education, New York – 11th Edition.
5. How to use the Module
This module should be studied using the recommended and prescribed textbook/s
and the relevant sections of this module. You must read about the topic that you
intend to study in the appropriate section before you start reading the textbook/s in
detail. Ensure that you make your own notes as you work through both the
textbook/s and this module. You will find a list of objectives and outcomes at the
beginning of each section. These outline the main points that you need to
understand when you have completed the section/s. The purpose of this guide is to
help you study. It is important for you to work through all the tasks and self-
assessment exercises as they provide guidelines for examination purposes.
6. Navigational Icons
Think Point
When you see this icon, you should think about and reflect on the
issues/challenges/themes presented.
Tasks
When you see this icon, you will know that you are required to perform
a task to gauge how well you remember or understand what you have
read or how good you are at applying what you have learnt.
Definitions
This icon will alert you to a specific definition related to the topic
under discussion.

Case Studies
Case studies are often used to illustrate a concept within the setting
of a real-life scenario. Answer the questions that follow to ensure
that you have a proper understanding of what has been discussed.
7. Specific Outcomes and Chapter Alignment
SPECIFIC OUTCOMES CHAPTER

ALIGNMENT
SO 1: Elucidate the relationship between organisations and 1

management with modern business landscapes.
SO 2: Analyse and discuss the link between organising and 1

other managerial functions.
SO 3: Analyse the value of virtual organisations. 1
SO 4: Assess the importance of managerial decision making 4

and apply the decision making processes thereof.
SO 5: Discuss and apply the communication process while 8

demonstrating an understanding of its significance to
business management, efficiency and performance.
SO 6: Demonstrate a detailed understanding motivation and 2

differentiate between the various motivation theories and
their relevance to businesses of today.
SO 7: Describe the strategic role of motivation in an 2

organisation and its impact on goal attainment.
SO 8: Apply strategies of organisational culture and 7

understand its impact on management and
organisational performance.
SO 9: Critically discuss workforce diversity, apply diversity 5

management strategies and acknowledge its influence
on enhancing business performance.

SPECIFIC OUTCOMES CHAPTER

ALIGNMENT
SO 10: Demonstrate knowledge of groups and teams in 3

organisations and implement its development such that
it may positively influence productivity and organisational
success.
SO 11: Critically evaluate and apply the negotiation process 8

and its importance to business management and
success.
SO 12: Discuss key components of political behaviour in 8

organisations and its impact on organisational
functioning.
SO 13: Analyse forms of organisational conflict and apply the 6

appropriate strategies thereof.
SO 14: Develop an understanding of people management & 9

employee performance; and to apply the appropriate
people and performance management strategies across
contemporary business environments.
8. Specific Outcomes and Assessment Criteria
SPECIFIC OUTCOMES ASSESSMENT CRITERIA
The student should demonstrate the ability to:
SO 1: Elucidate the relationship • Demonstrate a sound understanding of

between organisations and organising, organisational structure, factors
management with modern that affect organisational structure and
business landscapes. trends in virtual organisations.


• To relate the importance of organising to
SO 2: Analyse and discuss the link
between organising and other
• Demonstrate an understanding of
managerial functions.
departmental divisions and conduct an
assessment of its importance to businesses.
• Apply organising to other managerial
functions.
• Maintain a sound understanding of

SO 3: Analyse the value of virtual
organising, organisational structure, factors
organisations.
that affect organisational structure and
trends in virtual organisations.
• Develop a sound understanding of decision

SO 4: Assess the importance of
making, its importance and the ability to
managerial decision making
apply the process within a business context.
and apply the decision making
processes thereof. • Interpret and understand various decision-
making conditions, develop an appreciation
for various decision-making models and the
ability to apply them to the relevant
contexts.
• Distinguish between non-programmed and
programmed decisions within organisations
& assess the value of group decision
making in business management.
• Appropriately apply the communication

SO 5: Discuss and apply the
process in order to enhance organisational
communication process while
success, assess communication barriers,
demonstrating an
implement strategies necessary in
understanding of its
eliminating them and resolving
significance to business
communication problems.
management, efficiency and
performance.

SO 6: Demonstrate a detailed • Maintain a sound understanding of

understanding motivation and employee motivation and the ability to
differentiate between the explain various factors affecting employee
various motivation theories motivation.
and their relevance to • Maintain an understanding of intrinsic and
businesses of today. extrinsic motivation and apply it when
necessary.
• Perform an evaluation of various motivation
theories and apply them when appropriate.
• Unpack the strategic value of motivation.

SO 7: Describe the strategic role of
motivation in an organisation
and its impact on goal
attainment.
• Develop understanding of organisational
SO 8: Apply strategies of
culture.
organisational culture and
• Maintain a detailed understanding of the
understand its impact on
management and functions of organisational culture, the ability
organisational performance. to apply principles or strategies to create

and maintain organisational culture, the
ability to explain organisational culture
theories, and an understanding of
managerial actions which are applicable
to a wide range of cultures.

SO 9: Critically discuss workforce • Demonstrate a sound knowledge of

diversity, apply diversity diversity, the significance of workforce
management strategies and diversity to current workplace environments,
acknowledge its influence on to acknowledge diversity as a management
enhancing business challenge and its effect on performance.
performance. • To determine the impact of diversity on
organisational performance and apply
approaches of diversity management in
modern businesses.
• Develop a comprehensive understanding of

SO 10: Demonstrate knowledge of
the principles of groups and teams, types of
groups and teams in
groups and reasons for group formation in
organisations and implement
business environments.
its development such that it
may positively influence • Successfully apply the group development
process and maintain a sound knowledge of
productivity and organisational
success. group dynamics, how groups develop into
effective teams and the characteristics of
high-performance teams.
• Acquire the skill of evaluating and applying

SO 11: Critically evaluate and apply
the negotiation process to achieve
the negotiation process and its
organisational goals.
importance to business
management and success.
• Acquire a detailed understanding of key
SO 12: Discuss key components of
components of political behaviour and how
political behaviour in
this influences organisations.
organisations and its impact
on organisational functioning.


• Acquire a detailed understanding of conflict
SO 13: Analyse forms of
and its sources in business contexts & the
organisational conflict and
ability to distinguish between functional and
apply the appropriate
dysfunctional conflict in order to ensure
strategies thereof.
continue organisational growth.
• Acquire the skill of applying the appropriate
conflict management strategies in order to
achieve continued organisational success.
• Develop an understanding of people

SO 14: Develop an understanding of
management skills and the ability to
people management &
exercise them in the relevant contexts.
employee performance; and to
apply the appropriate people • Apply the appropriate people management
and performance strategies across contemporary business

environments.
management strategies
across contemporary business • Develop a thorough understanding of
environments. employee needs.

• Maintain a thorough understanding of
generational differences in the workforce
and how to manage them.
• Adopt the appropriate performance
management strategies in modern
workplaces.

CHAPTER 1:
Organisational Theory
Chapter Outcomes
Upon completion of this chapter, the learner should be able to:
• Explain the concepts of organising and organisational structure within a

business management context.
• Identify the factors that influence the choice of an organisational structure and
develop a well-informed understanding of the current trends in virtual
organisations.
• Discuss the significance of the organising process to management and
performance.
• Explain the ways in which organisations are divided into departments and
assess its relevance to various types of businesses.
• Critically discuss the significance of organising and apply this to other
managerial functions.
• Demonstrate an understanding of virtual organisations and trends.
1.1. Introduction
Organisational designs and structures allow for swift decision making demanded by the
volatility of dynamic market and business environments. Once management has devised
a plan to achieve the organisation’s goals, human and other resources – such as
money, machines, raw materials and information or knowledge – must be combined in
the best possible way to achieve these goals. In addition, management must design
jobs, assign tasks, duties and responsibilities to people, coordinate activities and
establish/ lines of communication and reporting. This is referred to as organising. This
chapter provides an overview of various concepts including organising, the importance
of organising, departmentalisation, and organisational structures.

1.2. Organising, Organisational Structure and Organisational Design
According to Badenhorst-Weiss, Botha, Cant, Jansen van Rensburg and Krüger,

(2019: 227-228): “Organising means that management has to develop mechanisms
in order to implement the strategy or plan. Organising can be defined as the process
of delegating and co-ordinating tasks, activities, and resources in order to achieve
organisational objectives. The organising process’s point of departure is the vision,
mission, goals and strategies of the organisation.”
Jones and George (2007:243) define organisational structure as the formal system of
task and job reporting relationships that determines how employees use resources to
achieve organisational goals. The organisational structure of a business therefore
indicates the work to be done and the connections between various positions and
tasks (du Toit, Erasmus and Strydom, 2007:16).
Organising is structuring working relationships so organisational members interact

and cooperate to achieve organisational goals. Organising people into departments
according to the kinds of job-specific tasks they perform lays out the lines of authority
and responsibility among individuals and groups. Managers lay out lines of authority
and responsibility. The organisational structure is a formal system of task and
reporting relationships that coordinate and motivate employees to achieve strategic
or organisational goals. The organisational structure assists in determining how
efficiently and effectively an organisation's resources can be used to achieve
organisation goals (Jones and George, 2020).
Organisational design is the process by which managers make specific organising

choices about tasks and job relationships that result in the construction of a particular
organisational structure (Jones and George, 2007:243).
Four factors are important determinants on the type of organisational structure

selected:
• The nature of the organisational environment.

• The type of strategy the organisation pursues.
• The technology (and particularly information technology) the organisation uses.
• The characteristics of the organisation’s human resources (Jones and
George, 2020).

1.2.1. Factors Affecting Organisational structure
Oraganisational
environment
DESIGN OF AN
Strategy ORGANISATIONAL Technology
STRUCTURE
Human
Resource
Management
Figure 1.1: Factors Affecting Organisational structure
1.2.2 The Importance of Organising
Organising, like planning is an integral and indispensable component of the

management process. Without it, successful implementation of plans and strategies
are impossible because of the absence of a systematic allocation of resources and
people to execute the plan.
Organising is important because:
• It entails a detailed analysis of work to be done and resources to be used

to accomplish the goals.
• It divides the total workload into activities that can comfortably be
performed by an individual or a group.
• It promotes the productive deployment and utilisation of resources.
• The development of an organisational structure results in a mechanism
that coordinates the activities of the whole organisation into complete,
uniform harmonious units (du Toit, Erasmus and Strydom, 2007:169).

• Synchronises individual goals with overall organisational goal (Lumen, 2022).

• Promotes efficiency and reduces waste (Lumen, 2022).
1.2.3. The fundamentals of organising
Badenhorst-Weiss et. al (2019) outline the fundamentals of organising as:
• Designing jobs for employees.

• Grouping employees into teams or departments based on commonalities.
• Assigning authority.
• Establishing a command structure.
• Establishing coordination mechanisms.
1.2.3.1. Job Design – Grouping tasks into Jobs:
The first step in organisational design is job design, the process by which managers
decide how to divide into specific jobs in terms of the tasks that must be performed.
Job design is the determination of an employee’s responsibilities in an organisation
and the compilation of a job specification. The result of the job design process is a
division of labour among employees.
1.2.3.2 Departmentalisation – grouping jobs into functions and divisions:
The next organising decision, once tasks are allocated to jobs, is how to group jobs
together to best match the needs of the organisation’s environment, strategy,
technology, and human resources.
Various organisational structures can be developed through departmentalisation.
1.2.3.2.1 Functional Organisational Structure
This is the most basic type of design (Badenhorst-Weiss et. Al, 2019). A function is a
group of people, working together, who possess similar skills or use the same kind of
knowledge, tools, or techniques to perform their jobs. Manufacturing, sales, and
research and development are often organised into functional departments. A functional
structure is an organisational structure composed of all the departments that

an organisation requires to produce its goods or services. Within an organisational

structure, the main functions include finance and administration, merchandising
(purchasing the goods), global sourcing (managing the vendors who supply the goods),
marketing and sales, planning and allocations (managing credit and product distribution),
and human resources. Each job inside a function exists because it helps the function
perform the activities necessary for high organisational performance. Thus, all the jobs
necessary to efficiently advertise the company’s products to increase their appeal to
customers (such as promotion, digital media, and visual communication) are located
within the marketing function (Jones and George, 2020).
Figure 1.2: Functional Organisational Structure
1.2.2.3.2. Product Departmentalisation
Departments are designed so that all activities concerned with the manufacturing of
a product or group of products are put together in sections, where all specialists
associated with the product are grouped together in product sections (Badenhorst-
Weiss et. al, 2019).

Figure 1.3: Departmentalisation according to product
1.2.2.3.3. Location departmentalisation
This is a structure that manufactures and sells its goods in different geographical
regions; this structure gives autonomy to area managements, in order to facilitate
decentralised decision-making and adjustment to local environments.
Figure 1.4: Departmentalisation according to location

1.2.2.3.4. Customer Departmentalisation
This is adopted when a business concentrates on some special segment of the

market or some group of consumers.
Figure 1.5: Departmentalisation according to customer
1.2.2.3.5. Matrix organisational structure
This structure is important because no organisational structure will meet all the
organisational needs of a particular business. As illustrated below, horizontal, and
vertical authority lines occur in the same structure (Badenhorst-Weiss et. al, 2019).
The matrix organisational structure as follows:
Figure 1.6: Matrix organisational structure

Hellreigel et al (2008:224) list the advantages and disadvantages of the various

forms of departmentalisation:
Table 1.1: Functional departmentalisation

Advantages Disadvantages
• Promotes skill specialization. • Emphasises routine tasks.

• Reduces duplication of • Reduces communication
resources. between departments.
• Increases co-ordination • May create conflict over
within the functional area. productpriorities.
• Enhances career • May make
development and training interdepartmental
within the department. scheduling difficult.
• Allows superiors and • Focuses on
subordinates to share departmentalisation rather
common expertise. than organisational issues
• Promotes high quality and goals.
technical problem solving. • Develops managers
• Centralises decision making. who are experts in
narrow fields.
Table 1.2: Product/service departmentalisation

• Is suited to fast • May not use skills and

changes in a product. resources effectively.
• Allows greater product • Does not foster
visibility.
coordination of activities
• Fosters a concern for customer
demand. across product lines.
• Clearly defines
• Fosters politics in
responsibilities.
resource allocation.
• Develops managers who can
• Restricts problem solving to
think across functional.
a single product.
• Limits career mobility for
personnel outside their
product line.

Table 1.3: Geographic departmentalisation
• Equipment used for products • All functions duplicated at

is all in one place, saving time each location.
and costs. • There may be conflict
• Managers develop expertise between each location’s
in solving problems unique to goals and corporate goals.
one location. • Extensive rules and
• Managers know regulations may be
customers’ problems. required to coordinate and
ensure uniformity of quality.
Table 1.4: Customer departmentalisation
• Allows greater customer focus. • Does not foster

• Clearly identifies key coordination
customers. between customers.
• Is suited to • Fosters politics in
understanding resource allocation.
customer needs.
• Employees feel pressure
• Develops managers from customers to give them
who become customer privileges.
advocates.
• Restricts problem solving
to a single type of
customer.

Table 1.5: Matrix departmentalisation

• Achieves coordination to meet • Requires people to work for two
dual demands of efficiency bosses – functional and
and changing customer product – which can be
preferences. frustrating and confusing.
• Encourages flexible sharing • Requires people to develop
of human resources across good interpersonal skills.
product lines. • Requires managers and
• Allows employees to learn other employees to
new skills in different areas. understand and accept
• Works best in organisations organic rather than
with limited resources and mechanistic management.
multiple products. • Requires a skilled matrix
manager.
1.3. Authority Relations
The assignment of tasks to sections and members of staff also entails the
assignment of responsibility and authority to each post in the organisational
structure. Responsibility is a particular obligation or commitment on the part of staff
to carry out tasks in accordance with instructions they have received.
Authority is the right to command or give orders. Authority is power that has been
legitimised by the organisation. Delegation of authority is the passing of formal
authority. Delegation can be viewed as the main source of authority.
Responsibility and authority go hand in hand.
1.4. Coordination
Coordination is a fundamental element of organising. Coordination comprises the

formal and informal procedures that integrate the activities that separate individuals,
teams, and departments in an organisation.

The primary reason for coordination is that departments and groups are
interdependent.
Du Toit, Erasmus and Strydom (2007: 179) maintain that organising is carried out in
a context where many different factors need to be taken into account. They identify
five factors:
• The environment in which a business operates – the environment may be

stable or turbulent and/or technologically dominated.
• The relationship between strategy and structure – structure should always
follow strategy.
• The size of the business.
• Staff employed by the business.
• The organisational culture.
1.5. Virtual Organisations
Due to the acceleration of information and communication technologies, virtual

organisations are expected to play a critical role in the global economy. Various
companies in some sectors will soon exist only at a virtual level. The main difference
between virtual organisations and traditional ones is in the way they deal with
knowledge: the traditional corporation stores knowledge by binding employees long-
term; the virtual enterprise of the future buys knowledge on the market based on the
need (Ksenija, 2016).
A virtual organisation refers to, “A goal-oriented enterprise composed of multiple

members who reside in geographically dispersed locations and use technology media to
communicate and coordinate the fulfilment of a defined objective or task. First, a virtual
organisation is an enterprise composed of multiple members. A member of a virtual
organisation could be defined as any individual, group of individuals, or formally
organised enterprise recruited to serve as a satisfier of an input requirement. Second,
members of virtual organisations reside in geographically dispersed locations ….and
are restricted by location from sharing the same physical workspace. Often, members of
virtual organisations live in different countries and across multiple time zones. Third,
members of virtual organisations communicate and coordinate activities through

technology media e.g. email and or Internet applications like Skype, Instant
Messenger, and GoToMeeting,” (Ksenija, 2016: 35-36).
There are many reasons that organisations become virtual. According to Ksenija
(2016), these include:
• Globalisation along with growing trends to include global customers.

• Ability to pool expert resources in a swift manner.
• Creation of communities of excellence.
• Evolving and changing needs.
• Rapid specialised products and services.
• Increasingly required to use specialised knowledge.
1.5.1 Virtual Organisation Trends
Hybrid Models Taking Centre Stage
Commuting may be challenging for employees, and more people will start skipping it
entirely so that they can be more productive and flexible in their work patterns
(William, 2021). However, there are others who would like to return to their
workplaces, citing better peer interactions and face-to-face solves. This may lead to
several organisations adopting a hybrid model (William, 2021).
Reduced Conference Calls
Organisations now spend 20% of their meeting room budgets on collaborative

conference call technologies as they expand their remote work capabilities to support
global meetings (William, 2021). But as more people get used to working from home,
the intrusive nature of video conferencing calls takes shape. Many businesses
realised that trying to compensate for the lack of “human interaction” with conference
calls may lead to reduced team productivity, especially when most people spend
time only on calls (William, 2021).

Greater Adoption of Cloud-Based HR Technology
The increase in Cloud-based HR technologies in order to provide a seamless

experience for all their remote working employees. This facilitates employee
engagement and productivity (William, 2021).
Enhanced Cybersecurity
Cybersecurity is of great concern to organisations. The challenges surround how

data is accessed remotely and how secure it can get. Thus, one should expect to
see significant new investments in cybersecurity IT systems and infrastructure
(William, 2021).
Reduced Office Space Leading to More Savings
The need for sprawling physical office spaces is no longer a requirement. Fully remote
based organisations without headquarters or organisational offices will become a reality.
A growing trend is that many companies will plan a strategy to have specific days for
meetings and collaboration and other days for remote work (William, 2021).
More Flexible Work Times
Although many organisations are working remotely, the work schedule has remained
the same as before. This might be restrictive for the employees, as many must
balance out domestic tasks as well as work commitments. As a result, more
companies must assess the need for traditional work times. Others will provide
flexibility for their employees as long as the work is completed (William, 2021).
Increased Demand for Retraining and Reskilling
The increase in job automation has catalysed the demand for retraining and skill-upping.
Reports show that only 16% of the new people hired today possess adequate skills for
the current job (William, 2021). The most in-demand skills are artificial intelligence,
machine learning, cloud computing, cybersecurity amongst a few.

1.6. Conclusion
Effective organisational structure and design are crucial for the effective and efficient
management of any business. When managers develop or change an organisation’s
structure, they are engaged in organisational design. Organisational design involves
determining the organisational structure for an entire organisation in order to
implement the strategies and plans embodied in its goals. Organisational design
involves difficult choices about how to control – that is, to coordinate organisational
tasks and motivate the people who perform them to maximise an organisation’s
ability to create value.
Self-Assessment Questions
READ THE EXTRACT BELOW AND ANSWER THE QUESTIONS THAT

FOLLOW:
Google’s organisational structure supports the company’s organisational culture to
maximise innovation. Innovation contributes to the brand image, which is an essential
strength identified in the SWOT analysis of Google LLC. The alignment between the
corporate culture and corporate structure helps develop the company’s competitive
advantages to address strategic challenges linked to multinational firms like Apple,
Amazon.com, IBM, Intel, Microsoft, Facebook, Snap Inc. (Snapchat), and Twitter. The
case of Google is an example of aligning and effectively using corporate structure and
corporate culture to achieve strategic objectives in developing competencies for
business growth. This alignment promotes human resource competencies that are
essential to business development toward the fulfilment of Google’s corporate mission
and vision statements (Smithson, 2019).
1. Describe the organisational structure of Google. Conduct your own desktop

research in order to support your answer.
2. Suggest the various types of organisational structures to Google’s management.
3. Examine the extract above and critically discuss the impacts of Google’s
organisational structure on their performance.

CHAPTER 2:
Motivation
Chapter Outcomes
• Demonstrate a detailed understanding of motivation in the workplace.

• Distinguish between intrinsic and extrinsic motivation and apply them
in terms of its relationship to organisational needs.
• Evaluate and apply various motivation theories in terms of their relevance.
• Explore modern approaches to motivating employees.
2.1. Introduction
Employee motivation is central to enhanced productivity, quality, customer satisfaction
and overall organisational excellence. Different people are motivated by different things
at work, and it is the task of the manager to determine what motivates each person to
increase productivity. When striving to motivate employees, it is important to remember
that people differ and that they are all motivated by different variables.
Motivation is a vital contributing factor of employees in any organisation. If

employees are demotivated, they will not perform well regardless of the systems or
techniques which management might introduce.
2.2. Understanding Motivation

Motivation means different things to different people; most people would agree that it
consists of two main aspects:
• A force within people which drives them to work towards achieving certain
goals (example personal needs).
• External forces which influence people to behave in a certain way (example
organisational reward systems) the job of a manager in the workplace is to

get things done through employees. To do this the manager should be able to
motivate employees.
To understand motivation, one must understand human nature itself. Human nature
can be very simple, yet very complex too. An understanding and appreciation of this
is a prerequisite to effective employee motivation in the workplace and therefore
effective management and leadership.
Motivating employees is one of the most important managerial functions. Motivation

cannot be separated from leadership. Leadership is the ability to inspire people to
voluntarily and enthusiastically work towards the attainment of organisational goals.
Motivation is the willingness to do something and is conditioned by this “actions-

ability” to satisfy some need for the individual. Motivation is concerned with the
factors that influence people to behave in a certain way.
Employees can function at one of 3 basic levels, that is, the minimum level, expected
level and maximum level:
1. At minimum level, employees do less than what is required. At expected level,

employees do what is required.
2. At maximum level, employees do more than what is required.
What this means is that employees who do less than what is required, deliver poor
quality of work, are disciplined more often, and make more errors.
Employees that operate at expected levels, do nothing more or nothing less than just
what is required. Employees who operate at maximum level, are willing to go the
extra mile, apply their skills where needed, bend over backwards for their
organisation and put in extra effort to achieve goals.
Various definitions of motivation exist. These include:
• “Psychological forces that determine the direction of a person’s behaviour

in an organisation, a person’s level of effort, and a person’s level of
determinations,” (Jones and George, 2007).
• “A conscious decision to perform one or more activities with greater effort than
other competing activities,” (Cook and Hunsaker, 2001).

• “Psychological processes that arouse and direct goal-directed behaviour,”

(Kreitner and Kinicki, 2001).
A common definition of motivation:

“A set of processes that arouse, direct and maintain human behaviour toward
attaining some goal.”
The illustration below may give a better understanding of this definition.
Figure 2.1: Motivation
Motivation involves the arousal, direction, and maintenance of behaviour toward a

goal. An example of this process is shown above.
The first part of the definition deals with arousal. This has to do with the drive, or
energy behind people’s actions. For example, people may be guided by their interest
in making a good impression on others, doing interesting work, being successful at
what they do, and so on. Their interest in fulfilling these motives stimulate them to
engage in behaviours designed to fulfil them. But what will people do to satisfy their
motives? Motivation is also concerned with the choices people make and the
direction their behaviours take.
For example, employees interested in cultivating a favourable impression on their

supervisors may do many different things; compliment them on their good work, do
them special favours and work extra hard on an important project. Each of these
options may be recognised as a path toward meeting the person’s goals.

The final part of the definition deals with maintaining behaviour. How long will people
persist at attempting to meet their goal? To give up in advance of goal attainment
means not to satisfy the need that stimulated behaviours in the first place. Obviously,
people who do not persist at meeting their goals (e.g., Salespeople who give up
before reaching their quotas) cannot be said to be highly motivated.
To summarise, motivation requires all three components: the arousal, direction, and
maintenance of goal directed behaviour. Common to all definitions pointed out above
is that motivation is a force that stimulates and directs behaviour, which is
meaningful to the individual.
Motivation can be described as goal directed behaviour. People are motivated when
they expect that the course of action is likely to lead to the attainment of a goal and a
valued reward. Some individuals need to be motivated to a greater or lesser extent.
High levels of motivation can be achieved by providing incentives and rewards.
Motivation can be described as intentional and directional.
Intentional refers to personal choice and persistence of action. Directional indicates

the presence of a driving force aimed at attaining a specific goal. A motivated person
is always aware that a specific goal must be achieved and will continuously direct all
his/her efforts at trying to achieve the goal.
2.3. Intrinsic versus Extrinsic Motivation
Motivation can result from either external or internal sources.
Intrinsic Motivation
Intrinsic motivation arises as a result of internal forces. It emerges through personal
enjoyment and educational achievement that is derived from doing something might
enjoy (Ganta, 2014). Examples include autonomy, mastery, accomplishment,
responsibility, and accountability.
Extrinsic Motivation
Extrinsic motivation is triggered by external forces. This means that motivation arises
out of factors that are outside the individual. Examples of extrinsic motivators include

social recognition, money, fame, competition, or material achievements are all

examples of extrinsic motivation (Ganta, 2014).
Intrinsic and extrinsic factors are presented in Figure 2.2 below:
Figure 2.2: Intrinsic Versus Extrinsic Factors
Individuals can be intrinsically motivated, extrinsically motivated or both intrinsically and

extrinsically motivated. Some people might value intrinsic rewards more than extrinsic
rewards but the actual value which people place on these rewards can differ from
person to person and from time to time. It is important for managers to determine what
employees expect as rewards and what values they place on the rewards.
The 3 components of motivation are:
• Direction- what a person is trying to do.

• Effort- how hard a person is trying?
• Persistence- how long a person keeps on trying?

2.4. The Process of Motivation
The motivation process can be seen in the illustration below.
This model suggests that motivation is initiated by the conscious or unconscious

recognition of unsatisfied needs. An unsatisfied need creates tension, which
stimulates drives within the individual.
Goals are then established which it is believed will satisfy these needs and wants
and a behaviour pathway is selected which is expected to achieve the goal. If the
goal is achieved, the need will be satisfied, this will lead to the reduction of tension,
and the behaviour is likely to be repeated the next time a similar need arises.
Figure 2.3: Motivation Process
2.5. Guidelines for Motivating People
The following are some guidelines that managers should adopt to ensure that their
subordinates are motivated:
• Get to know employees well: No two people are alike. Managers should be
well informed and have a good knowledge of their employee’s characteristics
such as their subordinate’s skills, job knowledge, values, qualifications, and
many other characteristics as possible so that they can make well-informed
decisions about these employees.
• Understand the needs of subordinates: Communication with subordinates
should be occur on a personal basis - one to one. (Manager and the
employee).

The more a manager knows about what the employees need in the
workplace, the greater the chance that these needs will be satisfied, and this
will in turn make it easier to create an environment in which they can become
motivated to perform well.
• Be pro-active in creating an environment in which people can motivate
themselves: That is by getting rid of aspects in their work environment which
will prevent them from performing well, such as poor equipment, cumbersome
administrative systems etc.
• Managers should assist subordinates to overcome problems that will
prevent them from performing well: Subordinates should be rewarded
appropriately using both intrinsic and extrinsic rewards.
• Managers should demonstrate their own commitment: Become a role
model and lead by example.
• Employees should be treated fairly: With regard to pay, benefits, workload,
and discipline.
• Encourage employees to achieve their goals: Focus on the positive
aspects of their performance.
• Subordinates should be given regular, objective feedback on their
performance: This means that their performance has to be measured in
some way.
• Managers should ensure that employees are not demotivated: If

employees are demotivated, managers must investigate the reasons for the
dissatisfaction and do everything they can within reason to eliminate the
causes of the dissatisfaction. Encourage subordinates to set their own goals
or set goals for them that they accept and are committed to:
▪ Job design.
▪ Employee involvement programmes such as participative
management and quality circles.
▪ Management-by-objectives (MBO) strategies. o Intrapreneurial
incentives.
▪ Training and education.
▪ Employee-recognition programmes.
▪ Empowerment programmes.
▪ Reward systems.
▪ Career management
▪ Employee engagement.

(Badenhorst-Weiss, Botha, Cant, Jansen van Rensburg, and Krüger, 2019)
Other Motivators
Other forms of motivators include:
• Healthy collegial relationships.
• Appropriate compensation levels.
• Health-related benefits.
• Funding for further studies.
• Flexible working hours.
• A healthy work-life balance.
• Flat organisational structure.
• Feedback.
• Non-financial rewards such as respect, recognition, acknowledgement,
individualised attention, and achievement of goals.
• Job security.
• Autonomy.
• Travel opportunities.
• Custom made incentives such as technological rewards in the form of the
latest smart devices and digital products.
2.6. De-motivation
Some signs that would indicate that employees are de-motivated would-be low
performance levels, grievances, disputes, absenteeism, labour turnover and strikes.
A very difficult task, in an organisation would be to get people to become motivated

and perform well if there is a negative environment which de-motivates them.
Hertzberg found that the factors which de-motivate people are poor relationships with
their superiors and co-workers.
He also found that in organisations where there are too many rules, policies and
procedures prevent people from performing well. The same happens when there are
unpleasant working conditions, and low or unfair pay structures.

These issues need to be addressed before one can motivate employees

Hertzberg’s research also indicated that in order for people to be motivated or to
perform well they should be given:
o Interesting work: Work that employees enjoy, not monotonous or boring.

o Responsibility: Employees should be given responsibilities within the
organisation.
o Opportunity to grow or develop in their jobs: Employees should grow with
the company in other words promotions should take place allowing employees
to better themselves and grow with the organisation.
o Opportunity to achieve something within the organisation: Employees
should be able to achieve personnel as well as organisational goals within the
organisation.
2.6.1 Equity
Equity is the fairness and justice of people in give and take relationships. There are
three main types of equity which affect employee motivation: Internal equity, External
equity, and Procedural equity.
Internal equity refers to the extent to which employees within an organisation are
treated fairly in terms of the compensation they receive (pay and benefits) the type of
work they are allocated, the way they are disciplined, and the way in which
managers and supervisors relate to them.
An example of this would be: If eight employees are salesmen, all doing the same
job equally well but are being paid very different rates of pay, the employees who are
being paid the lower rate will be extremely disappointed.
If a supervisor generally favours one employee above the others for reasons other
than that person’s performance this will be regarded as unfair and would probably
cause dissatisfaction.
2.6.2 Self confidence
People who are not confident about their ability to do their work, will not strive to
achieve high levels of performance.

2.6.3 Trust
People will not perform well for long periods if they do not trust their superiors,
especially regarding the rewards that they should receive. Trust could be easily
broken, for instance, if managers promise certain rewards, for example, a promotion
or a salary increase, but break this promise and not give employees what they were
promised
2.7. Frustration- Induced Behaviour
If a person’s motivational driving force is blocked before reaching a desired goal,

there are two sets of possible outcomes:
2.7.1 Constructive behaviour
This is a positive reaction to the blockage of a desired goal, and can take two main
forms:
2.7.1.1 Problem solving
Problem solving this is the removal of the barrier, for example repairing a damaged
machine.
2.7.1.2 Restructuring or compromise:
Restructuring or compromise is the substitution of an alternative goal, although such

a goal may be of a lower order; for example, taking an additional part- time job
because of failure to be promoted for a higher grading.
2.7.2 Frustration
This is a negative response to the blockage of a desired goal and results in a

defensive form of behaviour. There are many possible reactions to frustration caused
by failure to achieve a desired goal. These can be summarised under four broad
headings.
o Aggression: A physical or verbal attack on some person or object; for example,

striking a supervisor, rage or abusive language, malicious gossip about a

supervisor as well as destruction of equipment. This form of behaviour may be

directed against the person or object, which is perceived as the source of
frustration that is the actual barrier or blocking agent.
o Displaced aggression: A form of aggression where a person may find a

safer, easier person or object as a scapegoat to vent their frustration on. For
example, picking an argument with a friend at work, shouting at the cleaner,
or kicking the wastepaper bin.
o Fixation: This is continuing to repeat actions that have no positive reactions,

for example, repeatedly trying a machine which is clearly broken and will not
work.
o Withdrawal: This is giving up or resigning, for example, refusal to accept

responsibility, absenteeism, leaving a job for good.
2.8. Motivational Theories
Motivational theories can be divided into Content theories, Reinforcement theories,

Instrumentality theories, and Process theories (Badenhorst-Weiss et. al, 2019).
What is motivation? Why do people behave in the manner that they do? Why do
certain people refrain from doing certain things? Can managers in a predictable and
a systematic way influence people to act in the way they want them to?
Motivation theories attempt to answer these questions in an organisational context.

There are many competing theories that attempt to explain the nature of motivation,
these theories help to explain the behaviour of certain people at certain times. A theory
which aids an understanding of how best to motivate people at work would be useful.
The basis of this theory is the belief that an unsatisfied need creates tension and a
state of dis-equilibrium. To restore the balance, a goal that will satisfy the need is
identified, and a behaviour pathway that will lead to the achievement of the goal is
selected. All behaviour is therefore motivated by unsatisfied needs. Need theories

argue that individuals are motivated to perform work within organisations so as to

fulfil certain needs.
Not all needs are equally important for a person at any one time- some may provide
a much more powerful drive towards a goal than others, depending on the
individual’s background and present situation.
The needs theory was developed originally by Maslow (1954), who postulated the
concept of a hierarchy of needs which he believed was fundamental to personality.
2.8.1. Maslow’s Hierarchy of Needs
The most famous classification of needs is the one formulated by Maslow (1954).
Maslow identified five categories of needs which apply to people in general. These
needs are organised in levels from the most basic needs to the more sophisticated
needs (Robbins, 2003). The levels of needs are:
• Physiological needs: The need for oxygen, food, shelter, water, sex, and
other bodily needs.
• Safety needs: The need for protection against danger and the deprivation of
physiological needs.
• Belongingness needs (social): The need for love affection and acceptance
as belonging to a group.
• Esteem needs: The need to have a stable, firmly base, high evaluation of
oneself and to have the respect of others.
• Self-actualisation needs (self-fulfilment): The drive to become what one is
capable of becoming, includes growth, achieving one’s potential, self-
fulfilment. (Badenhorst-Weiss et. al, 2019).
Maslow’s theory maintains that an individual will seek to satisfy his/her lower need
before attempting to satisfy his/her higher need. For example, an individual will seek
to satisfy his/her physiological needs (e.g., through acquiring a job which provides
money for food, water, and shelter) before he/she attempts to satisfy his/her safety
needs (e.g., Through obtaining job security and safe working conditions).

While numerous criticisms of Maslow’s theory have been made, it is of use to

managers in that it identifies that different individuals seek to satisfy different needs.
In order to motivate their employees, managers must seek to identify and address
the needs which individuals are attempting to satisfy through their work.
Figure 2.4: Maslow’s Hierarchy of Needs
2.8.2. Alderfer’s ERG Theory
Alderfer identifies three categories of needs (Badenhorst-Weiss et. al, 2019) which
an individual seeks to satisfy:
o Existence needs: These needs relate to our basic material existence needs
(similar to Maslow’s physiological and safety needs).
o Relatedness needs: These entail the need to establish and maintain
relations with others, (similar to Maslow’s affiliation/social needs and the
external aspects of Maslow’s esteem needs).

o Growth needs: This grouping of needs relates to our inherent desire for
personal development. Growth needs are similar to the esteem and self-
actualisation needs identified by Maslow.
In contrast to Maslow, Alderfer argues that an individual can be motivated by more

than one category of needs at one time. More than one level of need can be
operative in the same person at the same time. In other words, needs do not present
themselves in a neat, linear, chronological order from lower to higher levels.
As with Maslow’s theory, the contribution which Alderfer makes to assist managers is
the recognition that individual employees are attempting to satisfy different needs at
work.
2.8.3. Herzbergs Motivation-Hygiene Theory
Herzberg’s Motivation-Hygiene theory was proposed by Fredrick Herzberg in 1959. The

Motivation-Hygiene is based on the effect of motivation factors and hygiene factors on
job satisfaction as fundamental human needs. According to the Motivation-Hygiene
theory, job satisfaction is one of the primary needs among staff. Hygiene factors have
more of a physical presence in the working environment and include salaries, working
conditions, job security, co-worker relationships, status, company policies, supervisor
quality, insurance and vacations. Motivation factors include
responsibility, self-actualisation, professional advancement, recognition,
meaningfulness of the job etc (Badenhorst-Weiss et. al, 2019).
Table 2.1: Herzbergs Motivation-Hygiene Theory

Hygiene Factors Motivation Factors
Salaries Responsibility
Working conditions Self-actualisation
Job security Professional advancement
Co-worker relationships Recognition
Status Meaningfulness of the job
Company policies Autonomy
Supervisor quality Creative opportunities
Insurance Intrinsic interests
Vacations Personal growth
BACHELOR OF COMMERCE IN SUPPLY CHAIN

MANAGEMENT 39
A lack of motivation and hygiene factors may be a cause for employee

dissatisfaction. Satisfying the factors above may contribute to improved job attitudes,
productivity, and ultimately organisational performance.
2.8.4. Mcclelland’s Achievement Motivation Theory
McClelland identifies three types of needs:
o Need for achievement, which refers to the desire to accomplish something

difficult, the need to excel and the need to be successful.
o Need for affiliation, the need to have friendly and mutually beneficial
relationships with other people. To be liked and accepted by other people.
o Need for power, which refers to the desire to influence, control and encourage
others. For someone who has a high need for power, the manager can provide
the person with responsibility in the job (Badenhorst-Weiss et. al, 2019).
McClelland identifies that different employees are driven by different needs.

McClelland argues that individuals with a need for achievement are successful
entrepreneurs, while top managers require a strong need for power and a low need
for affiliation (Kreitner and Kinicki, 2001). McClelland’s theory has important
implications for selection and placement of employees as well as for job design.
2.8.5. Goal-Setting Theory
Goal setting is one of the key aspects of motivation. It is important that managers ensure
that employees are working towards goals which will help to improve their performance.
This will result in improved organisational performance. The starting point in the goal
setting process should therefore be the setting of organisational goals.
In doing this, critical questions need to be asked and answered such as: What is our
main line of business? What do we want to achieve? Who are our customers? Which
area of the market are we trying to capture? In other words, a strategic plan should
be established which all the employees can understand and commit to.
Research shows that the setting of goals affects an employee’s motivation and
performance. Kreitner and Kinicki (2001) identify four motivational mechanisms of
goal setting:

o Goals direct attention: They focus on an employee’s attention on what is

important and relevant.
o Goals regulate effort: Where the level of effort is relative to the difficulty of the
goal.
o Goals increase persistence.
o Goals encourage the development of goal: Attainment strategies and
courses of action.
Seven steps are involved in setting goals. They are as follows:
Step one: Clarify specific goals to be achieved.

A job description (which is the process of identifying the tasks, duties and
responsibilities that make up a job) will be helpful in guiding the manager in this step.
Step two: Specify how the performance in question will be measured.

Outcomes can be measured in terms of physical units (quantity and quality), money
(sales, costs, profits, income) and behaviour.
Step three: Specify the specific standard to be reached. The degree of performance
that should be achieved.
Step four: Specify the time span involved Set deadlines.
Step five: Prioritise goals

Rank goals in terms of their relative importance if there are more than one.
Step six: Rate goals according to difficulty.

Rank goals in terms of how difficult they are if there is more than one goal.
Step seven: Determine coordination requirements and ensure that the goals of other
people are not conflicting.
Other important contingency factors associated with goal setting theory are: The more
difficult the goal the higher the performance. For simple tasks, difficult and specific goals
lead to higher performance. Feedback enhances the achievement of specific

and difficult goals (Kreitner and Kinicki, 2001); In other words, people will perform
better when they receive continuous feedback on how well they are progressing
towards the goal.
Goal commitment, or the extent to which an employee is personally committed to

achieving a goal, affects goal setting outcomes (Kreitner and Kinicki, 2001).
2.8.6. Equity Theory
Equity theory is a model of motivation which explains how “people strive for fairness
and justice in social exchanges or give-and-take relationships” (Kreitner and Kinicki,
2001).
Equity theory argues that employees make comparisons about their job inputs
(education, experience, effort, competence, etc.) and outputs (salary, salary increases,
recognition, etc.) with the inputs and outputs of other employees (Robbins, 2003). When
employees notice inequities, they react in one of the following ways:
• Change their inputs (e.g., through not exerting so much effort) (Badenhorst
Weiss et. al, 2019).
• Change their outputs (e.g., request a salary increase) (Badenhorst-Weiss et.

al, 2019).
• Distort perceptions of oneself.
• Distort perceptions of the others.
• Choose a different referent.
• Leave the field (e.g., resign from the job) (Robbins, 2001).
Equity theory has some important implications for motivating people:
Avoid unemployment
Companies that attempt to save money by reducing employees’ salaries, may find
that employees react in many different ways, for example employees may steal, save
a few minutes of their workdays or otherwise withhold production. Employees may
also embark on a strike (partial or concerted refusal to do work).

Avoid overpayment
Some employees work hard and go the extra mile in an organisation, managers
might think paying people more than they deserve would be a useful motivational
technique. This does not work because one employee is overpaid, and the rest are
underpaid as it results in a decrease in productivity by other employees.
Give people a voice in the decisions that affect them. When people have an
opportunity to voice their opinions, they feel that the decision has been made fairly.
The equity theory has a number of implications for managers. These may be noted
as follows:
• It is important that managers give attention and consideration to employees’

perceptions of fairness and equity.
• Managers generally benefit if employees are involved in the decision-making
process (such as participating in their own performance appraisals).
• Cooperation and teamwork can be promoted through the manager’s
equitable treatment of all employees.
• Managers must pay attention to the organisations climate and ensure
principles of fairness and equity are installed in organisations. A climate which
supports fairness and equity leads to increased employee satisfaction.
2.8.7. Expectancy Theory
Expectancy theory, developed by Vroom, is a popular theory of motivation. The

theory argues that motivation is dependent on whether or not employees believe that
their efforts will result in high performance, and whether or not this performance will
result in the desired outcomes. The process of motivation which expectancy theory
presents is depicted below:

Figure 2.5: Expectancy Theory
The Motivation Process Expectancy Theory (adapted from Jones and George, 2000)
His model is based on three key variables:
1. Valence.
2. Instrumentality.
3. Expectancy.
This theory is founded on the idea that people prefer certain outcomes from their
behaviour to others. They anticipate feelings of satisfaction, should the preferred
outcome be achieved. Expectancy theory argues that the following three factors are
important to an employee’s motivation:
Expectancy: Is the belief as to the level of performance which will result from an
individual’s effort (input); in other words, how likely is it that the performance goal will
be reached.
Instrumentality: Refers to the belief that a certain level of performance will result in
the attainment of outcomes. In other words, will various outcomes be received if the
performance goal is reached?
Valence: The value of the outcome to the individual. In other words, how desirable
or undesirable are these outcomes?

The theory has some important practical implications for managers:
Managers should assist employees in their performance goals through coaching and
support, and in so doing increase expectancy (effort-performance relationship).
Managers need to influence an employee’s instrumentalities (performance- outcome

relationship) and monitor the employee’s valence of the outcome. In this regard,
managers should:
• Develop and communicate performance standards to employees.
• Use accurate and valid performance ratings when appraising an employee’s

performance.
• Use performance ratings to differentially allocate rewards among employees

Expectancy theory employees will not be motivated to attend HRD programmes and
try to learn from them unless they believe that:
1) Their efforts will result in learning the new skills or information presented in
the programme.
2) Attending the programme and learning new skills will increase their job
performance.
3) Doing so will help them obtain desired outcomes or prevent

unwanted outcomes.
2.9. Conclusion
In conclusion, motivation carries a high level of strategic value. Theories and modern
approaches to employee motivation are key in creating a productive and healthy
workforce. This will yield better results in terms of quality, communication, customer
satisfaction and overall organisational performance.


FOLLOW:
The Google Way of Motivating

Employees by Martin Luenendonk
September 18, 2019
When it comes to motivating their employees, it can be said without question that
Google stands out from the rest. Google was named the 2014 “Best Company to
Work For” by the Great Place to Work Institute and Fortune Magazine. The
organisation topped the list for the fifth time. True, in its short lifespan, Google has
acquired for itself a huge and bright workforce (over 50,000 employees spread
throughout the world) that serves millions of people all over the globe. However,
what is even more exemplary is how Google heavily pampers its employees while
still being able to extract one-of-a-kind and outstanding ideas and products from
them.
(Luenendonk, 2019)
1. Evaluate the validity of the extract above by discussing the various ways that
Google motivates their staff. Conduct your own desktop research to support
your answer.
2. Identify and discuss the motivation theories that are applicable to an
organisation such as Google.
3. Suggest the various modern means of employee motivation in fast paced
business environments riddled with uncertainties.

CHAPTER 3:
Groups and Teams
Chapter Outcomes
• Explain the principles of groups and teams within a business context.
• Outline the different types of groups in current organisational contexts.
• Describe the reasons for group formation in order to achieve organisational

goals.
• Apply the group development processes to businesses in order to enhance

overall business performance.
• Identify the characteristics of high-performance teams and its impact on

organisational excellence.
3.1. Introduction
This chapter will examine the role and features of Groups and Teams within the
organisation by considering the following:
• Types of groups and reasons for group formation.

• Stages in group development.
• Group dynamics.
• Developing groups into teams.
• Types of teams.
• Characteristics of work teams.

3.2. Groups
A Group refers to two or more individuals, interacting and interdependent, who come
together to achieve goals (Badenhorst-Weiss et. al, 2019). A team is a special kind
of group, but not all groups are teams.
3.3. Reasons for Group Formation
The motivation for individuals to form groups within organisations is based on:
• Group members’ needs (such as the need for social interaction or self-
realisation).
• Proximity and attraction.
• Group goals which may appeal to a particular individual.
• Economics (where the efficiency and effectiveness which the group enables
provides for greater satisfaction of economic needs).
• Status. Belonging to the top management group or to a work union has its
own status.
• Groups represent power because group action can very often achieve more
than the individual can.
• Security to the individual. By joining the group there is “safety in numbers”
(Smit and de Cronjé, 2002:320).
3.4. Significance of Groups
Groups and Teams as Performance Enhancers
One of the main advantages of using groups is the opportunity to obtain a type of
synergy: People working in a group can produce more or higher-quality outputs than
would have been produced if each person had worked separately. Factors that
contribute to synergy include the ability of group members to bounce ideas off one
another, to correct another’s mistake, to bring in diverse knowledge base to discuss
problems and to accomplish tasks that are to vast form an individual to achieve. To
take advantage of the potential for synergy, managers need to make sure groups are
composed of members who have complementary skills and knowledge relevant to
the groups work (Jones and George, 2020).

Groups, Teams, and Responsiveness to Customers
Being responsive to customers can be difficult to achieve given the various constraints.
In manufacturing organisations, customers' needs and desires for new and improved
products must be balanced against engineering constraints, production costs and
feasibilities, government safety regulations, and marketing challenges. Cross-functional
teams can provide a wide variety of skills and expertise found at different levels in an
organisation's hierarchy. In a cross-functional team, the expertise and knowledge in
different organisational departments are brought together in the skills and knowledge of
the team members (Jones and George, 2020).
Teams and Innovation

Innovation, the creative development of new products, new technologies, new
services, or even new organisational structures. Individuals working alone do not
possess the extensive and diverse skills, knowledge, and expertise required for
successful innovation. Managers can better encourage innovation by creating teams
of diverse individuals who together and have the knowledge relevant to a particular
type of innovation. Team members can uncover each other’s flaws and balance each
other’s strengths and weaknesses. Managers can empower teams and make their
members fully responsible and accountable for the innovation process (Jones and
George, 2020).
Groups and Teams as Motivators

Members of groups, and especially members of teams, are often more motivated
and satisfied than individuals. The experience of working alongside other highly
charged and motivated people can be stimulating and motivating: Team members
can see how their efforts and expertise directly contribute to the achievement of
team and organisational goals, and they feel personally responsible for the outcomes
or results of their work. Working in a group or team can also satisfy organisational
members' needs for engaging in social interaction and feeling connected to other
people (George, et al, 2019).

3.5. Types of Groups
Various types of groups form within organisations for various reasons.
Smit and de Cronjé (2002:320-2) identify both formal and informal groups which exist
within organisations.
Formal groups are created by managers and include:
• Command Groups: which include a manager and his subordinates.

• Task Groups: which are created for the purpose of performing a particular
project. Once the project has been completed the group will disband (Smit
and de Cronjé, 2002:322).
Informal groups are not created by managers and include:
Friendship Groups: Which are composed of employees who enjoy each other’s
company and socialise together (Jones, et al, 1998) A social group is one of the
most common types of informal groups, usually consisting of between 3 and 12
members who frequently participate together in activities and share feelings. The
sense of loyalty between members may be greater than towards their employer
(Hellriegel et al., 2008:333).
Interest Groups: Which comprise employees who seek to achieve a common goal
within the organisation for which they work (for example, a childcare interest group
which seeks to achieve the establishment of a childcare facility within the
organisation) (Jones, et al, 1998). The emphasis on the interest group is on the
needs of the group itself. The reason for its existence is the shared interests of the
members (Smit and de Cronjé, 2002:321)
3.6 The Characteristics of Groups
The following general group characteristics emerge as a group develops

(Badenhorst-Weiss et. al, 2019).

Status: Refers to “prestige grading, position, or rank within a group” (Robbins and
Coulter, 2003:402). The status of group members can result from a number of
factors, such as, level of expertise and/or seniority.
Roles: A role refers to the “set of expected behaviour patterns of an individual” (Robbins
and Coulter, 2003:400). Individuals within a particular g r o u p are expected to behave in
a manner which is appropriate to their role. For example, a task group’s leader should
ensure that he/she adequately performs the planning, leading organising and controlling
tasks associated with his/her role. Each member in a group fulfils a role, and each role
carries a role expectation – the way other people believe a person should act in a given
situation (Smit and de Cronjé, 2002:330).
Group Norms: Group norms emerge from interactions between group members and
specify standards of behaviour and work expected in the group (Smit and de Cronjé,
2002:330). Norms can be formal, such as in this editorial section each person
completes at least 8 pages per day; or informal, such as, “On Friday afternoons we
all eat lunch together.”
Leadership: Good leadership, where the group’s leader provides direction and
motivates his/her subordinates, is necessary for the group to be effective.
Leadership in a group is a critical factor in both formal and informal groups (Smit and
de Cronjé, 2002:329).
Cohesiveness: Refers to the “degree to which members are attracted to each other
and motivated to stay in the group” (Robbins and Coulter, 2003:403).
Studies have found that in groups where performance norms exist, the greater a
group’s cohesiveness, the greater its productivity. Various strategies can be
employed to enhance group cohesiveness, such as reducing the size of the group
and increasing the time which group members spend with each other (Robbins and
Coulter, 2003:404).
Group Size: The size of a group can impact on the group’s overall performance. Indeed,
it has been found that smaller groups complete tasks more quickly than larger

groups, although larger groups have been found to be more effective than smaller
groups in problem solving (Robbins and Coulter, 2003:403).
Conflict: Is a further characteristic of groups (Smit and de Cronjé, 2002:330).

However, although ‘conflict’ generally carries negative connotations, conflict within
groups can be effectively utilised to improve creative group performance (Robbins
and Coulter, 2003:404).
3.7. Group Dynamics
How groups function and, ultimately, their effectiveness hinge on group characteristics
and processes is known collectively as group dynamics (Jones and George, 2020).
Group Size, Tasks, and Roles

Managers need to take group size, group tasks, and group roles into account as they
create and maintain high-performing groups and teams.
Group Size
The number of members in a group can be an important determinant of members'
motivation and commitment and group performance. There are several advantages
to keeping a group relatively small compared with members of large groups,
members of small groups tend to:
1) Interact more with each other and find it easier to coordinate their efforts.
2) Be more motivated, satisfied, and committed.
3) Find it easier to share information.
4) Be better able to see the importance of their personal contributions for group
success.
A disadvantage of small rather than large groups is that members of small groups have
fewer resources available to accomplish their goals. Large groups with 10 or more
members also offer some advantages. They have more resources at their disposal to
achieve group goals than small groups do. These resources include the knowledge,
experience, skills, and abilities of group members as well as their actual time and effort.
The disadvantages of large groups include the problems of communication and

coordination and the lower levels of motivation, satisfaction, and commitment that
members of large groups sometimes experience (Jones and George, 2020).
Group Tasks
The appropriate size of a high-performing group is affected by the kind of tasks the
group is to perform. Task interdependence, the degree to which the work performed
by one member of a group influences the work performed by other members. As task
interdependence increases, group members need to interact more frequently and
intensely with one another, and their efforts must be more closely coordinated if they
are to perform at a high level (Jones and George, 2020).
Pooled task interdependence exists when group members make separate and
independent contributions to group performance; overall group performance is the
sum of the performance of the individual members. Motivation in groups with pooled
interdependence will be highest when managers reward group members based on

individual performance (Jones and George, 2020).
Sequential task interdependence exists when group members must perform specific
tasks in a predetermined order; certain tasks have to be performed before others, and
what one worker does affect the work of others. With sequential interdependence, it is
difficult to identify individual performance, because one group member's performance
depends on how well others perform their tasks (Jones and George, 2020).
Reciprocal task interdependence exists when the work performed by each group
member is fully dependent on the work performed by other group members (Jones
and George, 2020).
Group Roles
A group role is a set of behaviours and tasks that a member of a group is expected
to perform because of his or her position in the group. Members of cross-functional
teams are expected to perform roles relevant to their special areas of expertise.
Managers should clearly describe expected roles to group members when they are
assigned to a group.
Role-making occurs as workers take on more responsibility in their roles as group

members. In self-managed work teams and some other groups, group members
themselves are responsible for creating and assigning roles. Many self-managed work

teams also pick their own team leaders. When group members create their own roles,
managers should be available to group members in an advisory capacity, helping them
effectively settle conflicts and disagreements (Jones and George, 2020).
3.8. Stages in Group Development
As many managers overseeing self-managed teams have learned, it sometimes

takes a self- managed work team two or three years to perform up to its capabilities.
A group’s achievement depends, in part, on its stage of development. Although
every group's development over time is unique, researchers have identified five
stages of group development that many groups seem to pass through.
In the first stage, forming, members try to get to know each other and reach a
common understanding of what the group is trying to accomplish and how group
members should behave. During this stage, managers should strive to make each
member feel that he or she is a valued part of the group.
In the second stage, storming, group members experience conflict and disagreements
because some members do not wish to submit to the demands of others. Disputes may
arise over who should lead the group. Managers need to keep an eye on groups at this
stage to make sure conflict does not get out of hand (Jones and George, 2020).
During the third stage, norming, close ties between group members begin to
develop, and feelings of friendship and camaraderie emerge. Group members arrive
at a consensus about what goals they should seek to achieve and how group
members should behave toward one another.
In the fourth stage, performing, the real work of the group is accomplished.
Managers overseeing self- managed work teams must empower team members and
make sure teams are given enough responsibility and autonomy at the performing
stage (Jones and George, 2020).
The last stage, adjourning, applies only to groups that are eventually disbanded,
such as task forces. During adjourning, a group is dispersed. Managers should have
a flexible approach to group development and should keep attuned to the different
needs and requirements of groups at the various stages (Jones and George, 2020).

3.9. Group Decision Making
Smit and de Cronjé (2002:333) point out that:
“Groupthink” occurs when individual group members do not express their own views,
where the group’s consensus differs from their own thinking on a problem. Group
shift occurs when group members take a less risky (more conservative) approach
than the decision that individual members would make on their own.
3.10 Managing Groups and Teams for High Performance
High-performing work teams can be defined as groups that consistently satisfy the
needs of customers, employees, investors, and other stakeholders and that
frequently outperform other teams that produce similar products or services.
Creating such high performance begins with three key strategies:
1. Motivating group members to work toward the achievement of organisational

goals.
2. Reducing social loafing.
3. Helping groups manage conflict effectively (Jones and George, 2020).
Figure 3.1: Characteristics of High Performing Teams

3.11. Developing Groups into Teams
A Team is regarded as a self-directing and self-managed, where members perform

work interdependently, are committed to a common purpose, and are evaluated on,
and rewarded for, work which they produce together (Smit and de Cronjé, 2002:334).
Work teams are formal groups made up of interdependent individuals who are
responsible for the attainment of a goal (Robbins and Coulter, 2003:411).
3.12. Why use Teams?
Teams are popular because they:
• Increase performance Create esprit de corps Increase flexibility.

• Take advantage of workforce diversity.
• Allow managers to do more strategic planning.
3.13. Types of Teams
The following types of teams can be identified (Badenhorst-Weiss et. al, 2019):
Problem Solving Teams: Which are composed of employees from the same work
environment. They meet for a couple of hours a week to discuss and solve problems
particular to their work-environment.
Cross Functional Teams: Which comprise functional managers (or employees)

from the same hierarchical level within the organisation. These teams serve to
address complex organisational problems.
Functional Teams: Composed of a manager and his or her employees from a

particular functional area (say, the sales manager and salespeople).
Self-Managed Teams: Which function autonomously and the management functions of

planning, organising, leading, and controlling become the team’s responsibility. For the
implementation of self-managed teams to be effective, appropriate changes need

to be made to the organisational system (e.g., performance management, flattening of

organisational structure, employee empowerment) (Smit and de Cronjé, 2002:338).
Virtual Teams: Are groups of individuals who collaborate, through various forms of
information technology, on one or more projects, while being in different locations in
a country or around the world. Virtual teams primarily work in any place, at any time,
and – increasingly– across organisational boundaries, because members may be
from different organisations.
3.14 Key Characteristics of High-Performance Teams Clear Goals
High performance teams have a clear understanding of the goals to be achieved

(Badenhorst-Weiss et. al, 2019):
Relevant Skills: The team is composed of highly skilled individuals who work well
together. In other words, the team possesses both technical and interpersonal skills
(Robbins and Coulter, 2003:414). Smit and de Cronjé, (2002:335) maintain that team
members should be selected on the basis that their skills should be complementary to
each other. This means that their skills should be varied, not duplicated, in the team.
Mutual Trust: Effective teams have a high mutual trust between members, believing
in the character and integrity of each other.
Unified Commitment: High performance teams exhibit intense loyalty and

dedication to the team and will do whatever it takes to help the team succeed. This
unified commitment to the team’s goals and a willingness to expend extraordinary
amounts of energy to achieve typifies high performance teams (Robbins and Coulter,
2003:415). Smit and de Cronjé, (2002:335) point out that the manager’s role is to
focus on involving members and making sure that they understand the goals, accept
them, and are committed to achieving them.
Good Communication: Good teamwork involves a large amount of feedback, which

implies a lot of communication. High performance teams are characterised by good
communication.

Negotiation Skills: Effective teams tend to be flexible and are continually adjusting
in who does what. This flexibility requires team members to possess negotiating
skills. Problems and relationships are regularly changing, and members need to be
able to confront and reconcile differences (Robbins and Coulter, 2003:415).
Appropriate Leadership: Effective leaders help to motivate a team to follow them

and to achieve goals. This applies to self- functional teams as well as virtual, cross-
functional, and functional teams. Team leaders empower members to take
responsibility and their role changes from managing to coaching and facilitating (Smit
and de Cronjé, 2002:336).
Internal and External Support: The team should have a sound infrastructure. This
includes proper training, a clear reasonable evaluation system, an incentive program
that recognises and rewards team activities and a supportive human resource
system (Robbins and Coulter,2003:416).
3.15 Conclusion
The value of groups and teamwork should not be understated. Groups and high-
performance teams are beneficial to organisations, especially in an ever evolving
internal and external environment plagued by constant change. High performance
teams are a must in terms of quick responses to dynamic contexts.
1. Discuss the various types of teams that would be effective in complex business
environments.
2. As a business practitioner, discuss the characteristics of high-performance
teams.
3. Discuss the process of group development in businesses.
4. Evaluate the significance of groups in organisations.

CHAPTER 4:
Management Decision-Making
Chapter Outcome s
• Analyse, discuss and apply the concept of decision making and its
relevance to business practice and operations.
• Explain the varying and uncertain conditions under which decisions are
made.
• Describe and apply the models of decision-making that are appropriate in
context of dynamic business environments.
• Differentiate between non-programmed and programmed decisions within
organisations.
• Assess the significance of group decision making in business management.
4.1. Introduction
Decision making skills are key to organisational excellence as well as organisational

resilience. Fast changing economies, markets and environments demand swift
decision-making processes. Thus, it is essential for managers to maintain the
appropriate decision-making skills in order to function effectively and ensure the
sustainability of the organisations through their actions.
4.2. Understanding Decisions
A decision is a choice made between two or more available alternatives. Managers

make decisions affecting the organisation daily and communicate those decisions to
others. Not all managerial decisions are of equal significance to the organisation.
Some affect a large number of organisation members, cost a great deal of money to
carry out, or have a long-term effect on the organisation. Such significant decisions

can have a major impact, not only on the management system itself, but also on the
career of the manager who makes them. Other decisions are fairly insignificant,
affecting only a small number of organisation members, costing little to carry out and
producing only a short-term effect on the organisation. Furthermore, decision making
as the central aspect of the planning function is the process of identifying and
choosing alternative courses of action in a manner appropriate to the demands of the
situation. This implies that alternative courses of action must be weighed and
weeded out. In developing goals, or in planning for the future, managers at all levels
of the organisation are confronted with decisions to make. In a decentralised
organisation, most members of the organisation participate in decision making. In a
centralised organisation, one person makes the most important decisions.
Importance of Decision-Making
Innovative decision making is crucial for organisational success (Oliveira et al., 2015
cited in Asikhia, Ogunode, Samson, Oluwatoyin, 2021). As organisations continue to
focus on and embrace the centrality of creativity, research, and development in order
to maintain competitiveness, making productive decisions based on such efforts
have become more challenging (Asikhia et al, 2021).
According to Litvaj, Ponisciakova, Stancekova, Svobodova, and Mrazik (2022), the

quality of management is dependent upon the quality of its decision-making.
Management decision-making is a special type of decision-making and the
significance in the business/organisation is generated mainly in the fact that its
quality and the results of these processes, particularly, the strategic decision-making
processes, has a direct impact on the efficiency and future success of the
organisation (Litvaj, Ponisciakova, Stancekova, Svobodova, and Mrazik, 2022).
Decision-makers must have some knowledge of the phenomenon otherwise, he/she
will not be able to make reasonable and justifiable decisions (Litvaj, Ponisciakova,
Stancekova, Svobodova, and Mrazik, 2022).
Example:
A company confronted with sales not rising as projected. This company may be forced
to decide whether to expand operations nationally and maybe even internationally. All

viable options will have to be considered before deciding, which is a daunting task.
The decision should consider the mission of the organisation, possible changes in
the external and internal environment and many other factors.
Although decision making has never been an easy process, it has become especially
challenging for today’s managers. The very speed of change forces managers to
make more and more decisions at a faster pace. Thus, decisions can be categorised
according to how much time a manager must spend in making them and the
organisational functions on which they focus.
4.3. Types of Decisions
Programmed decisions are routine and repetitive, and the organisation typically
develops specific ways to handle them. A programmed decision might involve
determining how products will be arranged on the shelves of supermarkets. For this
kind of routine, repetitive problem, standard- arrangement decisions are typically
made according to established management guidelines. At the heart of the
programmed decision procedures are decision rules.
A decision rule identifies the situation in which a decision is required and specifies how
the decision will be made. Decision rules permits managers to make routine decisions
quickly without having to go through comprehensive problem solving repeatedly.
Nonprogrammed decisions are typically one-shot decisions that are usually less
structured than programmed decisions. An example of the type of non- programmed
decision is whether this supermarket should stock many brands of products. The
manager making this decision must consider whether the new products will merely
stabilise products sales by competing with existing products carried in store or
actually increase various product sales by offering a desired brand of the product to
customers who has never bought that specific product in that store before.

•STRUCTURED
PROGRAMMED •REPETITIVE
DECISIONS •ORGANISATIONAL, OPERATIONAL, RESEARCH
BASED
•UNSTRUCTURED
NON-
•NON-REPETITIVE
PROGRAMMED
DECISIONS •PERSONAL, STRATEGIC, CRISIS, PROBLEM-
SOLVING
Figure 4.1: Programmed vs non-programmed decisions
4.4 Decision Making Process
After identifying the type of decision and the conditions under which the decision is
made, the decision maker must select the best possible solution. In most decision
situations, managers must go through a number of stages that help them think
through the problem and develop alternative solutions
The flow diagram below summarises each step in the normal progression that leads
to an optimal decision. These steps are more applicable to non-programmed
decisions than programmed decisions.

1. Define and
2. Set goals 3. Research
diagnose the 4. Compare
problem for and
alternative evaluate
solutions solutions
6. Implemen 5. Choose
7. Follow up
t the solution among
and control selected alternative
solutions
Figure 4.2: Rational decision-making model

Source: Rational decision-making model (Hellreigel et al, 2008:171)
Dealing with growing complexity:
For managers, increased situational complexity leads to more complex decisions,

which in turn makes situations yet even more complex. Thus, a working knowledge
of seven intertwined contributors to decision complexity can be of tremendous help
to decision makers. These several concepts are multiple criteria, intangibles, risk and
uncertainty, long-term implications, interdisciplinary input, pooled decision making
and value judgments. These shall be discussed very briefly below:
• Multiple criteria-any decisions taken often have to satisfy a number of

conflicting criteria representing the interest of different groups. Identifying
these different interest groups and trading off their conflicting interest is a
major challenge for today’s decision makers.
• Intangibles-factors such as customer goodwill and employee morale, although
difficult to measure, often influence decision alternatives.
• Risk and uncertainty-every decision alternative is confronted with the
possibility that it will fail to satisfy the relevant criteria.
• Long-term implications-decisions should have not only intended short-term
impact, but also unintended long-term impact.

• Interdisciplinary input-decision complexity is greatly increased when technical

experts such as lawyers, accountants, tax advisors and consumer advocates
are all consulted before making a decision. This is also a time-consuming
process.
• Pooled decision making-a single manager is very seldom involved in the entire
package of decisions. A single decision is usually a link in a chain and is passed
from hand to hand with the result being a complex series of recommendations
that will precede before the final approval and the overall decision.
• Value judgments-as long as decisions are made by people with different
backgrounds, values and perceptions, the decision-making process will be
marked by disagreement over what is wrong and right and what is good and
bad.
Certainty:
A condition of certainty exits when the outcome of a decision can be predicted

accurately, that is when the benefits or costs associated with an option is known. In
such a situation there is perfect knowledge about available options and their
consequences. Under conditions of certainty managers are faced simply with
identifying the consequences of available options and selecting the outcome with the
greatest benefit. Complete certainty, “Exists when decision makers know exactly
what the results of an implemented alternative will be. Under this condition,
managers have complete knowledge about a decision, so all they have to do is list
outcomes for alternatives and then choose the outcome with the highest payoff for
the organisation,” (Robbins and deCenzo, 2003:155).
Uncertainty:
Despite the fact that life is filled with uncertainties, managers are continually asked to
make the best decision they can in spite of the uncertainties about both the present
and future circumstances. There is, however, a negative correlation between
uncertainty and the decision maker’s confidence in a decision. In other words, the
more uncertain a manager is about the principal factors in a decision, the less
confident he will be about the successful outcome of that decision. Thus, the key lies
not in eliminating uncertainty, because it cannot be eliminated, but rather in learning

to work within an acceptable range of uncertainty. Robbins and deCenzo (2003:155)

suggest that the complete uncertainty condition, “Exists when decision makers have
absolutely no idea what the results of an implemented alternative will be.”
Risk:
A condition of risk exists when a decision must be made on the basis of incomplete but
reliable factual information. Under these conditions, the available options and the
potential benefits or costs associated with them are known and the probability that the
given event will occur. Therefore, the primary characteristic of the risk condition is that
decision makers have only enough information about the outcome of each alternative to
estimate how probable an outcome will be. Thus, the risk lies between complete
certainty and complete uncertainty. The risk condition is a broad one in which degrees of
risk can be associated with decisions. The lower the quality of information about the
outcome of an alternative, the closer the situation is to complete uncertainty and the
higher is the risk in choosing that alternative. Most decisions made in an organisation,
however, have some amount of risk involved in them.
Two types of decision-making models exist:
• The rational model, where the manager selects the best possible solution.
• The bounded rationality model, where the manager adopts a satisfying

approach to choosing a solution (Smit and de Cronjé, 2002).
Probabilities as discussed above, fall into two basic categories, namely:
• Objective probability-is derived from reliable historic data. It refers to the

likelihood that a particular state of things will occur, based on hard facts
and figures. Managers cannot be sure that certain events will occur, but
based on past records, they can determine the likely outcome of an event.
There is some element of risk.
• Subjective probability-this is done in the absence of historic data;

managers rely on past experience or personal judgment.

Thinking flexibly:
Thinking is an activity that managers engage in at all times. It is important that a

manager’s thinking does not get into an unproductive rut, for the quality of decisions
is a direct reflection of the quality of thinking.
4.5. Group decision making:
It was mentioned earlier that decision makers were defined as individuals or groups
that actually make a decision-that is, choose a decision alternative from those
available. The focus will now shift towards groups as decision makers.
Decisions made by a group are not necessarily better than the ones made by
individuals working alone. Groups when making decisions are subjected to social
processes such as the level of communication skills, dominance by a specific group
member and so forth. The two key topics under discussion will be the advantages
and disadvantages of using groups to make decisions and the best processes for
making group decisions.
Organisations make important decision by groups or management teams rather than

by individuals. Group decision-making is regarded as superior to individual decision-
making. When managers work as a team to make decisions and solve problems,
their choices of alternatives are less likely to fall victim to the biases and errors. They
are able to draw on the combined skills, competencies, and accumulated knowledge
of group members and thereby improve their ability to generate feasible alternatives
and make good decisions. Group decision-making also allows managers to process
more information and to correct one another's errors. In the implementation phase,
all managers affected by the decisions agree to cooperate. Potential disadvantages
are associated with group decision-making is that groups often take much longer
than individuals to make decisions. Getting two or more managers to agree to the
same solution can be difficult because managers' interests and preferences are often
different. In addition, just like decision-making by individual managers, group
decision-making can be undermined by biases (George, et al. 2019).

Table 4.1: Advantages and disadvantages of group decision making:

• Greater pool of knowledge: A • Social pressure-pressure to conform

group can bring much more may stifle the creativity of individual
information and experience in contributors.
solving a problem than can an • Minority domination-quality of group
individual acting alone. action may be reduced when the
• Different perspectives: group gives in to those who are the
Individuals with varied experience most dominant.
can help the group see decision • Logrolling-political wheeling and
situations and problems from dealing can displace sound thinking
alternative angles. when the individuals pet project or
• Greater comprehension: Those vested interest at stake.
who personally experience the • Goal displacement-secondary
give-and-take of group considerations such as winning an
discussion about alternative argument, making a point can
courses of action tend to displace the primary task of making
understand the rationale behind sound decision or solving a
the final decision. problem.
• Increased acceptance; Those
who play an active role in
group decision making view the
outcome as “ours” and not
“theirs”.
• Training ground-less
experienced participants learn to
cope with group dynamics by
actually being involved.

There are three best processes or methods for making/ improving group decision
making:
1. Brainstorming-usually conducted by lower-level management.

2. Nominal group techniques-usually conducted by middle and top
management.
3. Delphi technique-undertaken by top management.
Brainstorming:
This method stimulates creative solutions to problems. With this method, group
participants informally generate as many ideas as possible without evaluation by
others. This method promotes contributions from members who are shy, have
divergent ideas or have low status with the group. Group members are encouraged
to build on, but not criticise ideas produced by others. Certo (2003:159) defines
brainstorming as, “A group decision making process in which negative feedback on
any suggested alternative by any group member is forbidden until all members have
presented alternatives that they perceive as valuable.”
Nominal group technique:
This is another useful process for helping groups make decisions. As a structured
group decision making technique, it restricts discussion or interpersonal
communication during the decision-making process. Group members are physically
present but operate independently. This process is designed to ensure that each
group member has equal participation in making the group decision.
Robbins and de Cenzo (2003:160) suggests that it follows four steps:
• Step 1: Each group member writes down individual ideas on the decision or
problem being discussed.
• Step 2: Each member presents individual ideas orally. The ideas are usually
written on a board for all other members to see and to refer to.
• Step 3: After all members present their ideas, the entire group discusses these
ideas simultaneously. Discussion tends to be unstructured and spontaneous.

• Step 4: When discussion is completed, a secret ballot is taken to allow

members to support their favourite ideas without fear. The idea receiving the
most votes is adopted and implemented.
This technique is appropriate for situations in which a dominant person affects groups.
Delphi technique:
Decisions are made by experts in different geographical areas. This method does
not require the presence of the participants. The Delphi technique involves
circulating questionnaires on a specific problem among group members, sharing the
questionnaire results with them and then continuing to recirculate and refine
individual’s responses until a consensus regarding the problem is reached.
There are both advantages and disadvantages to both group and individual decision
making. Group decision making can be advantageous in that groups:
• Provide an increased diversity of views (which in turn contributes to creativity).

• Produce more holistic information.
• Generate decisions which are of a higher quality than individual decisions.
• Provide for greater acceptance of the decision (Robbins, 1997).
4.6. Conclusion
Managers and employees make decisions daily using a process that contains the
basic elements of decision making. Every time managers engage in planning,
organising, directing, or controlling organisational activities, they make a stream of
decisions. Decision making is the process by which managers respond to the
opportunities and threats that confront them by analysing the options and making
determinations, or decisions, about specific organisational goals and courses of
action.

1. “When you have a tough business problem to solve, you likely bring it to a group.
After all, more minds are better than one, right? Not necessarily. Larger pools
of knowledge are by no means a guarantee of better outcomes. Because of an
over-reliance on hierarchy, an instinct to prevent dissent, and a desire to
preserve harmony, many groups fall into groupthink.” (Emmerling and Rooders,
2020).
Critically evaluate the statement above. Support your argument with valid
reasons.
2. The fourth industrial revolution is changing the ways in which businesses

operate as well as the process of decision making. Discuss the various factors
that influence decision making in business.
3. Discuss the various other complexities associated with decision making for
managers.

CHAPTER 5:
Diversity Management
Chapter Outcomes
• Demonstrate a deep knowledge of diversity.

• Explain the importance of workforce diversity to current workplace
environments.
• Discuss diversity as a challenge to management and its influence on
• Analyse and apply diversity management approaches in current business
organisations.
5.1 Introduction
Diversity refers to differences between people. Some of these differences include

culture, race, ethnicity, economic class, and gender amongst a few. The
management of same is crucial for the optimal functioning of an organisation. Proper
care of diversity management may yield a variety of advantages for employees and
the organisation overall. Thus, the management of diversity requires that managers
be aware of the composition of their groups and teams.
5.2. Definition of Diversity:
Diversity, “Refers to characteristics of individuals that shape their identities and the
experiences they have in society. Diversity is the degree of basic human differences
among a given population. Major areas of diversity are gender, race, ethnicity,
religion, social class, physical ability, sexual orientation, and age,” (Certo 1993:74).
Understanding diversity is essential for managers today because managing diversity

will undoubtedly constitute a large portion of the management agenda well into the
21st century.
The Society for Human Resource Management cited in Fried and Fottler, (2015:
124) defines diversity as, “The collective mixture of differences and similarities that
includes, for example, individual and organisational characteristics, values, beliefs,
experiences, backgrounds, preferences, and behaviours. The organisation goes on
to define inclusion as, “The achievement of a work environment in which all
individuals are treated fairly and respectfully, have equal access to opportunities and
resources, and can contribute fully to the organisation’s success.”
Workforce diversity refers to the mix of people from various backgrounds in the
labour force. Two important aspects of workforce diversity are demographic
differences and cultural differences (Hellreigel et al, 2008:387).
5.3. The Social Implications of Diversity:
In most countries, it is clear that there is a heterogeneous mix of races, ethnicities,

religions, social classes, physical abilities and sexual orientations. Thus, these
differences, along with the basic human differences of age and gender, comprise
diversity. The purpose of exploring diversity issues in management is to suggest how
managers might include diverse employees equally, accepting their differences and
utilising their talents.
There are two groups that fall under diversity in organisations:
• Majority.
• Minority.
Majority group-refers to that group of people in the organisation who hold most of the
positions that command decision making power, control of resources and information
and access to system rewards. It must be noted that the majority is not always the
group with a numerical majority.
Minority group-refers to that group of people in the organisation who are smaller in
number or who lack critical power, resources, acceptance, and social status. It must
also be noted that the minority group is not always lesser in number than the majority
group.

Today, managers must understand increasingly diverse markets. Failure to discern

customers’ preferences can cost a company a great deal of business. Some argue
that one of the best ways to ensure that the organisation is able to penetrate diverse
markets is to include diverse managers among the organisation’s decision-making
team. Diversity in the managerial ranks has the further advantage of enhancing
company credibility with customers. Employing a manager who is of the same
gender or ethnic background as customers may imply to those customers that their
day-to-day experiences will be understood.
5.4 Challenges that Manager’s Face in Working with Diverse

Populations:
There are compelling reasons for an organisation to encourage diversity in its

workforce. For managers to fully appreciate the implications of promoting diversity,
however, they must understand some of the challenges they face in managing a
diverse workforce.
5.4.1. Changing demographics:
Demographics are statistical characteristics of a population. Demographics are an

important tool that managers can use to study workforce diversity. Workforces are
increasingly diverse in terms of demographics. Organisations and businesses also
form non-traditional relationships with employees through the engagement in flexible
working arrangements with, for example: Full-time contract workers, independent
contractors, part-time workers, home-based teleworkers and disabled workers
(Badenhorst-Weiss et. al, 2019).
5.4.2. Ethnocentrism and stereotyping:
Our natural tendency is to judge other groups less favourably than our own. This
tendency is the source of ethnocentrism, the belief that one’s own group, culture,
country, or customs are superior to others. Two related dynamics are:
• Prejudices-a preconceived judgment, opinion, or assumption about

an issue, behaviour, or group of people.

• Stereotypes-a positive or negative assessment of members of a group or

their perceived attributes. It is important for managers to know about
these negative dynamics so that they can monitor their own perceptions
and help their employees view diverse co-workers more accurately.
Older workers present some specific challenges for managers. Stereotypes and
prejudices link age with senility, incompetence, and lack of worth in the labour
market. It is the manager’s responsibility to value older workers for their contributions
to the organisation and to see to it that they are treated fairly. This requires an
understanding of and sensitivity to the physiological and psychological changes that
older workers experience. People with disabilities are subject to the same negative
dynamics that plague women, minorities, and older workers.
5.4.3. Discrimination:
When verbalised or acted upon, these negative dynamics can cause discomfort and
stress for the judged individual. In some cases, there is outright discrimination.
Discrimination is the act of treating an issue, person, or behaviour unjustly or
inequitably on the basis of stereotypes and prejudices. Discrimination occurs when
stereotypes are acted upon in ways that affect hiring, pay or promotion practices.
Other challenges facing minorities include the pressure to conform to the
organisation’s culture, high penalties for mistakes and tokenism. Tokenism refers to
being one of a very few members of a group in an organisation.
Nieman and Bennet (2008: 305) contend that the above problems can result in
friction, conflict and even violence in the workplace and that there is consequently a
need for proactive diversity management. These problems can impact negatively on
the competitive position of an organisation.
A diverse workforce poses a number of unique challenges for managers that could
jeopardise the competitiveness of the organisation if they are not effectively handled.
Included among these are the following:
• Lower group cohesiveness: Diverse groups tend to be less cohesive than

homogeneous groups. Because of a lack of similarity in terms of language,
culture, background, etc. among their members, diverse groups find it more
difficult to cultivate strong group cohesion. This could impact negatively on work

performance and teamwork, thus affecting the competitiveness of the

organisation.
• Communication problems: Misunderstandings, inefficiencies, inaccuracies
and slowness are typical communication problems experienced by diverse
groups.
• Mistrust and tension: Generally, people tend to associate with those who have
values or beliefs similar to their own. This tendency often leads to mistrust and
misunderstanding between groups (Nieman and Bennett, 2008: 305).
Table 5.1: Diversity challenges
Acceptance and Respect A fundamental value that contributes to a

successfully diversified workplace is respect
among workers and employees. When there
is a lack of acceptance of the diverse culture
and beliefs among employees, conflicts may
arise. Acceptance fosters mutual respect and
prevents conflicts from arising. Diversity
training will help employees understand,
accept, and respect each’s other’s
differences.
Accommodation of Beliefs Diversity in cultural, spiritual, and political
beliefs can sometimes pose a challenge in a
diverse workplace. Employees need to be
reminded that they shouldn’t impose their
beliefs on others to prevent spats and
disputes.
Language and Communication Language and communication barriers are

ever-present in companies with a diverse
workforce.
Physical and Mental Disabilities Often, disabled employees have a difficult
time navigating through their workplace
because proper accommodations as simple
BACHELOR OF COMMERCE IN SUPPLY

CHAIN MANAGEMENT 75
as wheelchair ramps are not available. Some

special needs employees also have service
dogs, and some office buildings do not allow
them inside. Make arrangements for service
dogs to be permitted in your place of work.
Have procedures in place for people with
physical or mental disabilities. Some
companies have a “quiet room” so that when
employees start to feel anxious, they can use
that room to ease their anxiety.
Generation Gaps By 2025, millennials will make up 75% of the
workforce, and they are changing the work
culture. Employees from other generations
may have difficulties adapting to changes in
the workplace and the work culture that the
younger generation are bringing about. In
larger corporations, there are more diversified
age groups, from teenagers to senior citizens.
As a result, cliques and social circles may be
formed, and some workers may be isolated
from the team.
Ethnic and Cultural Differences Sadly, issues from ethnic and cultural
differences are still present in the workplace.
There are still some individuals who hold
prejudice against people who have different
ethnic, cultural, and religious backgrounds as
their own. This prejudice and discrimination
should never be tolerated in the workplace (or
anywhere else). Cultural sensitivities training
and diversity awareness programs in the
workplace can help address this issue.
Gender Equality at the workplace A panel of seasoned entrepreneurs,
is yet to go mainstream corporates, and an investor, took a deep dive
into the issues of women empowerment in
the workplace at Fortune India Most Powerful
BACHELOR OF COMMERCE IN SUPPLY

CHAIN MANAGEMENT 76
Women summit. According to a 2017 World

Bank report India ranked 120 out of 131
countries when it came to female
participation in the workforce.
Sabbaticals work differently for men and

women. Marriage and motherhood can
almost be a certain death knell for a woman’s
career.
According to a recent survey, 40% of people

believe that both men and women will hire
men over women. This is supported by
another study that shows that men are 30%
more likely to be promoted to a managerial
position than women. Additionally, men earn
an approximately 24.1% higher base pay
than women.
Source: PMCPL, 2022
5.5 Benefits of Managing Diversity Effectively
When properly managed, diversity can yield various benefits to an organisation:
• Reputation for social responsibility.

• Attracting, retaining, and motivating employees.
• Acquiring greater insight into a diverse marketplace.
• Greater creativity, innovation and problem solving.
• Enhanced organisational flexibility (Nieman and Bennett, 2008: 305).
5.6. Pluralism:
Pluralism refers to an environment in which differences are acknowledged, accepted,

and seen as significant contributors to the entirety. A diverse workforce is effective

when managers are capable of guiding the organisation toward achieving pluralism.
Approaches or strategies to achieve effective workforce diversity has been classified
into 5 major categories:
1. “Golden Rule”
Approach-to diversity relies on the biblical dictate “do unto others as you would
have them do unto you.” The major strength of this approach is that it
emphasises individual morality. Its major flaw, however, is that individuals apply
the golden rule from their own particular frame of reference without knowing the
cultural expectations, traditions and preferences of the other person.
2. Assimilation Approach
Advocates shaping organisation members to fit the existing culture of the

organisation. This approach pressures employees who do not belong to the
dominant culture to conform at the expense of renouncing their own cultures
and worldviews. The end result is the creation of a homogenous culture that
suppresses the creativity and diversity of views that could benefit the
organisation.
3. “Righting-the-Wrongs”
Approach-is an approach that addresses past injustices experienced by a

particular group. When a group’s history places its members at a
disadvantage for achieving career success and mobility, policies are
developed to create a more equitable set of conditions.
4. Culture-Specific Approach
Teaches employees the norms and practices of another culture to prepare

them to interact with people from that culture effectively. This approach is often
used to help employees prepare for international assignments. The problem
with it is that it usually fails to give employees a genuine appreciation for the
culture they are about to encounter.
5. Multicultural Approach
Gives employees the opportunity to develop an appreciation for both

differences in culture and variations in personal characteristics. This approach
BACHELOR OF COMMERCE IN
SUPPLY CHAIN MANAGEMENT 78
focuses on how interpersonal skills and attitudinal changes relate to

organisational performance. One of its strengths is that assumes that the
organisation itself, as well as individuals working within it, will be required to
change in order to accommodate the diversity of the organisation’s workforce.
5.7. How to Manage Diversity Effectively
Various kinds of barriers arise when effectively managing diversity in organisations.

Some barriers originate in the person doing the perceiving; others are based on the
information and schemas that have built up over time concerning the person being
perceived. To overcome these barriers and effectively manage diversity, managers
(and other organisational members) must possess or develop certain attitudes and
values as well as the skills needed to change other people's attitudes and values
(Jones and George, 2020).
5.7.1. Steps in Managing Diversity Effectively
Consider the steps managers can take to change attitudes and values and promote
the effective management of diversity (Jones and George, 2020):
1) Secure Top Management Commitment
Top management needs to commit to correcting attitudes and ethical values in

their organisations to ensure diverse employees are treated fairly (Jones and
George, 2020).
2) Strive to increase the accuracy of perceptions
Managers should consciously attempt to be open to other points of view and

perspectives and encourage their subordinates to do the same (Jones and
George, 2020).
3) Increase diversity awareness and skills
Introduce diversity awareness programs to increase managers’ and employee’s

awareness of their own attitudes, biases, and stereotypes and the differing
perspectives of diverse management, subordinates, co-workers, and customers
(Jones and George, 2020).

4) Increase Diversity Skill
Efforts to improve the way managers and subordinates interact with each other
and improve their ability to interact with different kinds of people. Communication
with diverse employees is important.
5) Encourage Flexibility
Managers and subordinates must be open to different approaches and ways of doing
things. They must be patient and flexible to understand diverse perspectives.
6) Pay close attention to how organisational members are evaluated Review
objective performance indicators as they are less subject to bias.
7) Consider the numbers
Look at the number of various minority groups in the organisational hierarchy.
8) Empower employees to challenge discriminatory behaviours, actions, and remarks
Top managers should ensure zero tolerance to discrimination and encourage

employees to speak up and rectify situations when members are being unfairly
treated.
9) Reward employees for effectively managing diversity
Employees should be rewarded for their contribution to managing diversity.
10) Provide training using multi-pronged, ongoing approach
Provide a forum for people to discuss differing attitudes values and experiences.
Group exercises, role-playing, training videos and diversity related experiences
can help members develop skills they require to work effectively in organisations
(Jones and George, 2020)
11) Encourage mentoring of diverse employees
Supporting, mentoring, and providing diverse employees with the skills required
to move up ladder in the workplace is important (George, et al, 2019).

5.8 Managing Diversity and its Impact on Performance
An organisation with diverse employees can be a source of competitive advantage,

assisting the organisation to provide customers with better goods and services. The
variety of points of view and approaches to problems and opportunities that diverse
employees provide can improve managerial decision-making. Just as the workforce
is becoming increasingly diverse, so are the customers who buy an organisation's
goods or services. To suit local customers' needs and tastes, organisations often
vary the selection of products available in stores in different cities and regions.
Effective management of diversity can improve profitability by increasing retention of
valued employees. This, in turn, would lead to a decrease in the cost of hiring
replacements, as well as ensures that all employees are highly motivated. Recruiting
diverse employees must be followed with ongoing effective management of diversity
to retain valued organisational members (George, et al, 2019).
5.9 Conclusion
This chapter has explored the key areas related to managing diversity. In order to
acquire the benefits of diversity in business, one must ensure that adequate and
relevant diversity management approaches are implemented.

FOLLOW:
For a Culture of Appreciation and Respect: Diversity & Inclusion at

Mercedes-Benz
Our Statement
At Daimler we value the diversity of our workforce. For our global business, we make
the most of different experiences, skills, and perspectives. Our workforce reflects the
diversity of our customers, suppliers, investors, and our general environment.

Everyone at Daimler is committed to a working environment of appreciation and

mutual respect. It is how we shape our company's future.
All members of the Mercedes-Benz Board of Management support our diversity

statement and actively help to implement the principles enshrined in it:
Celebrating our differences. We respect and value the diversity of our employees.
We encourage them to contribute this diversity to the company.
Creating connections. We benefit from the diverse experience, skills and

perspectives of our employees around the world. They reflect the diversity of our
customers, suppliers and investors.
Shaping the future. Every one of us helps to create a working environment

characterised by appreciation and mutual respect. Together we are shaping the
future of Mercedes-Benz along these lines.
Our Fields of Action
Our three fields of action, Best Mix, Working Culture and Customer Access, are at
the foundation for a corporate culture in which diversity can unfold.
Best Mix: We form mixed teams – based on equal opportunity and non-
discrimination. Because diverse perspectives make us successful.
Working Culture: We create a work environment characterised by appreciation and

respect and offer opportunities for a better work-life balance.
Customer Access: We understand and value our customers in their individuality. Our
goal: Enabling people to experience mobility that fits to them and their life.
Source: Mercedes-benz Group, 2022

Questions:
1. Read the article above and discuss the ways in which Mercedes Benz aims to
promote diversity.
2. After a careful analysis of the article above, discuss the various ways diversity
approaches adopted at Mercedes-Benz is beneficial to the organisation.
3. Critically discuss some of the diversity related challenges managers may
experience at Mercedes Benz.
4. Discuss the social implications of diversity.

CHAPTER 6:
Conflict Management
Chapter Outcome
• Discuss in detail the concept of, and sources of conflict in business.

• Apply conflict management strategies in order to achieve continued
organisational success.
6.1. Introduction
Conflict, disagreement, and opposing interests are inevitable in dynamic, modern

workspaces. This chapter explores the importance of managing conflict appropriately
and making use of the perks of same. In addition, the sources of conflict as well as
the strategies to manage conflict, in various contexts, are uncovered.
6.2. What is Conflict?
Conflict is a disagreement between two or more parties – individuals, groups,

departments, organisations, countries – who perceive that they have incompatible
concerns.
As a group performs its assigned tasks, disagreements inevitably arise. When the
term conflict is encountered, it refers to perceived incompatible differences resulting
in some form of interference or opposition. Whether the differences are real or not is
irrelevant. If people in a group perceive that differences exist, then there is conflict.
Organisational conflict arises when the goals, interests, or values of different individuals
or groups are incompatible, and those individuals or groups block or thwart one
another's effort to achieve their objectives. Conflict is an inevitable given the wide range
of goals for the different stakeholders in the organisation. The current business

environment continues to evolve at a rapid pace, which intensifies the existence of

conflict throughout the organisation.
6.3. Transitions in Conflict Thought
Three different views of conflict have arisen over the years as Robbins (2003:384)
states: Philosophies of Conflict (Cook and Hunsaker, 2003:431):
1. Traditional view of conflict - conflict must be avoided, that it indicates a

problem within the group.
2. Human relations view of conflict - argues that conflict is natural and inevitable
outcome in any group and need not be negative but rather, has potential to be
a positive force in contributing to a group’s performance.
3. Interactionist view of conflict - not only can conflict be a positive force in a
group but that some conflict is absolutely necessary for a group to perform
effectively. This view does not suggest that all conflicts are good.
Unitarist perspective
This is the traditional view that sees conflict as undesirable, destructive and to be
avoided at all costs.
Philosophies of Conflict:
• Pluralist perspective:
An organisation is seen as a collection of different groups, all with their
legitimate aims to pursue, and therefore a degree of conflict is normal.
• Radical perspective:
Organisational conflict reflects the conflict in the wider society between
owners and workers.
• Interactionist perspective:
Conflict is neither good nor bad but simply inevitable.
BACHELOR OF COMMERCE 85
6.4. Functional versus Dysfunctional Conflict
There are several types of conflict in organisations: Interpersonal, intragroup,

intergroup, and interorganisational. Understanding how these types differ can help
managers deal with conflict.
Interpersonal Conflict
Interpersonal conflict is conflict between individual members of an organisation,
occurring because of differences in their goals or values.
Intragroup Conflict
Intragroup conflict arises within a group, team, or department. Managers of
departments usually play a key role in managing intergroup conflicts. Sometimes
intergroup conflict occurs between founders of companies and their families and
supporters on the one hand, and the top managers who run them on the other.
Interorganisational Conflict
Interorganisational conflict arises across organisations, when managers in one
organisation feel that another organisation is not behaving ethically and is threatening
the wellbeing of certain stakeholder groups. Interorganisational conflict also can occur
between government agencies and corporations (George, et al. 2019).
Some conflicts are seen as supporting the goals of the work group and improving its
performance; these are functional conflicts of a constructive nature. However, other
conflicts are destructive and prevent a group from achieving its goals, these are
termed dysfunctional conflicts. There are three types of conflict that arise when
comparing functional and dysfunctional conflict
1. Task conflict relates to the content and goals of the work.

2. Relationship conflict relates and focuses on interpersonal relationships.
3. Process conflict refers to how the work gets done.

6.5. Conflict Management
Cook and Hunsaker (2003:433) provide an overview of the process as follows:
Figure 6.1 Conflict management
Firstly, a manager needs to do is determine the stage the conflict is in. Thereafter,
the source of conflict must be established. Next, the manager must examine the
consequences and performance outcomes. Finally, the manager needs to decide
which conflict style orientation and specific strategies can be applied most
productively to manage the conflict.

Table 6.1 Conflict management overview
BACHELOR OF COMMERCE 88
Organisations are made up of interacting individuals and groups with varying needs,
objectives, values, and perspectives that naturally lead to the emergence of conflict.
When conflict occurs, it can either stimulate new positive changes or result in
negative consequences.
Conflict needs to be managed appropriately to provide positive outcomes and avoid

the negative possibilities. Interpersonal conflict management styles include
competing, avoiding, accommodating, collaborating, and compromising. Interacting
groups can be coordinated through rules and procedures, hierarchy, planning, liaison
roles, task forces, teams or integrating departments. Strategies for preventing and
reducing dysfunctional intergroup conflict include emphasising the total organisation
by focusing on superordinate goals, increasing communication, joint problem-solving,
negotiating, expanding resources, obtaining a mediator, changing the organisational
structure, smoothing things over, and avoiding potential win-lose conflict situations.
There is no one conflict-handling intention that will always be the best. Managers
must select an intention appropriate for the situation
Robbins (2003:403) advises as follows:
Use competition when:

• Quick, decisive action is vital, on important issues.
• Unpopular actions need implementing (e.g., Cost-cutting, enforcing unpopular
rules, discipline).
• On issues vital to the welfare of the organisation.
• You know you’re right.
• Against people who take advantage of non-competitive behaviour.
Use collaboration:
• To find an integrative solution when both sets of concerns are too important to
be compromised.
• When the objective is to learn.
• To merge insights from people with different perspectives.
• To gain commitment by incorporating concerns into a consensus.
• To work through feelings that have interfered with a relationship.

Use avoidance when:

• An issue is trivial.
• When no chance is perceived of satisfying concerns.
• When potential disruption outweighs the benefits of resolution.
• People need to cool down and regain perspective.
• gathering information supersedes immediate decision.
• Others can resolve the conflict more effectively.
• Issues seem tangential or symptomatic of other issues.
Use accommodation:
• When you find that you’re wrong and to allow a better position to be heard.
• To learn and show reasonableness.
• When issues are more important to others.
• To satisfy others and maintain cooperation.
• To build social credits for later issues.
• To minimise loss when outmatched and losing.
• When harmony and stability are especially important.
• To allow people to develop by learning from mistakes.
Use compromise:
• When goals are important but not worth the effort of potential disruption of
more assertive approaches.
• When opponents of equal power are committed to mutually exclusive goals.
• To achieve temporary settlements to complex issues.
• To arrive at expedient solutions under time pressure.
• As a backup when collaboration or competition is unsuccessful.
6.6. Sources of Conflict
Conflict in organisations results from a variety of sources. This includes different

goals and time horizons, overlapping authority, task interdependencies, different
evaluation or reward systems, scarce resources, and status inconsistencies (Jones
and George, 2020).

Different goals and time horizons

Managerial activity involves organising people and tasks into departments and
divisions to accomplish an organisation's goals. This grouping creates departments
and divisions that have different goals and time horizons, and the result can be
conflict between these groups or departments (Jones and George, 2020).
Overlapping Authority
When two or more managers, departments, or functions claim authority for the same
activities or tasks, conflict is likely.
Task Interdependencies
Task interdependence occurs when member of a group or a group fails to finish a
task that another member or group depends on, causing the waiting worker or group
to fall behind. This creates conflict in the group because other group members were
dependent on the late member's contributions to complete the work. Whenever
individuals, groups, teams, or departments are interdependent, the potential for
conflict exists.
6.7. Conclusion
This chapter has explored the area of conflict and conflict management. It is vital for
leaders to ensure that sources of conflict are detected and managed in the
appropriate manner.
1. Discuss the various sources of conflict in modern day business environments.

2. Identify and discuss the approaches to resolving various forms of conflict in the
workplace.
3. Critically evaluate the significance of ensuring that challenges relating to
conflict are adequately resolved.
4. Discuss the various transitions in conflict thoughts.
5. Critically assess the differences between functional and dysfunctional conflict
and discuss their impact on organisational performance.

CHAPTER 7:
Organisational Culture
Chapter Outcomes
• Define organisational culture.

• Demonstrate an understanding of the functions of organisational culture.
• Apply the associated strategies and theories of organisational culture.
• Develop an understanding of its relevance to organisational performance.
7.1. Introduction
Characteristics of culture include family patterns, customs, social classes, religions,

political systems, clothing, music, food, and laws. Understanding components of
culture helps diverse people to deal more constructively with one another. To
manage cultural diversity, there is no room for inflexibility and intolerance, and they
should be totally displaced by adaptability and acceptance.
7.2. Organisational Culture Defined
Organisational culture is a set of values, beliefs, norms, and patterns of behaviour

that are shared by organisation members, and that guide their behaviours.
Individuals who understand an organisations culture are better able to accurately
interpret organisational events, know what is expected of them, and behave in an
appropriate way in unfamiliar situations.
An organisation’s culture is shaped by the people inside the organisation, by the

ethics of the organisation, by the employment rights given to employees, and by the
type of structure used by the organisation. Organisational culture shapes and
controls behaviour within the organisation. It influences how people respond to a
situation and how they interpret the environment surrounding the organisation.

Cultures of organisations that provide essentially the same goods and services can
be very different. Organisations that have a strong culture try to perpetuate that
culture by selecting individuals who already share the culture.
Organisations which are committed to, diversity, (where individuals from all cultural
backgrounds are viewed and treated as full organisational members and participate
fully within the organisation), should strive to appreciate one another’s differences,
and behave in ways that encourage active participation and acceptance of all
members in achieving the organisations goals (Desimone, 2002).
Each culture is distinguished by a unique set of attributes, for example, food

preferences, race, language, common geographic origin etc. These characteristics
help people to differentiate one culture from another.
Organisational culture has a pervasive influence over the behaviours of

organisations and the individuals who comprise organisations. The culture of an
organisation develops over time, and employees are not even aware of its existence.
Culture involves general assumptions about the manner in which work should be
done, appropriate goals for the organisation as a whole and for departments within
the organisation and personal goals for employees. Organisational culture is also
known as the personality of the organisation.
A number of definitions of ‘organisational culture’ exist. These include:
• Mullins (2003) points out that a popular and simple way of defining
organisational culture is, “how things are done around here.”
• Atkinson (cited in Mullins, 2003) asserts that organisational culture reflects,
“The underlying assumptions about the way work is performed; what is
acceptable and not acceptable and what behaviour and actions are
encouraged and discouraged.”
• Schein (cited in Kreitner and Kinicki, 2001) argues that organisational
culture is, “The set of shared, taken-for-granted implicit assumptions that a
group holds and that determines how it perceives, thinks about, and reacts
to its various environments.”
• Robbins (2003) maintains that organisational culture refers to, “A system
of shared meaning held by members that distinguishes the organisation
from other organisations.”

Research has suggested that there are seven primary dimensions which comprise
the essence of an organisation’s culture. These are the degree to which the
organisation’s approach provides for:
Risk taking and innovation

The degree to which employees are encouraged to be innovative and take risks.
Attention to detail
The degree to which employees are expected to exhibit precision, analysis, and
attention to detail.
Outcome orientation
The degree to which management focuses on results or outcomes rather than on the
techniques and processes used to achieve those outcomes.
People orientation
The degree to which management decisions take into consideration the effect of
outcomes on people within the organisation.
Team Orientation
The degree to which work activities are organised around teams rather than
individuals.
Aggressiveness
The degree to which people are aggressive and competitive rather than easy going.
Stability
The degree to which organisational activities emphasise maintaining the status quo
in contrast to growth.
Organisational culture is concerned with how employees perceive the seven

characteristics, not whether they like them.

7.3. The Role of Culture in Organisations
Culture plays several important roles in organisations, an organisation’s culture

provides a sense of identity for its members. The more clearly an organisation’s
shared perceptions and values are defined, the more strongly people can associate
with their organisations mission and feel a vital part of it (Greenberg, 2000).
Culture serves to clarify and reinforce standards of behaviour. While this is essential
for newcomers, culture guides employ words and deeds, making it clear what they
should do or say in a given situation. However, when there is a strong, overarching
culture, people feel that they are part of that larger, well-defined whole and involved
in the entire organisations work. Bigger than any one individual’s interest, culture
reminds people about what their organisation is all about (Greenberg, 2000).
7.4. The Function(s) of Organisational Culture
Organisational culture performs a number of functions within an organisation. Culture

is like a genetic code of an organisation and is significant from various perspectives.
The functions of organisational culture include the following:
• Organisational culture has a boundary definition role- in that it distinguishes

an organisation from others (Robbins, 2001).
• Organisational culture provides members with an organisational identity.
• Organisational culture, “Facilitates the generation of commitment to
something larger than one’s individual self-interest.”
• Organisational culture promotes the stability of the social system and
addresses the creation of a positive working environment and the
management of conflict and change (Kreitner and Kinicki, 2001). It is the,
“Social glue that helps hold the organisation together,” (Robbins, 2003).
• Organisational culture shapes attitudes and behaviours by assisting
employees and teams in understanding their surroundings (Robbins, 2003;
Kreitner and Kinicki, 2001).
• Organisational culture promotes code of conduct: a strong culture in an
organisation explicitly communicates accepted modes of behaviour so that

people are conscious that certain behaviours are accepted, and others would
never be visible.
Subcultures contribute to organisational diversity: sub-cultures, and sub-systems of

values and assumptions which may be based on departmentalisation, activity
centres, or geographical locations, provide meaning to the interest of localised,
specific groups of people within the macro-organisation. Sub-cultures can affect the
organisation in many ways:
(i) They may perpetuate and strengthen the existing culture.

(ii) They may promote something very different from those.
Table 7.1: Benefits of a positive organisational culture

Recruitment Many HR professionals agree that a
strong company culture is one of the best
ways to attract potential employees. A
positive culture gives an organisation a
competitive advantage. People want to
work for companies with a good
reputation from previous and current
employees. A company with a positive
culture will attract the type of talent that is
willing to make their next workplace a
home, rather than just a stepping-stone.
Employee loyalty Not only will a positive culture help

recruitment effort, but it will also help
retain top talent as well. A positive culture
fosters a sense of employee loyalty.
Employees are much more likely to stay
with their current employer when they
feel they are treated right and enjoy going
to work every day.
BACHELOR OF COMMERCE IN SUPPLY CHAIN

MANAGEMENT 96
Job satisfaction It’s no surprise that job satisfaction is

higher at companies with a positive
corporate culture. Employers who invest
in the well-being of their employees will
be rewarded with happy, dedicated
employees.
Collaboration Employees are much more likely to come

together as a team at companies with a
strong culture. A positive culture
facilitates social interaction, teamwork,
and open communication. This
collaboration can lead to some amazing
results.
Work performance Strong company cultures have been

linked to higher rates of productivity. This
is because employees tend to be more
motivated and dedicated to employers
who invest in their well-being and
happiness.
Employee morale Maintaining a positive company culture is

a guaranteed way to boost employee
morale. Employees will naturally feel
happier and enjoy their work more when
they work in a positive environment.
Source: Kohll (2018)

7.5. The Creation and Maintenance of Organisational Culture

Organisational culture is created and maintained in a number of
ways.
The Creation of Culture
The founders of the organisation have a major impact on the early culture of the
organisation. They create the organisation’s early culture through:
- Recruiting employees who think and behave in similar ways to them.

- Indoctrinating and socialising these employees in their ideology and values.
- Modelling behaviour for these employees (Robbins, 2003).
The Maintenance of Culture
Organisational culture can be maintained in a number of ways, which include:
Selection:
Where during the selection and recruitment process not only an applicant’s
knowledge and competencies are assessed, but the potential of his/her values to ‘fit’
with the organisation’s culture is considered as well (Robbins, 2003).
Socialisation:
Refers to, “The process by which newcomers learn an organisation’s values and
norms and acquire the work behaviours necessary to perform jobs effectively,”
Robbins (2001) states that the most critical time for socialisation is when the
employee first enters the organisation.
The socialisation process is a three-stage process and involves:
1. Pre-arrival stage-which involves the learning and perceptions about work and
the organisation, prior to entry into the organisation.
2. Encounter stage-which involves the employee in assessing whether his/her
perception, developed in the pre-arrival stage, are congruent with the reality of
the work and organisation. Thus, should there be incongruence, the employee

would need to undergo socialisation to detach him/her from his/her previous

perception.
3. Metamorphosis stage-is where the employee resolves the problems that
he/she experienced during the encounter stage. The organisation may utilise
formal or informal, individual, or collective and fixed or variable means to bring
about the desired metamorphosis. The metamorphosis process is complete
when the employee is comfortable with his/her job and the organisation.
7.6. How Employees Learn Culture
Creation of an appropriate work culture is a time-consuming process. Therefore,

organisational culture cannot suddenly change the behaviour of people in an
organisation. A number of management tools are used to channel the behaviour of
people in a desired way. No change can be effectively brought about without
involving people. Culture is transmitted to people in a number of forms, the most
potent being stories, rituals, language and material symbols.
Stories
Provide for the maintenance of organisational culture in that they provide accounts of
the organisation’s history and significant events, which in turn serve as indicators
and reinforces of the organisation’s norms and values.
Rituals
These are the, “Repetitive sequences of activities that express and reinforce the key
values of the organisation, which goals are most important, which people are
important, and which are expendable,” (Robbins, 2003: 524).
Examples include the annual Christmas office party and annual award ceremonies.
Material Symbols
Such as the size of offices, the nature of the office furnishings, the cars which
management and employees drive and employee dress, also serve to maintain
organisational culture (Robbins, 2003).

For example, some companies use impressive buildings to convey the organisations
strengths and significance as a large, stable place. Other companies rely on slogans
to symbolise their values. These slogans change all the time.
If a collection of photos of oneself with successful people symbolise one’s own

success, then displaying such photos in an organisation may be recognised as
reflecting the successfulness of the organisation. Organisations regularly use such
symbols to convey important aspects of their organisational culture (Greenberg 6th
ed, 1997).
Language
Many organisations and units within organisations use language as a way to identify
members of a culture or sub-culture. By learning this language, members attest to
their acceptance of the culture and, in so doing, help to preserve it.
The kitchen personnel in large hotels use terminology foreign to people who work in
other areas of a hotel.
But once assimilated, this terminology acts as a common denominator that unites
members of a given culture or subculture.
The article below by Kohll (2018) provides ways in which eemployers can build a
positive corporate culture at their workplace:
Emphasis on employee wellness: No organisation can expect to foster a positive

culture without healthy employees. Employees need to feel their best – physically,
mentally, and emotionally – in order to contribute to a positive culture. In many ways,
employee wellness is a foundation for a positive corporate culture. Leaders should
ensure that employees have the resources, tools and on-site healthcare
opportunities they need to live their healthiest life – inside and outside of the office.
Grow off your current culture: Building a positive corporate culture doesn’t mean
employers should completely scrap everything their company currently stands for.
Rather than expecting employees to do a complete 180, employers should work on
enhancing the current culture they have. Ask employees what they do and don’t like
about their current culture and work environment. Leaders should use these

suggestions to help create a positive corporate culture that’s appropriate for their
workforce.
Provide meaning: Meaning and purpose are more important in the workplace now
than ever. A majority of employees crave meaning and purpose in their work.
Without it, job satisfaction takes a major hit. And a company certainly can’t build a
culture without any meaning behind its work. Create a mission statement and core
values and communicate these to employees. Give employees specific examples of
how their roles positively impact the company and its clients.
Create goals: No organisation can have corporate culture without clear goals in
place. Employers should gather with their team to create goals and objectives that
everyone can work towards. Creating a company goal brings employees together
and gives everyone something specific to work towards – other than a pay check.
Encourage positivity: In order to build a positive culture, employers need to start by

encouraging positivity in the workplace. It’s essential to promote positivity on a daily
basis. Employers should lead by example by expressing gratitude, smiling often and
remaining optimistic during difficult situations. Employees are much more likely to
engage in positive behaviour when they see their employers doing so.
Foster social connections: Workplace relationships are an essential element to a

positive company culture. When employees barely know their colleagues and rarely
interact, there’s no possible way for a strong culture to grow. Leaders need to provide
employees with opportunities for social interactions in the workplace. Consider weekly
team meals, happy hour excursions or even a book club to get things started.
Listen: Being a good listener is one of the easiest ways employers can start to build
a positive culture. According to research gathered by CultureIQ, 86% of employees
at companies with strong cultures feel their senior leadership listens to employees,
as compared to 70% of employees at companies without strong culture. Listen to
employees, and make sure they feel their voices are heard and valued.
Empower “culture champions”: Similar to “wellness champions,” culture champions

are employees who embody the values and missions of a company. They are excited

to promote a company’s aspirations and encourage others to do the same. Identify

these employees and encourage them to keep spreading the cheer.
One of the most important roles a leader has is creating a positive culture. Be sure to
cultivate a positive culture that enhances the talent, diversity, and happiness of your
workforce. Building a unique, positive culture is one of the best – and simplest –
ways to get your employees to invest their talent and future with your company.
7.7. Types of Organisational Culture
Various management theorists have attempted to identify types of organisational

cultures.
Hofstede’s Model of National Cultures
Hofstede in Cook and Hunsaker (2001) argued that national culture results in the
national mental pre-programming of the nation’s values, which in turn impacts on
organisational culture. The results of his extensive research provide a cultural
framework which identifies five dimensions of culture:
Individualism vs Collectivism, which looks at the degree to which an individual or

collective approach is preferred.
Power Distance which refers to the degree to which, “People expect inequality in
social institutions,” (Kreitner and Kinicki, 2001: 118).
Uncertainty Avoidance which refers to the degree to which people are willing and
able to tolerate risk and uncertainty (Jones and George, 2007).
Masculinity vs. Femininity which looks at the degree to which the society upholds
masculine traits (such as assertiveness and competitiveness) as opposed to
feminine traits (such as caring and a people orientation).
Long term vs. short term orientation which refers to the degree to which people
persist in their attempts to achieve long term goals as opposed to a focus on
happiness in the present (Jones and George, 2007).

The results of Hofstede’s research showed, for example, that the cultures within
companies within the United States are high on individualism, moderate on power
distance, and low in long term orientation. On the other hand, Japan has a culture
which is high on masculinity, uncertainty avoidance, and long-term orientation
Schein’s Three Cultures of Management
While Hofstede focuses on how national culture impacts on an organisational culture,

Schein (1996) focuses on three ‘cultures of management’ which exist simultaneously
within organisations. These cultures are the operator culture, the engineering culture,
and the executive culture.
The characteristics of the operator, engineering, and executive culture as identified

by Schein (1993) are discussed below.
The Operator Culture
Schein (1996) asserts that the operator culture is the most difficult to describe. This
culture provides for attention to be given to the tasks of the organisation and is
essentially, “Based on human interaction, and most line units learn that high levels of
communication, trust, and teamwork are essential to getting the work done
efficiently,” (Schein, 1996:13).
The Engineering Culture
The engineering culture is based on the assumption that, “The ideal world is one of
elegant machines and processes working in perfect precision and harmony within
human intervention,” (Schein, 1996). One of the key themes in this culture is, “The
preoccupation of designing humans out of systems rather than into them,” (Schein,
1996). The engineering culture therefore promotes efficient and reliable operations.

The Executive Culture
The executive culture is one with a financial, individualistic, and hierarchical focus.
This culture also places much emphasis on the task and control (Schein,1996). This
culture, “Has in common with the engineering culture a predilection to see people as
impersonal resources that generate problems rather than solutions,” (Schein,1996).
In essence, the executive culture promotes the minimisation of costs and the
maximisation of profits.
Schein (1996) identifies that when an organisation is presented with change, these
three cultures often collide. In order to achieve alignment among the three cultures,
mutual understanding between them needs to be established through cross-cultural
dialogues.
Types of Organisational Culture
Power culture: Depends on a central power source with influence from the central
figure throughout the organisation. A power culture is prominent in small
entrepreneurial organisations that depend on trust, empathy, and personal
communications. Control is enforced from the centre by key individuals (Mullins,
2016).
Role culture: May be viewed as a bureaucracy and works by logic and rationality.
Role culture relies on the strength of strong organisational ‘pillars’. The work of, and
interaction between, the pillars is controlled by procedures and rules (Mullins, 2016).
Task culture: Is job-orientated or project-orientated. In terms of structure, task

culture can be likened to a net, with some strands of which are stronger than others,
and with much of the power and influence at the interstices (Mullins, 2016).
Person culture: Has at its centre, an emphasis on the individual. Any structure
exists to serve the individuals within it. To illustrate, when a group of people decide
that it is in their own interests to share office space or equipment, then the
organisation would have a person culture. Other examples include groups of
barristers, architects, doctors, or consultants. Individuals are said to have almost
complete autonomy (Mullins, 2016).

7.8. Diversity in Organisations
A contemporary challenge that managers face, is when new employees who because of
race gender ethnic or other differences are not like the majority of the organisations
members creates what we call diversity. Management wants new employees to accept
the organisations core cultural values. Otherwise, these employees are unlikely to fit in
or be accepted. At the same time, management wants to openly acknowledge and
demonstrate support for the differences that these employees bring to the workplace.
Organisations hire diverse individuals because of the alternative strengths these people
bring to the workplace, yet these diverse behaviours and strengths are likely to diminish
in strong cultures as people attempt to fit in. The challenge for managers is to balance
two conflicting goals - get employees to accept the organisations dominant values and
encourage the acceptance of differences.
Culture helps to account for variations among organisations and managers, both
nationally and internationally. It helps to explain why different groups of people
perceive things in their own way and perform things differently from other groups or
organisations. Culture can help reduce complexity and uncertainty.
Functions of organisational culture:
• Organisational culture has a boundary definition role, in that it distinguishes

an organisation from others (Robbins, 2001).
• Organisational culture provides members with an organisational identity.
• Organisational culture “facilitates collective commitment” (Kreitner and Kinicki,
2001:74).
• Organisational culture promotes the stability of the social system and
addresses the creation of a positive working environment and the
management of conflict and change (Kreitner and Kinicki, 2001). It is the
“social glue that helps hold the organisation together” (Robbins, 2001:515).
• Organisational culture shapes attitudes and behaviours by assisting
employees and teams in understanding their surroundings (Robbins, 2001;
Kreitner and Kinicki, 2001).

Potential negative implications of organisational culture functions:
The functions of organisational culture are certainly of value to the organisation.

However, organisational culture can also have a negative impact on an
organisation’s effectiveness in that it can create barriers within the organisation.
Robbins states that these barriers include:
Barrier to change: Where the current culture of the organisation promotes shared
values that are not consistent with those which are necessary for the organisation to
continue to survive.
Barrier to diversity: While management may recruit diverse employees for the
purposes of harnessing the benefits of diversity, the achievement of these potential
benefits may be negated by a strong organisational culture which places mush
pressure on employees to conform.
Barrier to acquisitions and mergers: While acquisitions and mergers can provide
for the achievement of final product and financial synergy, experience has shown
that cultural incompatibility is a powerful force which can undermine the success of
the acquisition or merger.
7.9. Conclusion
This chapter explored the concept of organisational culture in businesses, its value,
and barriers. It is essential for culture to be created and maintained in order to
welcome employee satisfaction, growth, development and overall enhanced


FOLLOW:
Inside Apple’s company culture: Collaborative and

inspiring Thao Nguyen Le 2022
The work culture at Apple has caught the eye of many organisations. How they
make the necessary provisions for their employees and keep them satisfied has
contributed to the success of this prestigious company. So, what makes Apple's
company culture so admirable?
Company culture involves the values of the organisation by which all internal
activities are run. Healthy company culture helps to increase employee retention
and turnover rate. The HR department must ensure that the company culture is
well established and fit the mission and visions of the company.
Apple inspires the technology industry to manage teams and employees, in

general, properly. The employees at Apple have a unique organisational culture
and values, which helps maintain a positive relationship between human resources
and creative innovation.
Inside Apple, company culture is shaped to provide the best environment for
management and success. This article will find out what Inside Apple's company
culture is and why it works like magic.
Questions:
1. Through your own online research, discuss the key characteristics of Apple’s
organisational culture.
2. Discuss various other types of organisational culture.
3. Assess the value of Apple’s cultures towards their performance.
4. As a business development coach, advise Apple on the ways in which they can
create and maintain an effective organisational culture.

CHAPTER 8:
Communication, Negotiation and Political
Behaviour in Organisations
Chapter Outcomes
• Understand the significance of communication in business.

• Discuss the process of communication.
• Identify barriers to communication.
• Discuss and apply the negotiation process and cultivate an understanding of
its significance to organisational goal attainment.
• Discuss key components of political behaviour in organisations and its impact
on organisational functioning.
• Develop tactics to overcome communication barriers.
8.1. Introduction
Communication is fundamental to all working relationships. Communication is a

central component to management functioning. Good communication processes and
systems contribute to the overall improvement of organisational performance. This
chapter explores various areas including: the importance of communication, its
barriers as well as political behaviour in business.
8.2. The Importance of Communication
Good communication is essential for attaining efficiency, quality, responsiveness to

customers, and innovation and to gain a competitive advantage. Managers can
increase efficiency by updating the production process to take advantage of new and
more efficient technologies and by training workers to operate the new technologies
and to expand their skills (Jones and George, 2020).

When all members of an organisation can communicate effectively with one another
and with people outside the organisation, the organisation is much more likely to
perform highly and gain a competitive advantage. When managers and other
members of an organisation are ineffective communicators, organisational
performance suffers, and any competitive advantage the organisation might have is
likely to be lost. Poor communication can be dangerous and even lead to tragic and
unnecessary loss of human life (Jones and George, 2020).
Communication is key to good leadership. Effective leadership depends on constant

communication between leaders and their employees. Communication is vital in
building and sustaining relationships in a business (Badenhorst-Weiss et. al, 2019).
“Good communication is conducive to good relations between managers and
individual employees, groups, teams and, ultimately, the organisation and its
environment. Managers devote a considerable proportion of their time to
communicating with the organisation’s stakeholders, both inside and outside the
organisation. Furthermore, the management process is dependent on effective
communication,” (Badenhorst-Weiss et. al, 2019: 263).
8.3. The Communication Process
It is important to understand that communication never occurs in a neutral space and

always happens within a given context (du Plessis, 2014). People act as the senders
and receivers who attach meaning to messages through the process of encoding.
Messages are sent through a channel and may be distorted by noise. Feedback
refers to any response to a message. This process as per du Plessis (2014) is
discussed below:
This process is diagrammatically represented as follows:

Figure 8.1: Communication Process
The Communication Process
The components of the communication process include the following, as per Shonubi
and Akintaro, (2016: 1908):
Sender: The sender/encoder is the initiator of the message may be an individual,

group, or organisation with ideas, desires, needs to transmit to others.
Encoding: The appropriate language that the receiver understands is selected.

Signals to other person is made using shared symbols or in writing.
Message: This refers to ideas, thoughts, needs, emotions etc. put into a symbol,
figure, sign, etc. It is the actual physical product being encoded by the source.
Channel: This refers to how a message is conveyed. The sender must ensure that
the appropriate channel is used to transmit message.
Receiver: The receiver refers to the person the message is aimed at. That is, the
recipient(s) of the transmitted information.

Decoding: “Decoding is a process that occurs at the reception level where impulses,
figures and symbols are interpreted and translated into meaningful information.
Effective communication can only occur when both the encoder (sender) and
decoder(receiver) attach the same or at least similar meanings to the symbols that
make up the message.” (Shonubi and Akintaro, 2016: 1908).
Noise: Noise refers to any factor that hinders, disturbs, and interferes with
communication whether from the side of sender, the message channel, or the
receiver (Shonubi and Akintaro, 2016: 1908). “Noise can occur either internally
(wrong encoding, transmission, interruption etc.) or externally (confined
environment).” (Shonubi and Akintaro, 2016: 1908).
Feedback: “Feedback assures the encoder that the message was received and
understood. Receivers reply to the sender ends the communication process
mechanism.” (Shonubi and Akintaro, 2016: 1908).
Several different contexts in communication include physical, social, historical,

psychological and cultural (du Plessis, 2014: 226-227):
Physical:
• Concrete environment in which communication occurs.
• E.g., an office or boardroom.
• Conditions such as temperature or tidiness.
Social:
• Nature of relationships between those involved in the communication.
Historical:
• Previous communication encounters.
• History of a country or group from the historical context.
• E.g., punctuality issues associated with the leader.
Psychological
• Mental state within which participants exist.
• Feelings and emotions.

Cultural:
• Set of beliefs, values and norms shared by a group of people.
• May include the culture of an organisation.
In summary therefore, communication involves a process in which the sender

encodes a message which is communicated to the receiver via a channel.
Communication is central to the work of the manager in that:
• It is the process which provides for the manager’s accomplishment of the

four management functions: planning, leading, organising and controlling.
• It is an activity to which managers devote a considerable amount of their
time (Stoner & Freeman, 1992). Smit & Cronjé (2002) assert that the
manager is involved in communicating for 75% of the workday.
Communication takes place between the manager and his/her
subordinates, peers, suppliers, customers, and superiors face-to-face, via
email, business letters and/or over the telephone. During the periods when
managers are alone, studies have shown that their work is constantly
interrupted by communication demands (Stoner & Freeman, 1992).
Thus, given that communication is central to the work of the manager, it is imperative
that managers strive to constantly improve their communication abilities.
8.4. Organisational Communication
Managers are involved in intrapersonal communication (to and with themselves) and
interpersonal communication (to and with other individuals) (Smit & Cronjé, 2002).
Managers are also instrumental in promoting organisational communication, i.e.,
communication between departments and units within the organisation.
Smit and de Cronjé (2002) identify two forms of organisational communication

networks:
• Formal Communication
• Informal Communication

Formal Communication Networks

The flow of communication within the organisation’s formal communication network
is subject to the organisation’s hierarchy and the rules which govern such a
hierarchy (Smit and deCronjé, 2002). Thus, communication occurs in accordance
with the chain of command where lines of contact are official and established.
The organisational hierarchy provides for four types of information flows:
Downward communication: Which refers to the flow of information from top

management through middle and lower management, and eventually to the workers.
The main purpose of this form of communication is to provide for communication of
the organisation’s goals, strategies, and policies (Smit and de Cronjé, 2002).
Upward communication: Involves the communication of a message from the

employees to management. Upward communication serves primarily to inform
management about what is happening at the lower levels (Smit and de Cronjé, 2002).
Horizontal communication: Does not follow the chain of command but provides for
communication between employees on the same level of the hierarchy. This
communication serves essentially to improve departmental coordination (Smit and
de Cronjé, 2002).
Lateral communication: Occurs between employees at different levels of the

hierarchy. It serves to provide either or both employees with helpful information and
assistance (Smit and de Cronjé, 2002).
Informal Communication Networks

In contrast to the formal communication networks the informal communication
network involves communication which does not follow the organisational hierarchy,
but rather provides for communication which emerges from the social relationships.
Established between employees, it is commonly referred to as the grapevine, which

may be defined as, “An informal communication network along which unofficial
information flows,” (Jones and George, 2007: 479). The grapevine may be of benefit
to the organisation in that it provides for speedy and relatively accurate spread of
information (Smit and deCronjé, 2002).

8.5. Barriers to Effective Communication
Barriers to effective communication can undermine managerial and organisational

performance. Smit and de Cronjé (2002) identify five factors which can serve as
barriers to effective communication. The characteristics of these five factors are
summarised below.
Figure 8.2: Barriers to Effective Communication

Source: Smit & Cronjé, 2002:374).

Improving Managerial Communication

Smit and de Cronjé (2002) point out that barriers to communication can occur
between persons attempting to communicate. Barriers occur in each of the steps in
the communication process. The manager therefore needs to be aware of the
potential barriers to communication when:
• Encoding a message and selecting the communication channel (e.g.,

information overload would be a barrier to communication).
• Transmitting the message (e.g., timing and noise may serve as barriers to
communication).
• Decoding a message (e.g., trust, credibility, emotional differences and
differences in communication skills could serve as barriers to
communication).
The common barriers that are part of the communication are as follows:
Perceptual Barriers: Arise due to differences of opinion between two people. Such
differences do generate a requirement for effective communication which is not
always healthy for the functioning of the organisation (Kapur, 2018).
Emotional Barriers: During certain points in time, there are people who do not develop
interest in communicating with their others due to the feelings of fear, mistrust, anger or
annoyance. This may be referred to as emotional barriers (Kapur, 2018).
Language Barriers: When two persons or groups of people are involved in

communicating with each other and if a common language is used, then their
objectives will be fulfilled resulting in effective communication (Kapur, 2018).
Cultural Barriers: Many businesses hire individuals who belong to different

nationalities, regions, cultures, religions, castes, creed and different status groups.
They do familiarise themselves with other people’s cultures and backgrounds,
whereas at other times, they are even unaware (Kapur, 2018). A cultural barrier
occurs when people of different cultures are not able to communicate with each
other in an efficient way. This is due to diverse factors such as different
backgrounds, languages, customs, viewpoints, ideas, notions etc. (Kapur, 2018).

Physical Barriers: Within an organisational structure, it is vital to have team spirit.

Formal and informal means of communication occurs within organisations. One of
the key factors in an organisational structure is proximity (Kapur, 2018). A system of
hierarchy exists and those individuals who are placed at the higher levels of the
hierarchy have closed doors, offices and cabins and are physically placed at the
distance. Thus, their subordinates are not always able to communicate with them
and this serves as a physical barrier to effective communication in organisations
(Kapur, 2018).
8.6. Overcoming Communication Barriers
• Eliminating Differences in Perception: At the stage of recruitment,

employee’s performance, qualifications, skills, abilities, knowledge, attitude
should be taken into consideration. Training and development programmes
should be offered, employee selection procedures and individuals should
possess effective communication skills (Kapur, 2018).
• Use of Simple Language: The use of words should be understandable, clear,
and simple regardless of the language (Kapur, 2018).
• Reduction and Elimination of Noise Levels: It is critical to identify the
sources of noise and eliminate them (Kapur, 2018).
• Active Listening: It is essential that the receiver listen to the speaker with
awareness and in a considerate manner -he/she should engage and respond
by asking questions. The speaker should ensure that the listener understands
everything (Kapur, 2018).
• Emotional State: The speaker should make effective use of body language
and not depict one’s emotional state (Kapur, 2018).
• Simple Organisational Structure: The hierarchical levels within the
organisation should be optimum in number (Kapur, 2018). The organisation of
the operations and functions implemented within the organisation, the
leadership skills, span of control, authority, rules, policies should occur in an
appropriate manner (Kapur, 2018).
• Avoid Information Overload: Employers as well as the employees should
manage their work for the day accordingly- extended working hours should be
avoided and employees should ensure adequate time out during their working

hours to listen to the subordinates and workers grievances (Kapur, 2018).

Effective time management skills should also be exercised (Kapur, 2018).
• Provide Constructive Feedback: Feedback should always be delivered in a
constructive manner (Kapur, 2018).
• Proper Media Selection: The medium of communication should be
appropriate. For instance: if it is a simple message or just a minor notice, it
can be delivered either through a face-to-face conversation or through a
telephone. However, information which is complicated and lengthy should be
delivered in a written manner, through letters, notices, newspapers, or
electronic mail (Kapur, 2018). Thus, proper media selection also results in
highly effective communication (Kapur, 2018).
8.7. Multicultural Communication
There is a need for ‘multicultural communication’ within the workplace.

Multiculturalism is often used as an excuse for poor managerial communication, and
it is asserted that, “If one communicates well, culture is not an issue. If
communication efforts and processes are based on a sound understanding of
communication, that it is fundamentally a case of listening rather than telling, a lot of
what passes for multicultural communication would be what it really is – common
sense!” (Lakhani, 1994: 26).
A person’s linguistic style refers to his/her particular way of speaking and includes
tone of voice, speed, volume, pauses, directness and indirectness, choice of words,
questions and jokes. Managers should develop an understanding of the dynamics of
linguistic styles so that they may develop an, “Understanding that different people
have different ways of saying what they mean [which] will make it possible to take
advantage of the talents of people with a broad range of linguistic styles,” (Tannen,
1995: 148).
8.8. Negotiation
Managers spend a large amount of time negotiating, negotiating salaries, doing

deals, resolving conflicts, labour contracts, and many more.

Negotiation can be defined as a process in which two or more parties who have
different preferences must make a joint decision and come to an agreement, typically
using a bargaining strategy.
Negotiation is a particularly important conflict resolution technique for managers and

other organisational members in situations where the parties in a conflict have
approximately equal levels of power. During negotiation, the parties try to come up with
a solution acceptable to themselves by considering various ways to allocate resources
to each other. Sometimes, the sides involved in a conflict negotiate directly with each
other. A third-party negotiator is an impartial individual with expertise in handling
conflicts and negotiations. When a third-party negotiator acts as a mediator, his or her
role in the negotiation process is to facilitate an acceptable solution between parties.
Mediators facilitate negotiations but have no authority to force either party to make
concessions, nor can they force an agreement to resolve a conflict. Arbitrators, on the
other hand, are third party negotiators who can impose what they believe is a fair
solution to a dispute, which both parties are obligated to abide by.
There are two bargaining strategies:
1. Distributive bargaining involves negotiating under zero-sum conditions, in

which any gain by one party involves a loss to the other party, i.e., negotiating
over who gets what share of a fixed pie.
2. Integrative bargaining operates under the assumption that there is at least
one settlement that can create a win-win solution. In other words, it is a
settlement that involves no loss to either party.
8.9. Developing Effective Negotiating Skills
Effective negotiation can be summarised as follows:
• Research: Find out as much as possible about the other party with whom you
will be negotiating. Learn about their interests and goals, their strategies, and
their behaviour. This will help you to predict their response to your offers, and
to create solutions in their interests.
• Begin with a positive overture: Making concessions from the outset creates
a positive overture and leads to reciprocation and leads to agreement.

• Address problems, not personalities: Remain focused on negotiation

issues, and do not make personal attacks on the other party. Remember that
you disagree over that person’s ideas or position, not them personally.
• Pay little attention to initial offers: Treat initial offers as merely a point of
departure. Everyone’s initial position is extreme and idealistic.
• Emphasise win-win situations: Look for integrative solutions that allow you
and the other party to benefit.
8.10. The Negotiation Process Preparation phase
Step 1: Setting goals

This preparation phase starts with the formulation of the goals that are to be
achieved, i.e., goals that define the least that that person is willing to accept in the
negotiation, and the maximum that person could possibly gain.
Step 2: Analyse the situation

Analyse one’s own position, and the opponent’s position, at the time entering the
negotiation.
Step 3: Identify Issues

Issues are matters of substance and may be simple (like discount percentages) or
complex (like reshaping legislation) or even subtle (like clauses in a contract).
Step 4: Analyse Information on Opponents

Obtain information about opponent’s objectives, needs, financial position, immediate
and pressing problems, and previous negotiating behaviour.
Step 5: Consider legal and financial obligations

Negotiating parties must be aware of the legal implications and stipulations in
contracts, and the financial implications, before entering negotiations.
Step 6: Decide on tactics

Important factors to consider are the place and time of the negotiation, layout of the
venue, and composition of the negotiation team, and options that could be
presented, among others.

Step 7: Schedule feedback

Parties should schedule regular feedback sessions to review performance, and to
improve effectiveness in future rounds.
Actual negotiation phases:

Phase 1: Emotional phase
Negotiating parties make contact. The attitude and manner of greeting could
determine the climate for the rest of the negotiations.
Phase 2: Political phase

A task leader may emerge during this phase. This person will assist both parties to
agree on matters like rules, power, authority, and agenda of the meeting.
Phase 3: Problem-definition phase

The group attempts to define the problem, offer trade-offs, and implement the
agreement.
Phase 4: Constructive phase

The group deals constructively with the problem at hand. Experts and task leaders
are very active.
Phase 5: Final socio-emotional phase

Closure of the meeting. The climate for implementing the agreement or re- entering
negotiations will be established during this phase.
8.11. Political Behaviour in Organisations
Managers must develop the skills necessary to manage organisational conflict.

Organisational politics are the activities that managers and members of an organisation
engage in to increase their power and to use power effectively to achieve their goals and
overcome resistance or opposition (Jones and George, 2020).

8.11.1. The Importance of Organisational Politics
Effective managers engage in politics to gain support for and implement needed
changes. Managers often face resistance from those who disagree with their goals
and what they are trying to accomplish for the organisation. Engaging in
organisational politics can help managers overcome this resistance and achieve their
goals. When managers act in self-interest for their own benefit, organisational politics
are viewed negatively (Jones and George, 2020).
When people get together in groups, power will be exerted. When employees in
organisations convert their power into action, they become engaged in politics.
Political behaviour can be defined as those activities that are not required as part of
one’s formal role in the organisation, but that influence the distribution of advantages
or disadvantages within the organisation.
Political behaviour entails people gaining and exercising power to obtain a specific
outcome. It is a vague term that plays a decisive role in the behaviour of leaders and
managers.
Common examples of political behaviour are critical information from decision-

makers, whistleblowing, spreading rumours, and leaking confidential information
There are commonly two dimensions of political behaviour:
1. Legitimate political behaviour refers to the normal ‘everyday’ politics –

complaining to your supervisor, forming cliques or coalitions, bypassing the
chain of command, obstructing organisation policies and rules, and
developing contacts with people outside the organisation.
2. Illegitimate political behaviour refers to activities like sabotage, whistleblowing,

symbolic protests, and mass absenteeism.
Probably the most important factor leading to politics within organisations is the
realisation that most of the ‘facts’ that are used to allocate the limited resources are
open to interpretation. What, for example, is good performance?

Because most decisions have to be made in a climate of ambiguity where facts are
rarely objective, people within organisations will use whatever influence they can to
taint the facts to support their goals and interests.
8.12. Factors Contributing to Political Behaviour Individual Factors
Researchers have identified certain personality traits, and other factors, likely to
contribute to political behaviour. Employees who are high self-monitors, possess an
internal locus of control, and have a high need for power, are more likely to engage
in political behaviour.
The high self-monitor is more sensitive to social cues, exhibits higher levels of social
conformity, and is more likely to be skilled in political behaviour. Individuals with an
internal locus of control because they believe they can control their environment, are
more prone to take a proactive stance and attempt to manipulate situations in their
own favour.
The more a person has invested in the organisation, in terms of expectations of

future earnings and benefits, the more that person has to lose if forced out. This
person will be less likely to engage in illegitimate political behaviour. The more
alternative job opportunities the individual has, the more likely this individual is to
engage in illegitimate political behaviour.
Organisational factors
When organisations decide to downsize to improve efficiency, reductions in

resources have to be made. Threatened with the loss of resources, people may
engage in political behaviour to safeguard what they have.
The opportunity for promotions or advancement encourages people to compete for a

limited resource and to try and influence the decision outcome.
The less trust there is in an organisation, the higher the level of political behaviour
and the more likely that the political behaviour will be of the illegitimate kind.
Role ambiguity means that the prescribed behaviours of employees are not clear,
hence there are fewer limits to the scope and functions of the political behaviour.

The more that organisations use subjective performance criteria, emphasise a single
outcome measure, or allow significant time to pass between action and appraisal,
the greater the likelihood that an employee can get away with political behaviour.
The more that the organisational culture emphasises a ‘zero-sum’ or ‘win- lose’
approach to reward allocation, the more likely that employees will engage in political
behaviour. These approaches are a type of ‘I win therefore you must lose’
philosophy.
8.13. Types of Political Behaviour:
Inducement
This occurs when a manager offers or promises something to someone in exchange
for support. It is often found in the form of ‘putting in a good word.’
Persuasion
This aspect plays on the emotions of the subordinate and may include guilt of fear.
Creation of an obligation
One manager may support another and create an obligation on the part of the
second manager in the future. It is commonly found in the form of calling in favours.
Coercion
This behaviour borders on the use of violence to get one’s way. A manager may
withhold, or threaten to withhold, rewards or resources to force compliance.
8.14. Defensive Behaviours
Organisational politics includes the protection of self-interest as well as promotion.

Individual often engage in defensive behaviours to avoid action, or blame.
Avoiding Action
Over-conforming: One strictly interprets one’s responsibility by rigidly adhering to
rules, policies, and precedents, thus avoiding the need to consider the nuances of
each individual case.

Passing the buck: One transfers responsibility for the completion of a task or
decision to someone else.
Playing dumb: One avoids an unwanted task by falsely pleading ignorance or

inability.
Depersonalisation: One treats other people as objects or numbers in order to

distance oneself from having to consider the other person as a ‘person’, and the
effects of events on that person.
Stretching and smoothing: One ‘stretches’ or prolongs a task to appear occupied

for longer than necessary. One ‘smoothes’ a task by covering up fluctuations in effort
or output, in order to appear continually productive.
Stalling: This tactic requires one to appear more, or less, supportive publicly, while
doing little or nothing privately.
Avoiding blame
Buffing: This describes the practice of rigorously documenting activity to project an
image of competence and thoroughness.
Playing safe: One avoids situations that may reflect badly on oneself and includes
taking on projects only if they have a high probability of success, or having risky
decisions approved by senior managers, and taking neutral positions in conflicts.
Justifying: One develops explanations to reduce responsibility for a negative

outcome or apologising to demonstrate remorse.
Scape-goating: This is a classic effort to place blame for a negative outcome on

external factors.
Misrepresenting: One manipulates information by distorting, embellishing,

deceiving, or selectively presenting it. Escalation of commitment: One commits more
resources toward a poor decision to demonstrate that that decision was not a bad
one.

8.15. The Effects of Defensive Behaviour
The use of defensive behaviour in the short run will promote an individual’s self-
interest. But in the long run, it more often than not becomes a liability. The defensive
behaviour often becomes chronic or even pathological. People who rely on defensive
behaviour find that, eventually, it is the only way they know how to behave. At that
point, they lose the trust and support of their peers and superiors.
8.16. Managing Political Behaviour
The following guidelines to manage political behaviour have been suggested:
• Managers should realise that certain employees regard specific actions as

political, even if this is not the case.
• Adequate autonomy and responsibility should be granted where possible, and
regular feedback given to employees, as these reduce the risk of political
behaviour on the part of subordinates.
• Managers should limit the use of power to reduce the chances of being
accused of engaging in political behaviour.
• Managers should clear the air by handling conflict and grievances openly
through discussion.
• Managers should avoid covert behaviour of any sort.
• Management systems should evaluate subordinates’ performances
realistically and reward systems should be linked to performance, and a
restriction on competing for resource allocation should be imposed.
Political Strategies for Gaining and Maintaining Power

Managers who use political strategies to increase and maintain their power are better
able to influence others to work toward the achievement of organisational goals.
Controlling Uncertainty
Managers who can control and reduce uncertainty for other managers, teams, and
departments as well as the organisation are likely to see their power increase.
Managers of labour unions gain power when they can eliminate uncertainty over job
security for workers. Top managers gain power when they are knowledgeable about

global demand for an organisation's products. Managers who can control uncertainty
are likely to be in demand and sought after by other organisations.
Making Oneself Irreplaceable

Managers gain power when they have valuable knowledge and expertise that allow
them to perform activities no one else can handle, making themselves irreplaceable.
The more central these activities are to organisational effectiveness; the more power
managers gain from being irreplaceable.
Being in a Central Position

Managers in central positions have decision-making control over the firm’s crucial
activities, and resources, and have access to important information (Jones and
George, 2020).
Generating Resources
Managers who can generate resources to be effective e.g., input resources such as
raw materials, skilled workers, and financial capital, technical resources such as
machinery and computers, and knowledge resources such as marketing, information
technology, or engineering expertise are very effective and will find that their
organisational power increases (Jones and George, 2020).
Building Alliances
When managers build alliances, they develop mutually beneficial relationships with
people both inside and outside the organisation. The parties to an alliance support
one another because doing so is in their best interests, and all parties benefit from
the alliance. Alliances can help managers achieve their goals and implement needed
changes in organisations because they increase managers levels of power (Jones
and George, 2020).
Political Strategies for Exercising Power

Politically skilled managers not only understand, and can use, the five strategies to
increase their power, they also appreciate strategies for exercising their power.

Relying on Objective Information

Managers require the support of others to achieve their goals, implement changes,
and overcome opposition. One way for a manager to gain this support and overcome
opposition is to rely on objective information that supports the manager's initiatives.
Bringing in an Outside Expert

Bringing in an outside expert to support a proposal decision can, at times, provide
managers with some of the same benefits that the use of objective information does.
It lends credibility to a manager's initiatives and causes others to believe that what
the manager is proposing is the appropriate or rational thing to do.
Controlling the Agenda

Managers also can exercise power unobtrusively by controlling the agenda,
influencing which alternatives are considered or even whether a decision is made.
When managers influence the alternatives that are considered, they can make sure
that each considered alternative is acceptable to them and that undesirable
alternatives are not in the feasible set.
Making Everyone a Winner

Often, politically skilled managers can exercise their power unobtrusively because
they make sure that everyone whose support, they need benefits personally from
providing that support. By making everyone a winner, a manager can influence other
organisational members because these members see supporting the manager as
being in their best interest.
8.17. Conclusion
Communication, negotiation, and political behaviour in business formed the focal areas
of this chapter. It is crucial for organisations to adopt the relevant strategies concerning
the above in order to maintain efficiency and quality. This will result in customer
satisfaction, healthier internal relations, and enhanced performance overall.

1. Through your own online research, discuss the significance of communication

in the workplace.
2. Critically discuss the various barriers to communication across fast paced
organisations.
3. Suggest the various strategies to overcome barriers mentioned in question 2.
4. Depict the process of communication and provide a description of each stage.
5. Discuss how organisational politics affects managers.

CHAPTER 9:
People Management
Chapter Outcome
• Develop an understanding of people management skills and ways of

adopting them.
• Apply the appropriate people management strategies across
contemporary business environments.
• Understand Generational differences and their impact on business goals
and how to manage them in a way that achieves optimal outputs.
• Apply performance management strategies in modern workplaces.
9.1. Introduction
As managers emphasise the importance of utilising and acquiring various resources

and processes in an effective manner, similarly, special attention must be paid to
one of their most prized resources- that is, people. Grooming, nurturing, and treating
people respectfully should be a priority in the process of management. The aim of
this chapter is to provide an understanding of people management as a skilled
manager’s should possess and the ways in which managers may apply people
management strategies. In addition, the chapter also introduces the area of
generational differences and values in the workplace in order to better facilitate the
process of people management.
9.2. People Management
People may be viewed as the best assets of an organisation. However, they are not
always are given the attention that they deserve or need from their line managers.
The attitude of managers should set an example for all the subordinates (Dutta and
Chaudhry, 2021).

The concept of people management acknowledges that line managers play a

significant part in shaping employees’ perceptions of human resource management
via implementation of different human resource practices and their leadership
actions (Dutta and Chaudhry, 2021). To ensure the best in quality of work, managers
need to find innovative techniques of motivating employees and teams. Employees
attitude towards their managers and colleagues are subject to social influence.
During current times, it is becoming more and more evident that organisations need
motivated and productive people to execute their responsibilities efficiently.
Therefore, people management became probably one of the most important soft
leadership skills (Dutta and Chaudhry, 2021).
9.2.1. Defining People Management
People management is a term used to describe the business function of taking care
of an organisation’s employees. Further, people management systems collate
various elements of people information. This includes contract and salary, time, and
skills in a single, secure system of record (Sage, 2022). People management is also
known as human resources (HR) management.
9.2.2. People Management Skills
Many global leaders are said to bear effective people management skills since they
do understand the importance of the asset known as human resource.
For example, Jeff Weiner, CEO of LinkedIn Group emphasises the value of
compassionate management. He states that it is vital to understand their problems
instead of just expecting irrational sacrifice and resilience. Similarly, Richard
Branson, CEO of Virgin Group, stresses the importance of leaders simply being
caring. Arianna Huntington, former CEO of the Huffington Post, stresses the
importance of ensuring employee’s well-being in order to keep them productive.
Arianna had a system in place to ensure complete work-life balance so as to prevent
any kind of burnout (Dutta and Chaudhry, 2021).
Sundar Pichai, CEO of Google, another example of a leader that emphasised helping
others grow and succeed. He argued the on the significance of trusting people and
helping them prosper. If they are successful with their own goals then it is not only their
win, but also a win for the organisation. the common thread between global

leaders when it comes to people management is the importance of helping others

grow (Dutta and Chaudhry, 2021).
According to Malec, 2022, effective people management skills include:
• Ensuring that each employee clearly understands their role and responsibilities.
• Ensuring that the company’s expectations of each employee are aligned with
the resources (including time) in order to successfully fulfil this expectation.
• Clear lines of communication.
• Being a good listener.
• Encourage staff to engage in problem-solving and overcome challenges.
• Conflict management.
• Oversee employees' professional development.
• Promote knowledge-sharing and brainstorming.
9.2.3. People Management Strategies
Being tasked with the responsibility of a people’s manager is multifaceted as there

are many areas to focus. The following includes some of the ways in which one may
engage in effective people management.
Communication and Cooperation: it is important to note that communication is a

two-way process. Trust amongst all staff can be created through good transparent
communication creates. People managers should be open and share their ideas,
decisions, target milestones and future course of planned actions with their people
(Dutta and Chaudhry, 2021).
Importantly, a good people manager must first understand the need of his own people
before he starts to outline his own ideas- thus, be a good listener (Dutta and Chaudhry,
2021). A good people manager should empathise and put himself in his people’s shoes.
Effective synergy is dependent on communication (Dutta and Chaudhry, 2021).
Mentoring: Every people manager should be well equipped to mentor or guide his team
members in an efficiency manner. However, even though guidance is required from the
seniors, keep in mind that freedom along with guidance is beneficial towards needs of
employees. People managers should mentor employees/teams in a way that

allows people to associate with his thoughts, ideas, and style of thinking. This fosters
a good mindset required for the job (Dutta and Chaudhry, 2021).
Motivation: Motivation is key in people management. There are various ways of

motivating staff. People managers must listen to the under performer in order to
understand his/her problem and provide the relevant solution. Other ways to
motivate staff include rewards, wages and salaries (Dutta and Chaudhry, 2021).
However, one must note that while extra wages/cash provides a short-term
motivation, it is often not long before the staff member goes back once again to the
phase of under-performance or demotivation. Thus, managers must understand
other incentives that make a difference to an individual. In some cases, salaries
along with recognition or training and development may promote employee
motivation (Dutta and Chaudhry, 2021).
Delegation of work: Managers must understand the power of delegation. People

managers must evaluate people under various situations and times before
delegation of work to an employee (Dutta and Chaudhry, 2021).
Along with delegation, people must also get a sense of ownership. Thus, the
members of a team will develop confidence due to ownership resulting in proper
delegation of work (Dutta and Chaudhry, 2021).
Attrition Management: The importance in the need to hirer good employees cannot
be overstated. The new generation at workforce are mostly job hoppers (Dutta and
Chaudhry, 2021). As a result of this, a high rate of attrition occurs and the challenge
of retaining the talented force is increasing daily. This is said to be the case of almost
every industry currently. People managers must therefore take actions proactively.
Continuous training of existing team members and coaching them on the relevant
areas will play a key role in these challenging times (Dutta and Chaudhry, 2021).

9.3. Generational Differences between Employees
The Baby Boomers

The Baby Boomers refer to those born between 1946 and 1964. Baby boomers were
influenced by the civil rights movement and the Vietnam War. Boomers are now said
to be approaching the age of entering retirement (Maiers, 2017). In terms of
generational differences, prior to millennials are the Generation Xers.
Generation Xers:
Generation Xers refer to those born between 1965 and 1980 (Maiers, 2017;
Chandler, 2015; Stutzer, 2019), and have benefited from relative political and
economic stability (Maiers, 2017).
Generation Y:
Martin and Otteman (2016) outline the following as millennial employment interests:
portability of retirement benefits due to their desire to switch jobs or careers; reject
conformance to rigid policies, challenge workplace norms, expect rewards; desire
fun, flexible, and latest technology.
Millennials:
A millennial is referred to as a person born between the years 1980 -2000 (Chandler,
2015). Millennials are said to be the most educated generation and the global
workforce will consist of 75% of them by 2025 (Maiers, 2017). Millennials may be
useful in mentoring baby boomers and this ideology must be seen as a
steppingstone to develop personnel as well as close the generational skills gap. In
addition, this promotes fresh and innovative thinking (Crosley, 2018).
Generation Z:
Those who are born between 1994 and 2004 are considered to be part of
Generation Z. They are sometimes referred to as the iGeneration. Similar to
Generation Y, Generation Z are very collaborative and creative. Generation Z prefers
a flat organisation to a hierarchy at work and enjoy multi-tasking. However, there is
concern that they may not perform well in public speaking, which is vital as a
business skill set (Giunta, 2017).

Table 9.1 Generational values

9.3.1 Managing generations in the organisation
Performance and organisational growth depends on the design and implementation

of successful human resource development practices (Reza and Sarraf, 2019).
Thus, it is key to managers and researchers to identify and understand the issues
related to generation differences and the impact of these topics on organisational
performance. This will improve the capabilities of employees (Reza and Sarraf, 2019).
Each generation carries a set of values, views on power, expectations from leaders
and the workplace, attitudes toward work and a particular communication style
(Gursoy et al., 2008 cited in Reza and Sarraf, 2019).
In order to manage different generations, leaders and managers who must adapt
themselves to the environment and utilise the characteristics of each generation
group to meet the needs of the organisation. Employees must be seen as human
beings with different interests and tastes (Reza and Sarraf, 2019).
Managers must find ways to attract potential employees from different generations.
In order to execute this, they must pay attention to the fact that different generations
use different hiring channels and may be attracted by different brands of employers.
Also, different generations usually have different tastes than instruction. A generation
in traditional classrooms, with a professor, prefers paper-based education, as
opposed to others who emphasise development in general, and prefer independent
learning, often with the use of Computer-based or Internet-based education (Reza
and Sarraf, 2019).
Managers should also consider generational differences when selecting performance

management styles. Individuals from different generations may be interested in
being managed in numerous ways. Some prefer to trust them for independent work
instead of autocratic leadership, they require quick and frequent feedback, enjoy
work and provide social opportunities in their work (Reza and Sarraf, 2019).
Thus, it may be stated that the presence of employees from different generations at
all levels of the organisation has differences and similarities of generations in order
to exploit their diversity, creativity and energy. (Reza and Sarraf, 2019). This alludes
to the need to focus on the generational diversity factor in a wide range of workforce
characteristics.

9.4 Performance Management
The aim of human resources management (HRM) systems is to promote high levels
of performance and commitment from individuals and teams (Fried and Fottler,
2015). Performance management involves collecting performance information and
using that information to conduct formal and informal improvement efforts (Fried and
Fottler, 2015).
“Performance management is the process of creating a work environment or setting

in which people are enabled to perform to the best of their abilities. Performance
management is a whole work system that begins when a job is defined and follows
through every detail and stage of the employee’s performance of that job.” (Nel et al,
2017: 279).
Performance management may also be viewed as a set of tools and practices that
are utilised to set performance goals with employees, measure individual
performance, design strategies, monitor employee progress toward achieving goals,
and provide feedback (Fried and Fottler, 2015).
The process of performance management entails the following:
• Clarification and communication of organisational strategic objectives.

• Alignment of individual and group goals with the organisational objectives.
• Monitoring and measurement of individual and group performance.
• Early identification and reporting of deviations.
• Development of action plans to correct deviations.
Coaching and mentoring of individual and group performance and re-
evaluation of organisational processes and resources (Nel et al., 2017: 280).
9.4.1 Performance Management and High-Performance Work Systems
Performance management systems play a strategic role in high-performance work

systems (HPWS). Research emphasises HPWS is a vital component that enables
organisations to become more effective and gain core competitive advantages (Zhang,
Bal, Akhtar Long, Zhang and Ma, 2018). HPWS can be defined as a, “Group of internally
coherent and consistent human resource (HR) practices that are designed

to enhance employee competence, motivation, and commitment,” (Aryee et al. 2012;

Datta, Guthrie, and Wright 2005 cited in Zhang et al., 2018: 02).
HPWS has various desirable outcomes for employees including enhanced job
performance and organisational citizenship behaviour, increased organisational
commitment and job satisfaction (Zhang et al., 2018).
The effective management of performance enables a sustainable competitive

advantage. For organisations to be competitively advantageous, the performance
management system must be implemented as a strategic tool, as opposed to being
used merely as an evaluation and documentation tool. This allows for a holistic
analysis of performance at organisational, process and individual levels for individual
satisfaction, commitment as well as goal attainment (Sahoo and Mishra, 2012).
9.4.2. The Performance Management Process
Performance Planning
The first part of the performance management process begins with the planning
element so as to create an effective system. The process of planning for the
performance management process is outlined below:
Setting the direction and defining expectations:
The supervisor and employee meet to share information regarding strategic goals
and their achievement (Nel et al., 2017). This step involves how the organisation’s
strategic goals must be adopted and adapted by the department as well as the
individual (Nel et al., 2017: 282).
Determining employee goals and objectives:
Department goals must be adapted and aligned with goals of the employee in order
to instil some aspects of intrinsic motivation (Nel et al., 2017: 282).
Determining the evaluator and evaluation method to be used:
The evaluator as well as the evaluation process must be determined in advance. An

agreement must be reached about the basis on which performance will be measured.

Developing an action plan:
The manager and employee agree on specific times for formal checks to be made on
progress towards meeting the established goals. A document containing key points
of their discussion and agreement, indicating their different roles and responsibilities
with respect to goal achievement must be developed and signed by both parties.
(Nel et al., 2017: 282).
Performance coaching and mentoring
During this stage, the manager conducts interim checks on progress, explores
causes of poor performance and provides coaching and mentoring to the employee.
The employee is engaged with by the manager in an informal way in order to
observe and obtain feedback on the level of their performance. It is vital that
performance problems are identified early in the process and corrective action be
taken before greater losses are incurred (Nel et al., 2017: 283). Informal day-to-day
performance checks are more important than an annual performance review.
Performance Measurement and Evaluation
Measuring the performance:
Employee performance can be measured based on whether the type of judgment is

relative or absolute evaluation (Nel et al., 2017: 283).
Objectives of performance measurement and evaluation:
Two perspectives can be considered when evaluating employee’s performance: the

rational perspective and the political perspective.

Table 9.2: Rational perspective and the political perspective
Rational Approach Political Approach

The goal of appraisal is accuracy Goal of appraisal is utility
Managers and workers are passive Managers and workers are motivated in
measurement process
Focus of appraisal is measurement Focus of appraisal is management
Worker’s performance should be What is being assessed is left
clearly defined ambiguous
Managers make dimensional and Appropriate assessment of specifics
overall assessments based on follows overall assessment
specific behaviours observed
Source: Gomez-Meijia et al., 2001 cited in Nel et al., 2017: 284
Methods of performance evaluation:
The success or effectiveness of the performance evaluation depends on the person

conducting the evaluation as well as the methods used:
Immediate supervisor or manager: This is the most common method used as the
immediate supervisor knows the employee the best and has the opportunity to
observe actual daily performance of the employee (Nel et al., 2017).
Peers: When managers are not available, peer or collegial evaluations may be
performed.
Subordinates: The so called ‘reverse appraisals’ can be beneficial to the immediate

manager’s development. Employees know how well the manager communicates,
delegates, and plans (Nel et al., 2017).
Self-appraisal: “The opportunity to participate in the performance management

process, particularly if appraisal is combined with goal setting and the chance to add

value to the organisation, improves the ratee’s motivation and reduces

defensiveness during the evaluation interview.” (Nel et al., 2017: 285).
360° Feedback
This may also be referred to as multi-source feedback or the multi-rater system of

carrying out employee evaluation. It is a form of questionnaire that asks superiors,
subordinates, peers, and internal and external customers to respond to questions on
how well a specific individual performs in various behavioural areas (Nel et al., 2017).
Web-enabled performance management
Online performance management may be implemented and conducted from

anywhere if there is an internet connection. It makes it easier for employees and
managers to record performance and monitor agreements and progress. It reduces
paperwork and simplifies the process (Nel et al., 2017).
Performance Feedback and Documentation
It is critical for managers and supervisors to maintain measurements and keep records
of performance throughout the review period. Employees are also responsible for
ensuring documentation of their performance throughout the year (Nel et al., 2017).
The appraisal interview should be evaluative and developmental. Cascio (2006, cited
in Nel et. al, 2017) proposes a framework of activities that may be followed by the
person who will be conducting the feedback interview. Such activities should
commence before, during and after the interview.
An overview of the steps involved in the performance management process are

illustrated in Figure 9.1.

Performance Planning
Performance coaching &

Mentoring
Performance Measurement
& Evaluation
Performance Feedback &

Documentation
Figure 9.1: Performance management process
9.5. The Future of Performance Management
Heightened and rapid technological advancement impacts on the way in which

employee performance management plays out. Employee performance
management is evolving to meet the standards of modern HR departments (Nel et
al., 2017). The philosophy that underpins performance management now focuses on
employee engagement, collaboration, and innovation (Nel et al., 2017).
Many organisations no longer use annual reviews or have improved it with software
that generates regular employee feedback (Nel et al., 2017).
The three ways in which technology can be used to simplify and optimise employee
and team performance are listed below:

• Putting people back in people analytics:

Managers and executives will have to use technology to explain everything
from how employees feel to what percentage of their weekly or quarterly
objectives were met on time (Nel et al., 2017: 298). Employee data is only one
element of evaluation. The other element should be following up with
questions to provide context. Detailed employee feedback in analytics is
critical. The combination of high-level data allows managers to tap into the
human element of performance (Nel et al., 2017: 298).
• Human Resource Officers are shifting gears:
“There has been a shift in thinking away from seeing people as resources and
towards direct relationships with valuable employees.” (Nel et al., 2017: 298).
There is a focus on a shift in which HR departments take on people roles (Nel
et al., 2017).
• Human Relationship
Software can be helpful in team collaboration. The increasing innovation in
employee-manager communication allows people to align around objectives
and receive mentorship to help achieve goals. This notion will be seen more
in future. No technological solution can replace human relationships that form
the organisation’s culture and the healthy rapport between manager and
worker. However, technology can assist in maintaining visibility in the
employees’ lives as well as guidance (Nel et al., 2017). As performance
management continues to be redefined, the constant remains that a
streamlined feedback channel between managers and employees is the
mechanism to drive the next phase in the development of employee
performance management (Nel et al., 2017: 298).
9.6. Conclusion
Good people management strategies lead to better communication, fruitful

collaboration and yield better productivity. Given a highly dynamic world of business,
it is essential that global leaders concentrate on people management skills and
strategies for long term growth and sustainability.

1. Given rapid environmental changes that drastically affect businesses, discuss

the significance of people management.
2. With reference to your answer in question 1, discuss the people management
skills required in complex work environments.
3. As a manager, discuss the various people management strategies that can be
adopted in organisations to improve efficiencies.
4. Critically discuss the strategic role of performance management in high
performance work systems. Provide examples to support your answer.

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BUSINESS MANAGEMENT 2

BACHELOR OF COMMERCE IN SUPPLY CHAIN MANAGEMENT

INTRODUCTION TO BUSINESS MANAGEMENT 2 ...................................... 3

BIBLIOGRAPHY ......................................................................................... 144

BACHELOR OF COMMERCE IN SUPPLY CHAIN MANAGEMENT 1

List of Tables and Figures

Table 1.1: Functional departmentalisation ........................................................................ 19

BACHELOR OF COMMERCE IN SUPPLY CHAIN MANAGEMENT 2

INTRODUCTION TO BUSINESS MANAGEMENT 2

Welcome to the Bachelor of Commerce In Supply Chain Management Programme.

Management is the process of using organisational resources to achieve

Business Management 2 provides the student with an enhanced understanding of

3. Aim of the Module

This module aims to:

• Elucidate the relationship between organisations and management with

BACHELOR OF COMMERCE IN SUPPLY CHAIN MANAGEMENT 3

• Discuss and apply the communication process while demonstrating an

4. Essential (Prescribed) Reading

Your essential (prescribed) reading comprises the following:

4.1. Prescribed Reading

Badenhorst-Weiss, H., Botha, T. Cant, M. Jansen van Rensburg, M. Krüger, L.

BACHELOR OF COMMERCE IN SUPPLY CHAIN MANAGEMENT 4

4.2. Recommended Reading

Jones, G; George, J. (2020) Contemporary Management McGraw Hill

5. How to use the Module

BACHELOR OF COMMERCE IN SUPPLY CHAIN MANAGEMENT 5

7. Specific Outcomes and Chapter Alignment

SPECIFIC OUTCOMES CHAPTER

SO 1: Elucidate the relationship between organisations and 1

SO 2: Analyse and discuss the link between organising and 1

SO 3: Analyse the value of virtual organisations. 1

SO 4: Assess the importance of managerial decision making 4

SO 5: Discuss and apply the communication process while 8

SO 6: Demonstrate a detailed understanding motivation and 2

SO 7: Describe the strategic role of motivation in an 2

SO 8: Apply strategies of organisational culture and 7

SO 9: Critically discuss workforce diversity, apply diversity 5

BACHELOR OF COMMERCE IN SUPPLY CHAIN MANAGEMENT 6

SPECIFIC OUTCOMES CHAPTER

SO 10: Demonstrate knowledge of groups and teams in 3

SO 11: Critically evaluate and apply the negotiation process 8

SO 12: Discuss key components of political behaviour in 8

SO 13: Analyse forms of organisational conflict and apply the 6

SO 14: Develop an understanding of people management & 9

8. Specific Outcomes and Assessment Criteria

SPECIFIC OUTCOMES ASSESSMENT CRITERIA

The student should demonstrate the ability to:

SO 1: Elucidate the relationship • Demonstrate a sound understanding of

BACHELOR OF COMMERCE IN SUPPLY CHAIN MANAGEMENT 7

SPECIFIC OUTCOMES ASSESSMENT CRITERIA

The student should demonstrate the ability to:

• Maintain a sound understanding of

• Develop a sound understanding of decision

• Appropriately apply the communication

BACHELOR OF COMMERCE IN SUPPLY CHAIN MANAGEMENT 8

SPECIFIC OUTCOMES ASSESSMENT CRITERIA

The student should demonstrate the ability to:

SO 6: Demonstrate a detailed • Maintain a sound understanding of

• Unpack the strategic value of motivation.

organisational performance. to apply principles or strategies to create

BACHELOR OF COMMERCE IN SUPPLY CHAIN MANAGEMENT 9

SPECIFIC OUTCOMES ASSESSMENT CRITERIA

The student should demonstrate the ability to:

SO 9: Critically discuss workforce • Demonstrate a sound knowledge of